GAO-04-113R States’ Highway Construction Costs 

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. 
Page 2 GAO-04-113R States’ Highway Construction Costs 

Highway project costs can differ for a number of reasons.1

 For example, highways 

are more expensive to build in mountainous areas than in flat areas. Projects in 

urban areas are more expensive than those in rural areas. Projects with bridges cost 

more than similar projects that do not require bridges. Compared with smaller 

projects, large projects may result in lower unit costs because of economies of scale. 

More complicated projects, such as those with a large number of interchanges or 

complicated engineering problems, can cost more than less complicated projects. 

Other factors that may affect cost are the degree of competition for contracts and 

different state design standards. 

For each contract exceeding $500,000, FHWA requires that each state, the District of 

Columbia, and Puerto Rico (collectively called “states”) provide the agency with data 

(called bid price data) on the quantity of materials used and the installed price of the 

materials (representing materials, labor, overhead, and profit) from contracts to 

construct and maintain roads on the National Highway System.2

 States are required 

to provide FHWA with this data for seven materials (common and unclassified 

roadway excavation, structural reinforcement and structural steels, bituminous and 

Portland cement concrete surfaces, and structural concrete), as well as provide the 

total contract costs for road and bridge aspects of the contract, and the location of 

the project. According to FHWA, the bid price data are limited to seven materials 

because the materials are common to all states; therefore, they act as good indicators 

for changes in principal work items. FHWA makes summaries of its bid price data, 

including a national composite index of all materials on which data are collected, 

available to the public in its quarterly Price Trends for Federal-Aid Highway 

Construction and in its annual Highway Statistics.

3

According to FHWA officials, the bid price data are the only data they collect from 

states involving price and quantity, both of which are needed to compare state 

highway construction costs. FHWA collects bid price data so that it can use the 

national composite index to help (1) monitor changes in the purchasing power of the 

federal-aid highway construction dollar, and (2) develop, as one factor, projections of 

future highway funding needs. 

 

1

Most federal funds that states receive to fund their highway projects are apportioned to the states 

based on formulas and procedures prescribed by law. With few exceptions, state decisions to 

undertake higher- or lower-cost projects do not affect the level of funding they receive. However, to 

the extent that states can avoid excessive costs on ongoing projects, they will be able to undertake 

additional projects. 

2

The National Highway System consists of completed interstate highways, urban and rural principal 

arterials, other strategic highways, and intermodal connectors. The system comprises about 161,000 

miles of highway. Although the system represents about 4 percent of total highway miles, it carries 

about 43 percent of the traffic (as measured by vehicle miles traveled). 

3

In these publications, FHWA combines the two excavation items and reports on six materials. 
Page 3 GAO-04-113R States’ Highway Construction Costs

 

Summary 

FHWA’s database allows for comparisons of an individual state’s costs over time but 

does not allow for comparisons between states. In addition, FHWA has concerns, 

which have not been formally disclosed to users, about the quality of the data. 

Comparing States’ Construction Costs

FHWA’s database containing its bid price data allows for comparisons of an 

individual state’s costs over time but does not allow for comparisons between states.4 

Costs are tracked by state, according to an index value that is assigned quarterly. 

Each state received an index value of 100 for the base year (1987). If one state’s costs 

in the base year were twice those of another state, both would have an index value of 

100 for that year, and the difference in those costs would not be shown, thus 

preventing a comparison. 

In addition, FHWA officials told us that the bid price data do not contain details to 

determine why costs appear to differ either between states or within a state. They 

told us that the installed cost of materials could vary significantly, for example, 

because the quality of the materials or the installation specification (e.g., smoothness 

of the surface) could be very different. FHWA’s bid price data do not contain this 

information. 

FHWA is considering whether to discontinue collecting bid price data because of the 

(1) apparent limited use of the data, and (2) level of effort to collect data that 

apparently is not extensively used. In commenting on a draft of this report, FHWA 

noted that it hired a consultant to evaluate the usefulness of the data to stakeholders 

and to explore potential alternative approaches to gathering information that could 

be used within FHWA. FHWA also commented that it recently partnered with the 

American Association of State Highway Transportation Officials to survey all state 

departments of transportation on the extent of use of the published price trend data 

and alternative ways that FHWA could gather these data (such as using data that are 

being collected by states for their internal use). 

