Recovery.gov - Track the Money

The Department’s broad recovery goals reflect those of the Recovery Act: creating and preserving jobs and promoting economic recovery, and investing in infrastructure that has long-term economic benefits. A significant amount of the Department’s Recovery Act funding is provided to State and local transportation authorities through existing program structures, which helps ensure that these funds will be used for “shovel ready” projects to create and preserve jobs as quickly as possible.

The Department of Transportation received a total of $48.1 billion, of which $38.6 was distributed through existing funding programs. The Act also subjects many of them to “use or lose” provisions that ensure recipients spend funds, put people to work and contribute to our economic recovery quickly. Much of this funding is distributed directly to the States, who will determine how it is spent on eligible projects.

The Recovery Act also created new programs that will create long-term economic benefits by investing in a transportation network that can keep us competitive in the 21st century. The Recovery Act includes $8 billion to jumpstart high-speed and intercity rail programs in the United States. This investment provides a down payment for our efforts to transform travel in the United States and helps ensure that we reap benefits from our transportation systems for years to come. President Obama has proposed to budget $1 billion in each of the next five years, in addition to the Recovery Act’s $8 billion investment, to ensure that the Federal commitment to high-speed rail continues.

The Recovery Act also created a new $1.5 billion discretionary grant program administered by the Secretary’s office that will invest in projects that provide long-term economic benefits. This program presents the Department with a unique opportunity both to promote short-term economic recovery and also to focus investment on projects with long-term benefits.

Unlike any other U.S. DOT program, the Secretary’s discretionary grant program is multi-modal, allowing the Department to consider the benefits of investments in highway, transit, rail, ports or inter-modal projects. The program also aims to ensure that investments are made in both urban and rural communities and to achieve an equitable geographic distribution of funding.

A new transit grant program funded by the Recovery Act will allow projects to compete for grant funds based on how much their project is expected to reduce energy consumption or greenhouse gases, or both. According to Secretary LaHood, “this grant program establishes the transit industry as a leader in reducing America’s dependence on foreign oil, addressing global climate change and creating green jobs.”

The Department is also focused on providing unprecedented transparency and accountability for all of its Recovery Act funding. This includes ensuring that discretionary grants are awarded using merit-based criteria, and that registered lobbyists do not unduly influence the Department’s decision-making.

This focus on transparency and accountability is reflected in heightened management attention to grant, contract, and loan procedures and aggressive risk mitigation efforts. Even before the Recovery Act was passed, the Department created a senior leadership team to ensure that any Recovery Act funds appropriated to the Department would be spent quickly, wisely and transparently. This group is known as the TIGER Team (Transportation Investment Generating Economic Recovery).

The Department has already begun to use the $48.1 billion appropriated under the Recovery Act for a variety of transportation projects around the country. These projects range from renovating a taxiway in Pennsylvania, to completing a light rail project in Arizona. In each case, however, the outcome is clear: the Department’s goals of short-term job creation and preservation, and investment in long-term economic efficiency are being achieved.

The amount of Recovery Act funding to be used for grants dwarfs the amount of Recovery Act funding to be used for contracts. In fiscal year 2008, the Department of Transportation (DOT) achieved 82% competition in its contracting. So far in fiscal year 2009, DOT has again achieved 80% competition. The Department has made a significant effort in recent years to increase competition for its contracts, appointing a Competition Advocate in each of its operating administrations. In 2005, DOT ranked number 16 among 18 agencies and departments in its contracting competition percentage. DOT competed 61% of its contracts in 2006 and rose to 14th place. In 2007, DOT tied with three other departments and agencies for sixth place by competing 76% of its contracts.

For Recovery Act funds, DOT has several different competition strategies. The Federal Aviation Administration is using existing contract vehicles for approximately $112 million of the Recovery Act funds in order to expedite the obligation of funds. When awarded, these contracts were competitively selected. They will be primarily for elevator replacements, chiller modernizations, parking lot repairs, power system upgrades and navigation and landing equipment. The remaining $88 million, which will be used to replace airport towers and navigation and landing systems, will be new competitive contracts. The Federal Railroad Administration anticipates two contract awards using Recovery Act funds. Both of these contract awards will be competed, so 100 percent of FRA Recovery Act funds will be competed. The Federal Highway Administration (FHWA) has a significant small business outreach program. Accordingly, where possible, FHWA will compete its Recovery Act contracts among small businesses as much as possible, which may include sole-source awards to Small Business Act Section 8(a) contracts per Federal Acquisitions Regulation Subpart 19.8. Overall, in fiscal year 2009, DOT anticipates its competition rate to meet or exceed the 82% rate achieved in fiscal year 2008, including Recovery Act activity.

