PKG00264194-instructions.docx

Order 2020-11-5 Served: November 24, 2020

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the U.S. Department of Transportation on the 24th day of November, 2020

In the Matter of Grant Applications

SMALL COMMUNITY AIR SERVICE

DEVELOPMENT PROGRAM

under 49 U.S.C. § 41743

Docket DOT-OST-2020-0231

ORDER SOLICITING

SMALL COMMUNITY GRANT APPLICATIONS

By this Order, the U.S. Department of Transportation (the Department or DOT) invites applications from communities and/or consortia of communities interested in obtaining a Federal grant under the Small Community Air Service Development Program (“Small Community Program” or “SCASDP”) to address air service and airfare issues in their communities. As discussed below, the Department has up to $13 million available for FY 2019 grant awards to carry out this program.

APPLICATION DEADLINE

To participate in this proceeding, interested communities, or consortia of communities, must submit applications of no more than 20 one-sided pages each (excluding the completed Application for Federal Domestic Assistance (SF424), Summary Information schedule, and any letters from the community or an air carrier showing support for the application). These applications, including all required information, must be submitted to www.grants.gov no later than 4:00 PM EST on January 26, 2021.[footnoteRef:1] Applicants are strongly encouraged to submit applications in advance of the deadline. Please be aware that applicants must complete the grants.gov registration process before submitting an application, and that this process usually takes two to four weeks to complete.[footnoteRef:2] The Department will not accept late-filed applications except under limited circumstances related to technical difficulties. Additional information on applying through grants.gov is in Appendix A, including a notice regarding late-filed applications. [1: Applicant communities are encouraged to include all support letters with their applications to ensure that the Department has a complete record upon which to act. Any support letter that a community submits after the deadline for applications has passed will be considered by the Department only to the extent practicable. Moreover, any support letter or comment received in connection with this proceeding will be posted in this Docket, along with any Department response to that submission.] [2: If an applicant experiences difficulties at any point during the registration or application process, it should contact the grants.gov support center by email (support@grants.gov) or by telephone (1-800-518-4726, available 24/7 except Federal holidays). See www.grants.gov/web/grants/support.html. ]

ORGANIZATION OF THIS ORDER SOLICITING APPLICATIONS

In accordance with the requirements of 2 CFR Part 200, this Order is organized into the following sections:

A. Program Description B. Federal Award Information C. Eligibility Information

1. Eligible Applicants

2. Cost Sharing or Matching D. Application and Submission Information

1. Address to Request Application Package

2. Content and Form of Application Submission

3. Dun and Bradstreet Universal Numbering System (DUNS) Number and System for Award Management (SAM)

4. Submission Dates and Times

5. Funding Restrictions

6. Other Submission Requirements E. Application Review Information

1. Criteria

a. Priority Selection Criteria

b. Secondary Selection Criteria

c. Additional Guidance

2. Review and Selection Process F. Federal Award Administration Information

1. Federal Award Notices

2. Administrative and National Policy Requirements

3. Reporting G. Federal Awarding Agency Contact H. Other Information

1. Air Service Development Zone Designation

2. Submission of Confidential Commercial Information Appendix A – Additional Information on Applying Through www.grants.gov Appendix B – Summary Information Appendix C – Application Checklist Appendix D – Confidential Commercial Information

A. PROGRAM DESCRIPTION

The Small Community Program was established by the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (Pub. L. No. 106-181), reauthorized by the Vision 100-Century of Aviation Reauthorization Act (Pub. L. No. 108-176), and subsequently reauthorized by the FAA Modernization and Reform Act of 2012 (Pub. L. No. 112-95) as amended, the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Pub. L. No. 115-63), and the FAA Reauthorization Act of 2018 (Pub. L. No. 115-254) (FAA 2018). The program is codified at 49 U.S.C. § 41743. The program is designed to provide financial assistance to small communities to help them enhance their air service. The Department provides this assistance in the form of grants that are disbursed on a reimbursable basis.

The Small Community Program is authorized to receive appropriations under 49 U.S.C. § 41743(e)(2). Appropriations are provided for this program for award selection in FY 2019 pursuant to the Consolidated Appropriations Act, 2019 (Pub. L. No. 116-6).

49 U.S.C. § 41743(c) sets forth the “Criteria for Participation.” As detailed below, in implementing these statutory criteria, the Department has determined that certain criteria will be considered as part of the Eligibility Review, and other criteria will be considered as part of the Technical Review. The Department’s application of these criteria has not changed, but this NOFO provides additional clarity to assist applicants.

