House T&I hearing focuses on implementation and oversight of IIJA

A recently-held House Transportation & Infrastructure (T&I) Committee hearing focused on oversight of the bipartisan $1.2 billion Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law, with a sharp focus on “ensuring it is implemented as Congress intended.”

The legislation, which represents the single largest investment in repairing and reconstructing the nation’s bridges since the construction of the interstate highway system, was signed into law by President Biden in November 2021. A key objective of it is to “ease inflationary pressures and strengthen supply chains by making long overdue improvements for our nation’s ports, airports, rail, and roads,” according to the White House.

Some of its key components include:

• reauthorizing surface transportation programs for five years and investing $110 billion in additional funding to repair the nation’s roads and bridges and support major, transformational projects
• an investment of $17 billion in port infrastructure and waterways and $25 billion in airports to address repair and maintenance backlogs, reduce congestion and emissions near ports and airports, and drive electrification and other low-carbon technologies;
• a $7.5 billion investment to build out a national network of EV chargers to support the President’s goal of building a nationwide network of 500,000 EV chargers to accelerate the adoption of EVs, reduce emissions, improve air quality; and
• grows the U.S. DOT from a $90 billion agency to a $140 billion one, with the new law reauthorizing surface transportation programs and adding $550 billion in new spending on infrastructure within the next five years, from the time of it being signed into law, among others

A key theme of the House T&I hearing focused on the impact of inflation upping the costs of needed materials for infrastructure projects related to the legislation, as well as concerns about discretionary grant programs being an effective tool for administering federal funds.

“The overwhelming number of grants included in the IIJA continues to create challenges for states, localities, and even USDOT,” said Texas Department of Transportation Executive Director Mark D. Williams on behalf of the American Association of State Highway and Transportation Officials, at the hearing. “It may benefit Congress and USDOT to review whether the selected projects will achieve the desired objectives of the programs, and whether the distribution of awards are fair and equitable considering national performance needs and requirements.”

And Ciambro Assistant General Manager Aric Dreher, on behalf of the Associated Builders and Contractors, said that the impact of inflation on construction cannot be understated.

“Since November 2021, when President Joe Biden signed the IIJA into law, input prices for construction projects have increased on average by 11.1%, and nonresidential construction materials prices are up more than 39% since February 2020,” he said. “Combined with our current labor shortage and supply chain pressures, it is becoming increasingly difficult for construction projects to continue as originally planned.”

Elaine Nessle, executive director of the Washington, D.C.-based Coalition for America’s Gateways and Trade Corridors (CAGTC) told LM that there is a delicate balance, when it comes to implementing the bill’s projects on various fronts.

One key reason for that, she explained, is that the White House does have an historical amount of funding to roll out and included in that funding are a lot of new programs and also a lot of discretionary programs which CAGTC is very supportive, adding that discretionary programs are great for complex multimodal, multi-jurisdictional projects that don’t fit neatly into formula-based and other types of funding.

Addressing the impact of inflation on IIJA funding, she said these inflationary increases are very real and a worst-case scenario would be to have the inflationary increases in the cost of developing projects eat up the big boost in funding Congress included in the IIJA.

“The private sector tends to not have a great level of patience and tolerance for these delays and they don’t want their investments tied up for a substantial period of time,” said Nessle. “There are certainly ways we can move through this and make improvements to the process to speed it up without sacrificing the necessary oversight and judiciousness DOT should be giving these projects.”

Fred Wagner, an attorney at Washington, D.C.-based Venable LLP, and former chief counsel of the U.S. Federal Highway Administration (FHWA), explained that the IIJA is now in a major transition phase, where the initial grants are going out the door, applications are being processed.

“Between now and especially the election, it is going to be imperative for the administration to make sure things are being approved and built and voters can see the fruits of this bill,” said Wagner. “That is imperative. If they don’t see that—and there are still promises unchecked—and people don’t see the benefits of all this spending, that is where the oversight is really going to hit home.”

What’s more, Wagner added that every month that goes by this year into next year, will see that pressure get higher and higher.

“The President ran on it in the mid-terms i.e. ‘look at what we passed,” he said. “That was a theme. But you cannot run on that anymore the next time around. It has to be ‘OK, this is what we have done,’ and there will have to be some ribbon-cutting and demonstration of these projects getting off the ground….and that the money is being spent appropriately with no waste, fraud, or abuse. The recent hearing is a preview of what is to come. And there are going to be many more like it between now and this time next year.”