Date Published: November 10, 2021
On November 8, 2021 the U.S. house of representatives passed the Infrastructure Investment and Jobs Act, The bill calls for $1.2 trillion in spending, which includes $550 billion dedicated to new spending. Specific numbers include: $110 billion for roads, bridges, and
major projects; $73 billion for electric grid upgrades; $66 billion for rail and Amtrak improvements; $65 billion for broadband expansion; $55 billion for clean drinking water; $39 billion for transit; $17 billion for ports; $25 billion for airports; $7.5 billion for electric vehicle chargers. The bill had passed the Senate in early August. Included in the bill, a rule that requires “payment and performance security on all federally financed infrastructure projects receiving loans and grants under the Transportation Infrastructure Finance and Innovation Act (TIFIA), including public-private projects (P3s)”. Payment and performance security means the projects will require construction bonding.
Federally funded construction projects required the use of performance and payment bonds through the Miller Act of 1935. With the passage of the infrastructure bill, congress, made clear a specific gray area on the bonding requirement. This being the private-public projects. Many states are encouraging the public private partnerships to build toll roads and other revenue producing infrastructure projects. If Federal money will be used for these projects, then the projects will have a construction bonding requirement.
How to meet the Construction Bonding Requirement
Establishing a surety relationship with a from that specializes in performance and payment bonds for construction contractors is the first step in qualifying for bonding. There are several programs available to meet the construction bonding requirements included in the infrastructure bill. For newer and emerging contractors, the Small Business Administration has a bonding program. Some sureties have introduced bonding programs that are based on net worth, for experienced contractors that have built up a level of wealth but cannot “check all the boxes” to obtain surety bonding. A firm that specializes in nothing but surety bonding can help you navigate the bonding landscape and provide you with the most options. Bonding will be required to take advantage of this massive infrastructure bill.
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