oversight

Transportation Infrastructure: FHWA Should Assess and Compare the Benefits of Projects When Awarding Discretionary Grants

Published by the Government Accountability Office on 1999-09-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to the Chairman, Committee on
                  Transportation and Infrastructure,
                  House of Representatives


September 1999
                  TRANSPORTATION
                  INFRASTRUCTURE
                  FHWA Should Assess
                  and Compare the
                  Benefits of Projects
                  When Awarding
                  Discretionary Grants




GAO/RCED-99-263
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division

      B-282799

      September 24, 1999

      The Honorable Bud Shuster
      Chairman, Committee on
        Transportation and Infrastructure
      House of Representatives

      Dear Mr. Chairman:

      The Congress has authorized the Secretary of Transportation to select and
      fund state transportation projects under several discretionary highway
      programs. These funds supplement other funds that states routinely
      receive through the federal-aid highway program. In November 1997, we
      reported on five discretionary programs. That report showed that from
      fiscal years 1995 through 1997, the Federal Highway Administration’s
      (FHWA) Office of the Administrator selected a declining proportion of
      projects that FHWA staff considered promising and most promising.1 In
      May 1998, we reported that from fiscal years 1995 through 1997, the Office
      of the Administrator awarded a disproportionate number of projects and
      funds to projects located in Democratic congressional districts in the
      Public Lands Highways Program.2

      As a result of these reports, the Transportation Equity Act for the 21st
      Century as amended (TEA-21) required a number of changes to the
      Department of Transportation’s (DOT) process for awarding discretionary
      grants administered by FHWA. The act directed the Secretary of
      Transportation to establish and publish criteria for awarding grants under
      these discretionary programs that, to the extent practicable, conform to an
      executive order that outlines principles for federal infrastructure
      investments.3 The executive order directed federal agencies to make
      infrastructure investments based on an analytical evaluation of the
      expected benefits and costs, including an evaluation of the trade-offs
      among a variety of investment options. The act also directed the Secretary
      to issue reports to the Senate Committee on Environment and Public
      Works and the House Committee on Transportation and Infrastructure

      1
       Transportation Infrastructure: Review of Project Selection Process for Five FHWA Discretionary
      Programs (GAO/RCED-98-14, Nov. 7, 1997). The five programs reviewed in the report were the Public
      Lands Highways Program, the Discretionary Bridge Program, the Interstate Discretionary Program, the
      Interstate 4R Discretionary Program, and the Ferry Boats and Facilities Program.
      2
       Transportation Infrastructure: Supplemental Information on the Federal Highway Administration’s
      Project Selection Process for Five Discretionary Programs (GAO/RCED-98-179R, May 19, 1998).
      3
       Executive Order No. 12893: Principles for Federal Infrastructure Investments, Jan. 26, 1994 (see app.
      I).



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                   (the authorizing committees) specifying the results of the project
                   selections and how projects were selected. In addition, both the Senate
                   and House Appropriations Committees’ reports on the Department of
                   Transportation’s fiscal year 1999 appropriation expressed concerns about
                   the project selection process and directed FHWA to develop specific
                   merit-based criteria for the selection of discretionary projects for funding.

                   Because of delays in passing TEA-21, FHWA did not have time to proceed
                   with a separate funding cycle for fiscal year 1998 and, hence, combined
                   the solicitation and selection processes for fiscal years 1998 and 1999 into
                   one funding cycle. For the combined funding cycle for fiscal years 1998-99,
                   the Secretary selected 115 projects totaling about $470 million in federal
                   funds from the five discretionary programs we previously reviewed.4 As a
                   part of the Congress’ oversight of FHWA’s discretionary programs, you
                   asked us to (1) determine how FHWA has implemented the requirements
                   specified in TEA-21 and (2) compare the results of the selection process for
                   fiscal years 1998-99 with the results of the selection process for fiscal
                   years 1995 through 1997 that we previously reported on.


                   FHWA  has only partially implemented the requirements in TEA-21. FHWA
Results in Brief   developed and published criteria for selecting projects in 1998 and
                   reported its selections to the House and Senate authorizing committees in
                   1999. In addition, FHWA considered the estimated cost of each project when
                   it determined which projects to fund and the amount of funds to provide.
                   However, with the exception of the Discretionary Bridge Program, FHWA
                   staff do not evaluate or suggest projects on the basis of a comparative
                   analysis of the projects’ transportation benefits (e.g., improving safety,
                   mobility, and air quality). Our analysis of the process indicates that FHWA
                   staff primarily suggested projects based on their location to ensure an
                   equitable and geographic distribution of funds to the states. FHWA officials
                   asserted that it would not be feasible to compare the benefits of the
                   projects when making selections, especially in the Public Lands Highways
                   and Ferry Boats and Facilities programs, because each project has unique
                   and, therefore, incomparable characteristics. However, this assertion is
                   inconsistent with other Department programs that compare and assess the
                   transportation benefits of a wide array of discretionary projects.



                   4
                    Prior to passing TEA-21, the Congress passed the Surface Transportation Extension Act of 1997. This
                   act authorized about $29 million in Public Lands Highways funding but did not authorize funding for
                   the other four programs. FHWA funded 10 projects with this money during an initial funding cycle for
                   fiscal year 1998, and our analyses include the project selection results for this cycle under the
                   combined cycle for fiscal years 1998-99.



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             During the funding cycle for fiscal years 1998-99, 98 percent of the projects
             that the Office of the Administrator selected were projects that the staff
             had suggested for funding. This contrasts with the selection results in
             fiscal years 1995 through 1997, when the Office selected as little as
             59 percent of projects that staff considered promising and most promising.
             In addition, our analysis of the funding results by congressional district for
             the funding cycle in fiscal years 1998-99 found that FHWA awarded a slightly
             disproportionate amount of Public Lands Highways Program funds to
             projects located in districts with Republican representation. According to
             FHWA officials, the anomaly in the Public Lands Highways Program is
             primarily due to statutory direction that the Secretary give preference to
             projects in states with at least 3 percent of the nation’s public lands, that
             is, western states that currently have predominately Republican
             congressional districts. This result is different from our analysis of that
             program for the fiscal years 1995 through 1997, when FHWA awarded a
             significantly disproportionate amount of funds to projects in districts with
             Democratic representation.

             This report makes a recommendation intended to ensure that FHWA funds
             those projects that provide the greatest transportation benefits.


             Beginning in 1930, the Congress established the first transportation
Background   discretionary program, under which the executive branch could select
             specific transportation projects for federal funding. In 1930, the Public
             Lands Program was established to pay for roadwork on the nation’s public
             lands. Since 1930, the Congress has established several other discretionary
             programs, including the Discretionary Bridge, the Interstate Discretionary,
             the Interstate 4R, and the Ferry Boats and Facilities programs. The
             Discretionary Bridge Program was established to replace or rehabilitate
             high-cost bridges, while the Interstate Discretionary Program aimed to
             accelerate the construction of the Interstate Highway System. The
             Interstate 4R Discretionary Program was established to resurface, restore,
             rehabilitate, and reconstruct the Interstate Highway System. It was later
             renamed the Interstate Maintenance Discretionary Program. Finally, the
             Ferry Boats and Facilities Program was established to construct ferry
             boats and ferry terminal facilities. (See apps. II through VI for additional
             information on the five programs covered in this report.)

             TEA-21 reauthorized four of the five programs—it did not reauthorize the
             Interstate Discretionary Program. However, FHWA had about $63 million in
             Interstate Discretionary funds that were carried over from the Intermodal



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                                         Surface Transportation Efficiency Act of 1991 (ISTEA) authorization and
                                         allocated this amount to states during the selection process for fiscal years
                                         1998-99. TEA-21 increased the funding levels for the four reauthorized
                                         programs. (Table 1 shows the funding levels for the five FHWA discretionary
                                         programs under ISTEA and TEA-21.)

Table 1: ISTEA and TEA-21 Funding
Levels for Five FHWA Discretionary       Dollars in millions
Programs                                 Program                                         ISTEA (FY 1992-97)               TEA-21 (FY 1998-2003)
                                         Discretionary Bridge                                             349.5                           525.0a
                                         Ferry Boats and Facilities                                       100.0                           220.0
                                         Interstate Discretionary                                         400.0                             0.0b
                                         Interstate Maintenance
                                         Discretionary (4R)                                               375.0                           550.0
                                         Public Lands Highways                                            340.0                           484.6
                                         a
                                          Although TEA-21 did not reauthorize the Interstate Discretionary Program, about $63 million was
                                         carried over from amounts authorized by ISTEA.
                                         b
                                             This amount includes funds authorized for the seismic retrofit of bridges.

                                         Source: GAO’s analysis of FHWA’s data.



                                         Along with increasing the funding levels for the discretionary programs,
                                         TEA-21 required some significant changes to DOT’s process for awarding
                                         discretionary grants. In particular, TEA-21 required DOT to establish and
                                         publish criteria for awarding discretionary grants and directed that the
                                         criteria, to the extent practicable, conform to Executive Order No. 12893:
                                         Principles for Federal Infrastructure Investments. The order directed
                                         federal agencies making infrastructure investment decisions to develop
                                         and implement plans that are consistent with several principles. A key
                                         principle is that infrastructure investments are to be based on a systematic
                                         analysis of the expected benefits and costs in accordance with guidelines,
                                         including the following:

                                     •   The benefits and costs should be quantified and assigned a dollar value to
                                         the maximum extent practicable.
                                     •   An analysis of the benefits and costs should be done to enable informed
                                         trade-offs to be made among capital outlays, operating and maintenance
                                         costs, and nonmonetary costs borne by the public.
                                     •   Analyses should compare a comprehensive set of options that include,
                                         among other things, managing demand, repairing facilities, and expanding
                                         facilities.




