Highway Infrastructure:

FHWA's Model for Estimating Highway Needs Is Generally Reasonable, Despite Limitations

RCED-00-133: Published: Jun 5, 2000. Publicly Released: Jun 5, 2000.

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Pursuant to a legislative requirement, GAO provided information on how the Federal Highway Administration (FHwA) determines highway investment requirements, focusing on the: (1) methodology the Highway Economic Requirements System (HERS) computer model uses to generate its estimates of the nation's highway investment requirements; (2) strengths and limitations of the model; and (3) usefulness of the HERS estimates for deciding on federal investments in highway infrastructure.

GAO noted that: (1) the HERS computer model estimates investment requirements for the nation's highways by adding together the costs of highway improvements that the model's benefit-cost analyses indicate are warranted; (2) in making its estimates, the model relies on extensive data on highway segments throughout the nation, such as pavement conditions and expected growth in traffic; (3) the model also uses information, such as vehicle operating costs and emissions' obtained from other sources; (4) the HERS model uses the data to: (a) project the future condition and performance of the highway system; (b) assess whether any highway improvements are warranted; and (c) select and implement appropriate improvements; (5) such improvements range from resurfacing a highway to adding lanes and are based on a comparison of the construction costs and the lifetime benefits of the improvement; (6) a major strength of the model is its ability to assess the relative benefits and costs associated with alternative options; (7) the model has limitations, however, in that it: (a) does not completely account for the effect of highway improvements on all other highways and modes of transportation; (b) does not fully account for the uncertainties associated with its methods, data, and assumptions; (c) relies on a computational shortcut to approximate the future lifetime benefits of an improvement; and (d) uses data that vary in quality; (8) HERS estimates can be useful as a general guide for the investment requirements of the nation's highways included in the model, and for assessing relative investment requirements over time; (9) nevertheless, limitations and uncertainties associated with making forecasts prevent the estimates from being a precise forecast of highway investment requirements; (10) FHwA includes the HERS estimates in its current report on the conditions and performance of the nation's highways, bridges, and transit systems; (11) in the report, however, FHwA does not clearly disclose the level of uncertainties in the HERS estimates; (12) furthermore, to derive a total estimate of highway investment requirements, FHwA combines the HERS estimates with estimates for other types of highways and investments that are not based on benefit-cost analyses; and (13) as a result, the report's readers are not likely to be aware of the imprecision of the HERS estimates and the fact that only part of the total highway investment requirements is estimated on the basis of an assessment of the benefits and costs of alternative improvement options.

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 ensure that the HERS model achieves its objectives and that the limits of its estimates and the estimates presented in future conditions and performance reports are disclosed, the Secretary of Transportation should direct the Administrator, FHwA, to establish a timeframe for revising the HERS model in order to account for the expected lifetime benefits that are associated with alternative highway improvement options.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: DOT concurs with this recommendation. FHWA began work in fiscal year 2000, to eliminate the computational shortcut currently used to approximate the future lifetime benefits of an improvement. The Department established a timeframe--September 2001--for completion of work minimizing the effect of the computational shortcut. The contractor will consider using a single, long time period for all benefit cost analyses in the model and making the necessary changes to the model.

    Recommendation: In order to ensure that the HERS model achieves its objectives and that the limits of its estimates and the estimates presented in future conditions and performance reports are disclosed, the Secretary of Transportation should direct the Administrator, FHwA, to clarify, when presenting the HERS estimates, that there are uncertainties associated with the estimates and refer readers to the sensitivity analyses performed on the HERS model that illustrate these uncertainties.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: DOT concurred with this recommendation. The Department of Transportation's January 2003 report on investment requirements, introduced the estimates of investment requirements and their associated sensitivity analyses together, helping a reader to find critical needs forecases and clear information about the uncertainties associated with them.

    Recommendation: In order to ensure that the HERS model achieves its objectives and that the limits of its estimates and the estimates presented in future conditions and performance reports are disclosed, the Secretary of Transportation should direct the Administrator, FHwA, to explain in the report that one portion of the estimate for highway investment requirements is from the HERS model and is based on benefit-cost analyses and that the other portion was calculated using less reliable methods, as well as the percentage that each of these portions constitutes of the overall estimate.

    Agency Affected: Department of Transportation

    Status: Closed - Implemented

    Comments: DOT concurred with this recommendation. In its January 2003 report on highway investment requirements, DOT included an exhibit that identified the source and amount of each component that contributed to the overall estimate of future highway and bridge investment requirements. This alerted readers to the relative rigor of the different components of the estimate.

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