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Eno Transportation Weekly

DOT Requests Applications for $293 Million in Port Improvement Funding

June 14, 2019

This week, the U.S. Department of Transportation requested applications for $293 million in port infrastructure grant funding under a new program created by the 2019 Transportation Appropriations Act.

“This major investment in the Port Infrastructure Development Program will help strengthen, modernize, and improve our country’s maritime systems and gateway ports,” said U.S. Transportation Secretary Elaine L. Chao.

The appropriations law made two distinct appropriations under the same heading: $200.0 million “to make grants to improve port facilities as authorized under section 50302 of title 46″ and $92.7 million for “grants to the 15 coastal seaports that handled the greatest number of loaded foreign and domestic twenty-foot equivalent units of containerized cargo in 2016.” Those 15 ports are Los Angeles, Long Beach, New York (NY and NJ), Savannah, Port of Virginia, Houston, Oakland, Tacoma, Charleston, Seattle, Jacksonville, Miami, Port Everglades, San Juan (PR), and Honolulu. The top 15 ports are eligible for funding under the $200 million as well as the $92.7 million reserved for them.

(The law also said that the priority under that $92.7 million appropriation had to go to a project to build phytosanitary facilities at a port, which is another way of saying Miami, which coincidentally is where Rep. Mario Diaz-Balart (R-FL), he who chaired the Transportation-HUD Subcommittee last year and wrote the provision, hails from.)

The Maritime Administration issued a Notice of Funding Opportunity this week spelling out the requirements of the new program.

Deadline. Applications must be submitted by 8:00 p.m. E.D.T. on September 16, 2019 via grants.gov. Although the appropriations are “no-year” money (available until expended), the NOFO says that they want to obligate all the money by September 30, 2022, and “DOT will consider a project’s likelihood of being ready to proceed” on that timeline when making grant selections.

Grant size. After a 2 percent oversight set-aside, a total of $286.9 million is available. The law prescribes a minimum grant size of $10 million, but there is no maximum grant size. The objectives section (below) says that there will be at least 5 projects selected, one for each desired outcome, but if there aren’t many more than five grants made from the money, some of these projects could be very large indeed.

Federal cost share. The law says that the federal share of total project cost may not exceed 80 percent. DOT says  “Preference will be given to those projects that require a lower percentage Federal share of costs” (see the evaluation criteria write-up, below). DOT will not consider previously incurred costs or previously expended or encumbered funds towards the matching requirement for any project.

Desired outcomes/types of projects. The NOFO identifies five project outcomes and says it will select at least one project for each: “Among possible project outcomes, the Department seeks projects that will: (1) advance technology-supported safety and design efficiency improvements; (2) bring facilities to a state of good repair and improve resiliency; (3) promote efficient trade in energy resources; (4) promote exports of manufacturing, agriculture, or other goods; and (5) for only the top 15 coastal ports, support the safe flow of agricultural and food products, free of pests and disease, domestically and internationally. Accordingly, the Department expects to award at least one project that advances each of the aforementioned project outcomes, but a project does not need to address one or more of these outcomes to be awarded.”

Eligible applicants. Eligible applicants are “a port authority, a commission or its subdivision or agent under existing authority, as well as a State or political subdivision of a State or local government, a Tribal government, a public agency or publicly chartered authority established by one or more States, a special purpose district with a transportation function, a multistate or multijurisdictional group of entities, or a lead entity described above jointly with a private entity or group of private entities.”

Evaluation criteria. Section E of the NOFO lists x evaluation criteria that DOT will use to select projects:

  • Leveraging of federal funding. DOT intends to group applications into quintiles based on federal cost share and says that “Applications that require other discretionary funding from the Department to complete the project’s funding package will be considered less competitive.” Controversially, while the law creating the program said that “the proceeds of Federal credit assistance under [TIFIA] or [RRIF] shall be considered to be part of the non- Federal share of project costs if the loan is repayable from non- Federal funds, unless otherwise requested by the project sponsor” the NOFO says that, nonetheless, TIFIA and RRIF loans will be included as part of the federal share for purposes of evaluation criteria: “This evaluation criterion is separate from the statutory cost share requirements…Those statutory requirements establish the minimum permissible non-Federal share; they do not define a competitive Port Infrastructure Development Program Grant project.” So projects with a lower federal share and don’t rely on TIFIA or RRIF loans may get a thumb on the scale in their favor.
  • Project costs and benefits. DOT will use both benefit cost ratio (BCR) and net present value (NPV) of proposed projects and will group BCR into four ranges (less than 1; 1–1.5; 1.5–3; and greater than 3 and will also group NPV into four ranges (less than $0; $0–$50,000,000; $50,000,000–$250,000,000; and greater than $250,000,000).
  • Project outcomes. See “desired outcomes” above.
  • Demonstrated project readiness.The Department will assign one of three risk ratings based on the likelihood that the project will be successfully delivered within a reasonable timeframe: high risk means that there is a high likelihood that the project will not be successfully delivered; moderate risk means there is some possibility that the project will not be successfully delivery; and low risk means that it is highly likely that the project will be successfully delivered.”
  • Domestic preference. In re Buy America: “Among otherwise comparable applications that require exceptions or waivers, an application that presents an effective plan to maximize domestic content will be more competitive than one that does not. The Department will not award projects that likely need a waiver but present no plan to maximize domestic content.”
  • Additional considerations.  This includes the geographic diversity requirement and the phytosanitary facility preference written into the statute, plus report language restricting automation projects: “For projects that incorporate fully automated cargo- handling equipment, the Department will consider job change that will result from the project, including whether the project will directly result in a net job loss.”

 

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