Moving Ahead

Over the past three years, many construction projects involving the country’s infrastructure were authorized under temporary legislative extensions. The Moving Ahead for Progress in the 21st Century Act (MAP-21) was signed into law by President Obama on July 6, and authorizes more than $100 billion in construction spending through Sept. 30, 2014. Its predecessor, the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA:LU), allocated nearly $244 billion over five years, and was extended through a subsequent series of nine extensions, the latest of which expired on June 30.

Working under temporary extensions has made it difficult for proper planning, funding and execution of many larger projects in the federal transportation program. MAP-21 is intended to provide a more streamlined approach for project approval and commencement by focusing more on local priorities and less on satisfying federal mandates. To achieve that goal, MAP-21 includes program reforms such as an expansion of contract delivery methods (e.g., public-private partnerships, or P3s, design/build, etc.), allowance of two-phase contracting (initial phase for preconstruction, second phase for construction), the creation of dispute-resolution processes, more efficient approval procedures for projects with minimal environmental impact, and the promotion of interagency coordination during initial project phases. 

Further, the new law consolidates existing highway programs by nearly two-thirds, eliminating some 60 federal programs, focusing instead on five “core” areas: national highway performance, transportation mobility, highway safety improvement, congestion mitigation and air quality, and national freight. For instance, the National Highway System, Interstate Maintenance and Highway Bridge Programs are now consolidated under the new National Highway Performance Program.

In addition to consolidating existing programs into the core areas, MAP-21 eliminates many of the discretionary programs in SAFETEA:LU, but also provides for many of the previously eligible activities to be covered in other programs. The new law also creates several new programs, including Transportation Alternatives, which encompasses many activities previously funded under multiple SAFETEA:LU initiatives focusing on recreational trails and safe routes to schools. 

Funding for MAP-21 comes mostly from the Highway Trust Fund (HTF), which is largely the collection of fuel and other highway-related taxes from each state. Under SAFETEA:LU, a state’s total distribution was the sum of amounts received under each individual program. MAP-21 revises the distribution formula to base apportionment on the total amount received under the prior law rather than calculating separate amounts for each program. 

Instead, a single amount – some $38 billion per year – funds the core programs. For 2013, states will receive nearly the same apportionment as in 2012. The total available amount in 2014 will then be shared proportionately with the states, again based on their 2012 allocation but with adjustments made to ensure at least a 95 percent return on a state’s HTF contribution. Once a total apportionment per state is calculated, certain “set-asides” are made for specific programs and the remainder is divided among the various programs. Subject to limited restrictions, a state may transfer up to 50 percent of its apportionment in any one program to another.

States must continue to develop short and long-term transportation plans, with the latter incorporating measures to achieve new performance goals established by MAP-21. These goals include safety, infrastructure condition, congestion reduction, system reliability, freight movement and economic vitality, environmental sustainability, and reduced project delivery delays. The secretary of transportation will develop a new evaluation process to determine whether a state is making adequate progress towards these goals. If not, remedial measures must be outlined and implemented and states may be forced to reallocate its distributions to meet minimum standards.

MAP-21 also allocates nearly $400 million each year for various research and training programs, and allows the secretary of transportation to award a small percentage of those funds as cash prizes for innovative applications. Several provisions struck from the bill prior to enactment are equally notable. 

For instance, there are no penalties for utilization of P3 delivery methods, nor the establishment of dozens of new federal agencies, and no new regulations of the railroad industry. In addition, the Transportation and Infrastructure Committee has identified nearly 6,300 earmark projects in the previous SAFETEA:LU bill and no earmark projects are included in MAP-21. 

With respect to the growing interest in the P3 model, MAP-21 requires the United States Department of Transportation (USDOT) to develop “best practices” for effective implementation of P3 projects. It also requires the Secretary of Transportation to develop standard form P3 contract forms within 18 months and make those forms available to state and local governments.

A major goal of MAP-21 was to provide some long-term stability to a construction industry struggling to regain momentum from the economic conditions of the past several years. Once the new systems and procedures are in place, many projects that were previously tangled in various regulatory review processes can hopefully break ground. State and local officials are now better able to develop and begin other long-delayed projects – particularly those related to bridge and roadway improvements – with a more efficient process and increased stability­ for funding. As always, the devil is in the details and with new procedures being created and implemented, it is more important than ever for contractors to adequately assess the risks involved. 

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