December 5, 2022

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Discretionary Transportation Grants: DOT Should Clarify Application Requirements and Oversight Activities

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<div>What GAO Found The Department of Transportation (DOT) has taken some steps to clarify how it would evaluate applications for Infrastructure for Rebuilding America (INFRA) grants since the initial round of funding in 2016. In fiscal year 2019, DOT began providing applicants with information in the funding announcement on the specific scores DOT would assign when evaluating applications against merit criteria. In fiscal year 2020, DOT provided information to applicants to clarify how it would assess statutory requirements for large projects (those meeting a specified size threshold). For example, DOT clarified that it would determine a project to be cost-effective if its benefit-cost ratio was greater than or equal to one. DOT officials stated that these clarifications were intended to reduce the number of resource-intensive follow-up actions to obtain additional information from applicants. However, GAO found that DOT's efforts did not reduce the number of follow-up activities (see figure). DOT has not systematically analyzed all available application and follow-up information to determine how to better clarify application requirements for large projects. Instead DOT has relied on staff discussions and other observations to guide funding announcement clarifications. Without such an analysis, DOT may be unable to achieve its intended goal of reducing follow-up activities. Department of Transportation's Outreach to Infrastructure for Rebuilding America (INFRA) Large Project Applications Considered for Award, Fiscal Years 2016–2020 Note: DOT awarded fiscal year 2017 funds to large projects under a joint Notice of Funding Opportunity with the fiscal year 2018 funds, so these projects are included in 2018. DOT's quality control and oversight activities for the INFRA program did not consistently detect or correct inaccurate or incomplete application evaluations. According to DOT's INFRA evaluation plan, an internal quality control team is responsible for reviewing applications to ensure consistency and high-quality documentation reviews, and for ensuring that grant application evaluations are completed in accordance with INFRA guidelines. However, GAO identified errors in DOT's evaluation documentation. For example, seven of the 40 projects (18 percent) that DOT awarded in 2019 and 2020 had inaccurate or incomplete evaluations. DOT did not detect or correct these errors because it does not provide direction on how it will conduct oversight activities, including ensuring accurate and complete evaluation documentation. Without such an approach, DOT may continue to risk awarding some projects that have inaccurate evaluations. Why GAO Did This Study In 2007, GAO placed funding for surface transportation programs on the High Risk list. The INFRA program—a DOT discretionary grant program—was established by statute to fund nationally significant freight and highway projects. Since 2016, DOT has awarded more than $4 billion to 94 transportation projects across the country. The Infrastructure Investment and Jobs Act included a provision for GAO to review DOT's process for evaluating and selecting INFRA projects for award. This report examines, among other things, the extent to which DOT has: (1) taken steps to clarify to applicants how it will evaluate INFRA grant applications and (2) provided oversight for the INFRA grant application review process and ensured that application evaluations were accurate and complete. GAO reviewed documentation of the INFRA evaluation process, analyzed fiscal year 2019 and 2020 application and award data, and interviewed DOT officials and program applicants.</div>

What GAO Found

The Department of Transportation (DOT) has taken some steps to clarify how it would evaluate applications for Infrastructure for Rebuilding America (INFRA) grants since the initial round of funding in 2016. In fiscal year 2019, DOT began providing applicants with information in the funding announcement on the specific scores DOT would assign when evaluating applications against merit criteria. In fiscal year 2020, DOT provided information to applicants to clarify how it would assess statutory requirements for large projects (those meeting a specified size threshold). For example, DOT clarified that it would determine a project to be cost-effective if its benefit-cost ratio was greater than or equal to one.

DOT officials stated that these clarifications were intended to reduce the number of resource-intensive follow-up actions to obtain additional information from applicants. However, GAO found that DOT’s efforts did not reduce the number of follow-up activities (see figure). DOT has not systematically analyzed all available application and follow-up information to determine how to better clarify application requirements for large projects. Instead DOT has relied on staff discussions and other observations to guide funding announcement clarifications. Without such an analysis, DOT may be unable to achieve its intended goal of reducing follow-up activities.

Department of Transportation’s Outreach to Infrastructure for Rebuilding America (INFRA) Large Project Applications Considered for Award, Fiscal Years 2016–2020

Department of Transportation's Outreach to Infrastructure for Rebuilding America (INFRA) Large Project Applications Considered for Award, Fiscal Years 2016–2020

Note: DOT awarded fiscal year 2017 funds to large projects under a joint Notice of Funding Opportunity with the fiscal year 2018 funds, so these projects are included in 2018.

DOT’s quality control and oversight activities for the INFRA program did not consistently detect or correct inaccurate or incomplete application evaluations. According to DOT’s INFRA evaluation plan, an internal quality control team is responsible for reviewing applications to ensure consistency and high-quality documentation reviews, and for ensuring that grant application evaluations are completed in accordance with INFRA guidelines. However, GAO identified errors in DOT’s evaluation documentation. For example, seven of the 40 projects (18 percent) that DOT awarded in 2019 and 2020 had inaccurate or incomplete evaluations. DOT did not detect or correct these errors because it does not provide direction on how it will conduct oversight activities, including ensuring accurate and complete evaluation documentation. Without such an approach, DOT may continue to risk awarding some projects that have inaccurate evaluations.

Why GAO Did This Study

In 2007, GAO placed funding for surface transportation programs on the High Risk list. The INFRA program—a DOT discretionary grant program—was established by statute to fund nationally significant freight and highway projects. Since 2016, DOT has awarded more than $4 billion to 94 transportation projects across the country.

The Infrastructure Investment and Jobs Act included a provision for GAO to review DOT’s process for evaluating and selecting INFRA projects for award. This report examines, among other things, the extent to which DOT has: (1) taken steps to clarify to applicants how it will evaluate INFRA grant applications and (2) provided oversight for the INFRA grant application review process and ensured that application evaluations were accurate and complete. GAO reviewed documentation of the INFRA evaluation process, analyzed fiscal year 2019 and 2020 application and award data, and interviewed DOT officials and program applicants.

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