Grant News

By Joseph Phelan, Grants Development Consultant (Broadband, Transportation, & Utilities)

Many grant applications require similar information. A project narrative requires an applicant to share a project description, its location, expected benefits, and what will be viewed as success, among other must-haves. A budget will explain how things that are associated with the grant factor into the grant’s overall performance—any equipment, personnel salaries, and accrued expenses. A detailed timeline is included to ensure that planning has been thoroughly discussed. Then there are administrative requirements, which are where Standard Forms enter the equation. Some federal agencies require additional information to evaluate a grant application proposal. An example of this is a benefit-cost analysis (BCA), which is how USDOT determines many surface transportation projects.

At a high level, a BCA, according to USDOT, “is a systematic process for identifying, quantifying, and comparing expected benefits and costs of an investment, action, or policy.” The BCA measures the benefits and costs of a project against a scenario where the project never happens.

USDOT regularly updates BCA guidance, last doing so in May 2025. Some of the information included in this article is from that guidance. The guidance shares that applicants must follow six steps to create a legitimate BCA.

1. Identify and provide an analysis of the problem that needs to be solved
2. Estimate the cost of the proposed investment
3. Project the expected impacts of the investment
4. Explain the monetization of expected impacts into estimated benefits
5. Convert benefit and cost streams into their present value and calculate the benefit-cost ratio
6. Consider any unquantified benefits, which means outcomes that are either difficult or nearly impossible to assign any monetary value

The same document explains that each applicant will need three specific pieces of information to complete each step, which includes a project scope along with a cost estimate, an understanding of the problem that the project intends to solve, and how the project will address the problem, and monetization factors for any key project impacts, which will allow conversion to dollar-based values.

When applicants consider the benefits portion of a BCA, they are looking for expected outcomes that a project will make a reality. It could be reducing noise pollution in a specific area, improving the response time for any emergency service operation, or saving travel time through a more efficient route. Safety benefits loom large as one of the major benefits of proposed projects. How can this project reduce the likelihood of deaths and injuries? It can be tricky to monetize these project benefits, but the guidance shared by USDOT provides concrete examples.

What the project costs will include, whatever capital expenses are needed to develop and maintain the project over its lifecycle. Information should reflect the total and complete cost of the project that will achieve the benefits described in the BCA. Often, it includes the purchase of land to build a facility, equipment required for the construction of the project, the planning and design of the project, and any necessary technology.

Just like other important attachments to an application, an acceptable BCA must follow the guidelines established by the grant-maker. Normally, a BCA is broken down into two sections. A narrative, which is also referred to as a technical memo, and a spreadsheet, which consists of detailed calculations of the applicant showing their work.

The narrative will describe the benefits and costs associated with the project while also explaining the baseline for the analysis and how the proposed project will alter the baseline.

The spreadsheet will be unlocked and feature the calculations produced to show the work of the analysis.

A BCA allows the funder to understand the necessity of the project. For critical infrastructure projects like bridges or railroad upgrades, the most practical and worthwhile projects must be funded, which is why a BCA exists in the first place.

Example of grants that require a BCA: