"I am proud to utter the two rarest phrases in the English language — projects are being approved ahead of schedule, and they are coming in under budget,” said President Barack Obama in mid-April 2009 as he announced funding for the 2,000th transportation project under the American Recovery and Reinvestment Act (ARRA).

The White House underlined the phrase “under budget,” adding that due to heightened competition among contractors, transportation agencies across the nation were receiving project bids substantially lower than engineers’ initial estimates, allowing states to stretch funds to pay for additional projects.

From Utah to Louisiana to Connecticut, project bids are coming in as much as 30 percent below estimates. Does this mean states will have up to 30 percent more funding to allot toward other projects? We hope so. The ARRA provides $27.5 billion to highways and bridges, but that doesn’t mean an extra $9 billion will be miraculously available. Here’s how it all breaks down:

The ARRA pie
The ARRA provides a total of $48.1 billion for transportation infrastructure projects, to be administered by the U.S. Department of Transportation as shown below.

Before state DOTs get their hands on cash for highways and bridges, a small portion (about 3 percent) was allotted to programs such as the Federal Lands Highway Program, which received $550 million. The remainder, $26.6 billion, is apportioned to states into the following three buckets:

• Bucket 1 — Transportation enhancements: $799.8 million (3 percent)
• Bucket 2 — For use in any area: $17.86 billion (67 percent)
• Bucket 3 — Sub-allocation (based on population): $7.98 billion (30 percent)

Transportation enhancements are projects in a 12-area program, including sidewalks, safety education, and scenic easements. Sub-allocated funds are distributed to states based on population densities, and these funds are not required to meet the 120-day redistribution requirement.

120-day redistribution
Of the $26.6 billion apportioned to states, $9.33 billion (50 percent from buckets 1 and 2) must be obligated to projects by June 30, 2009 — 120 days after the March allotment. States that fail to obligate sufficiently will have the difference withdrawn and dispersed to states that met successfully the June 30 deadline. After the first deadline, the remainder from buckets 1 and 2 must be obligated by March 2, 2010.

Getting your piece of the pie
The Indiana Department of Transportation (INDOT) may be a good example for how DOTs nationwide are approaching the ARRA funding process. “We need roughly 10 weeks to review projects. A couple of those weeks are for advertising and bid gathering, so it’s closer to eight weeks of review,” said Bruce Childs, deputy commissioner of communications with INDOT, which emphasizes speed, coverage in multiple counties, and diversity of project types in what it reviews. “We review projects on a first-come first-served basis — if they get kicked out of line for corrections, they come back at the end of the line,” Childs said. “It’s kind of a Catch-22: You need a good project, but if you wait until the last minute, the money might be obligated already.”

For more information, consult the Funding & Policy section of the website, which provides answers to your ARRA and SAFETEA-LU questions.