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July 17, 2024
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DOT tangles with watchdog over $1.5 billion in freight grants

New bridge being built

GAO tells Congress it wants more infrastructure investment transparency from DOT. (Photo: Jim Allen/FreightWaves)

WASHINGTON — A new federal watchdog report criticizes the U.S. Department of Transportation for not properly documenting how it prioritizes funding for major infrastructure projects involving highways, ports and freight rail — but DOT disagrees with the assessment.

The report, published and sent to Congress on Wednesday by the U.S. Government Accountability Office (GAO), concluded that DOT needs to improve its process for conflict-of-interest screening when evaluating awards for its Multimodal Project Discretionary Grant program. GAO also found that DOT is not clearly defining criteria used to recommend “exemplary” national projects — those capable of generating significant economic benefits — to Transportation Secretary Pete Buttigieg.

While DOT concurred with the first finding, its justifications for award decisions ultimately made by Buttigieg are well documented “and, therefore, decisions by [DOT’s] Senior Review Team to advance applications to the Secretary for award are also well documented,” DOT told GAO in comments on the report’s recommendations.

But GAO responded that a final award, and advancing applications for a final award, are actually two different stages of the grant process.

“Improvements in one stage do not necessarily constitute improvements in the other,” GAO asserted.

“Specifically, while we found DOT improved its documentation of the Secretary’s final award decisions, we continued to find that DOT did not consistently document its rationale for its decisions to advance applications to the Secretary, including why an application was exemplary.

“Clearly defining what constitutes ‘exemplary project’ criteria would enhance the consistency and transparency of the program and provide better information to applicants.”

As federal investments for infrastructure projects have grown — particularly through the Bipartisan Infrastructure Law signed by President Joe Biden in 2021 — DOT has been under heightened pressure from Congress and policymakers to untangle permitting red tape for projects while at the same time ensuring the award process is fair and transparent.

In its most recent round of funding of discretionary grants through the Infrastructure for Rebuilding America (INFRA) program in September 2022, DOT awarded $1.5 billion in grants to 26 projects.

In its study, GAO reviewed DOT’s notice of funding opportunity, evaluation plan and documentation of the 2022 INFRA evaluation process, analyzed application and award data, and interviewed DOT officials. The oversight agency also reviewed the documentation of 50 applications, including the 26 applications that received an award.

GAO noted that DOT has improved some of its processes for evaluating and selecting INFRA applications for awards. For example, it put in place and documented an evaluation process as required by federal guidance. DOT also created a new memo “to better explain the Secretary’s award decisions, which provides insight into why the applications chosen for award were selected over similarly situated applications,” GAO stated.

But the watchdog agency also pointed out that it had made previous recommendations that DOT require INFRA program teams to document their decision-making rationale throughout all levels of review — a recommendation DOT has not yet fully implemented.

“Implementing our prior recommendation along with our second recommendation in this report would better position DOT to defend the overall integrity of its award process,” GAO stated.

Click for more FreightWaves articles by John Gallagher.

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