Where the IIJA Reauthorization Stands Now
The House Transportation and Infrastructure Committee was expected to mark up the IIJA replacement bill on May 13. It didn't. As of mid-May 2026, no committee vote on surface transportation reauthorization has been scheduled, and Congressional Research Service Report R48845 concludes that enactment before the September 30 IIJA expiration is unlikely. With IIJA expiring September 30 and less than five months to act, A/E firms now have more runway — and less certainty — before the funding cliff.
The Reauthorization Framework on the Table
A markup is the committee-level vote on the bill text before it heads to the full House. It's not final passage — the bill still has to clear the House, get reconciled with the Senate version, and be signed. Chairman Sam Graves's BASICS Act framework (H.R. 7437) is the working template, targeting $550–600 billion in a "back to basics" surface transportation reauthorization. Three things to read into the dollar figure and the framing:
The total dollar figure. IIJA authorized roughly $1.2 trillion across five years for transportation, water, broadband, and energy infrastructure. The new bill — at $550–600 billion — covers a narrower scope: surface transportation only. Apples to apples, surface transportation under IIJA was approximately $570 billion. So the new bill is essentially flat to slightly higher in real terms for the core programs that mid-market civil firms work on.
"Back to basics." The framing deprioritizes two categories from the IIJA framework: discretionary grant programs in their current form (RAISE, the Bridge Investment Program, INFRA) and policy-driven spending tied to electric vehicle charging buildout. The $2.3 billion in IIJA rescissions already enacted in FY26 — including $879 million from NEVI — is the political-direction signal. Formula programs (the funding that flows to state DOTs and gets used for highway and bridge projects) are durable. Discretionary grant programs are not.
Permitting reform. The bill is expected to include changes to NEPA timelines and expanded categorical exclusions for transportation projects. For A/E firms doing environmental, geotechnical, and corridor study work, this is a scope-shape signal — fewer multi-year EISs, more streamlined CEs, faster project starts but smaller per-project environmental scopes.
The Three Scenarios for Q3 and Q4 2026
There are three realistic outcomes for the reauthorization timeline. Each one changes what your firm's federal pursuit pipeline looks like in the second half of the year.
Scenario A: The Bill Passes Before September 30
The narrow but live path. Committee markup in late May or June, full House vote by midsummer, Senate version negotiated through summer, conference committee in early September, signed before September 30.
Likelihood: Lower probability but not negligible. The bigger drag is Senate negotiation — opposition will push to retain discretionary and climate-related programs the House bill drops, and that fight takes time.
What it means for your pipeline: State DOT procurement holds at IIJA volumes. New federal solicitations continue to flow. Discretionary grant programs may see structural changes but not immediate freezes. NEPA reforms tighten environmental scopes within 6–12 months of enactment.
Pursuit posture: Mostly business as usual. The exposed scopes are NEVI and discretionary EV/climate work — those should already be off your near-term pursuit list given the FY26 rescissions.
Scenario B: A Continuing Resolution Bridges to FY27
The most likely outcome. The House passes a bill, the Senate amends, conference stalls, Congress passes a short-term continuing resolution to keep federal programs operating at prior-year levels through Q1 2027.
Likelihood: Highest probability. The last surface transportation reauthorization (FAST Act → IIJA) required over a year of continuing resolutions before final enactment. The pattern is the rule, not the exception.
What it means for your pipeline: Existing programs continue at prior-year funding levels. State DOTs receive formula obligations on schedule, but new program starts and discretionary grants pause. Federal agencies become risk-averse on new IDIQ awards because the funding cliff in any CR scenario creates obligation uncertainty. Mid-cycle on-call task orders continue; new IDIQ master contracts slow.
Pursuit posture: Audit your pursuit list for "first task order under a new IDIQ" pursuits — those decelerate. Existing on-call contracts and pre-funded task orders are fine. Discretionary grant pursuits (state agencies pursuing federal grants for capital projects) get postponed.
