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Management Advisories

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Our ongoing audits of FHWA’s oversight of $27.5 billion in highway infrastructure investments funded through ARRA, revealed some states did not conduct federally required “value engineering” (VE) studies during project concept and design.  These studies aim to objectively review reasonable design alternatives on highway and bridge projects with an estimated total cost equal to or exceeding $25 million and $20 million, respectively.  Our preliminary results indicate that the state and local agencies' failure to comply with VE requirements resulted from out-of-date regulations and FHWA policy on conducting VE studies.  Furthermore, VE requirements were not included in most of the states' Stewardship and Oversight Agreements with FHWA.  Our advisory acknowledges recent steps taken by FHWA, including the issuance of revised VE policy and guidance, but notes that additional actions are still needed.