Sneak Preview: DOT Order Requires Cost Reviews of Grants, Rules
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) The head of the Department of Transportation recently issued an order to its operating administrations (OAs) and internal offices calling for “rigorous economic analysis and cost-benefit calculations” and giving preference to “communities with marriage and birth rates higher than the national average” when making grants, loans and contracts and establishing rules and policies. The agency also is calling for OAs to reassess terms and conditions on previously awarded funding.
The order, issued Jan. 29 by new DOT Secretary Sean Duffy and which became effective immediately, is designed to serve as a governing roadmap for all of the agency’s policies, programs and activities, not just funding actions, and lists responsibilities for OAs (e.g., Federal Transit Administration (FTA), Federal Highway Administration) and the DOT Office of General Counsel (OGC).
“The department’s grantmaking, lending, policymaking and rulemaking activities shall be based on sound economic principles and analysis supported by rigorous cost-benefit requirements and data-driven decisions,” the order states. “The requirement shall apply regardless of whether the activities in question fall below the economic threshold (i.e., rules that have an annual effect of $200 million or more on the economy) required for review [as established] by the [White House] Office of Information and Regulatory Affairs.”
Agency officials, when awarding grants and issuing policies, must determine if the program benefits outweigh the costs, the order explains. In addition, DOT-supported programs or activities (e.g., grants, loans, contracts) must not be used to further local political objectives or for projects and goals that are purely local in nature and unrelated to a proper federal interest. “DOT programs and activities should instead prioritize support and assistance for projects and goals that are consistent with the proper role of the federal government in our system of federalism, have strong co-funding requirements, adhere faithfully to all federal statutory Buy America requirements, and not depend on continuous or future DOT support or assistance for improvements and ongoing maintenance,” the order explains.
(The full version of this story has now been made available to all for a limited time here.)
Join us for our following Thompson Grants event:
2025 Thompson Grants Workshop: Indirect Costs | March 25, 2025 | Virtual Event