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                     FHWA has a two-phase process for selecting projects for discretionary
                     funding from these five programs.5 In the first phase, states apply for funds
                     through an annual solicitation process by submitting candidate projects to
                     FHWA. Using program-specific eligibility and selection criteria, professional
                     staff in FHWA’s Office of Infrastructure evaluate projects and place them in
                     one of three categories—“well qualified,” “qualified,” and “not
                     qualified.”6 From the list of well-qualified projects, program staff develop
                     a funding plan that expends all available funds and identifies specific
                     projects and funding amounts. The funding plan, which FHWA calls an
                     allocation plan, also includes the staff’s rationale for categorizing projects
                     as well qualified and suggesting specific projects and funding amounts. In
                     the second phase, professional staff provide the allocation plan to the
                     Office of the Administrator. Using its discretion, the Office of the
                     Administrator can select any project that meets basic eligibility criteria,
                     including projects that staff did not suggest. Once the Office of the
                     Administrator makes the final selections, staff notify FHWA’s divisions and
                     the states. FHWA subsequently allocates the funds for the selected projects.
                     For the discretionary funding cycle for fiscal years 1998-99, states’
                     requests greatly exceeded the amount of available funding. For example,
                     states submitted over $2.2 billion in requests for about $135 million in
                     Interstate Maintenance Discretionary funds. Similarly, states submitted
                     over $714 million in requests for about $126 million in Public Lands
                     Highways funds.



                     FHWA  addressed most, but not all, of the requirements in TEA-21. The act
FHWA Did Not Fully   required the Secretary to (1) establish and publish criteria for selecting
Address the TEA-21   discretionary projects; (2) issue quarterly reports to the House and Senate
Requirements         authorizing committees detailing the outcome of the selection process;
                     and (3) ensure, to the extent practicable, that FHWA’s selection criteria
                     conform to an executive order on federal infrastructure investments.
                     While FHWA established and published selection criteria and issued a
                     quarterly report on the outcome of the selection process, FHWA generally
                     did not establish criteria or processes that allow it to compare and assess
                     the transportation benefits of projects before selecting projects for
                     discretionary funding.


                     5
                      The Secretary of Transportation is responsible for selecting projects under the discretionary programs
                     but has delegated this responsibility to the FHWA Administrator.
                     6
                      During fiscal years 1995 through 1997, FHWA program staff used the categories of “most promising,”
                     “promising,” “qualified,” and “not qualified.” According to program staff, FHWA reduced the
                     number of categories for the process for fiscal year 1998-99 to make the process simpler.



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FHWA Established and        To establish criteria for use in selecting projects for discretionary funding,
Published Criteria for      FHWA combined unpublished and informal criteria it had used for the five

Selecting Projects          programs in the past with additional criteria mandated in TEA-21. For
                            example, under TEA-21, the Secretary established criteria that gave priority
                            to transportation projects in cities hosting international Olympic events.

                            FHWA’s   selection criteria are program-specific and address both statutory
                            requirements and administrative goals. For example, in response to
                            statutory provisions, FHWA’s selection criteria for the Interstate
                            Maintenance Discretionary Program give priority to candidate projects
                            that cost at least $10 million. FHWA’s selection criteria for the Public Lands
                            Highways Program also address statutory provisions and give preference
                            to projects from states with at least 3 percent of the nation’s public lands.7
                            In addition to statutory selection criteria, FHWA has developed
                            administrative selection criteria. For example, FHWA selects projects to
                            ensure that funds are geographically distributed among many states or to
                            ensure that projects leverage other state or local funds. (Apps. II through
                            VI list the criteria used for each program.)

                            In response to TEA-21, FHWA also published its selection criteria before it
                            accepted candidate projects for the funding cycle for fiscal years 1998-99.
                            FHWA published the criteria in the Federal Register, on the agency’s
                            Internet Web site, and in solicitation memorandums sent to the states.
                            FHWA also submitted its first quarterly report to the House and Senate
                            authorizing committees on April 1, 1999, that reiterated its selection
                            criteria for each program, identified the projects selected for funding, and
                            explained the agency’s reasons for selecting each project.


FHWA’s Selection Process    FHWA’s selection criteria do not provide for an assessment or comparison
Places Little Emphasis on   of candidate projects’ benefits and costs. Therefore, FHWA’s process for
Projects’ Transportation    suggesting and selecting projects also does not identify the projects with
                            the greatest benefits. Executive Order No. 12893 directs executive
Benefits                    departments and agencies with infrastructure responsibilities to develop
                            and implement infrastructure investment and management plans
                            consistent with the principles outlined in the order. A key principle is that
                            infrastructure investments are to be based on a systematic analysis of
                            expected benefits and costs, including both quantitative and qualitative
                            measures. Among other things, the order also provides that all types of
                            benefits and costs, both market and nonmarket, are to be quantified and

                            7
                            These states are Alaska, Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon,
                            Utah, and Wyoming.



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                                       monetized to the maximum extent practicable, thus helping ensure wise
                                       investment decisions. In a December 1998 memorandum to the FHWA’s
                                       Office of the Administrator (and other operating administrations), the DOT
                                       Deputy Secretary stated that the agency should award discretionary grants
                                       on the basis of merit and in compliance with the executive order.

                                       Our review of FHWA’s process for evaluating projects found that, while it
                                       considers the costs of projects, it does not compare and assess their
                                       benefits. Because of the limited funds available, FHWA considers the
                                       estimated cost of each project as it determines which projects it will fund
                                       and the amount of funds it will provide. However, our review of FHWA’s
                                       selection criteria found that with the exception of the Discretionary Bridge
                                       Program, the criteria did not provide the information necessary for staff to
                                       determine which projects offered the greatest transportation benefits.
                                       Instead, the criteria primarily assessed whether projects fostered the
                                       agency’s goals, such as providing an equitable and geographic distribution
                                       of program funds and whether projects should be given preference in
                                       order to meet statutory direction (such as whether a candidate project for
                                       Interstate Maintenance Discretionary Program funding cost at least
                                       $10 million).

                                       We assessed the extent that professional staff cited the transportation
                                       benefits of specific projects as reasons for suggesting the projects for
                                       funding.8 As table 2 shows, we found that staff cited specific project
                                       benefits, such as improving safety, adding needed capacity, and increasing
                                       mobility, for only 22 percent of the projects (that is, 23 of 106 projects).

Table 2: Staff Justifications Citing
Projects’ Benefits                                                                                     Number of
                                                                                Number of            projects staff            Percentage
                                                                              projects staff      suggested citing         suggested citing
                                       Program                                  suggested                 benefits                benefits
                                       Public Lands Highways                                55                        0                       0
                                       Ferry Boats and Facilities                           29                        5                      17
                                       Interstate Maintenance                                6                        2                      33
                                       Interstate Discretionary                              6                        6                    100
                                       Discretionary Bridge                                 10                      10                     100
                                       Total                                              106                       23                       22
                                       Source: GAO’s analysis of FHWA’s data.


                                       8
                                        During the first phase of the selection process, states submitted 620 candidate projects to FHWA.
                                       After applying the selection criteria in each of the five programs, FHWA professional staff categorized
                                       310 as well qualified. Of the 310 well-qualified projects, professional staff suggested 106 projects for
                                       funding.



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For example, in the Public Lands Highways Program, staff did not cite the
individual or relative benefits of any projects as reasons for suggesting
them for funding. Instead, staff primarily cited projects’ locations (that is,
whether projects were located in states with at least 3 percent of the
nation’s public lands) or the need to achieve an equitable and geographic
distribution of funds. In contrast, in the Discretionary Bridge Program,
staff often cited bridges’ deteriorating conditions and their priority need
for repair as reasons for funding projects. These justifications were based
primarily on a statutorily directed formula that takes into account factors
such as the condition of a bridge, its state of repair, its repair costs, and
traffic volumes to score each project. The score reflects each bridge’s
overall condition—bridges with the lowest scores have a greater repair
need and therefore higher priority. While staff in the Interstate
Discretionary Program cited specific aspects of projects, such as closing a
gap in the Interstate Highway System, as reasons for suggesting projects,
they made no attempt to compare and assess the benefits of the various
candidate projects. In the other two programs, we found that staff
suggested projects primarily to achieve an equitable and geographic
distribution of funds to the states.

We shared the results of our analysis with FHWA officials, who stated that
they had not attempted to compare or assess the benefits of projects when
determining well-qualified candidates and suggesting projects for funding
in the Public Lands Highways, Interstate Discretionary, Interstate
Maintenance, and Ferry Boats and Facilities programs. FHWA officials
asserted that it would not be feasible to make such an assessment in the
Public Lands Highways and Ferry Boats and Facilities programs because
each project has unique and, therefore, incomparable characteristics. In
contrast, they said that in the Interstate Maintenance Discretionary
Program, it would be feasible to obtain additional information from states
such as the condition of a roadway and its capacity to handle its current
volume of traffic. FHWA professional staff could then use this information
to help them compare and assess the benefits of candidate projects.

FHWA   officials also asserted that even though staff did not fully document
the benefits of projects when they suggested them for funding, staff had
considered these benefits in their project evaluations. After reviewing our
analysis, they provided us with a summary of project benefits such as
reducing traffic congestion and increasing the capacity of ferry boat
facilities that they said staff considered when suggesting projects for
funding. While this summary information indicated that the projects had
transportation benefits, it did not indicate the extent to which staff



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                     considered these benefits when evaluating projects. In addition, FHWA
                     officials stated that all of the projects that states submitted were
                     high-quality projects in need of federal funding. Therefore, they contend
                     that it would be unlikely for the Office of the Administrator to select a
                     poor-quality project for funding. However, they stated that as part of the
                     funding cycle for fiscal year 2000, they have asked states to provide
                     feedback on the selection criteria used for these programs and, based on
                     the comments, could make some adjustments to the criteria for the
                     funding cycle for fiscal year 2001.

