The Latest Highway Trust Fund Bill: A Win for Design-Build

Subscribe to our Blog


Posted on

The Latest Highway Trust Fund Bill: A Win for Design-Build

by Richard Thomas & Andrew Ausel  |  June 29, 2015

The Senate Environment and Public Works Committee got the ball rolling this past week on a long-term reauthorization of the Highway Trust Fund by approving the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act by a unanimous vote. The bill, among other things, provides six years of increased funding, giving state and local governments the certainty and stability they need to improve and develop their transportation infrastructure. It retains the design-build provisions written into the two previous transportation reauthorization bills and creates new programs that lend themselves to innovative project delivery and financing like design-build and P3s. Although most of the key highlights of the DRIVE Act may not specifically mention design-build, a closer look reveals that many of the provisions lend themselves to innovative project delivery methods. Below, we break down the provisions of the bill and pull out how the DRIVE Act programs will utilize and impact design-build.

A priority is placed on bridges and large, nationally-important facilities

As the bill is primarily a programming mechanism, for now void of any real funding measures (these should come later in the process), the main highlight of the bill is a six-year reauthorization of the Federal-aid highway program and an increase in funding levels by 13% for six years, from FY 2016 through FY 2021. Of the funds expended by the act, bridges and large, nationally-important facilities are prioritized by a dramatic increase in the funding specifically designated for projects to maintain and repair bridges off of the National Highway System, as these bridges often struggle to find a reliable funding stream. Design-Build Impact: The bill encourages states to bundle two or more bridge projects together to attract more interest from bidders and private investment. Bundling lends itself well to design-build and P3s as historically most bundled bridge programs were completed using design-build.

Substantial new funding provided to focus on freight and goods movement

During the EPW Committee hearing, the ranking minority member of the committee, Senator Barbara Boxer (D-Calif.) outlined the five main components of the bill and among them was substantial new funding to focus on freight and goods movement. The bill establishes a formula-based freight program, which will provide funds to all states to improve goods movement, reducing costs and improving performance for business. It also expands flexibility for both rural and urban areas to designate key freight corridors that match regional goods movement on roads beyond the Primary Highway Freight System. Design-Build Impact: As part of the criteria for project evaluation and selection, priority will be given to projects that ease congestion, which are more likely to be larger projects in urban areas which historically have been done using design-build.

Major projects funded

The bill provides new funds to major projects of high importance to a community, a region, or the nation (in excess of $350 million or 30% of the state’s federal funds) through a competitive grant program. The program includes a set-aside for rural areas and ensures an equitable geographic distribution of funds. Design-Build Impact: The sheer size and complexity of these projects will steer the delivery towards design-build and construction management (CM). Also as part of the criteria for project evaluation and selection, FHWA will consider the ability to begin construction within 18 months after the project is selected (this lends itself well to design-build), the incorporation of innovative project delivery (design-build and CM) and financing (P3s).

Creates Significant Federal Lands and Tribal Project program

The bill authorizes $150 million annually for a new program to fund important projects on federal and tribal lands. Expenditures of these funds require project costs of at least $25 million with priority given to those projects in excess of $50 million. Design-Build Impact: This program would lend itself well to design-build and CM because there are no state bidding laws to consider, the projects are larger and more complex, and because of requirements the projects use new technologies and innovations to enhance efficiency.

Improves TIFIA program and encourages P3s

The bill updates the Transportation Infrastructure Finance and Innovation Act (TIFIA) program and provides state and local governments new options for stretching transportation dollars and increasing efficiency and utilization. By improving the process whereby a TIFIA loan can be used to capitalize a State Infrastructure Bank, the bill increases leverage provided for small, rural projects that was previously unavailable. Furthermore, the bill creates a pilot program to establish a toll credit monitoring and tracking system. Design-Build Impact: The bill streamlines the TIFIA process and makes state and local bonds more attractive to private investors. Almost all TIFIA projects are P3s which use design-build. The pilot program will likely ease the way to integrate P3s into a national tolling system.

Requires Highway Trust Fund transparency

Within the legislation, new provisions are included to improve the transparency of how and where transportation projects are selected and funded, to ensure that stakeholders and the public have faith in the integrity of highway programs and the use of federal tax dollars. The improved transparency provisions will provide to the public better accountability on how the Federal Highway Administration is utilizing their administrative expenses as well as progress towards achieving national goals and improving federal reviews of highway projects. Design-Build Impact: The “Every Day Counts” initiative continues as part of these provisions. This initiative promoted the use innovative project delivery methods like design-build. This initiative would continue to do this and would require FHWA to continue working with stakeholders to identify new innovations and best practices through case studies, webinars and demonstration programs.

Creates a grant program for transportation performance and innovation

The DRIVE Act creates a $150 million a year grant program to award achievement in transportation performance management and the implementation of strategies that achieve innovation and efficiency. Design-Build Impact: This program rewards state and local governments that are using innovative techniques and practices such as design-build. It also considers reduced construction times, improved operational efficiencies and practices that extend the service life of roads and bridges. To meet these criteria, it is far more likely that these owners will favor design-build because it is almost impossible to meet these standards using traditional methods based solely on price.


Significantly, the DRIVE Act maintained language from MAP-21 encouraging the use of design-build, and includes new reforms that would improve collaboration between the lead agency and participating agencies. It would also allow for greater reliance on documents prepared during the planning process, and reduce duplication between agencies involved in the federal environmental review and permitting process. While much remains to be seen as to how these programs will be funded, for the time being innovative project delivery and streamlined construction seem to be a top priority for legislators looking for a long-term solution to the nation’s infrastructure needs, and that’s a victory for all Americans.