B. FEDERAL AWARD INFORMATION

No more than four communities or consortia of communities, or a combination thereof, from the same State may be selected to participate in the program in any fiscal year. No more than 40 communities or consortia of communities, or a combination thereof, may be selected to participate in the program in each year for which the funds are appropriated. Applications for renewal or supplementation of existing projects are not eligible to compete with applications for new Federal awards.

Pursuant to the authorities described above, the Department has up to $13 million available for FY 2019 grant awards to carry out this program. There is no minimum or maximum individual award amount, and the amounts awarded will vary depending upon the features and merits of the selected applications. In past years, the Department’s individual grant sizes have ranged from $20,000 to nearly $1.6 million. Funding amounts made available for reimbursement may be impacted by future limitations placed on the spending authority and appropriations enacted for the Department. The Department may, at its discretion, issue partial funding awards up to the level authorized and provided that the above conditions are met. Additional information on the budget process may be found in OMB A-11: http://www.whitehouse.gov/omb/circulars_default/.

C. ELIGIBILITY INFORMATION

1. Eligible Applicants

The Department determines application eligibility as part of the Eligibility Review stage. Applicants and applications deemed ineligible at this stage will be disqualified. The Department will apply the criteria under Section C.1 as part of the Eligibility Review stage.

Only public entities may apply for and serve as the legal sponsor of a grant under the Small Community Program. Private organizations cannot be the lead applicant. A community may file only one application for a grant, either individually or as part of a consortium.

Consortium Applications: Both individual communities and consortia of communities are eligible for SCASDP funds. An application from a consortium of communities must be one that seeks to facilitate the efforts of the communities working together toward one joint grant project, with one joint objective, including the establishment of one entity to ensure that the joint objective is accomplished.

Communities Without Existing Air Service: Communities that do not currently have commercial air service are eligible for SCASDP funds.

Eligible Projects: The Department is authorized to award grants under 49 U.S.C. § 41743(d) to communities that seek to provide assistance to:

· A U.S. air carrier[footnoteRef:3] to subsidize service to and from an underserved airport for a period not to exceed 3 years; [3: Only U.S. air carriers are eligible to receive assistance from communities under SCASDP. See 49 U.S.C. § 40102(a)(2). A particular U.S. carrier may hold authority to conduct operations as a certificated air carrier, a commuter air carrier, or an air taxi operator. Communities are encouraged to verify, at an early stage of any air carrier discussions, that the air carrier holds appropriate Department authority to conduct the proposed services. Communities may verify this authority by contacting the Department’s Air Carrier Fitness Division at (202) 366-9721.]

· An underserved airport to obtain service to and from the underserved airport; and/or

· An underserved airport to implement such other measures as the Secretary, in consultation with such airport, considers appropriate to improve air service both in terms of the cost of such service to consumers and the availability of such service, including improving air service through marketing and promotion of air service and enhanced utilization of airport facilities.

Eligibility Limitations:

Hub Size: In order to satisfy the hub size requirement set forth in 49 U.S.C. § 41743(c)(1)(A), the airport serving the community or consortium may not be larger than a small hub airport, as determined using the FAA’s most recently published classification effective on the date that the community or consortium files an application.[footnoteRef:4] [4: “Small hub airport” is defined in 49 USC §47102(23) as “a commercial service airport that has at least 0.05 percent but less than 0.25 percent of the passenger boardings.” See also http://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/categories/. For FAA passenger enplanement information to use to determine an airport’s eligibility as a small hub airport, see http://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/.]

Same Project Limitation: Under 49 U.S.C. § 41743(c)(4)(B), a community or consortium may not receive a new grant to support the same project more than once in a ten-year period.[footnoteRef:5] In assessing whether a previous recipient’s current application represents a new project, the Department will compare the goals and objectives of the previous grant, including the key components of the means by which those goals and objectives were to be achieved, to the current application. For example, if a community received an earlier grant to support a revenue guarantee for service to a particular destination or direction, a new application by that community for another revenue guarantee for service to the same destination or in the same direction would be subject to the ten-year restriction, even if the revenue guarantee were structured differently or the type of carrier were different. However, a new application by such a previous recipient for service to a new destination or direction using a revenue guarantee, or for general marketing and promotion (including advertising and public relations) of the airport and the various services it offers, would be eligible.[footnoteRef:6] The Department recognizes that not all revenue guarantees, marketing agreements, studies, or other activities are of the same nature, and that if a subsequent application incorporates different goals or significantly different components, it may be sufficiently different to constitute a new project under 49 U.S.C. § 41743(c). [5: For the purpose of this provision, the ten-year period starts on the date that the initial grant agreement was executed. Further, this limitation applies for all project elements contained in a previous grant agreement’s scope. ] [6: As noted in Section E.1.c (“Market Analysis”), target markets proposed by communities may be destination specific (e.g., service to LAX), a geographic region (e.g., northwest mountain region) or directional (e.g., hub in the southeastern United States or a point north, south, east, or west of the applicant community).]

