Federal-Aid Highways
Cost and Oversight of Major Highway and Bridge Projects--Issues and Options Gao ID: GAO-03-764T May 8, 2003Improving the oversight and controlling the costs of major highway and bridge projects is important for the federal government, which often pays 80 percent of these projects' costs. Widespread consensus exists on the need to fund such projects, given the doubling of freight traffic and worsening congestion projected over the next 20 years, yet growing competition for limited federal and state funding dictates that major projects be managed efficiently and cost effectively. The Federal Highway Administration (FHWA) provides funding to the states for highway and bridge projects through the federal-aid highway program. This funding is apportioned to the states, and state departments of transportation choose eligible projects for funding. FHWA provides oversight to varying degrees, and, under the Transportation Equity Act for the 21st Century (TEA-21), FHWA and each state enter into an agreement documenting the types of projects the state will oversee. This statement for the record summarizes cost and oversight issues raised in reports and testimonies GAO has issued since 1995 on major highway and bridge projects and describes options that GAO has identified to enhance federal oversight of these projects, should Congress determine that such action is needed and appropriate.
GAO and others have reported that cost growth has occurred on major highway and bridge projects; however, overall information on the amount of and reasons for cost increases is generally not available because neither FHWA nor state highway departments track this information for entire projects. GAO has found that costs grow, in part, because initial cost estimates, which are generally developed to compare project alternatives during a required environmental review phase, are not reliable predictors of projects' total costs. In addition, FHWA approves the estimated costs of major projects in phases, rather than agreeing to the total costs at the outset. By the time FHWA approves the total cost of a major project, a public investment decision might, in effect, already have been made because substantial funds could already have been spent on designing the project and acquiring property. FHWA's implementation of a TEA-21 requirement that states develop annual finance plans for major projects estimated to cost $1 billion or more has improved the oversight of some major projects, and FHWA is incorporating more risk assessment in its day-to-day oversight activities. Should Congress determine that enhancing federal oversight of major highway and bridge projects is needed and appropriate, GAO has identified options, including improving information on the cost performance of selected major projects, improving the quality of initial cost estimates, and enhancing and clarifying FHWA's role in reviewing and approving major projects. Adopting any of these options would require balancing the states' sovereign right to select projects and desire for flexibility and more autonomy with the federal government's interest in ensuring that billions of federal dollars are spent efficiently and effectively. In addition, the additional costs of each of these options would need to be weighed against its potential benefits.
GAO-03-764T, Federal-Aid Highways: Cost and Oversight of Major Highway and Bridge Projects--Issues and Options
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Testimony
Before the Subcommittee on Transportation, Treasury and Independent
Agencies, Committee on Appropriations, House of Representatives:
United States General Accounting Office:
GAO:
Hearing held on
May 8, 2003
Statement Submitted on
May 8, 2003:
Federal-Aid Highways:
Cost and Oversight of Major Highway and Bridge Projects--Issues and
Options:
Statement for the Record by
JayEtta Z. Hecker, Director,
Physical Infrastructure Issues:
GAO-03-764T:
GAO Highlights:
Highlights of GAO-03-764T, a statement for the record for the
Subcommittee on Transportation, Treasury, and Independent Agencies,
House Committee on Appropriations
Why GAO Did This Study:
Improving the oversight and controlling the costs of major highway and
bridge projects is important for the federal government, which often
pays 80 percent of these projects‘ costs. Widespread consensus exists
on the need to fund such projects, given the doubling of freight
traffic and worsening congestion projected over the next 20 years, yet
growing competition for limited federal and state funding dictates that
major projects be managed efficiently and cost effectively.
The Federal Highway Administration (FHWA) provides funding to the
states for highway and bridge projects through the federal-aid highway
program. This funding is apportioned to the states, and state
departments of transportation choose eligible projects for funding.
FHWA provides oversight to varying degrees, and, under the
Transportation Equity Act for the 21st Century (TEA-21), FHWA and each
state enter into an agreement documenting the types of projects the
state will oversee.
This statement for the record summarizes cost and oversight issues
raised in reports and testimonies GAO has issued since 1995 on major
highway and bridge projects and describes options that GAO has
identified to enhance federal oversight of these projects, should
Congress determine that such action is needed and appropriate.
