Surface Transportation: Action Needed to Guide Implementation of Build America Bureau and Improve Application Process

Constructing surface transportation projects can be long endeavors and involve multiple DOT offices. The 2015 Fixing America's Surface Transportation Act (FAST Act) required DOT to establish a finance bureau to consolidate certain funding and financing programs. The FAST Act further required that DOT improve procedures for evaluating applications for these programs—including providing a clear rationale for decisions and streamlining the process. The FAST Act also gave this finance bureau other responsibilities such as promoting best practices for innovative financing. In response, DOT opened the Build America Bureau in July 2016.

The FAST Act included a provision for GAO to review the Bureau. This report assesses, among other things, (1) progress DOT made to establish the Bureau and carry out its responsibilities, (2) the Bureau's process for evaluating applications, and (3) whether the Bureau provided a clear rationale for decisions in that process. GAO reviewed federal laws and Bureau documents and interviewed DOT officials and selected stakeholders, including 28 project sponsors selected so projects varied by mode, cost, and outcome.

The Department of Transportation (DOT) has taken initial steps to establish the Build America Bureau's (Bureau) organizational structure and to create a process to help the Bureau carry out some of its responsibilities since it was created in 2016. However, the Bureau lacks a plan to guide its ongoing and future efforts. Initial steps included creating a consolidated process to evaluate applications for three financing programs: Transportation Infrastructure Finance and Innovation Act (TIFIA), Railroad Rehabilitation and Improvement Financing (RRIF), and Private Activity Bonds (PAB). DOT largely based this consolidated process on prior practices used for individual programs but also sought to improve and streamline the process. For example, DOT formed a decision-making body that meets more frequently than a predecessor group to quickly address issues and to decide when to advance projects through the process. However, progress has been more limited in implementing other responsibilities, such as promoting best practices for innovative financing. While some of the lack of progress can be attributed to factors such as changes in leadership and staff, the Bureau lacks a plan with implementation goals and a timeline to guide its ongoing and future efforts and also lacks performance indicators to assess its progress. Without these tools, the Bureau may face difficulties prioritizing work to carry out other responsibilities and maintaining momentum throughout continued implementation efforts and any future changes in leadership and staff.

While the Bureau has taken steps to improve and streamline the application evaluation process, it does not have a mechanism to assess how well the process works—including what is challenging and what works well. Project sponsors GAO interviewed had mixed views on the Bureau's application evaluation process and whether it was streamlined. Selected sponsors that applied for TIFIA and RRIF financing identified challenges with the process, including the length of the process and changes to requirements or terms for a loan. For example, sponsors said the Bureau took longer than it had estimated to procure external advisors to help conduct its evaluation of applications. According to the sponsors, such delays and uncertainty led to cost increases for two projects and construction delays for one project. Bureau officials noted that many factors outside the Bureau's control influence the length of the application evaluation process, such as changes to a project's scope and construction cost estimates. However, the Bureau has not taken steps, such as consistently soliciting feedback from sponsors, to assess how to further improve and streamline its process. Without taking such steps, the Bureau is missing an opportunity to further streamline the process and to ensure that any challenges do not discourage sponsors from seeking the Bureau's financing programs.

GAO found that the Bureau provided a clear rationale for decisions to advance or approve projects in the TIFIA and RRIF programs but did not do so for the PAB program. While DOT did document the decisions made in each step of the application evaluation process for the PAB program, the lack of a documented rationale to support these decisions leaves that program open to questions about the integrity of its process, as it is not immediately clear how the Bureau determined that an application satisfied requirements and what information was used to support decisions that advanced projects.

GAO is making five recommendations, including that the Bureau develop a plan to guide its efforts and assess ways to further improve the application evaluation process. DOT concurred with two but did not fully concur with three of the recommendations and provided no rationale. GAO continues to believe the recommendations are valid as discussed in the report.

Constructing or rehabilitating surface transportation projects can be long,  costly endeavors. Many surface transportation projects involve multiple  jurisdictions or span modes of transportation, such as a highway project  that integrates a light rail line into its infrastructure. The Department of  Transportation (DOT) supports the building and maintaining of our  nation’s surface transportation infrastructure through a multiplicity of  programs administered and overseen by DOT’s individual modal  administrations with responsibilities for its highway, rail, transit, and  maritime ports, among other modes of transportation. Traditional sources  of federal funding for surface transportation projects are eroding as the  purchasing power of motor-fuel and other taxes upon which DOT relies is  declining due to increasingly fuel efficient vehicles and other factors, and  the nation lacks a long-term sustainable plan for funding surface  transportation. As a result, project sponsors—state departments of  transportation, cities, private companies, and others—increasingly  consider financing, such as obtaining a loan from DOT to obtain funds  that they can then repay over time, to help pay for and construct projects.

In 2015, the Fixing America’s Surface Transportation Act (FAST Act)  required DOT to establish a finance bureau to consolidate and administer  certain surface transportation funding and financing programs, rather than  keep these programs in separate modal administrations. According to  the conference report accompanying the FAST Act, it was envisioned that  this bureau would be a “one-stop shop” where project sponsors can  access these funding and financing sources and associated technical  assistance to help advance large, complex projects. For technical  assistance, for example, the FAST Act outlined specific responsibilities for  the bureau to provide expertise and resources to help sponsors navigate  federal environmental review and permitting requirements that  accompany federal funding and financing. In response, DOT opened the  Build America Bureau (Bureau) in July 2016.

The FAST Act also included a provision for us to review the Bureau, in  particular to review its procedures for evaluating applications for  programs it administers and its actions to document decisions and  provide a clear rationale for decisions when evaluating applications. This  report assesses  the progress DOT made to establish the Bureau and carry out its  responsibilities;  the Bureau’s process for evaluating applications and providing  technical assistance, including obtaining the views of sponsors and  stakeholders; and whether the Bureau, when evaluating applications, has provided a  clear rationale for its decisions.

To assess the progress DOT made to establish the Bureau and carry out  its responsibilities, we reviewed the FAST Act to identify responsibilities  set out for the new Bureau as well as its authorities to consolidate offices  and transfer funds. We also reviewed DOT and Bureau documents,  including Bureau implementation plans and operating procedures. In  addition, we interviewed current and former DOT and Bureau officials  who played key roles in the Bureau’s establishment or first year of  operation; these interviews covered DOT’s priorities, actions, and any  challenges faced in establishing the Bureau as well as the Bureau’s  progress in carrying out responsibilities set out in the FAST Act. We  compared DOT’s and the Bureau’s efforts to federal standards for internal  control and key practices for organizational transformations.

To assess the Bureau’s process for evaluating applications and providing  technical assistance, we reviewed Bureau documents and interviewed  Bureau officials. Our review of the process for evaluating applications  included semi-structured interviews with sponsors of 10 projects to  understand their experiences using the application evaluation process.  We selected 10 projects that had, at the time of our review, gone through  most or all of the updated process for the Bureau’s financing programs:  the Transportation Infrastructure Finance and Innovation Act (TIFIA),  Railroad Rehabilitation and Improvement Financing (RRIF), and Private  Activity Bonds (PAB) for Highway and Surface Freight Transfer Facilities.  In this report, we collectively refer to these three programs as the  Bureau’s financing programs. We also interviewed other select  stakeholders—three advisors, three associations, and five additional  project sponsors—to learn about their experiences working with the  Bureau. We selected additional project sponsors that had experience  applying for DOT financing both before and after the Bureau was created,  among other factors. We also calculated how much time it took each of  the 10 projects to move between each step in the process. In this  analysis, we could not compare the amount of time it took projects to  complete the Bureau’s process to the amount of time it took projects to  complete the processes in place before DOT created the Bureau because  the steps in the process changed. Therefore, we used other methods to  learn about changes in the application evaluation process from before  and after the Bureau was created. In particular, we selected sponsors to  interview that could compare the processes from before and after the  Bureau was created, and we examined past GAO and other reports to  understand past findings and challenges with the application evaluation  processes for the financing programs before the Bureau was created. Our  review of the Bureau’s technical assistance included semi-structured  interviews with 16 project sponsors that worked with the Bureau on  projects in the early stages of planning prior to formally applying to a  financing program. We selected sponsors that began working with the  Bureau after it was created in July 2016 and had been in contact with the  Bureau on or after October 2017, among other factors, as well as projects  that demonstrated variation in mode, location, experience with DOT’s  financing programs before the Bureau was created, and total cost.  Overall, we assessed the Bureau’s activities and collected evidence  against federal standards for internal control and Office of Management  and Budget’s guidance for agencies that manage financing programs.

To determine whether the Bureau provided a clear rationale when  evaluating applications, we reviewed DOT and Bureau documents,  including its public Credit Programs Guide, to identify major decisions in  the process as well as the information or requirements the Bureau  considers at each decision. We then reviewed Bureau memos and other  internal documents for 10 projects, as described above, that sought  financing to assess whether the Bureau documented its decisions and  provided a clear rationale for its decisions, and we assessed these  documents against practices in the Bureau’s application evaluation  process and federal standards for internal control. For this report, we  focused on the three financing programs the Bureau administers. We  previously examined whether DOT documented decisions for the grant  funding program the Bureau administers, and we have work in progress  to evaluate this program. Appendix I describes our scope and  methodology in greater detail.

