1657651 - An Optimization Model for maximizing Federal grants for State DOTs

Abstract: The Infrastructure Investment and Jobs Act (IIJA) presents significant opportunities for state and local transportation agencies (SLAs) to overcome legislative budget constraints and bridge the financing gap. The IIJA legislation has made available $565 billion through 114 grant programs in the transportation sector under the US Department of Transportation. SLAs encounter challenges accessing grants due to higher match requirements from increased grant amounts, complex application processes, and uncertainty regarding possibility of not meeting the eligibility criteria for Federal dollar awards. The problem becomes more complex due to the large number of both shovel-ready candidate projects and Federal grant programs with varying matching fund requirement (MFR), leading to computational challenges in developing the project portfolio. Therefore, SLAs seek innovative tools to expedite the Federal program identification and to ensure that maximum funds are received for their projects.

To address this issue, this study first evaluated Federal policies related to MFR across various Federal programs and conducted a survey among all the 50 State DOTs to identify the prevailing practices for securing match funds and the challenges faced by the SLAs in Federal grant application. The study further developed an optimization methodology for developing project portfolios which enables SLAs to maximize the permissible Federal grant amounts based on their corresponding match requirements. The methodology was demonstrated using a case study containing a sample set of 50 projects and 10 Federal programs. Finally, the study discusses strategies for successful Federal grant applications by SLAs.