What GAO Found:
GAO and others have reported that cost growth has occurred on major
highway and bridge projects; however, overall information on the amount
of and reasons for cost increases is generally not available because
neither FHWA nor state highway departments track this information for
entire projects. GAO has found that costs grow, in part, because
initial cost estimates, which are generally developed to compare
project alternatives during a required environmental review phase, are
not reliable predictors of projects‘ total costs. In addition, FHWA
approves the estimated costs of major projects in phases, rather than
agreeing to the total costs at the outset. By the time FHWA approves
the total cost of a major project, a public investment decision might,
in effect, already have been made because substantial funds could
already have been spent on designing the project and acquiring
property. FHWA‘s implementation of a TEA-21 requirement that states
develop annual finance plans for major projects estimated to cost $1
billion or more has improved the oversight of some major projects, and
FHWA is incorporating more risk assessment in its day-to-day oversight
activities.
Should Congress determine that enhancing federal oversight of major
highway and bridge projects is needed and appropriate, GAO has
identified options, including improving information on the cost
performance of selected major projects, improving the quality of
initial cost estimates, and enhancing and clarifying FHWA‘s role in
reviewing and approving major projects. Adopting any of these options
would require balancing the states‘ sovereign right to select projects
and desire for flexibility and more autonomy with the federal
government‘s interest in ensuring that billions of federal dollars are
spent efficiently and effectively. In addition, the additional costs
of each of these options would need to be weighed against its potential
benefits.
www.gao.gov/cgi-bin/getrpt?GAO-03-764T.
To view the full testimony, including the scope
and methodology, click on the link above.
For more information, contact JayEtta Hecker at (202) 512-2834 or
heckerj@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
We appreciate the opportunity to offer this statement for the record
concerning efforts by the Federal Highway Administration (FHWA) to
oversee and control the costs of major highway and bridge projects--80
percent of which are often paid by the federal government.[Footnote 1]
With freight traffic expected to double and congestion projected to
worsen over the next 20 years, widespread consensus exists on the need
to maintain and improve the nation's surface transportation
infrastructure. Given that both the federal government and state
governments are facing budget deficits in the hundreds of billions of
dollars in the coming years, it is even more important that major
highway and bridge projects be managed efficiently and cost
effectively. While effectively managing these projects involves many
factors other than cost--including safety, quality, mobility, and
environmental impact--cost increases on major projects often take
center stage, especially in light of the growing competition for
federal dollars.
My statement today is based on a body of work we have performed and
products we have issued since 1995 on the costs and oversight of major
highway and bridge projects. (See the list of related GAO products at
the end of this statement.) Today's statement (1) summarizes these cost
and oversight issues, (2) discusses FHWA's recent efforts to improve
the management and oversight of these projects, and (3) describes
options we have identified that might enhance federal oversight of
these projects, should Congress determine that such action is needed
and appropriate.
In summary:
* We have reported--as has the Department of Transportation's (DOT)
Inspector General and various state audit and evaluation agencies--that
cost growth has occurred on many major highway and bridge projects.
However, overall information on the amount of and reasons for cost
increases on major projects is generally not available because neither
FHWA nor state highway departments track this information over the life
of projects. While many factors can cause costs to increase, we have
found, on projects we have reviewed, that costs increased, in part,
because initial cost estimates were not reliable predictors of the
total costs or financing needs of projects. Rather, these estimates
were generally developed for the environmental review--whose purpose
was to compare project alternatives, not to develop reliable cost
estimates. In addition, we reported in 1997[Footnote 2] that FHWA had
done little to ensure that containing costs was an integral part of the
states' project management, in part because FHWA believed it had no
mandate to either encourage or require states to adopt such practices.
Finally, we have noted that FHWA generally approves the estimated cost
of a major project in phases, when individual project segments are
ready for construction, rather than agreeing to the total cost of the
entire project at the outset. By the time FHWA approves the total cost
of a major project, a public investment decision might, in effect,
already have been made because substantial funds would already have
been spent on designing the project and acquiring property, and many of
the increases in the project's estimated costs might already have
occurred.