We conducted this performance audit from December 2017 to February  2019 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

DOT is made up of nine modal administrations and the Office of the  Secretary of Transportation (OST), each of which has its own mission,  primarily focused on enhancing mobility and safety. Among other  activities, modal administrations oversee financing and grant funding  programs specific to their modes (e.g., roads, transit, rail). OST oversees  the formulation of national transportation policy and promotes intermodal  transportation. In this latter role, OST administers programs that provide  grants to projects that can represent multiple transportation modes:  roads, bridges, transit, rail, or ports. In fall 2015, DOT created the Build  America Transportation Investment Center within OST—a predecessor to  the Bureau. This new center was created to be a single point of contact  and coordination for project sponsors seeking to apply for finance  programs and explore innovative financing, in recognition of the fact that  sponsors can face difficulties navigating multiple modal administrations to  apply for funding or financing for a single project.

In 2015, DOT was required by law to establish a finance bureau to align,  coordinate, and consolidate certain surface transportation funding and  financing programs. The Bureau—located within OST—is led by an  Executive Director, who is responsible for managing and overseeing the  daily activities, decisions, operations, and personnel of the Bureau. The  Executive Director is appointed by the Secretary and then approved by  the President. Three financing programs and one grant funding program  were moved into the Bureau. Collectively, these programs provide  billions of dollars of support to transportation projects across the country,  as described below:

TIFIA. TIFIA provides direct loans, loan guarantees, and standby lines  of credit to surface transportation projects of national or regional  significance. Eligible projects include a variety of projects such as  highways, intermodal stations, and passenger rail. The fundamental  goal of TIFIA is to leverage federal funds by attracting substantial  private and other non-federal co-investment, and the legislation  creating TIFIA stated that the program can do so by complementing  existing resources to fill market gaps. For fiscal year 2018, the FAST  Act authorized $285 million in funding to cover the federal  government’s cost of providing financing and administering the  program. According to DOT, $1 of TIFIA’s budget authority generally  allows DOT to provide more than $10 in credit assistance, so $285  million in funding authority could support approximately $2.9 billion in  assistance. TIFIA has provided over $31 billion in financing to 79  projects since its creation in 1998. The Federal Highway  Administration (FHWA) administered TIFIA before it was moved to the  Bureau.

RRIF. RRIF provides direct loans and loan guarantees to finance the  development of railroad infrastructure, such as rehabilitating  passenger equipment and acquiring or rehabilitating track and  bridges. Created in 1998, the RRIF program is authorized to provide  up to $35 billion in credit assistance, and RRIF dedicates part of this  funding to providing vital access to financing for smaller, short-line  and regional railroads, which have historically lacked the access to  private financing. The RRIF statute permits appropriations of budget  authority to be used for the cost of providing financing, but  appropriations acts have typically prohibited the use of appropriations  for such purposes. This prohibition, however, was not included in the  fiscal year 2018 Consolidated Appropriations Act and appropriations  were, for the first time, made available to pay the cost of providing  financing. RRIF loans totaling over $5 billion have supported 39  projects as of February 2019. The Federal Railroad Administration  (FRA) administered RRIF before it was moved to the Bureau.

PAB for Highway and Surface Freight Transfer Facilities. PAB  provides private-sector developers of certain types of surface  transportation projects with access to tax-exempt financing. In  contrast to TIFIA and RRIF, where the federal government directly  provides loans and other forms of credit assistance, PAB does not  directly provide financing but enables a state or city to borrow on  behalf of private companies and nonprofits. PAB does, however,  impose costs on the federal government through forgone tax  revenues. The total amount of PAB for surface transportation is  limited by statute to $15 billion, and the Secretary of Transportation  allocates this available capacity among qualified projects. As of  February 2019, DOT had allocated about $10.3 billion in PAB to 27  projects. A different office within OST previously administered PAB.

Infrastructure for Rebuilding America (INFRA). The FAST Act  authorized DOT to award $4.5 billion in discretionary grants for  nationally significant freight and highway projects for fiscal years 2016  through 2020. In response, DOT developed the INFRA grant funding  program. States and local governments are among the eligible  entities that may apply for INFRA grants. DOT may fund freight or  highway projects that meet statutory requirements, such as reserving  at least 25 percent of available funds for rural areas. In June 2018,  DOT announced its most recently proposed INFRA grants totaling  nearly $1.5 billion for 26 projects.

The FAST Act also created the Council on Credit and Finance (Council)  to review and make recommendations to the Secretary on applications for  DOT’s financing programs, regularly review projects that have received  financing, and conduct other duties the Secretary establishes. The  Council is mostly comprised of DOT political appointees, including the  Deputy Secretary of Transportation, Under Secretary of Transportation for  Policy, and Administrators of FRA, FHWA, and the Federal Transit  Administration (FTA).

The FAST Act outlined specific responsibilities for the Bureau, some of  which relate to administering the above programs. The responsibilities  include the following, grouped into five broad categories:

Administering the application evaluation process for certain

Establishing procedures for analyzing and evaluating applications  for these programs, as well as for documenting major decisions in  the application evaluation process through a decision  memorandum or similar mechanism that provides a clear rationale  for such decisions

Streamlining the approval processes for the above programs

Providing assistance to project sponsors seeking funding or financing

Making credit assistance programs more accessible

Providing technical assistance, upon request, for proposed public- private partnerships and environmental reviews and permitting,  among other areas

Promoting innovative-financing best practices:

Developing and monitoring best practices for state authorities and  practices, standard contracts, and analytical tools  Improving environmental reviews and permitting:

Serving as DOT’s liaison on the Council on Environmental  Quality

Coordinating efforts to improve the efficiency and effectiveness of  the environmental review and permitting process  Identifying, developing, and tracking metrics for permit reviews  and decisions

Sharing information on procurement costs and risks:

Developing procurement benchmarks for projects receiving  assistance under the above programs, and collecting and  publishing information on procurement benchmarks; to the extent  possible, the benchmarks should establish maximum thresholds  for cost increases and schedule delays, establish uniform ways to  measure these changes, and be tailored to different types of  project procurement

Developing guidance to require and publish value for money and  after-action reports findings for public-private partnerships seeking  assistance from the Bureau programs  The conference report accompanying the FAST Act noted that the Bureau  would serve as a one-stop shop for states and local governments, and to  serve in this capacity, the report highlights the Bureau’s role to work with  individual project sponsors as the Bureau administers financing  programs, as well as its broader role to help reduce costs and uncertainty  with environmental reviews and permitting and procurement. The FAST  Act also gave the Secretary of Transportation authority to consolidate or  eliminate different offices within DOT as it creates the Bureau.

DOT Made Progress Establishing the Bureau and Meeting Some Responsibilities, but the Bureau Lacks Tools to Further Guide and Measure Its Efforts

DOT established an organizational structure for the Bureau and created a  consolidated process for it to use when working with sponsors to evaluate  applications for financing programs and provide assistance. Creating this  process helped the Bureau make progress on two of its FAST Act  responsibilities, and overall, DOT’s initial steps were important actions  that allowed it to open and operate the Bureau. Since the Bureau was  established in 2016, it has made more limited progress on its other  responsibilities, including promoting innovative-financing best practices  for certain types of projects. Although we recognize that it is a relatively  new office that in many ways remains a work in progress, the Bureau  lacks a plan to guide its ongoing and future efforts and has not  established performance indicators to measure its outcomes and assess  progress.

DOT Established the Bureau’s Structure and Created a Consolidated Process for Evaluating Applications and Providing Assistance

DOT designed and established the Bureau in the year after the FAST  Act’s enactment. DOT established internal committees and hired a  consultant to produce an initial implementation plan to establish the  Bureau. To create this plan, the consultant analyzed existing staffing and  processes, interviewed internal and external stakeholders, and examined  organizational structures at public and private sector entities, among  other things. DOT prioritized several areas for this initial work, including  consolidating existing processes for evaluating applications for finance  programs and providing assistance, that were important to opening and  operating the Bureau as well as assuming control of the financing  programs.

As part of its work to develop a structure for the Bureau, DOT’s initial  implementation plan set out guiding principles for what the Bureau aims  to achieve: mobilizing available financial resources for high-impact transportation  projects in the United States;  identifying and encouraging innovative best practices in project  planning, financing, delivery, and monitoring;  clearing roadblocks to provide financing and grants more quickly and  transparently, with a streamlined user interface and less uncertainty,  complexity, and cost for project sponsors; and ensuring the protection of public resources through efficient  leveraging of taxpayer money and the development of a creditworthy  portfolio of projects.

DOT also created an organizational structure for the Bureau and laid out  the Bureau’s relationships to other offices in DOT. When the Bureau  opened in July 2016, DOT appointed an Acting Executive Director, filled  29 positions with staff from other DOT offices, and created two offices  within the Bureau, all of which generally aligned with the initial  implementation plan. The Outreach and Project Development Office  largely aligns with the Bureau responsibility to provide assistance to  sponsors, which includes providing technical assistance on public-private  partnerships and federal requirements to specific project sponsors as  they prepare to apply for funding and financing. The Bureau’s Credit  Programs Office largely aligns with the Bureau’s responsibility to  administer the application evaluation process for certain programs  through its work on underwriting, risk management, and portfolio  management. DOT decided to also leverage other DOT offices within  OST and modal administrations to carry out some of the Bureau’s work.  Bureau officials told us this was a more efficient approach because it  used the expertise and support of existing DOT offices rather than  duplicating this expertise and support. For example, DOT used staff in  OST that administer another competitive grant funding program to  administer the INFRA grant program. See appendix II for more detail on  the Bureau’s organizational structure and staffing.

