Report to Congressional Committees

United States Government Accountability Office

GAO 

URBAN 

PARTNERSHIP 

AGREEMENTS 

Congestion Relief 

Initiative Holds 

Promise; Some 

Improvements Needed 

in Selection Process 

March 2009 

GAO-09-154 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

 March 2009

URBAN PARTNERSHIP AGREEMENTS

Congestion Relief Initiative Holds Promise; Some 

Improvements Needed in Selection Process

Highlights of GAO-09-154, a report to 

congressional committees 

As part of a broad congestion relief 

initiative, the Department of 

Transportation awarded about $848 

million from 10 grant programs to 

five cities (Miami, Minneapolis, 

New York, San Francisco, and 

Seattle) in 2007 as part of the 

Urban Partnership Agreements 

(UPA) initiative. The UPA initiative 

is intended to demonstrate the 

feasibility and benefits of 

comprehensive, integrated, and 

innovative approaches to relieving 

congestion, including the use of 

tolling (congestion pricing), transit, 

technology, and telecommuting 

(4Ts). Congestion pricing involves 

charging drivers a fee that varies 

with the density of traffic. 

This report addresses 

congressional interest in (1) how 

well the department communicated 

UPA selection criteria, (2) whether 

it had discretion to allocate grant 

funds to UPA recipients and 

consider congestion pricing as a 

priority selection factor, and (3) 

how it is ensuring that UPA award 

conditions are met and results are 

assessed. GAO reviewed 

departmental documents, statutes 

and case law, and interviewed 

department officials and UPA 

applicants. 

What GAO Recommends

The department should provide 

applicants with information about 

selection criteria in similar 

initiatives and follow statutory 

priority consideration of grant 

selection factors. For the most 

part, the department agreed with 

the draft report and agreed to 

consider its recommendations. 

Although GAO did not assess the merits of the UPA initiative’s design, it has 

reported on its support for integrated approaches to help reduce congestion. 

With minor exception, the department did a good job communicating the 

criteria it would use to select urban partners and how much funding was 

available, but it did not clearly communicate the relative priority of the 

criteria or extend the same outreach to all applicants. The department clearly 

communicated 10 of the 11 selection criteria—such as the political and 

technical feasibility of projects—that it used to decide which cities to select as

urban partners, but it did not publicize which criteria, other than the 4Ts, were 

most important. In addition, over time, the department provided information 

indicating that about $852 million was available for these projects—a figure 

short of the actual $1.02 billion but sufficient to give applicants a rough idea of 

the program’s size. Clearly communicating selection criteria, their relative 

priority, and the available funding allows applicants to make informed 

decisions when preparing their applications. GAO also found that the 

department told two semifinalists for being named urban partners how to 

revise their applications to make them more competitive, but did not do so for 

the other semifinalists. Both were ultimately selected as urban partners. 

However, in the absence of government-wide or departmental guidance, it is 

unclear how to assess the appropriateness of this assistance. 

The department acted within its authority to allocate about $848 million of its 

fiscal year 2007 appropriation under 10 grant programs to five UPA cities. 

Typically these funds have been awarded through congressional direction 

(earmarks) to thousands of jurisdictions; but the department’s 2007 funds 

were not subject to such directives. In addition, the department had authority 

to consider congestion pricing as a priority selection factor when awarding 

funds because the underlying statutes either explicitly permit it or provide the 

department with the authority to do so. However, GAO found that the 

department likely did not comply with statutory requirements of the 

Transportation, Community, and System Preservation program by failing to 

require applicants to meet all five statutory factors in order to receive “priority 

consideration,” but this may not have affected the selection outcome. 

The department has developed a framework to ensure that UPA award 

conditions are met and the initiative’s results will be evaluated. The 

department is monitoring urban partners’ completion of award conditions, 

such as obtaining congestion-pricing authority, and has already acted when 

conditions have not been met, such as by taking away New York City’s 

funding when it could not obtain congestion pricing authority from the state. 

In addition, the department plans to evaluate urban partners’ strategies for, 

and results in, reducing congestion. The evaluation, to be conducted by 

To view the full product, including the scope Battelle Memorial Institute, is in its early stages. and methodology, click on GAO-09-154. 

For more information, contact Katherine A. 

Siggerud at (202) 512-2834 or 

siggerudk@gao.gov and Susan Sawtelle at 

(202) 512-6417 or sawtelles@gao.gov.
Contents 

Letter 1

Results in Brief 5 

Background 8 

The Department Communicated Most Selection Information to 

Applicants, but Gave Two Applicants Assistance over Others 16 

The Department Had the Authority to Allocate Funds to the UPA 

Initiative, and to Consider Congestion Pricing as a Priority 

Selection Factor for Underlying Grant Programs 28 

The Department Has a Framework to Ensure That Award 

Conditions Are Being Met and That Results Will Be Evaluated 34 

Conclusions 40 

Recommendations for Executive Action 41 

Agency Comments and Our Evaluation 41 

Appendix I Department of Transportation Actions to Select 

Corridors of the Future and Ensure Transportation 

Benefits 45 

Appendix II The Department Actively Promotes Public-Private 

Partnerships to Reduce Highway Congestion 52 

Appendix III Extent to Which Previous Recipients of Grant 

Programs Received UPA Initiative and Corridors 

Funding 57 

Appendix IV Scope and Methodology 63 

Appendix V The Department’s Legal Compliance in Awarding 

Grants to Support the UPA Initiative 66 

Appendix VI GAO Contacts and Staff Acknowledgments 93 

Page i GAO-09-154 Congestion Relief Initiatives 
Tables 

Table 1: Discretionary Grant Programs Available and Used to 

Support UPAs 12 

Table 2: Urban Partner Congestion-Reduction Projects Using the 

4Ts 14 

Table 3: The Department’s Communication of Information on 

Funding Availability to Applicants 24 

Table 4: Nine Grant Programs that Permit the Department to Use 

Congestion Pricing/Tolling as a Selection Factor 31 

Table 5: Four Phases of the UPA Evaluation 38 

Table 6: Evaluation Questions and Analyses for the UPA Evaluation 39 

Table 7: Corridors Projects That Received Funding 47 

Figures 

Figure 1: The Department’s View of How Tolling (Congestion 

Pricing), Transit, Technology, and Telecommuting Reduce 

Congestion 9 

Figure 2: Degree to Which the Department Communicated 

Selection Criteria to Applicants 18 

Figure 3: UPA Funding Timeline 22 

Figure 4: Locations of the Six Corridors of the Future 46 

Figure 5: Comparison of Funding Provided through 11 Grant 

Programs to Top 10 States and to UPA Initiative and 

Corridors States 58 

Figure 6: Comparison of Funding Provided through the Bus and 

Bus Facilities and New Starts/Small Starts Programs to 

Top 10 States and to UPA Initiative and Corridors States 60 

Figure 7: Comparison of Funding Provided through 9 Remaining 

Grant Programs to Top 10 States and to UPA Initiative and 

Corridors States 62 

Page ii GAO-09-154 Congestion Relief Initiatives 
Abbreviations 

4Ts tolling, transit, technology, and telecommuting 

Corridors Corridors of the Future 

FHWA Federal Highway Administration 

HHS Department of Health and Human Services 

HOT high-occupancy toll 

HOV high-occupancy vehicle 

ITS-OTMC Intelligent Transportation Systems-Operational 

Testing to Mitigate Congestion 

LEAA Law Enforcement Assistance Administration 

PUP preliminary urban partner 

SAFETEA-LU The Safe, Accountable, Flexible, Efficient 

Transportation Equity Act—A Legacy for Users 

TCSP Transportation, Community, and System 

Preservation program 

UPA urban partnership agreement 

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Page iii GAO-09-154 Congestion Relief Initiatives 
United States Government Accountability Office

Washington, DC 20548 

 

March 25, 2009 

Congressional Committees 

Mobility on our nation’s roads is essential for a strong economy. These 

roads provide businesses with access to materials, markets, and people 

and provide people with access to goods, services, jobs, and recreation. 

According to the Department of Transportation (the department), 

congestion is one of the single largest threats to our economic prosperity 

and way of life. In addition, the department states that congestion and the 

growing unreliability of the highway system impose severe costs on the 

quality of life of millions of Americans.1

 We have reported that the nation’s 

transportation infrastructure is under great strain and that congestion is 

significant and expected to worsen. Furthermore, federal funds are often 

tied to a single transportation mode, which may limit the use of these 

funds to finance the greatest improvements in mobility.2

 The department 

also has recognized that these “modal funding silos” present challenges in 

combating congestion,3

 and in May 2006 it issued a strategy to reduce 

congestion that, among other things, called for 

• entering into urban partnership agreements (UPA) under which the 

department would give priority consideration for funding from existing 

programs to cities, designated as urban partners, that had developed and 

were standing ready to quickly implement a comprehensive, integrated, 

and innovative performance-oriented approach designed to reduce 

congestion through the use of the “4Ts”—tolling (more specifically, 

 

1

U.S. Department of Transportation, National Strategy to Reduce Congestion on America’s 

Transportation Network (Washington, D.C., May 2006). 

2

GAO, Transportation Programs: Challenges Facing the Department of Transportation 

and Congress, GAO-09-435T (Washington, D.C.: Mar. 10, 2009). For example, according to 

the department, highway spending by all levels of government has increased 100 percent in 

real dollar terms since 1980, but the hours of delay during peak travel periods have 

increased by almost 200 percent during the same period. 

3

U.S. Department of Transportation, Refocus. Reform. Renew. A New Transportation 

Approach for America (Washington, D.C., July 2008). 

Page 1 GAO-09-154 Congestion Relief Initiatives 
 

congestion pricing4), transit, technology, and telecommuting—rather than 

relying on unintegrated efforts to relieve congestion; 

• establishing a Corridors of the Future (Corridors) program as a model for 

adopting a multistate approach to planning, developing, constructing, 

operating, and maintaining nationally and regionally significant 

transportation corridors that would be designated to reduce congestion 

and increase freight system reliability; and 

• reducing barriers to private-sector investment in the construction, 

ownership, and operation of transportation infrastructure.5

In our prior work, we have supported integrated, performance-based 

approaches to reducing congestion.6

 In addition, we have reported that 

public-private partnerships show promise—but also risk—as a strategy to 

provide new infrastructure and funding for transportation needs.7

In February 2007, Congress enacted a continuing resolution for fiscal year 

2007. The continuing resolution funded the department at 2006 levels but 

did not include spending directives (earmarks) for the department’s grant 

programs.8

 According to the department, the continuing resolution gave it 

 

4

Congestion pricing is a tolling strategy that often entails charging drivers a fee that varies 

with traffic volumes or by time of day according to a published schedule to help shift some 

rush-hour traffic to off-peak times. According to the department, it was not looking for 

proposals that simply tolled roads (i.e., would charge a flat fee) to generate revenue but 

was instead seeking proposals that would provide congestion relief. The department also 

considers congestion parking, which charges drivers a fee to park that varies with traffic 

volumes or by time of day, as a form of congestion pricing. 

5

According to the Federal Highway Administration, public-private partnerships involve a 

greater private role in planning, financing, designing, constructing, operating, and 

maintaining a transportation facility compared to traditional procurement methods. 

6

See, for example, GAO-09-435T and 21st Century Challenges: Reexamining the Base of the 

Federal Government, GAO-05-325SP (Washington, D.C.: Feb. 1, 2005). 

7

See GAO, Highway Public-Private Partnerships: More Rigorous Up-front Analysis Could 

Better Secure Potential Benefits and Protect the Public Interest, GAO-08-44 (Washington, 

D.C.: Feb. 8, 2008). 

8

Pub. L. No. 105-5, 121 Stat. 8 (Feb. 15, 2007). In previous years, Congress provided the 

department with specific instructions on which cities and states should receive funds for a 

number of the department’s programs. For example, according to the department’s Office 

of Inspector General, there were about 8,000 funding directives in fiscal year 2006, nearly 

all for highway and transit programs. See U.S. Department of Transportation, Office of 

Inspector General, Review of Congressional Earmarks Within Department of 

Transportation Programs (Washington, D.C., Sept. 7, 2007). 

Page 2 GAO-09-154 Congestion Relief Initiatives 
 

the opportunity to make funding decisions based on programmatic criteria 

and merit, rather than devoting funds to projects specifically directed by 

Congress that, in the department’s view, may have had fewer 

transportation benefits or that otherwise would have been ineligible for 

funding. Given this flexibility, the department decided to further its 2006 

congestion-reduction initiative by making available about $1 billion of its 

2007 appropriation for its UPA initiative, through grants made under 13 

existing highway, transit, and technology grant programs. This was a 

major undertaking over a short time to develop an integrated approach 

from separately existing programs. The department set aside the bulk of 

these funds to support its UPA initiative and, in August 2007, conditionally 

awarded about $848 million from 10 of the 13 programs to five cities: 

Miami, Florida; Minneapolis, Minnesota; New York City, New York; San 

Francisco, California; and Seattle, Washington. 

As part of an integrated approach to reducing congestion, many UPA 

applicant cities9

 proposed to implement a tolling (congestion-pricing) 

project. To address the other three “Ts,” urban partners coupled their 

congestion pricing projects with transit, technology, and telecommuting 

projects. Transit projects included expanded bus service (and sometimes 

ferry service), including providing additional buses and bus stops, express 

bus routes, and park-and-ride facilities. Technology uses included such 

things as providing real-time traveler information on tolls being charged 

and opportunities for rerouting traffic to alternative travel routes. 

Telecommuting involved increasing the number of telecommuters. 

Applying for the UPA initiative required no small effort on the part of 

applicants because many public stakeholders were involved and some 

cities faced political opposition to congestion-pricing projects. For 

example, New York City was unable to obtain authority from the state 

legislature to implement a congestion-pricing approach. In accordance 

with the terms of the department’s agreement with New York City, the 

department therefore cancelled the city’s UPA and in 2008 awarded the 

funds to Chicago, Illinois; Los Angeles, California; and Seattle, 

Washington.10 In addition to awarding funds to cities for integrated 

 

9

In this report, we refer to metropolitan areas as cities, since cities generally took the lead 

with UPA applications. 

10Chicago did not meet its December 2008 deadline for obtaining the legal authority 

necessary to implement congestion pricing. As a result, in accordance with the terms of the 

department’s Congestion Reduction Demonstration Agreement with Chicago, the 

department cancelled Chicago’s agreement. 

Page 3 GAO-09-154 Congestion Relief Initiatives 
 

approaches to reducing congestion that could be implemented quickly, the 

department saw another major benefit of UPAs as providing an incentive 

for state and local transportation stakeholders to work together toward 

transportation solutions. Beyond breaking down stovepipes in devising 

approaches to reduce congestion, UPAs, according to department officials, 

helped break down stovepipes within the department as different 

transportation administrations increased collaboration in addressing 

congestion-reduction strategies, where before they may have acted 

separately.11

In response to the department’s dedication of about $1 billion to its 

congestion-reduction initiatives and its focus on funding a small number of 

cities through the UPA initiative, Congress, in the conference report for 

the department’s fiscal year 2008 appropriation and in a separate letter 

from the Senate and House leadership responsible for transportation 

matters, requested that we review certain aspects of the UPA initiative. To 

do this, we examined (1) the department’s communication and application 

of the selection criteria and funding devoted to the UPA initiative, (2) the 

department’s authority to allocate substantial grant funds to support the 

UPA initiative and to consider congestion pricing as a priority factor in 

selecting urban partner awardees for underlying grant programs, and (3) 

steps the department is taking to ensure that UPA award conditions are 

being met and that results will be evaluated. These activities are the main 

focus of this report. In addition, in response to your interests, we 

examined how the department selected awardees for its Corridors of the 

Future program, the department’s efforts to promote public-private 

partnerships, and the extent to which previous recipients of grants from 

programs that funded the UPA initiative and Corridors were awarded 

funds from those programs in fiscal year 2007. (See apps. I to III.) We did 

not assess the merits of the UPA initiative or Corridors program design. 

To carry out our work, we reviewed the department’s communication of 

the criteria for selecting UPA awardees and the funding amounts to be 

devoted to the initiative through notices in the Federal Register and UPA 

initiative outreach materials, such as presentation slides and handouts. We 

 

11As we have reported, the department’s operating administrations are organized by 

mode—reflecting the structure of funding programs—resulting in an organizational 

structure that can impede collaboration between modes and limit the department’s ability 

to plan, fund, and construct intermodal projects. See GAO, Intermodal Transportation: 

DOT Could Take Further Actions to Address Intermodal Barriers, GAO-07-718 

(Washington, D.C.: June 20, 2007). 

Page 4 GAO-09-154 Congestion Relief Initiatives 
 

also discussed these activities with senior department leaders, department 

staff who reviewed UPA applications, and 14 of the 26 UPA applicants.12

We also reviewed all of the 26 UPA applications. In determining good 

grants practices, we reviewed the department’s, as well as other 

government agencies’, grant policies. Furthermore, we researched and 

analyzed the department’s legal authority to allocate substantial grant 

funds to support the UPA initiative and to consider congestion pricing as a 

selection factor for allocating individual grant funds to support UPAs, by 

reviewing relevant statutes, case law, and department records, and by 

obtaining the department’s legal views. Finally, we reviewed documents 

and interviewed department officials on their actions to monitor UPA 

award conditions and plans to evaluate each urban partner’s projects to 

reduce congestion. Specifically, we reviewed urban partner term sheets 

and grant or cooperative agreements that list the conditions to receive 

federal funds. We conducted this performance audit from February 2008 

through March 2009 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. (See app. IV for 

additional discussion of our scope and methodology.) 

Overall, although we did not assess the merits of the UPA initiative’s 

design, we have reported on our support for the concept of providing 

performance-oriented, integrated approaches, such as the UPA initiative, 

to help reduce congestion. 

The department clearly communicated all but one of the criteria that it 

used to select urban partners, but it did not communicate the relative 

priority of the criteria or the full amount of available funding to applicants, 

and its methods of assisting applicants raise concerns. More specifically, 

the department clearly communicated to potential applicants 10 of the 11 

criteria it used to select cities as urban partners, such as the need for costeffective projects. However, it did not communicate to applicants the 

relative priority, or weights, it would give the criteria in selecting projects. 

Results in Brief 

 

12The 14 applicants included the 5 cities that the department designated as urban partners, 

the 4 other cities that were semifinalists but were not selected as urban partners, and 5 

other unsuccessful applicants. 

Page 5 GAO-09-154 Congestion Relief Initiatives 
 

Page 6 GAO-09-154 Congestion Relief Initiatives 

Clearly communicating selection criteria and their weights is important to 

ensure that the selection process is as fair as possible, and 

governmentwide guidance calls for disclosing all selection criteria and 

their weights to applicants. For the remaining criterion, department 

officials told us that they looked positively on applications that were 

politically bold—that is, proposed a congestion-pricing project that 

represented a political challenge to acceptance in the applicant’s region—

but did not inform applicants that political boldness was a selection 

criterion. In addition, the department did not communicate the full amount 

of available funding to applicants, although it did keep them abreast of 

most of the changes to available funding. As the fiscal year 2007 budget 

evolved, the amount available to the UPA initiative increased from $100 

million to about $1 billion. The department communicated through 

Federal Register notices that $852 million was available. While 

communicating the complete amount ($1.02 billion) would have been 

desirable to gain the most responsive applications to the initiative’s goal of 

congestion-reduction, the $852 million amount, in our opinion, provided 

potential applicants with a rough understanding of the program’s size. We 

also found that the department proactively gave assistance to two 

semifinalists (called preliminary urban partners or PUPs) that it did not 

provide to the other seven semifinalists. For example, according to 

Minneapolis officials, after the city was selected as a PUP, the department 

told Minneapolis officials to revise its application and include fewer 

projects than it originally applied for. We believe that while this attention 

could cause concern, it is unclear—in the absence of government-wide or 

departmental guidance—how to assess the appropriateness of the 

department’s actions. 

The department had authority under the 2007 Revised Continuing 

Appropriations Resolution to allocate its appropriations to various 

existing grant programs, as long as the funds were spent for the purposes 

specified in the appropriations legislation and the department complied 

with the restrictions and requirements of the underlying grant statutes.13

The department also had authority to consider congestion pricing as a 

priority factor in selecting urban partners to receive grants under these 

programs. The department likely failed to comply with all of the statutory 

priority consideration specified in the statute for one of the grant 

programs—Transportation, Community and System Preservation 

program—through which the department awarded a total of $50.4 million 

 

13See the background section of this report for a description of these programs. 
 

Page 7 GAO-09-154 Congestion Relief Initiatives 

to urban partners. Based on available information, however, it is not clear 

that this failure affected the ultimate grant award decisions. 

The department is monitoring UPA award conditions to ensure they are 

being met and has developed a framework to ensure that the initiative’s 

results will be evaluated. The department created a UPA management 

team to track urban partners’ progress in completing the requirements 

established as conditions of the awards, such as obtaining authority to use 

congestion pricing where needed. The UPA management team uses 

memorandums of understanding, funding agreements, an implementation 

matrix, and project management documentation, among other things, to 

monitor the progress being made on award conditions. The department 

has acted to ensure that urban partners complete award conditions. In 

April 2008, the department canceled New York City’s urban partner 

designation after the city was unable to obtain the authority for congestion 

pricing, which was a condition of its UPA award. In addition, the 

department will evaluate urban partners’ strategies for reducing 

congestion and has created a UPA evaluation subteam to lead this effort. 

In April 2008, the evaluation team hired Battelle Memorial Institute 

(Battelle) to evaluate the urban partner projects. Battelle will also 

coordinate with officials from Miami, which is funding and performing its 

own UPA evaluation. The department’s evaluation team will manage 

Battelle’s efforts, which Battelle plans to complete by late 2011. Although 

progress has been made in monitoring and evaluating urban partner 

activities, we did not attempt to assess the overall reasonableness of these 

efforts because they are in the early stages. 

This report contains recommendations to the Secretary of Transportation 

aimed at better ensuring that applicants for future congestion-reduction 

initiatives are provided with all selection criteria and their weights 

ensuring that the department applies statutory priority selection factors 

correctly. 

In commenting on a draft of this report, the department generally agreed 

with most of our findings. The department indicated that it was 

considering the recommendations and noted that the recommendation 

concerning the Transportation, Community, and System Preservation 

program will require its own legal analysis. 
 

In May 2006, the department announced its National Strategy to Reduce 

Congestion on America’s Transportation Network (the “congestion 

initiative”), a comprehensive national initiative to reduce congestion on 

the nation’s roads, rails, runways, and waterways. A major component of 

this initiative is the UPA initiative, under which the department gives 

selected cities special consideration for funding from existing programs. 

To qualify for selection, a city had to develop and be ready to quickly 

implement a comprehensive, integrated, and innovative approach to 

reducing congestion through the use of the 4Ts. 

On December 8, 2006, the department issued a Federal Register notice 

soliciting proposals by cities to enter into UPAs with the department.14

According to the notice, the department planned to fund the agreements 

through several existing grant programs and lending and credit support 

programs. This cross-cutting approach was designed to enable the 

department to fund the greatest improvements in mobility in a coordinated 

manner across its modal operating administrations. The notice further 

indicated that the department would support its urban partners with 

regulatory flexibilities and dedicated expertise and personnel. Applicants 

wishing to become urban partners had to submit their applications by 

April 30, 2007. The notice stated that the department would consider 

applications filed after this date to the extent practicable. In addition, 

applicants had to apply to any underlying grant program from which they 

sought funding. They could do so by submitting a single application that 

covered each of the grant programs as long as the application was 

responsive to the requirements of each program. To achieve this, the 

department published several Federal Register notices between December 

2006 and March 2007, requesting that UPA applicants apply to the 

underlying programs. 

The Federal Register notice also set forth requirements for the UPA 

application. Under the UPA initiative, the department and the urban 

partner would agree to pursue the 4Ts to reduce traffic congestion. The 

department sought projects with congestion pricing to help shift some 

rush-hour traffic to off-peak times, coupled with new or expanded transit 

services. In this way, buses could move more freely through previously 

Background 

 

1471 Fed. Reg. 71231 (Dec. 8, 2006). 

Page 8 GAO-09-154 Congestion Relief Initiatives 
 

congested roadways and could provide more reliable service.15 To further 

reduce congestion, the urban partner could use cutting-edge 

technologies—such as providing travelers with real-time transportation 

information—to improve transportation performance and secure 

agreements from area employers to expand telecommuting programs. (See 

fig. 1.) Finally, the department’s solicitation stated that neither the 

procedures nor the criteria identified in the notice would be binding on the 

department. 

