A Law That Built America Is About to Run Out

On September 30, 2026, the Infrastructure Investment and Jobs Act (IIJA) — the most significant federal infrastructure investment in a generation — expires. Signed into law in November 2021, the IIJA directed $1.2 trillion in total investment and $550 billion in new spending into U.S. roads, bridges, transit, water systems, broadband, and ports. By its third anniversary in November 2024, $568 billion had been allocated to more than 68,000 projects nationwide — roughly 47 percent of total IIJA funds.

As of January 2026, 72.6 percent of DOT-administered funding had been formally obligated, with 43 percent already spent on active construction. An additional $136 billion in federal infrastructure funds remains available for allocation in 2026 — creating a short but significant window for contractors, bond agents, and public agencies to lock in work before the clock runs out.

What Expiration Actually Means

When the IIJA expires, it does not mean all infrastructure work stops. Projects already under construction with obligated funding are relatively secure — the federal government has committed those dollars and contractors can expect to finish the work and get paid. The more serious concern is the pipeline of new work.

Without a reauthorization bill, the mechanisms that continuously feed new projects into the construction market — annual formula funding allocations to states, discretionary grant programs, and multi-year competitive awards — all come to a halt. Formula programs for highways, bridges, and transit would revert to pre-IIJA baseline levels, which are dramatically lower than the amounts state DOTs have been working with for the past five years. That gap amounts to more than $28 billion per year less than current state DOT pipelines have been budgeted around.

Projects in design that have not yet received formal obligation face real uncertainty. New discretionary grant rounds — programs like MEGA, INFRA, and the Bridge Investment Program — would not launch new award cycles without authorization. For contractors whose backlog is heavily weighted toward federally funded work, that has direct implications for 2027 revenue planning.

The BUILD America 250 Act: Congress Moves Toward a Replacement

The path forward is the BUILD America 250 Act — a $580 billion, five-year surface transportation reauthorization bill introduced by the House Transportation and Infrastructure Committee. The American Society of Civil Engineers commended the bill's introduction in May 2026, stating that it would sustain investments in roads, bridges, transit, railroads, and safety programs ahead of the IIJA's September expiration.

On May 22, 2026, the House Transportation and Infrastructure Committee advanced the BUILD America 250 Act by a bipartisan vote of 61 to 2 after a fifteen-hour markup. The bill would authorize $580 billion over five years — FY2027 through FY2031 — and represents the largest-ever federal investment in bridges, totaling $50 billion over the life of the bill.

Key provisions include:

• Bridge Formula Program: Grows from $5.5 billion per year under IIJA to $9 billion per year, with an expanded 20 percent set-aside for off-system bridges.
• INFRA Grants: The Nationally Significant Multimodal Freight and Highways program is authorized at $1.2 billion per year from the General Fund.
• MEGA, BUILD, and SMART Programs: Reauthorized at their IIJA authorization levels.
• NEPA Reform: Projects receiving federal assistance up to $12 million and projects with total costs up to $70 million would qualify for categorical exclusions from environmental review, reducing compliance timelines for smaller projects.
• Electric Vehicle Fee: A new fee on EV owners would help shore up the Highway Trust Fund, which currently faces a structural gap. The gas tax — unchanged at 18 cents per gallon since 1993 — raises roughly $44 billion per year against an annual spending need exceeding $102 billion to maintain IIJA-level investment.

The bill also includes passenger rail investments and consolidates certain programs to reduce duplication, while eliminating the Carbon Reduction Program and the PROTECT resiliency program established under the IIJA.

The Race to Obligate What Remains

Even as the reauthorization debate plays out in Congress, states are racing to obligate remaining IIJA funds before September 30. The FY26 INFRA Grant Program — which funds nationally significant multimodal freight and highway projects of national or regional significance — remains open for applications as of early June 2026.

The Bridge Investment Program's rolling application process has a June 29, 2026 deadline for FY2026 funds, with up to $3 billion still available for large and standard bridge projects. Contractors and engineering firms positioning for near-term award should be actively monitoring these discretionary programs.

What This Means for the Construction Industry

The IIJA built a five-year pipeline. The transition period — whether through a short-term extension or a full BUILD America 250 reauthorization — will shape market conditions well into 2028. The most likely scenario, given congressional history, is a short-term continuing resolution that maintains current funding levels while lawmakers negotiate a longer bill, potentially extending uncertainty into 2027.

For contractors: those with more than 60 percent of their backlog tied to federally funded work should begin diversifying toward data center, energy, and private industrial work — sectors that are growing independent of congressional action. Those who move quickly to bid the remaining IIJA-funded project pipeline before September will likely find a competitive but active market over the next two quarters. Understanding the difference between what is obligated, what is in design, and what depends on a new bill is now a core part of strategic planning for any firm with significant public works exposure.

Sources

• GRIT Insurance Group: IIJA Expires September 2026 — What Bonded Contractors Need to Know (May 26, 2026)
• American Society of Civil Engineers: Statement on the BUILD America 250 Act (May 22, 2026)
• National Association of Counties: House T&I Committee Advances BUILD America 250 Act (May 2026)
• JD Supra: Massive Multi-Year Federal Transportation Infrastructure Bills (May 21, 2026)
• U.S. DOT: FY26 INFRA Grant Program (June 2026)