Funding Application is Open for SMART Grant Program

Eligible entities include states, political subdivisions of a state, federally recognized Tribal governments, public transit agencies or authorities, public toll authorities, metropolitan planning organizations or a group of two or more of these entities (called a group application). Group applications can span different regions but work on developing similar projects and sharing information within the group.

Entities that are not eligible to apply directly—like technology developers and manufacturers—should consider partnering with eligible entities and contributing to their project proposals in order to benefit from the Department of Transportation’s (DOT) initiative. The application process allows eligible applicants to note critical partners in their application. Partnering with eligible entities through the application process can help present a stronger application and increase the likelihood of receiving funding in this competitive program. The Department recently clarified that while foreign companies may be able to partner with the applicant, federal rules of procurement and Buy America requirements both still apply.

The program will be operated in two stages: 1. planning and prototyping and 2. implementation. During Stage 1 of the program, initial awardees will submit their concepts to the Department of Transportation and work with the Department and public sector project leaders to gather information and buy-in for the concept. In Stage 2, selected Stage 1 awardees will develop scaled-up demonstrations of their concepts. Ideally, demonstration projects developed in Stage 2 will be replicable by other communities.

The BIL appropriated $500 million to the program, with $100 million available for funding each year FY22 – FY26. In FY22, the first year of the SMART grant program, the Department announced $94 million in grant awards for 59 projects across 33 states. Selected projects included deploying drone technology to conduct infrastructure inspections, demonstrating a smart grid electric vehicle charge management solution through a charging software, installing sensor-based traffic signals, and integrating a sensor-based platform with existing water, transportation and communication technologies to provide real-time data on flooding and congestion. One of the overarching goals of the program is to address real world challenges through the projects it supports.

The Notice of Funding Opportunity
On August 8, the Department of Transportation announced the Stage 1 Notice of Funding Opportunity (NOFO) for FY23 with applications due October 10, 2023. Half of the FY23 funding was made available for the Stage 1 funding opportunity, with the other $50 million to be made available in a 2024 NOFO for Stage 2 funding. The Department anticipates that it will award up to 30 Stage 1 grants of $2 million per award, and it designated a minimum award size of $250,000. Once the Stage 1 awardees reach Stage 2, they may be selected for additional funding of up to $15 million per award.

The grant program will be administered on a competitive basis. While there is no set date for when the awards must be announced, based on the FY22 funding timeline, FY23 applicants may expect news early next spring. Last year’s funding opportunity, which made applications due in November 2022, announced its awardees in March 2023.

Crafting a Successful Application
Successful FY22 applications follow themes that future applications should incorporate to maximize their opportunities for receiving an award. First, applicants should explore how their project aligns with the program’s structure for both Stage 1 and Stage 2 activities. Second, applicants should frame their applications through a “purpose-driven” lens, organizing the project around a problem it is going to solve. Third, projects should emphasize their transformational approach, highlighting how they are using existing technology in a new way. Finally, applicants should stress how their project will benefit the local community. All four of these lessons learned from FY22 are reflected in the guidance of the FY23 NOFO.

The FY230 NOFO asks that applicants participating in the SMART NOFO align with Department strategies and priorities. Applications should elaborate on how their concept will:

• Improve the safety of transit systems and improve emergency responses;
• Increase the reliability and resiliency of the transportation system (including cybersecurity);
• Connect or expand access for underserved or disadvantaged populations;
• Reduce congestion and/or air pollution and improve energy efficiency;
• Contribute to economic competitiveness and incentivize private sector investments or partnerships; and
• Improve the integration of systems and promote connectivity.

The NOFO adds that the Department will prioritize applications that demonstrate the following characteristics:

• Fit, scale and adoption: The applicant should show how the project is designed to complement the density, demographics and attributes of the community it intends to serve.
• Data sharing, cybersecurity and privacy: The applicant should include information on their cybersecurity policies and practices, demonstrating that they meet industry standards and how they protect individual privacy. The applicant should also detail how they will share information and best practices as well as leverage open platforms, open data formats, technology-neutral requirements and interoperability.
• Workforce development: The applicant should provide information on how their project will develop a skilled and inclusive workforce.
• Measurement and validation: The applicant should develop a strategy to measure the success of their project in terms of cost savings and performance improvements.

Along with the application materials highlighting the project’s scope, community impact and workforce development goals, applicants should be prepared to submit a summary budget narrative that describes all planned costs for Stage 1. Cost sharing or matching is not required in Stage 1; however, if the applicant has been awarded other federal funding or plans to pursue other federal funding for the project, the budget narrative should detail those funding sources, in addition to any known private sources of funding.

The program understands that many public sector transportation agencies have difficulties in securing resources and personnel to carry out their projects and, as such, the program allocates time during Stage 1 to help the awardees build the support they need for deployment. However, applications should demonstrate how the applicant plans to collaborate to develop these needed resources over time.

Pillsbury’s Government Law and Strategies and Regulatory practices stand ready to help clients access federal funding opportunities. For those interested in pursuing federal benefits, in the form of either direct grants, through public-private partnership, or through loan opportunities or tax credits, Pillsbury is prepared to help you navigate the myriad of programs, eligibility requirements and application processes.