Figure 1: The Department’s View of How Tolling (Congestion Pricing), Transit, Technology, and Telecommuting Reduce 

Congestion 

Source: GAO analysis of Department of Transportation information.

Telecommuting

• Employees working from home reduces the number of cars on the road

• Flexible scheduling allows workers to travel at off-peak times

• Telecommuting centers allow commuters to shift travel to less congested roads 

Transit

• Enhanced transit services improve highway throughput during peak travel times

• Accommodates commuters who shift transportation modes after the imposition of 

congestion pricing 

Technology 

• Traffic signaling coordination along a corridor reduces stops and allows vehicles to 

move at greater speeds

• Lane management devices and signal priority systems for buses improve transit quality

• Traveler information systems, such as Web or wireless access to route-specific 

travel time and toll information, help commuters plan to travel at off-peak times or 

take alternate routes

• Transponders, cameras, or global positioning systems allow congestion pricing 

fees to be collected at highway speeds

Tolling (congestion pricing)

• Charges drivers on highways or drivers using parking spaces a fee that varies by 

traffic volumes or time of day according to a published schedule, which shifts

some discretionary rush hour traffic to off-peak times and helps allocate traffic 

levels throughout the day

• Improves reliability of transit services by creating freer flowing traffic conditions, 

encourages increased transit ridership, and expands the source of revenue that 

may be used for transit

Reduced

traffic

congestion

 

15As we have reported, congestion pricing can potentially enhance mobility by reducing 

congestion and the demand for roads. See GAO, Highway Finance: States’ Expanding Use 

of Tolling Illustrates Diverse Challenges and Strategies, GAO-06-554 (Washington, D.C.: 

June 28, 2006). 

Page 9 GAO-09-154 Congestion Relief Initiatives 
 

Aside from publishing the UPA initiative notice in the Federal Register, the 

department took a number of steps intended to (1) generate interest in the 

initiative, (2) encourage cities to develop fresh ideas, and (3) provide 

information to potential applicants. First, before publishing the December 

2006 Federal Register notice, department officials met separately with 

officials from three urban areas—Seattle; northern Virginia; and Portland, 

Oregon—and presented information on congestion pricing and UPAs. 

Then, after publishing the notice, at the request of New York City, 

department officials met with the New York state legislature; conducted 

national workshops in Atlanta, Georgia; Denver, Colorado; and 

Washington, D.C. that were open to any interested UPA applicant;16 made 

presentations at transportation conferences; and held a Webinar for city 

officials who could not attend the national workshops.17 In the workshops 

and the Webinar, department officials discussed congestion pricing and 

supporting strategies, political and public outreach techniques that might 

be used to gain support for congestion-pricing initiatives, and potential 

funding opportunities under UPA. According to the department, it 

conducted a number of other outreach activities including (1) establishing 

a Web page with information for such applicants,18 (2) giving speeches on 

the UPA initiative, and (3) sending information on congestion pricing to email listservs. In its Federal Register notice, the department stated that it 

reserved the right to solicit, and was actively soliciting, by means other 

than the notice certain cities the department had determined to be 

candidates for UPA award consideration. 

The department received 26 UPA applications and created a multistep 

review process to select PUPs (announced in June 2007) and then urban 

partners (announced in August 2007). First, a review team, composed of 

staff from several modal administrations,19 used several technical 

criteria—such as innovation, the comprehensiveness of the 4Ts, costeffective use of federal dollars, and the feasibility and likelihood of 

 

16According to the department, it selected Washington, D.C., as a national workshop site 

because it was a low-cost location to test the workshop. It selected Atlanta and Denver 

because they are major transportation hubs that are accessible to many travelers. 

17A Webinar is a workshop transmitted over the World Wide Web. 

18Department of Transportation, National Strategy to Reduce Congestion, Urban 

Partnerships, www.fightgridlocknow.gov (last visited Jan. 7, 2009). 

19The UPA technical review team included staff from the Federal Transit Administration, 

the Federal Highway Administration, and the Research and Innovative Technology 

Administration. 

Page 10 GAO-09-154 Congestion Relief Initiatives 
 

implementation—to perform a technical review of the UPA applications 

and rank them for the department’s senior leaders. Second, the senior 

leaders reviewed the review team’s rankings in light of broader 

department goals and recommended nine PUPs to the Secretary, which 

according to department officials, the Secretary approved.20 The PUPs then 

each presented their proposals, first to the Secretary and Deputy Secretary 

and afterward to officials from the modal administrations involved in the 

UPA initiative. Following these presentations, the department, in some 

cases, asked for additional detail or clarification from the applicant. Third, 

using this information, the review team created funding scenarios—for 

example, one scenario provided funding for New York City and four other 

urban partners while another scenario did not provide funding for New 

York City, but did do so for seven other urban partners. Finally, using UPA 

applications and funding scenarios, the Secretary selected five urban 

partners—Miami, Minneapolis, New York City, San Francisco, and Seattle. 

The Federal Register notice stated the department would select up to 10 

urban partners. 

The urban partner designation did not include funds for the urban 

partners, but did give them special consideration in obtaining department 

resources such as funding from grant programs and administrative 

flexibilities, including streamlined environmental reviews. Between 

December 2006 and April 2007, the department issued several Federal 

Register notices describing the amount of funding available to urban 

partners. Initially, the Federal Register notice stated that up to $100 

million, over 3 years, was available from 1 grant program, but this amount 

was expanded to about $1 billion from 13 grant programs when the 

President signed the 2007 Revised Continuing Appropriations Resolution. 

Unlike previous years, the department’s appropriation was not subject to 

congressional directives that funds be dedicated for particular 

transportation projects. As a result, urban partners applied for and were 

eventually awarded funds from 10 grant programs for 94 projects totaling 

$848.1 million. (See table 1.) This report focuses on the 5 urban partners, 

94 projects, and $848.1 million in awards announced in August 2007. As the 

department negotiated with the prospective urban partners, the numbers 

of urban partners, projects, and awards were reduced somewhat. 

 

20The nine preliminary urban partners were Atlanta, Dallas, Denver, Miami, Minneapolis, 

New York City, San Diego, San Francisco, and Seattle. 

Page 11 GAO-09-154 Congestion Relief Initiatives 
 

Table 1: Discretionary Grant Programs Available and Used to Support UPAs 

Dollars in millions 

Program Description 

Amount

available

Amount 

awarded 

Bus and Bus Facilities Provides for new and replacement buses and related equipment and 

facilities 

$433 $418

New Starts/ Small Starts Supports locally planned, implemented, and operated transit “guideway” 

capital investments (e.g., trolleys) 

 145 113

Intelligent Transportation 

Systems-Operational Testing to 

Mitigate Congestion 

Supports the implementation of intelligent transportation system policies 

and programs aimed at increasing the level of integrated deployment of 

these systemsa

 100 92

Interstate Maintenance 

Discretionary 

Provides funding for resurfacing, restoration, rehabilitation, and 

reconstruction work on most existing Interstate system routes 

 92 50

Public Lands Highway 

Discretionary 

Improves access to and within federal lands 84 47

Transportation, Community, and 

System Preservation 

Provides funding for a comprehensive initiative including implementation 

grants and research to address the relationships between transportation, 

community, and system preservation and to identify private-sector-based 

initiatives 

 55 50

Ferry Boat Discretionary Provides for constructing ferry boats and terminal facilities 40 40

Value Pricing Pilot Encourages the implementation and evaluation of projects to manage 

congestion on highways through tolling and other pricing mechanisms 

 30 30

Alternatives AnalysisbAssists in financing the evaluation of modal and multimodal alternatives 

and general alignment options for identified transportation needs in a 

particular, broadly defined travel corridor 

 12 2

Highways for Life Accelerates the adoption of innovations and new technologies, thereby 

improving safety and highway quality while reducing congestion caused 

by construction 

 9 0

Delta Region Development Supports and encourages multistate transportation planning and corridor 

development in the eight states forming the Delta regionc

 9 0

Truck Parking Pilot Addresses the shortage of long-term parking for commercial motor 

vehicles on the national highway system 

6 5

Innovative Bridge Research and 

Deployment 

Accelerates the adoption of innovations and new technologies, thereby 

improving safety and highway quality while reducing congestion caused 

by construction 

5 0

Total $1,020 $848d

Source: GAO presentation of Department of Transportation information. 

a

Intelligent transportation systems involve the use of a variety of hardware and software that enables 

applications of advanced electronics and information management to monitor, regulate, and facilitate 

traffic flow; support transit, commercial vehicle, and freight operations; and improve highway safety. 

b

Although the Alternative Analysis program was part of the UPA initiative, department officials told us 

they did not consider the 4Ts in awarding these funds. 

c

Alabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee. 

d

Amounts do not add to $848 million because of rounding. 

Page 12 GAO-09-154 Congestion Relief Initiatives 
 

The department awarded New York City $354.5 million (42 percent) of the 

$848.1 million. San Francisco was awarded $158.7 million (19 percent), 

Minneapolis $133.3 million (16 percent), Seattle $138.7 million (16 

percent), and Miami $62.9 million (7 percent). In addition, although San 

Diego was not selected as an urban partner, the department awarded it $15 

million under the Bus and Bus-Related Facilities Capital Investment 

Grants (Bus and Bus Facilities) program and $3 million under the 

Intelligent Transportation Systems-Operational Testing to Mitigate 

Congestion (ITS-OTMC) program for a project element of its UPA 

application. Departmental senior leaders and officials believed that San 

Diego’s project to demonstrate the safety and efficiency of cutting-edge 

separation and braking technologies on narrow lanes was meritorious.21

Each urban partner proposed to implement a tolling project with 

congestion pricing that would be supported by projects primarily from at 

least two of the other three Ts—transit and technology. (See table 2.) 

According to department officials, telecommuting projects received less 

emphasis from the urban partners and the department because it was 

generally beyond the control of the city to influence many employers and 

because they received telecommuting proposals in few applications. 

 

21San Diego’s transit project would install vehicle assist and automation system 

technologies on buses. Vehicle assist technologies help the driver maintain lateral control 

of the bus. Vehicle automation technologies provide both longitudinal and lateral control of 

the transit vehicle’s movement. 

Page 13 GAO-09-154 Congestion Relief Initiatives 
 

Table 2: Urban Partner Congestion-Reduction Projects Using the 4Ts 

Project element 

Urban 

partner Tolling Transit Technology Telecommuting 

Miami Transition from one highoccupancy vehicle (HOV) 

lane in each direction 

along I-95 into two 

variably priced highoccupancy toll (HOT) 

lanes in each direction.a

Expand transit capacity and 

implement new bus rapid transit 

service within the HOT lanes. 

Improve a park-and-ride transit 

facility. 

Minneapolis Convert the existing HOV 

lanes along I-35 West into 

dynamically priced HOT 

lanes. 

Operate dynamically 

priced shoulder lanes 

along I-35 West. 

Increase park-and-ride and transit 

capacity along the corridor. 

Construct double-lane contraflow 

bus lanes, bus rapid transit stations, 

and other bus amenities. 

Implement bus technologies 

(e.g., traffic signal priority). 

Install a pilot 

program with the 

goal of increasing 

the number of 

teleworkers in the I35 West corridor by 

500 individuals. 

New York City Institute a cordon pricing 

system in Manhattan 

south of 86th Street. 

Construct a series of bus rapid 

transit corridors. 

Construct new transit facilities. 

Construct an East River bus lane. 

Purchase additional buses. 

Improve regional ferry boat service. 

Collect and analyze data on transit 

ridership patterns, travel times, and 

mode preference. 

Implement transit 

technologies, including transit 

signal priority. 

San Francisco Implement congestion 

pricing on either Doyle 

Drive or the Golden Gate 

Bridge. 

Variably price parking in 

downtown San Francisco. 

Improve regional ferry boat service. Develop a simplified 

forecasting approach for a 

bus rapid transit corridor. 

Provide travelers with 

integrated mobility accounts. 

Upgrade hardware/software 

in key corridors to improve 

traffic movement. 

Upgrade the regional 511 

system to provide real-time 

tolling, parking, and transit 

information.b

Expand the 

technical and 

promotional 

aspects of 

telecommuting 

programs. 

Seattle Variably price portions of 

all through-lanes of SR520. 

Increase transit capacity along SR520 by enhancing express bus 

service and constructing transit 

improvements. 

Improve regional ferry boat service. 

Use advanced technologies 

to actively manage 

congestion along SR-520 and 

I-90. 

Provide travelers with realtime transportation 

information. 

Work to increase 

the use of 

telecommuting 

within the region. 

Source: GAO presentation of Department of Transportation information. 

Page 14 GAO-09-154 Congestion Relief Initiatives 
 

a

A high-occupancy-vehicle lane is designated for carpool/vanpool vehicles. A high-occupancy toll lane 

allows carpool/vanpool vehicles to drive toll-free in the lane, but also allows motorists that do not 

meet established vehicle occupancy requirements to drive in the lane if they pay a toll, allowing them 

to travel faster and more reliably than traffic in adjacent nonpriced lanes. 

b

511 is a nationwide three-digit telephone number to call for traveler information. 

Each UPA was subject to several terms and conditions. One significant 

condition was that no urban partner could expend federal funds until it 

had obtained the legal authority necessary to implement congestion 

pricing for the applicable highway or parking area. To date, three urban 

partners have the necessary authority for congestion pricing—Miami, 

Minneapolis, and San Francisco—and Seattle needs to obtain it by 

September 2009.22 However, New York City failed to meet its April 2008 

deadline for obtaining congestion pricing authority from the state 

legislature. As a result, in accordance with the terms of the department’s 

UPA with New York City, the department cancelled New York City’s 

agreement23 and awarded about $364 million to Chicago and Los Angeles 

through the department’s Congestion Reduction Demonstration Program.24

As its name indicates, the Congestion Reduction Demonstration Program, 

established in 2007, is a successor to the UPA initiative. This program’s 

goals and selection criteria are similar to the UPA initiative’s. For example, 

the Federal Register notice solicited applications that would support 

congestion-pricing, transit, and technology strategies to reduce 

congestion.25 Like the UPA initiative, the Congestion Reduction 

Demonstration Program allows the department to partner with applicants 

to support congestion reduction using the department’s discretionary 

 

22In August 2008, San Francisco modified its proposal to meet the congestion-reduction 

goals of the department. San Francisco will not variably price Doyle Drive or the Golden 

Gate Bridge, as originally proposed; it will variably price on-street and off-street parking in 

downtown San Francisco. As a result, San Francisco is receiving about $72 million less 

than originally awarded. 

23New York City was allowed to retain $2 million from the Alternatives Analysis Program 

because the 4Ts were not considered in making the award, and $1.6 million from the Value 

Pricing Pilot Program to help cover project planning and development costs. 

24In April 2008, the department allocated Chicago and Los Angeles $153 million and $211 

million, respectively. For this report, we reviewed urban partners selected in fiscal year 

2007; therefore, we did not review the department’s actions related to Chicago and Los 

Angeles. 

2572 Fed. Reg. 63951 (Nov. 13, 2007). According to the department, it received and reviewed 

35 applications. Of these 35, Los Angeles; Chicago; Atlanta; Denver; Dallas; Santa Clara 

County, California; and Salt Lake City, Utah previously submitted applications for the UPA 

initiative. 

Page 15 GAO-09-154 Congestion Relief Initiatives 
 

funds. In addition, in July 2008, the Secretary announced a new 

administration plan to create a more sustainable way to pay for and build 

roads and transit systems.26 This plan includes a proposal for creating a 

Metropolitan Mobility Program. Among other things, this proposal 

envisions financial support for innovative approaches to reduce traffic 

congestion. 

The department clearly communicated 10 of the 11 criteria it used to select 

urban partners, but it could have better communicated to applicants the 

relative weights it would assign to the selection criteria and the amount of 

funding available under the UPA initiative. We also found that the 

department provided additional attention to two applicants after they were 

selected as PUPs, but in the absence of government-wide guidance it is 

unclear on how to assess the appropriateness of this attention. 

The Department 

Communicated Most 

Selection Information 

to Applicants, but 

Gave Two Applicants 

Assistance over 

Others 

Nearly All Selection 

Criteria Were 

Communicated Clearly to 

Applicants but the 

Department Could Have 

Better Communicated the 

Weights Assigned to the 

Criteria 

According to grants policies and guidance, funding announcements that 

clearly state the criteria that will be used to evaluate applications promote 

competition and fairness in the selection of grantees. For example, an 

Office of Management and Budget policy directive states that an agency’s 

funding announcements must clearly describe all criteria and if they vary 

in importance, the relative priority, or weights, assigned to the criteria.27

Similarly, the Federal Highway Administration’s (FHWA) assistance 

agreement procedures manual states that evaluation criteria must be 

prepared before a funding announcement is published and should be 

available to both applicants and reviewers.28 These procedures allow 

 

26U.S. Department of Transportation, Refocus. Reform. Renew. (July 2008). 

2768 Fed. Reg. 37370 (June 23, 2003) Office of Federal Financial Management Policy 

Directive on Financial Assistance Program Announcements. The department has described 

the weights of criteria in other areas. For example, the notice of funding availability (72 

Fed. Reg 13980 (Mar. 23, 2007)) for the Alternatives Analysis Program laid out the relative 

weights of the criteria: demonstrated need (30 points), potential impact on decision making 

(40 points), and capacity of the applicant to carry out the proposed work successfully (30 

points). 

28U.S. Department of Transportation, FHWA, Assistance Agreement Procedures Manual 

(May 2007). 

Page 16 GAO-09-154 Congestion Relief Initiatives 
 

applicants to make informed decisions when preparing their applications 

and help ensure the selection process is as fair and equitable as possible. 

Like the Office of Management and Budget’s guidance, the FHWA manual 

identifies good grants making practice but it does not strictly apply to the 

UPA initiative, since four of the grant programs under the initiative were 

not FHWA programs. The department does not have agency-wide guidance 

that mirrors the Office of Management and Budget guidance. 

The UPA initiative was not funded like a traditional grant program, since 

there was no UPA-specific funding. Instead, the department gave urban 

partners special consideration when allocating funds from as many as 13 

individual grant programs. However, we believe grant-making practices 

such as those prescribed in the Office of Management and Budget’s 

guidance are relevant to the initiative because they can increase the 

likelihood that the department will receive applications that best further 

agency goals. 

The department used 11 criteria to select urban partners. (See fig. 2.) We 

found that the department clearly communicated 10 of these to potential 

applicants in the December 2006 Federal Register notice. For example, 

this notice made it clear to applicants that the department wanted 

applicants to incorporate the 4Ts and explained how the different parts of 

the 4Ts strategy would interact to reduce congestion (synergy of 4Ts). This 

notice also stated the department sought proposals that would affect the 

most surface transportation travelers, include congestion pricing, be cost 

effective, and demonstrate innovative technology applications. The notice 

also made it clear the department sought proposals that were likely to be 

implemented, and requested that applicants submit information on 

political support for their proposal. 

Page 17 GAO-09-154 Congestion Relief Initiatives 
 

Figure 2: Degree to Which the Department Communicated Selection Criteria to 

Applicants 

Congestion pricing measures

Potential congestion reduction

Funding support

Implementation time frame

Political and technical feasibility

Synergy of 4Ts

Travelers affected daily

Innovation

National demonstration value

Political boldness

Cost-effectiveness

Selection criteria How communicated Degree communicated

Federal Register 

notice

Not communicated

to applicants

Source: GAO analysis of the Department of Transportation’s criteria and actions. 

Communicated

Not communicated 

The remaining criterion—political boldness—however, was not 

communicated at all to applicants. As a result, the applicants we spoke 

with had varying levels of awareness and understanding of this criterion. 

Senior department officials considered the political boldness of a city’s 

projects when selecting urban partners. The department defined this 

criterion as the level of boldness of the congestion-pricing component 

relative to the level of political acceptance of congestion pricing in the 

applicant’s particular region. Senior department officials told us they 

viewed projects that were politically bold positively, and took into 

consideration that although a particular congestion-reduction strategy 

might not be new nationally, it could be politically bold in the applicant’s 

region. This criterion was not stated in the Federal Register, on the 

department’s Web site, or in presentations. The department subsequently 

told us that political boldness was the same as political and technical 

feasibility. However, in our view, proposals can be politically feasible 

without being bold and the department was looking for bold proposals. 

Page 18 GAO-09-154 Congestion Relief Initiatives 
 

Nine of the 14 applicants we spoke with said they were not aware of this 

selection criterion,29 while another 5 applicants told us they thought the 

department implied it was seeking politically bold proposals.30

The department’s March 2007 Federal Register notice indicated the 

criteria could change. It stated that neither the procedures nor the criteria 

set out in the notice would be binding on the department. Our search for 

language of this sort in Federal Register notices found that it is unique.31

The department indicated it might have needed to change both the criteria 

and the procedures to gain more participation in the initiative. 

The department’s Federal Register notice announcing the selection 

criteria for the UPA initiative also fell short of the Office of Management 

and Budget’s policy guidance in that it did not communicate the relative 

weights of the selection criteria, as the guidance directs. Department 

officials and six of eight reviewers told us they viewed congestion pricing 

measures as the most important criterion in selecting urban partners. The 

department identified congestion pricing as the most important of the 4Ts 

in a document posted on its Web site 4 weeks before applications were 

due—and about 16 weeks after the original Federal Register notice 

appeared.32 Although some applicants we spoke with were aware of the 

department’s emphasis on congestion pricing in general, none knew the 

relative weights of the selection criteria.33 Nine of the 14 applicants we 

spoke with about the impact of the weighting information on their 

applications said that having weighting information would have changed 

 

29These were 3 urban partners and 6 unsuccessful UPA applicants, including 3 PUPs. 

30Three of these 5 applicants did not specify how they thought political boldness was 

implied, a fourth cited its discussions with department officials, and the fifth told us that 

the department’s frequently asked questions document said the department was seeking 

projects that were politically challenging. Our review of the frequently asked questions 

document did not find such a statement. These were 2 urban partners and 3 unsuccessful 

UPA applicants, including 1 PUP. 

31This search included government-wide Federal Register notices from January 1981 

through July 2008. 

32On Apr. 2, 2007, the department’s Web site stated the department was not requiring that 

each application include congestion pricing. However, the Web site added that among the 

4Ts, congestion pricing was the most important and applications that excluded congestion 

pricing would be at a competitive disadvantage against applications that included 

congestion pricing. 

33These were 5 urban partners and 9 unsuccessful UPA applicants, including 4 PUPs. 

Page 19 GAO-09-154 Congestion Relief Initiatives 
 

their applications,34 while the remaining 5 said it would not.35 For example, 

an official from San Diego noted that knowing the weights of the selection 

criteria would have helped him to decide which projects to include and 

exclude, and would have resulted in a more focused application. 

The department’s incomplete communication to applicants of UPA 

selection criteria and weights may have had little, if any, effect on the final 

selection, since four of the five urban partners were rated high for 

technical merit and the fifth one, while rated lower, was seen as innovative 

because it would be the first in the country to convert high-occupancy 

vehicle (HOV) lanes to high-occupancy toll (HOT) lanes while 

simultaneously increasing HOV eligibility from two to three occupants. 

The Department 

Communicated Much of 

the Funding Availability as 

It Became Known 

Grant announcements should fully describe the funding opportunity to 

give applicants a sense of the scope of the funding, and to assist them in 

prioritizing and developing their proposed projects. To this end, an Office 

of Management and Budget policy directive requires an agency to publish 

the full programmatic description of the funding opportunity, to 

communicate to applicants the areas in which funding may be provided, 

and to describe the agency’s funding priorities. FHWA’s procedures 

manual reflects the Office of Management and Budget’s directive to 

include a description of the funding opportunity in the grant 

announcement. Communicating the funding opportunity was important for 

the UPA initiative, since the funding motivated cities to do the 

comprehensive planning and serious consideration of congestion pricing 

the department wanted cities to reflect in their applications. 

As stated previously, an awardee’s selection as an urban partner meant the 

department would give the awardee priority consideration when allocating 

funding from as many as 13 individual grant programs.36 The original 

December 2006 UPA initiative announcement indicated that up to $100 

 

34These were 3 urban partners and 6 unsuccessful UPA applicants, including 3 PUPs. 

