Discretionary Transportation Grants: DOT Should Better Align Its Application Evaluation Process with Federal Guidance
Fast Facts
In FY 2022, the Department of Transportation's RAISE program awarded about $2.25 billion to transportation projects. As part of the RAISE application, DOT required capital grant applicants to analyze the costs and benefits of their projects.
According to our survey, 69% of applicants found this analysis challenging. DOT provided some cost-benefit analysis resources in 2022, but it hasn't reviewed whether more resources are needed.
We also found that DOT's application evaluation process didn't align with federal guidance in several areas—for example, it didn't consistently document how decisions were made.
We recommended addressing these issues.
Highlights
What GAO Found
In fiscal year 2022, the U.S. Department of Transportation (DOT) awarded $2.25 billion to 166 road, rail, and other surface transportation projects through a grant program known as Rebuilding American Infrastructure with Sustainability and Equity (RAISE). DOT established a multiphase process which included evaluating applications against criteria in a merit review phase and evaluating applicant-submitted benefit-cost analyses. These analyses require applicants to show if a project expects greater benefits than costs.
Fiscal Year 2022 RAISE Application Evaluation and Selection Process
In GAO's survey of RAISE applicants, 69 percent of capital grant applicants reported that they found developing the benefit-cost analysis very or moderately challenging. For example, some applicants told GAO they did not have the staff capacity or expertise to complete this analysis. DOT has provided guidance and webinars but has not fully reviewed if additional resources for applicants could more fully address their challenges. Addressing these challenges could help applicants more fully assess their projects' benefits and costs and give DOT the information it needs to make cost-effective award decisions.
DOT's implementation of its process for evaluating RAISE applications did not fully align with federal guidance for discretionary grant programs. Specifically, GAO found that DOT did not:
- sufficiently assess whether evaluation teams consistently applied the merit review criteria,
- consistently document decisions for advancing applications expected to have greater costs than benefits,
- publicly disclose two selection factors used to make award decisions, or
- consistently document a specific explanation for not selecting certain Highly Rated projects for funding.
Strengthening the RAISE evaluation process in these areas would position DOT to more fully demonstrate that it is implementing the program with enhanced transparency and making fair grant award decisions.
Why GAO Did This Study
Since 2009, DOT has awarded over $14 billion through a discretionary grant program referred to by DOT as RAISE. The Infrastructure Investment and Jobs Act authorized RAISE for fiscal years 2022 through 2026 and detailed requirements for DOT to use in administering the program.
The act also includes a provision for GAO to examine DOT's administration of the RAISE program. This report: (1) describes DOT's application evaluation process, (2) examines challenges applicants reported experiencing and how DOT addressed these challenges, and (3) assesses the extent to which DOT's implementation of its application evaluation process aligned with federal guidance.
GAO reviewed relevant laws and DOT documents, such as RAISE's evaluation plan and meeting minutes, and interviewed DOT officials. GAO also conducted a generalizable survey of eligible fiscal year 2022 RAISE applicants. The response rate was 67 percent.
Recommendations
GAO is making five recommendations to DOT regarding the RAISE program: (1) address applicant challenges with developing a benefit-cost analysis, (2) implement additional oversight of evaluation teams, (3) consistently document specific evaluation decisions, (4) identify all selection factors, and (5) document specific rationales for selection decisions. DOT concurred with three recommendations, partially concurred with one, and did not concur with one. GAO continues to believe these recommendations should be fully implemented.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | The Secretary of Transportation should review what additional resources and flexibilities would best address challenges applicants face developing a benefit-cost analysis and take steps to implement them. (Recommendation 1) |
As of March 2024, DOT has partially addressed this recommendation by publishing a benefit-cost analysis spreadsheet on the DOT website to assist RAISE applicants in completing their analyses. According to DOT, this new spreadsheet includes prepopulated formulas for calculations that are common to all benefit-cost analyses and is available to applicants for the fiscal year 2024 RAISE grants. In addition, DOT officials said that DOT hosted multiple webinars in December 2023 and January 2024 to explain how to conduct a benefit-cost analysis and use the new template and held "office hours" to answer applicant questions. However, DOT has not yet provided information to GAO on how it determined that this template would best address applicant challenges with developing a benefit-cost analysis, and whether additional resources and flexibilities are necessary, as GAO recommended. GAO has requested this information from DOT and will continue to follow DOT's progress in implementing this recommendation.
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| Department of Transportation | The Secretary of Transportation should ensure RAISE officials implement oversight steps to assess the consistency of ratings across evaluation teams in the merit review phase and document these steps in the RAISE evaluation plan. (Recommendation 2) |
As of June 2024, DOT stated that it concurred with this recommendation and was taking steps to address it. According to officials, the FY 2024 RAISE grant application evaluation guidelines outline the process that DOT will use to assess whether merit evaluation teams consistently apply individual and overall merit criteria ratings to provide assurance that differences in ratings reflect differences in the quality of applications rather than inconsistencies in how ratings were applied across evaluation teams. DOT agreed to provide additional information on these actions by the end of September 2024. GAO will continue to monitor DOT's progress in addressing this recommendation.
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| Department of Transportation | The Secretary of Transportation should ensure RAISE officials develop an enhanced process to verify that DOT documents all decisions to include projects with a negative benefit-cost analysis rating on the Highly Rated List prior to sending the Highly Rated List to the Secretary of Transportation. (Recommendation 3) |
As of June 2024, DOT stated that it concurred with this recommendation. The officials stated that they are developing an enhanced process to verify that DOT documents all decisions to include projects with a negative benefit-cost analysis rating on the Highly Rated List prior to sending the Highly Rated List to the Secretary of Transportation. DOT agreed to provide additional information on this process by the end of September 2024. GAO will continue to monitor DOT's efforts to address this recommendation.
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| Department of Transportation | The Secretary of Transportation should ensure that the RAISE NOFO identifies all selection factors, such as those used when creating a selection portfolio or other process to facilitate award decisions. (Recommendation 4) |
As of June 2024, DOT has partially addressed this recommendation. In our report, we found that DOT did not include all of the factors it used to create the selection portfolio in the FY 2022 RAISE NOFO. Specifically, DOT did not tell applicants that it sought to make at least one award to each state or territory that applied for a RAISE award. OMB Guidance requires federal agencies to list any program policy or other factors, other than the merit criteria, that the agency may use in selecting applications (such as geographical dispersion) in the NOFO. In response to our recommendation, the Department included a statement in the FY 2024 RAISE NOFO that "the Secretary may, depending on the pool of qualified applications, seek to award at least one project per state or territory." Upon the completion of DOT's application evaluation and award selection process for the FY 2024 funding round, we will review the award decisions to assess whether the final selection factors used to make the FY 2024 decisions were included in the NOFO.
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| Department of Transportation | The Secretary of Transportation should ensure that RAISE officials document a specific rationale explaining why all non-awarded Highly Rated projects were not selected for an award. (Recommendation 5) |
As of June 2024, DOT has not addressed this recommendation. In its written response to GAO's report, DOT stated that it did not concur with this recommendation. Specifically, DOT stated that its selection portfolio process adequately documents why it did not select projects and that no further documentation is necessary. We disagree for the reasons outlined in our report. Specifically, DOT's selection portfolio did not provide specific rationales for not awarding projects, as required by DOT guidance. In addition, while the selection portfolio stated that a project was not included in the portfolio, it did not explicitly provide the rationale for why DOT did not award these projects. We continue to believe that documenting specific rationales for not selecting projects would provide a clearer picture of how DOT makes award decisions, and that DOT should fully implement our recommendation. GAO will continue to monitor DOT's efforts regarding this recommendation.
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