In FAA 2018, Congress authorized limited waivers of the Ten-Year Same Project Limitation. Under Section 41743(c)(4)(C), the Secretary may waive the limitation, and thus make additional grants to a community or consortium of communities to participate in support of the same project within a 10-year period, if the Secretary determines that communities “spent little or no money on [their] previous project or encountered industry or environmental challenges, due to circumstances that were reasonably beyond [their] control….” The Department will consider such waivers as part of complete and timely applications submitted in response to this Order. Communities seeking a waiver are asked to include in their application a discussion of the facts and circumstances that the Secretary should consider in applying the statutory test to their request, e.g. a full history of the previous grant and a documented and well-supported description of any industry or environmental challenges encountered in the communities.

Concurrent Grant Limitation: A community or consortium may have only one SCASDP grant at any time. If a community or consortium applies for a subsequent SCASDP grant when its current grant has not yet expired, that community/consortium must notify the Department of its intent to terminate the current SCASDP grant, and if the community/consortium is selected for a new grant, such termination must take place prior to entering into the new grant agreement. In addition, for consortium member applicants, permission must be granted from both the grant sponsor and the Department to withdraw from the current SCASDP grant before that consortium member will be deemed eligible to receive a subsequent SCASDP grant.

Airport Capital Improvement Projects: Airport capital improvement projects, including, but not limited to, runway expansions and enhancements, the construction of additional aircraft gates, and other airport terminal expansions and reconfigurations are ineligible for funding under the Small Community Program. Airports seeking funding for airport capital improvement projects may want to consult with their local FAA Regional Office to discuss potential eligibility for grants under the Airport Improvement Program.

Essential Air Service Communities: Small communities that currently receive subsidized air service under the Essential Air Service (“EAS”) or Alternate Essential Air Service (“AEAS”) program will not be considered eligible for SCASDP funds. The EAS statute (49 U.S.C. § 41733(c)(1)(E)) includes a provision requiring that the Department consider whether an air carrier has included a marketing proposal in its proposal to provide subsidized EAS as part of the carrier selection criteria. In light of this and the scarcity of SCASDP funds, the Department will not consider awarding additional Federal support under SCASDP for the marketing of subsidized EAS air service.

2. Cost Sharing or Matching

Cost sharing or matching is not required for applications. However, applications that provide multiple levels of contributions (State, local, cash, and in-kind contributions) will be viewed more favorably. See Section E.1.c (“Cost sharing and Local Contributions”).

D. APPLICATION AND SUBMISSION INFORMATION

1. Address to Request Application Package

Applications must be submitted electronically via www.grants.gov. This announcement lays out all application steps and includes all application forms or Internet addresses where such forms may be found.

2. Content and Form of Application Submission

Required Steps to Apply:

· Determine eligibility;

· Register with www.grants.gov (see Registration with www.grants.gov, below);

· Submit an Application for Federal Domestic Assistance (SF424);

· Submit a completed “Summary Information” schedule. This is your application cover sheet (see Appendix B);

· Submit a detailed application of up to one-sided 20 pages (excluding the completed SF424, Summary Information schedule, and any letters from the community or an air carrier showing support for the application) that meets all required criteria (see Appendix C);

· Attach any letters from the community or an air carrier showing support for the application, which should be addressed to: Brooke Chapman, Associate Director, Small Community Air Service Development Program;[footnoteRef:7] and [7: See footnote 1, above.]

· Provide separate submission of confidential material, if requested (see Appendix D).

An application consisting of more than 20 pages will be accepted by the Department, but the content in the additional pages past page 20 will not be evaluated or considered by the Department. The Department would prefer that applicants use one-inch margins and a font size not less than 12 point type and include page numbers.

Registration with www.grants.gov: Communities must be registered with www.grants.gov in order to submit an application for funds available under this program. For consortium applications, only the legal sponsor must be registered with www.grants.gov in order to submit its application for funds available under this program. See Appendix A for additional information on applying through www.grants.gov.

