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Transportation Dept. pushes Recovery Act projects.

The Department of Transportation plans new guidance to ensure that Recovery Act funds go to economically distressed areas, under prodding from House Oversight and Government Reform Committee Chairman Edolphus Towns, D-NY.

Separately, DOT announced it will help disadvantaged businesses obtain bonding for Recovery Act contracts.

Although the Recovery Act requires that economically distressed areas get priority in funding, the Government Accountability Office reported in July that DOT had not developed clear guidance for steering the funds. Economically depressed areas are defined as communities suffering from substantial business closures, declared natural disasters or other severe economic problems.

"Some states were failing to award projects in economically distressed areas," Towns said in a statement. "As a result, opportunities for essential job creation, business development and economic reinvestment were missed in areas like Brooklyn. Based on our hearing, it became clear that current federal guidance needed to be adjusted in order to ensure that Recovery Act dollars are targeted to areas in distress."

Towns said Transportation Secretary Ray LaHood agreed to target Recovery Act funds to areas suffering significant economic hardship and to give states guidance on how to target their grant money.

Secretary LaHood announced that the department will provide financial assistance in the form of bonding fee cost reimbursement to DBE contractors and subcontractors working on transportation infrastructure projects funded by the Recovery Act. DOT will directly reimburse DBEs the premiums paid to the surety company for performance, payment or bid/proposal bonds.

Additional information about the bonding assistance is available from DOT's Office of Small and Disadvantaged Business Utilization or at osdbu/index.htm.
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Publication:Set-Aside Alert
Date:Sep 11, 2009
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