                     The approach FHWA used in the Public Lands Highways, Interstate
                     Discretionary, Interstate Maintenance Discretionary, and Ferry Boats and
                     Facilities programs contrasts with the comparative selection approach
                     used in the Discretionary Bridge Program and other programs
                     administered by the DOT. For example, under its roughly $750 million
                     Airport Improvement Program, the Federal Aviation Administration (FAA)
                     ranks projects based on how they meet the agency’s goals for safety,
                     security, and infrastructure preservation. FAA establishes a cutoff point
                     that identifies high-priority projects. In addition, the Federal Transit
                     Administration’s (FTA) Job Access (welfare to work) program requires
                     applicants to submit data on projects’ expected benefits, evaluates the
                     benefit of each candidate project based on four primary factors (including
                     the need for transportation services), and assigns an overall score to each
                     candidate project. FTA’s criteria take geographic distribution into
                     consideration, but FTA officials cited it as a secondary selection factor.
                     Also, under the new Transportation Infrastructure Finance and Innovation
                     Act (TIFIA) program, DOT quantifies the benefits of very diverse projects
                     (e.g., high-speed rail systems, highways, and mass transit projects), assigns
                     a numerical score to each project, and ranks the projects prior to making
                     selections for funding. While we have not performed a detailed analysis of
                     the criteria used in these three programs, they illustrate that it is possible
                     to develop a system that awards grants based on an comparative
                     assessment of the benefits of diverse transportation projects.


                     For the selection process for fiscal years 1998-99, FHWA changed its prior
The Office of the    practices and allowed professional staff to suggest specific projects and
Administrator        funding amounts to the Office of the Administrator. The Office of the
Generally Selected   Administrator generally adhered to the professional staff’s input and
                     analyses; almost all of the projects selected were those staff had suggested
Projects That Were   for funding. These selection results differ significantly from the results in
Suggested by Staff   fiscal years 1995 through 1997, when the Office of the Administrator



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                                         selected a declining proportion of projects that staff had placed in the
                                         promising and most promising categories. The results for fiscal years
                                         1998-99 also show that for the programs we reviewed, the Office of the
                                         Administrator generally awarded a proportionate amount of discretionary
                                         funds to projects located in Democratic, Republican, and independent
                                         congressional districts.


Final Selections Mirrored                Our analysis of the selection results for fiscal years 1998-99 shows that the
the Staff’s Priorities                   Office of the Administrator selected 98 percent of all projects that staff
                                         suggested for funding (104 projects selected out of the 106 suggested by
                                         the staff). In addition, of the 115 total projects that the Office of the
                                         Administrator selected, 110—or 96 percent—were those staff considered
                                         well qualified (see fig. 1). By either measure, the Office of the
                                         Administrator primarily selected projects that staff considered the most
                                         qualified.


Figure 1: FHWA’s Office of the
Administrator’s Selections of Projects   Percentage
Recommended, Categorized, or             100
Suggested by Staff as a Percentage of
All Projects Selected, Fiscal Years       90
1992-99
                                          80

                                          70

                                          60

                                          50

                                          40

                                          30

                                          20

                                          10

                                           0

                                                1992     1993     1994     1995   1996    1997    1998-99

                                                                                                    Staff-
                                            Staff-recommended projects       Most promising and     suggested
                                                                             promising projects     projects


                                         Source: GAO’s analysis of FHWA’s data.




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                         During the period of fiscal year 1992 through 1999, FHWA used three
                         different processes to evaluate and select projects. From fiscal year 1992
                         through 1994, staff recommended specific projects and funding amounts to
                         the Office of the Administrator. From fiscal year 1995 through 1997, FHWA
                         changed the process, and staff placed projects into categories rather than
                         recommending specific projects. For the selection process in fiscal years
                         1998-99, staff placed projects in categories and suggested specific projects
                         for funding. As shown in figure 1, the selection results for fiscal years
                         1998-99 are similar to those of fiscal years 1992 through 1994 but
                         significantly different from those of fiscal years 1995 through 1997. During
                         the period of fiscal year 1995 through 1997, the Office of the Administrator
                         selected a declining percentage of projects that staff considered promising
                         and most promising, reaching a low of 59 percent during fiscal year 1997.
                         According to FHWA professional staff, the results for fiscal years 1998-99
                         reflect the added weight once again given to the staff’s input through the
                         revised selection process.


FHWA Generally Awarded   In four of the five programs we reviewed (the Discretionary Bridge,
Funds in Proportion to   Interstate Maintenance Discretionary, Interstate Discretionary, and Ferry
Requests                 Boats and Facilities programs), the Office of the Administrator generally
                         awarded a proportionate amount of funds to projects located in
                         Democratic, Republican, and independent congressional districts. For
                         example, the Office of the Administrator awarded 55 percent of the
                         Interstate Maintenance Discretionary Program funds to projects in
                         Republican districts and 45 percent to projects in Democratic districts.
                         This distribution was consistent with the proportion of states’ requests,
                         which was 49 percent of the funds for projects in Republican districts,
                         41 percent for projects in Democratic districts, 9 percent for projects that
                         crossed Democratic and Republican districts, and about 1 percent for
                         projects in independent districts (apps. II through VI contain detailed
                         selection results for each of the five programs).9 The results are consistent
                         with those of fiscal years 1995 through 1997, when the Office of the
                         Administrator also awarded a proportionate amount of funds in these four
                         programs to projects in Democratic, Republican, and independent
                         districts.

                         In the Public Lands Highways Program, the Office of the Administrator
                         awarded 88 percent of the funds to projects in Republican districts, which
                         was slightly disproportionate to the states’ requests for 74 percent of the

                         9
                         In appendixes II through VI, we refer to projects that were located in both a Democratic and a
                         Republican district as “other” projects.



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                 funds for projects in Republican districts. According to FHWA staff, the
                 results reflect a renewed emphasis on following the statutory criteria that
                 require FHWA to give preference to projects located in states with at least
                 3 percent of the nation’s public lands, mostly western states with
                 predominantly Republican districts. These results are significantly
                 different from those of fiscal years 1995 through 1997, and particularly
                 fiscal year 1997, when the Office of the Administrator awarded 91 percent
                 of the Public Lands Highways funds to projects in Democratic districts
                 despite states’ requests for 62 percent of the funding for projects in
                 Republican districts. At the time of our previous review, FHWA could not
                 provide a detailed justification to explain those results.


                 TEA-21 provided FHWA with an opportunity to refine its awards process for
Conclusions      discretionary grants and to target limited funds to projects with the
                 highest transportation benefits. While the selection results for fiscal years
                 1998-99 revealed that FHWA’s process was more transparent than in prior
                 years, the results also indicated that, despite the principles outlined in
                 Executive Order No. 12893, FHWA continues to award most of its grants
                 based on factors other than transportation benefits. We recognize that
                 FHWA must address statutory direction and that it attempts to achieve an
                 equitable and geographic distribution of funds. However, a comparative
                 assessment of the transportation benefits of projects is also needed,
                 particularly given that states’ funding requests greatly exceed available
                 funding. While we acknowledge that it would be challenging to develop a
                 selection process that measures, compares, and assesses the
                 transportation benefits of candidate projects, FHWA’s Discretionary Bridge
                 Program and other DOT programs have been able to develop such
                 processes.


                 Given that states’ requests for federal discretionary funding greatly exceed
Recommendation   available funds, a grant process that measures, compares, and assesses the
                 transportation benefits of projects would help ensure that FHWA funds
                 projects with the greatest transportation benefits. Accordingly, we
                 recommend that the Secretary of Transportation direct the FHWA
                 Administrator to develop the necessary process and criteria to measure,
                 compare, and assess the transportation benefits of projects before making
                 grant selections as outlined in Executive Order No. 12893 and emphasized
                 in TEA-21. As a starting point, FHWA should examine the process used by its
                 own Discretionary Bridge Program office as well as other operating




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                     administrations within the Department of Transportation to learn how
                     they developed their processes.


                     We provided a draft of this report to the Department of Transportation for
Agency Comments      review and comment. The Department’s written response to our report is
and Our Evaluation   included in appendix VII. The Department disagreed with our conclusion
                     that FHWA had awarded discretionary grants based on factors other than
                     the projects’ transportation benefits. The Department stated that all
                     projects funded through FHWA’s discretionary programs have
                     transportation benefits. However, the Department noted that the extent to
                     which FHWA can compare the benefits of one project with those of another
                     is limited by the degree to which the projects are similar and by the type
                     and amount of data available. The Department noted that the Public Lands
                     Highways and Ferry Boats and Facilities programs consider projects that
                     are so dissimilar that a meaningful comparison among projects is not
                     possible. For example, the Department stated that in the Public Lands
                     Highways Program, FHWA would be required to compare the benefits of a
                     parking lot in a wildlife refuge with the benefits of restroom facilities at a
                     national forest. In addition, the Department noted that these two programs
                     do not have the type or abundance of data needed to compare projects, as
                     the Department has with its Discretionary Bridge Program. The
                     Department also stated that FHWA’s criteria do conform, to the extent
                     practicable, to Executive Order No. 12893. Despite the comparability issue
                     and data limitations, the Department offered several potential steps for
                     improving its selection processes. It noted that FHWA can provide better
                     descriptions of the benefits of the projects selected for funding, obtain
                     more data from states on pavement condition and levels of congestion and
                     safety, and require states to prioritize their requests and provide more
                     detailed descriptions of projects’ benefits in their applications.

