Congress has allocated over $305 billion for surface transportation for fiscal years 2016 through 2020, a substantial portion of which is used for highway construction. Current law advocates for the use of cost reduction practices in project delivery. Federal law also generally requires States to award contracts for Federal-aid highway projects through competitive bidding, which can reduce costs incurred in procurement contracts. Nonetheless, concerns about anticompetitive practices in highway procurements have existed for decades.
Because of the importance of competition in highway procurement and the low number of studies that have attempted to assess it, we are initiating this audit. Our objective is to inform the Federal Highway Administration’s (FHWA) guidance for preventing and deterring anticompetitive practices. Specifically, we will (1) assess competition in procurement for Federal-aid highway projects using statistical methods, (2) provide estimates of the effects on contract costs when certain anticompetitive practices occur, and (3) identify opportunities to improve FHWA’s guidance.