Discretionary Transportation Grants: DOT Should Clarify Application Requirements and Oversight Activities
Fast Facts
The Department of Transportation has awarded more than $4 billion over 5 years through its Infrastructure for Rebuilding America program. The funding went to 94 nationally significant freight and highway projects. We previously found ways to improve the transparency and consistency of the program's application and award process.
DOT now provides more information on the program's evaluation criteria to help clarify the process. But applicants still don't have enough information to help them make good decisions on whether and how to apply. Our recommendations address this issue and more.
Surface transportation funding is on our High Risk List.
Highlights
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.
Recommendations
GAO is recommending that DOT: (1) systematically analyze applicants' information to determine how to clarify large project requirements and (2) provide direction on how oversight activities will be conducted and designed to detect and correct evaluation errors and ensure accurate documentation. DOT concurred with GAO's recommendations and provided technical comments, which GAO incorporated as appropriate.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | The Secretary of Transportation should ensure that INFRA officials systematically analyze available quantitative data and qualitative information from applicants and use the results of that analysis to determine how to clarify the large project requirements in the NOFO. (Recommendation 1) |
The Infrastructure for Rebuilding America (INFRA) program aims to provide financial assistance for highway and freight projects of national or regional significance. Since 2016 the INFRA program has awarded more than $4 billion to 94 transportation projects across the country for eligible project types. DOT categorizes each project as either large or small; for a large project to be eligible for INFRA funding, the project must meet seven statutory requirements. In 2022, GAO reported that DOT took some steps to clarify in its Notice of Funding Opportunity (NOFO) how it would assess whether applicants met the seven large project requirements. However, DOT's efforts to clarify how applicants can demonstrate that their applications meet the large project statutory requirements did not result in much improvement or reduce related follow-up. GAO reported that the percentage of applicants initially found by DOT to meet all large project requirements remained below 15 percent across funding rounds since fiscal year 2016. In addition, DOT had not systematically analyzed information from applicants submitted in prior rounds to determine how to further clarify the NOFO. Federal standards for internal control state that management should use quality information to achieve the entity's objectives and make informed decisions. GAO reported that systematically analyzing available large project applicant information could complement DOT's existing, informal efforts. Similarly, a systematic analysis could identify where DOT's follow-up efforts have assisted applicants and help DOT target clarifications to the NOFO in those areas. As a result, GAO recommended that The Secretary of Transportation should ensure that INFRA officials systematically analyze available quantitative data and qualitative information from applicants and use the results of that analysis to determine how to clarify the large project requirements in the NOFO. In April 2024, GAO confirmed that DOT had systematically analyzed data and information from applicants. Specifically, in April 2024, DOT's Office of the Secretary provided GAO with its an analysis of applicant efforts to meet large project requirements of the statutory requirements for the 2020, 2021, and 2022 INFRA funding rounds. GAO also confirmed that this analysis was used to determine how to clarify the large project requirements in the NOFO. For example, in its analysis DOT noted that the cost-effectiveness is consistently the most challenging requirement to meet for applicants. Accordingly, DOT clarified in the NOFO that for the cost-effective requirement, a project is cost-effective if the benefit-cost ratio is greater than one. By systematically analyzing the information provided by applicants DOT obtained insight into what information DOT could clarify in the NOFO. Such clarification has provided applicants with better information on how to meet application requirements and improving the fairness of the process, which meets the intent of GAO's recommendation.
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| Department of Transportation | The Secretary of Transportation should ensure that INFRA officials provide direction on how oversight activities are to be conducted during the application review process and that such activities are designed to routinely detect and correct evaluation errors and verify that evaluation documentation is complete. (Recommendation 2) |
The Infrastructure for Rebuilding America (INFRA) program aims to provide financial assistance for highway and freight projects of national or regional significance. Since 2016 the INFRA program has awarded more than $4 billion to 94 transportation projects across the country for eligible project types. DOT's process for evaluating INFRA grant applications has multiple phases. Across those phases, DOT conducts quality control and oversight that is intended to ensure consistent reviews of applications and documentation. In 2022, GAO reported that 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. INFRA officials told GAO that they did not fully define how oversight activities would be conducted because they did not think it was necessary. Without such an approach, DOT may risk awarding some projects that have inaccurate evaluations. As a result, GAO recommended that the Secretary of Transportation should ensure that INFRA officials provide direction on how oversight activities are to be conducted during the application review process and that such activities are designed to routinely detect and correct evaluation errors and verify that evaluation documentation is complete. In August 2024, GAO confirmed that DOT had ensured that INFRA officials provide direction on how oversight activities are to be conducted during the application review process and that such activities are designed to routinely detect and correct evaluation errors and verify that evaluation documentation is complete. Specifically, DOT developed instructions for conducting oversight activities, including quality control and quality assurance reviews, for the INFRA application review process. These instructions provide direction on how reviewers should identify and correct errors and inconsistencies, such as ratings that do not align with the documented narratives. The instructions also direct reviewers to verify that the evaluation narratives are complete. The instructions specify that these activities should occur following the outcome and statutory requirements reviews. GAO reviewed DOT's documentation and confirmed the application of these procedures for the fiscal year 2023 and 2024 INFRA awards. By clarifying how oversight should be conducted, DOT is better positioned to help ensure that INFRA grant awards are best meeting the nation's transportation needs.
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