Lessons Learned From ARRA: Improved FHWA Oversight Can Enhance States’ Use of Federal-aid Funds
On April 5, 2012, we issued our report on the Federal Highway Administration’s (FHWA) oversight of State DOT American Recovery and Reinvestment Act (ARRA) contract awards. As FHWA’s $27 billion in ARRA funds represents a 67-percent one-time increase to its $40 billion Federal-aid program, we initiated this audit to: (1) examine the level of competition for State DOT awarded ARRA contracts; (2) evaluate FHWA policies and guidance for awarding Federal-aid contracts; and (3) assess FHWA’s oversight of State DOT contracting practices.
Our report identifies opportunities to foster competition and maximize use of Federal-aid funds. Overall, we found that: (1) one-fifth of State DOT ARRA contracts were awarded with one or two bids; (2) FHWA does not require States to use contract award practices that promote increased competition; and (3) FHWA does not have effective controls for monitoring State award policies and procedures. In its response, FHWA concurred with four of our five recommendations and partially concurred with one.