June 29, 2017

The FASTLANE grant program is now the INFRA grant program.

The Department of Transportation has submitted a notice for printing in the Federal Register requesting applications for grants under a revised surface transportation grant program first authorized by section 1105 of the FAST Act of 2015. The grant program, by law, is called the “nationally significant freight and highway projects program,” but NSFHPP was not a catchy enough acronym for the Obama Administration, so they called it the FASTLANE program and gave out the FY 2016 grants in September 2016.

The following month, DOT surprised some observers by requesting applications for the FASTLANE program for FY 2017. Those applications were due on December 15, 2016.

The Trump Administration has now changed the name of the program to INFRA (INFrastructure for Rebuilding America) and made several substantive changes;

The notice of funding opportunity (NOFO) to appear in the Register does several things:

• Announces that only the “small project set-aside” portion of the FY 2017 program money – $79 million – will be given out under the terms and criteria in the FY 2017 NOFO published last October. That $79 million for small projects will be announced “soon.” Large projects to be funded with the FY 2017 money, and projects both large and small to be funded with the FY 2018 money, will be graded under the revised INFRA criteria.
• Announces revised application and project criteria for the remainder of the FY 2017 money and all of the FY 2018 money, which DOT estimates will be around $1.5 billion in total grant money. The FAST Act makes $850 million in contract authority available for the program in FY 2017 and $900 million in FY 2018, which totals $1.750 billion, but once you subtract the $79 million in FY 2017 small project money and then reduce the gross totals for both years by about 8 to 9 percent for the annual obligation limitation, you should have about $1.5 billion in usable money remaining). Applications for FY 2017-2018 grants are due by the end of October (120 days from the date of the NOFO’s print publication in the Register).
• Details three “innovation areas” as merit subcriteria, including use of innovative technology, possibly including enhancing the environment for autonomous vehicles, to increase safety.

The new evaluation criteria for the INFRA program are compared to the old FASTLANE criteria in this table from a DOT fact sheet:

As could be expected given the Trump Administration’s focus on leveraging non-federal dollars in its infrastructure plan, the degree of leverage has been elevated into a major “merit” criteria when judging the applications for the new INFRA grant program. And, as could be expected from the electoral coalition that elected Donald Trump, the new INFRA program will have a special focus on rural America. This is from a FAQ document on the new program prepared by DOT:

“The INFRA Grant program calls on the Department to consider geographic diversity among recipients. This means accounting for the impact of transportation funding for the economic revitalization of rural and disadvantaged communities. The Department intends to provide careful consideration to projects that address transportation needs in rural areas of varying sizes. For rural communities, the Department will consider an applicant’s resource constraints when assessing the leverage criterion.”

(Ed. Note: Here is where we point out that the statute authorizing the program, now codified in 23 U.S.C. §117, has this to say about rural America in §117(i)(1): “The Secretary shall reserve not less than 25 percent of the amounts made available for grants under this section, including the amounts made available under [the small projects set-aside], each fiscal year to make grants for projects located in rural areas.” 25 percent is a floor, not a ceiling. ETW is considering starting a betting pool on just what the rural percentage of the final INFRA grant totals will be…)

Here are details from the revised merit criteria on which INFRA projects will be judged (the criteria are not weighted, at least not in the NOFO):

Criterion #1 – Support for National or Regional Economic Vitality. “To the extent possible, the Department will rely on quantitative, data-supported analysis to assess how well a project addresses this criterion, including an assessment of the applicant-supplied benefit-cost analysis…” Types of projects specifically mentioned in the NOFO that might meet this criterion: projects that significantly reduce traffic fatalities, improve interactions between roadway users (i.e. grade crossings), eliminate freight bottlenecks, bring infrastructure that supports commerce and economic growth to a state of good repair, “Sustain or advance national or regional economic development in areas of need,” and reducing barriers separating workers from employment centers. “The Department anticipates that applications for networks of projects are likely to align well with this evaluation criterion because networks of projects are often able to address problems on a broader scale.”

Criterion #2 – Leveraging of Federal Funding. “…an application that proposes a 20 percent Federal share will be more competitive than an otherwise identical application proposing 50 percent Federal share. For the purposes of this criterion, funds from Federal credit programs, including TIFIA and RRIF, will be considered non-Federal funding.” However, projects will be graded on a curve: “In practice, the Department expects that projects that come from rural or less-wealthy applicants till have to meet a lower standard for leverage than projects coming from urban or more wealthy applicants…” Also: “…the Department will consider how well the applicant has prepared for future operations and maintenance costs associated with their project’s life-cycle. Applicants should demonstrate a credible plan to maintain their asset

without having to rely on future federal funding.” (Bear in mind that the average FASTLANE share of FY 2016 projects was already under 50 percent – see here.) Also, “projects that incorporate private sector contributions, including through a public-private partnership structure, are seen to be more competitive than those that rely solely on public non-Federal funding.”

Criterion #3: Potential for Innovation. “The Department seeks to use INFRA program to encourage innovation in three areas:”

• Innovation Area #1: Environmental Review and Permitting. The NOFO indicates that DOT will begin a new process to embed liaisons from other agencies (Corps of Engineers, EPA, etc) at DOT headquarters to facilitate the reviews for certain “larger, more complex” projects that want to participate.
• Innovation Area #2: Use of Experimental Project Delivery Authorities. This refers to projects whose sponsors want to participate in the Federal Highway Administration’s SEP-14 (alternative contracting) and SEP-15 (PPP trial) programs.
• Innovation Area #3: Safety and Technology. “USDOT seeks opportunities under the INFRA program to experiment with innovative approaches to transportation safety, particularly projects which incorporate innovative design solutions, enhance the environment for automated vehicles, or use technology to improve the detection, mitigation and documentation of safety risks.” Examples listed in the NOFO include dynamic signaling and pricing systems, connected vehicle technology (both V2V and V2I), intersection alerts and signal prioritization, and cybersecurity.

Criterion #4: Performance and Accountability. “The Department intends to award INFRA funding to projects that will be delivered on agreed-upon schedules, that will generate clear, quantifiable results, and that will advance the Department’s transportation policy goals…Instead of rewarding unrealistic promises, the Department intends to reward thoughtful planning, efficient delivery, and effective policy.” And “the Department encourages applicants to voluntarily identify measures through which the Department may hold them accountable, describe, in their application, how the Department could structure any conditions on funding, and detail how the structure advances INFRA program goals/”

The two additional considerations listed in the NOFO are geographic diversity and project readiness. On geography, the NOFO says “the Department also recognizes that it can better balance the needs of rural and urban communities if it does not take a binary view of urban and rural…when balancing the needs of rural and urban communities, the Department will consider the actual population of the community that each project serves.” On project readiness, the standards are basically the same as the last Obama Administration NOFO, requiring risk mitigation strategies and that projects be ready to break ground within 18 months of the obligation of funds.

For more information on the FASTLANE program, see the white paper released by the Eno Center earlier this year, Life in the FASTLANE: Recommendations for Improving Federal Freight Grants.