:
* Since 1998, FHWA has taken a number of steps to improve the
management and oversight of major projects, including implementing a
requirement of the Transportation Equity Act for the 21st Century (TEA-
21) that states develop, and that the Secretary approve, annual finance
plans for any highway or bridge project estimated to cost $1 billion or
more. As of May 2003, FHWA had approved finance plans for 10 federal-
aid highway projects and expected finance plans to be prepared 5
additional projects in the future.[Footnote 3] As I testified in May
2002,[Footnote 4] while indications are that the finance plan
requirement has improved the oversight of some major projects, many
multibillion-dollar corridor projects representing a substantial
investment of federal funds will not be covered by the requirement
because the projects will be constructed as a series of smaller
projects that will cost less than $1 billion each. Other steps FHWA has
taken to improve its oversight include introducing greater risk-based
oversight into its day-to-day activities and attempting to resolve
conflicting interpretations of its oversight role that it believes have
occurred since 1991, when the states began assuming greater
responsibility for approving the design and construction of many
projects. Finally, FHWA has taken actions to respond to a DOT task
force report on the management and oversight of major transportation
projects,[Footnote 5] such as developing and publishing core
competencies for managers overseeing major projects. However, FHWA has
not yet developed goals or measurable outcomes linking its oversight
activities to its business goals in its performance plan, as an FHWA
task force recommended in 2001. As I testified in May 2002, until FHWA
takes these actions, it will be limited in its ability to judge the
success of its efforts or to know whether conflicting interpretations
of the agency's roles have been resolved.
:
* Our past work, including my testimony of May 2002, presented options
for enhancing FHWA's role in overseeing the costs of major highway and
bridge projects, should Congress, in reauthorizing TEA-21, determine
that such action is needed and appropriate. These options include
improving information on the cost performance of selected major highway
and bridge projects, improving the quality of initial cost estimates,
and enhancing and clarifying FHWA's role in reviewing and approving
major projects. Each of these options entails a commitment of
additional resources and poses costs and challenges that must be
weighed against the option's potential benefits. Adopting one or more
of these options would require Congress to determine the appropriate
federal role--balancing the state's sovereign right to select its
projects and desire for flexibility and more autonomy with the federal
government's interest in ensuring that billions of federal dollars are
spent efficiently and effectively.
:
Background:
FHWA provides funding to the states for roadway construction and
improvement projects through various programs collectively known as the
federal-aid highway program.[Footnote 6] Most highway program funds are
distributed to the states through annual apportionments according to
statutory formulas; once apportioned, these funds are generally
available to each state for eligible projects. The responsibility for
choosing projects to fund generally rests with state departments of
transportation and local planning organizations. The states have
considerable discretion in selecting specific highway projects and in
determining how to allocate available federal funds among the various
projects they have selected. For example, section 145 of title 23 of
the United States Code describes the federal-aid highway program as a
federally assisted state program and provides that the federal
authorization of funds, as well as the availability of federal funds
for expenditure, "shall in no way infringe on the sovereign right of
the states to determine which projects shall be federally financed.":
While FHWA approves state transportation plans, environmental impact
assessments, and the acquisition of property for highway projects, its
role in approving the design and construction of projects varies.
Relatively few projects are subject to "full" oversight, in which FHWA
prescribes design and construction standards, approves design plans and
estimates, approves contract awards, inspects construction progress,
and renders final acceptance on projects when they are completed. Under
TEA-21, FHWA exercises full oversight only of certain high-cost
Interstate system projects.[Footnote 7] For other federally assisted
projects, there are two options. First, for a project that is not
located on the Interstate system but is part of the National Highway
System,[Footnote 8] a state may assume responsibility for overseeing
the project's design and construction unless the state or FHWA
determines that this responsibility is not appropriate for the state.
Second, for a project that is not part of the National Highway System,
the state is required to assume responsibility for overseeing the
project's design and construction unless the state determines that this
responsibility is not appropriate for it. Under both options, TEA-21
requires FHWA and each state to enter into an agreement documenting the
types of projects for which the state will assume oversight
responsibilities.
A major highway or bridge construction or repair project usually has
four stages: (1) planning, (2) environmental review, (3) design and
property acquisition, and (4) construction. The state's activities and
FHWA's corresponding approval actions are shown in figure 1.
Figure 1: Stages of a Highway or Bridge Project:
[See PDF for image]
Source: GAO.