35These were 2 urban partners and 3 unsuccessful UPA applicants, including 1 PUP. 

36Applicants were instructed to apply separately to the UPA initiative and the individual 

grant programs. In the end, three of these discretionary grant programs (FHWA’s Delta 

Region Development, Highways for Life, and Truck Parking Pilot programs) were not used 

to fund UPA projects. 

Page 20 GAO-09-154 Congestion Relief Initiatives 
 

million was available to urban partners through the ITS-OTMC program.37

(See fig. 3.) After more funds became available for the department’s 

discretionary use, the department decided sometime between February 15, 

2007, and April 2007 to dedicate about $1 billion to the UPA initiative. As a 

result, the department solicited applications for the 13 discretionary 

programs through Federal Register notices over a period of 4 months 

(December 2006 through March 2007). 

 

37This announcement also indicates that Value Pricing Pilot Program and Small Starts funds 

may be used to fund urban partners, but does not disclose amounts available under these 

grant programs. 

Page 21 GAO-09-154 Congestion Relief Initiatives 
 

Figure 3: UPA Funding Timeline 

 December 8, 2006—Federal Register notice solicits applications for UPA and states that the department plans to 

use funding from the ITS-OTMC, Value Pricing Pilot, Small Starts and other programs. Specifically, the department 

may provide UPA up to $100 million of ITS-OTMC funds over 3 years. UPA applicants should apply separately to 

these programs.

 December 18, 2006—Federal Register notice solicits applications for up to $100 million over 3 years under 

ITS-OTMC program. In order to support UPA, the department is seeking applications to the ITS-OTMC program that 

have innovative uses of technology to address congestion. 

 December 22, 2006—Federal Register notice solicits applications for up to $12 million for each of fiscal years 2007 

through 2009 under the Value Pricing Pilot program. In order to support UPA, the department is seeking applications

that have congestion pricing strategies to reduce congestion.

February 15, 2007—The President signs the department’s fiscal year 2007 appropriation, which does not include 

directions on funding for the department’s grant programs.

Sometime between February and April, 2007—The department posts a funding document online indicating that 

about $1 billion will be available from some programs over 3 years.

 March 22, 2007— Federal Register notice solicits applications for 8 highway grant programs, but does not list 

funding availability. Applicants that also apply for UPA must submit separate applications to each of the 8 highway 

programs from which they seek funding. 

 March 23, 2007— Federal Register notice solicits applications for $12 million for 1 year under the Alternatives

Analysis program. Urban partners will be given additional consideration to these funds.

 March 23, 2007—The department issues two Federal Register notices soliciting applications for $438 million for 1 

year under the Bus and Bus Facilities program. These funds will be available to Bus and Bus Facilities and UPA 

projects. In addition, UPA applicants should apply separately to the Bus and Bus Facilities program.

April 2, 2007—The department posts “questions and answers” online that states about $1 billion in funds is available 

and instructs UPA applicants to apply separately to 12 grant programs.

 April 10, 2007—Federal Register notice provides a summary of the 13 grant programs that are connected to UPA. For 

the New and Small Starts programs, approximately $266 million for 1 year is available for fixed guideway capital projects. 

 April 30, 2007—Applications for UPA, ITS-OTMC, Value Pricing Pilot, and the 8 highway grant programs are due. 

 May 22, 2007—Applications for the Alternatives Analysis and Bus and Bus Facilities programs are due.a

June 7, 2007—The department announces 9 preliminary urban partners.

August 14, 2007— The department announces 5 urban partners to conditionally receive a total of $848 million.

2006

2007

Source: GAO analysis of Department of Transportation information.

Federal Register notice

Application deadline

Other event

a

The application deadline for New Starts and Small Starts program projects varies depending on the 

stage of the project. 

Although funding for UPA was available under 13 grant programs, the 

department published the amount of funding available in the Federal 

Register for 5 of these programs and distributed funding information for 

12 at conferences and through its Web site. Between February 15, 2007, 

and April 30, 2007 (the date when UPA applications were due), the 

Page 22 GAO-09-154 Congestion Relief Initiatives 
 

department communicated the amount of funding available for UPAs to 

applicants in two ways: First, the department solicited applications for the 

13 grant programs through Federal Register notices. (See table 3.) For 5 of 

these grant programs, the department published the amount of funding 

available in the notices. The amount available for UPAs through these 5 

grant programs totaled $852 million and ultimately accounted for 77 

percent of the funds awarded to urban partners. However, of this $852 

million amount, $716 million (about 65 percent of the approximate $1.1 

billion that was ultimately made available) was announced less than 6 

weeks before the UPA application deadline. By the time this additional 

funding was announced, applicants may have already substantially 

completed their applications, and in some cases, obtained the approval of 

their stakeholders. According to a department official, it took the 

department several weeks to issue a Federal Register notice. For the 

remaining 8 grant programs, the Federal Register notices contained no 

information on the amount of funding available. A department official told 

us he does not know why these Federal Register notices did not include 

funding information. 

The department disagreed with our assessment that the applicants could 

have benefited if funding information had been communicated more than 

6 weeks before applications were due. The department indicated that it 

typically provides 2 months for the submission of applications and cited 

several grant programs in which this was the case. For example, the 

department said 2 months was adequate time to file Bus and Bus Facilities 

program applications. However, because of its complexity, the UPA 

application could be expected to take longer to complete than applications 

for more traditional grant programs, such as the Bus and Bus Facilities 

program. 

Page 23 GAO-09-154 Congestion Relief Initiatives 
 

Table 3: The Department’s Communication of Information on Funding Availability to Applicants 

Dollars in millions 

Federal Register notices 

Grant program 

Date published in 

Federal Register

Funding availability 

listed in Federal 

Register

Funding handout 

distributed via 

Web site and 

conferences

Amount

 awarded to 

urban partners

Intelligent Transportation Systems 

Operational Testing to Mitigate 

Congestion Dec. 18, 2006 $100 $100 $92

Value Pricing Pilot Dec. 22, 2006 36 30 30

Bus and Bus Facilities Mar. 23, 2007 438 438 418

Alternatives Analysis Mar. 23, 2007 12 12 2

New Starts/ Small Starts Apr. 10, 2007 266 267 113

Interstate Maintenance Discretionary Mar. 22, 2007 a a 50

Transportation, Community, and System 

Preservation Mar. 22, 2007 a 61 50

Ferry Boat Discretionary Mar. 22, 2007 a 60 40

Highways for Life Mar. 22, 2007 a 20 0

Truck Parking Pilot Mar. 22, 2007 a 6 0

Innovative Bridge Research and 

Deployment Mar. 22, 2007 a 5 5

Delta Region Development Mar. 22, 2007 a 10 0

Public Lands Highway Discretionary Mar. 22, 2007 a 80 47

Total $852 $1,089b $848c

Source: GAO presentation of Department of Transportation information. 

a

Information not published in the Federal Register or included in the funding handout. 

b

Although the department made available $1.020 billion as shown in table 1, it communicated to 

applicants that $1.089 billion was available. 

c

Dollar amounts do not total $848 million because of rounding. 

Second, the department developed a funding handout that listed the 

amounts available for UPAs through 12 of the 13 grant programs.38 These 

amounts totaled almost $1.1 billion. The department updated this 

document several times with new funding information and posted the 

 

38The department did not include funding information for the Interstate Maintenance 

Discretionary Program in this handout because, as a department official told us, the 

department thought it would use these funds at the time for Corridors of the Future. 

However, urban partners were ultimately awarded $50 million from this program. 

Page 24 GAO-09-154 Congestion Relief Initiatives 
 

document on the department’s Web site sometime between February 15, 

2007, and April 2007. In addition, department officials handed out this 

document at conferences. 

Applicants’ understanding of the funding available under the UPA initiative 

varied, and several applicants told us that if they had had more complete 

funding information, they would have changed their applications. Of the 14 

applicants we spoke with about funding, 6 told us they had the funding 

handout,39 which included information on the availability of funding by 

program (see table 3), while the other 8 said they did not have this 

handout when they were developing their applications.40 Of the applicants 

that did not have complete funding information, 6 told us they were aware 

of the total funding available but not the amounts available for each 

program, while 2 told us that they did not know the amount of funding 

available under the initiative when they were applying to the program. Of 

the 2 UPA applicants that said they did not know the amount of funding 

available to the initiative, 1 applicant said it thought the total amount of 

funding available was the $100 million initially identified under the ITSOTMC program. Half of the 8 applicants we spoke with that did not have 

the funding handout told us if they had had better information on the 

funding available under the UPA initiative, they would have changed their 

applications and been able to scope their projects better.41 While 

communicating the complete amount would have been desirable as a 

means of eliciting applications that were optimally responsive to the 

initiative’s goal of congestion reduction, the $852 million amount, in our 

opinion, provided potential applicants with a rough understanding of the 

program’s size. 

The Department Treated 

Two Applicants Differently 

from Others While 

Evaluating Applications 

After the department selected nine cities as PUPs, it used various methods 

to select and determine funding for the final 5 urban partners. The 

department invited officials from the nine PUP cities to Washington, D.C., 

to present their applications and asked them to provide additional 

information, when needed, about their congestion-reduction initiative. 

Department officials then explored ways to fund UPAs by identifying the 

PUPs’ core projects that were most in the spirit of the initiative. Next, 

 

39These were 3 urban partners and 3 unsuccessful applicants, including 2 PUPs. 

40These were 2 urban partners and 6 unsuccessful applicants, including 2 PUPs. 

41These were 1 urban partner and 3 unsuccessful applicants. 

Page 25 GAO-09-154 Congestion Relief Initiatives 
 

department staff developed funding scenarios, including options with and 

without New York City, reflecting the department’s concerns that the New 

York state legislature might not pass the congestion-pricing legislation 

necessary to allow the New York City projects to move forward. At this 

time, department officials told us that, in some cases, they were also 

contacting PUPs to have them submit new grant applications because 

PUPs had submitted applications for more funding than was available 

under some grant programs and because PUPs could submit applications 

for the same uses under other, undersubscribed programs. 

However, in two cases, the department went beyond asking UPA 

applicants to submit applications for the same projects under other 

funding programs. In these instances, the department contacted the UPA 

applicants to request substantive changes to the applications.42

• Miami indicated in its application that it would run bus rapid transit, but 

did not provide details on the project, or state its cost. Miami officials told 

us they did not intend to purchase buses or improve bus facilities through 

the UPA initiative. However, after Miami’s selection as a PUP, the 

department encouraged the city to apply for funding from the Bus and Bus 

Facilities program and suggested specific measures (such as bus branding, 

hybrid buses, bus facility improvements, and transit signal priority 

technology) for city officials to include in the proposal. As a result, Miami 

submitted a Bus and Bus Facilities application 4 weeks after the 

application deadline and was awarded $19.5 million in these funds.43

According to department officials, this was reasonable, since Miami’s 

original UPA application had contained bus elements, even though Miami 

had not originally requested funds to purchase buses or improve bus 

facilities. 

• According to officials from the Minnesota Department of Transportation, 

after Minneapolis was selected as a PUP, the department asked it to 

include fewer projects in its UPA application to make the application more 

competitive for limited funding. According to Minneapolis officials, this 

allowed Minneapolis to better describe some projects and create more 

accurate cost estimates. 

 

42Department officials told us that throughout the application process, they provided advice 

to applicants about their proposed initiatives, when asked to do so. 

43The department indicated in the initial December 2006 UPA Federal Register notice that 

late applications would be accepted to the extent practicable. 

Page 26 GAO-09-154 Congestion Relief Initiatives 
 

The officials from the remaining seven PUPs told us the department did 

not contact them to suggest specific ways of strengthening their 

applications. 

Department officials told us that, after the nine PUPs presented their 

proposals, all of the PUPs’ congestion-reduction plans were meritorious 

and all nine PUPs were worthy of being designated as urban partners. 

Because time was of the essence in reaching a decision and announcing 

the urban partner designations, department officials told us that they 

provided special attention to the PUPs they felt were likely to be selected 

as urban partners—rather than spending time with PUPs that were 

unlikely to be selected—in order to craft the strongest congestionreduction proposals possible. They said that working with only certain 

PUPs to develop stronger congestion-reduction efforts was appropriate 

because prior interactions with other PUPs indicated that those PUPs 

were less likely to make meaningful changes to their proposals. Finally, 

they said that if at any time negotiations failed with designated urban 

partners, the department would be able to offer urban partner designation 

to another PUP. 

There is little if any government-wide or Department of Transportation 

guidance that would shed light on when and if it is appropriate to provide 

proactive assistance to grant applicants to help them create stronger 

applications. Thus, while the assistance could cause concerns, it is unclear 

how to assess the appropriateness of the department’s actions toward 

Miami and Minneapolis, where the grant-making agency sees the 

applicants as such strong candidates that they are likely to be selected. 

Page 27 GAO-09-154 Congestion Relief Initiatives 
 

The department had the legal authority to allocate appropriated funds to 

the UPA initiative as long as the funds were spent for the purposes 

authorized in the appropriations legislation, and the department complied 

with the restrictions and requirements of the underlying grant statutes. 

The department also had authority to consider congestion pricing as a 

priority factor in making grant selections. Each of the nine grant statutes 

either explicitly permitted the consideration of congestion pricing or 

afforded the department discretion to consider congestion pricing because 

it is rationally related to statutory objectives.44 Because of an error in the 

department’s technical evaluation for the Ferry Boat program, the 

department’s initial documentation suggested that the department had 

improperly favored congestion pricing over statutory priorities. The 

Secretary did not rely on this documentation in awarding Ferry Boat 

grants, however, and the corrected information confirmed that the urban 

partners in fact met statutory priorities, and that the Secretary was within 

her discretion to apply congestion pricing as a discriminating factor. 

Finally, in one instance the Transportation, Community, and System 

Preservation (TCSP) program the department likely did not comply with 

all of the statutory requirements in evaluating the grant applications. 

Based on available information, it is not clear that this failure affected the 

ultimate grant award decisions. The statute required that “priority 

consideration” be given to applicants meeting five specified factors, and 

the department instead gave such consideration to applicants (including 

urban partners) that met just one such factor. Because “priority 

consideration” does not entitle an applicant to selection as a grantee, only 

to a bona fide and careful review and because the department terminated 

its evaluation after confirming applicants met only one factor, it is not 

possible to determine whether any applicant met all five factors and thus 

deserved the required bona fide “hard look.” 

The Department Had 

the Authority to 

Allocate Funds to the 

UPA Initiative, and to 

Consider Congestion 

Pricing as a Priority 

Selection Factor for 

Underlying Grant 

Programs 

 

44Statutes for the Value Pricing program and the Intelligent Transportation SystemsOperational Testing to Mitigate Congestion program authorize the use of tolling as a 

priority selection factor. As we have previously noted, congestion pricing is a form of 

tolling; therefore, we conclude the express provision for tolling in these statutes authorizes 

the consideration of congestion pricing. 

Page 28 GAO-09-154 Congestion Relief Initiatives 
 

Agencies generally have considerable discretion in choosing how to 

allocate lump-sum appropriations—appropriations that are available to 

cover a number of programs, projects, or items—to specific programs and 

activities. In the past, the department’s discretion had been circumscribed 

by congressional directives that earmarked most of its appropriations for 

particular projects, but this changed for fiscal year 2007. The department’s 

fiscal year 2007 appropriation, enacted in the 2007 continuing resolution, 

funded the department based on 2006 levels and authorities but removed 

earmarks contained in the 2006 committee reports (the continuing 

resolution stated that such earmarks shall have no legal effect). In 

addition, the continuing resolution did not include congressional 

directives that funds be dedicated or earmarked for particular projects and 

stated that earmarks contained in 2006 committee reports shall have no 

legal effect. The department interpreted this language as permitting it to 

allocate its appropriations to various grant programs in order to fund its 

UPA initiative. Specifically, the department drew from three lump-sum 

appropriations for (1) payment of obligations incurred in carrying out the 

provisions of bus-related statutes, (2) federal-aid highways and highway 

safety construction programs, and (3) necessary expenses of the Research 

and Innovative Technology Administration. 

We concluded that the department’s appropriations were available to carry 

out the discretionary grant programs identified in each of these lump-sum 

appropriations. The department had broad discretion in choosing how to 

allocate funds among those programs. For example, the “Federal-aid 

highways and highway safety construction programs” lump-sum 

appropriation was available to fund several grant programs, and absent 

any other statutory restriction, the department could choose how much, if 

any, of that appropriation to allocate to each of the grant programs. In 

carrying out each individual grant program, the department, of course, was 

required to comply with the restrictions and requirements of the 

underlying grant statutes and to award funding to grantees in accordance 

with the statutory provisions. In the discussion that follows, we address 

whether the department complied with these underlying provisions. 

The Department Had the 

Authority to Allocate 

Appropriated Funds to the 

UPA Initiative 

Page 29 GAO-09-154 Congestion Relief Initiatives 
 

As discussed earlier, in determining which cities would receive the urban 

partner designation, the department gave special consideration to those 

that had, or had committed to obtaining, authority to use congestion 

pricing. The department then awarded grant funds under 10 of its grant 

programs to the five urban partners. The impact of this sequential process 

was to give congestion pricing priority as a selection factor not only for 

the UPA initiative but for the individual grant programs as well. 

The specific terms of the authorizing statute for each grant determine 

whether the department has the authority to give priority to congestion 

pricing as a selection factor in making grant decisions. According to 

department officials, they considered congestion pricing as a priority or 

priority consideration selection factor for only 9 of the 10 programs 

(excluding the Alternative Analysis program). As a result our analysis 

focused on the 9 remaining programs.45 We concluded that the authorizing 

statutes for the 9 grant programs used to fund urban partners either 

explicitly permit the consideration of congestion pricing or afford the 

department discretion to consider congestion pricing as a factor because it 

was rationally related to program objectives. (See table 4.) In particular, 2 

of the 9 grant-authorizing statutes permit the Secretary to consider 

congestion pricing as a selection factor by express mention: ITS-OTMC 

and Value Pricing Pilot programs. The remaining 7 grant-authorizing 

statutes (Bus and Bus Facilities; Ferry Boat Discretionary; Innovative 

Bridge; Interstate Maintenance Discretionary; New Fixed Guideway 

Facilities (specifically Very Small Starts); Public Lands Highway 

Discretionary; and TCSP programs) grant the department discretion to use 

congestion pricing as a priority consideration selection factor because 

tolling has a rational connection to statutory objectives, such as mobility 

and reduced congestion. 

The Department Had 

Authority to Consider 

Congestion Pricing as a 

Priority Selection Factor 

for Each of the Grant 

Programs, but Improperly 

Awarded “Priority 

Consideration” in the 

TCSP Program Based on a 

One-Factor Approach 

 

45The other sections of this report describe the 10 grant programs the department has 

treated as being “under” and “within” the UPA initiative, including the Alternatives Analysis 

Program. According to the department, it did not use the 4Ts including tolling (congestion 

pricing) in awarding Alternatives Analysis grants for fiscal year 2007, but instead used the 

factors it identified in the Federal Register notice soliciting grant applications. October 

2008 DOT letter at 5-6; see 72 Fed. Reg. 13980 (Mar. 23, 2007) (notice states that cities that 

are “part of the Department’s Congestion Initiative” would get “additional consideration” 

but not “priority consideration” as the department announced for the other grant 

programs). This analysis of how the department applied tolling as a priority selection factor 

therefore does not include the Alternatives Analysis grants. 

Page 30 GAO-09-154 Congestion Relief Initiatives 
 

Table 4: Nine Grant Programs that Permit the Department to Use Congestion Pricing/Tolling as a Selection Factor 

Program Authority to use congestion pricing/tolling 

Intelligent Transportation Systems-Operational Testing to 

Mitigate Congestion (ITS-OTMC) 

Statute expressly permits the Secretary to consider “toll collection” as 

a factor. 

Interstate Maintenance Discretionary Statute permits the department to use congestion pricing as a factor 

because it is rationally related to statutory objectives, such as mobility 

and congestion. 

Value Pricing Pilot Statute expressly permits the Secretary to consider congestion 

pricing/tolling as a factor. 

Bus and Bus Facilities Statute grants the department discretion to use congestion pricing as 

a priority selection factor because no selection criteria are specified. 

Ferry Boat Discretionary Statute permits the department to use congestion pricing as a factor 

because it is rationally related to statutory objectives, such as mobility 

and congestion. 

Innovative Bridge Research and Deployment Use of the term “includes” indicates the department has discretion to 

consider other factors. Additionally, the statute permits the department 

to use congestion pricing as a factor because it is rationally related to 

statutory objectives, such as mobility and congestion. 

Public Lands Highway Discretionary Statute permits the department to use congestion pricing as a factor 

because it is rationally related to statutory objectives, such as mobility 

and congestion. 

Transportation, Community, and System Preservation (TCSP) Statute permits the department to use congestion pricing as a factor 

because it is rationally related to statutory objectives, such as mobility 

and congestion. 

New Fixed Guideway Facilities (Very Small Starts) Statute permits the department to use congestion pricing as a factor 

because it is rationally related to statutory objectives, such as mobility 

and congestion. 

Source: GAO. 

Although we believe the department had authority to consider congestion 

pricing as a selection factor, with respect to the Ferry Boat program, the 

department’s initial technical evaluation documentation suggested (albeit 

incorrectly) that the department had exceeded its authority. This technical 

evaluation documentation made it appear that the department had 

overridden the statute by rejecting nonurban partners that lacked 

congestion pricing but met one or more statutory priorities in favor of 

urban partners that had congestion pricing but met no statutory priorities. 

In making the final award decision, however the Secretary relied on 

correct information showing the urban partners in fact met statutory 

priorities. The Secretary therefore was within her discretion to apply 

congestion pricing as a selection factor. Specifically: 

• Using congestion pricing as a priority selection factor, the department 

awarded grants totaling $40.2 million under the Ferry Boat program to 

New York City, San Francisco, and Seattle as urban partners. Under this 

Page 31 GAO-09-154 Congestion Relief Initiatives 
 

program, the department is authorized to award grants for the 

construction of ferry boats and ferry terminal facilities in accordance with 

statutory eligibility criteria.46 The Ferry Boat grant statute lists three 

permissible “priority” selection factors for Ferry Boat program grants that 

the department must apply. Priority is required for ferry systems that will 

(1) provide critical access to areas not well served by other modes of 

surface transportation, (2) carry the greatest number of passengers and 

vehicles, or (3) carry the greatest number of passengers in passenger-only 

service. 

• Although the Ferry Boat statute does not explicitly identify congestion 

pricing as a priority selection factor, the department believes it had 

discretion to use congestion pricing to discriminate between grant 

applicants. The department makes a connection between congestion 

pricing and the second Ferry Boat statutory priority (carrying large 

numbers of passengers and vehicles), which it believes reflects 

congressional support for activities that increase mobility and reduce 

congestion. We agree that the department had discretion to use congestion 

pricing as a discriminating factor under the Ferry Boat statute, because 

there is a rational connection between congestion pricing, mobility, and 

congestion. 

• The department could not, however, apply congestion pricing in a way that 

would fail to comply with the statutory priority factors—that is, it could 

not reject nonurban partners that met statutory priorities simply because 

they lacked congestion pricing in favor of urban partners that had 

congestion pricing but did not meet statutory priorities. The department’s 

technical evaluation documentation incorrectly suggested that such a 

situation occurred in the case of one grant, Seattle’s High-Speed, UltraLow Wake Passenger-Only Ferry project. Although the department’s 

technical review team evaluator appeared to have determined that this 

Seattle project failed to meet two statutory priority selection criteria—

carrying large numbers of passengers and vehicles, and carrying a large 

number of passengers in passenger-only service—the department 

nevertheless awarded the project $2 million based on Seattle’s urban 

partner designation, passing over nonurban partners the technical review 

team had determined to have met one or more of the statutory priorities. 

The technical review team evaluator apparently reached this conclusion 

by incorrectly relying on the total number of passengers carried by 

individual projects, not the total number of passengers carried by the ferry 

 

4623 U.S.C. §129(c). 

Page 32 GAO-09-154 Congestion Relief Initiatives 
 

system as a whole as required by statute.47 In fact, Seattle’s ferry system 

carries the greatest number of passengers of all ferry systems in the 

country, and therefore was entitled to “priority.” 

