DOT Requests Applications for FY19 INFRA Grants

December 21, 2018

The Department of Transportation today solicited applications for fiscal year 2019 grants under what is now called the INFRA surface transportation grant program created by the FAST Act (officially the Nationally Significant Freight and Highway Projects program, but no one can pronounce NSFHP). Applications are due March 4, 2019 for what USDOT anticipates will be between $855-902.5 million in funding.

This program has the largest grants of any ongoing USDOT competitive grant program – the statutory minimum grant size for non-rural projects is $25 million, and the biggest grant so far was $184 million for a single project.

Legal authority for the program is codified in 23 U.S.C. §117.

Program History. Created by the FAST Act in December 2015, the first round of projects (FY 2016) were called FASTLANE by USDOT. Applications were solicited in March 2016 and $759.2 million in grants were awarded in July 2016. Another $79 million in FY17 grants were announced in August 2017. The Trump Administration renamed the program INFRA and combined remaining FY17 funding with the FY18 funding, solicited applications on July 5, 2017 and announced a massive $1.535 billion in grants in June 2018.

Amount. The FAST Act provided $950 million in contract authority for FY19 for the program, but like most other FHWA programs, that gets “lopped off” by the application of the annual obligation limitation in the appropriations bill. For FY18, for example, the FAST Act provided $900 million in contract authority for the program, but that was reduced by 8.3 percent by the application of the obligation limitation, so the amount that was actually available to make grants was only $825.3 million. For FY19, the new announcement is estimating a lop-off percentage of between 5 and 10 percent.

Changes in evaluation criteria. The new funding notice appears almost identical in most respects to the FY17-FY18 funding notice. Projects are to be evaluated on the same four merit criteria:

  1. Support for national or regional economic vitality;
  2. Leveraging of federal funding;
  3. Potential for innovation; and
  4. Performance and accountability.

The way in which criterion #2 is described has changed significantly. The FY7-18 notice said that “the Department will consider the extent to which an applicant proposes to use non- Federal funding. For example, an application that proposes a 20 percent Federal share will be more competitive than an otherwise identical application proposing 50 percent Federal share.” Under the new notice, all FY19 applications are to be rated on proposed federal cost share relative to other applications and and placed in quintiles. Presumably, this will work like the mass transit new start program – the top quintile would be High, the next Medium-High, the next Medium, then Medium-Low, and finally Low.

Also, last year’s notice explicitly stated that “For the purposes of this criterion, funds from Federal credit programs, including TIFIA and RRIF, will be considered non-Federal funding.” The new notice drops this requirement.

While last year’s notice acknowledged that some areas have more problems raising their own money than do others, the new notice expands on that theme, noting “In practice, the Department expects that projects that come from rural or less-wealthy applicants will have to meet a lower standard for leverage than projects coming from urban or more wealthy applicants; however, the Department still expects all applicants’ projects to maximize leverage to the extent they are able.”

The “potential for innovation” evaluation criteria has also changed

FY17-FY18 “Potential for Innovation” Sub-Criteria FY19 “Potential for Innovation” Sub-Criteria

(1) Environmental review and permitting

(1) The accelerated deployment of innovative technology and expanded access to broadband

(2) use of experimental project delivery authorities

(2) use of innovative permitting, contracting, and other project delivery practices

(3) safety and technology

(3) innovative financing

For innovative financing, the notice says “the Department will consider if the project financial plan incorporates funding or financing from innovative sources, or if the applicant describes recent or pending efforts to raise significant new revenue for transportation investment across its program.”

The fourth criterion has been completely rewritten, to emphasize that performance and accountability are two separate things. Performance has been redefined in terms of lifecycle costs: “A credible plan to address full lifecycle costs should include, at a minimum, (1) an estimate of the lifecycle costs of the project; (2) an identified source of funding that will be sufficient to pay for operation and maintenance of the project; and (3) a description of controls in place to ensure the identified funding will not be diverted away from operation and Start Printed Page 65801maintenance. Examples of such controls include if a private sector entity is contractually obligated to maintain the project, if a project sponsor has a demonstrated history of fully funding maintenance on its assets, or if the sponsor describes an asset management plan or strategy.”

As far as accountability goes, applicants are given three options: definite start and completion dates (subject to a penalty of up to $10 million if the dates are missed), specific metrics of a project success (an amount of reduced travel time, for example) also subject to a $10 million failure penalty, or a specific recent example of enacting state or local policy change to facilitate interstate commerce.

Addressing both performance and accountability gets you a rating bonus; “Applications that address both lifecycle costs and accountability measures will receive a high rating. Applications that address either lifecycle costs or accountability measures, but not both, will receive a medium rating. Applications that address neither area will receive a low rating.”

Deadline. The page for the FY19 INFRA grants will open by January 7, 2019, and applications must be submitted by 8 p.m. Eastern time on March 4, 2019.

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