Exploring Technology in Civil Construction
Unpacking the Structures, Stakeholders, and Technology Maturity in Civil Construction
This article was written by Aaron Toppston who is the Managing Partner of GS Futures' early stage venture investment fund focused on technology for the built environment. The fund is supported by GS E&C, one of the largest contractors in the world and member of GS Group, a large Korean conglomerate. Previously, Aaron worked at Navitas, a proptech venture fund, and The Walsh Group, an ENR Top 20 contractor. Aaron attended Kellogg (MBA) and Miami University (BS) and lives in Chicago with his wife and two daughters.
Note from Editor: GS Futures authored a description of commercial construction in 2024. This follow-up explores civil construction, which has some notable differences. The original article can be found here.
At GS Futures, an early stage venture fund for built environment technology, we are fortunate to meet with hundreds of founders each year. Each of them is building innovative solutions, ranging from AI agents to hardtech like IoT devices.
What we’ve noticed, however, is that most founders primarily sell to the commercial construction industry rather than other sectors.
This focus appears to be driven partially by the fact that well-known commercial builders tend to use a more diversified technology stack. But it’s also about familiarity. Founders and early employees without direct construction experience relate more easily to how we build our homes, offices and apartments rather than roads or bridges.
Yet, civil or ‘linear’ construction accounts for a large part of the industry. Roads, bridges, water infrastructure and other public infrastructure we rely on everyday accounts for $308 billion or 25% of U.S. non-residential construction. Despite this, the sector remains relatively untapped by startups.
This article aims to introduce civil construction, outlining its governance structures and exploring how and why technology is adopted in this sector. To provide a consistent comparison with commercial construction, we’ll use highway construction as our primary example in this narrative.
Our goal of publishing this article is to (a) meet founders interested in (or currently are) building technology for civil construction and (b) offer a connection point between civil contractors and technolodgy providers to encourage collaboration.
With that in mind, let’s dive in.
Contents:
Funding and Governance structure
Procurement Structure
Contractor Stakeholders
Design Process
Contracting and Risk Transfer
Low Price Competition & Process-Driven Construction
Technology Comparison
Final Thoughts on Venture-Backed Technology in Civil Construction
Reading Time: 8 min
Funding and Governance structure
In the US, many civil assets are funded by public entities and built by private companies. As shown in the figure above, public funding can come from both Federal and State / Local sources.
As a rule of thumb, capital expenditure projects are usually funded 80% Federal and 20% State / Local (Pareto principle holds true; I did a lot of work on reviewing funding of capital plans in a prior life and this estimation is remarkably accurate).
A significant proportion of this funding flows via formula. The US Department of Transport (DOT) follows specific rules on distribution of funds to State DOTs based on population and other factors.
Additional information on each public and owner advisory stakeholder is shown in the table below.
Procurement Structure
The design of civil assets are, as a rule, less differentiated vs commercial buildings.
This is because civil design tends to be more standardized than a building as civil projects must adhere to uniform engineering standards, safety regulations and specifications set by government-related organizations (e.g. AASHTO guidelines). While civil design may vary due to localized conditions, buildings tend to have more unique architectural and functional considerations.
This dynamic has allowed the Design-Bid-Build (DBB) project delivery method to rise in prominence. Under this method, a project is first designed with specifications and drawings completed at the direction of the owner (i.e. a state DOT and its owner representatives). These design documents are packaged together with contractual information and issued as a tender for bids from competing contractors for construction pricing. Typically, GCs that have available labor, access to necessary equipment and cost-competitive materials (including soil for earthworks) will win a job.
The criteria for pricing a bid can be hyper-local dependent on factors such as labor and material costs. For example, earthwork is expensive to transport and workers don’t usually commute more than an hour. It means that job site location can have a significant impact on cost resulting in regional variations that may not otherwise be obvious to an outside observer.
Contractor Stakeholders
The design consistency reinforced by regulatory codes and industry standards also means that all industry stakeholders have common expectations as to how a civil project must be completed.
For example, general contractors follow standardized methodologies for concrete or asphalt paving when pricing jobs. However, these firms adapt these methods slightly to account for regional or local factors, such as weather expectations, materials availability, etc.
This consistency fosters a community of practice where informal knowledge, widely accepted techniques, and local expertise contribute to industry hyper-localization and trade specialization.
Similar to commercial construction, where repeatable and consistent units of work lead to specialized trades like MEP or drywall, civil construction has its own specialty contractors, such as asphalt paving, concrete paving, earthwork, and others. The table below describes these ‘builder’ stakeholders in a bit more detail:
Design Process
Linear civil assets, such as roads, bridges and highways, are typically designed based on roadway capacity (i.e. number of axles per day).
This expected future utilization is informed by traffic studies, economic forecasts, regional roadway planning and other inputs. The physical asset is then designed based on right of way availability, environmental and geotechnical conditions, drainage requirements and truck utilization (especially for pavement engineering).
For most capital projects, an engineer of record (EOR) is hired and supervised by state or local DOT staff. Firms such as AECOM, HNTB, RS&H, STV, WSP, Garver and many others have teams of professional engineers and other disciplines to complete the various iterations of design.
Additionally smaller firms provide support to the project design where the EOR does not have capability, providing assistance to the project design, community engagement, cost estimating and other project requirements. This dynamic is similar to a general contractor interacting with specialty trades to provide capability instead of self performing all scopes of work.
