Last week, the U.S. Department of Transportation notified Congress that they have selected nine projects to share almost $1.2 billion in “megaproject” funding through the first year’s awards of grants from the new megaprojects program established by the bipartisan infrastructure law (at 49 U.S.C. §6701).

Per subsection (k) of that statute, the Department cannot make a public announcement of grant selections until a 30-day waiting period has passed following Congressional notification (which took place on December 29). But the Members of Congress in whose states and districts the projects are located have been making their own announcements (the $250 million in MEGA funding for the Brent Spence Bridge Corridor, for example, was announced last week by Senator McConnell and others).

The infrastructure law (IIJA) provided $1.0 billion in funding per year over five years for this program, which gets reduced by a $20 million per year oversight takedown. So, Dear Reader, you might ask, “how did they make $1.2 billion of grants with only $980 million in first-year funding?” The answer is that, for one project, they committed $192 million in IIJA appropriations already made which will not become available, legally, until future years.

The projects to which DOT intends to award grants are in the following table:

There is not necessarily anything fiscally irresponsible with DOT committing out-year IIJA advance appropriations – the budget authority has been created and is on the books, and will stay that way unelss Congress were to pass a special law repealing it, which rarely happens. In future cycles, however, a close eye must be kept on DOT to see whether they start announcing intent to commit funds that would require future appropriations after the IIJA money runs out in 2026. That would be fundamentally different.

The MEGA program has a statutory federal share ceiling – a MEGA grant cannot comprise more than 60 percent of the eligible capital costs of a proposed project. This year’s selections run between 9 percent and 58 percent of the proposed project costs.

This year, DOT combined three different competitive grant program into one grant solicitation – the new MEGA program, the pre-IIJA INFRA program, and the new rural grant program. According to documentation sent to Capitol Hill by DOT, a total of 138 applications were filed for projects that are eligible for the MEGA program. 10 of those were given INFRA grants instead when the FY 2022 round of those projects went out last September.

Of the remaining 128 MEGA applications, the career staff at DOT evaluated them under the terms of the statute. Any project that did not meet the six statutory criteria for a successful grant application, in the staff’s view, was rated Not Recommended. The rest were graded as either Recommended or Highly Recommended (except for three projects which met all six statutory requirements but still got a Not Recommended grade – Contra Costa County 680 Forward, Long Beach Pier B Rail Program Buildout, and Oregon I-205 Improvements, Phase 2).

Out of the 128 applicants, just 16 got the Highly Recommended nod. Those include the nine selectees, above, and the following seven, which have to be considered front-runners for the FY 2023 MEGA selection process:

Then there were a total of 13 out of the 128 applicants who got the less desirable, but still acceptable, “Recommended” rating.

All the other applicants were cited for being insufficient in some way to meet the legal requirements for the law. The most-cited failure was that the application did not demonstrate that the project would be cost-effective.

Some very large and famous applications were ruled insufficient and given “Not Recommended” labels in this cycle, including the California High-Speed Rail Project, the Mobile Bay Bridge, and the Hudson River Tunnel (though the concrete casing on the New Jersey side, technically a separate project, got a grant). Some of those may be fixed in subsequent cycles (the lack of a data collection and analysis plan seems easy to fix, and non-federal sponsors can always build or buy more technical capacity). But if the lack of cost-effectiveness is fundamental to the project, it’s hard to see how that gets overcome.