Audit Reports

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Lessons Learned From ARRA: Improved FHWA Oversight Can Enhance States’ Use of Federal-aid Funds

Project ID: 

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.




Closed on 11.13.2015
No. 1 to FHWA

Complete a nationwide assessment to determine current levels of competition for Federal-aid contracts; evaluate factors affecting competition; identify State DOT contract award practices that may need improvement; and address perceived barriers to State DOT implementation of FHWA, AASHTO, and other best practices for improving competition.

Closed on 02.28.2022
No. 2 to FHWA

Mandate the confidentiality of potential and actual bidders' names and engineer's estimates, as currently recommended in FHWA's competitive bidding and contract award guidance.

Closed on 02.28.2022
No. 3 to FHWA

Implement policies and procedures for ensuring that each State DOT establishes and uses a written, FHWA-approved plan for evaluating competition. These plans should address: assessing bidder interest levels, evaluating and documenting decisions on bids that vary significantly from the engineer's estimate, conducting and documenting bid analysis, identifying and mitigating perceived barriers to increasing competition, and adequately documenting final award decisions.

Closed on 02.28.2022
No. 4 to FHWA

Develop and implement effective performance measures and metrics to assess and trend State DOT contract award practices, document concerns, and share best practices with other State DOTs.

Closed on 06.16.2022
No. 5 to FHWA

Establish standard FHWA Division Office requirements for performing and documenting oversight of State contracting activity, including stewardship agreement requirements for (a) FHWA approval of procurement policies and procedures and (b) FHWA verification that State DOTs have determined a potential winning bidder's status on the Excluded Parties Listing System list prior to contract award.