DOT has a preference for fixed-price contracts and emphasizes the importance of acquisition planning and requirements development, which facilitate the use of these contracts. As Contracting Officers, Contracting Officers Technical Representatives (COTRs), and Program Managers are trained and certified under the Federal Acquisition Certification program, they will be better positioned with the skills needed to effect fixed-price contracts. DOT has a robust certification program for these three types of acquisition professionals. DOT also emphasizes that there are many different contract types available and the contracting professionals must understand the best and most effective use for these various contract types. For fiscal year 2009, The Federal Aviation Administration (FAA) plans to use firm fixed-price contracts for $150 million of its Recovery Act contracts. For the remaining $50 million, FAA will award task orders through existing time and materials contracts that contain “not to exceed” amounts and savings incentives clauses that enhance vendor performance. These task orders will have a guaranteed maximum price. The Federal Railroad Administration (FRA) anticipates two contract awards using Recovery Act funds. Both of these contract awards will be fixed-price, so 100% of FRA Recovery Act funds will be fixed-price. In fiscal year 2008, the Federal Highway Administration (FHWA) awarded 77% of its contracts as fixed-price contracts. For fiscal year 2009, the FHWA plans to reinforce the regulatory preference for fixed-price contracts through added acquisition and program office staff training, with an emphasis on maximizing fixed-price Recovery Act awards where it is practical to do so. Overall, the FHWA plans to maintain its achievement of 77% of contracts being awarded as fixed-price in fiscal year 2009, which includes Recovery Act contracts. This will likely represent an increase in $29 million in fixed-price contracts for fiscal year 2009 over fiscal year 2008 for the FHWA.

Progress and Performance Measurement

Progress on distributing Recovery Act funds is reported to Secretary LaHood weekly. Maps and other visualization tools are used to clearly communicate patterns of funding distribution by operating administration, program, State, and Congressional District. Regular feedback from the Secretary is then communicated to the TIGER Team, and quickly passed down through the appropriate management chains. The purpose is not only to identify potential problems but also to improve business processes and continually raise the standards to which the Department holds itself.

In addition, all Senior Executives involved in Recovery Act implementation have a new condition of performance built in to their individual performance plans related to minimizing waste, fraud, error, and abuse in Recovery Act programs.

The DOT’s twelve Program-Specific Recovery Plans serve as guides for monitoring performance and anticipated achievements at the program level. The Department will rely on its funding recipients to report back on progress at the project level. This is a new relationship between the Department and State and local governments, and more robust data systems are being put into place to make it possible. The Department is also developing new protocols to validate the quality of this data, which will start flowing in on October 10, 2009.

While the Department’s internal processes are all designed to ensure good use of Recovery Act funds, the public plays an important role in monitoring progress and performance. A variety of reports and raw data are available for public review. It is taxpayers that will ultimately hold the Department accountable and everyone is encouraged to be involved with our economic recovery effort.

Risk and Corrective Actions

The Office of the Assistant Secretary for Budget and Programs/CFO established a four-step Recovery Act Risk Management Plan designed to identify and mitigate any risks that could threaten the Department’s ability to achieve its programmatic goals and meet its transparency and reporting requirements.

1: Risk Assessment Questionnaire
Due April 6, 2009

Developed in conjunction with fellow Federal Agencies, DOT’s Recovery Act Risk Assessment Questionnaire encompasses seven functional capabilities critical to the efficient operation of operating administrations receiving Recovery Act funds:

•Human Capital
•Procurement
•Information Technology
•Reporting
•Grants
•Budget / Financial
•Audits and Investigations

2: Risk Profile
Due April 27, 2009

DOT’s Recovery Act Risk Profile examines five internal control focus areas for each Recovery Act program:

•General Control Environment
•Control Activities
•Information and Communication
•Monitoring
•Risk Assessments

The profile assigns “High,” “Medium,” or “Low” risk ratings to each aspect of every focus area based upon pre-defined definitions.

3: Risk Mitigation Strategy Template
Due May 9, 2009

DOT’s Recovery Act Risk Mitigation Template requires program managers to describe and document risk mitigating procedures and/or strategies for the following risks:

•All program capability gaps identified in Step 1
•All aspects from each of the five focus areas assigned a risk rating of “Medium” or “High” in Step 2

For each described risk and its associated mitigating strategy, program managers will:

•Define “trigger” events which will initiate contingency plans;
•Provide the status of current mitigation efforts; and
•Delegate an official tasked with oversight of current mitigation efforts.

4: Risk Strategy Validation & Testing
Due June 5, 2009

To ensure the proper mitigation of all identified risks, DOT will test and validate all submitted mitigation efforts and cited internal controls.