Federal-Aid Highways:

FHWA Needs a Comprehensive Approach to Improving Project Oversight

GAO-05-173: Published: Jan 31, 2005. Publicly Released: Jan 31, 2005.

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The federal-aid highway program provides over $25 billion a year to states for highway and bridge projects, often paying 80 percent of these projects' costs. The federal government provides funding for and oversees this program, while states largely choose and manage the projects. Ensuring that states effectively control the cost and schedule performance of these projects is essential to ensuring that federal funds are used efficiently. We reviewed the Federal Highway Administration's (FHWA) approach to improving its federal-aid highway project oversight efforts since we last reported on it in 2002, including (1) FHWA's oversight-related goals and performance measures, (2) FHWA's oversight improvement activities, (3) challenges FHWA faces in improving project oversight, and (4) best practices for project oversight.

FHWA has made progress in improving its oversight efforts since 2002, but it lacks a comprehensive approach, including goals and measures that guide its activities; workforce plans that support these goals and measures; and data collection and analysis efforts that help identify problems and transfer lessons learned. FHWA's 2004 performance plan established, for the first time, performance goals and outcome measures to limit cost growth and schedule slippage on projects, but these goals and measures have not been effectively implemented because FHWA has not linked its day-to-day activities or the expectations set for its staff to them, nor is FHWA fully using them to identify problems and target its oversight. FHWA undertook activities in response to concerns raised about the adequacy of its oversight efforts that have both promising elements and limitations. For example, while FHWA now assigns a project oversight manager to each major project (generally projects costing $1 billion or more) and identified skills these managers should possess, it has not yet defined the role of these managers or established agencywide performance expectations for them. While FHWA issued guidance to improve cost estimating and began collecting information on cost increases, it still does not have the capability to track and measure cost growth on projects. Finally, although FHWA received direction to develop a more multidisciplinary workforce to conduct oversight, it has not fully incorporated this direction into its recruiting and training efforts. FHWA faces challenges to improving its oversight that are in large part rooted in the structure of the federal-aid highway program and in FHWA's organization and culture. As such, they may be difficult to surmount. For example, because the program does not link funding to states with the accomplishment of performance goals and outcome measures, it may be difficult for FHWA to define the role and purpose of its oversight. Also, FHWA's decentralized organization makes it difficult to achieve a consistent organizational vision. Human capital challenges affecting much of the federal government have affected FHWA, particularly in its need to transform its workforce to meet its evolving oversight mission. FHWA faces an increased oversight workload in the years ahead as the number of major projects grows and if provisions Congress is considering to increase FHWA's responsibilities become law. Questions exist about FHWA's ability to effectively absorb these new responsibilities, overcome underlying challenges, and improve its oversight. We identified selected best practices that could help FHWA develop a framework for a comprehensive approach to project oversight. These include establishing measurable goals to objectively and quantifiably assess progress, making oversight managers accountable for the effective implementation of these goals, providing professional training, and collecting and transferring lessons learned.

Status Legend:

More Info
  • 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: In order to establish a comprehensive approach to project oversight, the Secretary of Transportation should direct the Administrator, FHWA, to improve the use and performance of project oversight managers by centrally defining their role and responsibilities.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: In July 2005, FHWA centrally defined the role, responsibilities, performance objectives, and required skills of major project oversight managers in an agency policy document that it distributed to its division offices.

    Recommendation: In order to establish a comprehensive approach to project oversight, the Secretary of Transportation should direct the Administrator, FHWA, to develop an overall plan for its oversight initiatives that is tied to its goals and measures, along with priorities and time frames, and that includes workforce planning efforts that support these goals and measures.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: FHWA's fiscal year 2009 strategic implementation plan contains an overall plan for its oversight initiatives that includes goals and performance measures, along with strategies and time frames for achieving the goals. In addition, FHWA's longer-term strategic plan includes four goals associated with workforce issues, one of which specifically addresses workforce planning issues. Also, the fiscal year 2009 plan has a workforce goal that the plan calls for meeting by managing the agency's resources strategically to increase flexibility in achieving critical goals.

    Recommendation: In order to establish a comprehensive approach to project oversight, the Secretary of Transportation should direct the Administrator, FHWA, to link FHWA's day-to-day activities and the performance expectations set for its staff to its goals and outcome measures.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: For fiscal year 2009, FHWA linked its day-to-day oversight activities and the performance expectations set for its staff to its oversight goals and outcome measures. We reviewed five FHWA division offices and found that each office's fiscal year 2009 performance plan generally includes activities that support and further the oversight goals and measures articulated in FHWA's 2009 strategic implementation plan. In addition, the plans specify which staff members are expected to carry out each action.

    Recommendation: In order to establish a comprehensive approach to project oversight, the Secretary of Transportation should direct the Administrator, FHWA, to develop the capability to track and measure costs over the life of projects to help identify the extent of and reasons for problems, target resources, and transfer lessons learned.

    Agency Affected: Department of Transportation

    Status: Closed - Not Implemented

    Comments: In its October 2005 "60 Day" letter, DOT stated that it does not intend to implement this recommendation.

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