Funding Status: Infrastructure Investment and Jobs Act and Inflation Reduction Act

Executive Summary

The Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) funded transportation, infrastructure, and energy projects administered by several agencies. GAO’s review of four selected agencies (EPA, Interior, NTIA, and DOT) found the agencies obligated a majority of their IIJA and IRA budget authority but had materially varied disbursement rates and ongoing reviews. Specifically, of approximately $574.7 billion in IIJA funding provided to them, the agencies obligated about 76 percent and disbursed about 54 percent of obligated funds for fiscal years 2022–2025. Of about $53.7 billion in IRA funding provided to them, EPA, Interior, and DOT obligated about 72 percent and disbursed about 60 percent of obligated funds for fiscal years 2022–2025; in July 2025 Congress rescinded $6.4 billion of the three agencies’ unobligated IRA funds per agencies’ data.

Beginning January 20, 2025, executive orders prompted agencies to pause and review IIJA and IRA awards for alignment with administration priorities. Agencies developed new review processes (including searches for terms such as “diversity” and “environmental justice”), and senior leadership made final approval/modification/cancellation decisions. As a result, selected agencies reported approving about 9,500 awards ($128 billion), canceling about 800 awards ($17.8 billion), and leaving more than 2,500 awards pending ($33.6 billion) as of the dates shown in GAO’s review. Contractors should pay attention now: review-driven pauses, award modifications, cancellations, and a rescission reduce near-term certainty, affect cash flow and scheduling, and shift competitive dynamics. Prepare to document alignment with review criteria, track agency decisions closely, and plan for contingent funding outcomes.

Impact Matrix

transportation

• Risk Level: Critical
• Opportunity: Continued demand for services and projects exists where awards are approved; contractors can pursue newly approved awards and respond rapidly to reinstatements or modified solicitations. Specific opportunities TBD pending solicitation language.
• Timeline: Fiscal years 2022 to 2025; agency reviews initiated beginning January 20, 2025; rescission action in July 2025 (per agencies’ data).
• Action Required:
• Monitor agency review status and decision updates for relevant awards.
• Reassess cash-flow and staffing plans for projects with pending or modified awards.
• Update proposals and compliance packages to demonstrate alignment with review factors (e.g., terms identified in agencies’ searches).
• Prepare contingency plans for canceled or delayed awards.
• Competitive Edge: Rapidly document program alignment with agencies’ review priorities (e.g., environmental justice/diversity where relevant), and build flexible staffing/partnering plans that allow quick scaling if pending awards are approved or modified.

infrastructure

• Risk Level: Critical
• Opportunity: Projects with approved awards represent immediate work; contractors can position for follow-on work if agencies resume disbursements. Specific opportunities TBD pending solicitation language.
• Timeline: Fiscal years 2022 to 2025; agency reviews initiated beginning January 20, 2025; rescission action in July 2025 (per agencies’ data).
• Action Required:
• Inventory existing awards and identify which are approved, modified, canceled, or pending.
• Quantify exposure to canceled or delayed awards and update financial forecasts.
• Ensure proposals and delivery plans clearly reflect compliance with review expectations.
• Engage with agency points of contact to clarify modification terms if an award is being restructured.
• Competitive Edge: Offer modular delivery options and risk-sharing approaches that reduce agency concerns about project execution during review periods, and highlight documented compliance with review criteria.

energy

• Risk Level: High
• Opportunity: Approved IRA/IIJA awards create immediate project work; prospective awards remain available but subject to review outcomes and rescissions. Specific opportunities TBD pending solicitation language.
• Timeline: Fiscal years 2022 to 2025; agency reviews initiated beginning January 20, 2025; rescission action in July 2025 (per agencies’ data).
• Action Required:
• Track award status for energy-related grants and loans administered by the reviewed agencies.
• Reevaluate project timelines and supplier commitments in light of pending agency decisions and the July 2025 rescission.
• Prepare documentation that demonstrates alignment with administration review factors referenced by agencies.
• Maintain flexible contracting terms with subcontractors to absorb schedule or funding changes.
• Competitive Edge: Demonstrate measurable benefits tied to agency review priorities (e.g., environmental justice impacts where applicable) and maintain financing contingency plans to bridge payment timing variability.

Cross-Segment Implications

• The agency review process and the July 2025 rescission create cross-cutting funding uncertainty that affects transportation, infrastructure, and energy projects concurrently; reduced or delayed funding in one segment can slow interdependent work in others (for example, infrastructure enabling transportation or energy installations).
• Pending decisions and cancellations increase competition for the subset of awards that remain available, pushing contractors to better document alignment with review criteria and to offer faster, lower-risk delivery options.
• Contractors with cross-segment capabilities may face both opportunity and risk: they can reallocate resources to approved work across segments but must manage integrated cash-flow impacts and supply-chain constraints arising from delayed disbursements.
• Because agencies used new review processes and criteria (including searches for terms such as “diversity” and “environmental justice”), contractors that proactively adapt proposals and compliance practices to reflect those priorities may gain advantage across multiple segments.