In February 2021, Texas suffered an unprecedented power crisis because of three severe winter storms. More than 4.5 million homes and businesses were left without power and interstate supply chains were shut down for several days as Texas' electrical grid, natural gas infrastructure and freight and passenger railway systems froze. In October 2012, Hurricane Sandy flooded New York City area homes and public and private infrastructure, leaving many residents without food, drinking water, healthcare and other critical services, requiring major renovations to subway systems and private buildings.

These are only two examples of major natural disasters and extreme weather events that exposed the fragility of the U.S.' aging infrastructure systems. According to the National Oceanic and Atmospheric Administration, in 2020 alone, the U.S. faced 22 extreme weather and climate disasters, cumulatively costing $98.9 billion in damages.

While debate rages on, and there seems to be no clear agreement on a plan for investment in the nation's core infrastructure, trends are appearing. The current infrastructure bills all will result in new federal investment in the nation's roads and bridges, water and electrical grid infrastructure, climate-resilience and broadband internet, putting money into "climate" type projects and not just traditional roads and bridges. Whatever bill becomes law, the tone is set for megaprojects with an emphasis on new or rebuilt infrastructure that can withstand extreme weather events.

Specific Funding Programs and Grant Authorizations

The proposed Infrastructure Act increases funding to existing grant programs and funds dozens of new programs, many of which emphasize climate resiliency. It includes billions in funding for federal and state agencies to fund competitive grant programs to replace and repair the nation's crumbling roads and bridges, in addition to funding other major surface transportation projects through a series of programs.

For example, the Bridge Grant Program is authorized to spend billions to replace roads and bridges and to address the bridge repair backlog. The Rebuilding American Infrastructure with Sustainability and Equity Act (RAISE Act) provides funding for surface transportation projects of regional significance, while the Infrastructure for Rebuilding America Grant Program (INFRA) provides funding for highway and rail projects of national significance. Importantly, the Infrastructure Act would lift the cap on surface transportation private activity bonds, increasing the ability of state and local governments to use public-private partnerships to supplement investment in surface transportation projects.

In addition, the act promotes broad investment in the nation's water infrastructure. It injects billions in funding through the Army Corps of Engineers, the U.S. Department of Transportation and other federal agencies to improve waterway and coastal infrastructure, including water and land port infrastructure projects. The act would authorize funding to the Corps of Engineers, including funds to complete construction projects that have been authorized, but that have not received funding, as well as five years of funding for the DOT's Port Infrastructure Development Program, which will facilitate significant improvements to port facilities and infrastructure. The act will authorize millions over five years to fund construction of ferry terminal facilities along the nation's coast. The act also authorizes direct funding to the Bureau of Reclamation to rehabilitate aging water infrastructure, including projects that have reached critical failure, to build new water and groundwater storage and conveyance facilities, to rehabilitate and build new dams with weatherization in mind, as well as to rehabilitate and enhance water storage and hydroelectric capacity in the Columbia Basin.

A Focus on Resiliency and Mitigating the Effects of Extreme and Unpredictable Weather

Recognizing that natural disasters are increasingly powerful and destructive, the Infrastructure Investment and Jobs Act enacts the Energy Infrastructure Act, which outlines historic federal investment in improving the resiliency of the U.S.' electrical grid and water infrastructure against unpredictable and extreme weather patterns. The EIA authorizes $5 billion in funding to the Department of Energy to establish competitive grant programs to support construction and improvement projects that reduce the likelihood and consequences of impacts to the electrical grid due to extreme weather, wildfires and natural disasters. The act also increases the Bonneville Power Administration's borrowing authority to enable it to finance the acquisition, construction and replacement of the Columbia River Power System. Finally, the bill overhauls the Federal Energy Regulatory Commission's permitting authority and establishes a revolving loan fund, allowing the U.S. Department of Energy to issue loans or establish public private partnerships for new transmission lines or to upgrade existing ones.

In addition, the act envisions significant investment into developing the nationwide hydroelectric infrastructure by authorizing the DOE to make incentive payments to owners and operators of hydroelectric facilities for capital improvements related to improving grid resiliency, improving dam safety and other environmental improvements. The act also establishes a Weatherization Assistance Program with funding authorizations to support major construction and improvement projects to harden grid infrastructure against extreme weather patterns.

Contractors Need to Be Ahead of the Curve on Resiliency and Weatherization Projects

Whatever the politics, traditional infrastructure projects that are being funded will include climate resiliency features. This may be a sign of the times and of the future of mega-public-infrastructure projects. And while the Infrastructure Investment and Jobs Act would provide significant federal investment to state and local government, it also encourages public private partnerships to achieve its weatherization focus.

Considering the funding envisioned, to capture the future market, contractors should:

  1. Identify specific resiliency-oriented industries for investment; research best practices for weatherization and hardening projects; and leverage that investment and industry knowledge to gain a competitive edge when competitively bidding under the act's grant programs. Practical and technical knowledge of effective coastal infrastructure practices, including shoreline buffering and mitigation practices that sustain natural structures and wildlife will enable contractors and design-builders to qualify for projects pursuant to federal grant programs geared toward rehabilitating coastal infrastructure battered by extreme weather events, and protecting coastal communities against rising sea levels. Likewise, experience with and technical knowledge of effective weatherization practices for grid resiliency and water infrastructure projects is critical; knowledge of which materials are most effective at withstanding extreme cold or extreme heat, or which construction practices will result in cost savings for public agencies, while also delivering on project goals for withstanding extreme weather impact will assist with success.
  2. Advocate for transparent communications with contracting agencies as to the short- and long-term expectations of the resiliency project. Although the Bipartisan Infrastructure Act is quiet on competitive grant program requirements, and each project has its own goals, effective communication and clear contractual language outlining short- and long-term expectations will be critical to mitigating contractor and design-builder risk when building resiliency-oriented projects.
  3. Foster relationships with other contractors, subcontractors and suppliers who have the industry knowledge, tools and technical skill to engage in large scale infrastructure weatherization projects, taking advantage of and consolidating different specialties to improve their reach and competitiveness.
  4. Foster relationships with federal agencies, particularly those which are outlined with key funding and permitting authority under Infrastructure Investment and Jobs Act, through trade associations or direct contact. The Infrastructure Act envisions a broad role for federal agencies in distributing money and approving permits for infrastructure projects. Contractors and design-builders should be aware of these key federal agencies, particularly the Army Corps of Engineers, Department of Transportation and Department of Energy, and stay apprised of opportunities to competitively bid for and participate in major infrastructure construction.
  5. Consider opportunities for unsolicited proposals for projects that combine traditional infrastructure with innovative practices in resiliency-oriented technologies.

The Infrastructure Investment and Jobs Act will set the tone for the next generation of mega-infrastructure projects. Contractors who take steps now to invest in and research resiliency-oriented construction practices and supply chains will be poised to capitalize on these projects when they inevitably arrive.

Originally published by Construction Executive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.