In its initial work, DOT also created a consolidated process for the Bureau  to use when working with project sponsors pursuing TIFIA and RRIF  financing, including standardized steps for evaluating applications for  financing programs as well as providing assistance. Applications for the  PAB program, which was also moved into the Bureau, go through many  of the same application evaluation steps as TIFIA and RRIF, especially in  the latter phases. DOT’s work to create this process aligned with two  responsibilities given to the Bureau in the FAST Act:

Administering the application evaluation process for certain programs

Providing assistance to project sponsors seeking funding or financing  DOT, in creating this process, set out steps that the Bureau would follow  when working with sponsors. In the first two phases—initial engagement  and project development—the Bureau provides assistance to project  sponsors as they consider and navigate the financing programs. In those  phases, a single point of contact works with sponsors to share information  on the Bureau and provide assistance as sponsors develop materials to  apply for financing programs. In the remaining phases of the process,  Bureau staff and other DOT officials evaluate financing applications.  During the creditworthiness review for a TIFIA or RRIF loan, for example,  Bureau staff and independent advisors conduct an in-depth review of the  project, including the sufficiency of a proposed repayment stream or  collateral pledged. Throughout the process, the Credit Review Team—a  decision-making body composed of Bureau and other DOT staff—votes  at three points whether to advance a project seeking a TIFIA or RRIF loan  and votes once for PAB allocations. During a later phase in the process,  the Council then votes whether to recommend that an application  advance to the Secretary for approval. The phases and steps in the  Bureau’s process are summarized in figure 1 below.

In creating this consolidated process, DOT also sought to improve and  streamline the process, as called for in the FAST Act. Overall, DOT  officials and documentation stated that these improvements, described  below, should allow the Bureau to gather more information and better  assist sponsors in the early phases of the process as well as identify and  address potential issues earlier in the process.

Single point of contact in the initial engagement and project  development phases. The Bureau provides a single point of contact to  assist sponsors during the early phases of the process. With a single  point of contact, the Bureau aims to provide a streamlined interface  with DOT for a sponsor. Furthermore, Bureau documents show that  the single point of contact works with the sponsor to identify specific  technical assistance needs—such as help completing environmental  review requirements—and then develops a roadmap for providing this  assistance as the sponsor develops its draft application. The point of  contact can also help to resolve any conflicting requirements; for  example, Bureau officials said the point of contact can facilitate  discussions with a project sponsor and modal administrations on  which Buy America requirements apply for a multi-modal project, as  the requirements may differ across modes. Bureau officials said the  Bureau’s work in these phases builds off the functions of the Bureau’s  predecessor, the Build America Transportation Investment Center,  which the initial implementation plan shows reached out to some  sponsors interested in federal financing and connected them to the  TIFIA, RRIF, and PAB programs, as well as the work of the former  TIFIA Joint Program Office and RRIF Office. In contrast, the Bureau  now more formally connects early assistance to later phases where  the Bureau evaluates financing applications, all within the same office.

Combined process for the creditworthiness review, application review,  and Council review phases. The Bureau’s process combined the  various review processes previously used by the three separate  offices—in FHWA, FRA, and OST—to administer the three financing  programs—TIFIA, RRIF, and PAB, respectively. For example, before  this new process was implemented, a sponsor seeking a TIFIA loan  and a RRIF loan would have to submit two applications to two offices  and then work through two different processes; now a sponsor can  submit one application to the Bureau and work through a single  process for both loans. Our analysis of DOT and Bureau documents  found that the reviews conducted in these phases are largely built off  and resemble previously used processes. For example, the initial  implementation report shows that previously the offices administering  TIFIA, RRIF, and PAB were each required to brief the Council’s  predecessor at different steps for each program, while the new  process requires briefings to the Council at the same step for each  program.

Formalized decision-making body that monitors and advances  projects through phases. The Credit Review Team—the new, primary  decision-making body within the Bureau—plays a key role in deciding  when projects can advance from one phase to another. For example,  the team reviews a project’s initial materials for a TIFIA or RRIF loan  and then votes on whether the project is ready to advance to the  creditworthiness review phase. According to Bureau documents, the  team’s predecessor, a less formal working group, did not review  projects until after the creditworthiness review began. Bureau  documents show that the Credit Review Team is meant to meet  weekly, in contrast to its predecessor organization, which met  monthly. According to Bureau officials, this more frequent meeting  schedule allows the Bureau to expedite its decision-making.

Bureau Lacks a Plan and Timelines to Guide Ongoing and Future Efforts and Indicators to Assess Progress

Since DOT designed and established the Bureau, the Bureau has made  more limited progress in its first 2 years on addressing additional  responsibilities assigned to it by the FAST Act, as listed and described  below. Bureau officials spoke generally about plans to continue making  progress on these responsibilities in the future, and pointed out that the  Bureau is still a relatively new office that remains a work in progress.  However, Bureau officials were unable to provide written plans or  timelines for these additional efforts.

Promoting innovative-financing best practices. The Bureau has  started to address this responsibility by employing the expertise of  modal administration staff. The Bureau signed an agreement with  FHWA in October 2016 to leverage the expertise of FHWA’s long- standing Office of Innovative Program Delivery rather than duplicate  these efforts in the Bureau. Since signing the agreement, the Bureau  and FHWA have jointly developed or updated a number of resources  for public-private partnerships, building on FHWA’s existing work. This  includes conducting on-site trainings for state entities and updating  two model contract guides. Progress with other modal  administrations has been more limited. For example, Bureau staff told  us they have worked with FTA to start to identify gaps and jointly  produce materials, such as an upcoming public-private partnership  procurement guide. Though the Bureau does not have a signed  agreement with FTA, Bureau officials said they want to sign one.  Bureau officials said that they have started speaking with officials at  other modal administrations to identify opportunities but that it will take  time to identify gaps and develop tools in innovative financing for rail,  maritime, and aviation.

Improving environmental reviews and permitting. Bureau officials said  they have relied on the expertise of DOT’s Infrastructure Permitting  Improvement Center to carry out responsibilities to improve  environmental reviews and permitting, rather than duplicate this  expertise in the Bureau. The Center’s stated mission is to improve the  performance of federal environmental review and permitting of  infrastructure projects. As a result, Bureau officials said the Center  carries out several specific responsibilities directed to the Bureau in  the FAST Act, including serving as DOT’s liaison to the Council on  Environmental Quality and tracking metrics for permit reviews and  decisions in a public dashboard. According to Bureau officials, the  Infrastructure Permitting Improvement Center and the Bureau also  jointly hired an environmental expert. This environmental expert’s  duties include supporting broad efforts to improve the efficiency and  effectiveness of these processes in the Center and providing technical  assistance to ensure that environmental reviews on specific projects  move forward in the Bureau. Bureau officials told us that the Bureau  does not have a written plan to document its efforts to fulfill the  Bureau’s FAST Act environmental review and permitting  responsibilities, beyond the position description for the environmental  expert, because both offices are under the direction of the Under  Secretary. However, the position description does not mention the  Bureau or provide a sequence or timeline to fulfill these  responsibilities that could help ensure continued progress.

Sharing information on procurement costs and risks. The Bureau has  not taken steps to collect or share information on procurement costs  and risks, though documents show it has coordinated with FHWA to  take some preliminary planning steps. For its FAST Act responsibility  to develop, collect, and publish procurement benchmarks, the Bureau  and FHWA published a preliminary paper in June 2017 that identified  the types of procurement information to collect and publish, identified  existing information sources for highway projects, and outlined  possible next steps. However, Bureau officials told us that much  work remains to identify specific cost and schedule information to  collect from project sponsors and ultimately publish procurement  benchmarks for projects across modes. The FAST Act also directs the  Bureau to require sponsors procuring a project as a public-private  partnership to conduct and publish value for money assessments and  after-action reports, but the Bureau has not taken steps to do so.  Bureau officials stated that additional efforts to address these  responsibilities will require additional work and resources. Bureau  officials could not provide a written plan or schedule for these future  efforts.

Several factors, including some outside the Bureau’s control, have  affected the Bureau’s ability to more fully carry out its responsibilities in its  2 years of operation. First, there have been changes in leadership. After  the presidential transition in early 2017, many DOT leadership positions,  including many members of the Council, were vacant until new political  appointees were put in place. Bureau documents show that the Council  did not meet for 2 months, and Bureau officials told us that career staff  sat on the Council to enable it to meet and resume voting on applications  until appointees were confirmed. In addition, the Bureau’s Executive  Director stepped down in November 2017. The Bureau is currently trying  to fill that position through a second job announcement. With the  Executive Director position vacant, Bureau officials told us that the  Deputy Assistant Secretary and 3 senior officials from the Bureau and  OST have fulfilled the day-to-day activities of that leadership role in the  interim. Bureau officials told us that the lack of an Executive Director has  had an effect on setting long-term plans for the Bureau; such planning is  part of the duties of that position. Some stakeholders we spoke to  stressed the importance of having an Executive Director in place so  Bureau staff can quickly elevate issues or make decisions that currently  need to be made by higher-level officials.

Second, the Bureau has had a number of vacant positions since it was  opened. Based on Bureau documents and discussions with Bureau  officials, we determined that between 8 and 11 positions in its current  organizational chart were vacant during 2018. During the government- wide hiring freeze in early 2017, the Bureau could not fill any vacancies,  but several positions remained vacant before and after the hiring freeze,  and two former Bureau officials said that the Bureau remained  understaffed into mid-2017. The positions vacant during 2018 changed  over time due to attrition, but two positions that remained vacant  throughout this period are the transit-oriented development and project  finance specialists. When asked about the vacancies in early 2018,  Bureau officials said that they had originally wanted to fill the Executive  Director position before filling other vacancies but later decided to start  filling some critical vacancies. In July 2018, Bureau officials discussed  their strategy for filling some vacant positions in response to immediate  needs and in October 2018 said they intended to fill all vacant positions.  Throughout this period, Bureau officials verbally shared these staffing  priorities with us but did not provide a written plan or strategy for  prioritizing the Bureau’s vacancies. Bureau officials said they do not have  a timeline to fill remaining vacant positions in part due to limited human  capital resources to draft position descriptions and conduct other parts of  the hiring processes.

