The efficient utilization of network resources is a fundamental property that is best exploited through multi-layer networks. The Optical Transport Network (OTN) over Dense Wavelength Division Multiplexing (DWDM) is based on the multi-layer concept. These networks, while combining the grooming capabilities offered by the OTN switches with the optical bypass inherent to the Reconfigurable Optical Add-Drop Multiplexers (ROADMs) have the potential to reduce the required network resources and achieve cost efficient designs. Furthermore, an additional degree of flexibility can be added by using flexible-grid solutions for the DWDM layer. In order to explore the full potential of these networks it is import to apply adequate algorithms to design them in an efficient way. With this aim, we propose in this paper a novel heuristic algorithm to solve the routing and grooming problem in the context of OTN/ flexible-grid DWDM networks. The algorithm is based on the concept of an auxiliary graph and operates iteratively, first obtaining an approximated solution and then successively improving it. This algorithm is applied to multiple network scenarios regarding topology, traffic distribution and available transmission formats, in order to quantify the efficiency benefits of deploying flexible-grid formats.