Jul 18, 2022
ARTBA Contractors Express Project Costs, Material Availability Concerns with US DOT
What happened: A group of American Road & Transportation Builders Association (ARTBA) contractors told U.S. Department of Transportation (U.S. DOT) senior leadership July 13 that project costs and materials availability are impeding their ability to deliver much needed transportation infrastructure improvements. The group cited steep increases for a variety of inputs and urged department officials to allow price adjustment clauses for existing federal-aid contracts, which would provide contractors temporary relief from unforeseen inflationary pressures. U.S. DOT officials also engaged ARTBA members in a detailed dialogue on the pending expansion of Buy America requirements to certain construction materials, pursuant to the Infrastructure Investment and Jobs Act (IIJA). Attendees discussed efforts to assess the availability of domestically-produced covered materials during the coming months, as well as the challenges in increasing that supply during the short term.
Why it’s important: The spike in fuel and other project costs is affecting the viability of existing contracts—some of which were entered into years ago—and the uncertainty about the future has the potential to dilute the increased investment from the new federal infrastructure law. ARTBA has documented this situation with its national dashboard of materials costs. The association’s state affiliates regularly discuss the challenges faced in different regions and share strategies about developing solutions with their respective transportation agencies. At the U.S. DOT meeting, all participants expressed concern over the ability of smaller subcontractors and suppliers—especially those in the Disadvantaged Business Enterprise (DBE) program—to weather the current market pressures. The impact of inflation on infrastructure improvements is drawing increased attention in the nation’s capital. The day after ARTBA members met with U.S. DOT officials, Rep. Rick Crawford (R-Ark.), a senior member of the House Transportation & Infrastructure (T&I) Committee, told attendees at ARTBA’s Public Private Partnerships (P3) in Transportation Conference that he and his colleagues are increasingly aware of its effect on projects. Later that day, T&I Republicans held a roundtable discussion on the topic with a variety of stakeholders.
What’s next: ARTBA is preparing follow-up information and data for its continuing dialogue with U.S. DOT, the White House and Congress on materials costs, price adjustments and Buy America. To share comments or concerns on these issues, please contact ARTBA’s Rich Juliano.