[End of figure]
In TEA-21, Congress required states to submit annual finance plans to
DOT for highway and bridge projects estimated to cost $1 billion or
more. Congress further required each finance plan to be based on
detailed estimates of the costs to complete the project and on
reasonable assumptions about future increases in such costs.
Issues Identified with the Costs and Oversight of Major Highway and
Bridge Projects:
Our work has raised issues concerning the cost and oversight of major
highway and bridge projects, including the following:
* Cost growth has occurred on many major highway and bridge projects.
For example, on 23 of 30 projects initially expected to cost over $100
million, our 1997 report identified increases ranging from 2 to 211
percent--costs on about half these projects increased 25 percent or
more.[Footnote 9] In addition, the DOT Inspector General has recently
identified cost increases on major projects such as the Wilson Bridge,
Springfield Interchange, and Central Artery/Tunnel projects. As I
testified in 2002, reviews by state audit and evaluation agencies have
also highlighted concerns about the cost and management of major
highway and bridge programs.[Footnote 10] For example in January 2001,
Virginia's Joint Legislative Audit and Review Commission found that
final project costs on Virginia Department of Transportation projects
were well above their cost estimates and estimated that the state's 6-
year, $9 billion transportation development plan understated the costs
of projects by up to $3.5 billion. The commission attributed these
problems to several factors, including not adjusting estimates for
inflation, expanding the scope of projects, not consistently including
amounts for contingencies, and committing design errors.[Footnote 11]
:
* Although cost growth has occurred on many major highway and bridge
projects, overall information on the amount of and reasons for cost
increases on major projects is generally not available because neither
FHWA nor state highway departments track this information over the life
of projects. Congressional efforts to obtain such information have met
with limited success. For example, in 2000 the former Chairman of this
subcommittee asked FHWA to provide information on how many major
federal-aid highway projects had experienced large cost overruns.
Because FHWA lacked a management information system to track this
information, officials manually reviewed records for over 1,500
projects authorized over a 4-year period.[Footnote 12] FHWA's
information, however, measured only the increases in costs that
occurred after the projects were fully designed. Thus, cost increases
that occurred during the design of a project--where we have reported
that much of the cost growth occurs--were not reflected in FHWA's data.
In contrast to the federal-aid highway program, the Office of
Management and Budget requires federal agencies, for acquisitions of
major capital assets, to prepare baseline cost and schedule estimates
and to track and report the acquisitions' cost performance. These
requirements apply to programs managed by and acquisitions made by
federal agencies, but they do not apply to the federal-aid highway
program, a federally assisted state program.
:
* While many factors can cause costs to increase, we have found, on
projects we have reviewed, that costs increased, in part, because
initial cost estimates were not reliable predictors of the total costs
or financing needs of projects. Rather, these estimates were generally
developed for the environmental review--whose purpose was to compare
project alternatives, not to develop reliable cost estimates. In
addition, each state used its own methods to develop its estimates, and
the estimates included different types of costs, since FHWA had no
standard requirements for preparing cost estimates. For example, one
state we visited for our 1997 report included the costs of designing
projects in its estimates, while two other states did not.[Footnote 13]
We also found that costs increased on projects in the states we visited
because (1) initial estimates were modified to reflect more detailed
plans and specifications as projects were designed and (2) the
projects' costs were affected by, among other things, inflation and
changes in scope to accommodate economic development over time.
:
* In 1997, we reported that cost containment was not an explicit
statutory or regulatory goal of FHWA's full oversight. On projects
where FHWA exercised full oversight, it focused primarily on helping to
ensure that the applicable safety and quality standards for the design
and construction of highway projects were met. According to FHWA
officials, controlling costs was not a goal of their oversight and FHWA
had no mandate in law to encourage or require practices to contain the
costs of major highway projects. While FHWA influenced the cost-
effectiveness of projects when it reviewed and approved plans for their
design and construction, we found it had done little to ensure that
cost containment was an integral part of the states' project
management.
:
* Finally, we have noted that FHWA's oversight and project approval
process consists of a series of incremental actions that occur over the
years required to plan, design, and build a project. In many instances,
states construct a major project as a series of smaller projects, and
FHWA approves the estimated cost of each smaller project when it is
ready for construction, rather than agreeing to the total cost of the
major project at the outset. In some instances, by the time FHWA
approves the cost of a major project, a public investment decision may,
in effect, already have been made because substantial funds have
already been spent on designing the project and acquiring property, and
many of the increases in the project's estimated costs have already
occurred.
