Transportation:

Comparison of States' Highway Construction Costs

GAO-04-113R: Published: Nov 3, 2003. Publicly Released: Dec 3, 2003.

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We are reporting to Congress on whether Federal Highway Administration (FHWA) data can help transportation stakeholders understand how states' costs to build, reconstruct, and maintain federally financed highways, roads, and bridges (termed "constructing highways" for this report) compare. Durig our review, we became aware of significant issues regarding the quality of the data that FHWA collects and reports, a topic also discussed in this report.

FHWA's database allows for comparisons of an individual state's costs over time but does not allow for comparisons between states. In addition, FHWA has concerns, which have not been formally disclosed to users, about the quality of the data. FHWA's database containing its bid price data allows for comparisons of an individual state's costs over time but does not allow for comparisons between states. Costs are tracked by state, according to an index value that is assigned quarterly. Each state received an index value of 100 for the base year (1987). If one state's costs in the base year were twice those of another state, both would have an index value of 100 for that year, and the difference in those costs would not be shown, thus preventing a comparison. In addition, FHWA officials told us that the bid price data do not contain details to determine why costs appear to differ either between states or within a state. They told us that the installed cost of materials could vary significantly, for example, because the quality of the materials or the installation specification (e.g., smoothness of the surface) could be very different. FHWA's bid price data do not contain this information. FHWA is considering whether to discontinue collecting bid price data because of the (1) apparent limited use of the data, and (2) level of effort to collect data that apparently is not extensively used. In commenting on a draft of this report, FHWA noted that it hired a consultant to evaluate the usefulness of the data to stakeholders and to explore potential alternative approaches to gathering information that could be used within FHWA. FHWA also commented that it recently partnered with the American Association of State Highway Transportation Officials to survey all state departments of transportation on the extent of use of the published price trend data and alternative ways that FHWA could gather these data (such as using data that are being collected by states for their internal use). We contacted 12 states, the Bureau of Transportation Statistics, and several industry associations about the usefulness of the bid price data. Generally, they told us they do not use the data. For example, a few states told us that they maintain more complete data, and FHWA's data are not compatible with their own. FHWA estimated that it takes states, in total, about 975 hours annually to report the bid price data (based on reporting by 37 states), or an average of about 6.5 hours per state per quarterly report.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: While FHWA continues to collect and disseminate bid price data, the Secretary of Transportation should direct the Federal Highway Administrator follow departmental guidelines for systematic quality control procedures, such as standard error-checking routines and keypunching verification, to improve the accuracy of the data reported.

    Agency Affected: Department of Transportation

    Status: Closed - Not Implemented

    Comments: In April 2007, after determining that few states relied upon its bid price data and that the quality of the data was below the Department of Transportation's standards, FHWA discontinued collecting the data. Therefore, this recommendation is no longer relevant.

    Recommendation: The Secretary of Transportation should direct the Federal Highway Administrator to determine whether it would be useful and feasible to collect and disseminate other state construction cost data that could supplement or supplant FHWA's bid price data.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: FHWA determined that it would be useful to the agency and to the Bureau of Labor Statistics for FHWA to develop and disseminate a new bid price index based on proprietary data captured from states' web-postings of bids submitted on highway construction contracts. As of July 2007, FHWA was evaluating proposals from contractors to develop the index. FHWA plans to begin disseminating the index in 2008.

    Recommendation: In order to determine whether continued federal and state efforts to provide and analyze state construction cost data are warranted, the Secretary of Transportation should direct the Federal Highway Administrator to determine whether the bid price data collected by FHWA is useful to transportation stakeholders and, if not, to discontinue collecting the data.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: Status of 6/18/2007: In April 2007, after determining that few states relied upon its bid price data and that the quality of the data was below the Department of Transportation's standards, FHWA discontinued collecting the data.

    Recommendation: Finally, until the quality of the bid price data is improved, the Secretary of Transportation should direct the Federal Highway Administrator to disclose its limitations in any published distribution of the data.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: FHWA has reinforced and augmented previous disclosure statements through providing additional information on how data are collected and used in developing the quarterly report. These actions are responsive to the problems we found with incomplete and inconsistent reporting of data and limited quality control. The price trends report can be found at www.fhwa.dot.gov/progamadmin/pricetrends.htm.

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