Alaska DOT tells Senate panel federal funding remains steady but project delivery faces inflation, bidding and timing challenges

Department of Transportation and Public Facilities officials told the Senate Transportation Committee on Feb. 11, 2025 that Alaska’s transportation program is heavily federally funded and that a mix of inflation, late federal grant authorizations and a lack of responsive bidders constrained project delivery in federal fiscal year 2024 and is shaping the 2025 delivery plan.

Catherine Keith, deputy commissioner, and Dom Pinon, director of program management and administration, described the department’s funding portfolio, the major federal partners (Federal Transit Administration, Federal Highway Administration, Federal Aviation Administration, Maritime Administration and others), and the difference between formula apportionments and discretionary grants. Keith said the statewide capital portfolio being planned ranges between $1.5 billion and $1.6 billion and that contract awards and contractor payments are affected by project readiness, bid results and timing of federal obligation authority.

Committee members pressed DOT&PF on several specific delivery challenges. The department said 22 projects were awarded in federal fiscal year 2024 but 14 projects intended for 2024 were rebid because either no contractors bid, bids were rejected, or bids came back above estimates; those projects are back on the tentative advertising list. DOT reported contractor payments of about $250 million for work underway, approximately $65 million in awarded contracts with another roughly $30 million in projects in negotiation or bidding, and forecast total contract awards of $935 million for fiscal year 2025. Of that forecast, DOT said $575 million is planned for projects that will be advertised, roughly $189 million is already awarded or out for bid and $170 million is planned under the Construction Manager/General Contractor (CMGC) delivery method (these CMGC amounts are not advertised in the same manner as standard bids).

DOT officials explained that some FAA airport grants were executed late in calendar year 2024, delaying the ability to advertise and construct airport projects in 2024; they said this was a nationwide issue and not limited to Alaska. To address timing risks, DOT said it is discussing options with federal partners and the congressional delegation, including the possibility of the state accepting short-term risk to advertise and award before a federal grant agreement is fully executed, with the intent to swap in federal funds once obligations are authorized. The department said that approach would carry state risk and requires concurrence from federal agencies.

Other points DOT officials made to committee members:

- Several federal fund types are prescriptive and subdivided into many sub‑allocations, which can limit the state’s ability to match a ready project to a specific fund pot and therefore limit obligation of authority (DOT said there are about 60 sub‑fund types in surface transportation alone).

- The department has received August redistribution authority (additional obligation limitation) and reported an August redistribution amount of about $126 million available to obligate, but DOT emphasized the distinction between the underlying dollars (which carry forward) and the obligation authority that is issued periodically and must be used to tie specific projects to federal agreements.

- The National Electric Vehicle Infrastructure (NEVI) program guidance has been paused pending further federal instructions; DOT said it is continuing preconstruction work on NEVI‑related projects but that construction carried out before final federal guidance would be at the state’s risk for reimbursement.

- Since the Bipartisan Infrastructure Law, DOT said it has applied for 106 competitive grant opportunities and secured 38 awards, bringing roughly $910 million in discretionary grant funding to Alaska; 15 grant applications remain pending for roughly $350 million. DOT gave examples of discretionary awards, including port infrastructure grants passed through from local recipients and a $25 million RAISE-type award to support rehabilitation of the Alaska Highway in coordination with Yukon (the department said limited work in Canada is done under an intergovernmental agreement so federal funds can support corridor maintenance).

- The department has begun a project management office (PMO) using agile project management techniques to improve preconstruction efficiency and reduce preconstruction cost as a share of total project cost; the PMO is led by a recently hired director, reports to the deputy commissioner or commissioner, currently has three dedicated staff and will expand by consolidating related positions across divisions.

Committee requests and DOT commitments recorded in the hearing included: a historical quarterly lookback on bids and awards over the last 10 years, a list of projects currently in the STIP and the forecast list of projects for 2025, specific advertising dates for the 14 rebid projects from FY24, and timely publication of STIP Amendment No. 2 (DOT said it expected the amendment to go out for public comment within days). DOT also agreed to provide follow‑up figures requested by senators, including further breakdowns of awarded and paid contract amounts and the status of discretionary grant agreements.

The committee will continue discussion of project delivery, contracting and obligations at its next meeting on Thursday.