Contents of Application: There is no set format that must be used for applications. Each application should, to the maximum extent possible, address the selection criteria set forth in Section E.1 below, including a clear description of the air service needs/deficiencies and present plans/strategies that directly address those needs/deficiencies. At a minimum, however, each application must include the following information:

· A description of the community’s air service needs or deficiencies, including information about: (1) major origin/destination markets that are not now served or are not served adequately; (2) fare levels that the community deems relevant to consideration of its application, including market analyses or studies demonstrating an understanding of local air service needs; (3) any air service developments within the past ten years that have adversely affected the community, including, but not limited to, termination of scheduled passenger service;[footnoteRef:8] and (4) any air service development efforts over the past three years and the results of those efforts (such as marketing and promotion (including advertising and public relations)). [8: For example, if a community has lost scheduled passenger air service, or other air service, or been otherwise adversely affected as a result of an airline merger, the applicant should describe the situation in detail and quantify, to the extent possible, its effects on the community.]

· A strategic plan for meeting those needs under the Small Community Program, including the community’s specific project goal(s) and detailed plan for attaining such goal(s). If the application is selected, the Department will work with the recipient to incorporate the relevant elements of the application’s strategic plan into the grant agreement’s project scope.[footnoteRef:9] Applicants should note that, once a grant agreement is signed, the agreement generally cannot be amended in a way that would alter the project scope. Applicants also are advised to obtain firm assurances from air carriers proposing to offer new air services if a grant is awarded. Strategic plans should: [9: If new service is proposed to or from a specific city or market served by multiple airports (such as New York, Chicago, Los Angeles, or Washington, D.C., for example), the applicant is encouraged to identify the airport(s) in that city or market the community would be targeting under its application in order to facilitate the drafting of the grant agreement’s project scope. Communities should carefully select, within a specific city or market, those airports for which it proposes service, as proposing multiple airports in a city or market could impact the ability of a community to seek future grants involving those airports (see Section C.1’s description of the Same Project Limitation). ]

· for applications involving new or improved service, explain how the service will become self-sufficient;

· fully and clearly outline the goals and objectives of the project; and

· fully and clearly summarize the actual, specific steps (in bullet form, with a proposed timeline) that the community intends to take to bring about these goals and objectives.

· If relevant, a detailed description of the funding necessary for implementation of the proposed project (including Federal and non-Federal contributions).

· An explanation of how the proposed project differs from any previous projects for which the community received SCASDP funds within a ten-year period; applicants for which the Same Project Limitation may apply should also explain why a waiver under Section 41743(c)(4)(C) should be granted by the Secretary. See Section C.1 (“Same Project Limitation”).

· Designation of a legal sponsor responsible for administering the proposed project. The legal sponsor of the proposed project must be a government entity, such as a State, county, or municipality. The legal sponsor must be legally, financially, and otherwise able to execute the grant agreement and administer the grant, including having the authority to sign the grant agreement and to assume and carry out the certifications, representations, warranties, assurances, covenants and other obligations required under the grant agreement with the Department and to ensure compliance by the grant recipient with the grant agreement and grant assurances. If the applicant is a public-private partnership, a public government member of the organization must be identified as the community’s sponsor to receive project cost reimbursements. A community may designate only one government entity as the legal sponsor, even if it is applying as a consortium that consists of two or more local government entities. Private organizations may not be designated as the legal sponsor of a grant under the Small Community Program. The community has the responsibility to ensure that the legal sponsor and grant recipient of any funding has the legal authority under State and local laws to carry out all aspects of the grant, and the Department may require an opinion of the legal sponsor’s attorney as to its legal authority to act as a sponsor and to carry out its responsibilities under the grant agreement. The applicant should also provide the name of the signatory party for the legal sponsor.

3. Dun and Bradstreet Universal Numbering System (DUNS) Number and System for Award Management (SAM)

Each applicant is required to (i) be registered in SAM before submitting its application; (ii) provide a valid DUNS number in its application; and (iii) continue to maintain an active SAM registration with current information at all times during which it has an active Federal award or an application or plan under consideration by the Department. The Department will not make any award to an applicant until the applicant has complied with all applicable DUNS and SAM requirements and, if an applicant has not fully complied with the requirements by the time the Department is ready to make an award, the Department may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant. For more information on DUNS and SAM requirements for this award, see Appendix A.

4. Submission Dates and Times

An application will not be complete and will be deemed ineligible for a grant award until and unless all required materials, including SF424, have been submitted through www.grants.gov and time-stamped by 4:00 PM EST on January 26, 2021 (the “Application Deadline”). See Appendix A, “Timely Receipt Requirements and Proof of Timely Submission” and “Experiencing Unforeseen www.grants.gov Technical Issues” for more details.

Late Application Notice: Applicants that are unable to successfully submit their application package through grants.gov prior to the Application Deadline due to technical difficulties outside their control must submit an email to SCASDPgrants@dot.gov with the information described in Appendix A.

