The American Jobs Plan—What Does it Mean for Utility, Heavy Highway, and Transportation Construction?

Cohen Seglias Pallas Greenhall & Furman PC
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This week, President Biden introduced the $2 trillion American Jobs Plan (AJP), which includes his blueprint for investing in the country’s infrastructure, utility, and transportation systems over the next eight years. If made into law, the proposed program would profoundly impact the construction industry, especially heavy civil, as the nation has more than enough infrastructure, transportation, and utility needs to exhaust the proposed investment. The American Society of Civil Engineers’ annual infrastructure report card, released in January, found a $5.6 trillion gap between existing infrastructure investment and what is needed.
 

As the AJP represents only the president’s intentions, it remains up to Congress to transform the proposal into law. Both the House of Representatives and Senate are working on infrastructure bills. Over the next few weeks or months, the legislative and political process will shape how much of the plan becomes law. Nonetheless, the president sees deep investment not only as a way to repair roads and bridges but to also generate jobs and make up for COVID-19-related economic losses. That investment would likely mean an increased number of utility, heavy highway, and transportation projects.

What Does the AJP Call “Infrastructure?”

Taking a broad view, infrastructure under the AJP means: highway and bridge construction and repairs; public transportation expansion; improvements to Amtrak and freight railroads; airport improvements; upgrades to ferries, ports, and inland waterways; construction of electric vehicle charging stations; lead pipe preplacement; electric grid upgrades and broadband internet expansion; low and middle-income housing construction or renovations; modernization of schools, community colleges, and childcare centers; and upgrades to Veterans Affairs hospitals and federal buildings.

How Much Does the AJP Propose To Spend on Utilities, Heavy Highway, and Transportation Projects?

Over $900 billion, including:

  • $115 billion to modernize and repair roads and bridges. This would include work on approximately 20,000 miles of highway, the 10 most “economically significant” bridges in the U.S., and 10,000 smaller bridges.
  • $111 billion to replace lead water lines, and modernize drinking water, wastewater, and storm water systems.
  • $100 billion to improve the electric grid.
  • $100 billion to expand high-speed broadband internet to areas lacking coverage.
  • $80 billion to Amtrak for repairs, improvements, and work to expand routes, in addition to grant programs for freight rail.
  • $85 billion for public transit systems, repairs, and expansion.
  • $25 billion for airport improvements, including terminals.
  • $20 billion for road safety enhancements.
  • $17 billion for improvements to coastal ports, land ports, ferry systems, and inland waterways.
  • $20 billion to connect neighborhoods and areas historically cut off or inequitably considered in past infrastructure decisions.

The AJP’s Potential Impacts

As the AJP moves through the legislative process, how Congress resolves these key issues could affect the construction industry:

  • The AJP prioritizes resiliency to natural disasters in the nation’s infrastructure and transportation systems. If the AJP becomes law, the language used to fulfill this goal would impact the projects that receive funding. Contractors with experience in building such resilient infrastructure may have an advantage in bidding such projects.
  • At this time, there is no indication that the AJP will veer from the federal funding formulas used for decades. Because such formulas direct the amounts apportioned and distributed, they can significantly affect what projects are put out for bid. The funding formulas enacted would directly impact the work contractors could expect.
  • The AJP also includes about $100 billion for workforce training initiatives, including creating two million apprenticeships and supporting pre-apprentice programs to foster the pipeline of talent. With many trades facing challenges in attracting younger and more diverse talent, the industry will need this funding to fulfill a higher number of projects, and to maintain the country’s infrastructure in the future.

In addition, new initiatives and issues may arise as Congress takes on the challenges of the AJP’s proposals. The lawyers at Cohen Seglias will continue to monitor the AJP’s progression into law and provide updated information to our clients and contacts.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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