                     While the Department of Transportation stated that the discretionary
                     projects FHWA selected have transportation benefits, we remain concerned
                     that FHWA does not evaluate or select projects based on a comparative
                     analysis of the projects’ transportation benefits (e.g., improving safety,
                     mobility, and air quality) to ensure that it selects projects with the greatest
                     transportation benefits. Our analysis of the projects indicates that FHWA
                     primarily selects projects for funding based on their location to ensure an
                     equitable and geographic distribution of funds to the states. It is clear from
                     our review that achieving this distribution of projects is considered to be
                     more important than comparing the relative transportation benefits. We
                     believe that providing an equitable and geographic distribution of the



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              B-282799




              funds should not replace the important goal of making funding decisions
              based on a process that measures, compares, and assesses each project’s
              transportation benefits.

              We also believe the Department has overstated the extent to which
              candidate projects are dissimilar and thus impossible to compare. For
              example, of the 116 Public Lands Highways projects that FHWA evaluated in
              fiscal year 1998, 73 percent (85 projects) were projects for designing,
              constructing, or repaving highways and bridges. Many of the remaining 31
              projects were comparable projects intended to improve access and
              mobility, such as constructing bike and pedestrian paths. Moreover, we
              have found that other Department programs compare and assess the
              transportation benefits of dissimilar candidate projects. For example, the
              Department’s new Transportation Infrastructure Finance and Innovation
              Act program quantifies the benefits of very diverse high-speed rail,
              highway, and mass transit projects; assigns a score to each project; and
              then ranks the projects based on their relative benefits.

              We believe that the Department’s suggestions for collecting better data
              from applicants are good first steps in a longer effort to improve the
              selection process. Additional data will also enable the Department to
              develop better processes and criteria for judging the benefits of candidate
              projects. By making these improvements, the Department can ensure that
              these programs are consistent with other discretionary programs that use
              data on expected benefits to compare dissimilar projects.


              To determine how FHWA addressed the requirements of TEA-21, we reviewed
Scope and     documentation outlining the process for selecting projects in fiscal years
Methodology   1998-99, including the solicitation memorandums that FHWA sent to the
              states. We also reviewed the criteria that FHWA used to evaluate and select
              projects for funding. We discussed the selection process with professional
              staff responsible for implementing and publishing the selection criteria as
              outlined in TEA-21. We also reviewed Executive Order No. 12893: Principles
              for Federal Infrastructure Investments and compared it with FHWA’s
              existing process to see whether FHWA’s criteria were consistent with the
              principles outlined in the order.

              To determine the results of the selection process and to compare the
              results with those of prior fiscal years, we examined the staff’s analysis of
              the projects submitted for funding for the combined 1998-99 funding cycle.
              We also reviewed the extent to which the Office of the Administrator



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B-282799




selected the projects that staff had considered well qualified or suggested
for funding and compared the results with those of fiscal years 1992
through 1997. Using data that FHWA generates each year, we determined
which congressional districts the projects were in and the political
affiliations associated with those districts at the time the projects were
submitted. We then determined the proportion of projects and funding
requests submitted by states and selected by FHWA that were located in
districts with Democratic, Republican, or independent representation.
Finally, we compared our district analysis for the funding cycle for fiscal
years 1998-99 with our earlier analysis for fiscal years 1995 through 1997.
We performed our review from May 1999 through August 1999 in
accordance with generally accepted government auditing standards.


We will send copies of this report to Rodney E. Slater, Secretary of
Transportation; Kenneth R. Wykle, Administrator of FHWA; cognizant
congressional committees; and other interested parties. We will also make
copies available to others on request.

Please call me at (202) 512-2834 if you or your staff have any questions
about this report. Key contributors to this report were Joseph Christoff,
David Lehrer, David Lichtenfeld, and Phyllis Scheinberg.

Sincerely yours,




John H. Anderson, Jr.
Director, Transportation Issues




Page 15                            GAO/RCED-99-263 FHWA Discretionary Programs
Contents



Letter                                                                      1


Appendix I                                                                 20

Executive Order No.
12893: Principles for
Federal Infrastructure
Investments
Appendix II                                                                23

Public Lands
Highways Program
Appendix III                                                               27

Discretionary Bridge
Program
Appendix IV                                                                30

Interstate
Discretionary
Program
Appendix V                                                                 33

Interstate
Maintenance
Discretionary
Program
Appendix VI                                                                36

Ferry Boats and
Facilities Program




                         Page 16   GAO/RCED-99-263 FHWA Discretionary Programs
                    Contents




Appendix VII                                                                                  40

Comments From the
Department of
Transportation
Tables              Table 1: ISTEA and TEA-21 Funding Levels for Five FHWA                     4
                      Discretionary Programs
                    Table 2: Staff Justifications Citing Projects’ Benefits                    7
                    Table II.1: Staff’s Suggestions for the Public Lands Highways             24
                      Program and the Office of the Administrator’s Selections, Fiscal
                      Years 1998-99
                    Table II.2: Public Lands Highways Funding Requested and                   24
                      Provided, Fiscal Years 1998-99
                    Table II.3: Public Lands Highways Projects Requested and                  25
                      Provided, Fiscal Years 1998-99
                    Table III.1: Staff’s Suggestions for the Discretionary Bridge             28
                      Program and the Office of the Administrator’s Selections, Fiscal
                      Years 1998-99
                    Table III.2: Discretionary Bridge Funding Requested and                   28
                      Provided, Fiscal Years 1998-99
                    Table III.3: Discretionary Bridge Projects Requested and                  28
                      Provided, Fiscal Years 1998-99
                    Table IV.1: Staff’s Suggestions for the Interstate Discretionary          30
                      Program and the Office of the Administrator’s Selections, Fiscal
                      Years 1998-99
                    Table IV.2: Interstate Discretionary Funding Requested and                31
                      Provided, Fiscal Years 1998-99
                    Table IV.3: Interstate Discretionary Projects Requested and               31
                      Provided, Fiscal Years 1998-99
                    Table V.1: Staff’s Suggestions for the Interstate Maintenance             33
                      Discretionary Program and the Office of the Administrator’s
                      Selections, Fiscal Years 1998-99
                    Table V.2: Interstate Maintenance Funding Requested and                   34
                      Provided, Fiscal Years 1998-99
                    Table V.3: Interstate Maintenance Projects Requested and                  34
                      Provided, Fiscal Years 1998-99
                    Table VI.1: Staff’s Suggestions for the Ferry Boats and Facilities        36
                      Program and the Office of the Administrator’s Selections, Fiscal
                      Years 1998-99




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          Contents




          Table VI.2: Ferry Boats and Facilities Funding Requested and              37
            Provided, Fiscal Years 1998-99
          Table VI.3: Ferry Boats and Facilities Projects Requested and             37
            Provided, Fiscal Years 1998-99

Figures   Figure 1: FHWA’s Office of the Administrator’s Selections of              10
            Projects Recommended, Categorized, or Suggested by Staff as a
            Percentage of All Projects Selected, Fiscal Years 1992-99
          Figure I.1: Text of Executive Order No. 12893                             21
          Figure II.1: FHWA’s Public Lands Highways Discretionary                   26
            Program Project Selection Criteria
          Figure III.1: FHWA’s Discretionary Bridge Program Project                 29
            Selection Criteria
          Figure IV.1: FHWA’s Interstate Discretionary Program Project              32
            Selection Criteria
          Figure V.1: FHWA’s Interstate Maintenance Discretionary                   35
            Program Project Selection Criteria
          Figure VI.1: FHWA’s Ferry Boats and Facilities Discretionary              39
            Program Project Selection Criteria




          Abbreviations

          DOT        Department of Transportation
          FAA        Federal Aviation Administration
          FHWA       Federal Highway Administration
          FTA        Federal Transit Administration
          ISTEA      Intermodal Surface Transportation Efficiency Act of 1991
          TEA-21     Transportation Equity Act for the 21st Century
          TIFIA      Transportation Infrastructure Finance and Innovation Act


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Page 19   GAO/RCED-99-263 FHWA Discretionary Programs
Appendix I

Executive Order No. 12893: Principles for
Federal Infrastructure Investments

               On January 26, 1994, the President signed an executive order outlining the
               administration’s priorities for federal infrastructure investment. The
               following is the full text of the order.




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                                                   Appendix I
                                                   Executive Order No. 12893: Principles for
                                                   Federal Infrastructure Investments




Figure I.1: Text of Executive Order No. 12893


 A well-functioning infrastructure is vital to sustained economic growth, to the quality of life in our
 communities, and to the protection of our environment and natural resources. To develop and maintain its
 infrastructure facilities, our Nation relies heavily on investment by the Federal Government.

 Our Nation will achieve the greatest benefits from its infrastructure facilities if it invests wisely and continually
 improves the quality and performance of its infrastructure programs. Therefore, by the authority vested in
 me as President by the Constitution and the laws of the United States of America, it is hereby ordered as
 follows:

 Section 1. Scope. The principles and plans referred to in this order shall apply to Federal spending for
 infrastructure programs. For the purposes of this order, Federal spending for infrastructure programs shall
 include direct spending and grants for transportation, water resources, energy, and environmental
 protection.

 Section 2. Principles of Federal Infrastructure Investment.

