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Improvement and innovation based on highway research have long been important to the highway system. The Federal Highway Administration (FHWA) is the primary federal agency involved in highway research. Throughout the past decade, FHWA received hundreds of millions of dollars for its surface transportation research program, including nearly half of the Department of Transportation's approximate $1 billion budget for research in fiscal year 2002. Given the expectations of highway research and the level of resources dedicated to it, it is important to know that FHWA is conducting high quality research that is relevant and useful. In May 2002, GAO issued a report on these issues and made recommendations to FHWA, which the agency agreed with, aimed at improving its processes for setting research agendas and evaluating its research efforts. GAO was asked to testify on (1) best practices for developing research agendas and evaluating research outcomes for federal research programs; (2) how FHWA's processes for developing research agendas align with these best practices; and (3) how FHWA's processes for evaluating research outcomes align with these best practices.

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