Scenario C: IIJA Lapses With No Extension
The cliff scenario. The bill stalls in committee or on the floor, no continuing resolution passes, IIJA authorization expires on September 30 without replacement.
Likelihood: Lowest of the three but not zero. A government shutdown in late September is the typical accelerant — if Congress is fighting over broader FY27 appropriations and surface transportation gets caught in the dispute, a clean lapse is possible.
What it means for your pipeline: Federal agencies stop obligating new funds under expired IIJA authority. State DOTs that depend on federal pass-through dollars revert toward their pre-IIJA SAFETEA-LU baseline, which historically ran 25–35% lower in absolute funding. Existing obligated contracts continue; new federal solicitations halt. State and municipal procurement using state-only funds becomes the safest pursuit lane.
Pursuit posture: This is the scenario where firms with federal-heavy pipelines need to have already added state, municipal, and private-sector pursuits. The lapse window is also when firms that already do data center, utility, and industrial work move into the state and municipal markets your transportation team historically owned.
Which Scopes Are Durable Across All Three Scenarios
The strategic question for proposal teams isn't "which scenario will happen." It's "what scopes are worth investing pursuit hours in regardless." Here's the durability map:
| Scope | Scenario A (pass) | Scenario B (CR) | Scenario C (lapse) | Durability |
|---|---|---|---|---|
| Core highway formula (preservation, rehab) | Stable | Stable | Reduced 25–35% | High |
| Bridge inspection and rehab | Stable | Stable | Reduced 25–35% | High |
| State-funded transportation (trust fund states) | Stable | Stable | Stable | Very high |
| Water / SRF (EPA capitalization grants) | Stable | Reduced | Reduced sharply | Medium |
| Resilience and hazard mitigation (FEMA BRIC) | Stable | Stable | Stable | High |
| NEVI / EV charging | Reduced | Reduced sharply | Halted | Low |
| RAISE and discretionary grants | Reformed | Paused | Halted | Low |
| Military construction (MILCON, ERCIP microgrids) | Stable | Stable | Stable | Very high |
| Data-center-adjacent civil / utility / transmission | Stable | Stable | Stable | Very high |
| Federal IDIQ new master contracts (non-MILCON) | Stable | Reduced | Halted | Medium |
The durability map is what should drive SOQ library positioning right now. A firm with 70% of its book on highway and bridge work isn't exposed if it's working state DOT formula programs in a state with strong dedicated transportation funding. A firm with 70% on RAISE-grant-funded city projects is highly exposed in scenarios B and C.
The scopes worth adding to your library this month — if you can credibly qualify — are state-funded transportation, resilience and hazard mitigation (FEMA BRIC's pre-application window is open through July 23), military microgrid and reliability work (insulated from the September 30 cliff), and data-center-adjacent civil and utility work.
The Action Plan Checklist for A/E Proposal Teams
The runway between now and September 30 is the right time to do five specific things. None of them require waiting on legislative outcomes.
1. Audit Your SOQ Library by Funding Source
Pull every active SOQ and qualification package your firm has submitted in the last 12 months. Tag each one by funding source: direct federal (USACE, FHWA), federal pass-through (state DOT using federal formula), state-only, municipal, or private. Calculate the percentage that depends on direct federal or federal-pass-through dollars.
If that number is above 60%, you have concentration risk that needs addressing in scenarios B or C. Above 80% means scenario A is the only path your current pipeline survives intact.
2. Review Project Sheets for Scope Drift Opportunities
Look at the top 20 project experience sheets in your library. For each one, ask: which other scopes does this project credibly support that we haven't been positioning for? A highway widening project usually has a stormwater component. A bridge replacement usually has a utility coordination scope. A corridor study usually has an environmental review element.
Most firms have project experience that supports more durable scopes than they're actively pursuing. The gap is positioning, not capability — and the federal proposal library realignment process covers the audit framework in more depth.