DOT’s efforts to establish the Bureau and its processes were guided by  an initial implementation plan. However, subsequent work by the Bureau  to address its responsibilities and continue its implementation efforts is  ongoing without the benefit of a plan and associated timelines. Key  practices for organizational transformations state that an agency must set  implementation goals and a timeline and ensure that top leadership drives  the transformation, as such a transformation could take years to  complete. Bureau officials have developed general priorities and  approaches that they said have been communicated to staff through  regular meetings and use specific performance plans to guide work in  certain areas. However, without detailed written plans with  implementation goals and timelines, the Bureau risks not being able to  sustain the progress it has made in the last 2 years and ensure that it  implements all of its statutory responsibilities in a timely manner.

Finally, though the consultant’s report recommended that the Bureau  develop indicators to track its performance, the Bureau has not  established any indicators or measures to track progress in  accomplishing its guiding principles or mission to be a “one-stop shop.”  Federal standards for internal control and key practices for organizational  transformations stress the importance of setting measurable objectives  and developing performance measures to assess progress. The  consultant’s initial implementation plan identified a number of potential  performance indicators for the Bureau, including customer satisfaction.  Bureau officials said they currently track data on projects through early  assistance and application evaluation. However, Bureau officials said  they do not want to use certain indicators, such as those that measure  how long different parts of the process take, as they could create  incentives to move projects ahead before they are ready. However, our  prior work shows that to counter such incentives as well as to help an  agency avoid drawing the wrong conclusions about its effectiveness, an  agency could use multiple indicators rather than any one indicator to  assess progress. Concerns about one indicator might be countered by  information from other indicators. For example, to help offset incentives to  move projects ahead before they are ready, an indicator for how long  different parts of the process take could be considered along with an  indicator that also measures the ratio of projects that were and were not  returned to staff to gather additional information. Without establishing or  beginning to use performance indicators that measure the Bureau’s  performance rather than the progress of individual projects as it currently  does, the Bureau will not know if it is achieving its guiding principles or  meeting the mission set out in the conference report that it serve as a  “one-stop shop” that advances projects.

Sponsors Highlighted Positive Experiences and Challenges with Application Process, but Bureau Lacks a Mechanism to Assess How Well Its Process Is Working

Sponsors we interviewed had mixed views on the Bureau’s process for  evaluating applications and providing technical assistance, including  views on whether the process was quick or streamlined. Selected  sponsors had a generally positive experience with the PAB application  evaluation process. However, for TIFIA and RRIF, selected sponsors had  more mixed experiences and identified challenges with the application  evaluation process, including the length and uncertainty of the process,  changes to requirements or terms, and unclear goals and risk appetite— that is, how much risk an agency is willing to accept to achieve its goals— for the programs. Bureau officials identified limitations to providing more  certainty to sponsors for each of these challenges and noted that the  Bureau cannot control all the factors, such as a sponsor’s responsiveness  or changes to a project’s proposed financing, surrounding the application  evaluation process. However, the Bureau has also not determined how it  will improve or streamline its process by, for example, consistently  soliciting feedback from sponsors, nor has it outlined the goals and  appetite for risk for TIFIA and RRIF.

Sponsors Had Positive Experiences with PAB Application Evaluation Process

As discussed earlier, DOT created a consolidated process for evaluating  applications for its financing programs. Selected sponsors we interviewed  that applied for a PAB allocation since the Bureau was created had a  generally positive experience with the PAB application evaluation  process. In particular, sponsors of the four PAB projects we selected  said the process was quick and streamlined. For example, each sponsor  said the process met or exceeded its schedule expectations for receiving  a PAB allocation. In addition, these sponsors said the process was simple  to follow and that the simplicity was an important strength. One sponsor  found its point of contact’s efforts to clearly explain information  requirements early in the process as useful to understand the Bureau’s  expectations. DOT officials also said that PAB applications can move  relatively quickly as they, in contrast to TIFIA and RRIF, do not create a  direct financial risk for DOT or the federal government since DOT’s role is  limited to approving the use of tax-exempt bond authority.

Sponsors Had Mixed Views on TIFIA and RRIF Application Evaluation Process, and Some Cited Challenges

Selected sponsors that applied for TIFIA and RRIF financing had mixed  views on their overall experiences with the Bureau’s application  evaluation process. Some sponsors had positive experiences to share.  Among sponsors of six projects we selected, two sponsors said they  believed the application evaluation process was streamlined, and five  sponsors said it was somewhat streamlined. Some sponsors based  their responses on comparing the Bureau’s process to the processes  previously used to administer TIFIA and RRIF, while other sponsors  focused on whether the process was efficient. For example, one sponsor  that was new to TIFIA and that believed the process was streamlined said  the Bureau was thorough but did not ask repetitive questions and that the  process was not overly onerous. In terms of speed, two sponsors said the  process was quick, two said the process was somewhat quick, and three  said the process was not quick. Among sponsors of the six projects we  selected and ten additional sponsors and stakeholders that had  experience with some part of the Bureau’s application evaluation process,  five sponsors and one stakeholder found the responsiveness of the  Bureau’s staff to questions or issues as most useful, and several  sponsors also praised individual staff or cited the professionalism and  commitment of Bureau staff.

Despite these positive comments, sponsors and stakeholders we  interviewed also identified challenges with the application evaluation  process for TIFIA and RRIF and offered some suggestions to improve the  process, including how to further streamline the process. Based on our  interviews, the most common challenges involved uncertainty related to  the overall length of the application process, changes to the Bureau’s  requirements or terms for loans, and the goals and risk appetite for the  financing programs. We and others have previously reported on some of  these challenges for TIFIA or RRIF.

Length and uncertainty of process. Four sponsors and one  stakeholder said the overall length of the application evaluation  process creates a challenge when seeking and planning for credit  assistance. This challenge predated the Bureau as we similarly  reported in 2012 and 2016, before the Bureau was created, that  project sponsors cited the length of the application evaluation process  for the TIFIA and RRIF programs respectively as challenges.  Furthermore, seven sponsors and three stakeholders we spoke with  also said the Bureau should refine or further streamline the application  evaluation process. For example, one sponsor said it faced an  uncertain timeline when its project awaited Credit Review Team  approval and that it was not informed by the Bureau when the meeting  would be held. The Bureau instituted regular Credit Review Team and  Council meetings to give sponsors a greater sense of certainty and  transparency on when DOT would be voting to advance a project.  Another sponsor said it took the Bureau over 3 months to procure  independent advisors to help with the Bureau’s creditworthiness  review, though Bureau officials said it takes about 6 weeks to procure  these advisors. In our analysis of six selected TIFIA and RRIF  projects, we found that five projects signed their credit agreements  between 3 and 6 months later than was anticipated when the project  was in creditworthiness review, according to Bureau documents for  each project. Our analysis also found that the processing time for  steps in the process varied, including steps that may be more within  the Bureau’s control. For example, the number of days between a  project’s receiving approval by the Council and the Secretary ranged  from same-day approval to 43 days. Though some slowdowns can  result from factors that are out of the Bureau’s control, sponsors we  interviewed discussed the overall effect of slowdowns to projects. For  example, sponsors of two projects said application slowdowns led to  cost increases and a schedule delay for one project. To improve the  application evaluation process, three sponsors and one stakeholder  said the Bureau could provide tailored schedules for a project for each  phase of the process. One stakeholder also said the Bureau could  add certainty and transparency by providing information on how long  different phases generally take, information that this stakeholder said  it had not received when working with the Bureau, though this is a  customary practice when seeking financing in the private sector.

Bureau officials pointed out limitations to providing or predicting formal  schedules and timelines for the process for specific projects. Bureau  officials said many factors influence how quickly a project can  advance through the application evaluation process for TIFIA and  RRIF, primarily the quality of the project’s credit and overall  complexity. In addition to these primary factors, Bureau officials said  an application’s processing time can be affected by a sponsor’s  responsiveness to requests or whether the sponsor is concurrently  negotiating other agreements. Bureau officials said they do not tell a  sponsor the specific date of the Credit Review Team or Council  meeting on which its project will be reviewed, but instead tell a  sponsor what information is needed and by when to reach the next  meeting. The Bureau takes this approach because a sponsor may, for  example, provide incomplete information, meaning the project would  have to wait to be discussed at a meeting that is later than expected.  Furthermore, the dates of Council meetings often change due to the  members’ schedules, and the Bureau does not want to cause a  sponsor undue alarm if the date changes. Bureau officials said they  provide a general schedule to a sponsor once a project enters  creditworthiness review and use this schedule as a starting point to  build a tailored schedule for a project. We found that this general  schedule uses historical data to show how long steps in the process  could take, but this schedule uses steps and decisions for the process  used for TIFIA that pre-dated the Bureau. Bureau officials also said  they may informally identify ways to expedite the process where  appropriate for a specific project, but that these enhancements affect  primarily lower-risk projects.

Changing requirements or terms for loans. Six sponsors said  changing requirements or terms during the application evaluation  process created a challenge of having to navigate new expectations  during the process. For example, two sponsors said they had to make  changes to terms and conditions for loans late in the process.  Specifically, one of the sponsors said it would have preferred to learn  about the Bureau’s policy related to certain terms earlier in the  process rather than have to accept an unexpected change late in the  process, after it has committed time and resources to the process.  One sponsor said certain terms developed by the Bureau’s  underwriting team, which conducts the creditworthiness review, had to  be restructured following review by the Credit Review Team. Another  sponsor said the Bureau changed or introduced new requirements  after it began the application evaluation process, including what was  required at particular steps, but did not provide reasoning for its  changes. To address such challenges, four sponsors and two  stakeholders said the Bureau could better accommodate projects with  different revenue streams by, for example, creating different standard  terms and contract templates.