In general, the timeline to complete a roadway design is far longer than the timeline to complete building design. This is due to the number of stakeholders requiring iterations and approvals from entities such as DOT officials, other government agencies, environmental authorities, community stakeholders and others. This approval process pain point cannot be understated. Linear civil asset projects can be time consuming due to the coordination piece requiring 20+ parties to reach agreement on a final design.
Contracting and Risk Transfer
Finalizing design can be one of the hardest parts of civil construction. In addition, there are a number of other key risks described in the table below that owners and builders must be aware of:
In recent times, conversation has increased on the value of moving away from DBB project delivery and towards Construction Manager/General Contractor (CM/GC) delivery for civil assets. CM/GC construction is common practice for U.S. commercial construction, but less common in civil construction.
However, as of 2025, most civil projects are still procured through DBB. This is partially due to the limited design deviation allowed by an owner between competing contractors bidding for the same project, making DBB a practical and competitive method. Additionally, DBB offers the easiest process for DOTs awarding contracts on low-price.
In addition, most civil contractors are regional firms with modest financial capacity making them less able to take on risks associated with alternative contracting methods such as Design Build. Larger, more complex projects which attract national or international builders have significantly more risk transfer (including design requirements).
Low Price Competition & Process-Driven Construction
One of the most important points of comparison between commercial and civil construction is ‘what wins a bid.
Commercial construction is often won on relationships. Civil construction is won on price.
Even in procurement structures which score technical submissions, 9 times out of 10, the bidder with the lowest price wins the civil infrastructure request for proposal (RFP).
The reason why is that the procurement decision must be clearly communicated to the public or a political body at the time of the award. Explaining anything other than “lowest price wins” can be difficult in these forums.
Once a project is awarded, commercial and civil projects often differ as well.
Commercial projects emphasize speed to results. Civil projects emphasize process.
Civil projects often involve large sums of taxpayer (or regulated entity) dollars which must be managed through documented decisions.
Equally, constructability is important. This refers to how easily, efficiently and cost-effectively a construction project can be built given project constraints. For example, in re-paving a road, there is limited time for construction given the need for road closures. Additionally, construction work may be piecemeal as the road may need to be opened to live traffic after each night shift.
This dynamic means ‘how it will be built’ and the planning stage is increasingly important to a successful financial outcome for a civil builder.
By comparison commercial projects must be well-planned in space-constrained environments. These projects have the constant pressure of ‘time is money’ from a loan, future revenues or other financial dependencies contingent on occupancy readiness.
Technology Comparison
In general, commercial construction has adopted modern software to improve collaboration, communication and project management more rapidly compared to civil construction.
This is for two main reasons:
Commercial construction has more specialty trades on a typical project
This creates a higher need for company to company communication.Civil construction is a low price competition
Contractors do not benefit from including the costs of an out-of-specification technology on a project unless financial returns are well proven.
Note: the adoption of new delivery approaches other than DBB is changing this calculation.
These points aren’t to say civil construction lacks innovation. It’s just seen a different kind of innovation such as equipment (including robotics), materials, means & methods as well as other factors which are easily factored into the bid day cost estimate.
When we consider the standard bearer for software adoption in commercial construction, Procore, this platform has been adopted by GCs and Owners ranging from small tenant improvement to massive hospital projects. Even some fancy custom homes use Procore.
In comparison civil construction has historically utilized procurement-focused tools such as eBuilder. Even then, use has been limited.
Post 2020, software adoption increased as COVID necessitated progress reviews without physical site access. It became a forcing function for the digitization of paperwork.
This online documentation is particularly robust for public civil works because much of the day-to-day work is managed by owner’s representatives. For instance if a project scope changes or the schedule is mismanaged, it typically becomes a disagreement between the builder and the owner’s representatives.
The dynamic has created an increase in administrative burden for managing public works. Contractual requirements mandate everything to be written for traceability (mostly electronically but not always), slowing decision making and straining workforces. It is an area where modern software such as Clearstory and SmartPM (as well as the crafty application of general LLMs) have begun to make an impact.
Final Thoughts on Venture-Backed Technology in Civil Construction
We have seen impressive applications of technology in civil infrastructure. These range from earthwork quantification based on drone images to autonomous excavation equipment.
Going forward, we believe civil construction will continue to see an outsized emphasis on field innovation — how technology can improve production rates. Venture capital has a role to play in supporting these innovations but it also has a role in bridging the gap between commercial and civil construction innovation. Back office operations (i.e. payroll, project accounting, legal, insurance, etc.) are very similar between commercial and civil construction. Solutions can and will support both sectors.
We are optimistic about the potential impact of software adoption in civil construction and look forward to partnering with founders serving civil construction. Please reach out to discuss more any time. Thanks for reading.
This article was written by Aaron Toppston who is the Managing Partner of GS Futures' early stage venture investment fund focused on technology for the built environment. The fund is supported by GS E&C, one of the largest contractors in the world and member of GS Group, a large Korean conglomerate. Previously, Aaron worked at Navitas, a proptech venture fund, and The Walsh Group, an ENR Top 20 contractor. Aaron attended Kellogg (MBA) and Miami University (BS) and lives in Chicago with his wife and two daughters.
It is truly an informative and insightful article.