Try the code below.
<div class="container-fluid gray-section">
<div class="container">
<div class="row">
<?php
$projects = get_posts(array('post_type'=>'project','posts_per_page'=>5, 'order'=>'ASC'));
if ($projects) { ?>
<ul class="list-unstyled">
<?php $i = 0; ?>
<?php foreach ($projects as $post) { setup_postdata( $post ) ?>
<?php if($i % 3 == 1) { ?>
<li class="col-md-4 col-sm-6 col-xs-12 col-xxs-12 text-center ">
<?php } else if ($i % 3 == 0 && $i > 0) { ?>
<li class="col-md-6 col-sm-6 col-xs-12 col-xxs-12 text-center ">
<?php } ?>**
<a class="highlights-item" href="https://wordpress.stackexchange.com/questions/178338/<?php echo get_permalink(); ?>">
<div class="highlights-container">
<?php the_post_thumbnail(); ?>
<span class="highlights-title">
<?php the_excerpt(); ?>
</span>
</div>
</a>
</li>
<?php $i++; ?>
<?php } wp_reset_postdata(); ?>
</ul>
<?php }
?>
</div> <!-- end row -->
</div> <!-- end container -->
</div> <!-- end container fluid -->