Bureau officials described factors that can result in changes to the  tentative terms and conditions during the application evaluation  process for a project. For instance, if a project’s scope or construction  cost estimates change significantly in ways that affect the financial  assumptions for a project, the Bureau must reevaluate the project and  make changes to the terms and conditions accordingly. Bureau  officials said they try to balance providing certainty and flexibility but  lean toward providing flexibility; for instance, the Bureau will try to  accommodate a sponsor that changes the proposed financing for a  project, which then may result in changes to terms as the Bureau  reevaluates the project’s risk. In addition, the terms and conditions  discussed for a project are tentative until they are approved by the  Credit Review Team, Council, and Secretary. According to Bureau  officials, sponsors can advance through the application process more  quickly and with greater certainty by agreeing to use the Bureau’s  standard credit terms—that is, agreeing to the terms and conditions in  a template provided by the Bureau as opposed to choosing to  negotiate with the Bureau with those terms and conditions as a  starting point. Finally, Bureau officials said they were developing two  additional standard loan templates to post on the Bureau’s website  with the two existing loan templates for projects with different  financing structures and revenue streams.

Unclear program goals and risk appetite. Many sponsors we  interviewed said the Bureau did not clearly convey the program goals  or appetite for risk for its TIFIA and RRIF programs. Eight sponsors  and one stakeholder cited the Bureau’s approach toward risk as  creating a challenge for sponsors to determine if their projects fit the  Bureau’s programs. Four sponsors said the Bureau required strict  terms and conditions in its credit agreements that seemed excessive,  and one sponsor said such strict terms can impose additional costs on  a sponsor without materially improving credit quality since a project  must have an investment-grade credit rating. One sponsor stated that  the lack of clarity on goals and appetite for risk for its project, coupled  with other challenges, led the sponsor to withdraw from seeking  financing. According to the sponsor, while the programs were created  to fill market gaps, it is not clear whether the Bureau’s financing  programs currently seek to provide financing to lower risk projects that  have a high-quality credit rating or to higher risk projects that are  unable to secure financing in the private markets. Similarly, a May  2017 Congressional Research Service report noted that a significant  portion of RRIF financing has gone to passenger rail projects since  2008, though the program was primarily created to support freight rail  projects, and that the size of loans and some of the risks for  passenger rail assistance differ from the assistance historically  provided for freight rail. One sponsor we spoke with said it would be  helpful if the Bureau and the Council shared information with sponsors  regarding DOT’s appetite for risk when evaluating projects, similar to  how commercial banks can share a risk profile framework.

Bureau officials said DOT’s financing programs and their treatment of  risk have evolved over the past decade based on changes to private  markets and lessons learned by DOT in working on projects that  faced bankruptcy. According to Bureau officials, the Bureau has also  changed its standard terms and conditions, as any lender would do,  over time. However, Bureau officials said the Bureau lacks an external  statement that communicates its goals and appetite for risk for its  financing programs. Bureau officials told us they have developed a  draft risk appetite statement for internal use. Officials said this risk  appetite statement is imbedded in draft credit-risk guidelines the  Bureau is developing to use to enable more consistent review of  individual projects applying for financing. The officials noted that this  draft statement is short and general by design because TIFIA and  RRIF can finance a wide range of projects. Furthermore, Bureau  officials said it would be difficult to create a public risk appetite  statement, as suggested by the consultant, that did not constrain their  flexibility to finance a range of projects, particularly as the Bureau  seeks to further diversify its portfolio and assist a variety of projects. In  lieu of a public risk appetite statement, the Bureau encourages  sponsors to meet with its staff early to assess whether a project would  be a good fit for its financing programs. However, Bureau officials  agreed that it could be beneficial for the Bureau to issue a public  statement that conveys how it intends to balance its financing portfolio  and support varying types of risks and projects that seek assistance.

Bureau Lacks a Mechanism to Assess its Process

Given the challenges identified by sponsors, we found that the Bureau  has not developed an approach to assess how effectively its application  evaluation process works for TIFIA and RRIF, including what in the  process is challenging and what works well. In particular, Bureau officials  said they have not formally analyzed the amount of time it takes for  projects to proceed through the process due to concerns that assessing  speed and efficiency may not be appropriate to track for all projects. For  example, a sponsor may not need financing immediately and thus choose  to proceed at a slower pace. Also, while Bureau officials said it would be  beneficial to formally solicit and analyze the satisfaction of sponsors that  have closed loans, the Bureau has not implemented a mechanism to  systematically solicit feedback on sponsors’ experiences, including any  challenges. Federal standards for internal control state that management  should design control activities to achieve its objectives. Control activities  include reviews of an agency’s programs or activities to compare actual  results to objectives and expected results, for example by evaluating the  amount of time projects take in each step of the process. Federal  standards for internal control also state that an agency should externally  communicate information to achieve its objectives; this communication  includes receiving information through reporting lines from external  parties to help ensure effective operations. In addition, Office of  Management and Budget guidance to agencies that manage financing  programs also states that effective oversight relies on robust data  collection and reporting systems that include, for instance, metrics from  collected feedback on customer service or overall applicant satisfaction.  As noted above, the Bureau cannot control all the factors and  circumstances surrounding the application evaluation process. However,  officials have stated that the Bureau seeks to expand and diversify the  types of projects that access the TIFIA and RRIF programs, and one of  the Bureau’s own guiding principles is to clear roadblocks to provide  financing more quickly and transparently and to have a consistent  application process. Without a mechanism to formally examine how to  improve and further streamline the process, the Bureau may be missing  an opportunity to address any recurring challenges with the process or  with how the Bureau communicates with sponsors, a situation that could  discourage sponsors from the seeking financial assistance from these  programs.

Moreover, the Office of Management and Budget has directed agencies  that manage financing programs to establish acceptable risk thresholds to  balance policy goals with risks and costs to the taxpayer, and to monitor  the program’s progress toward achieving policy goals within those  acceptable risk thresholds. Federal standards for internal control also  call for management to define objectives or goals clearly to enable the  identification of risks and define risk tolerances. These standards also call  for management to externally communicate the necessary information to  achieve its goals. In the initial implementation plan, the Bureau’s  consultant recommended that the Bureau publicly issue a risk appetite  statement that specified acceptable types of risks and projects DOT would support. We have previously reported that setting an organizational  risk appetite is an example of a good practice agencies can take to align  risk management processes to goals and objectives. We also reported  that by not clearly defining and communicating its appetite for risk, an  agency could be taking risks well beyond management’s comfort level or  be passing up opportunities by assuming its leaders were risk averse. In  addition, a former DOT official we interviewed said DOT and the Bureau  should have an in-depth conversation about the risk in its portfolio of  projects to help decide what risks are tolerable and, thus, help the Bureau  better decide the risks it can accept for individual projects. Without clearly  defining and communicating to the public the goals and appetite for risk  for TIFIA and RRIF programs, the Bureau may be missing an opportunity  to make its application process more transparent. Moreover, by issuing a  public statement that clearly communicates the types of risks DOT is  willing to accept, sponsors would be in a better position to determine if the  TIFIA and RRIF programs would be a feasible option for their projects  before committing resources to applying.

Half of Selected Sponsors Were Satisfied with the Bureau’s Technical Assistance when Seeking Financing, but Some Sponsors Highlighted Concerns

Since it opened in July 2016, the Bureau has provided technical  assistance to sponsors for 119 distinct projects, based on our analysis of  Bureau data. As of August 2018, about half of projects were in the early  phases of working with the Bureau. In total, 56 projects were in initial  engagement or project development, the phases during which the Bureau  provides technical assistance to sponsors (see table 1). By mode, rail and  highway projects comprised about half of all projects.

The amount of technical assistance and level of interaction between the  Bureau and project sponsor in the initial engagement and project  development phases varied, based on the sponsor’s experience using  DOT’s financing programs and the project’s complexity. For example, one  sponsor we interviewed met with the Bureau to discuss the expected  timing to apply for and receive a TIFIA loan; this sponsor did not seek  additional technical assistance in project development as it had previously  received a TIFIA loan and had completed work to comply with federal  requirements for the project, including the environmental review and  permitting work. Another sponsor we interviewed was new to the  Bureau’s financing programs and met with the Bureau to learn more  generally about the requirements for the different programs and the  application process.

Half of the sponsors we interviewed were satisfied with the Bureau’s  technical assistance, but some sponsors expressed concerns including  the following:

Ability and willingness to move projects forward. In our interviews with  16 sponsors that received technical assistance from the Bureau, 8  said they were satisfied with the technical assistance provided by the  Bureau, and 9 said that the Bureau functioned as a one-stop shop to  access financing and funding programs and technical assistance.  However, six sponsors said the Bureau’s technical assistance was  slightly helpful or not helpful in clearing roadblocks to provide credit  and grants more quickly and transparently. For example, one  sponsor said its project experienced delays over a period of several  months as it made multiple attempts to obtain specific, actionable  feedback from the Bureau on its materials to better understand what  was needed to advance in the Bureau’s process.

Lack of clarity on RRIF program eligibility. In our interviews with  sponsors, a recurring concern included a lack of clarity from the  Bureau on eligibility requirements for the RRIF program, in particular  for sponsors seeking financing for transit-oriented development  projects. For example, from information gathered from sponsors of  10 inactive projects, we found that four were transit-oriented  development projects that became inactive because the Bureau  determined them to be ineligible. Sponsors of two of these projects  said they were initially told their projects would be eligible, but after  continuing to work with the Bureau for 5 to 6 months, the sponsors  said their transit-oriented development projects were determined to be  ineligible for the RRIF program. In addition, sponsors of these two  projects said they faced difficulty reconciling differences found in the  Bureau’s transit-oriented development eligibility guidance for the RRIF  program and transit-oriented development guidance issued by modal  administrations for other programs. For example, one sponsor said it  felt that the Bureau’s guidance did not clearly outline the eligibility  requirements for transit-oriented development for the RRIF program  and that it would help if the Bureau provided greater clarity about what  kinds of development around rail stations would be eligible.

