Transportation Infrastructure: Managing the Costs of Large-Dollar Highway Projects
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Transportation Infrastructure: Managing the Costs of Large-Dollar Highway Projects

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  • English

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    • Abstract:
      The General Accounting Office (GAO) was requested to assess the effectiveness of the Federal Highway Administration's (FHWA's) oversight of the costs of large-dollar highway and bridge projects (those with a total estimated cost of over $100 million). In particular, GAO was asked to (1) determine if large-dollar highway projects experience cost growth, (2) identify how FHWA approves large-dollar highway projects and agrees to their costs, and (3) identify how FHWA ensures that project costs are controlled and that federal funds are efficiently used. Briefly, GAO found the following: Cost growth has occurred on many of the large-dollar highway projects that GAO examined. FHWA's project approval process consists of a series of incremental actions that occur over the period of years required to plan, design, and build a project. FHWA approves the estimated cost of a large-dollar project in segments when those project segments are ready for construction. By the time FHWA approves the cost of a large-dollar project, a public investment decision may have effectively been made because substantial funds will already have been spent on designing the project and acquiring property, and much of the increases in the project's estimated costs will have already occurred. Cost containment is not an explicit statutory or regulatory goal of FHWA's "full" oversight. As such, FHWA has done little to ensure cost containment is an integral part of the states' project management. FHWA influences the cost-effectiveness of projects by its review and approval of design and construction plans and through daily interaction with state departments of transportation.
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