:
Efforts by FHWA to Improve the Management and Oversight of Major
Projects:
Since 1998, FHWA has taken a number of steps to improve the management
and oversight of major projects. FHWA implemented TEA-21's requirement
that states develop an annual finance plan for any highway or bridge
project estimated to cost $1 billion or more. Specifically, FHWA
developed guidance that requires state finance plans to include a total
cost estimate for the project, adjusted for inflation and annually
updated; estimates about future cost increases; a schedule for
completing the project; a description of construction financing sources
and revenues; a cash flow analysis; and a discussion of other factors,
such as how the project will affect the rest of the state's highway
program. As of May 2003, FHWA had approved finance plans for 10
federal-aid highway projects and expected finance plans to be prepared
for 5 additional projects at the conclusion of those projects'
environmental review phase.[Footnote 14] In addition, FHWA established
a major projects team that currently tracks and reports each month on
these 15 projects, and has assigned--or has requested funding to
assign--a full-time manager to each project to provide oversight. These
oversight managers are expected to monitor their project's cost and
schedule, meet periodically with project officials, assist in resolving
issues and problems, and help to bring "lessons learned" on their
projects to other federally assisted highway projects.
As I testified in 2002,[Footnote 15] there are indications that the
finance plan requirement has produced positive results. For example, in
Massachusetts, projections of funding shortfalls identified in
developing the Central Artery/Tunnel project's finance plan helped
motivate state officials to identify new sources of state financing and
implement measures to ensure that funding was adequate to meet expenses
for the project. However, some major corridor projects will not be
covered by the requirement. FHWA has identified 22 corridor projects
that will be built in "usable segments"--separate projects costing less
than $1 billion each--and therefore will not require finance plans.
According to FHWA officials, states plan these long-term projects in
segments because it is very difficult for them to financially plan for
projects extending many years into the future. Nevertheless, these
major projects represent a large investment in highway infrastructure.
For example, planned corridor projects that will not require finance
plans total almost $5 billion in Arkansas, about $12.3 billion in
Texas, about $5.3 billion in Virginia, and about $4.2 billion in West
Virginia. In addition, the $1 billion threshold does not consider the
impact of a major highway and bridge project on a state's highway
program. In Vermont, for instance, a $300 million project would
represent a larger portion of the state's federal highway program
funding than a $1 billion dollar project would represent in California.
In addition to implementing TEA-21's requirements, FHWA convened a task
force on the stewardship and oversight of federal-aid highway projects
and, in June 2001, issued a policy memorandum to improve its oversight.
The memorandum directed FHWA's field offices to conduct risk
assessments within their states to identify areas of weakness, set
priorities for improvement, and work with the states to meet those
priorities. Soon afterwards, FHWA convened a review team to examine its
field offices' activities, and in March 2003, it published an internal
"best practices" guide to assist the field offices in conducting risk
assessments. FHWA also began an effort during 2003 to identify
strategies for assessing and managing risks and for allocating
resources agencywide.
FHWA's policy memorandum further sought to address the task force's
conclusion that changes in the agency's oversight role since 1991 had
resulted in conflicting interpretations of the agency's role in
overseeing projects. The task force found that because many projects
were classified as "exempt" from FHWA's oversight, some of the field
offices were taking a "hands off" approach to these projects. The
policy stipulates that while states have responsibility for the design
and construction of many projects, FHWA is ultimately accountable for
the efficient and effective management of all projects financed with
federal funds and for ensuring compliance with applicable laws,
regulations, and policies.
While FHWA has been moving forward to incorporate risk-based management
into its oversight through the use of risk assessments, it has not yet
developed goals or measurable outcomes linking its oversight activities
to the business goals in its performance plan, nor has it developed a
monitoring plan as its task force recommended in 2001. As I testified
in May 2002,[Footnote 16] until FHWA takes these actions, it will be
limited in its ability to judge the success of its efforts or to know
whether the conflicting interpretations of its roles discussed above
have been resolved.