5. Funding Restrictions

Expenditures made prior to the execution of a grant agreement, including costs associated with preparation of the grant application, will not be reimbursed. For more information, see Section F.1 below.

6. Other Submission Requirements

Applicants must follow the steps outlined above and in Appendix A to submit applications electronically via www.grants.gov. Additional information about submission requirements and www.grants.gov requirements is detailed in Appendix A.

E. APPLICATION REVIEW INFORMATION

1. Criteria

Applications meeting the Eligibility Review stage criteria as set forth in Section C.1 (“Eligible Applicants”) are advanced to the Technical Review stage. SCASDP grants will be awarded based on the selection criteria outlined below. There are two categories of selection criteria at the Technical Review stage: Priority Selection Criteria and Secondary Selection Criteria. Applications that align well with one or more of the Priority Selection Criteria will be viewed more favorably than those that do not align with any Priority Selection Criteria. In conducting its Technical Review, the Department will concurrently examine the application’s alignment with both the Priority and Secondary Selection Criteria.

The Technical Review determines an application’s alignment with the following factors in 49 U.S.C. § 41743(c)(1) & (2):

· The applicant community or consortium has insufficient air carrier service or unreasonably high air fares; and

· The airport serving the community presents characteristics, such as geographic diversity or unique circumstances that demonstrate the need for, and feasibility of, grant assistance from the Small Community Program.

a. Priority Selection Criteria

49 U.S.C. § 41743(c)(5) directs the Department to give priority consideration to those communities or consortia whose applications align with the following criteria:

Air fares are higher than the national average air fares for all communities. The Department will compare the local community’s air fares to the national average air fares for all similar markets. Communities with market air fares significantly higher than the national average air fares in similar markets will receive priority consideration. The Department calculates these fares using data from the Bureau of Transportation Statistics (BTS) Airline Origin and Destination Survey data. The Department evaluates all fares in all relevant markets that serve a SCASDP community and compares the SCASDP community fares to all fares in similar markets across the country. Each SCASDP applicant’s air fares are computed as a percentage above or below the national averages. The report compares a community’s air fares to the average for all other similar markets in the country that have similar density (passenger volume) and similar distance characteristics (market groupings). All calculations are based on 12-month ended periods to control for seasonal variation of fares.

The community or consortium will provide a portion of the cost of the activity from local sources other than airport revenue sources. The Department will consider whether a community or consortium proposes local funding for the proposed project. Applications providing proportionately higher levels of cash contributions from sources other than airport revenues will be viewed more favorably. Applications that provide multiple levels of contributions (State, local, cash and in-kind contributions) will also be viewed more favorably. See Section E.1.c (“Cost sharing and Local Contributions), for more information on the application of this selection criterion.

The community or consortium has established or will establish a public-private partnership to facilitate air carrier service to the public. The Department will consider a community’s or consortium’s commitment to facilitate air carrier service in the form of a public-private partnership. Applications that describe in detail how the partnership will actively participate in the implementation of the proposed project will be viewed more favorably.[footnoteRef:10] [10: An air carrier may not be a participant in any public-private partnership that a community or consortium has established, or is working with, to seek a grant in this proceeding.]

The assistance will be used to help restore scheduled passenger air service that has been terminated. The Department will consider factors including the circumstances surrounding the cessation of service, the extent to which market circumstances have now changed, warranting the restoration of service, and the reasonableness of the applicant’s plan to restore service (and, where appropriate, the length of time since the service was last operated). Applications where changed circumstances would support the viability of replacement service, and for which the community has put forth a robust plan to obtain that service, will be viewed more favorably.

The assistance will provide material benefits to a broad segment of the traveling public, including businesses, educational institutions, and other enterprises, whose access to the national air transportation system is limited. The Department will consider whether the proposed project would provide, to a broad segment of the community’s traveling public, important benefits relevant to the community. Examples include service that would offer new or additional access to a connecting hub airport, service that would provide convenient travel times for both business and leisure travelers that would help obviate the need to drive long distances, and service that would offer lower fares.

The assistance will be used in a timely manner. The Department will consider whether a proposed project provides a well-defined strategic plan and reasonable timetable for use of the grant funds. Apart from the three-year period of time that a community may subsidize air service to and from an underserved airport, the statute does not place limits on the duration for which the Department may authorize various forms of assistance under SCASDP. Beginning with the FY 2017 SCASDP Order Awarding Grants,[footnoteRef:11] the Department increased the duration of grant awards under the program by one year over the durations it previously awarded, resulting in durations of two years for grants only seeking to perform studies, three years for those involving marketing, and four years for those involving revenue guarantees.[footnoteRef:12] The Department found that these longer terms were warranted, as communities often requested extensions of their grant durations to achieve the goals they set in their grant application. [11: See Order 2018-7-10 in Docket DOT-OST-2017-0155, at p. 5–6.] [12: As noted above, the three-year limitation set forth in 49 U.S.C. § 41743(d)(1) applies only to revenue guarantees, and the three-year limitation clock begins only when subsidized service commences.]

