Role of BCA in TIGER grant reviews: common errors and influence on the selection process
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Anthony C. Homan
Abstract
As directed by the American Recovery and Reinvestment Act of 2009, the US Department of Transportation (DOT) created the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program for surface transportation infrastructure projects. Through 2013, there have been five rounds of the grant program. TIGER uses a multi-step competitive application process to award surface transportation funds. TIGER applications are initially screened by US DOT’s staff of technical experts. For projects forwarded by the review team, US DOT economic experts then review the applicant’s benefit-cost analysis (BCA) and attempt to determine the likelihood that the benefits exceeded costs (i.e. not the applicant’s self-determination). The final awardees are then selected by a Review Team of Modal Administrators and DOT Office of the Secretary level officials. The purpose of this paper is to discuss many of the common errors in preparing, and issues in reviewing the applicant’s BCA and in making a net benefit determination. A secondary purpose is to determine if the most deserving projects, based on an applicant’s BCA and the likelihood that benefits exceeded costs, are more likely to receive grant funding. We do so for the second through the fifth rounds of the program.
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In the existence of unemployed or underemployed labor, job creation can be real benefit since excluded labor services exceed the opportunity cost of unemployed workers’ (involuntary) leisure time. However, there is uncertainty as to the percentage of workers drawn from the ranks of those already employed in the construction trades, in particular the more specialized labor trades (i.e. that require training) as opposed to the percentage of workers drawn from the ranks of the unemployed. There is also uncertainty as to the extent that all unemployed labor can quickly shift into some of the more specialized labor trades engaged in construction of infrastructure projects. For these reasons, for the purposes of the BCA, DOT assumed a full employment labor market. This also facilitated comparison across projects with different unemployment rates in different regions.
Acknowledgments
Many thanks to Jack Wells for useful inputs throughout the process and to an anonymous referee for helpful comments. I would also like to thank Ryan Endorf for assistance in conducting the research.
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Article note
The US Department of Transportation (DOT) disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the DOT.
©2014 by De Gruyter
Artikel in diesem Heft
- Frontmatter
- Letter from the editors
- Letter from the Editors for the JBCA, Volume 5, Issue 1 (2014) June 17, 2014
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Artikel in diesem Heft
- Frontmatter
- Letter from the editors
- Letter from the Editors for the JBCA, Volume 5, Issue 1 (2014) June 17, 2014
- Articles
- Estimating the social value of higher education: willingness to pay for community and technical colleges
- A benefit-cost framework for early intervention to prevent sex trading
- Behavioral economics and policy evaluation
- Role of BCA in TIGER grant reviews: common errors and influence on the selection process
- Identifying the analytical implications of alternative regulatory philosophies