In addition, in one instance—the TCSP program, under which the 

department awarded $50.4 million in grants to urban partners—we 

concluded that although the department had discretion to use congestion 

pricing as a discriminating priority factor, it likely did not apply statutory 

“priority consideration” factors correctly, in the way the statute requires. 

However, “priority consideration” entitles an applicant only to a bona fide 

and careful review, not to guaranteed selection. Furthermore, based on 

available information, it is not clear that the department’s incorrect 

evaluation approach affected the ultimate outcome of its selections. As a 

result, we are not recommending that the department re-evaluate the more 

than 500 grant applications it received for fiscal year 2007 for this 

program. Specifically: 

• Using congestion pricing as a priority selection factor, the department 

awarded three grants totaling $50.4 million under the TCSP program to 

urban partner applicants—Minneapolis, San Francisco, and Seattle. The 

statute requires that the department give “priority consideration” only to 

applicants that meet five separate factors, none of which explicitly relates 

to congestion pricing and all five of which must be satisfied. The statute 

provides that priority consideration shall be given to applicants that (1) 

have instituted preservation or development plans and programs; (2) have 

instituted other policies to integrate TCSP practices; (3) have preservation 

or development policies that include a mechanism for reducing potential 

impacts of transportation activities on the environment; (4) demonstrate a 

commitment to public and private involvement, including the involvement 

of nontraditional partners in the project team; and (5) examine ways to 

encourage private-sector investments. 

• The department believes that the term “priority consideration” does not 

require the department to award grants to applicants that meet the above 

criteria; instead, the department believes priority consideration entitles an 

applicant only to precedential or careful deliberation or thought before 

competing alternatives. We agree with the department that, unlike 

“priority,” “priority consideration” does not guarantee an applicant 

selection. However, the department’s reading, as we understand it, is too 

narrow. We believe “priority consideration” entitles an applicant to special 

 

4723 U.S.C. §147(c). 

Page 33 GAO-09-154 Congestion Relief Initiatives 
 

attention and a careful and bona fide review, not just consideration earlier 

in the evaluation process. Nonetheless, ultimately, the department had 

discretion to grant awards to applicants that did not meet priority 

consideration criteria, based on other factors, such as congestion pricing, 

found to be rationally connected to statutory objectives. 

• The remaining issue is whether, before the department applied congestion 

pricing as a selection factor, it followed the statute and gave any 

applicants qualifying for “priority consideration” the bona fide review 

Congress required. The answer is not clear. The statute lists five factors, 

with the last two joined by the conjunctive “and,” indicating all five factors 

must be met in order for an applicant to receive priority consideration. 

Department review team officials told us they rated grant applicants as 

meeting statutory priority consideration criteria so long as just one factor 

was met (essentially the reviewers treated the “and” in the statute as an 

“or”). We disagree with the department’s interpretation and believe the 

“and” is used in its ordinary sense, requiring applicants to meet all five 

factors. Once the department found that an applicant met one factor, it 

terminated its evaluation. The effect of this error is unknown since, from 

the current record, it is not possible to determine whether any applicant 

met all five factors. 

Appendix V contains a complete analysis of these legal issues and our 

conclusions about the department’s compliance. 

The department is tracking urban partners’ progress in completing the 

conditions of their awards, such as obtaining their authority to use 

congestion pricing where needed. In addition, the department has 

contracted with Battelle Memorial Institute to evaluate the outcomes of 

UPA projects, such as the extent to which congestion is mitigated. While 

progress is being made in these two areas, we did not attempt to assess 

the overall reasonableness of these efforts because they are in early 

stages. 

The Department Has a 

Framework to Ensure 

That Award 

Conditions Are Being 

Met and That Results 

Will Be Evaluated 

Page 34 GAO-09-154 Congestion Relief Initiatives 
 

The department’s UPA initiative management team48 monitors urban 

partners’ completion of award conditions by tracking each urban partner’s 

progress in implementing congestion-reduction projects. According to a 

department official, the UPA initiative management team meets weekly in 

an effort to obtain and track real-time data from urban partner sites and 

address issues as they occur. Typical meetings consist of reports from 

department officials on the status of each urban partner’s planning efforts, 

federal fund obligations, and environmental reviews. The UPA initiative 

management team identifies and monitors the award conditions of UPAs 

in the following ways: 

The Department Is 

Monitoring Urban 

Partners’ Completion of 

Award Conditions 

• Term sheet. Each urban partner entered into a term sheet, or 

memorandum of understanding, with the department that includes the 

urban partner’s award conditions. Each term sheet describes the 

congestion-reduction projects funded by the department, the amount of 

funding to be obligated, and the responsibilities of the parties. A 

department official told us that although not legally binding, the term 

sheets formalize both the department’s and the urban partners’ 

understanding of project requirements and deadlines, and provide the 

department with a mechanism to track urban partners’ progress in meeting 

the award conditions. 

• Funding agreements. Each urban partner has proposed to implement 

several projects to reduce congestion. These projects are tied to funding 

agreements that establish the amounts of funding to be provided by the 

department, the grant programs that serve as the sources of funding, and 

the conditions that must be met to ensure obligation of federal funds. The 

content of these funding agreements varies and is dependent on statutory 

and contractual requirements associated with each funding source. 

• Implementation matrix. The UPA initiative management team has 

created an implementation matrix spreadsheet to track and update 

progress in meeting requirements from the UPA term sheets and funding 

agreements. For example, each urban partner’s implementation matrix 

spreadsheet tracks the following conditions contained in urban partner 

funding agreements: (1) the completion of preconditions for obligating 

federal funds, (2) UPA project funding sources, and (3) the dates federal 

funds were (or were expected to be) obligated. The implementation matrix 

 

48The UPA initiative management team consists of a team leader from an FHWA team 

assigned to each urban partner and staff from different modal administrations with 

backgrounds in information and project management; congestion pricing; transit, 

technology, environment and planning; and evaluation and performance management. 

Page 35 GAO-09-154 Congestion Relief Initiatives 
 

also tracks award conditions contained in each UPA term sheet, including 

initiative-driven conditions, such as legislative authority for congestion 

pricing, and project-related award conditions, such as environmental 

approval, planning, design, development, evaluation requirements, and 

completion dates. 

• Project management documentation. The UPA initiative management 

team requires that each urban partner adhere to project management 

processes and protocols. The department has requested that each urban 

partner provide standard project management documentation that follows 

project management standards,49 including project management plans, 

project charters, baseline schedules and budgets, and progress reports. 

These items will be tracked by the UPA initiative management team. 

According to department officials, only Miami’s UPA projects have 

progressed far enough to require a significant amount of tracking, and 

Miami officials have begun to provide project management 

documentation. Seattle also has provided a draft project management plan 

in support of its UPA. However, in anticipation of the other urban partners 

entering the project implementation phase, the department is exploring 

the use of software applications that fulfill project management standards 

and can be used to track the urban partners’ adherence to project 

management documentation requirements. 

The department has already taken steps to ensure that urban partners 

complete their award conditions. For example, in April 2008, New York 

City was unable to obtain the legal authority to do congestion pricing, 

which was a selection condition of its UPA. As a result, New York City lost 

its designation as an urban partner and the funding for its congestionreduction projects. In addition, in May 2008, the department determined 

that the congestion-pricing project identified in San Francisco’s term sheet 

might not achieve the department’s congestion-reduction goals. As a 

result, the department decided not to release about $100 million of San 

Francisco’s UPA funding from several grant programs50 until the city 

adopted a congestion-pricing project that was acceptable to the 

department. (San Francisco did so in October 2008.) A department official 

has indicated that the UPA initiative management team will continue to 

 

49American National Standards Institute, A Guide to the Project Management Body of 

Knowledge, ANSI/PMI 99-001-2004 (2004). 

50Alternatives Analysis, Bus and Bus Facilities, Ferry Boat Discretionary, TCSP, Value 

Pricing Pilot, and ITS-OTMC programs. 

Page 36 GAO-09-154 Congestion Relief Initiatives 
 

monitor urban partners’ completion of award conditions throughout the 

implementation of UPA initiative congestion-reduction projects. 

We did not evaluate whether the implementation tracking was reasonable 

or whether the award conditions were fulfilled, because projects have not 

progressed far enough to make this determination. 

To oversee the development and implementation of the UPA evaluation, 

the department created an evaluation subteam within the UPA initiative 

management team. In April 2008, the department hired Battelle to evaluate 

three urban partners: Minneapolis, San Francisco, and Seattle. Battelle 

also was hired to provide technical assistance to New York City and 

Miami, which both agreed to contract for and fund their own evaluations.51

From these individual urban partnership evaluations, including Miami, 

Battelle will develop a national evaluation of the UPA initiative to generate 

conclusions about the effectiveness of various types of congestionreduction strategies. 

The evaluation subteam manages Battelle’s development and 

implementation of the UPA evaluation process. For example, the UPA 

evaluation subteam will approve central parts of Battelle’s evaluation 

framework, such as the site test plans that will detail data collection and 

analysis activities for each urban partner site. In addition, a department 

official has told us that for each urban partner site, the evaluation subteam 

will coordinate with site officials and Battelle to ensure the evaluation 

effort receives adequate support and is appropriate for each site’s projects. 

The urban partnership evaluation will be completed in four phases. For 

each phase, Battelle will produce a product that the UPA evaluation 

subteam must approve. (See table 5.) According to Battelle, phase one—

the initial evaluation strategy formulation—is complete, and phase two is 

underway. 

The Department Plans to 

Evaluate Urban Partners’ 

Strategies for Reducing 

Congestion 

 

51After New York City lost its designation and funding as an urban partner, the department 

reallocated these funds to Los Angeles and Chicago under the Congestion Reduction 

Demonstration Program. In September 2008, the department hired Battelle to evaluate the 

Los Angeles and Chicago congestion-reduction efforts. However, in January 2009 Chicago 

lost its designation as a Congestion Reduction Demonstration partner, and as a result the 

department cancelled Battelle’s evaluation of Chicago’s congestion-reduction projects. 

Page 37 GAO-09-154 Congestion Relief Initiatives 
 

Table 5: Four Phases of the UPA Evaluation 

Phase Product 

Expected completion 

date Statusa

One Initial evaluation strategy 

formulation 

June 4, 2008 Completed June 25, 

2008 

Two National evaluation framework 

development 

Site-specific evaluation plans 

Draft submitted to the 

department on Sept. 5, 

2008 

Expected by Apr. 30, 

2009b

Completed Nov. 21, 

2008 

Being drafted by 

Battelle 

 Three Evaluation monitoring and 

technical support 

Expected Mar. 30, 

2009, to Mar. 25, 2011b

Four Data analysis and report of 

findings 

Expected May 13, 

2009, to Aug. 25, 2011 

Source: Battelle Memorial Institute. 

a

Completion dates are based on the initial project plan submitted to the department on June 13, 2008. 

b

Subject to change as projects are implemented. 

The department identified four questions to be used in the urban 

partnership evaluation. (See table 6.) As part of phase one, Battelle then 

developed a number of evaluation analyses from these questions that it 

presented to the department in an initial strategy briefing. Battelle rated 

the evaluation potential of each urban partner using these analyses, based 

on the analyses’ applicability and feasibility. Battelle defined applicability 

as the likelihood that each site will be able to provide significant answers 

to the four evaluation questions and feasibility as the likelihood that 

Battelle will be able to measure the impact of project strategies to reduce 

congestion and determine that those strategies are the cause of any 

improvement found. Since Battelle will be relying on data collected by 

each urban partner site to perform its evaluation, the department is 

working with urban partners to ensure they will devote sufficient 

resources to data collection. 

Page 38 GAO-09-154 Congestion Relief Initiatives 
 

Table 6: Evaluation Questions and Analyses for the UPA Evaluation 

Evaluation questions Evaluation analyses 

How much was congestion reduced? Understand the extent to which the combined 

congestion-reduction strategies reduced 

traffic congestion in study routes/corridors 

and in adjacent routes/corridors. 

What are the associated impacts of the 

congestion-reduction strategies? 

Understand the contribution of the 4Ts to the 

congestion impacts. 

Understand the associated impacts of the 

4Ts on the environment, movement of goods, 

businesses, and safety. 

What are the lessons learned? Document a variety of lessons learned by the 

key stakeholders implementing the 

congestion-reduction strategies. 

What are the overall costs and benefits 

of the strategies? 

Document public and private costs and 

consider the benefits in relation to costs. 

Source: Battelle Memorial Institute. 

Battelle has delivered a draft national evaluation framework as part of 

phase two of the evaluation process. The national evaluation framework 

will act as a guide for site-specific evaluations and defines the entire 

evaluation process. The department is reviewing the draft framework. The 

national evaluation framework will be followed by site-specific evaluation 

plans that provide a high-level view of data collection, analyses to be 

performed, roles and responsibilities of stakeholders, and schedules for 

urban partner sites. Minneapolis and Seattle are the first sites scheduled, 

and the remaining sites will follow. While Battelle is still working on 

finalizing future deliverables, phase three will include the collection of preand postdeployment data, and phase four will conclude the evaluation 

with Battelle’s report of findings. As of December 2008, the department 

had not decided whether to release the reports as they are completed or in 

a consolidated format at the end of the evaluation. 

Miami proposed to fund and perform its urban partnership evaluation. 

According to Florida Department of Transportation officials, Miami did 

this to make its UPA application more competitive and because at the 

time, Miami did not know that the department would provide funding for 

this activity. Miami’s UPA evaluation will also answer the four evaluation 

questions. In September 2008, Miami provided the department with a 

master transit evaluation matrix, which Miami officials have described as a 

crosswalk between the variables Miami will measure and the department’s 

evaluation questions. In addition, to date, Miami has hired a contractor to 

perform transit surveys and create lessons-learned reports for its transit 

Page 39 GAO-09-154 Congestion Relief Initiatives 
 

projects under the UPA initiative. Miami will receive technical assistance 

from the department and from Battelle, and will work with the University 

of South Florida’s Center for Urban Transportation Research to complete 

its evaluation. Battelle and the department have noted that the urban 

partner evaluations will differ somewhat, since all urban partners have 

different congestion-reduction plans. 

We did not determine whether the evaluation methodologies proposed by 

Battelle or Miami were reasonable, because these methodologies have not 

been fully developed. 

We support performance-based integrated approaches—such as the one 

the department employed for the UPA initiative—because of the potential 

for a greater impact than can be achieved by operating the component 

programs in a stand-alone mode. Moreover, the initiative was a highly 

complex activity undertaken relatively quickly to take advantage of 

flexibilities allowed under the 2007 Revised Continuing Appropriations 

Resolution and to produce results in a relatively short period of time. 

With minor exceptions, the department did a good job of letting applicants 

know which criteria it would use in selecting urban partners and of the 

funding available for the initiative. However, the department could have 

done a better job of letting applicants know which of the dozen selection 

criteria it considered most important so that applicants could tailor their 

applications accordingly. 

The department acted within its legal authority in funding individual grant 

programs to support the UPA initiative, and using congestion pricing as a 

priority or priority consideration selection factor in making award 

decisions under the individual grant statutes. In one instance—the TCSP 

program—the statute required that “priority consideration” be given to 

applicants meeting five specified factors, and the department instead gave 

such consideration to applicants (including urban partners) that met just 

one such factor. Because of the department’s approach, it is not possible 

to determine from the documentation we reviewed whether any of the 

applicants in fact qualified for priority consideration. However, because 

“priority consideration,” unlike “priority,” entitles an applicant only to a 

bona fide and careful review, not to guaranteed selection, and because the 

department ultimately had discretion to use congestion pricing as a 

discriminating priority factor, we are not recommending that the 

department re-evaluate the more than 500 grant applications it received for 

fiscal year 2007 for this program. Rather, in the future, the department 

Conclusions 

Page 40 GAO-09-154 Congestion Relief Initiatives 
 

should evaluate these grant applications in accordance with the statute, by 

awarding priority consideration only to applicants that meet all five 

factors. 

The department has promoted UPA goals and concepts in its proposed 

successors to the UPA initiative—the Congestion Reduction 

Demonstration and the Metropolitan Mobility programs.52 To the extent 

that the department moves forward to select communities to receive funds 

for these proposed initiatives and to allocate funds to them, it must look 

back on the lessons learned from the UPA initiative to ensure that the 

missteps identified in this report are not repeated. This is especially 

important when the department employs a relatively novel framework as 

an umbrella to integrate the underlying programs that may fund these 

initiatives. 

We are making two recommendations. First, to better ensure that potential 

applicants for future congestion relief initiatives are aware of the criteria 

for assessing the applications, we recommend that the Secretary of 

Transportation communicate all selection criteria—and the relative weight 

to be given to the criteria—to potential applicants. Second, for the 

Transportation, Community, and System Preservation program, we 

recommend that the Secretary direct the Administrator, FHWA, to give 

priority consideration only to applicants that meet all five statutory 

factors, as required by the grant statute. 

The department reviewed a draft of our report and generally agreed with 

most of its findings. The department indicated that it was considering the 

recommendations; however, it indicated that the recommendation 

concerning the Transportation, Community, and System Preservation 

program will require careful legal analysis by the agency. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

 

52For fiscal year 2008, Congress directed that not more than 10 percent of the funds 

provided to carry out the bus program could be used to fund the UPA initiative or any other 

new highway congestion initiative such as the Congestion Reduction Demonstration 

program. Pub. L. No. 110-161 (December 26, 2007). The department acknowledged that this 

restriction would affect its use of fiscal year 2008 funds. See Letter from D.J. Gribbin, 

General Counsel, DOT, to Susan D. Sawtelle, Managing Associate General Counsel, GAO, 

Apr. 17, 2008). 

Page 41 GAO-09-154 Congestion Relief Initiatives 
 

Overall, the department told us that it views performance-based initiatives, 

such as the UPA initiative, as critical tools for applying its limited 

discretionary funding to achieve the greatest possible congestion 

reduction. The department said that the UPA initiative also made use of 

other best practice approaches. For example, the department incorporated 

an intermodal perspective for assessing program applicants based on 

established and publicized criteria. Intermodal teams assessed the merits 

and viability of proposals under the leadership of the Office of the 

Secretary to ensure that funding was awarded in a manner consistent with 

statute and regulation, to those projects that offered the most significant 

congestion relief benefits. The department also emphasized that it used 

extensive outreach to potential participants, because the program’s 

dynamic environment made it particularly important to ensure clear, 

consistent, and effective communication. The department indicated that it 

made its expertise available to all potential applicants on an ongoing basis 

from the outset of the program. Finally, the department stated that the 

UPA initiative incorporates elements for assessing results, so that 

information can be obtained for consideration in future efforts of this type. 

Our draft report stated that the department appeared to give Minneapolis 

proactive assistance in crafting a stronger application before the 

department selected the city as a preliminary urban partner. We concluded 

that this action was inappropriate and tendered a draft recommendation 

on this issue. The department took exception to our discussion that it 

provided Minneapolis assistance at this point of the evaluation process. 

The department maintained that it did everything possible to ensure these 

interactions were consistent and fair to all applicants, and did not agree 

that its discussions with Minneapolis or any potential applicants were 

either unfair or inappropriate. As a result, we had additional discussions 

with Minneapolis officials and reviewed documentary evidence which 

showed that the department provided assistance to Minneapolis after it 

was selected as a preliminary urban partner, similar to Miami. As a result, 

we revised our draft report accordingly and removed the draft 

recommendation. 

The department offered several technical comments, which we have 

incorporated where appropriate. 

We are sending copies of this report to other congressional committees 

and subcommittees with responsibility for highway mobility issues; the 

Secretary of Transportation; the Administrator, Federal Highway 

Administration; the Administrator, Federal Transit Administration; the 

Page 42 GAO-09-154 Congestion Relief Initiatives 
 

Administrator, Research and Innovative Technology Administration; and 

the Director, Office of Management and Budget. This report will be 

available at no charge on the GAO Web site at http://www.gao.gov. 

If you have any questions about this report, please contact either Susan 

Sawtelle, Managing Associate General Counsel at (202) 512-6417 or 

sawtelles@gao.gov; or me at (202) 512-2834 or siggerudk@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. Staff who made key contributions 

Katherine A. Siggerud 

to this report are listed in appendix VI. 

Managing Director, Physical Infrastructure Issues 

Page 43 GAO-09-154 Congestion Relief Initiatives 
 

List of Congressional Committees 

The Honorable Patty Murray 

Madam Chairman 

The Honorable Christopher S. Bond 

Ranking Member 

Subcommittee on Transportation, Housing and 

Urban Development, and Related Agencies 

Committee on Appropriations 

United States Senate 

The Honorable John Olver 

Chairman 

The Honorable Tom Latham 

Ranking Member 

Subcommittee on Transportation, Housing and 

 Urban Development, and Related Agencies 

Committee on Appropriations 

House of Representatives 

The Honorable James Oberstar 

Chairman 

The Honorable John Mica 

Ranking Republican Member 

Committee on Transportation and Infrastructure 

House of Representatives 

The Honorable Peter DeFazio 

Chairman 

The Honorable John Duncan 

Ranking Member 

Subcommittee on Highways and Transit 

Committee on Transportation and Infrastructure 

House of Representatives 

Page 44 GAO-09-154 Congestion Relief Initiatives 
Appendix I: De

Actions

Ensure Transp

partment of Transportation 

 to Select Corridors of the Future and 

ortation Benefits 

Page 45 GAO-09-154 

Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

In May 2006, the Department of Transportation (the department) 

established Corridors of the Future (Corridors) as a demonstration 

program to accelerate the development of multistate transportation 

corridors to reduce congestion. In designating such corridors, the 

department followed criteria that it communicated to potential applicants. 

In addition, the department has established a framework to ensure that 

states will work together and that Corridor projects will come to fruition 

and produce transportation benefits. 

In September 2006, the department issued a Federal Register notice 

soliciting applications for Corridors, which is a major component of its 

congestion-reduction initiative. This program is to accelerate the 

development of multistate transportation corridors, for one or more 

transportation modes, in need of investment to reduce congestion. The 

department also encouraged participation by sending an e-mail to 

transportation groups and by citing the program’s benefits in speeches. 

According to department officials, another purpose of the demonstration 

program is to encourage states to work together, rather than acting 

separately, to reduce congestion along major transportation corridors. 

The department solicited applications for Corridors in two phases. For 

phase one, the department asked for proposals containing general 

information about the proposed corridor, such as its location, purpose, 

preliminary design features, and estimated capital costs. The department 

received 38 proposals and established a review team comprising 

representatives from the department’s surface transportation 

administrations, with expertise in finance, environment and planning, and 

infrastructure. In accordance with the review team’s recommendations, 

the department announced it had selected eight potential corridors to 

submit applications for phase two. The phase two applications were more 

detailed than the phase one proposals and supplied information on the 

corridor’s physical description, congestion-reduction goals, mobility 

improvements, economic benefits and support of commerce, value to 

users, innovations in project delivery and finance, environmental 

stewardship, finance plan, and proposed project timeline. Several state 

officials told us that the process of completing proposals or applications 

for Corridors fostered cooperation between states and began discussions 

about multistate efforts to reduce congestion that would not have 

happened otherwise. 

On September 14, 2007, relying on the recommendations of the review 

team, the department announced its selection of six corridors: Interstate 

Background 

 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

95, Interstate 15, Interstate 5, Interstate 10, Interstate 70, and Interstate 69. 

(See fig. 4.) 

Figure 4: Locations of the Six Corridors of the Future 

Sources: U.S. Department of Transportation (data); and MapArt (base map).

Pa.

Ore.

Nev.

Idaho

Mont.

Wyo.

Utah

Ariz.

N.Mex.

Colo.

N.Dak.

S.Dak.

Nebr.

Tex.

Kans.

Okla.

Minn.

Iowa

Mo.

Ark.

La.

Ill.

Miss.

Ind.

Ky.

Tenn.

Ala.

Fla.

Ga.

S.C.

N.C.

Va.

Ohio

N.H.

Mich. Mass.

Calif.

Wash.

Wis. N.Y.

Vt.

W.Va.

R.I.

Conn.

N.J.

Del.

Md.

D.C.