3. Add Funding-Source Risk to Your Go/No-Go Matrix
Update your go/no-go matrix to include funding-source risk as a scoring criterion. A pursuit funded by IIJA-discretionary dollars in May 2026 should score lower than a pursuit funded by a state transportation trust fund — even if everything else is identical. Most firms run go/no-go without explicitly weighting funding-source risk. This is the cycle to start.
4. Talk to Your State DOT Program Managers Directly
The most useful intelligence you can gather right now is not from policy news. It's from the program managers running your state DOT consultant selection programs. Call them and ask:
- What does your FY27 obligation schedule look like under each scenario?
- Are you holding back any procurements pending federal clarity?
- Which programs in your portfolio are state-funded versus federal-pass-through?
The answers vary state by state. A state with a strong dedicated transportation trust fund is much less exposed than a state that runs primarily on federal formula. Most state DOTs publish funding-source breakdowns in their STIP documents and annual work programs — but the program manager's qualitative read is what tells you which procurements are actually moving in Q3.
5. Reframe Section H Narratives That Assume Continued Federal Investment
Pull the last three SF330s your firm submitted. Read the Section H technical approach narratives. Flag any language that frames your firm's qualification or approach around assumptions of continued IIJA-style federal investment — particularly NEVI, electric vehicle infrastructure, climate resilience grants, and discretionary corridor programs.
Update those narratives now. Federal evaluators reading proposals in Q3 and Q4 will be reading them against a different funding landscape than the one your existing templates were written for.
Frequently Asked Questions
When does the IIJA actually expire?
IIJA's authorization period ends September 30, 2026. That's the date by which Congress needs to pass a replacement bill or a continuing resolution to avoid lapse. Funds already obligated to specific contracts continue regardless. What stops at expiration is the federal authority to obligate new funds to new projects under IIJA programs. For A/E firms, new solicitations tied to IIJA-authorized programs slow or pause unless Congress acts.
What happens to my existing federal contracts if the bill doesn't pass?
Contracts with funds already obligated continue. IDIQ master contracts remain valid, but new task orders under IDIQs may not receive funding if the underlying program authority has lapsed. Subsequent option-year exercises may also be affected. Read your contracts for termination-for-convenience and continuation language, and reference the EO 14398 active-contract modification window running concurrently through July 24.
Should we still pursue federal work right now?
Yes — but with concentration discipline. Federal A/E work doesn't disappear in any of the three scenarios. The change is in volume and scope mix. The right posture is to keep pursuing federal work while bringing your federal exposure down to a level that survives scenario C without crisis. For most firms, that means moving from 70%+ federal pipeline concentration to 50% or below over the next two quarters.
Which state DOTs are least exposed to a federal lapse?
States with dedicated transportation funding sources — gas taxes indexed to inflation, transportation trust funds, tolling revenue, vehicle-miles-traveled fees — can sustain consultant procurement programs at near-current levels even in scenario C. States that depend primarily on federal formula dollars for their consultant programs are the most exposed. Most state DOTs publish their funding mix in their annual work program or STIP — start there.
What's the BASICS Act?
H.R. 7437, the Building America's Surface Infrastructure and Critical Systems (BASICS) Act, is the legislative vehicle the House Transportation and Infrastructure Committee is using as the template for surface transportation reauthorization. It's the formal name behind the "back to basics" framing. The final bill that emerges from markup may not retain the BASICS Act name, but the policy framework — formula-program preservation, discretionary-program reduction, permitting reform — is what's on the table.
Legislative outcomes vary. Pursuit math doesn't. The firms that come out of the next 90 days well-positioned will be the ones with proposal libraries organized by scope durability rather than by client agency — and with SOQ infrastructure that can repoint at state, municipal, and private-sector work as fast as the federal landscape shifts.
RFPM.ai stores structured proposal content — staff qualifications, project sheets, and scope tags — so that when the funding picture changes, the contracts and proposal team can repoint the library in days rather than rebuilding from scratch. See how it works.