Current industry realities likewise warrant a further extension in the durations of the grants that we will issue in this proceeding. Specifically, the Department intends to award grants for three years to complete studies, four years for marketing and promotion (including advertising and public relations) of the airport, community, carrier, or destination, and five years for projects that target a revenue guarantee, subsidy, or other financial incentives. In their grant applications, communities should describe how their projects can be accomplished within this revised timetable, including whether the airport and proposed air service provider have the requisite authorities and certifications necessary to carry out the proposed projects. In addition, because of this emphasis placed on timely use of funds, applicants proposing new service should describe the airport and whether it can support the proposed service, including whether the airport holds, or intends to apply for, an airport operating certificate issued under 14 C.F.R. Part 139. Air service providers proposed for the new service must have met or be able to meet, in a reasonable period of time, all Department requirements for air service certification, including safety and economic authorities.

Multiple communities cooperate to submit a regional or multistate application to consolidate air service into one regional airport. The Department will consider whether a proposed project involves a consortium effort to consolidate air service into one regional airport. This statutory priority criterion was added pursuant to Section 429 of the FAA Modernization and Reform Act of 2012 (Pub. L. No. 112-95).

b. Secondary Selection Criteria

While applications aligning with one or more Priority Selection Criteria will be viewed more favorably than those that do not, the Department’s analysis of an application’s alignment with all the stated selection criteria, taken together, will inform its Technical Review.[footnoteRef:13] [13: In some cases, information relating to Secondary Selection Criteria may support a determination of the extent that an application aligns with one or more Priority Selection Criterion, by demonstrating the depth or extent of the community’s fulfillment of that Priority Selection Criterion.]

Innovation: The Department will consider whether an application proposes new and creative solutions to air transportation issues facing the community, including:

· the extent to which the applicant’s proposed solution(s) to solving the problem(s) is new or innovative, including whether the proposed project utilizes or encourages intermodal or regional solutions to connect passengers to the community’s air service (or, if the community cannot implement or sustain its own air services, to connect to a neighboring community’s air service) e.g., cost-effective inter/intra city passenger bus service, or marketing of intermodal surface transportation options also available to air travelers; and

· whether the proposed project, if successfully implemented, could serve as a working model for other communities.

Community Participation: The Department will consider whether an application has broad community participation, including:

· whether the proposed project has broad community support; and

· the community’s demonstrated commitment to and participation in the proposed project.

Location: The Department will consider the location and characteristics of a community:

· the geographic location of each applicant, including the community’s proximity to larger centers of air service and low-fare service alternatives;

· the population and business activity, as well as the relative size of each community; and

· whether the community’s proximity to an existing or prior grant recipient could adversely affect either its application proposal or the project undertaken by the other recipient.

Other Factors: The Department will also consider:

· whether the proposed project clearly addresses the applicant’s stated problems;

· the community’s existing level of air service and whether that service has been increasing or decreasing;

· whether the applicant has a plan to provide any necessary continued financial support for the proposed project after the requested grant award expires;

· the grant amount requested compared with the total funds available for all communities;

· the proposed Federal grant amount requested compared with the local share offered;

· any letters of intent from airline planning departments or intermodal surface transportation providers on behalf of applications that specifically indicate intent to enlist new or expanded air service or surface transportation service in support of the air service in the community;

· whether the applicant has plans to continue with the proposed project if it is not self-sustaining after the grant award expires; and

· equitable and geographic distribution of available funds.

c. Additional Guidance

Market Analysis: Applicants requesting funds for a revenue guarantee/subsidy/financial incentive are encouraged to conduct and reference in their applications an in-depth analysis of their target markets. Target markets can be destination specific (e.g., service to LAX), a geographic region (e.g., northwest mountain region) or directional (e.g., hub in the southeastern United States or a point north, south, east, or west of the applicant community).

Complementary Marketing Commitment: Applicants requesting funds for a revenue guarantee/subsidy/financial incentive are encouraged to designate in their applications a portion of the project funds (Federal, local or in-kind) for the development and implementation of a marketing plan in support of the service sought.

