What is the IIJA?
The IIJA stands for the Infrastructure Investment and Jobs Act, which is also known as the bipartisan infrastructure bill. It is a result of months of negotiations between Democrats and 
Republicans in Congress, as well as the White House. It aims to improve the nation’s infrastructure, which has been rated as C- by the American Society of Civil Engineers. The IIJA will invest in sectors such as roads, bridges, railways, airports, ports, water systems, power grids, broadband internet, electric vehicles, environmental remediation and resilience.
The IIJA includes $550 billion in new spending, on top of the existing baseline spending for infrastructure. According to Reuters, the breakdown of the new spending is as follows:
– Roads and bridges: $110 billion
– Passenger and freight rail: $66 billion
– Broadband internet infrastructure: $65 billion
– Water infrastructure, such as eliminating lead pipes: $55 billion
– Public transit: $39.2 billion
– Electrical grid improvements: $73 billion
– Resiliency (flood and wildfire mitigation, ecosystem restoration, weatherization, cybersecurity etc.): $47.2 billion
– Electric vehicle chargers and other EV infrastructure: $7.5 billion
– Cleaning up polluted sites, reclaiming abandoned mines and plugging oil and gas wells: $21 billion
– Reconnecting urban neighborhoods that were divided by highways: $1 billion
– Airport maintenance and improvements: $25 billion
– Port and waterway improvements: $17 billion
The IIJA will be funded by various sources, such as repurposing unused COVID-19 relief funds, selling oil from the Strategic Petroleum Reserve, collecting unpaid taxes from cryptocurrency transactions, reinstating fees on chemical companies and imposing new fees on electric vehicles.
How does the IIJA relate to the construction industry?
The IIJA will have a significant impact on the construction industry, as it will create a surge of opportunities for contractors and construction workers. According to Moody’s Analytics, the IIJA 
will create 872,000 more jobs by the fourth quarter of 2025, of which 461,000 are in the construction industry. The IIJA will also boost the demand for materials and equipment, such as steel, concrete, asphalt, pipes, wires, cables, transformers, generators and vehicles.
However, the IIJA will also present some challenges and complexities for the construction industry. For instance:
– The construction industry will face increased competition from both domestic and foreign contractors who will seek to bid for the lucrative projects. The IIJA includes a provision called the Build America, Buy America Act, which requires that federal funds be used to purchase goods that are made in America. This may pose some barriers for foreign contractors who want to enter the US market.
– The construction industry will have to cope with supply chain disruptions and labor shortages that have been exacerbated by the COVID-19 pandemic. The IIJA will increase the demand for materials and workers at a time when inflation is high and unemployment is low. This may lead to higher costs and delays for contractors.
– The construction industry will have to comply with stricter environmental, social and governance (ESG) requirements that are embedded in the IIJA. The IIJA aims to reduce greenhouse gas emissions, promote clean energy sources, support disadvantaged communities and improve diversity and inclusion in the workforce. Contractors will have to demonstrate their ESG performance and meet certain standards to qualify for federal contracts.
What can contractors do to prepare for the IIJA?
The IIJA offers a once-in-a-generation opportunity for contractors to participate in rebuilding America’s infrastructure. To take advantage of this opportunity, contractors should:
– Stay informed about the latest developments and updates on the IIJA’s implementation and funding process. Contractors should monitor the websites of federal agencies that are responsible for overseeing and awarding contracts for different infrastructure sectors.
– Build relationships with potential partners and clients who are involved in or interested in pursuing infrastructure projects. Contractors should network with other contractors, subcontractors, suppliers, consultants, engineers, architects and financiers who can offer complementary skills and resources.
– Develop capabilities and competencies that are relevant and competitive for the infrastructure market. Contractors should invest in training their workers, upgrading their equipment, improving their quality and safety standards, enhancing their data and analytics capabilities and adopting alternative project delivery methods, such as alliance contracting or integrated project delivery.
– Align their business strategies and practices with the ESG goals and expectations of the IIJA. Contractors should assess their current ESG performance and identify areas for improvement. They should also communicate their ESG achievements and commitments to their stakeholders and the public.
The IIJA is a landmark legislation that will transform America’s infrastructure and economy. The construction industry will play a vital role in making this vision a reality. By preparing for the opportunities and challenges that the IIJA will bring, contractors can position themselves for success and growth in the coming years.
References:
– What the US IIJA Means for Contractors – Marsh McLennan
– ‘Once-in-a-generation’ $1.2 trillion infrastructure bill heads to Biden’s desk | Construction Dive
– The Infrastructure Investment and Jobs Act Impact on Construction Staffing
– Contractors and Steel Framing Industry Prepare for Increased Workload from IIJA