In response to these concerns, the Bureau has begun taking steps that  could help address them. For example, the Bureau is working to develop  an expedited application process—RRIF Express—for RRIF projects that  meet certain criteria. As we and the DOT Office of Inspector General  have previously reported, sponsors have identified challenges with RRIF that, in some cases, have deterred them from applying to the program, so  steps taken by the Bureau to expand use of the program are of particular  interest to many sponsors of potential rail projects. Despite these  efforts, as stated earlier, the Bureau does not have a written plan to guide  its continued implementation efforts, and it does not have a formal  mechanism to examine how it could improve its process for working with  sponsors. Such a plan and mechanism could help the Bureau better  understand and appropriately address sponsors’ concerns with the  Bureau’s provision of technical assistance.

Bureau Provided Clear Rationale for TIFIA and RRIF Decisions but Not For PAB Decisions

As discussed earlier, the FAST Act required the Bureau to document  major decisions in the application evaluation process and provide a clear  rationale for its decisions. Federal standards for internal control also call  for management to internally communicate the necessary quality  information to achieve its objectives; this communication includes  providing management quality information that is necessary for effective  oversight. We reviewed documents for six TIFIA and RRIF projects and  found the Bureau documented each decision to approve these projects  and provided a clear rationale for those decisions. To document  decisions about whether to advance and approve these projects, the  Bureau used formal meeting agendas and notes from the Credit Review  Team and Council meetings and internal memorandums. For example,  the Bureau used internal memorandums to record the Secretary’s  signature of approval to extend credit to a project. To document the  rationale in support of these decisions, the Bureau used internal reports  and memorandums. For example, to support its decisions to invite or not  invite a project sponsor to submit a formal application, the Credit Review  Team provided a description of how the project satisfied program  requirements like having a preliminary rating opinion letter and how the  project satisfied program creditworthiness standards including the  sufficiency of the repayment source or collateral.

However, in our review of four projects that received PAB allocations, we  found that while the Bureau documented its decision about whether to  advance and approve each application, it did not document a clear  rationale to support that decision. Specifically, the Bureau recorded  decisions in Credit Review Team and Council meeting materials and the  approval letter sent to the sponsor. To evaluate a PAB application, the  Bureau reviews the application against statutory eligibility requirements  and the availability of PAB allocation capacity. We found that the  Bureau’s documents in the PAB evaluation process lacked a clear  rationale in support of decisions. Specifically, the documents summarized  information from the application but did not articulate whether or how the  Bureau determined that this summarized information from the application  satisfied PAB eligibility and availability requirements. We found that this  occurred because the Bureau lacks a policy to document the rationale for  how a project meets statutory and DOT requirements in order to advance  a PAB application.

DOT officials said determining whether a project meets requirements to  receive a PAB allocation can be self-evident, and therefore, the  application itself can be sufficient documentation. However, absent a  documented rationale to support its decisions, it is not immediately clear  what information the Bureau cited or used to make decisions about  applications through the process. As a result, DOT, the Bureau, and the  PAB program could be exposed to risks. For example, we previously  reported that programs that do not have defined application review  procedures may not review applications consistently and thereby leave  the program vulnerable to questions about the integrity of the process.  Moreover, as the PAB program nears the $15 billion allocation limit,  recording the rationale—including the effect of a proposed allocation—would help ensure DOT’s decision makers receive up-to-date information  needed to make informed decisions and manage the program.

With the creation of the Bureau, transportation projects seeking financing  from DOT have a new, central point of contact for assistance. A  concerted initial-planning effort enabled the Bureau to open and start  working with project sponsors in just over 6 months after federal law  called for its creation. The Bureau has made varied progress on its  statutory responsibilities since it was created over 2 years ago. This  situation underscores the need to sustain momentum beyond an initial  implementation effort, in order to give ongoing planning and attention to  additional priorities and tasks and to identify possible improvements  based on early experiences. The Bureau was given a challenging task— to serve as a one-stop shop that provides a number of different services  and diverse technical resources. However, without an implementation  plan and performance indicators, it may not be able to sustain its  progress and prioritize its efforts.

In response to congressional direction for the Bureau to make changes to  streamline the application evaluation process for DOT’s financing  programs, the Bureau created a new, consolidated process to accept and  evaluate applications. However, the Bureau has not developed an  approach to examine whether opportunities for further streamlining and  improvement exist. Furthermore, absent clarity about the Bureau’s  appetite for risks for its financing programs, sponsors lack information to  know if they should invest time and resources applying for TIFIA or RRIF  for their projects. Without examining the Bureau’s process and  communicating its appetite for risk, the Bureau may be missing an  opportunity to address any recurring challenges that may undermine the  purpose and availability of its programs. Finally, for the PAB program, the  Bureau does not have a policy to document its rationale justifying  decisions and that lack of a rationale may leave the Bureau open to  challenges regarding its decisions. By providing the rationale for its  decisions, the Bureau could engender more trust in these decisions and  increase the program’s transparency.

We are making the following five recommendations to DOT:

The Under Secretary of Transportation for Policy should ensure that  the Build America Bureau develop a detailed implementation plan that  sets goals and a timeline for the Bureau’s continued efforts, fills  vacancies in the Bureau, and prioritizes and sequences work to carry  out the multiple responsibilities given to the Bureau in the FAST Act.  (Recommendation 1)

The Under Secretary of Transportation for Policy should ensure that  the Build America Bureau develop performance indicators to assess  the Bureau’s progress toward meeting its guiding principles or mission  as a “one-stop shop.” (Recommendation 2)

The Under Secretary of Transportation for Policy should ensure that  the Build America Bureau develop a mechanism to assess the  Bureau’s application evaluation process for TIFIA and RRIF and  identify and address opportunities to improve and further streamline  the process. This evaluation should include mechanisms to solicit  feedback from project sponsors that sought financing.  (Recommendation 3)

The Under Secretary of Transportation for Policy should ensure that  the Build America Bureau develop and adopt a public statement that  outlines DOT’s and the Bureau’s policy goals and appetite for risk for  the TIFIA and RRIF financing programs. (Recommendation 4)

The Under Secretary of Transportation for Policy should ensure that  the Build America Bureau establish a policy to document a clear  rationale to support decisions made in the PAB application evaluation  process to explain why an allocation should or should not be  approved. (Recommendation 5)

We provided a draft of this report to the Department of Transportation for  review and comment. In its comments, reproduced in appendix III, DOT  concurred with our recommendation to develop performance measures  (Recommendation 2) and to assess its application review process  (Recommendation 3). DOT did not fully concur with our recommendations  to develop a detailed implementation plan (Recommendation 1), adopt a  public statement of its policy goals and risk appetite for its financing  programs (Recommendation 4), and establish a policy to document the  rationale for decisions in the PAB process (Recommendation 5).  In its  comments, DOT did not provide reasons for disagreeing with these three  recommendations. We continue to believe that it is important for DOT to  implement these recommendations to help the Bureau prioritize and  complete its continued implementation efforts and to help improve the  transparency of the Bureau’s processes and decisions for evaluating  applications. DOT also provided one technical comment, which we  incorporated.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of the Department of Transportation, and other  interested parties. In addition, the report is available at no charge on the  GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or flemings@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

The Fixing America’s Surface Transportation Act (FAST Act) required that  the Department of Transportation (DOT) establish a finance bureau to  coordinate and consolidate certain surface transportation funding and  finance programs. The FAST Act also included a provision for GAO to  review the Bureau’s actions to establish procedures for evaluating  applications for programs it administers and provide a clear rationale for  major decisions in the application evaluation process. We assessed (1)  the progress DOT made to establish the Bureau and carry out its  responsibilities; (2) the Bureau’s process for evaluating applications and  providing technical assistance, including obtaining the views of sponsors  and stakeholders; and (3) whether the Bureau, when evaluating  applications, has provided a clear rationale for its decisions. In the second  objective, we focused on the Bureau’s work evaluating applications and  providing technical assistance because these two responsibilities aligned  with the mandate for GAO and were responsibilities the Bureau has made  the most progress on.

To examine DOT’s progress establishing the Bureau, we reviewed DOT  and Bureau documents—90-day and yearly implementation progress  reports to Congress, operating procedures, job descriptions and position  postings for vacant positions, and budget requests—to determine DOT’s  plans and progress organizing and staffing the Bureau. We also analyzed  reports, including an initial implementation plan, created by a consultant  DOT hired in 2016 to help it create and organize the Bureau, and we  reviewed the FAST Act and appropriations acts to identify DOT  authorities to eliminate and consolidate offices and transfer funds and  staff in order to establish the Bureau. We interviewed former and current  DOT and Bureau officials to understand DOT’s goals and priorities,  coordination with modal administrations, challenges or successes, and  key next steps for the Bureau. We selected former DOT and Bureau  officials who played key roles to establish or work in the Bureau or that  were recommended in our interviews. We also interviewed select  associations and advisors about their interactions with the Bureau to date,  including observations on its creation, organization, and staffing. We  selected associations representing project sponsors that have sought or  could seek assistance from the Bureau, that vary in mode and sponsor  type, and that vary in terms of experience working with the Bureau since  July 2016. We selected advisors that have experience working with  multiple project sponsors and that worked with the most sponsors of  recently closed TIFIA and RRIF loans. At the end of this appendix, these  selected organizations are included in table 2, which lists the individuals  and organizations interviewed for this report.

