Federal Aid Program Supports $10 Billion Annually in Highway Bridge Planning & Design Projects

by Dr. Alison Premo Black

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We can’t overemphasize how important the federal aid highway program is to the U.S. highway and bridge construction market, accounting for over 52 percent of state DOT capital outlays. But a closer look at those numbers reveals just how crucial that federal investment is for the early phases of the highway and bridge construction pipeline—the planning and design market.

Planning and design and construction engineering investment on federal aid projects has totaled nearly $100 billion over the last decade—or just over 14 percent of total project costs.1  During that time period, states obligated over $524.6 billion in federal aid funds to support $718.4 billion in total highway and bridge program spending. Depending on the mix of projects, planning and design work ranged from 12 to 16 percent of total project costs in a given year.

As with the construction market, planning and design activity in 2016 and beyond will depend on the overall health of state and local government revenues and the federal aid program. Continued delays and extensions for fully funding a long-term surface transportation bill will further temper the market.

This summer, the Senate passed the “Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act,” which contained modest increases in investment, but only funding for three of its six years. A House bill was still being deliberated on as this story went to press.

State DOTs used federal funds to support planning and design work on nearly 200,000 projects between 2005 and 2014, not including general programs that covered design work in multiple districts or regions. Over half of total spending was for design-related work on our most traveled network—the roads and bridges on the National Highway System.

Forty states and Washington, D.C. also used $13.7 billion in federal funds to support over $30.1 billion in design-build projects during the last decade. Planning and design work accounted for $3.3 billion or just over 10 percent of total costs. Eight states—Florida, Virginia, California, Pennsylvania, South Carolina, Minnesota, Ohio and Texas—generated 78 percent of the design-build market activity that used federal funds.

Some of the largest design-build projects that received approval for federal funding in the last decade include the Port of Miami Tunnel in Florida; State Highway 183 reconstruction and managed lanes in Texas; the Safe and Sound Bridge Improvement Project in Missouri; and the 11th Street bridge project in Washington, D.C.

State and local highway and bridge programs spend an estimated $13 billion annually on highway and bridge planning and design work, including the use of outside consultants and in-house staff.

The full outlook for the 2016-2020 planning and design market will be released Dec. 2, along with the rest of ARTBA’s modal forecast.

1ARTBA analysis of data from the Federal Highway Administration (FHWA). Total project cost includes any spending associated with a project, including debt repayments. Projects are assigned to a year based on the year that the FHWA Division Office approved the project. Planning and design work in this article also includes expenditures for construction engineering and statewide obligations for overall design work where the project is not specified.       

Dr. Alison Premo Black is ARTBA chief economist.

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