Finally, FHWA has taken actions to respond to a DOT task force report
on the management and oversight of major projects. In December 2000,
this task force concluded that a significant effort was needed to
improve the oversight of major transportation projects--including
highway and bridge projects. The task force made 24 recommendations,
including recommendations to establish an executive council to oversee
major projects, institute regular reporting requirements, and establish
a professional cadre of project managers with required core
competencies, training, and credentials. The task force's
recommendations were not formally implemented for several reasons,
including turnover in key positions and the need to reevaluate policy
following the change in administrations in January 2001, and higher
priorities brought on by the events of September 11, 2001. However,
FHWA believes it has been responsive to the task force's
recommendations by establishing a major projects oversight team,
designating an oversight manager for each project, and, most recently,
developing and publishing core competencies for managers overseeing
major projects.
In addition, 7 of the task force's 24 recommendations would have
required legislation. For example, the task force recommended
establishing a separate funding category for preliminary engineering
and design--those activities that generally accomplish the first 20 to
35 percent of a project's design. The task force concluded that a
separate funding category would allow a new decision point to be
established. Initial design work could proceed far enough so that a
higher-quality, more reliable cost estimate would be available for
decisionmakers to consider before deciding whether to complete the
design and construction of a major project--and before a substantial
federal investment had already been made.
Options to Enhance Federal Oversight of Major Projects:
In my testimony of May 2002, I presented options for enhancing FHWA's
role in overseeing the costs of major highway and bridge projects,
should Congress, in reauthorizing TEA-21, determine that such action is
needed and appropriate. Each of these options would be difficult and
possibly costly; each represents a commitment of additional resources
that must be weighed against the option's potential benefits. Adopting
any of these options would require Congress to determine the
appropriate federal role--balancing the states' sovereign right to
select its projects and desire for flexibility and more autonomy with
the federal government's interest in ensuring that billions of federal
dollars are spent efficiently and effectively. These options include
the following:
* Have FHWA develop and maintain a management information system on the
cost performance of selected major highway and bridge projects,
including changes in estimated costs over time and the reasons for such
changes. While Congress has expressed concern about cost growth on
major projects, it has had little success obtaining timely, complete,
and accurate information about the extent of and the reasons for this
cost growth on projects. Such information could help define the scope
of the problem with major projects and provide insights needed to
fashion appropriate solutions.
:
* Improve the quality of initial cost estimates by having states
develop--and having FHWA assist the states in developing--more uniform
and reliable total cost estimates at an appropriate time early in the
development of major projects. This option could help policymakers
understand the extent of the proposed federal, state, and local
investment in these projects, serve as a baseline for measuring cost
performance over time, and assist program managers in reliably
estimating financing requirements.
:
* Have states track the progress of projects against their initial
baseline cost estimates. Expanding the federal government's practice of
having its own agencies track the progress of the acquisition of major
capital assets against baseline estimates to the federally assisted
highway program could enhance accountability and potentially improve
the management of major projects by providing managers with real-time
information for identifying problems early, and for making decisions
about project changes that could:
affect costs. Tracking progress could also help identify common
problems and provide a better basis for estimating costs in the future.
:
* Establish performance goals for containing costs and implement
strategies for doing so as projects move through their design and
construction phases. Such performance goals could provide financial or
other incentives to the states for meeting agreed-upon goals.
Performance provisions such as these have been established in other
federally assisted grant programs and have also been proposed for use
in the federal-aid highway program. Requiring or encouraging the use of
goals and strategies could also improve accountability and make cost
containment an integral part of how states manage projects over time.
:
* Expand FHWA's finance plan requirement to other projects. While
Congress has decided that enhanced federal oversight of the costs and
funding of projects estimated to cost over $1 billion is important,
projects of importance for reasons other than cost may not, as
discussed earlier, receive such oversight. Should Congress believe such
an action would be beneficial, additional criteria for defining
projects would need to be incorporated into FHWA's structure for
overseeing the costs and financing of major projects.
:
* Clarify FHWA's role in overseeing and reviewing the costs and
management of major projects. Changes in FHWA's oversight role since
1991 have created conflicting interpretations about FHWA's role, and
our work has found that FHWA questions its authority to encourage or
require practices to contain the costs of major highway projects.
Should uncertainties about FHWA's role and authority continue, another
option would be to resolve the uncertainties through reauthorization
language.