In addition, to determine DOT’s and the Bureau’s progress in carrying out  responsibilities set out for the Bureau in the FAST Act, we examined DOT  and Bureau documents, such as the Credit Programs Guide and Build  America Bureau Processes and Governance Manual, and procedures,  documents, and other information publicly available on the Bureau’s  website. We supplemented this information with interviews with DOT and  Bureau officials to understand the progress the Bureau made for each  responsibility and how the Bureau prioritized its approach to fulfilling  these responsibilities overall. We also used these interviews to  understand the Bureau’s timeline or strategy for fulfilling each  responsibility in the future or the cause of no action to date for  responsibilities on which the Bureau has taken limited or no action, as  well as to understand what metrics or performance measures DOT  established to track its progress or outcomes for these responsibilities.  We also asked stakeholders we interviewed—including select former  DOT officials, associations, and advisors, selected as described above— about their observations on the Bureau’s progress in carrying out these  responsibilities. We compared DOT’s and the Bureau’s efforts to federal  standards for internal control and key practices for organizational  transformations.

To assess the Bureau’s process for evaluating applications and providing  technical assistance, we reviewed the Credit Programs Guide and other  Bureau documents and interviewed Bureau officials to determine the  phases and steps in the process. We also reviewed these documents and  interviewed Bureau officials to understand the changes DOT made to  combine and consolidate existing processes. Our review of the process of  evaluating applications included semi-structured interviews with selected  project sponsors and stakeholders to understand their experiences using  the application evaluation process, experiences working with the Bureau,  and comparisons of the application process before and after the Bureau  was created, if applicable. First, we selected sponsors for the 10 projects  for which we reviewed application documents, as described below, to  determine whether the Bureau provided a clear rationale for its decisions. Second, we selected other stakeholders—including advisors  and associations (as described above) and projects sponsors with  experience applying for DOT financing both before and after the Bureau  was created. Among these project sponsors, we selected three projects  that had multiple loans; used special authorities or agreements (i.e.,  master credit agreement); or employed public-private partnerships to  deliver projects. Five additional project sponsors, selected as part of  other samples described in this appendix, had experience with some part  of the TIFIA or RRIF application evaluation process under the Bureau, so  we asked these sponsors questions on this part of the process. We  analyzed the interview responses by categorizing them based on the  extent to which respondents said the process was quick, streamlined,  and transparent; what in the process was most useful and most  challenging; suggestions for improving the process; and overall  satisfaction or dissatisfaction with the process.

Furthermore, our review of the Bureau’s process for providing technical  assistance included analyzing the Bureau’s data to describe the projects  that have sought assistance from the Bureau since it opened by mode,  location, type of financing pursued, and step reached in the application  process. For technical assistance, we focused on project-specific  assistance provided by the Outreach and Project Development Office  before a project enters the creditworthiness review phase—referred to as  initial engagement and project development. We reviewed the Bureau’s  data on projects from April 2018 as well as updated data from August  2018. To assess the reliability of these data, we reviewed relevant  documents and interviewed Bureau officials responsible for overseeing  the data to learn how information was entered, maintained, and reviewed.  We also reviewed relevant data elements for missing data, outliers, and  obvious errors. Based on these steps we determined that the data were  sufficiently reliable for the purpose of describing the number and type of  projects that worked with the Bureau and selecting project sponsors to  interview.

We also conducted semi-structured interviews with project sponsors to  understand their experiences working with the Bureau during the initial  engagement and project development phases. In these interviews, we  asked sponsors whether the Bureau serves as a single DOT point of  contact and provides access to its finance programs with greater speed  and transparency; for projects no longer seeking assistance from the  Bureau, we asked about the reasons for doing so. Among project  sponsors actively working with the Bureau, we identified 32 projects that  began working with the Bureau after it was created in July 2016, that had  met with or been in contact with the Bureau in the 6 months prior to April  2018, and that the Bureau ranked as 2 or higher on its readiness scale.  Of these projects, we selected 13 sponsors to ensure variety in project  status (i.e., initial engagement, project development, creditworthiness),  mode, total project cost, prior experience with DOT’s financing programs,  and location. Among project sponsors no longer actively working with the  Bureau, we identified 10 projects that began working with the Bureau  after it was created in July 2016 and had at least two interactions with the  Bureau, based on available data. We selected 5 of these sponsors to  interview to ensure variation in mode and location.

For the Bureau’s provision of technical assistance, we categorized the  responses to questions in terms of which interactions with the Bureau  were most useful and most challenging, suggestions for improving the  process, and overall satisfaction or dissatisfaction. For inactive project  sponsors, we categorized responses according to reasons the project  became inactive or withdrew from working with the Bureau, and what  other financing, if any, was used for the project. Table 2 below lists  project sponsors and other organizations we interviewed. Overall, we  assessed the Bureau’s process for evaluating applications and providing  technical assistance and the collected evidence against federal standards  for internal control and Office of Management and Budget’s guidance for  agencies that manage financing programs.

To assess whether the Bureau provided a clear rationale for its decisions  when evaluating applications, we reviewed the Credit Programs Guide  and other Bureau documents to identify steps and major decision points  and accompanying documents in the application evaluation process. We  identified 5 major decision points for TIFIA and RRIF and 3 major  decision points for PAB. We also used these documents to identify  evaluation criteria for each major decision point (i.e., the information or  requirements that the Bureau says must be considered at each decision  point) to use to assess whether the Bureau provided a clear rationale for  each decision point. We confirmed our list of steps and major decision  points, as well as accompanying documents, with Bureau staff  responsible for the financing programs. We did not examine whether the  Bureau documented decisions for the grant funding program it  administers, and we have previously evaluated this program and also  have work in progress to evaluate it.

To assess whether the Bureau followed these procedures and  documented major decisions and rationale, we selected projects that  went through most of the application process after the Bureau updated its  process in September 2016. For TIFIA and RRIF, these are projects that  completed the first or second decision point—being invited to enter  creditworthiness or being invited to submit a formal application—and had  signed credit agreements as of March 31, 2018. We selected all three  projects that completed the first decision point and had signed credit  agreements. We selected 3 of the 5 projects that completed the second  decision point and had signed credit agreements to ensure variation in  type of sponsor (e.g., state or local government, private entity), mode,  and size of loan. For PAB, we selected all four projects that submitted  an application after September 2016 and received an allocation as of  March 2018.

For each selected project, we reviewed Bureau documents, including  meeting agendas and summaries, memos, summaries of financial  analyses, and letters to sponsors. Two GAO staff independently reviewed  these documents to determine if the Bureau documented and provided a  clear rationale for each major decision point, comparing the documents  against practices in the Bureau’s application evaluation process and  federal standards for internal control. Using Bureau documents, we also  calculated how much time it took for each project to move between each  step and decision point and determined whether each project met its  anticipated financial close date. We did not compare the amount of time it  took for these projects to complete the application process to projects that  received financing before DOT created the Bureau because the steps and  decision points for the application process changed. However, we  interviewed Bureau officials to understand the application evaluation  process and the 10 projects we selected. We also drew on past GAO  work and that of others to understand past findings and challenges for the  financing programs before the Bureau was created.

Appendix II: Additional Information on Build America Bureau’s Organizational Structure and Staffing

The consultant’s initial implementation plan for the Build America Bureau  (Bureau)—created by the consultant while working with the Department of  Transportation’s (DOT) internal committees—outlined an organizational  structure with responsibilities and roles for its positions. Most positions  resided in three offices that administer specific programs or provide  technical assistance to sponsors.

The Outreach and Project Development Office works to educate  project sponsors about how they can best combine DOT’s financing  and funding programs as well as innovative project delivery  approaches. The implementation plan envisioned a director to  manage the office, general project development lead positions to  conduct outreach and provide assistance to sponsors on specific  projects, and specialized project development lead positions with  expertise in a particular area, such as rail or maritime, to help  sponsors with more complex projects and to provide technical  assistance to other sponsors and staff in the Bureau. The plan also  envisioned best practices positions with expertise in public-private  partnerships, transit-oriented development, or federal permitting.

The Credit Programs Office administers the application processes for  the Transportation Infrastructure Finance and Innovation Act (TIFIA)  and Railroad Rehabilitation and Improvement Financing (RRIF)  programs. The implementation plan envisioned a director to manage  the office with the remaining positions split among three areas:  underwriting positions to review and evaluate project applications,  portfolio management positions to manage existing credit  agreements, and risk management positions to evaluate project- specific risks, conduct audit activities, and carry out other risk and  budget activities. Underwriting staff, for example, conduct an in-depth  review of a project application that includes evaluating the plan of  finance and feasibility of the revenue stream pledged to repay credit  assistance or sufficiency of other pledged collateral.

For the Infrastructure for Rebuilding America (INFRA) Grants Office,  the structure envisioned a director and additional positions to  administer the competitive grant program.

Beyond these offices, the initial implementation plan proposed an  Executive Director, as required by statute, to lead the Bureau’s work and  positions to support the entire Bureau. The organizational structure also  included additional positions to provide full-time legal support to the  Bureau, which are housed in DOT’s Office of General Counsel.

Our analysis—based on Bureau documents and discussions with Bureau  officials—shows that when the Bureau opened in July 2016, 7 months  after the Fixing America’s Surface Transportation Act (FAST Act) was  enacted, it largely followed the envisioned structure. When the Bureau  opened in July 2016, DOT detailed or transferred 29 staff to run the  Bureau. Twenty-five of these staff filled positions in the Bureau’s three  offices, and the four remaining staff filled positions in the Office of  General Counsel that provided dedicated legal services to the Bureau.  These staff came from other parts of DOT as follows:

Federal Highway Administration (FHWA). DOT detailed 16 staff from  FHWA’s TIFIA Joint Program Office to the Bureau, primarily to work in  the Bureau’s Credit Programs Office. DOT also detailed three  attorneys from FHWA’s Office of the Chief Counsel to the Office of  General Counsel.