 Each executive department and agency with infrastructure responsibilities (hereinafter referred to collectively
 as “agencies”) shall develop and implement plans for infrastructure investment and management consistent
 with the following principles:

 (a) Systematic Analysis of Expected Benefits and Costs. Infrastructure investments shall be based on
 systematic analysis of expected benefits and costs, including both quantitative and qualitative measures, in
 accordance with the following:

 (1) Benefits and costs should be quantified and monetized to the maximum extent practicable. All types of
 benefits and costs, both market and nonmarket should be considered. To the extent that environmental and
 other nonmarket benefits and costs can be quantified, they shall be given the same weight as quantifiable
 market benefits and costs.

 (2) Benefits and costs should be measured and appropriately discounted over the full life cycle of each
 project. Such analysis will enable informed tradeoffs among capital outlays, operating and maintenance
 costs, and nonmonetary costs borne by the public.

 (3) When the amount and timing of important benefits and costs are uncertain, analyses shall recognize the
 uncertainty and address it through appropriate quantitative and qualitative assessments.

 (4) Analyses shall compare a comprehensive set of options that include, among other things, managing
 demand, repairing facilities, and expanding facilities.

 (5) Analyses should consider not only quantifiable measures of benefits and costs, but also qualitative
 measures reflecting values that are not readily quantified.

 (b) Efficient Management. Infrastructure shall be managed efficiently in accordance with the following:

 (1) The efficient use of infrastructure depends not only on physical design features, but also on operational
 practices. To improve these practices, agencies should conduct periodic reviews of the operation and
 maintenance of existing facilities.

 (2) Agencies should use these reviews to consider a variety of management practices that can improve the
 return from infrastructure investments. Examples include contracting practices that reward quality and
 innovation, and design standards that incorporate new technologies and construction techniques.




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                                                Appendix I
                                                Executive Order No. 12893: Principles for
                                                Federal Infrastructure Investments




(3) Agencies also should use these reviews to identify the demand for different levels of infrastructure
services. Since efficient levels of service can often best be achieved by properly pricing infrastructure, the
Federal Government—through its direct investments, grants, and regulations—should promote
consideration of market-based mechanisms for managing infrastructure.

(c) Private Sector Participation. Agencies shall seek private sector participation in infrastructure investment
and management. Innovative public-private initiatives can bring about greater private sector participation in
the ownership, financing, construction, and operation of the infrastructure programs referred to in section 1
of this order. Consistent with the public interest, agencies should work with State and local entities to
minimize legal and regulatory barriers to private sector participation in the provision of infrastructure facilities
and services.

(d) Encouragement of More Effective State and Local Programs. To promote the efficient use of Federal
infrastructure funds, agencies should encourage the State and local recipients of Federal grants to
implement planning and information management systems that support the principles set forth in section
2(a) through (c) of this order. In turn, the Federal Government should use the information from the State
and local recipients’ management systems to conduct the system-level reviews of the Federal Government’s
infrastructure programs that are required by this order.

Section 3. Submission of Plans. Agencies shall submit initial plans to implement these principles to the
Director of Management and Budget (“OMB”) by March 15, 1994. Agency plans shall list the actions that will
be taken to provide the data and analysis necessary for supporting infrastructure-related proposals in future
budget submissions. Agency implementation plans should be consistent with OMB Circular A-94 that
outlines the analytical methods required under the principles set forth in section 2 of this order.

Section 4. Application to Budget Submissions. Beginning with the fiscal year 1996 budget submission to
OMB, each agency should use these principles to justify major infrastructure investment and grant
programs. Major programs are defined as those programs with annual budgetary resources in excess of
$50 million.

Section 5. Application to Legislature Proposals. Beginning March 15, 1994, agencies shall employ the
principles set forth in section 2 of this order and, at the request of OMB, shall provide supporting analyses
when requesting OMB clearance for legislative proposals that would authorize or reauthorize infrastructure
programs.

Section 6. Guidance. The Office of Management and Budget shall provide guidance to the agencies on the
implementation of this order.

Section 7. Judicial Review. This order is intended only to improve the internal management of the
executive branch and does not create any right or benefit, substantive or procedural, enforceable by a party
against the United States, its agencies or instrumentalities, its officers or employees, or any other person.

William J. Clinton

The White House, January 26, 1994




                                                Page 22                                      GAO/RCED-99-263 FHWA Discretionary Programs
Appendix II

Public Lands Highways Program


Background:            The Public Lands Highways Program was initially established in 1930. The
                       Federal-Aid Highway Act of 1970 changed the funding source for the
                       program from the general fund to the Highway Trust Fund, effective in
                       fiscal year 1972. The funding level for the Public Lands Highways Program
                       was $16 million per year during fiscal years 1972 through 1982. The
                       Surface Transportation Assistance Act of 1982 increased the annual
                       authorization level to $50 million for fiscal years 1983 through 1986, but
                       the Surface Transportation and Uniform Relocation Assistance Act of 1987
                       reduced this amount to $40 million for fiscal years 1987 through 1991. The
                       program funds projects that are within, adjacent to, or provide access to
                       the areas served by public lands highways—such as roads in national
                       parks, forests, or Indian reservations. The Intermodal Surface
                       Transportation Efficiency Act of 1991 (ISTEA) authorized $340 million for
                       fiscal years 1992 through 1997. The federal share under this program is
                       100 percent. Funds remain available for the fiscal year allocated plus 3
                       years.

Eligibility:           Public Lands Highways funds may be used on eligible public lands
                       highways, defined by the Transportation Equity Act for the 21st Century
                       (TEA-21) as a forest road or any highway through unappropriated or
                       unreserved public lands, nontaxable Indian lands, or other federal
                       reservations that are under the jurisdiction of and maintained by a public
                       authority and open to public travel. A variety of activities are eligible for
                       funding, including planning, research, engineering, and construction.
                       Projects ranging from reconstructing a road to adding parking facilities are
                       eligible.

TEA-21’s Provisions:   TEA-21 authorized $37.3 million for fiscal year 1998 and $83.6 million for
                       each of fiscal years 1999 through 2003. The Federal Highway
                       Administration (FHWA) combined the funds for fiscal years 1998 and 1999
                       when it last solicited candidate projects from the states for this program.

Project Selections:    During fiscal years 1998-99, the Office of the Administrator selected
                       98 percent of the projects that the FHWA program staff suggested for
                       funding. (See table II.1.)




                       Page 23                            GAO/RCED-99-263 FHWA Discretionary Programs
                                            Appendix II
                                            Public Lands Highways Program




Table II.1: Staff’s Suggestions for the Public Lands Highways Program and the Office of the Administrator’s Selections,
Fiscal Years 1998-99
                                                                      Number of                                     Percentage of
                                                                staff-suggested         Number of other           staff-suggested
                                                        projects that the Office projects that the Office projects that the Office
                              Number of projects that      of the Administrator     of the Administrator     of the Administrator
Fiscal years                      the staff suggested                   selected                selected                  selected
1998-99                                             55                            54                              6                             98
                                            Source: GAO’s analysis of FHWA’s data.



                                            To determine the proportion of projects and funds FHWA awarded to
                                            Democratic or Republican congressional districts, we examined all the
                                            Public Lands Highways projects submitted and selected for fiscal years
                                            1998-99. When compared with funding requests, FHWA awarded a slightly
                                            disproportionate amount of funds to projects located in Republican
                                            districts. For example, projects located in Republican districts represented
                                            74 percent of the total dollars requested; however, these projects
                                            represented 88 percent of the dollars FHWA provided. According to FHWA
                                            officials, these results primarily reflect the application of the criteria that
                                            give priority to states with at least 3 percent of the nation’s public lands.
                                            During fiscal years 1998-99, these states had more Republican than
                                            Democratic districts. Tables II.2 and II.3 show the results of our analysis.10

Table II.2: Public Lands Highways
Funding Requested and Provided,             Dollars in millions
Fiscal Years 1998-99                                                      Funding                                  Funding
                                            Party                       requested           Percentage             provided          Percentage
                                            Democratic                       $165.2                    23               $13.5                   11
                                            Republican                        527.4                    74               110.9                   88
                                            Independent                          3.5                  <1                   2.0                   2
                                            Other                               17.7                    2                  0.0                   0
                                            Total                            $713.8                  100              $126.4                  100
                                            Note: Percentages may not add to 100 because of rounding.

                                            Source: GAO’s analysis of FHWA’s data.




                                            10
                                              The Conference Report on the Department of Transportation and Related Agencies Appropriations
                                            Act for fiscal year 1999 directed FHWA to fund certain projects. Therefore, FHWA “pulled” $10 million
                                            worth of funding for two projects—one in Arizona and one in Utah—as a result of the conference
                                            report. FHWA committed to giving these two projects top priority in fiscal year 2000. Funding for these
                                            two projects plus an additional $500,000 available was allocated to projects in Hawaii ($2.5 million),
                                            Montana ($2.5 million), Kentucky ($2 million), and Alaska ($3.5 million). Our analyses do not reflect
                                            these allocations.



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                                    Appendix II
                                    Public Lands Highways Program




Table II.3: Public Lands Highways
Projects Requested and Provided,                               Projects                        Projects
Fiscal Years 1998-99                Party                     submitted      Percentage        selected      Percentage
                                    Democratic                       126             35              18              30
                                    Republican                       222             61              38              63
                                    Independent                         7             2               4               7
                                    Other                               6             2               0               0
                                    Total                            361            100              60             100
                                    Source: GAO’s analysis of FHWA’s data.



                                    To address the TEA-21 requirement to establish and publish selection
                                    criteria for the projects it funds, FHWA published its existing selection
                                    criteria for the Public Lands Highways Program in the Federal Register on
                                    July 23, 1998. Figure II.1 shows the criteria that FHWA included in its fiscal
                                    years 1998-99 solicitation memorandum to the states.




