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GAO-04-113R 1 (2003-11-03)

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       Accountability * Integrity * Reliability
United States General Accounting Office
Washington, DC 20548


         November 3, 2003

         The Honorable Peter G. Fitzgerald
         Chairman
         The Honorable Daniel K. Akaka
         Ranking Member
         Subcommittee on Financial Management,
           the Budget, and International Security
         Committee on Governmental Affairs
         United States Senate

         Subject: Comparison of States' Highway Construction Costs

         In your recent letter to us concerning the impending reauthorization of the
         Transportation Equity Act for the 21st Century, you stated that the return on federal
         investment could be increased through effective cost competition for states' highway
         construction contracts. In this context, you asked that we report on how states
         compare in terms of the cost of highway construction. As agreed with your offices,
         we are reporting to you on whether Federal Highway Administration (FHWA) data
         can help transportation stakeholders understand how states' costs to build,
         reconstruct, and maintain federally financed highways, roads, and bridges (termed
         constructing highways for this report) compare. During our review, we became
         aware of significant issues regarding the quality of the data that FHWA collects and
         reports, a topic also discussed in this report. On September 11, 2003, we briefed the
         Chairman on the results of our work, and on September 22 we provided the Ranking
         Member's office with the briefing slides we prepared. This report summarizes the
         briefing. The slides that formed the basis for the briefing are enclosed.

         Background

         States, with support from localities, are primarily responsible for building and
         maintaining the nation's highways, roads, and bridges, with significant financial
         support from the federal government. From 1998 through 2001 (the latest years for
         which data are available), all levels of government spent more than $80 billion each
         year for capital construction and maintenance of their highways, roads, and bridges.
         Of this amount, the federal government supplied about $30 billion annually.


GAO-04-113R States' Highway Construction Costs

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