Federal Railroad Administration (FRA). DOT transferred five staff from  FRA to the Bureau’s Credit Programs Office.

Federal Transit Administration (FTA). DOT transferred one attorney  from this modal administration to the Office of General Counsel.

Maritime Administration. DOT transferred one staff member from this  modal administration to the Bureau to work in the Outreach and  Project Development Office.

Office of the Secretary of Transportation (OST). DOT transferred the  remaining three staff from the Build America Transportation  Investment Center to work in the Outreach and Project Development  Office and in Bureau leadership and support roles.

DOT, in opening the Bureau, did not fill any of the positions in the INFRA  Grants Office. According to current and former DOT officials, DOT used  staff in OST that administer another competitive grant funding program to  administer the first round of INFRA grants, as noted above. This decision  also allowed DOT to move quickly to make grants for the first round of  funding. At the same time, DOT officials told us that no funding was provided specifically to administer the INFRA program, so hiring staff to  fill those envisioned positions would have diverted resources from other  Bureau priorities. In addition, one OST staff person who both worked on  the INFRA program and managed the Private Activity Bonds (PAB)  program continued to manage PAB after the Bureau took over  administration of that program while staying in OST.

DOT also decided to leverage other DOT offices and modal  administrations to carry out some of the Bureau’s work. Bureau officials  stated that this model allows the Bureau to realize efficiencies by using  the expertise and support of existing DOT offices rather than duplicating  this expertise and support. Figure 2 summarizes the DOT offices that the  Bureau interacts with, based on our analysis of Bureau and DOT  documents and interviews with Bureau officials.

Support provided by other offices within OST: As noted above, the  Office of Infrastructure Finance and Innovation administers the INFRA  program, leveraging the experience and knowledge of staff in that  office that administer another competitive grant program. The Bureau also coordinates with the Infrastructure Permitting Improvement  Center on its FAST Act responsibilities related to environmental  reviews and permitting.

Expertise from DOT’s modal administrations: Designated liaisons in  FRA, FTA, FHWA, and the Maritime Administration coordinate with  the Bureau to help assess project readiness or identify issues on  projects applying for financing, such as ongoing litigation or work  remaining on environmental reviews. Liaisons are funded by their  modal administration and told us that they spend anywhere from 10 to  75 percent of their time serving as a liaison to the Bureau.

The FAST Act gave DOT authority to consolidate or eliminate offices and  positions when creating the Bureau. When the Bureau opened in July  2016, DOT eliminated the FRA office that administered RRIF and the  Build America Transportation Investment Center as staff and functions  transferred to the Bureau. DOT also plans to eliminate the TIFIA Joint  Program Office—the office that FHWA staff detailed to the Bureau  formerly worked in. According to DOT officials, the FHWA staff from that  office are fully integrated and working in the Bureau; however, these staff  will remain FHWA employees until DOT completes actions to transfer  funds and staff to the Bureau and formally eliminate that office. See below  for more detail on the transfer of funds and staff. DOT officials said it was  easier to eliminate FRA’s RRIF office than the TIFIA Joint Program Office  because the RRIF office did not have dedicated administrative funding  like the TIFIA office did and FRA employees worked on RRIF as one of  several duties.

Changes to Organizational Structure and Staffing

After opening and operating the Bureau, DOT made minor changes to the  initial organizational structure. According to DOT officials, the Bureau has  evolved and changed since it began operations—as would occur for any  new office—and its current structure differs in various ways from its initial  structure. Based upon the Bureau’s early experience, it eliminated 7  proposed positions: 1 position providing legal support, 3 positions for  outreach to sponsors, 2 for addressing risk management, and 1 for  managing the Bureau’s portfolio. The Bureau decided to eliminate the  outreach positions because despite earlier findings that DOT’s TIFIA and  RRIF programs were underutilized, officials discovered that more  sponsors than expected were interested in those financing programs. The  Bureau also added 5 positions that had not been initially proposed: 2  underwriter positions and 3 positions that work across individual Bureau  offices. These cross-Bureau positions handle several duties, including  budget, human resources, and procurement issues for the Bureau,  working closely with the Office of the Under Secretary for Policy.

Funding for the Bureau currently comes from three sources, though DOT  officials said they want to consolidate all funding for the Bureau in OST.  First, 12 positions are funded through appropriations from general  revenues to OST specifically for the Bureau. The President’s budget  request has requested funding to support these 12 positions since fiscal  year 2017. Second, 23 positions for the TIFIA program are funded  through appropriations from the Highway Trust Fund. This funding cannot  be used for positions that do not work on matters involving the TIFIA  program, unless it is formally transferred to the Bureau, according to  DOT. Third, the remaining 8 positions identified in the Bureau  organizational chart are not carried out by Bureau employees. Instead,  they are carried out by contractors and employees supported by other  units of DOT, an approach that Bureau officials said is consistent with the  missions of those other units and the Bureau. For instance, FHWA funds  two positions in the Outreach and Project Development Office, outside of  funding for TIFIA. DOT’s initial ability to transfer funds under the FAST  Act to support the Bureau ended in December 2017; according to Bureau  officials, this impaired the Bureau’s ability to finish steps to formally  consolidate staff who are paid from the Highway Trust Fund. Due to how  funds for TIFIA are authorized to FHWA in the FAST Act, DOT needed to  receive transfer authority beyond December 2017 so that it could  maintain its ability to pay Highway Trust-funded employees in future years  after they are formally transferred to OST and paid from OST’s budget. In  early 2018, DOT’s ability to transfer funds was extended in the fiscal year  2018 Consolidated Appropriations Act. DOT provided information to the  appropriations committees on transferring funds and consolidating offices,  as required in statute, and is awaiting a response from these committees.  See figure 3 below for position titles, locations in the organization, and  funding sources as of October 2018.

The Bureau has had many vacant positions since it opened in July 2016,  based on our interviews with current and former DOT officials and our  review of Bureau documents. In the 6 months after the Bureau opened,  DOT filled some positions, including competitively selecting an Executive  Director. Then, in early 2017, DOT and other executive branch agencies  were subject to a hiring freeze for about 3 months. However, in the time  since the end of the hiring freeze, we found that the Bureau has  continued to have many vacant positions (see fig. 4).

The Executive Director position has been vacant since the person  previously in that role stepped down in November 2017. DOT posted an  unsuccessful announcement for this position in November 2017, followed  by a second announcement in April 2018 that largely matched the earlier  announcement.

Beyond the Executive Director, the Bureau has had between 8 and 11  vacant positions in its organizational structure throughout 2018. Some  positions, such as the Deputy Executive Director position, have never  been filled. Other positions were filled but became vacant as staff left the  Bureau for other opportunities. According to our analysis of Bureau  documents, 16 of the 29 staff who were detailed or transferred to work in  or for the Bureau when it was created in July 2016 remained in the  Bureau as of August 2018. DOT and Bureau officials said that DOT did  not want to fill vacant positions in the Bureau before filling the Executive  Director position, as hiring is one of that position’s duties. Therefore,  between fall 2017 and spring 2018, while the Executive Director position  was vacant, DOT did not actively fill other vacancies, instead taking a  “wait and see” approach, according to DOT and Bureau officials.  However, in spring 2018, DOT and Bureau officials said they identified 5  critical vacancies to fill but were not able to provide a written document  that laid out a hiring plan or sequence for filling the remaining positions.  As of October 2018, Bureau officials said they had filled 5 positions and  are in various stages of filling all the remaining vacant positions, either  planning to write position descriptions, working with human resources to  post jobs, or are in the hiring process.

Finally, according to DOT and Bureau officials, DOT continues to use  other OST staff to administer INFRA because of uncertainties related to  the Bureau’s funding sources. However, DOT and Bureau officials said  that many members of the team that oversees the INFRA evaluation  process are also members of the Council on Credit and Finance, so the  Bureau has an indirect role in the program.

The Bureau has used detailees and contractors to fill vacant positions in  the Outreach and Project Development Office. This office, unlike the  Credit Programs Office, did not have an existing program or a large  existing office to fill its positions from. Since July 2016, four detailees from  other parts of DOT have filled positions in the Outreach and Project  Development Office—the project development or specialized project  development lead positions—on short, 4 to 6 month terms. Two of these  detailees were reassigned permanently to these positions in the Bureau  in summer 2018, and the other two detailees returned to their prior roles.

Recently, the Bureau filled one additional such positon with a 2-year  detailee from the Federal Aviation Administration. Finally, the Bureau  filled two other positions with staff provided through an interagency  agreement with the John A. Volpe National Transportation Systems  Center effective through fiscal year 2020.

Appendix III: Comments from the Department of Transportation

In addition to the contact named above, Steve Cohen (Assistant Director);  Joanie Lofgren (Analyst in Charge); Lauren Friedman; David Hooper;  Lauren Lynch; Ned Malone; Malika Rice; Amy Rosewarne; and Michael  Sweet made key contributions to this report.

State and local governments or other transportation authorities who want project funding from the Department of Transportation used to face long journeys through multiple programs and offices.

A 2015 law sought to create a one-stop shop for applicants. It required DOT to consolidate key programs into one bureau—the Build America Bureau—and simplify the application process.

We found that the bureau has tried to streamline its application process but doesn't have a way to evaluate progress.

We recommended that the bureau assess its efforts to streamline the application process and find out what customers think.