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IIJA Transportation Project Grants
With the infusion of the $1.2 trillion authorized for transportation and infrastructure spending under the Infrastructure Improvement and Jobs Act (IIJA) signed into law in November 2021, there will be many new transportation projects in 2023 and over the next few years. Although IIJA became law in 2021, most of 2022 was devoted to getting the administrative framework up and running.
This included establishing offices and programs within the federal Department of Transportation, Department of Defense, Department of Agriculture, Department of Energy, Department of Commerce, and the Environmental Protection Agency. In addition, administrative and operational guidelines were established for states, territories, and tribal entities to follow. And at the state, territorial, and tribal level, authorities were setting up their own systems for proposing projects for IIJA funding and soliciting bids from construction companies. Consequently, it wasn’t until mid-2022 that transportation project grants began to be awarded.
Funding Opportunities for 2023
The federal government’s schedule of funding opportunities for 2023 includes a variety of grant programs. Some grants are awarded through competitive bidding. Cities and other municipalities compete for these grants or can apply directly to receive them. Others are formula grants that distribute funds to states, territories, and tribal entities according to such factors as population or size.
Among the funding opportunities for 2023 administered through the Department of Transportation or one of its agencies are:
- Charging and Fueling Infrastructure Grants
- Marine Highway Grants
- Pipeline and Hazardous Materials Safety Administration Grants
- Tribal Transit Set Aside Grants
- Safe Streets and Roads for All Grants
- Transit Oriented Development Grants
- Neighborhood Access and Equity Grants
- Reconnecting Communities Grants
- PROTECT Grants
- Interstate Rail Compacts Grants
- University Transportation Centers of Excellence Grants
- Bridge Investment Program Grants
- Railroad Crossing Elimination Program Grants
- Strengthening Mobility and Revolutionizing Transportation Grants
- Regional Infrastructure Accelerators Demonstration Program Grants
- Rural And Tribal Assistance Pilot Program
- Transportation Access Pilot Program Grants
- Railroad Crossing Elimination Grants
- Consolidated Rail Infrastructure and Safety Improvements Grants
- National Culvert Removal Replacement and Restoration Grants
- Innovative Coordinated Access and Mobility Program Grants
- Nationally Significant Federal Lands and Tribal Projects Program Grants
The federal Calendar of Upcoming Funding Opportunities, a comprehensive listing of IIJA-funded grant programs, lists the responsible federal department/agency and the estimated open date. A new calendar is released each year and updated throughout the year as needed. Keeping an eye on the grants their state and municipal governments are bidding on or have received can help construction companies identify the upcoming IIJA-funded projects they might want to bid on.
Tips for Contractors
Now that states are receiving IIJA funds and have allocated them to specific projects, they are working to get those projects out for bidding. In deciding which projects to bid on, contractors must be very clear about project requirements.
For example, contractors are required to adhere to a “Buy America” policy in sourcing many materials for IIJA-funded projects, though some materials are exempt from this requirement, and certain waivers may be permitted. This is because sourcing materials domestically supports U.S. workers and helps prevent delays due to overseas supply chain disruptions.
There are some concrete steps contractors can take in preparation for bidding on IIJA-funded transportation projects. These are particularly important for contractors with little or no prior government contracting experience. For example:
- Government security policies are strict. It’s a good idea for contractors to review their own cybersecurity protocols and align them with government requirements.
- Government-funded projects typically require contractors to comply with certain legal and cost-reporting requirements. Contractors should look closely at their business operations to align their cost accounting and reporting procedures accordingly.
- Contractors new to government work should make it a point to build sufficient bonding capacity.
Why Is Bonding Capacity Important?
All government-funded projects valued over $100,000 require contractors submitting bids to provide a bid bond and proof of their ability to obtain both performance and payment bonds if chosen as the winning bidder. The purpose of such construction surety bonds is to provide financial protection for project owners if a contractor defaults on the job or fails to meet contractual requirements.
Surety underwriters determine bonding capacity based on a contractor’s industry experience, management practices, and financial strength and stability. Based on these and other factors, sureties establish the maximum amount they will approve per bond and in the aggregate for multiple bonds. Having sufficient bonding capacity is essential to growing a construction business through government-funded projects.
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