Hispanic Contractors Helped Build IIJA. Most Are Not Bidding on $3 Billion a Year in Water Infrastructure That IIJA Funds.

The EPA redirected $4.1 billion to states for lead service line replacement in 2026, according to Engineering News-Record. That money flows through state drinking water revolving funds to municipal water utilities, which then bid construction contracts for lead service line replacement and related water infrastructure work. Those bids are open right now. This is the last full appropriation year before the Infrastructure Investment and Jobs Act expires on September 30, 2026. Most Hispanic contractors are not in the procurement cycle receiving those bids.

This is not an access problem created by an executive order or a court ruling. No certification has been suspended. No program has been challenged in federal court. The water infrastructure bid cycle is operating exactly as intended. The problem is that most Hispanic contractors built their federal contracting capacity in transportation and buildings, the sectors where DBE and 8(a) programs historically directed opportunity, and the water utility procurement system operates through a completely separate channel that most of those firms have never registered in.

That is a $3 billion per year opportunity the industry's most experienced group of net new entrants is largely missing, in the final year it is available at full funding.

How IIJA Water Infrastructure Funding Actually Moves

The Infrastructure Investment and Jobs Act allocated $15 billion over five years for lead service line replacement through the Drinking Water State Revolving Fund. The math is approximately $3 billion per year. That money moves from EPA to state drinking water programs, which distribute it to municipal and county water utilities as low-interest loans and grants. The utilities then design projects, write scopes, and solicit construction bids to remove and replace lead service lines, the pipes that run from the water main to individual homes and buildings.

The procurement mechanism is not the Federal Acquisition Regulation system that most experienced DBE contractors know. It is not a state DOT bid portal. It is not a public buildings procurement office. Each state's revolving fund program has its own vendor registration system, its own small business set-aside structure, and its own subcontracting requirements. A construction firm that has won dozens of FHWA-funded highway contracts may have never registered with the state SRF program that is now dispensing three billion dollars a year in DWSRF construction contracts.

The WIFIA program, the Water Infrastructure Finance and Innovation Act, operates alongside the revolving fund system, providing direct EPA loans to large utilities for major water projects. WIFIA projects have their own procurement requirements and bidding processes. Both channels are active and understaffed with qualified small contractors.

Why This Matters in 2026

September 30, 2026 is the date the IIJA's authorization expires. Federal agencies are moving the remaining obligated dollars through their respective pipelines before that date. For water infrastructure, that means 2026 is the year that states are maximizing their draw on revolving fund allocations, and utilities are prioritizing projects that can reach the bid and award stage before the federal reimbursement window closes.

The HCC's NXT Infrastructure Database tracks real-time project activity across the United States. What that data shows in the water infrastructure segment is that lead service line replacement projects are concentrated in states with older housing stock: Michigan, Illinois, Ohio, New Jersey, Pennsylvania, and New York. These are also states with significant Hispanic construction workforces. The firms that should be positioned to bid on these projects are present in the same markets where the projects are being built.

The gap is registration, not capability.

Hispanic contractors represent 34 percent of the U.S. construction labor force, according to the HCC's 2026 State of Hispanics in Construction Report, available at hispanicconstructioncouncil.com. The installation of residential and small commercial service lines, the core task in lead pipe replacement, is work that Hispanic-owned specialty and residential contractors do every day. The scale requirements for most residential lateral replacement contracts are well within the bonding and capacity range of small and mid-sized Hispanic-owned firms. The barrier is not technical. It is that the procurement channels are different from the ones these firms have built relationships with, and this funding year is the one with the most money moving through those channels.

What Hispanic Contractors Need to Enter the DWSRF Bid Cycle

A contractor that wants to bid on lead service line replacement projects in 2026 needs to take several specific steps.

The first is identifying the state drinking water revolving fund program in their state. Every state EPA primacy agency administers its own DWSRF program. The state drinking water office maintains a project list and a list of solicitations that are actively open. This is not the same as checking SAM.gov for federal solicitations. It requires registering directly with the state water program.

The second is getting on the utility's vendor list. Municipal water utilities that receive SRF funding solicit bids through their own procurement portals, not through federal bid boards. A firm that is registered in SAM and has an active DBE certification may still be invisible to a city water department that posts bids through a separate municipal purchasing system. Registration in the relevant utility's procurement portal is a prerequisite to receiving a bid notification.

The third is understanding the small business requirements specific to the SRF program in their state. Some states have set-aside requirements for small or disadvantaged businesses in their SRF-funded projects. Others require that prime contractors submit workforce utilization plans demonstrating compliance with state prevailing wage rules. The requirements vary by state and by utility. Understanding the applicable rules before submitting a bid is the only way to avoid a technical disqualification.

The HCC is tracking DWSRF solicitations in the states where Hispanic construction contractors are most concentrated. Current project data and contractor registration resources are available at hispanicconstructioncouncil.com. If your firm has the capacity to do residential or commercial plumbing and utility work and you are not currently receiving water infrastructure bid notifications, the issue is likely registration, not eligibility.

This is one of the last procurement windows under IIJA before the authorization expires. The capacity gap this industry has documented for years is not fixed by waiting for the next funding cycle. It is fixed by getting registered in the channels where the current funding is moving before those channels close.

George Carrillo is the Chief Executive Officer of the Hispanic Construction Council. He is a United States Marine Corps veteran and a former law enforcement officer. The HCC publishes the annual State of Hispanics in Construction Report, the Americas Construction Crisis 50-State Report, and the NXT Infrastructure Database at hispanicconstructioncouncil.com.

Sources: Engineering News-Record, "EPA Redirects $4.1B to States for Lead Pipe Removal," 2026. U.S. Environmental Protection Agency, Water Infrastructure Finance and Innovation Act (WIFIA) Program, epa.gov. U.S. Environmental Protection Agency, IIJA Division E Water Infrastructure Allocations, 2021. HCC, State of Hispanics in Construction Report, 2026. HCC, NXT Infrastructure Database, Q1 2026 Contractor Capacity Tracking Data.