Subsidies for a Carrier to Compete Against an Incumbent: The Department is reluctant to subsidize one carrier, but not others, in a competitive market. For this reason, a community that proposes to use the grant funds for service in a city-pair market that is already served by another air carrier must explain in detail why the existing service is insufficient or unsatisfactory, or provide other compelling information to support such an application proposal.

Cost Sharing and Local Contributions: Applications must clearly identify the level of Federal funding sought for the proposed project. Applications must also identify the community’s cash contributions to the proposed project, in-kind contributions from the airport, and in-kind contributions from the community. Non-Federal funds will be applied proportionately to the entire scope of the project. Communities cannot use non-Federal funds selectively to fund certain components of a project (see Section F.2 below on Payments for more information). Cash contributions from airport revenues must be identified separately from cash contributions from other community sources. Cash contributions from the State and/or local government should be separately identified and described as well.

Types of contributions: Contributions should represent a new financial commitment or new financial resources devoted to attracting new or improved service, or addressing specific high-fare or other service issues, such as improving patronage of existing service at the airport. For communities that propose to contribute to the grant project, that contribution can be in the following forms:

Cash from non-airport revenues: A cash contribution can include funds from the State, the county or local government, and/or from local businesses, or other private organizations in the community. Because private cash contributions are to be from local community sources, the Department will not consider as a part of these non-airport revenues any funds that a community might receive from an air carrier interested in providing service under that community’s application. Moreover, contributions that are comprised of intangible non-cash items, such as the value of donated advertising, are considered in-kind contributions (see further discussion below).

Cash from airport revenues: This includes contributions from funds generated by airport operations. Airport revenues may not be used for subsidies (including revenue guarantees) to airlines, per 49 U.S.C. §§ 47107 and 47133. Applications that include local contributions based on airport revenues do not receive priority consideration for selection.

In-kind contributions from the airport: This can include such items as waivers of landing fees, ground handling fees, terminal rents, fuel fees, and/or vehicle parking fees.

In-kind contributions from the community: This can include such items as donated advertising from media outlets, catering services for inaugural events, or in-kind trading, such as advertising in exchange for free air travel. Travel banks and travel commitments/pledges are considered to be in-kind contributions.

Cash vs. in-kind contributions: Communities that include local contributions made in cash will be viewed more favorably.

Aviation Security: Communities proposing new or expanded air service under a SCASDP grant application are encouraged to contact the Transportation Security Administration (TSA) early in the process to ascertain what the security implications of such service would be with respect to the airport involved, and what measures that airport would need to take with the TSA to assure that the service would meet all applicable TSA requirements.

2. Review and Selection Process[footnoteRef:14] [14: While the description of the Department’s review process is different from that in orders soliciting SCASDP applications prior to FY2018, the actual process the Department will follow is the same as that used previously. The language in this Order is intended to more clearly describe the process and its alignment with 49 U.S.C. § 41743.]

Each application received in response to this solicitation will undergo an Eligibility Review based on the criteria outlined in Section C to determine whether that application conforms to basic eligibility standards. An application that does not satisfy all the Eligibility Review criteria will be disqualified. The Department will then conduct a Technical Review of all eligible applications based on the selection criteria outlined above in Section E.1. The Department will not assign specific numerical scores to projects based on the selection criteria. Rather, ratings of “highly recommended,” “recommended,” “acceptable,” or “not recommended” will be assigned to applications.

The Department reserves the right to award funds for a part of the project included in an application, if a part of the project is eligible and aligns well with the selection criteria specified in this Order. In addition, as part of its review of the Secondary Selection Criterion “Other Factors,” the Department will consider the geographical distribution of the applications to ensure consistency with the statutory requirement limiting awards to no more than four communities or consortia of communities, or a combination thereof, from the same State. The final selections will be limited to no more than 40 communities or consortia of communities, or a combination thereof.[footnoteRef:15] [15: As a part of its review process, prior to making a Federal award with a total amount of Federal share greater than the simplified acquisition threshold, the Department is required to review and consider any information about the applicant that is in the designated integrity and performance system accessible through the System for Award Management (SAM) (currently the Federal Awardee Performance and Integrity Information System (FAPIIS)) (see 41 U.S.C. 2313). An applicant, at its option, may review information in the designated integrity and performance system accessible through SAM and comment on any information about itself that a Federal awarding agency previously entered and is currently in the designated integrity and performance system accessible through SAM. The Department will consider any comments by the applicant, in addition to the other information in the designated integrity and performance system, in making a judgment about the applicant's integrity, business ethics, and record of performance under Federal awards when completing the review of risk posed by applicants as described in § 200.205 Federal awarding agency review of risk posed by applicants.]

