Increasing industrial productivity and innovation is essential to meet needs to reduce lead times and costs. However, diffusion of systemic innovations in project-based industries (PBIs), such as the infrastructure sector, has proven difficult. The Swedish Transport Administration (STA) has unique opportunity to influence the degree of innovation in the sector, due to its strong position as the largest public client of infrastructure in Sweden. Therefore, the aims of an ongoing study reported here are to identify and evaluate challenges and requirements affecting the diffusion of innovation related to this key client. This is being done by examining relevant aspects of construction infrastructure projects executed via the pre-defined design procedure currently applied by STA. The results reveal that the procedure hampers diffusion since certain activities must be performed early, is applied indiscriminately to all types of projects, and hinders inter-organizational collaboration.