                                    Page 25                                  GAO/RCED-99-263 FHWA Discretionary Programs
                                               Appendix II
                                               Public Lands Highways Program




Figure II.1: FHWA’s Public Lands Highways Discretionary Program Project Selection Criteria



 Eligibility
 Funds are available for any kind of transportation project eligible for assistance under Title 23, United States Code,
 that is within, adjacent to, or provides access to the areas served by public lands highways.

 Statutory
 Funds shall be allocated among those states having unappropriated or unreserved public lands, nontaxable Indian
 lands or other federal reservations, on the basis of need in such states.

 Preference shall be given to those projects significantly impacted by Federal land and resource management
 activities which were proposed by a State which contains at least three percent of the total public lands in the Nation
 (23 U.S.C. 202(b)).

 Administrative
 Equitable distribution of Public Lands Highways funding among the States—The amount of Public Lands Highways
 funding distributed over the past 20 years to a State was compared to the State’s equitable share of funding based
 on two factors: 1) the State’s share of the Nation’s Federal public lands area, and 2) the percentage of an individual
 State’s area that is comprised of Federal public lands. Preference was given to States that are “behind” in their
 equitable distribution of the Public Lands Highways funding.

 Leverage of private or other public funding—Because the annual requests for funding far exceed the available Public
 Lands Highways discretionary funds, commitment of other funding sources to complement the requested funding
 was an important factor.

 Expeditious completion of project—Preference was given to requests that will expedite the completion of a viable
 project over requests for initial funding of a project that will require a long-term commitment of future Public Lands
 Highways funding. For large-scale projects, consideration was given to the State’s total funding plan to expedite the
 completion of the project.

 Amount of Public Lands Highways funding—The requested amount of funding was another consideration. For
 States that have a relatively small amount of Federal public lands, more moderately sized (less than $500,000)
 project requests were given more favorable consideration.

 State priorities—For states that submit more than one project, consideration was given to individual state priorities, if
 specified.

 National geographic distribution of the funding within the Public Lands Highways program—Although preference was
 to be given to states with at least three percent of the nation’s public lands, all of which are in the western part of the
 country, consideration was also given to providing funding to states in the eastern part of the country to provide
 geographic balance for this program.

 Program emphasis area—For the fiscal year 1998-99 funding, priority was given to projects for the construction or
 restoration of nationally significant trails. This reflects the on-going development of a Millennium Trails Program to
 commemorate trails important to the Nation’s past.

 Project selection also considered national geographic distribution among all of the discretionary programs as well as
 congressional direction or guidance provided on specific projects or the program.


                                               Source: FHWA’s fiscal years 1998-99 solicitation memorandum to the states.




                                               Page 26                                      GAO/RCED-99-263 FHWA Discretionary Programs
Appendix III

Discretionary Bridge Program


Background:            The Discretionary Bridge Program was established by the Surface
                       Transportation Assistance Act of 1978. The act required that $200 million
                       be withheld from the Highway Bridge Replacement and Rehabilitation
                       Program apportionment for each of fiscal years 1979 through 1982 and
                       used by the Secretary of Transportation as a discretionary fund to replace
                       or rehabilitate bridges that cost more than $10 million each or twice the
                       apportionment of the state in which the bridge is located. The Surface
                       Transportation Assistance Act of 1982 continued the program at the same
                       funding level through fiscal year 1986. That act directed FHWA to establish a
                       formal process to rank and select Discretionary Bridge projects for
                       funding and decreed that the projects must be on a federal-aid highway
                       system. The Surface Transportation and Uniform Relocation Assistance
                       Act of 1987 increased the discretionary set-aside to $225 million for each
                       fiscal year during 1987 through 1991. The federal share under this program
                       is 80 percent. ISTEA authorized a total of $349.5 million for fiscal years 1992
                       through 1997.

Eligibility:           Projects eligible for funding under the Discretionary Bridge Program are
                       bridge rehabilitation or replacement projects that cost more than
                       $10 million or at least twice the amount of Highway Bridge Replacement
                       and Rehabilitation Program funds apportioned to the state in which a
                       bridge is located. Discretionary Bridge projects must be on a federal-aid
                       system. Each project is scored on factors such as the bridge’s condition,
                       its repair costs, and traffic volumes, with the lowest scores indicating the
                       greatest needs. To be eligible for funding, candidate bridges must have a
                       rating factor of 100 or less, unless they were selected prior to
                       November 1983.

TEA-21’s Provisions:   For fiscal year 1998, $25 million was authorized by TEA-21. For each of the
                       fiscal years 1999 through 2003, $100 million was authorized for bridge
                       replacement and rehabilitation projects with a maximum of $25 million of
                       that amount made available only for projects for the seismic retrofit of
                       bridges, including projects in the New Madrid fault region, which crosses
                       five state lines between Illinois and Arkansas.

Project Selections:    During fiscal years 1998-99, the Office of the Administrator selected
                       90 percent of the projects that the FHWA program staff suggested for
                       funding. (See table III.1.)




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                                            Appendix III
                                            Discretionary Bridge Program




Table III.1: Staff’s Suggestions for the Discretionary Bridge Program and the Office of the Administrator’s Selections,
Fiscal Years 1998-99
                                                                       Number of                                     Percentage of
                                                                 staff-suggested         Number of other           staff-suggested
                                                         projects that the Office projects that the Office projects that the Office
                              Number of projects that       of the Administrator     of the Administrator     of the Administrator
Fiscal years                       the staff suggested                   selected                selected                  selected
1998-99                                             10                          9                       3                       90
                                            Source: GAO’s analysis of FHWA’s data.



                                            To determine the proportion of projects and funds FHWA awarded to
                                            Democratic or Republican congressional districts, we examined all the
                                            Discretionary Bridge projects submitted and selected for fiscal years
                                            1998-99. When compared with project submissions, FHWA awarded a
                                            proportionate amount of projects and funds to Democratic and Republican
                                            districts. Tables III.2 and III.3 show the results of our analysis.

Table III.2: Discretionary Bridge
Funding Requested and Provided,             Dollars in millions
Fiscal Years 1998-99                                                    Funding                          Funding
                                            Party                     requested        Percentage        provided      Percentage
                                            Democratic                     $661.0                 57         $68.5              63
                                            Republican                      450.3                 39          35.0              32
                                            Independent                       0.0                  0           0.0               0
                                            Other                            44.1                  4           5.5               5
                                            Total                       $1,155.4                100         $109.0             100
                                            Source: GAO’s analysis of FHWA’s data.



Table III.3: Discretionary Bridge
Projects Requested and Provided,                                       Projects                          Projects
Fiscal Years 1998-99                        Party                     submitted        Percentage        selected      Percentage
                                            Democratic                         36                 55            7               58
                                            Republican                         26                 39            4               33
                                            Independent                         0                  0            0                0
                                            Other                               4                  6            1                8
                                            Total                              66               100            12              100
                                            Note: Percentages may not add to 100 because of rounding.

                                            Source: GAO’s analysis of FHWA’s data.




                                            Page 28                                    GAO/RCED-99-263 FHWA Discretionary Programs
                                                Appendix III
                                                Discretionary Bridge Program




                                                FHWA had already established selection criteria for Discretionary Bridge
                                                projects prior to the TEA-21 requirement. Most of the criteria were
                                                established following legislation passed in 1982. Figure III.1 shows the
                                                criteria that FHWA included in the fiscal years 1998-99 solicitation
                                                memorandum to the states.



Figure III.1: FHWA’s Discretionary Bridge Program Project Selection Criteria



 Eligibility
 Funds are available for deficient highway bridges located on Federal-aid highways that have a replacement or
 rehabilitation cost of more than $10 million, or a cost that is twice the amount apportioned under 23 U.S.C. 144(e) to
 the State in which the bridge is located.

 In accordance with 23 U.S.C. 144(d), seismic retrofit projects for non-deficient highway bridges are also eligible.
 Therefore, bridges only in need of seismic retrofitting are considered for Discretionary Bridge funding.

 Statutory
 The Rating Factor formula (23 C.F.R. 650, Subpart G).

 Special considerations including unique situations (23 C.F.R. 650, Subpart G). FHWA has identified the need for
 seismic retrofitting as a unique situation.

 Seismic retrofit allocations for non-deficient bridges (23 U.S.C. 144 (d)).

 Priority may be given to funding a transportation project relating to an international quadrennial Olympic or
 Paralympic event, or a Special Olympics International event if the project meets the extraordinary needs associated
 with such events and is otherwise eligible for assistance with Discretionary Bridge funds (TEA-21, Section 1223).

 Administrative
 Leveraging of private or other public funding—Because the annual requests for funding far exceed the available
 Discretionary Bridge funds, a commitment of other funding sources to complement the requested funding was an
 important factor.

 Expeditious completion of project —Preference was also given to the continuation and completion of bridge
 projects previously begun with Discretionary Bridge funds. For large-scale projects, consideration is given to the
 state’s total funding plan to expedite the completion of the project.

 National geographic distribution of the funding within the Discretionary Bridge program—Consideration was also
 given to providing funding to States to provide some geographic balance for the program.

 The project selection process may also consider national geographic distribution among all of the discretionary
 programs, as well as congressional direction or guidance provided on specific projects or programs.


                                                Source: FHWA’s fiscal years 1998-99 solicitation memorandum to the states.




