Competitive Grant Programs Could Benefit from Increased Performance Focus and Better Documentation of Key Decisions
GAO-11-234: Published: Mar 30, 2011. Publicly Released: Apr 11, 2011.
In February 2009, the American Recovery and Reinvestment Act (Recovery Act) appropriated $1.5 billion for discretionary grants for capital investments in surface transportation projects of national and regional significance, including highways, transit, rail, ports, and others. The act required the Department of Transportation (DOT) to develop criteria to award these grants--known as the Transportation Investment Generating Economic Recovery (TIGER) grants--and to meet several statutory requirements. GAO was asked to review (1) the criteria and process used to evaluate applications and award grants, (2) the outcome of the process, and (3) the extent to which DOT communicated information to applicants and the public. GAO reviewed documentation of the award process and selection documentation and interviewed key DOT officials.
DOT developed criteria to evaluate TIGER applications, such as improving the state of repair of critical infrastructure, reducing fatalities and injuries, and increasing economic competitiveness by improving the efficient movement of workers or goods. GAO has called for a more performance-oriented approach to funding surface transportation and has recommended that a merit-based competitive approach--like TIGER--be used to direct a portion of federal funds to transportation projects of national and regional significance. This is a departure from the formula-based approach regularly used for surface transportation in which funds are largely returned to their state of origin and states have considerable flexibility in selecting projects for these funds--an approach that can potentially result in projects of national or regional significance that cross state lines and involve more than one transportation mode not competing well at the state level for these funds. DOT provides over $40 billion annually in formula funds to states and urbanized areas for highway and transit projects; by contrast, TIGER provided $1.5 billion on a one-time basis. However, TIGER was part of the Recovery Act, which was intended to provide economic stimulus across the nation, and the act required TIGER to balance using a competitive approach with achieving an equitable geographic distribution of funds. DOT has proposed a discretionary grant program like TIGER in its fiscal year 2012 budget, which means that DOT and Congress have the opportunity to consider how to balance the goals of merit-based selection of projects with geographic distribution of funds. Of the 51 applications that received awards, 26 were from the highly recommended applications advanced by the Evaluation Teams and the other 25, which received one-third of TIGER funds, were from the recommended applications advanced by the Control and Calibration Team. While DOT thoroughly documented the Evaluation Teams' assessments and the Review Team's memo described the strengths of projects recommended for award, it did not document the Review Team's final decisions and its rationale for selecting recommended projects for half the awards over highly recommended ones. Internal documentation of the Review Team's deliberations was limited to draft minutes from the team's initial assessments of projects. These draft minutes, which were not complete and never finalized or approved, reflect questions Review Team members raised about the strengths and weaknesses of various applications. For example, the Review Team questioned the extent to which financial commitments of project partners had been secured, whether projects were "ready-to-go," or whether a project's economic benefits were overstated. However, these questions did not necessarily reflect the reason a project was ultimately recommended or rejected for award. In addition, DOT officials told us that some highly recommended projects were not selected to achieve an equitable geographic distribution of award funds. In particular, DOT officials stated that some highly recommended projects from the Central and Western regions were rejected to prevent these regions from being overrepresented and that they advanced recommended projects from the South because projects initially selected for award underrepresented this region. DOT's TIGER program externally communicated outcome information similar to other Recovery Act competitive grant programs GAO examined, including the Review Team's memo to the Secretary and the amount of funding awarded. As with most other programs, DOT did not publish the reasons for the Review Team's decisions or why some applications were selected while others were rejected. GAO found no requirements for federal programs to externally communicate the reasons for their selection decisions and federal agencies rarely publicly disclose the reasons for their selection decisions.
Matter for Congressional Consideration
Status: Closed - Not Implemented
Comments: Since 2009 DOT has (as of May 2017) awarded 8 rounds of TIGER grants, providing around $5.1 billion to over 400 projects, and in 2015, authorized several new competitive discretionary grant programs, including the multi-billion dollar FASTLANE program for highway and freight projects of national significance. In taking these actions, Congress maintained provisions to achieve an equitable geographic distribution of funds and no thresholds or other mechanisms to limit the influence of geographic considerations were established. For this reason, GAO is closing this recommendation as not implemented.
Matter: If Congress enacts competitive discretionary grant programs such as the TIGER program in the future, it may wish to consider balancing the goals of funding projects through merit-based selection with achieving an equitable geographic distribution of funds by establishing thresholds and other mechanisms to limit, as appropriate, the influence of geographic considerations.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: In February 2010, the Department of Transportation (DOT) awarded around $1.5 billion for discretionary grants for surface transportation projects of national and regional significance (including highway, transit, rail, port, and other projects) under the Transportation Investment Generating Economic Recovery (TIGER) program. In March 2011, we reported that DOT developed comprehensive selection criteria and a competitive process for evaluating applications, but did not document key decisions, including its rationale for selecting projects with lower technical ratings for half the awards over more highly-rated ones. We noted that the absence of such documentation can give rise to challenges to the integrity of DOT's selection decisions and subject it to criticism that it selected projects for reasons other than merit. We recommended that DOT document key decisions for all major steps in the TIGER review process. In May 2014, DOT revised its program guidance for the 2014 "TIGER VI" funding round to improve the application evaluation and project selection process in several areas, including guidance to "fully document" the reasons for advancing projects with lower technical ratings. We reviewed DOT's TIGER VI award selections and found that key decisions such as advancing projects with lower technical ratings had been documented, consistent with good internal control practices and DOT's guidance. As a result, DOT has established additional accountability measures for the TIGER discretionary grant program that will create a foundation on which to ensure public and congressional trust in the program and transparency for its funding decisions.
Recommendation: To ensure that future rounds of the TIGER program or other similarly structured competitive grant programs are accountable to Congress, transparent to the public, and provide meaningful feedback to applicants, the Secretary of Transportation should document key decisions for all major steps in the review of applications, particularly the reasons for acceptance or rejection of applications and decisions in which lower-rated applications are selected for award over higher-rated applications.
Agency Affected: Department of Transportation
Status: Closed - Not Implemented
Comments: Since 2009 DOT has (as of May 2017) awarded 8 rounds of TIGER grants, providing around $5.1 billion to over 400 projects. DOT did not, during this time, consult with Congress to develop and implement a strategy to disclose information regarding award decisions. As a result, we are closing this recommendation as not implemented.
Recommendation: To ensure that future rounds of the TIGER program or other similarly structured competitive grant programs are accountable to Congress, transparent to the public, and provide meaningful feedback to applicants, the Secretary of Transportation should, in consultation with the Congress, develop and implement a strategy to disclose information regarding award decisions.
Agency Affected: Department of Transportation