:
* Establish a process for the federal approval of major projects. This
option, which would require federal approval of a major project at the
outset, including its cost estimate and finance plan, would be the most
far-reaching and the most difficult option to implement. Potential
models for such a process include the full funding grant agreement
process that the Federal Transit Administration uses for major transit
projects, and the DOT task force's December 2000 recommendation calling
for the establishment of a separate funding category for initial design
work and a new decision point for advancing projects. Establishing such
a federal approval process could have the potential to improve the
reliability of the initial baseline estimates and the cost performance
of major projects over time.
:
Contacts:
For further information on this statement, please contact JayEtta Z.
Hecker (heckerj@gao.gov) or Steve Cohen (cohens@gao.gov).
Alternatively, they may be reached at (202) 512-2834.
[End of section]
Related GAO Products:
Transportation Infrastructure: Cost and Oversight Issues on Major
Highway and Bridge Projects. GAO-02-702T. Washington, D.C.: May 1,
2002.
Surface Infrastructure: Costs, Financing, and Schedules for Large-
Dollar Transportation Projects. GAO/RCED-98-64. Washington, D.C.:
February 12, 1998.
DOT's Budget: Management and Performance Issues Facing the Department
in Fiscal Year 1999. GAO/T-RCED/AIMD-98-76. Washington, D.C.: February
12, 1998.
Transportation Infrastructure: Managing the Costs of Large-Dollar
Highway Projects. GAO/RCED-97-27. Washington, D.C.: February 27, 1997.
Transportation Infrastructure: Progress on and Challenges to Central
Artery/Tunnel Project's Costs and Financing. GAO/RCED-97-170.
Washington, D.C.: July 17, 1997.
Transportation Infrastructure: Central Artery/Tunnel Project Faces
Financial Uncertainties. GAO/RCED-96-1313. Washington, D.C.: May 10,
1996.
Central Artery/Tunnel Project. GAO/RCED-95-213R. Washington, D.C.:
June 2, 1995.
FOOTNOTES
[1] There is currently no standard definition of what constitutes a
"major" project. The definition has been applied to projects ranging
from those with a total cost of as little as $10 million to those
estimated to cost $1 billion or more.
[2] Transportation Infrastructure: Managing the Costs of Large-Dollar
Highway Projects (GAO/RCED-97-47, Feb. 27, 1997).
[3] FHWA also requires finance plans for projects that funded under the
Transportation Infrastructure Finance and Innovation Act. Currently, 3
additional projects funded under the act have approved finance plans.
[4] U.S. General Accounting Office, Transportation Infrastructure: Cost
and Oversight Issues on Major Highway and Bridge Projects, GAO-02-702T
(Washington, D.C.: May 1, 2002).
[5] Report of the ONE DOT Task Force on Oversight of Large
Transportation Infrastructure Projects; December 2000
[6] Most of the funding for these programs is derived from highway user
taxes, such as excise taxes on motor fuels, tires, and the sale of
trucks and trailers, and taxes on the use of heavy vehicles.
[7] States may assume responsibilities for other types of Interstate
system projects, including projects to resurface, restore, and
rehabilitate Interstate roadways, and those Interstate construction or
reconstruction projects estimated to cost less than $1 million.
[8] Designated in 1995, the 160,000-mile National Highway System
consists of the Interstate Highway System and other principal arterial
routes that serve major population centers, international border
crossings, national defense requirements, and interstate and
interregional travel needs. Other highways and roads make up the
remaining 4 million miles of roads in the United States.
[9] GAO/RCED-97-47
[10] GAO-02-702T.
[11] Joint Legislature Audit and Review Commission of the Virginia
General Assembly, Review of Construction Costs and Time Schedules for
Virginia Highway Projects, House Document No. 31 (Richmond: Jan. 9,
2001).
[12] For the purposes of this analysis, FHWA identified major projects
as those that were expected to cost $10 million or more to construct
and had experienced cost increases of 25 percent or more. FHWA
identified 80 such major projects, 12 of which were part of the Central
Artery/Tunnel project in Massachusetts.
[13] GAO/RCED-97-47.
[14] FHWA also requires finance plans for projects that funded under
the Transportation Infrastructure Finance and Innovation Act.
Currently, 3 additional projects funded under the act have approved
finance plans.
[15] GAO-02-702T.
[16] GAO-02-702T.