5

15

10

70

69

95 

Maine

Designation as a corridor did not include an award of funds, but did give 

individual corridors priority access to department resources such as 

funding from grant programs and administrative flexibilities, such as 

environmental streamlining. Each corridor proposed a series of 

improvement projects that collectively totaled about $106 billion and 

individually ranged in cost from about $8.5 million to $63 billion. However, 

because of funding limitations, the department strategically chose where 

to best utilize funds and only selected one or two projects per corridor. 

For example, Interstate 10 proposed about $6.7 billion in high-priority 

projects in several areas: security, incident management, traveler 

information systems, traffic management, multiagency coordination, and 

capital projects. Following Interstate 10’s designation as a corridor, the 

Page 46 GAO-09-154 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

department provided $8.6 million in funding for two projects within this 

corridor. (See table 7.) In all, the department provided $66.2 million in 

funding from five grant programs for 10 projects in the six corridors. 

Table 7: Corridors Projects That Received Funding 

Dollars in millions 

Corridor Project description 

Amount 

awarded 

Interstate 95 North Carolina will use Interstate Maintenance Discretionary program funds to widen the 

interstate (including additions to lanes and ramp capacity improvements) and increase vertical 

clearances for bridges. $21.0

North Carolina will use Transportation, Community, and System Preservation (TCSP) program 

funds to install sensors and dynamic message signs. 0.8

Interstate 15 Nevada will use Public Lands Highway Discretionary program funds for environmental work to 

expand the number of lanes in and around Las Vegas, realign off ramps at one interchange, 

and widen the roadway to support managed or express lanes. 10.0

California will use Highways for Life program funds to replace concrete on an existing section 

of roadway. 5.0

Interstate 5 Washington will use Interstate Maintenance Discretionary program funds for environmental and 

predesign work and a right-of-way purchase for a new bridge across the Columbia River 

between Oregon and Washington. 15.0

Interstate 10 Arizona will use Interstate Maintenance Discretionary program funds to widen a section of the 

interstate. 4.0

Louisiana will use Delta Region Development program funds to construct additional lanes and 

add auxiliary lanes. 4.6

Interstate 70 Missouri will use Interstate Maintenance Discretionary program funds for an environmental 

study to evaluate the impact of adding two dedicated truck lanes in each direction along the 

interstate. 2.0

Indiana will administer TCSP program funds for a corridor-wide study to evaluate the feasibility 

of constructing truck-only lanes along the interstate. 3.0

Interstate 69 Arkansas will administer TCSP program funds for a corridor-wide study to identify sources of 

innovative financing for projects on the corridor. 0.8

Total $66.2

Source: GAO presentation of Department of Transportation information. 

The department is developing agreements for how the states along each 

corridor will work together to develop their corridor. As of February 2009, 

the department finalized agreements for three corridors. According to a 

department official, the department is working to finalize the remaining 

three agreements by the end of December 2009. 

Page 47 GAO-09-154 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

Beyond the general information requested for phase I proposals, the 

September 2006 Federal Register notice provided nine criteria for 

reviewing phase two applications. Specifically, the proposals and 

applications were to include 

• a description of the corridor, 

• proposed strategies for reducing congestion, 

The Department 

Selected Awardees for 

Corridors by 

Following Its 

Published Criteria 

• planned mobility improvements, 

• expected economic benefits and support of commerce, 

• estimated value to users of the corridor, 

• innovative project delivery and financing features, 

• evidence of exceptional environmental stewardship, 

• a finance plan and opportunities for private-sector participation, and 

• a proposed project timeline. 

In reviewing both the phase one proposals and phase two applications, the 

department applied the criteria stated in the Federal Register and, 

according to the department, gave equal weight to all the criteria. 

According to the Office of Management and Budget policy directive 

described earlier in this report, since the selection criteria for Corridors 

did not vary in importance, it was not necessary for the department to 

describe the weights of the criteria in its funding announcements. 

Page 48 GAO-09-154 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

As discussed earlier in this report, grant announcements should provide a 

complete description of the funding opportunity to give applicants a sense 

of the scope of the funding, and to assist them in prioritizing and 

developing proposals for projects. The September 2006 Federal Register

notice did not state a specific amount of funding available to corridors 

through grant programs. However, the Federal Register notice did state 

that (1) if a corridor was selected for participation in the Corridors 

program, the department would work with the corridor to identify possible 

funding sources and (2) the department would select up to five corridors 

(although six were ultimately selected). The Federal Register notices 

soliciting Corridors proposals and applications were issued before 

February 15, 2007, when the President signed the department’s fiscal year 

2007 appropriation without any congressional directives that funds be 

dedicated for particular projects. Therefore, department officials told us 

that, at the time Corridors proposals and applications were solicited, the 

department did not know to what extent funds would be available for 

allocation to Corridors projects. 

Department officials told us that in April 2007, the department sent out an 

e-mail to phase two applicants stating that $329 million, from eight Federal 

Highway Administration (FHWA) grant programs, was available to 

applicants that met the grant programs’ respective statutory criteria and 

emphasized the proposed projects’ highway safety and congestionreduction benefits. However, it was not clear in this document what 

portion of the $329 million would be dedicated to Corridors. According to 

the department, the level of funding that would be allocated to Corridors 

was unknown at this time. In July 2007, the department set aside $66.2 

million for Corridor designees and funded 10 projects. This sum 

represented the amount remaining after funds were set aside for 

congressionally directed activities, urban partnership agreements (UPA), 

and other grant programs. Department officials told us that after 

identifying the six corridors, they called each corridor to solicit projects 

that could be funded. 

For 9 of the 10 funded Corridors projects, we found corresponding 

projects listed in the respective Corridors applications. However, the 

Corridors application for Interstate 10 did not include an Arizona project 

to widen a section of this highway. Officials from the Florida and Texas 

Departments of Transportation who served as the points of contact for the 

Interstate 10 Corridors project told us they did not receive telephone calls 

from the department soliciting projects for funding in the Interstate 10 

corridor. Rather, these officials told us that Arizona received Corridors 

funding for a project that was not listed in the Interstate 10 Corridors 

Amount of Funding 

Available under 

Corridors Was 

Unclear and Most 

Funds Awarded to 

Projects Were 

Requested in 

Applications 

Page 49 GAO-09-154 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

application and therefore was not a priority for the corridor. According to 

the department, it was not necessary for a project to be listed in a 

Corridors application for the project to be funded. Instead, the department 

said, it gave priority consideration in its funding decisions to parties 

designated as corridors. In our opinion, this approach appears to act at 

cross purposes to the department’s goal of encouraging multistate 

collaboration to address pressing congestion along corridors. 

The department is developing an agreement for each corridor on how the 

states will work together to plan, develop, finance, construct, and maintain 

the corridor. As of February 2009, the department had finalized 

agreements for three corridors. According to a department official, the 

department is working to finalize the remaining three agreements by the 

end of December 2009. Each agreement will establish the objectives for 

developing the respective corridor. The department is asking the signatory 

states to use the following objectives as the guiding principles for 

development: 

The Department Plans 

to Ensure Award 

Conditions Are Met 

and Assess the 

Results 

• Promote innovative national and regional approaches to congestion 

mitigation. 

• Address major transportation investment needs. 

• Illustrate the benefits of alternative financial models that involve privatesector capital. 

• Promote a more efficient environmental review and project development 

process. 

• Develop corridors that will increase freight system reliability and enhance 

the quality of life for citizens. 

• Demonstrate the viability of a transportation investment model based on 

sound economics and market principles. 

Each agreement will require that the signatory states develop a multistate 

approach to developing and managing the corridor. The department is 

asking that the states execute a memorandum of understanding among 

themselves, with the department’s concurrence, that sets forth how the 

states will collaborate to support each other in corridor activities. To 

ensure that the signatory states are speaking with one voice, the 

department is asking each corridor to establish a committee that can 

Page 50 GAO-09-154 Congestion Relief Initiatives 
Appendix I: Department of Transportation 

Actions to Select Corridors of the Future and 

Ensure Transportation Benefits 

represent the states and negotiate on behalf of the corridor with the 

department. 

Each agreement also will include specific requirements for developing and 

operating the corridor. The department is asking the signatory states to 

develop a process under which each project will be subject, as applicable, 

to specific development goals to ensure coordinated planning, financing, 

construction, operation, maintenance, and performance of the corridor. 

The department is also encouraging the signatory states to cooperatively 

develop a method to select projects and establish a schedule for project 

delivery. The department would like the signatory states to create and 

maintain a schedule that will establish priorities for undertaking projects 

and obtaining funding from different sources. 

Lastly, each agreement will address the development of a performance 

plan for the corridor, including operations and management performance 

goals and expectations, and methods to measure travel time and reliability. 

Beginning 1 year after the effective date of the agreement and regularly 

thereafter, the department will ask the signatory states to report to the 

department on the corridor’s performance and progress. 

Page 51 GAO-09-154 Congestion Relief Initiatives 
A

Promotes Public-Pr

R

ppendix II: The Department Actively 

ivate Partnerships to 

educe Highway Congestion

Page 52 GAO-09-154 

Appendix II: The Department Actively 

Promotes Public-Private Partnerships to 

Reduce Highway Congestion 

In February 2008, we reported that the department encourages and 

promotes the use of highway public-private partnerships through policy 

and practice, including the development of experimental programs that 

waive certain federal regulations and encourage private investment.1

 The 

department believes that public-private partnerships have the potential to 

reduce highway congestion, among other things. 

Since our report, the department has taken additional steps to promote 

highway public-private partnerships through programs and practice. This 

appendix updates our prior report on the activities the department has 

used to promote public-private partnerships. We did not assess these new 

efforts. 

Since our February 2008 report, the department has extended credit and 

credit support under the Transportation Infrastructure Finance and 

Innovation Act program to two public-private partnerships. This act 

authorizes the department to provide secured (direct) loans, lines of 

credit, and loan guarantees to public and private sponsors of eligible 

surface transportation projects. For example, in December 2007, under the 

Transportation Infrastructure Finance and Innovation Act, the department 

allocated $589 million for Virginia’s Capital Beltway high-occupancy toll 

lanes project, which will use congestion pricing to ensure reliable traffic 

flow on one of the nation’s most congested highways. In addition, in 

March 2008, the department allocated $430 million for segments of Texas 

state highway 130, which will form part of a new 91-mile tollway intended 

to relieve congestion on Interstate 35. Both transactions involved a 

partnership between private borrowers and a state. 

Departmental 

Programs Promote 

Public-Private 

Partnerships 

 

1

These include: (1) incorporating highway public-private partnerships into its policy 

statements, such as its 2006 national congestion strategy, which stated that the federal 

government should remove or reduce barriers to private investment in the construction or 

operation of transportation infrastructure; (2) using its administrative flexibility to develop 

three experimental programs (Special Experimental Projects Numbers 14 and 15 and the 

Innovative Finance Test and Evaluation Program) to allow more private-sector 

participation in federally funded highway projects; and (3) publishing a public-private 

partnership manual that has material to educate state transportation officials about 

highway public-private partnerships and to promote their use. See GAO, Highway PublicPrivate Partnerships: More Rigorous Up-front Analysis Could Better Secure Potential 

Benefits and Protect the Public Interest, GAO-08-44 (Washington, D.C.: Feb. 8, 2008). 

 Congestion Relief Initiatives 
Appendix II: The Department Actively 

Promotes Public-Private Partnerships to 

Reduce Highway Congestion 

In addition, as of December 2008, the department had allocated about $9.2 

billion in private activity bonds to eight public-private partnerships.2

 The 

Safe, Accountable, Flexible, Efficient Transportation Equity Act—A 

Legacy for Users (SAFETEA-LU) amended the Internal Revenue Code to 

add qualified highway or surface freight transfer facilities to the types of 

privately developed and operated projects for which tax-exempt facility 

bonds (a form of private activity bonds) may be issued. For example, the 

department allocated $980 million for private activity bonds to a group of 

private companies that are planning to build a tunnel connecting the Port 

of Miami on Dodge Island with Watson Island and Interstate 95 on the 

Florida mainland.3

 However, according to a department official, not all of 

the $9.2 billion allocated in private activity bonds has been issued. In 

addition, according to this official, the department is currently reviewing 

applications for additional private activity bond allocations to other 

public-private partnerships. 

Finally, the department plans to study projects that use methods of 

procurement that integrate risk and streamline project development. 

SAFETEA-LU established the Public-Private Partnership Pilot Program, 

known as Penta-P, to evaluate the benefits of forming public-private 

partnerships for new construction projects. In 2007, the department 

executed agreements for three pilot projects: the first is a single contract 

for the construction of two light rail lines in Houston, Texas, that will 

ultimately serve the city’s two main airports; the second is a contract in 

Denver, Colorado, for two rail projects that will serve the Denver airport 

and northwest Denver; and the third is a contract in Oakland, California, 

for a transit system that will connect the Oakland International Airport 

with the San Francisco Bay Area Rapid Transit District’s Coliseum Station. 

According to a department official, construction on the projects has not 

begun. Denver is contemplating an innovative contract that increases risk 

sharing between the private partner and the local, state, and federal 

governments. In this agreement, the Denver Regional Transportation 

District will ask its private partner to assume a degree of risk by 

contributing equity capital to the project. This capital will be at risk until 

the project is operating and collecting revenue. In addition, the 

 

2

Qualified private activity bonds are tax-exempt bonds issued by a state or local 

government, the proceeds of which are used for a defined, qualified purpose by an entity 

other than the government that issued the bond. 

3

In December 2008, Florida cancelled this project because the firm that was supposed to 

provide the equity for the project could not meet its commitments. 

Page 53 GAO-09-154 Congestion Relief Initiatives 
Appendix II: The Department Actively 

Promotes Public-Private Partnerships to 

Reduce Highway Congestion 

Metropolitan Transit Authority of Harris County, Texas, is contemplating 

an innovative contract under which a “facility provider” will share risk 

with the vehicle provider, construction firm, and operator. Also, the 

project’s development will be streamlined, since the private partner will 

coordinate all work with the contractor, vehicle provider, and operator. As 

these projects proceed, the department will study how public-private 

partnerships affect completion times, projections of project costs and 

benefits, and project performance. Lastly, the San Francisco Bay Area 

Rapid Transit District plans to use an innovative contract where a 

consortium of private firms will assume the risk to design, build, operate, 

maintain, and finance the project. 

The department has promoted public-private partnerships in the following 

ways: 

• Developing publications. In July 2008, the department published a report 

that describes the use of public-private partnerships by transportation 

authorities and updates the department’s 2004 report to Congress on 

public-private partnerships.4

The Department 

Promotes PublicPrivate Partnerships 

through Multiple 

Practices 

• Drafting model legislation for states to consider highway public-private 

partnerships within their jurisdiction. The model legislation addresses 

such subjects as bidding, agreement structures, reversions of the facilities 

to the state, remedies, bonds, federal funding, and property tax 

exemptions, among other things. In July 2008, the department published a 

framework for overhauling the way transportation decisions and 

investments are made.5

 Specifically, the framework recommends the use 

of public-private partnerships, expansion of Transportation Infrastructure 

Finance and Innovation Act program capacity, and removal of the $15 

billion cap on private activity bonds administered by the department. In 

addition, the department is currently developing guidance on the use of 

public-private partnerships by procurement agencies. This guidance will 

describe how federal, state, and local officials have structured publicprivate partnerships. 

 

4

U.S. Department of Transportation, Federal Highway Administration, Innovation Wave: 

An Update on the Burgeoning Private Sector Role in U.S. Highway and Transit 

Infrastructure (July 18, 2008). 

5

U.S. Department of Transportation. The Secretary of Transportation, Refocus. Reform. 

Renew. A New Transportation Approach for America (July 2008). 

Page 54 GAO-09-154 Congestion Relief Initiatives 
Appendix II: The Department Actively 

Promotes Public-Private Partnerships to 

Reduce Highway Congestion 

• Maintaining a public-private partnership Internet Web site. This Web 

site serves as a clearinghouse for information to states and other 

transportation professionals about public-private partnerships, pertinent 

federal regulations, and financing options.6

• Making public presentations. Department officials have made public 

speeches and written at least one letter to a state in support of highway 

public-private partnerships. Officials of the department also have testified 

before Congress in support of highway public-private partnerships. Since 

February 2008, the department has conducted workshops on the structure 

and rationale for public-private partnerships. For example, in October 

2008, the department gave a presentation at a transit conference on how 

public-private partnerships can be used to address funding shortages in 

highway infrastructure projects. 

• Making public-private partnerships a key component of congestion 

mitigation. Two major parts of the department’s May 2006 national 

strategy to reduce congestion are the UPA initiative and Corridors. In 

August 2007, the department awarded funds to five urban partners that 

would make congestion pricing a key component of congestion mitigation. 

Such a strategy could act to promote highway public-private partnerships, 

since tolls provide a long-term revenue stream, key to attracting investors. 

In September 2007, the department awarded funds to six interstate routes 

for use in developing multistate corridors to help reduce congestion. 

These six interstates were selected for their potential to use private 

resources to reduce traffic congestion within the corridors and across the 

country. 

• Encouraging public-private partnerships in its reform proposal to 

Congress. In July 2008, the Secretary announced the administration’s new 

plan to create a more sustainable way to pay for and build roads and 

transit systems. This plan includes a proposal for leveraging federal 

resources. Among other things, this proposal encourages states and 

metropolitan areas to explore innovative transportation financing 

mechanisms by expanding the use of public-private partnerships. For 

example, the administration’s plan proposes that all federal aid projects 

with a total cost of over $250 million would not receive federal assistance 

unless the project sponsor first compared the project’s lifecycle costs 

under the most cost-effective form of conventional public procurement 

with the project’s lifecycle costs if procured using a public-private 

 

6

The Web site can be found at http://www.fhwa.dot.gov/ppp. 

Page 55 GAO-09-154 Congestion Relief Initiatives 
Appendix II: The Department Actively 

Promotes Public-Private Partnerships to 

Reduce Highway Congestion 

partnership (assuming state law allows for public-private partnership 

procurement). 

Page 56 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA Appendix III: Extent to Which Previous Initiative and Corridors Funding 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

This appendix provides information on the extent to which previous 

recipients of grants provided through 11 programs received funds under 

the UPA initiative and Corridors.1

 To develop this information, we 

compared the amounts of funds states were allocated during fiscal years 

2004 through 2006 with the amounts awarded for the UPA initiative and 

Corridors in fiscal year 2007. 

Urban partners were awarded about 26 percent of the funding provided 

through the 11 grant programs in fiscal year 2007, while Corridors states 

were awarded 2 percent of the funding provided through those grant 

programs. (See fig. 5.) For fiscal years 2004 through 2006, about $6.9 

billion was allocated through the 11 grant programs to 50 states and the 

District of Colombia, in amounts ranging from about $319 million on 

average per year (California) to $2.4 million on average per year 

(Wyoming). The top 10 states, in descending order of grant size, were 

California, New York, Illinois, New Jersey, Washington, Pennsylvania, 

Colorado, Maryland, Arizona, and North Carolina. Three of the top 10 

states had urban partners (California, New York, and Washington), and 

two of these states were involved in a Corridors project that received 

funding (California and Washington) in fiscal year 2007. In fiscal year 2007, 

about $2.8 billion was awarded through the 11 grant programs. Of this 

amount, about $715 million was awarded to urban partners and about $66 

million was awarded to Corridors states through grants ranging from 

about $328 million (New York) to $1.1 million (Arkansas). 

 

1

For this analysis, we provide information on 11 of the 13 grant programs that were 

available for the UPA initiative and Corridors. We do not provide information on the 

remaining 2 programs because (1) no funds were dedicated to the Intelligent 

Transportation Systems-Operational Testing to Mitigate Congestion program during fiscal 

years 2004 through 2006 and (2) the department did not award Truck Parking Pilot program 

funds in fiscal year 2007 for the UPA initiative or Corridors. 

The 11 grant programs in the analysis are the Alternatives Analysis; Bus and Bus Related 

Facilities Discretionary Grant; Delta Region Development; Ferry Boat Discretionary; 

Highways for Life; Innovative Bridge Research and Deployment; Interstate Maintenance 

Discretionary; New Starts/Small Starts; Public Lands Highway Discretionary Program; 

Transportation, Community, and System Preservation; and Value Pricing Pilot. 

Page 57 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

Figure 5: Comparison of Funding Provided through 11 Grant Programs to Top 10 States and to UPA Initiative and Corridors 

States 

Source: GAO analysis of Department of Transportation information.

All other

($892 million)

New York

($221 million)

Illinois

($164 million)

New Jersey

($139 million)

Washington

($120 million)

Pennsylvania

($109 million)

Colorado

($98 million)

Maryland

($96 million)

4%

Arizona

($83 million)

3%

North Carolina

($68 million)

California

($319 million)

Minnesota

($111 million)

5%

4%

12%

73%

All programs, fiscal years 2004-2006 All programs, fiscal year 2007

California

($134 million)

2%

Corridors

($66 million)

2%

Florida

($63 million)

New York

($328 million)

3%

Washington

($79 million)

All other

($2.1 billion)

Corridors allocation

14% 10%

7%

6%

5%

5%

4%

4%

39%

2%

Arkansas

($1 million)

3%

Missouri

($2 million)

Indiana

($3 million)

California

($5 million)

Louisiana

($5 million)

Nevada

($10 million)

Washington

($15 million)

North Carolina

($22 million)

Arizona

($4 million)

6%

5%

8%

7%

15%

33%

23%

Urban

partners

Note: The dollar amounts for all programs, fiscal years 2004-2006, are an average annual allocation 

over 3 years. 

Page 58 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

Urban partners were awarded about 22 percent of the funding provided 

through the two largest grant programs, Bus and Bus-Related Facilities 

Capital Investment Grants (Bus and Bus Facilities) and New Starts/Small 

Starts, in fiscal year 2007. (See fig. 6.) For fiscal years 2004 through 2006, 

about $6.4 billion was allocated through Bus and Bus Facilities and New 

Starts/Small Starts to 50 states and the District of Colombia, in amounts 

ranging from about $307 million on average per year (California) to 

$900,000 on average per year (Wyoming). The top 10 states, in descending 

order of grant size, were California, New York, Illinois, New Jersey, 

Pennsylvania, Washington, Colorado, Maryland, Arizona, and North 

Carolina. Three of the top 10 states had cities designated as urban partners 

(California, New York, and Washington) and 3 of the top 10 states were 

part of a Corridors project that received funding (Arizona, California, and 

Washington) in fiscal year 2007. In fiscal year 2007, about $2.4 billion was 

awarded through the Bus and Bus Facilities and New Starts/Small Starts 

programs. Of this amount, $530 million was awarded to urban partners in 

grants ranging from about $326 million (New York) to $19.5 million 

(Florida). In fiscal year 2007, no funding was awarded for Corridors 

projects from Bus and Bus Facilities and New Starts/Small Starts. 

Page 59 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

Figure 6: Comparison of Funding Provided through the Bus and Bus Facilities and New Starts/Small Starts Programs to Top 

10 States and to UPA Initiative and Corridors States 

Urban

partners

Source: GAO analysis of Department of Transportation information.

3%

North Carolina

($65 million)

Bus/Facilities and New Starts, fiscal years 2004-2006 Bus/Facilities and New Starts, fiscal year 2007

4%

Maryland

($91 million)

4%

Arizona

($78 million)

California

($307 million)

New York

($218 million)

Illinois

($162 million)

New Jersey

($135 million)

Pennsylvania

($105 million)

Washington

($104 million)

Colorado

($93 million)

All other

($770 million)

2%

California

($58 million)

1%

Florida

($20 million)

4%

Minnesota

($86 million)

New York

($326 million)

All other

($1.9 billion)

2%

Washington

($41 million)

14% 10%

8%

6%

5%

5%

4%

36%

13%

78%

Note: The dollar amounts for Bus and Bus Facilities and New Starts/Small Starts for fiscal years 2004 

through 2006 are an annual average allocation over 3 years. 

Urban partners were awarded about 54 percent of the funding provided 

through the remaining 9 grant programs in fiscal year 2007, while 

Corridors states were awarded about 21 percent of the funding provided 

through those programs. (See fig. 7.) In fiscal years 2004 through 2006, 

about $547 million was awarded through the remaining 9 grant programs 

to 50 states and the District of Colombia, in amounts ranging from about 

$17 million on average per year (Washington) to about $500,000 on 

average per year (New Hampshire). The top 10 states, in descending order 

of grant size, were Washington, Alaska, California, Utah, Kentucky, 

Nevada, Colorado, Mississippi, Texas, and Alabama. Two of the top 10 

states had cities designated as urban partners (California and Washington) 

and 3 of the top 10 states were part of a Corridors project that received 

Page 60 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

funding (California, Nevada, and Washington) in fiscal year 2007. In fiscal 

year 2007, about $315 million was awarded through the 9 grant programs. 