                                                Page 29                                      GAO/RCED-99-263 FHWA Discretionary Programs
Appendix IV

Interstate Discretionary Program


Background:                                 The program was originally created by section 115 (a) of the Surface
                                            Transportation Assistance Act of 1978 to accelerate construction of the
                                            Interstate Highway System. The Surface Transportation Assistance Act of
                                            1982 and the Surface Transportation and Uniform Relocation and
                                            Assistance Act of 1987 both continued and modified the Interstate
                                            Discretionary Program. ISTEA authorized a $100 million per year set-aside
                                            from the Interstate Construction Program for the Interstate Discretionary
                                            Program annually for fiscal years 1993 through 1996. FHWA also provided
                                            Interstate Discretionary funds from lapsed Interstate Construction funds
                                            that had reached the end of their availability period. TEA-21 did not
                                            reauthorize this program, and it expired after the remaining funds were
                                            allocated during fiscal years 1998-99.

Eligibility:                                Interstate Discretionary funds may be used for the same purpose as
                                            Interstate Construction funds—initial construction of remaining portions
                                            of the Interstate Highway System. However, only work eligible under the
                                            provisions of the Federal-Aid Highway Act of 1981 and included in the
                                            1981 Interstate Cost Estimate is eligible for Interstate Discretionary
                                            funding. The federal share for projects under this program (including
                                            projects to add high-occupancy vehicle or auxiliary lanes) is generally 90
                                            percent; the federal share is 80 percent for projects that provide additional
                                            capacity. The final set-aside of Interstate Discretionary funds occurred
                                            with the fiscal year 1996 Interstate Construction apportionment. However,
                                            in fiscal year 1999, a balance of Interstate Discretionary funds of about
                                            $63 million remained from the ISTEA authorization.

Project Selections:                         During fiscal years 1998-99, the Office of the Administrator selected
                                            100 percent of the projects that the FHWA program staff suggested for
                                            funding. (See table IV.1.)


Table IV.1: Staff’s Suggestions for the Interstate Discretionary Program and the Office of the Administrator’s Selections,
Fiscal Years 1998-99
                                                                       Number of                                    Percentage of
                                                                 staff-suggested        Number of other           staff-suggested
                                                        projects that the Office projects that the Office projects that the Office
                             Number of projects that        of the Administrator    of the Administrator     of the Administrator
Fiscal years                     the staff suggested                     selected               selected                  selected
1998-99                                               6                         6                      0                      100
                                            Source: GAO’s analysis of FHWA’s data.




                                            Page 30                                  GAO/RCED-99-263 FHWA Discretionary Programs
                                       Appendix IV
                                       Interstate Discretionary Program




                                       To determine the proportion of projects and funds FHWA awarded to
                                       Democratic or Republican congressional districts, we examined all the
                                       Interstate Discretionary projects submitted and selected for fiscal years
                                       1998-99. When compared with project submissions, it appears that FHWA
                                       selected a disproportionate number of projects located in Democratic
                                       districts. However, because of the small number of projects submitted and
                                       selected, no meaningful conclusions can be drawn from this analysis. The
                                       funding FHWA provided was in proportion to total funding requests. Tables
                                       IV.2 and IV.3 show the results of our analysis.

Table IV.2: Interstate Discretionary
Funding Requested and Provided,        Dollars in millions
Fiscal Years 1998-99                                               Funding                               Funding
                                       Party                     requested           Percentage          provided       Percentage
                                       Democratic                     $31.9                  26             $19.2              30
                                       Republican                       26.5                 22              14.2              22
                                       Independent                        0.0                 0               0.0               0
                                       Other                            64.1                 52              30.0              47
                                       Total                         $122.6                 100             $63.4             100
                                       Note: Percentages may not add to 100 because of rounding.

                                       Source: GAO’s analysis of FHWA’s data.



Table IV.3: Interstate Discretionary
Projects Requested and Provided,                                       Projects                              Projects
Fiscal Years 1998-99                   Party                          submitted          Percentage          selected Percentage
                                       Democratic                               3                   27              3          50
                                       Republican                               6                   55              2          33
                                       Independent                              0                   0               0           0
                                       Other                                    2                   18              1          17
                                       Total                                    11                 100              6         100
                                       Source: GAO’s analysis of FHWA’s data.



                                       Although TEA-21 did not reauthorize the program, FHWA established
                                       selection criteria for projects funded by the program and published them
                                       in the Federal Register on September 18, 1998. FHWA used these criteria to
                                       select projects for funding for fiscal years 1998-99. Figure IV.1 shows the
                                       criteria that FHWA included in its fiscal years 1998-99 solicitation
                                       memorandum to the states.




                                       Page 31                                       GAO/RCED-99-263 FHWA Discretionary Programs
                                              Appendix IV
                                              Interstate Discretionary Program




Figure IV.1: FHWA’s Interstate Discretionary Program Project Selection Criteria



 Eligibility
 Funds are available for work eligible under the provisions of the Federal-Aid Highway Act of 1981 and included in
 the 1981 Interstate Cost Estimate.

 Funding requests must be for ready-to-go projects in states which have obligated or will obligate during fiscal year
 1999 all available Interstate Completion and Interstate Discretionary funds.

 Statutory
 None.

 Administrative
 Segments not open to traffic—Consideration was given to eligible projects that will close gaps in the Interstate
 system.

 State priorities—For States that submit more than one project, consideration was given to the individual State’s
 priorities, if specified.

 Leveraging of private or other public funding—Because the requests for funding usually far exceed the available
 Interstate Discretionary funds, commitment of other funding sources to complement the requested funds was an
 important factor.

 Project selection also considered national geographic distribution among all of the discretionary programs as well as
 congressional direction or guidance provided on specific projects or programs.


                                              Source: FHWA’s fiscal years 1998-99 solicitation memorandum to the states.




                                              Page 32                                      GAO/RCED-99-263 FHWA Discretionary Programs
Appendix V

Interstate Maintenance Discretionary
Program

Background:                                 The Interstate Maintenance Discretionary Program, originally called the
                                            Interstate 4R Discretionary Program, was created by section 115 (a) of the
                                            Surface Transportation Assistance Act of 1982. Funds were provided for
                                            the program from lapsed Interstate 4R apportionments. The Surface
                                            Transportation and Uniform Relocation and Assistance Act of 1987
                                            provided for a $200 million set-aside for each of the fiscal years 1988
                                            through 1992 from the Interstate 4R authorization for the continuation of
                                            the Interstate 4R discretionary fund and provided criteria and factors to be
                                            used in the distribution of funds. ISTEA set aside $375 million. Of the
                                            amount set aside, $16 million was for fiscal year 1992 and $17 million was
                                            for each of fiscal years 1993 and 1994 to be used for improvements on the
                                            Kennedy Expressway in Chicago. ISTEA terminated the apportioned
                                            Interstate 4R Fund Program and provided that the Interstate 4R set-aside
                                            come from the National Highway System Program.

Eligibility:                                Interstate Maintenance Discretionary funds may be used for resurfacing,
                                            restoring, rehabilitating, and reconstructing the Interstate Highway
                                            System, including providing additional capacity. The federal share under
                                            this program is generally 90 percent.

TEA-21’s Provisions:                        TEA-21 authorized $50 million for fiscal year 1998 and $100 million for
                                            each of fiscal years 1999 through 2003 for this program.

Project Selections:                         During fiscal years 1998-99, the Office of the Administrator selected
                                            100 percent of the projects that the FHWA program staff suggested for
                                            funding. The Office of the Administrator also selected two additional
                                            projects. (See table V.1.)


Table V.1: Staff’s Suggestions for the Interstate Maintenance Discretionary Program and the Office of the Administrator’s
Selections, Fiscal Years 1998-99
                                                                      Number of                                     Percentage of
                                                                staff-suggested         Number of other           staff-suggested
                                                        projects that the Office projects that the Office projects that the Office
                            Number of projects that        of the Administrator     of the Administrator     of the Administrator
Fiscal years                     the staff suggested                    selected                selected                  selected
1998-99                                               6                         6                      2                      100

                                            Source: GAO’s analysis of FHWA’s data.


                                            To determine the proportion of projects and funds FHWA awarded to
                                            Democratic or Republican congressional districts, we examined all the
                                            Interstate Maintenance projects submitted and selected for fiscal years



                                            Page 33                                  GAO/RCED-99-263 FHWA Discretionary Programs
                                    Appendix V
                                    Interstate Maintenance Discretionary
                                    Program




                                    1998-99. When compared with project submissions, it appears that FHWA
                                    selected a higher percentage of projects in Democratic congressional
                                    districts. However, because of the small number of projects selected, no
                                    meaningful conclusions can be drawn from this analysis. The funding FHWA
                                    provided was in proportion to total funding requests. Tables V.2 and V.3
                                    show the results of our analysis.

Table V.2: Interstate Maintenance
Funding Requested and Provided,     Dollars in millions
Fiscal Years 1998-99                                            Funding                          Funding
                                    Party                     requested        Percentage        provided      Percentage
                                    Democratic                    $887.0                  41        $59.7              45
                                    Republican                   1,056.2                  49          71.9             55
                                    Independent                      10.4                <1            0.0              0
                                    Other                          198.8                   9           0.0              0
                                    Total                       $2,152.3                100        $131.6             100
                                    Note: Percentages may not add to 100 because of rounding.

                                    Source: GAO’s analysis of FHWA’s data.



Table V.3: Interstate Maintenance
Projects Requested and Provided,                               Projects                          Projects
Fiscal Years 1998-99                Party                     submitted        Percentage        selected      Percentage
                                    Democratic                         43                 45            5              63
                                    Republican                         45                 47            3              37
                                    Independent                         1                  1            0               0
                                    Other                               7                  7            0               0
                                    Total                              96               100             8             100
                                    Note: Percentages may not add to 100 because of rounding.

                                    Source: GAO’s analysis of FHWA’s data.



