	Background

The Recovery Act provided the Secretary of Transportation $1.5 billion for  the purpose of awarding discretionary grants on a competitive basis. The Recovery Act also directed the Secretary to  meet several statutory requirements in making the final award selections  including:  1.  ensuring an equitable geographic distribution of funds;  2.  achieving an appropriate balance in addressing the needs of urban and  3.  giving priority to projects for which federal funding would be required  to complete an overall financing package that includes nonfederal  sources; and  4.  giving priority to projects that are expected to be completed within 3  years of enactment of the act and obligating all TIGER funds by  September 30, 2011. DOT Developed Comprehensive Merit- Based Selection Criteria and a Competitive Selection Process to Evaluate TIGER Applications and Meet Statutory Requirements

		DOT Established Criteria for Awarding Competitive Grants That Support Merit- Based Investments in Transportation Infrastructure

To meet the Recovery Act requirement that DOT develop criteria to  evaluate the merits of TIGER program applications and select grants, DOT  published criteria in a May 2009 interim Notice of Funding Availability  after the passage of the Recovery Act, and in June 2009, when DOT  published its final Notice of Funding Availability, we evaluated the criteria. For example, DOT’s criteria clearly  indicated that projects should produce long-term benefits such as  improving the state of repair of existing transportation infrastructure,  reducing fatalities and injuries through safety investments, and increasing  economic competitiveness by improving the efficient movement of  workers or goods. Specifically, we  have recommended that a criteria-based selection approach—like that  developed in TIGER—be used to direct a portion of federal funds in  programs designed to select transportation projects with national and  regional significance. Such an approach—one rarely used to fund surface transportation— represents a significant departure from the formula-based approach  regularly used to fund the nation’s surface transportation program. Formula programs distribute over $40 billion annually to states and  urbanized areas for highway and transit projects (compared with the $1.5  billion one-time appropriation provided for TIGER). Moreover, once the funds are  apportioned, states have considerable flexibility to reallocate them among  highway and transit programs. This formula-based approach  can potentially result in meritorious projects of national or regional  significance—in particular those involving multiple modes of  transportation or those that cross state boundaries—not competing well at  the state level for available funds. Half the Awardees Were Chosen from Applications Advanced by the Evaluation Teams While the Other Half Were Advanced by the Control and Calibration Team

The Review Team selected 26 awardees from the pool of 115 highly  recommended applications advanced by the Evaluation Teams’  competitive review process. However, while DOT thoroughly documented the Evaluation Teams’  assessments and the reasons for its decisions and the Review Team’s  memo to the Secretary described the strengths and benefits of projects  recommended for award, DOT did not document the Review Team’s  reasons for its decisions, including the reasons for selecting recommended  projects over highly recommended ones. We analyzed these draft minutes and found that they reflected questions  Review Team members raised about the strengths and weaknesses of  various applications—questions consistent with TIGER criteria and  requirements. For instance, the Review Team raised questions about the  following projects, none of which received an award:    The extent to which financial commitments of project partners had been  secured. Whether projects were sufficiently ready-to-go. Whether a project’s economic benefits were overstated. However, DOT officials told  us that these questions did not necessarily reflect the reason a project was  ultimately recommended or rejected for award. Specifically, officials stated that that 15 highly  recommended projects in the West and the Central regions were rejected  to limit the awards to these regions. While the DOT’s draft minutes and our discussions with OST officials  provide some insight into the deliberations of the Review Team, because  there was no internal documentation from the Review Team meetings in  which final decisions to recommend or reject projects for award were  made, DOT cannot definitively demonstrate the basis for its award  selections, particularly the reasons why recommended projects were  selected for half the awards over highly recommended ones. DOT made less information publicly available on the outcome of its  selection process—for instance, it did not publish the reasons for the  Review Team’s decisions or why some applications were selected while  others were rejected. To assess the extent to which DOT publicly communicated outcome  information, we compared the information TIGER externally  communicated to the information communicated by 22 other similar  Recovery Act competitive grant programs (for a list of these programs, see  app. Congress expressed an interest in continuing  this new approach when it enacted TIGER II, and DOT has proposed a  new $2 billion discretionary grant program in its fiscal year 2012 budget  modeled after TIGER. Rail, port, and other projects each had  about one-tenth of applications forwarded.
Why GAO Did This Study

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.

What GAO Found

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.