Of this amount, about $169 million was awarded to urban partners and 

about $66 million was awarded to Corridors states through grants ranging 

from about $61 million (California) to $1.1 million (Arkansas). 

Page 61 GAO-09-154 Congestion Relief Initiatives 
Appendix III: Extent to Which Previous 

Recipients of Grant Programs Received UPA 

Initiative and Corridors Funding 

Figure 7: Comparison of Funding Provided through 9 Remaining Grant Programs to Top 10 States and to UPA Initiative and 

Corridors States 

Urban

partners

Source: GAO analysis of Department of Transportation information.

Washington

($17 million)

3%

Texas

($5 million)

3%

Alabama

($5 million)

Other programs, fiscal years 2004-2006 Other programs, fiscal year 2007

Utah

($7 million)

3%

Nevada

($6 million)

3%

Colorado

($6 million)

Kentucky

($7 million)

3%

Mississippi

($5 million)

California

($12 million)

Alaska

($14 million)

All other

($99 million)

California

($61 million)

Corridors

($66 million)

Florida

($43 million)

Minnesota

($25 million)

1%

New York

($2 million)

Washington

($38 million)

All other

($80 million)

Corridors allocation

2%

Arkansas

($1 million)

3%

Missouri

($2 million)

Indiana

($3 million)

California

($5 million)

Louisiana

($5 million)

Nevada

($10 million)

Washington

($15 million)

North Carolina

($22 million)

Arizona

($4 million)

6%

5%

8%

7%

15%

33%

23%

9%

8%

7%

4%

4%

54%

19%

21%

14%

8%

25% 12%

Note: The dollar amounts for the 9 remaining grant programs, fiscal years 2004–2006, are an annual 

average allocation over 3 years. 

Page 62 GAO-09-154 Congestion Relief Initiatives 
Appendix IV: Scope and Methodology Appendix IV: Scope and Methodology 

To determine the extent to which the department communicated 

information about the selection criteria and funding for the UPA initiative, 

applied the criteria, and selected applicants for grant awards, we analyzed 

department publications, such as Federal Register notices on the UPA 

initiative and its underlying grant programs, and UPA initiative outreach 

materials, such as presentation slides and handouts. To understand how 

UPA applicants understood this information about the selection criteria 

and funding, we interviewed representatives of 14 of the 26 UPA 

applicants, including all of the 9 preliminary urban partners and 5 of the 17 

unsuccessful UPA applicants, which we selected at random. Because the 

department did not track which applicants received particular outreach 

materials, we had to rely on these interviews with applicants to analyze 

the extent to which the department communicated information about the 

selection criteria and funding. Additionally, we spoke with representatives 

of five randomly selected cities that did not apply to the UPA initiative but 

had been identified by the department’s Volpe National Transportation 

Systems Center as having extreme or high levels of congestion. We also 

spoke with officials of three national professional transportation groups 

about their role, if any, in communicating information on the UPA 

initiative to potential applicants and their understanding of UPA selection 

criteria and funding. 

In determining good grants practices, we reviewed grants policies from the 

department and its agencies—particularly FHWA—as well as other 

government agencies, such as the Departments of Energy, Commerce, and 

Labor. Furthermore, we reviewed several of our reports on competitive 

discretionary grants and grants guidance from the Office of Management 

and Budget and the Guide to Opportunities for Improving Grant 

Accountability developed by the Domestic Working Group Grant 

Accountability Project. 

In examining how the department applied UPA selection criteria, we 

reviewed and analyzed department documents such as the 26 UPA 

applications, the department’s instructions for UPA application reviewers, 

the results of the reviewers’ assessments of applications, and 

documentation of the reviews conducted by senior department officials. 

We compared the department’s review of UPA applications, particularly 

the criteria used, with the criteria listed in Federal Register notices and 

reviewed other materials made available to applicants, such as a UPA 

frequently asked questions document. We also spoke with senior 

department officials about their application of the UPA selection criteria 

and their UPA funding decisions. Additionally, we also spoke with 8 of the 

11 department officials who served on the UPA application review team 

Page 63 GAO-09-154 Congestion Relief Initiatives 
Appendix IV: Scope and Methodology 

and with senior department officials about their reviews of UPA 

applications. 

To assess whether the department had authority to allocate grant funds to 

support the UPA initiative and give priority consideration in allocating 

individual grants to support projects that involve congestion pricing, we 

analyzed the department’s fiscal year 2006 appropriation, the fiscal year 

2007 revised continuing resolution, the applicable authorizing legislation, 

and relevant case law and other legal authorities. We obtained the 

department’s legal position regarding its authority in these areas through 

formal and informal correspondence and through discussions with the 

department’s General Counsel and other senior department officials. We 

reviewed the department’s documentation of its technical evaluation team 

application review for several grant programs: the Intelligent 

Transportation Systems-Operational Testing to Mitigate Congestion; 

Interstate Maintenance Discretionary; Ferry Boat Discretionary; Public 

Lands Highway Discretionary; and Transportation, Community, and 

System Preservation programs. We also spoke with department staff 

members that manage the four grant programs to determine how they 

reviewed and ranked applications. We selected these grant programs 

because their statutes authorize the department to give priority or priority 

consideration to certain categories of applicants. 

To describe the steps the department is taking to ensure that award 

conditions are met and that results will be evaluated, we reviewed 

documents on the department’s actions to monitor UPA award conditions 

and plans to evaluate each urban partner’s projects to reduce congestion. 

Specifically, we reviewed urban partners’ term sheets (or memorandums 

of understanding) with the department and grant and cooperative 

agreements that list the conditions to receive federal funds. We also 

reviewed documents from Battelle Memorial Institute’s plans to evaluate 

UPAs. In addition, we interviewed officials from the department, Battelle 

Memorial Institute, and Miami about their plans for implementing and 

evaluating projects. 

To determine how the department applied the criteria and selected 

applicants for grant awards for Corridors, we reviewed all phase one and 

phase two applications, the September 2006 Federal Register notice, and 

the guidance given to review team members. In addition, we spoke with 10 

of the 38 Corridors applicants. Of these, 5 applied to phase one and were 

not invited to apply to phase two, 1 applied to phase two but was not 

selected, and 4 were designated as corridors. To understand the 

department’s review of Corridors applications, we spoke with six of eight 

Page 64 GAO-09-154 Congestion Relief Initiatives 
Appendix IV: Scope and Methodology 

review team members. In addition, to describe the steps the department is 

taking to ensure that selection conditions are met and results are assessed, 

we reviewed Corridors development agreements, which state performance 

objectives and the conditions for receiving federal funds. We also spoke 

with the department officials responsible for managing five grant 

programs to understand how the program managers will monitor and 

evaluate Corridors projects. 

To determine what actions the department has taken to support publicprivate partnerships to reduce highway congestion, we reviewed several 

documents, such as the department’s 2006 National Strategy to Reduce 

Congestion on America’s Transportation Network, documents on the 

department’s public-private partnership Web site, and our reports on 

public-private partnerships. We also interviewed department officials on 

actions the department has taken. 

To identify the previous recipients of funding from the 13 discretionary 

grant programs used to fund the UPA initiative and Corridors, we 

collected funding information for fiscal years 2004 through 2007 from 

FHWA and the Federal Transit Administration and compared the 

recipients of those funds and the amounts they received for fiscal years 

2004 through 2006 with UPA and Corridors recipients and the amounts 

they received in 2007. We assessed the reliability of the data by 

interviewing knowledgeable department officials about data collection 

methods, particularly those pertaining to funds allocated to states for 

fiscal years 2004 through 2007 from the 13 grant programs. We determined 

that the data were sufficiently reliable for the purposes of this report. 

Page 65 GAO-09-154 Congestion Relief Initiatives 
A

Complia

the UPA Initiat 

ppendix V: The Department’s Legal 

nce in Awarding Grants to Support 

ive

Page 66 GAO-09-154 

Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

As part of our review of the department’s National Strategy to Reduce 

Congestion on America’s Transportation Network, we examined 

whether, for fiscal year 2007, the department had legal authority to 

allocate its lump-sum appropriations to 10 existing discretionary grant 

programs in order to “fund” the UPA initiative, and if so, whether the 

department could use tolling (specifically, congestion pricing) as a priority 

or priority consideration factor in deciding which applicants would be 

awarded grants under those programs.1

 

We conclude that because there were no statutory designations of funding 

for specific projects or programs in fiscal year 2007—no legally binding 

“earmarks” or other directives—the department had authority to allocate 

its lump-sum appropriations to its existing discretionary grant programs. 

The department’s appropriations were available to carry out the programs 

identified in each of the lump-sum appropriations, and the department had 

discretion in choosing how to allocate funds among those programs. 

 

We conclude further that, for nine of the 10 grant programs that were used 

to fund UPA projects, the department had authority to use congestion 

pricing as a discriminating priority or priority consideration factor to 

select among otherwise equally qualified grant applicants. Each of the 

grant statutes underlying these 9 programs either explicitly permitted 

consideration of tolling or afforded the department discretion to consider 

tolling because it was rationally related to program objectives. For 8 of 

these 9 grant programs, it is clear that the department then applied 

congestion pricing in this way, although in the Ferry Boat program, the 

department’s technical evaluation documentation initially suggested the 

department had improperly supplanted statutory priorities with tolling by 

allegedly awarding a $2 million grant to an urban partner that did not meet 

any statutory priority criteria (but had congestion pricing) while passing 

over a number of nonurban partners that met at least one priority criterion 

(but lacked congestion pricing). The technical evaluation was incorrect, 

however, and was not relied on by the Secretary in making the final grant 

decision. The Secretary relied on corrected information showing the urban 

Introduction and 

Summary of 

Conclusions 

 

1

As noted elsewhere in this report, the department treated 10 grant programs as being 

“under” and “within” the UPA initiative, including the Alternative Analysis program. 

According to the department, the 4T’s, specifically tolling, were not used in awarding 

Alternative Analysis grants. Letter from D.J. Gribbin, General Counsel, DOT, to Susan 

Sawtelle, Managing Associate General Counsel, GAO, October 31, 2008 October 2008 DOT 

Letter)at 5-6; see 72 Fed. Reg. 13980 (Mar. 23, 2007). Therefore, this legal analysis does not 

include a discussion of the Alternative Analysis grant. 

 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

partners in fact met statutory priorities. The Secretary therefore was 

within her discretion to apply congestion pricing as a discriminating 

factor. 

With respect to the remaining grant program—the Transportation, 

Community, and System Preservation (TCSP) program—we conclude that 

the department likely did not apply statutory “priority consideration” 

factors consistent with the requirements of the statute. Because priority 

consideration does not entitle an applicant to grant selection, only to a 

bona fide and careful review, and because the department had discretion 

to use congestion pricing as a rational discriminating priority factor, the 

department’s action may not have affected the outcome of its grant 

awards. Although not free from doubt, we believe the statute allows the 

department to give priority consideration only to cities that meet all five 

statutory criteria, while the department believes an applicant must meet 

only one factor, and rated applicants accordingly. Because the department 

used a one-factor rating approach, it is not possible to determine from the 

current record whether any of the applicants satisfied all five criteria and 

thus deserved a bona fide “hard look.” Given that the department had 

ultimate discretion to select applicants that were not entitled to priority 

consideration, we do not recommend reevaluating the more than 500 

project applications and possibly reawarding the fiscal year 2007 TCSP 

grants. We note also that all TCSP grant funding has been obligated. 

Instead, the department should ensure that all future TCSP program 

discretionary grant awards are carried out in accordance with the statute, 

that is, by giving priority consideration only to applicants that meet all five 

of the factors.2

 

 

2

As part of our analysis and similar to our regular practice in preparing legal opinions, we 

requested the department’s legal position on its authority to allocate its fiscal year 2007 

lump-sum appropriations to support the Urban Partner initiative and to select grantees 

under the 9 underlying grant statutes using tolling as a selection factor. See GAO, 

Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP 

(Washington, D.C.: September 2006), http://www.gao.gov/legal/resources.html (last visited 

Feb. 5, 2009). The department provided its views in two letters, see Letters from D.J. 

Gribbin, General Counsel, DOT, to Susan D. Sawtelle, Managing Associate General 

Counsel, GAO, Apr. 17, 2008 (April 2008 DOT Letter) and Oct. 31, 2008 (October 2008 DOT 

Letter); in meetings on Oct. 9 and 23 and Nov. 21, 2008; and in phone calls and e-mail 

correspondence. 

Page 67 GAO-09-154 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

The department received a number of lump-sum appropriations for fiscal 

year 2006. These included 

• approximately $36 billion “for Federal-aid highways and highway safety 

construction programs” administered by FHWA, see Pub. L. No. 109-115, 

119 Stat. 2396, 2402 (2005); 

Background 

• $1.5 billion “[f]or payment of obligations incurred in carrying out the 

provisions of 49 U.S.C. 5305, 5307 5308, 5309, 5310, 5311, 5317, 5320, 5355, 

5339, and 5340 . . .” for bus and transit-related programs administered by 

the Federal Transit Administration, id.,119 Stat. at 2417; and 

• approximately $5.8 million “[f]or necessary expenses of the Research and 

Innovative Technology Administration. . .,” id., 119 Stat. at 2423. 

Although the fiscal year 2006 appropriations act itself made these sums 

available for a number of programs, the accompanying conference report 

contained designations—so-called “earmarks”—directing how substantial 

amounts of these appropriations should be spent.3

 For fiscal year 2007, 

however, Congress enacted a $463 billion continuing resolution, giving 

budget authority to federal agencies based on the same 2006 levels, but 

removing the nonstatutory earmarks: “[a]ny language specifying an 

earmark in a committee report or statement of managers accompanying an 

appropriations Act for fiscal year 2006 shall have no legal effect with 

respect to funds appropriated by this division.” Revised Continuing 

Appropriations Resolution, 2007, Pub. L. No. 110-5, sec. 112 (Feb. 15, 

2007). 

The department interpreted this language as permitting it to allocate the 

above lump sums to discretionary grant programs administered by FHWA, 

the Federal Transit Administration, and the Research and Innovative 

Technology Administration, in order to “fund” policy initiatives such as the 

UPA initiative. April 2008 DOT Letter at 2. Accordingly, following passage 

of the fiscal year 2007 continuing resolution, the department announced in 

the Federal Register that it was soliciting applications by metropolitan 

areas to enter into UPAs with the department. 71 Fed. Reg. 71231 (Dec. 8, 

2006). Under the UPA initiative, cities would agree to demonstrate 

 

3

For example, the conference report stated that the department should make $35 million in 

Ferry Boat and Ferry Boat Terminal Facility funds available for 26 specifically identified 

projects and that it should fund hundreds of specific Bus and Bus Facility projects at levels 

totaling millions of dollars. See H. R. Rep. No. 109-307, at 158, 188, 191 (2005). 

Page 68 GAO-09-154 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

innovative strategies that would reduce traffic congestion. In order to be 

designated as an urban partner, applicants had to demonstrate their ability 

to implement the 4Ts: tolling/congestion pricing, transit, technology (use 

of cutting-edge approaches to improve system performance), and 

telecommuting (expansion of telecommuting and flexible work 

schedules). The urban partner designation itself would not entitle a city to 

any grant funding; urban partners (as well as other cities) had to apply and 

qualify for grants under the department’s existing discretionary grant 

programs. Designation as an urban partner, however, would entitle a grant 

applicant to “preferential treatment” as the department made its individual 

grant decisions. 71 Fed. Reg. at 71233-34. 

The department received 26 applications for the UPA initiative and well 

over 1,300 project applications from urban partner applicants and others, 

for grants under various discretionary programs. After narrowing the 26 

applicants to 9 potential urban partners, the department selected Miami, 

Minneapolis, New York City, San Francisco, and Seattle as urban partners 

in August 2007. In the meantime, the department solicited applications 

under 13 grant programs, and in almost all instances, explained the 

department would give “priority consideration” to cities selected as urban 

partners in deciding which cities would be awarded such grants.4

 As 

announced, the department then gave priority consideration to these 5 

urban partners in awarding them approximately $848 million in grants for 

94 different projects under 10 discretionary grant programs administered 

by FHWA, the Federal Transit Administration, and the Research and 

Innovative Technology Administration. The department also awarded $18 

million in grants to preliminary urban partner San Diego under two of 

these programs. All told, the department awarded approximately 98 

percent of the total $866 million in grant funding under these 9 programs 

to urban partners. 

 

4

See 71 Fed. Reg. 75806 (Dec. 18, 2006) (Intelligent Transportation Systems-Operational 

Testing to Mitigate Congestion program); 71 Fed. Reg. 77086 (Dec. 22, 2006) (Value Pricing 

Pilot Program); 72 Fed. Reg. 13522 (Mar. 22, 2007) (Ferry Boat Discretionary; Innovative 

Bridge Research and Deployment; Interstate Maintenance Discretionary; Public Lands 

Highway Discretionary; Highways for Life; Transportation, Community, and System 

Preservation; Truck Parking Facilities Pilot; and Delta Region Transportation Development 

programs); 72 Fed. Reg. 13974 (March 23, 2007) (Bus and Bus Facilities program); 72 Fed. 

Reg. 17982 (Apr. 10, 2007) (New Starts/ Small Starts program). 

Page 69 GAO-09-154 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

A lump-sum appropriation is one that Congress intends to cover a number 

of programs, projects, or items. By contrast, a line-item or an earmarked 

appropriation refers to funds that Congress has designated for specific and 

particular purposes. See GAO, Principles of Federal Appropriations Law, 

Vol. II, 3d ed., GAO-06-0382SP (Washington, D.C.: Feb. 2006), at 6-5. 

Agencies have considerable discretion in choosing how to allocate lumpsum appropriations to specific programs and activities. As the Supreme 

Court recognized in Lincoln v. Vigil, 508 U.S. 182 (1993), “as long as the 

agency allocates funds from a lump-sum appropriation to meet permissible 

statutory objectives, [the Administrative Procedure Act] gives the courts 

no leave to intrude.” Id. at 193. The Supreme Court in Lincoln found that 

the allocation of funds from a lump-sum appropriation is an example of an 

administrative decision generally committed to agency discretion, noting 

“the very point of a lump-sum appropriation is to give an agency the 

capacity to adapt to changing circumstances and meet its statutory 

responsibilities” “in what [the agency] sees as the most effective or 

desirable way.” 508 U.S. at 192 (citing, among other authorities, GAO, 

Principles of Federal Appropriations Law). 

After the fiscal year 2007 continuing resolution removed the fiscal year 

2006 report earmarks (and even before),5

 the department’s appropriations 

were available to carry out the discretionary grant programs identified in 

the each of the lump-sum appropriations. The department had broad 

discretion in choosing how to allocate funds among those programs; for 

example, because the $1.5 billion lump-sum appropriation was available to 

fund various bus and other transit-related programs under a dozen 

different statutes, absent any other statutory restriction, the department 

Analysis 

The Department’s 

Authority to Allocate 

Lump-Sum Appropriations 

to the UPA Initiative 

 

5

The department had legal authority to allocate its lump sum appropriations to 

discretionary grant programs even before the fiscal year 2007 Continuing Resolution. 

Although the term “earmark” is often used to refer to congressional funding designations 

contained in conference reports, managers’ statements, and other legislative documents, 

only designations contained in enacted statutes are binding as a matter of law. See, e.g., 

Lincoln, 508 U.S. at 192, quoting 55 Comp. Gen. 307, 319 (1975); Hein v. Freedom From 

Religion Foundation, Inc., 551 U.S. 587, 127 S. Ct. 2553, 2568 n.7 (2007). The department 

nevertheless followed these nonbinding earmarks, as do most agencies. While it has long 

been settled that “[e]xpressions of committees dealing with requests for appropriations 

cannot be equated with statutes enacted by Congress,” Tennessee Valley Authority v. Hill, 

437 U.S. 153, 191 (1978), it is also true that “an agency’s decision to ignore congressional 

expectations may expose it to grave political consequences.” Lincoln, 508 U.S. at 193. 

Page 70 GAO-09-154 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

could choose how much of that appropriation to allocate to each of the 

dozen programs. See Illinois Environmental Protection Agency v. United 

States Environmental Protection Agency, 947 F.2d 283, 291-92 (7th Cir. 

1991) (EPA could set aside a portion of discretionary air pollution grant 

funds for its own air pollution control activities; EPA appropriation for 

“Abatement, Control and Compliance” was available for these activities). 

In carrying out each individual grant program, the department, of course, 

was required to comply with the restrictions and requirements of the 

underlying grant statutes and to award funding to grantees in accordance 

with the statutory provisions. We address below whether the department 

complied with these underlying provisions. 

As detailed in this report, the single most important factor in determining 

which cities would be designated as urban partners was whether a city 

had, or had committed to obtaining, authority to implement tolling 

(congestion pricing). Except for nonurban partner San Diego, the 

department then awarded all of the funding under the 10 programs to the 

five urban partners. Because congestion pricing was the most important 

factor in selecting the urban partners, and because urban partners were 

placed “at the head of the line” in receiving grant awards, concerns have 

been raised about whether congestion pricing was an inappropriate 

“superpriority” factor in making grant selections. 

Whether the department had authority to use congestion pricing in this 

manner depends on the specific terms of each grant statute. Duncan v. 

Walker, 533 U.S. 167, 172 (2001) (“Our task is to construe what Congress 

has enacted. We begin, as always, with the language of the statute.”). But 

before we evaluate how the department applied the terms of each statute, 

it will be helpful to address the general scope of agency discretion in 

making grant awards. 

The scope of an administrative agency’s authority to award federal 

assistance funding depends on the specific terms of the authorizing 

statutes. “‘When Congress passes an Act empowering administrative 

agencies to carry on governmental activities, the power of those agencies 

is circumscribed by the authority granted.’” State Highway Comm’n of 

Missouri v. Volpe, 479 F.2d 1099, 1107 (8th Cir. 1973), quoting Stark v. 

Wickard, 321 U.S. 288, 309-10 (1944). In the case of statutory earmarks and 

formula grants, for example, agencies have little or no discretion in 

making awards. By contrast, agencies are given considerable flexibility in 

making so-called discretionary grants. See generally GAO, Principles of 

Federal Appropriations Law, Vol. I, 3d ed., GAO-04-261SP (Washington, 

The Department’s 

Authority to Use 

Congestion Pricing as a 

Priority Selection Factor 

Page 71 GAO-09-154 Congestion Relief Initiatives 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

D.C.: Jan. 2004), at 3-40 to 3-52. Some discretionary grant statutes require 

agencies to make awards on a competitive basis, while others do not. 6

Agencies have greater (but not unlimited) flexibility in making 

noncompetitive grants. In such instances, it is well settled that where an 

agency does not have sufficient appropriations to fund all applicants for a 

program and the legislation does not establish priorities or guidance, the 

agency may, within its discretion, establish selection priorities, 

classifications, and/or eligibility requirements, so long as it does so on a 

rational and consistent basis. Id. at 3-49 to -52. However, “in such a case 

the agency must, at a minimum, let the standard be generally known so as 

to assure that it is being applied consistently and so as to avoid both the 

reality and appearance of arbitrary denial of benefits to potential 

beneficiaries.” Morton v. Ruiz, 415 U.S. 199, 231 (1974).7

 

 

6

See, e.g., GAO, Welfare Reform: Competitive Grant Selection Requirement for DOT’s Job 

Access Program Was Not Followed, GAO-02-213 (Washington, D.C., Dec. 7, 2001). Even 

where not required by statute, some agencies have established competitive grant award 

procedures as a matter of policy. See, e.g., GAO, Discretionary Grants: Further 

Tightening of Education’s Procedures for Making Awards Could Improve Transparency 

and Accountability, GAO-06-268 (Washington, D.C., Feb. 21, 2006). Although the 

department has adopted the so-called agency “common rules” concerning the award and 

management of grants, see 49 C.F.R. Part 18, the rules do not address the issues raised 

here. 