                                    To address the TEA-21 requirement to establish and publish selection
                                    criteria for projects, FHWA published its existing selection criteria for the
                                    Interstate Maintenance Discretionary Program in the Federal Register on
                                    July 23, 1998. Figure V.1 shows the criteria that FHWA included in the fiscal
                                    years 1998-99 solicitation memorandum to the states.




                                    Page 34                                    GAO/RCED-99-263 FHWA Discretionary Programs
                                                Appendix V
                                                Interstate Maintenance Discretionary
                                                Program




Figure V.1: FHWA’s Interstate Maintenance Discretionary Program Project Selection Criteria



 Eligibility
 Funds are available for resurfacing, restoring, rehabilitating and reconstructing (4R), including added lanes, on most
 existing Interstate system routes. However, not eligible for allocation of funds are projects on any highway
 designated as a part of the Interstate System under Section 139 of 23 U.S.C., as in effect before the enactment of
 TEA-21 and any toll road on the Interstate System not subject to an agreement under Section 119 (e) of 23 U.S.C.,
 as in effect on December 17, 1991.

 Statutory
 Any project the cost of which exceeds $10 million (23 U.S.C. 118).

 A project on any high volume route in an urban area or high truck volume route in a rural area (23 U.S.C. 118).

 Priority may be given to funding a transportation project relating to an international quadrennial Olympic or
 Paralympic event, or a Special Olympics International event if the project meets the extraordinary needs associated
 with such events and is otherwise eligible for assistance with Interstate Maintenance Discretionary funds (TEA-21,
 Section 1223).

 Administrative
 Leveraging of private or other public funding—Because the annual requests for funding far exceed the available
 Interstate Maintenance Discretionary funds, commitment of other funding sources to complement the requested
 funds was an important factor.

 State priorities—For States that submit more than one project, consideration is given to the individual State’s
 priorities, if specified.

 Expeditious completion of project—Preference was also given to requests that will expedite the completion of a
 viable project over requests for initial funding of a project that will require a long-term commitment of future funding.
 For large-scale projects, consideration was given to the State’s total funding plan to expedite the completion of the
 project.

 Project selection also considered national geographic distribution among all of the discretionary programs as well as
 congressional direction or guidance provided on specific projects or programs.


                                                Source: FHWA’s fiscal years 1998-99 solicitation memorandum to the states.




                                                Page 35                                      GAO/RCED-99-263 FHWA Discretionary Programs
Appendix VI

Ferry Boats and Facilities Program


Background:                                 In 1991, ISTEA created a discretionary funding program for the construction
                                            of ferry boats and ferry terminal facilities and authorized funding from the
                                            Highway Trust Fund. ISTEA authorized $100 million for fiscal years 1992
                                            through 1997. The federal share under this program is 80 percent. Funds
                                            are available until expended.

Eligibility:                                Ferry boats and facilities must be publicly owned. The operation of the
                                            ferry facilities must be on a route classified as a public road, except an
                                            Interstate route.

TEA-21’s Provisions:                        TEA-21 authorized $30 million for fiscal year 1998 and $38 million for each
                                            of fiscal years 1999 through 2003 for this program. TEA-21 further
                                            earmarked $20 million of the Ferry Boats and Facilities funds for each of
                                            fiscal years 1999 through 2003 for projects in three states—Alaska
                                            ($10 million), New Jersey ($5 million), and Washington ($5 million).
                                            Therefore, $18 million remains for allocation to the other states for each of
                                            fiscal years 1999 through 2003.

Project Selections:                         During fiscal years 1998-99, the Office of the Administrator selected
                                            100 percent of the projects that the FHWA program staff suggested for
                                            funding. (See table VI.1.)


Table VI.1: Staff’s Suggestions for the Ferry Boats and Facilities Program and the Office of the Administrator’s Selections,
Fiscal Years 1998-99
                                                                      Number of                                     Percentage of
                                                                staff-suggested        Number of other            staff-suggested
                                                       projects that the Office projects that the Office projects that the Office
                             Number of projects that      of the Administrator     of the Administrator      of the Administrator
Fiscal years                     the staff suggested                    selected                selected                  selected
1998-99                                           29                           29                      0                      100
                                            Source: GAO’s analysis of FHWA’s data.



                                            To determine the proportion of projects and funds FHWA awarded to
                                            Democratic or Republican congressional districts, we examined all the
                                            Ferry Boats and Facilities projects submitted and selected for fiscal years
                                            1998-99. When compared with project submissions, it appears that FHWA
                                            awarded both a disproportionate percentage of projects and funds to
                                            projects located in Democratic districts. However, a congressional
                                            earmark of $20 million to three states—Alaska, New Jersey, and
                                            Washington—represented more than 50 percent of the total program
                                            allocation. In allocating the remaining $18 million in funds, FHWA officials




                                            Page 36                                  GAO/RCED-99-263 FHWA Discretionary Programs
                                         Appendix VI
                                         Ferry Boats and Facilities Program




                                         chose to place all projects from the three states into the qualified category.
                                         The disproportionate results can be attributed to the fact that a great
                                         number of projects from these three states are primarily from Republican
                                         districts and accounted for about 64 percent of projects submitted and
                                         73 percent of the funding requested from Republican districts. When we
                                         removed the projects and associated funding amounts for the three states
                                         and recalculated the district analysis, we found the remaining results to be
                                         proportionate. Tables VI.2 and VI.3 show the results of our analysis not
                                         excluding the earmarks.

Table VI.2: Ferry Boats and Facilities
Funding Requested and Provided,          Dollars in millions
Fiscal Years 1998-99                                                    Funding                                 Funding
                                         Party                        requested         Percentage              provided         Percentage
                                                                                  a
                                         Democratic                         $60.5                  40               $28.4               48
                                         Republican                          74.9a                 49                 22.9              39
                                         Independent                           0.0                   0                 0.0               0
                                         Other                               17.6                  12                  8.0              13
                                         Total                             $153.0                 100               $59.3b              100
                                         Note: Percentages may not add to 100 because of rounding.
                                         a
                                          This includes $2.6 million for projects located in Democratic districts (New Jersey) and
                                         $55 million for projects located in Republican districts (Alaska and Washington).
                                         b
                                             Funding provided includes $20 million earmarked by the Congress.

                                         Source: GAO’s analysis of FHWA’s data.



Table VI.3: Ferry Boats and Facilities
Projects Requested and Provided,                                       Projects                                 Projects
Fiscal Years 1998-99                     Party                        submitted         Percentage              selected         Percentage
                                                                                  a
                                         Democratic                            37                  43                   19              66
                                         Republican                            42a                 49                    7              24
                                         Independent                             0                   0                   0               0
                                         Other                                   7                   8                   3              10
                                         Total                                 86                 100                   29              100
                                         a
                                          This includes 2 projects in Democratic districts (New Jersey) and 27 projects in Republican
                                         districts (Alaska and Washington).

                                         Source: GAO’s analysis of FHWA’s data.



                                         To address the TEA-21 requirement to establish and publish selection
                                         criteria for projects, FHWA published its existing selection criteria for the




                                         Page 37                                        GAO/RCED-99-263 FHWA Discretionary Programs
Appendix VI
Ferry Boats and Facilities Program




Ferry Boats and Facilities Program in the Federal Register on July 23,
1998. Figure VI.1 shows the criteria that FHWA included in the fiscal years
1998-99 solicitation memorandum to the states.




Page 38                              GAO/RCED-99-263 FHWA Discretionary Programs
                                                 Appendix VI
                                                 Ferry Boats and Facilities Program




Figure VI.1: FHWA’s Ferry Boats and Facilities Discretionary Program Project Selection Criteria



 Eligibility
 Funds are available as specified in Section 1064 of ISTEA, as amended, for the construction of ferry boats and ferry
 terminal facilities in accordance with 23 U.S.C. 129. The basic criteria are:

 The ferry facility is providing a link on a public road (other than Interstate) or the ferry facility is providing passenger
 only ferry service.

 The ferry and/or ferry terminal to be constructed or improved is either publicly owned, publicly operated, or a public
 authority that has majority ownership interest where it is demonstrated that the ferry operation provides substantial
 public benefits.

 The ferry does not operate in international water except for Hawaii, Puerto Rico, Alaska and for ferries between a
 State and Canada.

 Statutory
 None

 Administrative
 Expeditious completion of project—Consideration was given to requests that will expedite the completion of a viable
 project. This was a project’s ability to expeditiously complete usable facilities within the limited funding amounts
 available.

 Leverage of private or other public funding—Because the annual requests for funding far exceed the available Ferry
 Boat Discretionary funds, commitment of other funding sources to complement the requested funding was an
 important factor.

 Amount of Ferry Boat Discretionary funding—The requested amount of funding was a consideration. Realizing the
 historically high demand of funding under this program, the more moderately sized (less than $2 million) project
 requests were given more favorable consideration to allow more States to receive funding under this program.

 State Priorities—For States that submit more than one project, consideration was given to individual State priorities,
 if specified.

 National geographic distribution of funding within the program—Consideration was given to selecting projects over
 time among all the States competing for funding.

 Project selection also considered national distribution among all of the discretionary programs as well as
 congressional direction or guidance provided on specific projects or the program.


                                                 Source: FHWA’s fiscal years 1998-99 solicitation memorandum to the states.




                                                 Page 39                                       GAO/RCED-99-263 FHWA Discretionary Programs
Appendix VII

Comments From the Department of
Transportation




               Page 40   GAO/RCED-99-263 FHWA Discretionary Programs
           Appendix VII
           Comments From the Department of
           Transportation




(348172)   Page 41                           GAO/RCED-99-263 FHWA Discretionary Programs
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