The Department will review and consider applications for funding pursuant to this Order in accordance with the President’s September 2, 2020, memorandum, entitled Memorandum on Reviewing Funding to State and Local Government Recipients of Federal Funds that Are Permitting Anarchy, Violence, and Destruction in American Cities, consistent with guidance from the Office of Management and Budget and the Attorney General and with all applicable laws.

F. FEDERAL AWARD ADMINISTRATION INFORMATION

1. Federal Award Notices

Grant awards will be made as promptly as possible so that selected communities can complete the grant agreement process and implement their plans. Given the competitive nature of the grant process, the Department will not meet with applicants regarding their applications before awards have been announced.[footnoteRef:16] All non-confidential portions of each application, all correspondence and ex-parte communications, and all orders will be posted in the above-captioned docket on www.regulations.gov. [16: Once the Department has completed the selection process and has issued a final order in this Docket, however, Department staff is available to provide any applicant, at its request, with feedback on its application.]

The Department will announce its grant selections in a Selection Order that will be posted in the above-captioned docket, served on all applicants and all parties served with this Solicitation Order, and posted on the Department’s SCASDP website https://www.transportation.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP.

Grant Agreements: Communities selected to receive grants are required to execute a grant agreement with the Department before they begin to expend funds under the grant award. Applicants should not assume they have received a grant, nor should they obligate or expend local funds prior to receiving and fully executing a grant agreement with the Department. As noted above, expenditures made prior to the execution of a grant agreement, including costs associated with preparation of the grant application, will not be reimbursed.

2. Administrative and National Policy Requirements

Assurances: There are numerous assurances that grant recipients must sign and honor when Federal funds are awarded. All communities receiving a grant will be required to accept and meet the obligations created by these assurances when they execute their grant agreements. Copies of assurances are available online at http://www.dot.gov/policy/aviation-policy/small-community-rural-air-service/SCASDP, (click on “SCASDP Grant Assurances”).

In connection with any program or activity conducted with or benefiting from funds awarded under this notice, recipients of funds must comply with all applicable requirements of Federal law, including, without limitation, the Constitution of the United States; statutory, regulatory, and public policy requirements, including without limitation, those protecting free speech, religious liberty, public welfare, the environment, and prohibiting discrimination; the conditions of performance, non-discrimination requirements, and other assurances made applicable to the award of funds in accordance with regulations of the Department of Transportation; and applicable Federal financial assistance and contracting principles promulgated by the Office of Management and Budget. In complying with these requirements, recipients, in particular, must ensure that no concession agreements are denied or other contracting decisions made on the basis of speech or other activities protected by the First Amendment. If the Department determines that a recipient has failed to comply with applicable Federal requirements, the Department may terminate the award of funds and disallow previously incurred costs, requiring the recipient to reimburse any expended award funds.

Payments: The Small Community Program is a reimbursable program; therefore, communities are required to make expenditures for project implementation under the program prior to seeking reimbursement from the Department. Eligible project implementation costs are reimbursable from grant funds only for services or property delivered during the grant term.[footnoteRef:17] [17: In addition, communities should be aware that the Department will not reimburse a community for any advance, up-front payments or financial guarantees made to an air carrier or other party (for example, reimbursement will not be made for a lump-sum payment made to an air carrier on the date of an inaugural flight, when the payment exceeds the cost basis of that flight). The Department will only reimburse for services actually provided; for an air carrier, that would be under a per-flight or per-operating hour post-flight accounting. ]

Expenditures incurred by third parties are not directly reimbursable to such third parties under this program. The legal sponsor must have paid all costs associated with eligible invoices, including costs incurred by third parties, prior to seeking reimbursement from the Department. The sponsor may NOT seek reimbursement from the Department in any case where a third party has paid for such services instead of the sponsor.

Reimbursement rates are calculated as a percentage of the total Federal funds requested divided by the Federal funds plus the local cash contribution (which is not refundable). The percentage is determined by: (SCASDP Grant Amount) ÷ (SCASDP Grant Amount + Local Cash Contribution + State Cash Contribution, if applicable). For example, if a community requests $500,000 in Federal funding and provides $100,000 in local contributions, the reimbursement rate would be 83.33 percent: ((500,000) / (500,000 + 100,000)) = 83.33. Payments/expenditures in forms other than cash (e.g., in-kind) are not reimbursable.

3. Reporting

Unless otherwise noted, each grant recipient must submit semi-annual reports on the progress made during the previous period in implementing its grant project. In addition, each community will be required to submit a final report on its project to the Department, and 10 percent of the grant funds will not be reimbursed to the community until such a final report is received. Additional information on award administration for selected communities will be provided in the grant agreement.