7

The State Highway Comm’n of Missouri v. Volpe case cited above illustrates a range of 

the department’s discretion in making grant awards. The court found there that the 

Federal-Aid Highway Act provided the department with no discretion to withhold highway 

grant funds from states once funds had been apportioned by statutory formula, but did 

provide the department with discretion, as constrained by statutory eligibility and selection 

criteria, to approve or disapprove which specific state-proposed projects would receive 

that funding. The court rejected the department’s argument that it had discretion to hold 

back the funds as a means of carrying out administration policy, noting that “[i]t is 

impossible to find . . . discretion . . . to withhold approval on projects . . . because of a 

system of priorities the Executive chooses to impose on all expenditures.” Id. at 1114. As 

the court explained: 

 “The issue before us is not whether the Secretary abused his discretion in [withholding 

 funds] but whether the Secretary has been delegated any discretion to so act in the first 

 place. . . [T]he Secretary [does not possess] unfettered discretion as to when and how 

 the monies may be used. The Act circumscribes that discretion and only an analysis 

 of the statute itself can dictate the latitude of that discretion. . . . It should require no 

 citation of authority to reaffirm the proposition that the Secretary’s authority is limited to 

 carrying out the law according to its terms. . . . As has been observed, ‘[a]n agency may 

 not finally decide the limits of its statutory power.’” 

479 F.2d at 1106-07, 1109, 1124 (citation omitted) (emphasis added). 

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In cases where the authorizing statute provides discretion, agencies are 

deemed to act within their authority as long as there is a rational basis for 

their decisions and their acts are not “arbitrary and capricious, an abuse of 

discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); 

see Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). 

Under this standard, courts look to whether the agency’s decision was 

“based on a consideration of the relevant factors and whether there has 

been a clear error in judgment.” Overton Park, 410 U.S. at 416. Although 

the factual inquiry is to be “searching and careful” and there must be a 

“thorough, probing, in-depth review,” the ultimate standard of review “is a 

narrow one.” Id. at 415-16. See, e.g., City of Grand Rapids v. Richardson,

429 F. Supp. 1087, 1094-95 (W.D. Mich. 1977) (denying request to halt grant 

awards based on allegations of vague and unpublicized eligibility criteria; 

while court was “tremendously sympathetic” to the losing applicant, “the 

Court cannot say that the agency committed error, abused its discretion or 

acted arbitrarily or capriciously within the meaning of . . . Overton Park,” 

nor did agency violate “elementary fairness”). 

One other introductory point is relevant before reviewing the department’s 

use of congestion pricing in awarding grants under the 9 programs. As a 

general rule, section 301 of Title 23 of the U.S. Code prohibits the 

imposition of tolls on all roads, highways, bridges, tunnels, and other 

transportation facilities constructed with federal funds.8

 Thus in our view, 

the department could not use any form of tolling, such as congestion 

pricing, as a selection factor for a grant—whether made under Title 23 

(FHWA and Research and Innovative Technology Administration grants) 

or Title 49 (Federal Transit Administration grants)—if the tolling that was 

the basis of the grant’s “priority” was prohibited by section 301. Congress 

has enacted a number of exceptions to the tolling ban, however,9

 and the 

department has confirmed that all of the tolling, specifically congestion 

 

8

Section 301 provides, “Except as provided in section 129 of this title with respect to 

certain toll bridges and toll tunnels, all highways constructed under the provisions of this 

title shall be free from tolls of all kinds.” “Highway” is defined to include a road, street, or 

parkway; a bridge, tunnel, right-of-way, or other facility in connection with a highway; and 

the portion of any interstate bridge or tunnel or approach paid for by a state. 23 U.S.C. § 

101(a)(11). 

9

As relevant here, tolling is permitted on certain interstate and noninterstate highways, 

bridges, and tunnels and certain ferry boats, terminals, and approaches; see 23 U.S.C. § 

129(a)-(c). In addition, states and localities are authorized to toll facilities participating in 

certain pilot programs such as the Value Pricing Pilot Program discussed below, see 23 

U.S.C. § 149 note, and, as of 2005, high-occupancy-vehicle (HOV) lanes that are converted 

to high-occupancy-toll (HOT) lanes; see 23 U.S.C. § 166. 

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pricing, activity supporting the grants at issue qualified under one or more 

of these exceptions. October 2008 DOT Letter at 15-16. 

Using congestion pricing as a priority selection factor, the department 

awarded grants under the Bus and Bus-Related Facilities Capital 

Investment Grants (Bus and Bus Facilities) program to all five urban 

partners—New York City, San Francisco, Minneapolis, Seattle, and 

Miami—and to San Diego, which was not designated as an urban partner. 

The total funding was $433 million, the single largest amount allocated to 

the 10 programs at issue and fully half of the $866 million awarded under 

all of these programs. Under the Bus and Bus Facilities program, the 

department “may make grants . . . to assist State and local governmental 

authorities in financing capital projects to replace, rehabilitate and 

purchase buses and related equipment and to construct bus-related 

facilities . . ..” 49 U.S.C. § 5309(b)(3). The only explicit direction in the 

statute concerning the selection of grantees is that the department “shall 

consider the age and condition of buses, bus fleets, related equipment, and 

bus-related facilities.” 49 U.S.C. § 5309(m)(8) (emphasis added). The 

department is required only to “consider” this factor, however, not to give 

it priority. 

The statute also authorizes the department to make bus grants subject to 

“terms, conditions, requirements, and provisions that the Secretary 

determines to be necessary or appropriate for the purposes of this 

section.” 49 U.S.C. § 5309(c)(3) (emphasis added). In the department’s 

view, this provision, combined with the absence of mandatory selection 

criteria, underscored its “broad discretion” to use congestion pricing as a 

selection factor, because the statute leaves to the department’s judgment 

what conditions are “necessary” or “appropriate” to achieve “the purposes 

of this section.” April 2008 DOT Letter at 7. Requiring congestion pricing as 

a selection factor for bus grants was “necessary” or at least “appropriate,” 

in the department’s judgment, because motorists who are priced off the 

roads by congestion pricing will need greater mass transit options. 

Requiring congestion pricing also was consistent, in the department’s 

judgment, with the general policies, findings, and purposes of the public 

transportation statute, such as development of “improved public 

transportation . . . techniques,” 49 U.S.C. § 5301(f), which the department 

believes would include an integrated congestion management system of 

which congestion pricing is a component. As the department also notes, 

Congress has found that 

 “[the] welfare and vitality of urban areas, the satisfactory movement of people and goods 

within those areas, and the effectiveness of programs aided by the United States 

Bus and Bus Facilities Program 

Page 74 GAO-09-154 Congestion Relief Initiatives 
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Government are jeopardized by deteriorating or inadequate urban transportation service 

and facilities, the intensification of traffic congestion, and the lack of coordinated, 

comprehensive, and continuing development planning . . ..,” 

Id. § 5301(b)(2) (emphasis added). Congress therefore has declared that 

 “[it is] in the interest of the United States . . . to foster the development and revitalization 

of public transportation systems that—(1) maximize the . . . efficient mobility of 

individuals; (2) minimize environmental impacts; and (3) minimize transportation-related 

fuel consumption . . ..” 

Id. § 5301(a) (emphasis added); see October 2008 DOT Letter at 7. The 

department’s judgment is that congestion pricing supports all three of 

these goals, and that one of these, mobility, will enhance the effectiveness 

of the bus transportation system. 10 

We conclude that the department acted within its discretion in using 

congestion pricing as a priority selection factor for the fiscal year 2007 Bus 

program grants. Courts have found that language very similar to that in the 

Bus program statute provides agencies with broad discretion in awarding 

grants so long as the agency complies with any specific statutory 

directives. The court in Pullman Inc. v. Volpe, 337 F. Supp. 432 (E.D. Pa. 

1971), for example, addressed the predecessor statute to the precise Bus 

program provision at issue here.11 The court held that the provision, 

authorizing the department to include in public transit capital investment 

grants “such terms and conditions as [the Secretary] may prescribe,” see 

337 F. Supp. at 438, provided broad discretion to fulfill broad 

congressional purposes such as to “encourage the planning and 

 

10 The department notes as well that while the Bus program provision of 49 U.S.C. § 

5309(b)—authorizing the department to make grants to “replace, rehabilitate and purchase 

buses and related equipment and to construct bus-related facilities”—does not have a 

specific statutory tolling requirement, another clause in the Capital Investment Grants 

statute—49 U.S.C. § 5309(c)(1)(A)—prohibits the department from approving any grant 

unless the department “determines that the project is part of an approved transportation 

plan and program of projects under 49 U.S.C. § 5303,” which, in turn ties in to congestion 

reduction. April 2008 DOT Letter at 6-7. The department states that using tolling as a 

selection factor for bus grants “is fully consistent with” the requirements of 49 U.S.C. § 

5303, including section 5303(k)(3)’s requirement that transportation planning in large cities 

address “congestion management” through Title 23 (highway) grant projects involving 

“travel demand reduction and operational management strategies” such as the 4Ts. April 

2008 DOT Letter at 7. 

11Pullman involved section 3(a) of the Urban Mass Transportation Act of 1964, Pub. L. No. 

88-365, formerly codified at 49 U.S.C. § 1602(a). 

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establishment of areawide urban mass transportation systems needed for 

economical and desirable urban development, with the cooperation of 

mass transportation companies both public and private . . ..” See Pub. L. 

No. 88-365, sec. 2(b)(2), 78 Stat. 302, 303 (July 9, 1964). The court found 

that while the department did not have complete discretion—in selecting 

grantees, for example, it had to make a number of statutory findings—the 

“such terms and conditions” provision authorized the department to 

“determine[] the procedure to be applied and the grants to be made. Within those 

limitations the statute is permissive, provides only the broadest conceptual guidelines for 

action, and requires highly developed expertise in the determination of the conditions 

under which the grant of assistance will fulfill the broad congressional purposes.” 

Id. at 438. Pullman therefore upheld as within the department’s broad 

discretion a grant condition requiring the local applicant to use 

competitive bidding for any subcontracts and to determine bid 

responsiveness. The court found this requirement “consistent with the 

statute’s encouragement of local responsibility in urban mass 

transportation” and thus an appropriate exercise of the department’s 

discretion. Id. 

Like the department’s grant condition in Pullman, the department’s 

congestion pricing grant condition here is consistent with the overarching 

objectives of the Bus statute—to provide a public transportation system 

that maximizes mobility and minimizes environmental impacts and 

transportation-related fuel consumption. While the Pullman statute 

arguably afforded even greater discretion (it allowed the department to 

impose “such terms and conditions as [the Secretary] may prescribe,” 

while the current statute authorizes the department to set “terms [and] 

conditions . . . that the Secretary determines to be necessary or 

appropriate for the purposes of this section”), and while congestion 

pricing may not be strictly “necessary” for 49 U.S.C. § 5309(c)(3) purposes 

to achieve the objectives of the bus statute—a well-functioning bus system 

does not “need” congestion pricing; congestion pricing “need”s a wellfunctioning bus system—we agree with the department that congestion 

pricing is at least “appropriate” to achieve the larger statutory purposes. 

See Town of Secaucus v. DOT, 889 F. Supp. 779, 789 (D.N.J. 1995) 

(upholding grant award for construction of strengthened foundation 

underlying mixed public transportation hub/commercial development 

because project would “enhance the effectiveness of a mass transportation 

project”); B-160204, Dec. 7, 1966 (GAO approval of grants to purchase city 

buses used occasionally for charter service in off-peak hours, because 

buses were needed for “an efficient and coordinated mass transportation 

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system”); see generally State Highway Comm’n of Missouri v. Volpe, 

above, 479 F.2d at 1112 (a statute “should be construed according to its 

subject matter and the purpose for which it was enacted.”). Other grant 

statutes with similarly broad language have been found to provide broad 

agency discretion. See, e.g., Illinois Environmental EPA v. USEPA, 

above, 947 F.2d at 291 (authority to make grants “upon such terms and 

conditions . . . necessary to carry out the purpose” of Clean Air Act 

provision should be read broadly; grant statute’s purpose was to 

implement air quality standards within states); LEAA, above, 605 F.2d 21, 

22, 27 (1st Cir. 1979) (authority to make grants “according to the criteria 

and on the terms and conditions the Administration determines consistent 

with this chapter” provided “large discretion”). 

Using congestion pricing as a priority selection factor, the department 

awarded grants totaling $40.2 million under the Ferry Boat grant program 

to urban partners New York City, San Francisco, and Seattle. The 

department is authorized to award grants under this program for 

construction of ferry boats and ferry terminal facilities in accordance with 

eligibility criteria in 23 U.S.C. § 129(c), see 23 U.S.C. § 147(a), and priority 

selection criteria in 23 U.S.C. § 147(c). Regarding the latter, the statute 

requires the department to give priority in the allocation of funds 

 “to those ferry systems, and public entities responsible for developing ferries, that—(1) 

provide critical access to areas not well-served by other modes of surface transportation; 

(2) carry the greatest number of passengers and vehicles; or (3) carry the greatest number 

of passengers in passenger-only service.” 

23 U.S.C. § 147(c). 

Although congestion pricing is not explicitly identified as a priority 

selection factor, the department believes it had discretion to apply 

congestion pricing as a discriminating or “tie-breaking” factor to select 

among otherwise equally qualified applicants, because congestion pricing 

is rationally related to the purposes of the Ferry Boat program. April 2008 

DOT Letter at 6, 9. The department reasons that Congress’s decision to 

give priority to ferry systems that carry the greatest number of passengers 

and vehicles reflects congressional support for increasing mobility and 

reducing congestion. Id. at 6, note 1; see also id. at 8-9 (tolling and 

congestion pricing are consistent with the department’s core mission 

focusing on “mobility, safety, efficiency, convenience, and economic 

growth.”); October 2008 DOT Letter at 9 (congestion pricing will shift 

passengers from cars to ferries, maximizing “social yield” on the federal 

government’s investment). The department therefore used congestion 

Ferry Boat Program 

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pricing to select among applicants qualifying under one or more of the 

statutory priorities. 

We agree that the department had discretion to use congestion pricing as a 

discriminating factor among equally qualified applicants based on the 

rational connection between congestion pricing, mobility, and congestion. 

However, the department did not have authority to override the statute by, 

for example, rejecting applicants that lacked congestion pricing but met 

one or more statutory priorities in favor of urban partners that had 

congestion pricing but met no statutory priorities. The department’s initial 

technical evaluation documentation for the fiscal year 2007 Ferry Boat 

grant awards suggested (incorrectly) that this occurred for one grant, 

Seattle’s grant for the High-Speed, Ultra-Low Wake Passenger-Only Ferry 

project. According to the evaluation documentation, that project 

application “[d]oes not meet statutory priority selection criteria under 23 

U.S.C. 147(c) of serving large number of passengers and vehicles, or large 

number of passengers in passenger-only service.” (Emphasis added.) The 

department’s technical evaluator rated the application as “qualified” rather 

than “highly qualified,” in part because it did not “meet statutory 

preference criteria.” The department nevertheless awarded a $2 million 

grant for this project based on Seattle’s urban partner status, passing over 

applications for at least 23 other projects from other jurisdictions that the 

department’s technical evaluator determined met one or more of the 

statutory priorities.12

The initial technical evaluation was incorrect, however. As noted, the 

statute requires priority for “ferry systems, and public entities 

responsible for developing ferries”—not for individual projects—that carry 

the greatest number of passengers and vehicles, and the ferry system in 

Seattle carries the greatest number of passengers of all ferry systems in 

 

12According to the department’s technical evaluation forms, projects were proposed by 

non-urban partners that the evaluator determined met at least one of the statutory 

priorities in Alaska (3 projects), Connecticut (1 project), Florida (2 projects), Hawaii (1 

project), Illinois (1 project), Kentucky (2 projects), Louisiana (2 projects), Massachusetts (3 

projects), New York (1 project), Ohio (3 projects), the U.S. Virgin Islands (2 projects), and 

Virginia (2 projects). 

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the country (emphasis added).13 Thus all of the projects proposed by 

Seattle should have been rated as meeting at least one of the statutory 

priority criteria. October 2008 DOT Letter at 9-10. Yet the department 

evaluator apparently focused (incorrectly) on whether an individual 

project would carry the greatest number of passengers. October 2008 DOT 

Letter at 9.14

Equally important, the department told us that the Secretary did not rely 

on (or see) the technical evaluation forms for the Seattle High-Speed 

project (or any other project funded under the UPA initiative), but instead 

relied on other department officials’ determinations that the recommended 

grants “comply or would comply with the statutory requirements of the 

FBD [Ferry Boat Discretionary] program,” October 2008 DOT Letter at 10, 

which would have included the statutory priorities. Accordingly, despite 

the technical reviewer’s error, the Secretary was within her discretion to 

apply congestion pricing as a discriminating factor and to select Seattle’s 

High-Speed project for funding. See Mass. Dep’t of Correction v. Law 

Enforcement Assistance Administration, 605 F.2d 21, 24-25 (1st Cir. 

1979) (LEAA) (upholding grant decision despite errors in technical 

evaluation process; “[w]hatever was the case at the panel review level, 

LEAA’s final decision did not rely on the discredited factors. It relied 

exclusively on [permissible factors] . . . [W]e do not believe these 

beginning errors sufficiently infected the entire process . . . to warrant 

setting aside a decision entrusted to LEAA’s discretion.”). 

Using congestion pricing as a priority selection factor, the department 

awarded grants under the TCSP program totaling $50.4 million for projects 

by urban partners Minneapolis, San Francisco, and Seattle. Under the 

TCSP statute, enacted in 1998 as a “smart growth” initiative, the 

Transportation, Community, 

and System Preservation 

Program 

 

13The ferry systems in Seattle, New York City, and San Francisco—the three urban partners 

that received Ferry Boat grants in fiscal year 2007—are the three largest in the country. In 

2006, the Seattle system (Washington state, Kitsap Transit, and Pierce County) had 24.45 

million passenger trips, the New York City system (New York City Department of 

Transportation, Port Authority of New York and New Jersey, and Metro North Ferry) had 

22.28 million passenger trips, and the San Francisco system (Golden Gate, Vallejo, and 

Alemeda) had 3.44 million passenger trips. The remaining top 10 ferry systems had between 

1.93 million and 0.16 million passenger trips (Puerto Rico and Broward County, Florida, 

respectively). See FTA National Transit Database, 2006. 

14The technical evaluator may have made additional errors, because he also determined 

that many of the other proposed individual projects did meet “the greatest number of 

passengers” factor, including another project in Seattle (Guemes Island Ferry Dock 

Repair). 

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department may award grants and other assistance to support local 

strategies that integrate transportation projects with community and 

system preservation “livability” plans and practices. The statute specifies 

broad eligibility criteria: grants may be awarded for any project under the 

federal-aid highway, bus, or transit-related programs or for “any other 

activity relating to transportation, community, and system preservation 

that the Secretary determines to be appropriate.” Pub. L. No. 109-59, sec. 

1117(d), 23 U.S.C. §101 note (Aug. 10, 2005).15 

The statute also requires the department to give “priority consideration”

to applicants that meet specified criteria. See id. sec. 1117(e) (emphasis 

added). “Priority consideration” is not a defined term; Congress added it in 

2005 when it converted TCSP from a pilot program to a permanent 

program. As originally enacted in 1998, the statute required the department 

to give selection “priority” to applicants meeting specified criteria.16 Thus, 

as under the Ferry Boat statute discussed above, the department did not 

have discretion under the TCSP pilot program to pass over applicants that 

met the “priority” criteria in favor of those that did not. In 2005, however, 

Congress added the word “consideration” after “priority.”17 The legislative 

history is silent on the reason for this change, but Congress must be 

presumed to have intended a meaning different from “priority,” as well as 

from mere “consider[ation],” which it used in the Bus statute as discussed 

above. Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) (in construing a 

statute, courts must give effect, if possible, to every word Congress used). 

Thus at least in the context of grant selection criteria, it is possible 

 

15The department also must ensure that there is an “equitable distribution” of TCSP funds 

to a diversity of populations and geographic regions. Id. sec. 1117(f). 

16See Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, § 1221(c)(3) 

(June 9, 1998) (“Criteria.—In allocating funds made available to carry out this subsection, 

the Secretary shall give priority to applicants that [meet certain criteria].”) (planning 

grants), (d)(2) (implementation grants)(same)(emphasis added). The department told us 

that primarily because of congressional earmarks, to date it has been able to award 

discretionary grants in only 3 of the program’s 10 years—the first 2 years (fiscal year 1999 

and fiscal year 2000) and the year at issue here, fiscal year 2007. See generally FHWA, 

Transportation and Community and System Preservation Pilot Program, Third-Year Report 

(“FHWA Third-Year Report”) at 2 (noting grantee, federal program partner, and 

stakeholder groups’ concerns that the TCSP program’s intended focus was decreasing 

because of earmarks). 

17See Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 

Pub. L. No. 109-59, § 1117(e) (Aug. 10, 2005) (“Criteria.—In allocating funds made 

available to carry out this section, the Secretary shall give priority consideration to 

applicants that [meet certain criteria].”)(emphasis added). 

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Congress intended a sort of hierarchy—consideration, priority 

consideration, and priority—with priority requiring the greatest adherence 

to named criteria. 

Relying on dictionary definitions of “priority” and “consideration,” since 

the terms are not defined in the statute, the department believes that 

“priority consideration” does not require the department to award funds to 

applicants that meet the criteria but “means only that the Secretary shall 

give the applicants that meet one or more of the criteria in section 1117(e) 

precedential or careful deliberation or thought before competing 

alternatives . . ..” October 2008 DOT Letter at 13 (emphasis added). 

We agree that the department likely is not required to select “priority 

consideration” candidates, because this was the meaning of “priority” 

before the statute was amended. But the department’s reading, as we 

understand it, is too narrow. The department appears to argue that it must 

simply give “careful deliberation” first to applicants that meet the criteria, 

then to “competing alternatives” applicants that do not meet the criteria, 

without giving substantive weight to the criteria themselves in selecting 

grant recipients. This process-oriented interpretation does not account for 

the fact that “priority” and “priority consideration” both appear in 

selection “criteria” provisions (see notes 16-17 above), not in selection 

process provisions. While a process-oriented interpretation has been 

recognized in a number of court decisions, it is used there as a specialized 

term—“a term of art in the jargon of federal employment law.” Pope v. 

FCC, 311 F.3d 1379, 1381 (Fed. Cir. 2002).18 Moreover, when the 

department analyzed the 1998 and 2005 statutes more contemporaneously, 

it read both “priority” and “priority consideration” as pertaining to 

 

18As the Federal Circuit explained in Pope (involving whether a veteran’s preference 

candidate had been given the requisite priority consideration for an attorney position), “[i]n 

a nutshell, ‘priority consideration’ requires the deciding official [to] treat the priority 

candidate as ‘first in line, up or down” . . . There of course is no assurance that a priority 

candidate will be picked for the open job, but there is assurance that the priority candidate 

will not have his application compared with the applications of others, and he is not in 

competition with others.” Pope, 311 F.3d at 1382. See also Watts v. Carlson, 854 F.2d 528 

(Table), 1988 WL 81534 *2 (D.C. Cir. 1988) (unpublished opinion) (interpreting “priority 

consideration” in the context of federal employment litigation using dictionary definitions, 

the court found that “[t]he precedence conferred . . . related only to consideration, not 

selection. Watts was entitled to have his applications . . . considered prior to applications 

submitted by other candidates. The agreement did not guarantee that the consideration 

received would be entirely favorable, resulting in selection and promotion.”). 

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selection criteria, not selection sequence,19 and indeed, according to the 

department, this was how the fiscal year 2007 evaluations for TCSP grants 

were performed. The department reviewers considered whether 

applicants met priority consideration and other factors. Final selections 

were made applying congestion pricing as a discriminating factor. 

In our view, the fact that Congress changed “priority” to “priority 

consideration” means the department was not bound to select applicants 

that met the “priority consideration” factors. Because Congress retained 

the phrase in the selection “criteria” provision, we also believe it relates to 

more than simply the timing of an applicant’s consideration. Congress 

singled out a class of candidates and mandated that the department give 

them special attention and a careful and bona fide review. Ultimately, 

however, the department had discretion to select applicants that were not 

in the “priority consideration” class, or to select among multiple applicants 

that were all in the class, based on other factors rationally connected to 

the objectives of the statute. Congestion pricing was a factor rationally 

related to the TCSP statute, in the department’s judgment, because the 

stated purpose of the statute is to support development and 

implementation of strategies to integrate transportation and community 

plans for addressing, among other things, improving the efficiency of the 

nation’s transportation system—which congestion pricing would help to 

achieve. October 2008 DOT Letter at 10-11; see Pub. L. No. 109-59, § 

1117(b)(1). We agree that the department could use congestion pricing as 

a discriminating factor in selecting among otherwise qualified applicants. 

