This is how funding for a lot of infrastructure projects around the country works. Federal agencies dole out cash to their state counterparts, who then loan it out (usually with insanely good terms and often 0% interest and principal forgiveness. But fuck college students I guess) to municipalities to bid their infrastructure projects out to local contractors.
There’s also usually strings attached like prevailing wage requirements, and requiring the use of American-made products where possible, so these contracts usually help boost the local economy in general. It varies by area, but prevailing wage can be very fucking high.
It’s good stuff imo. It gets murkier when you start adding “public/private partnerships” and neolib shit like that.