The remaining issue is whether, before the department applied congestion 

pricing as a discriminating factor, it followed the statute and gave 

applicants that qualified for priority consideration (if any) the bona fide 

“hard look” that Congress required. The answer to this is not 

straightforward. Department officials told us they treated applications as 

qualifying for priority consideration if a candidate met just one of the five 

statutory criteria, and looked no further. As discussed below, we believe 

the better view is that the statute requires all five to be met. Because of the 

 

19See FHWA, TEA-21 - Transportation Equity Act for the 21st Century, Fact Sheet, 

“Transportation and Community and System Preservation Pilot Program” (Sept. 14, 1998) 

(“DOT TEA-21 Fact Sheet”), available at www.fhwa.dot.gov/tea21/factsheets/t-c-sp.htm 

(last visited November 6, 2008); FHWA, Office of Legislation and Strategic Planning, 

Program Analysis Team, SAFETEA-LU, Fact Sheets on Highway Provisions, 

“Transportation, Community, and System Preservation Program” (Oct. 25, 2007) (“DOT 

SAFETEA-LU Fact Sheet”), available at www.fhwa.dot.gov/safetealu/factsheets/tcsp.htm 

(last visited Nov. 7, 2008). 
Appendix V: The Department’s Legal 

Compliance in Awarding Grants to Support 

the UPA Initiative 

department’s one-factor approach, however, it is not possible to determine 

from the current record whether any of the applicants met all five factors. 

Even if no urban partner had satisfied all five criteria but some other 

applicants had done so, the outcome might not have changed. Because the 

department had discretion, once it gave bona fide consideration to priority 

consideration applicants, to make selections based on congestion pricing, 

its announced key factor, it could well be that the same urban partners 

would have been selected. It is also possible that having taken a hard look 

at “true” priority consideration candidates, the department would have 

selected applicants that were not urban partners instead. Given that the 

department had ultimate discretion to select nonpriority-consideration 

applicants, and that all TCSP grant funding has been obligated, we do not 

recommend re-evaluating the more than 500 project applications and 

possibly reawarding the fiscal year 2007 TCSP grants. Instead, the 

department should ensure that all future TCSP discretionary grant awards 

are carried out in accordance with the statute, that is, by giving priority 

consideration only to applicants that meet all five of the factors, for the 

reasons we now address. 

Literally read, the statute requires that an applicant satisfy all five factors 

in order to qualify for priority consideration. The statute lists five factors, 

Page 83 GAO-09-154 Congestion Relief Initiatives 
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with the last two joined by the word “and.”20 The usual meaning of the 

word “and” is conjunctive—”and” means “and”—unless the context 

dictates otherwise. The presumption is that “and” is used in its ordinary 

sense. See, e.g., Reese Brothers v. United States, 447 F.3d 229 (3d Cir. 

2006); Zorich v. Long Beach Fire Dep’t and Ambulance Serv., 118 F.3d 

682, 684 (9th Cir. 1997). Overall, we believe the TCSP program’s context 

does not dictate otherwise. Several of the five factors have subparts, 

providing different ways in which an applicant can satisfy that factor, and 

these are separated by the word “or” rather than “and.” This shows that 

when Congress intended to provide alternatives, it did so. On the other 

hand, the five factors appear to overlap to some extent, for example in 

referring to environmental protection, arguably indicating that just one 

factor must be met. At least initially, however, environmental protection 

was one of the key aims of the TCSP program,21 and thus requiring that it 

be addressed in more than one area may be warranted. In addition, the 

second factor refers to applicants that “[h]ave other policies to integrate 

transportation, community, and system preservation practices,” arguably 

indicating this was intended as an alternative. In context, however, we 

read this as simply a way to describe one in a list of five factors requiring 

an applicant to have different types of plans, policies, and programs, to be 

 

20Pub. L. No. 109-59, § 1117(e) provides: 

“(e) Criteria.—In allocating funds made available to carry out this section, the Secretary 

 shall give priority consideration to applicants that— 

 “(1) have instituted preservation or development plans and programs that— 

 “(A) are coordinated with State and local preservation or development plans, including 

 transit-oriented development plans; 

 “(B) promote cost-effective and strategic investments in transportation infrastructure 

 that minimize adverse impacts on the environment; or

 “(C) promote innovative private sector strategies; 

 “(2) have instituted other policies to integrate transportation, community, and system 

 preservation practices, such as— 

 “(A) spending policies that direct funds to high-growth areas; 

 “(B) urban growth boundaries to guide metropolitan expansion; 

 “(C) ‘green corridors’ programs that provide access to major highway corridors for 

 areas targeted for efficient and compact development; or 

 “(D) other similar programs or policies as determined by the Secretary; 

 “(3) have preservation or development policies that include a mechanism for reducing 

 potential impacts of transportation activities on the environment; 

 “(4) demonstrate a commitment to public and private involvement, including the 

 involvement of nontraditional partners in the project team; and 

 “(5) examine ways to encourage private sector investments that address the purposes of 

 this section.” 

(Emphasis added). 

21See, e.g., DOT Press Release (Jan. 13, 1999) (describing TCSP as a program created “to 

help protect the environment and improve access to jobs, services, and the marketplace.”). 

Page 84 GAO-09-154 Congestion Relief Initiatives 
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expected in a grant program focusing on planning rather than on 

construction. 

The department states that because the five criteria are “stated in a widesweeping manner” and because of the “broad context of the entire TCSP 

statute” “with its inclusive purposes, wide eligibility requirements, and 

extensive criteria for priority consideration . . . it was logical to conclude 

that the applicants did not have to meet all five of the criteria . . ..” October 

2008 DOT Letter at 12-13. We believe these factors show the opposite. 

Given the extraordinary breadth of the eligibility requirements, it is logical 

that Congress would provide criteria for narrowing the pool, by specifying 

which applicants deserve special consideration. Only having to meet one 

of the criteria would undercut the very concept of “priority,” because 

virtually all applicants could satisfy one of these broad requirements.22 

The provision’s legislative history also supports the interpretation that all 

factors must be met. As noted, when Congress made the TCSP program 

permanent in 2005, it amended what were then two “priority” criteria 

provisions (one for planning grants, another for implementation grants). It 

combined them into a single provision and changed the requirement from 

the department having to give “priority” to having to give only “priority 

consideration.” At the same time, Congress amended the “purposes” 

provision from a list of five purposes joined by the word “and” to a list of 

roughly the same five purposes introduced by the term “one or more of the 

following.” See Pub. L. No. 105-178, sec. 1221(c)(2) (1998 statute), Pub. L. 

No. 109-59, sec. 1117(b) (2005 statute). Despite all of these changes, 

Congress retained the “and” in the list of priority consideration factors. 

 

22The department cites Action for Boston Community Development, Inc. v. Shalala, 136 

F.3d 29 (1st Cir. 1998), and Reiter v. Sonotone Corp., 442 U.S. 330 (1979), to show that “and” 

can mean “or” based on context. We agree, but the holdings of those cases do not support 

the department’s position. Reiter held that “or” in the Clayton Act means “or,” and thus 

supports our interpretation of the TCSP statute. Boston Community Development held 

that “and” means “or” but for reasons not applicable here. The case involved a challenge by 

a Head Start provider to the non-renewal of its grant by the Department of Health and 

Human Services (HHS) under a statute giving long-time providers priority unless HHS finds 

they “fail[] to meet program, financial management, and other requirements established by 

the Secretary.” 136 F.3d at 31 (emphasis added). The court held that “and” meant “or” 

because otherwise, HHS would have to renew the grant unless the provider failed in all 

respects, potentially endangering young children. The court also focused on the catch-all 

“and other requirements,” a virtually limitless list of standards that a provider would have 

to fail before HHS could terminate. The result is the opposite for TCSP, where the public 

interest favors priority for those who achieve more of the program’s purposes, not fewer, 

and where there is no similar catch-all language. 

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This suggests that “and” was intentional, not a drafting oversight. The fact 

that Congress was amending the statute to require only priority 

consideration rather than priority also supports this reading—once the 

department had this additional selection discretion, it would make the 

provision be virtually meaningless if only one of the five factors had to be 

met. 

The overall purpose of the program and the department’s historic 

descriptions of it also support the reading that all five factors must be met. 

The TCSP program was established as a counterpoint to traditional 

transportation grant programs that focus on new construction as a way to 

improve mobility, without necessarily considering the effect on 

surrounding communities and the environment. The TCSP program was 

intended to encourage communities to think more strategically and to 

integrate their transportation planning with community and regional 

economic planning. As the department has noted on many occasions, the 

TCSP program is intended to address the relationships among 

transportation, community, and system preservation plans and practices—

the so-called land use/transportation link23—and to encourage the “use [of] 

transportation to build livable communities.”24 Giving priority to applicants 

that meet all five factors supports this purpose by rewarding those that 

integrate the greatest number of activities. The department itself has 

recognized this focus on integration in numerous descriptions of the TCSP 

program, literally underlining the “and” between the final two priority 

 

23See, e.g., FHWA, Office of Legislation and Intergovernmental Affairs, Program Analysis 

Team, “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for 

Users—A Summary of Highway Provisions,” at 16-17 (Aug. 25, 2005); 63 Fed. Reg. 49632, 

49633 (Sept. 16, 1998); 64 Fed. Reg. 25098, 25099-25101, 25103 (May 10, 1999). 

24FHWA, Transportation and Community and System Preservation Pilot Program, FirstYear Accomplishments (“FHWA First-Year Report”); FHWA Third-Year Report at 3-4 

(same), 12 (“while maintaining highway mobility is important, we can no longer ‘build’ our 

way out of traffic congestion.”), 19 (“Rather than simply being perceived as the ‘highway 

builder,’ TCSP allows the department to introduce transportation design and investment 

policies as a legitimate—and important—component of community preservation activities . 

. . bringing a more wholistic [sic] approach”). 

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factors and emphasizing that it will give priority to applicants that meet all 

five program purposes (which roughly mirrored the priority factors).25

Finally, the conjunctive “and” should be interpreted as a disjunctive “or” 

only to avoid an incoherent reading of the statute or a reading that leads to 

an irrational result. Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 

979, 983 (11th Cir. 2003); OfficeMax v. United States, 428 F.3d 583, 589 

(6th Cir. 2005). Reading these factors as conjunctive would not lead to 

such a result, however, because an applicant can meet all five factors. The 

department demonstrated this in recent discussions by outlining how it 

believes the TCSP projects funded for Seattle, Minneapolis, and San 

Francisco could have met all of the five factors. 

Using congestion pricing as a priority selection factor, the department 

awarded grants totaling $20 million under the Value Pricing Pilot program 

to urban partners Minneapolis, New York, San Francisco, and Seattle. 

Under this program, the department is authorized to fund cooperative 

agreements with up to 15 state and local governments to “establish, 

maintain and monitor value pricing programs,” Pub. L. No. 109-59, sec. 

1604, 23 U.S.C. § 149 note, and Value Pricing Pilot projects may include 

tolling and other forms of congestion pricing on federally funded 

highways. 

Value Pricing Pilot Program 

 

25See, e.g., DOT TEA-21 Fact Sheet, above (paraphrasing five priority factors in section 

1221(d)(2)(B) and underlining “and” between last two factors); DOT SAFETEA-LU Fact 

Sheet, above (paraphrasing five priority selection factors in section 1117(e) and using “and” 

between last two factors); TCSP Additional Information (Attachment 1 to Mar 22, 2007 

FHWA Associate Administrator Memorandum re Information: TCSP Request for Fiscal 

Year 2007 Grant Applications) (stating for “Selection Criteria” that “[a]ctivities funded 

under the TCSP Program must address and integrate each of the purposes of the program”) 

(emphasis added); 63 Fed. Reg. 49632, 49634, 49637, but see id. at 49635 (Sept. 16, 1998) 

(same; “If a proposal does not address one or more purposes, the applicant must clearly 

state why each purpose was not addressed. Priority will be given to those proposals which 

clearly and comprehensively meet and integrate the greatest number of purposes . . 

..”)(emphasis added); 64 Fed. Reg. 25098, 25104, 25106, 25112 (May 10, 1999)(“The panel 

looked for proposals that . . . specifically address[ed] each of these [TCSP purposes]. In 

some cases, a proposal would indicate that if congestion were reduced that would also 

increase access to jobs [but] [t]he panel looked for more proactive solutions . . ..” ) 

(emphasis added); 64 Fed. Reg. 63366, 63369 (Nov. 19, 1999) (same); 65 Fed. Reg. 55317, 

55318, 55322 (Sept. 13, 2000) (same); FHWA First-Year Report (“The emphasis . . . is on 

strategies that meet all of these objectives rather than just one or two. TCSP is not simply 

an economic development or environmental preservation program. Instead, projects should 

search for ways to reconcile transportation system performance, infrastructure costs, 

economic needs, and environmental impacts.”) (emphasis added). 

Page 87 GAO-09-154 Congestion Relief Initiatives 
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We conclude that the department had authority to use congestion pricing 

as a priority selection factor. Because the very purpose of the program is 

to fund congestion pricing and tolling pilot projects, congestion pricing 

clearly was a permissible selection factor. 

Using congestion pricing as a priority selection factor, the department 

awarded grants under the Intelligent Transportation System-Operational 

Testing to Mitigate Congestion (ITS-OTMC) program totaling $89 million 

to urban partners New York City, Seattle, Minneapolis, and San Francisco, 

and $3 million to San Diego, which is not an urban partner. Under this 

program, the department is authorized to fund grants to cities to carry out 

comprehensive programs of intelligent transportation system research, 

development, and operational testing. See Pub. L. No. 109-59, §§ 5201, 5306 

(Aug. 10, 2005), 23 U.S.C. § 512 note. The grant statute requires the 

department to give “higher priority” to funding program projects that, 

among other things 

“(1) enhance mobility and productivity through improved traffic management . . . [and] 

toll collection . . .; (2) utilize interdisciplinary approaches to develop traffic management 

strategies and tools to address multiple impacts of congestion concurrently; [and] . . . (3) 

address traffic management . . . [or] toll collection traveler information with goals of . . . 

reducing metropolitan congestion by not less than 5 percent by 2010 . . ..” 

Pub. L. No. 109-59, sec. 5306(b) (emphasis added). 

Because the statute specifically requires the department to give higher 

priority to projects that enhance mobility through toll collection, and 

focuses on reducing congestion—a goal that the department’s expert 

judgment, is facilitated and enhanced by congestion pricing—the 

department was clearly authorized to use congestion pricing as a priority 

selection factor in awarding these grants. 

Using congestion pricing as a priority selection factor, the department 

awarded a total of $112.7 million in grants to urban partner New York City 

under the New Fixed Guideway Facilities (New Starts) program.26 The 

funding consisted of a series of individual grants, each for less than $25 

Intelligent Transportation 

System-Operational Testing to 

Mitigate Congestion Program 

New Fixed Guideway Facilities 

Program (Very Small Starts) 

 

26A fixed guideway is any transit service that uses exclusive or controlled rights of way or 

rails, such as light and heavy rails, commuter rails, automated fixed guideway systems such 

as “people movers,” and busway/HOV lanes. 

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million, thus qualifying as Very Small Starts grants. October 2008 DOT 

Letter at 4-5. 

Under the general New Starts program, the department may award grants 

“only if the Secretary, based on evaluations and considerations set forth in 

paragraph (3), determines that the project is [among other things] . . . 

justified based on a comprehensive review of its mobility improvements, 

environmental benefits, [and] cost effectiveness,” see 49 U.S.C. § 

5309(d)(2)(B). In making this determination, the department must 

evaluate, among other things, “(i) congestion relief; (ii) improved mobility; 

(iii) air pollution; (iv) noise pollution; [and] (v) energy consumption,” see

49 U.S.C. § 5309(d)(3)(D), as well as “other factors that the Secretary 

determines to be appropriate to carry out this subsection,” 49 U.S.C. § 

5309(d)(3)(K). The department has identified these “other factors” as 

including congestion management/pricing strategies. See 72 Fed. Reg. 

17981, 17982 (Apr. 10, 2007); 72 Fed. Reg. 30907, 30913 (June 4, 2007). 

By contrast, grants made under the Very Small Starts program—a subset 

of the New Starts program—are not currently subject to these or any other 

specific selection criteria.27 The department therefore had discretion to use 

selection criteria rationally connected to achieving the purposes of the 

statute. The department states that it looked to the above New Starts 

selection criteria for guidance in exercising this discretion, October 2008 

DOT Letter at 5, and in the department’s judgment, congestion-pricing 

measures meet several of the New Starts selection factors. Congestion 

pricing reduces congestion by creating a price incentive for motorists to 

keep off the roads in the most congested times of day and to use public 

transit alternatives. Less congestion, in turn, improves mobility, reduces 

environmental pollution, and reduces fuel consumption. October 2008 

DOT Letter at 5; see also Department of Transportation, Fight Gridlock 

Now, available at www.etc.dot.gov (accessed Nov. 14, 2008). 

We conclude that the department had authority to use congestion pricing 

as a priority factor in making these Very Small Starts grants. Based on the 

department’s technical expertise in traffic management, we give deference 

 

27The New Starts selection criteria do not apply to grants for less than $25 million until 

certain regulations have been finalized. See 49 U.S.C. § 5309(3)(1)(B). Although the 

department has proposed regulations, it has not finalized them because of appropriations 

act restrictions. See, e.g., Transportation, Housing and Urban Development, and Related 

Agencies Appropriations Act, 2008, Pub. L. No. 110-161, sec.170, 121 Stat. 2401 (Dec. 26, 

2007). 

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to the department’s position that congestion pricing supports and 

enhances the achievement of several of the selection factors for this 

program—reduced congestion, increased mobility, and reduced pollution. 

Using congestion pricing as a priority selection factor, the department 

awarded grants totaling $5.1 million under the Innovative Bridge Research 

and Deployment program to urban partner Seattle. Under this program, 

the department is authorized to award grants to “promote, demonstrate, 

evaluate, and document the application of innovative designs, materials, 

and construction methods in the construction, repair, and rehabilitation of 

bridges and other highway structures.” 23 U.S.C. § 503(b)(1). The 

department is required to “select and approve” grants for this program 

“based on whether the project . . . meets the goals of the program 

described in paragraph (2).” Id. § 503(b)(3)(B). Paragraph (2) provides a 

nonexclusive list of the program’s goals; it states that “[t]he goals of the 

program shall include” eight different objectives, id. § 503(b)(2), none of 

which is to reduce congestion or increase the use of congestion pricing. 

Although congestion pricing is not explicitly identified as a selection 

factor, the statute affords the department discretion to use congestion 

pricing as a selection factor provided congestion pricing is rationally 

related to the program’s objectives. The statute’s use of the term “include” 

indicates that the list of goals was nonexclusive. Puerto Rico Maritime 

Shipping Authority v. I.C.C., 645 F.2d 1102, 1112 (D.C. Cir.1981); Adams 

v. Dole, 927 F.2d 771, 776 (4th Cir. 1991). The department suggests that the 

statutory objective in 23 U.S.C. § 503(b)(2)(B) to reduce “traffic 

congestion” supports the use of congestion pricing, see April 2008 Letter at 

6, October 2008 Letter at 14, although this objective only pertains to 

congestion during bridge construction. In our view, an even stronger 

nexus is that congestion pricing would help achieve some of the policies 

of the national transportation system reflected in the federal aid highway 

program: “(i) national and interregional personal mobility (including 

personal mobility in rural and urban areas) and reduced congestion; [and] 

(ii) flow of interstate . . . commerce and freight transportation . . ..” Id. § 

101(b)(3)(C). 

Using congestion pricing as a priority selection factor, the department 

awarded grants totaling $50 million under the Interstate Maintenance 

Discretionary grant program to urban partners Miami and Minneapolis. 

Under this program, federal set-aside funds are available “for resurfacing, 

restoring, rehabilitating, and reconstructing any route or portion thereof 

on the Interstate System . . . and any toll road on the Interstate System” not 

subject to certain agreements. 23 U.S.C. § 118(c)(1). The statute requires 

“priority consideration” of applicants proposing maintenance on high-cost 

Innovative Bridge Research and 

Deployment Program 

Interstate Maintenance 

Discretionary Program 

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(above $10 million), high-volume (urban high-volume, or rural high-truckvolume) routes. 23 U.S.C. § 118(c)(3). 

Although congestion pricing is not an explicit priority selection factor, we 

conclude that the department had discretion to use it to discriminate 

among otherwise equally qualified applicants. Miami qualified for statutory 

priority consideration because it proposed a high-cost project on a highvolume route. Although Minneapolis may not have qualified for priority 

consideration (its grant was only for $6.6 million), as discussed above 

under the TCSP program; nonetheless, the department could select 

Minneapolis based on congestion pricing if there was a rational nexus 

between congestion pricing and the Interstate Maintenance Discretionary 

program’s objectives or the general federal aid highway objectives. As 

noted in discussing the Bridge program, this nexus exists with the federal 

aid highway goals of mobility and reduced congestion; the Bridge program 

priority for high-volume and urban routes also reflects a mobility focus 

that would be enhanced by congestion pricing. See April 2008 DOT Letter 

at 6. We therefore conclude the department had discretion to use 

congestion pricing as a factor. 

Using congestion pricing as a priority selection factor, the department 

awarded a $47.3 million grant under the Public Lands Highway 

Discretionary program to urban partner San Francisco. Under this 

program, which improves access to and within public lands, the 

department must allocate a portion of annual authorized funding on the 

basis of state need “as determined by the Secretary,” and in making this 

allocation, the Secretary is required to “give preference” to projects that 

are “significantly impacted by Federal land” and “resource management 

activities that are proposed by a State that contains at least 3 percent of 

the total public land in the United States.” 23 U.S.C. § 202(b)(1)(A), (B) 

(emphasis added). San Francisco met these preference criteria because 

California has at least 3 percent of U.S. public lands and San Francisco’s 

proposed grant project (either on the Golden Gate Bridge or Doyle Drive) 

was deemed “significantly impacted” based on location, traffic volumes, 

and access to the public land. According to a department official, the 

department then applied congestion pricing to select San Francisco from 

among the “preferred” applicants.28

Public Lands Highway 

Discretionary Program 

 

28San Francisco has since removed the congestion-reduction aspects of its grant project, 

Doyle Drive, but the department has retained this grant under San Francisco’s UPA 

because the other grants under the agreement include congestion-reduction components. 

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There is no explicit basis in the Public Lands grant statute to use 

congestion pricing as a discriminating factor, and the department 

acknowledges that there is not a specific congestion-reduction or mobility 

component “associated with” the Public Lands program. April 2008 DOT 

Letter at 6. Nonetheless, there was a rational nexus between congestion 

pricing and program objectives. As the department notes, congestion 

pricing will provide California with additional funds, “thereby leveraging 

the federal investment,” and congestion pricing “is reasonably expected to 

reduce emissions.” April 2008 DOT Letter at 6; October 2008 DOT Letter at 

3-4. Furthermore, as with the other federal-aid highway program grants 

discussed above, congestion pricing supports the general program goals of 

mobility and reduced congestion. Thus we believe the department had 

discretion to use congestion pricing as a factor in awarding this grant. 

Page 92 GAO-09-154 Congestion Relief Initiatives 
Appendix VI: 

A

GAO Contacts and Staff 

cknowledgments 

Page 93 GAO-09-154 

Appendix VI: GAO Contacts and Staff 

Acknowledgments 

Katherine Siggerud (202) 512-2834 or siggerudk@gao.gov

Susan Sawtelle (202) 512-6417 or sawtelles@gao.gov

In addition to the contacts named above, Richard Burkard, David Hooper, 

Emily Larson, James Ratzenberger, Aron Szapiro, Donald Watson, Crystal 

Wesco, Carrie Wilks, and Courtney Williams made key contributions to 

this report. 

GAO Contacts 

Staff 

Acknowledgments 

(542137) Congestion Relief Initiatives 
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