We contacted 12 states, the Bureau of Transportation Statistics, and several industry 

associations about the usefulness of the bid price data. Generally, they told us they 

do not use the data. For example, a few states told us that they maintain more 

complete data, and FHWA’s data are not compatible with their own. FHWA 

estimated that it takes states, in total, about 975 hours annually to report the bid price 

 

4

In 2002, the Washington State Department of Transportation surveyed states on the costs to build a 

1.02-mile interchange whose design the department believed was universal to all states. Reported 

costs ranged from $4 million to $26.7 million, based on 25 states reporting. See the enclosure to this 

report. 
Page 4 GAO-04-113R States’ Highway Construction Costs 

data (based on reporting by 37 states), or an average of about 6.5 hours per state per 

quarterly report. 

Quality of FHWA’s Bid Price Data

FHWA’s quality control procedures on its bid price data are limited. It receives the 

bid price data either electronically or on paper from the states, and FHWA officials 

then input the data into their database. FHWA officials told us that they 

intermittently review submitted data for obvious errors and completeness and follow 

up with states for correction. However, they said they do not follow standard errorchecking procedures, such as those contained in departmental guidelines, for 

reviewing state submitted reports.5

 They also told us that they have no procedures 

for verifying the keypunching of data made by their data entry staff. An FHWA 

official told us that FHWA is reluctant to invest time and money into improving the 

quality of its data until it decides whether it will continue to collect the data. While 

we agree that any substantial investments in time and money may not be warranted if 

FHWA ultimately decides to discontinue collecting bid price data, following standard 

error-checking routines would increase FHWA’s knowledge about the quality of its 

data and the extent to which its concerns should be communicated to data users. 

FHWA recognizes that it has problems with the quality of its bid price data. 

According to FHWA officials, underreporting and, to a lesser degree, inconsistent 

reporting are the biggest problems affecting data quality. Regarding underreporting, 

we examined data in the database for 3 years, 2000 through 2002. We found that the 

database did not contain data for seven states for 1, 2, or all 3 years.6 In addition, we 

found instances in which states that received relatively more highway funds from 

FHWA reported far fewer contracts (and contract amounts) than states that received 

significantly fewer funds from FHWA, suggesting that states that received more funds 

may be underreporting. 

We also found data inconsistencies. For example, about 19 percent of the data for 

2000 through 2002 were for a year other than the one being reported on. Most often 

these incorrect data were for the previous year. FHWA officials told us that, for the 

most part, states submitted these data late.7

 Instead of omitting the data, FHWA 

officials told us they included the previous year’s data to add robustness to the data 

reported for the reporting year and because the information for the prior years had 

already been disseminated. Among other problems, we found a $7 million contract 

erroneously included in the database as a $7 billion contract, thus potentially skewing 

some information (but not the unit costs for the six materials reported) for that state. 

 

5

Guidelines for processing statistical data are available in The Department of Transportation’s 

Information Dissemination of Quality Guidelines and the Bureau of Transportation Statistics’ Guide 

to Good Statistical Practices in the Transportation Field. 

6

The one state that did not report data for all 3 years told us that it was too much trouble. Three other 

states we contacted told us that they made data available to FHWA’s field office, which compiled it for 

reporting purposes. We did not attempt to verify whether the states reported the data or how FHWA 

processed submitted data. 

7

We did not attempt to determine when these data were submitted. 
Page 5 GAO-04-113R States’ Highway Construction Costs

 

With the exception of the erroneous $7 billion contract amount, we did not attempt to 

trace the data back to the states. Therefore, we cannot say whether the state 

incorrectly reported the data for the problems we found or whether the data were 

entered incorrectly at FHWA.8

 

FHWA has not formally disclosed its concerns with the quality of the bid price data 

when it reported these data in its Price Trends for Federal-Aid Highway 

Construction or Highway Statistics. An FHWA official told us that he believes that 

most state departments of transportation and other users are aware of the bid price 

data flaws because this information has been provided informally to many 

stakeholders over the years and state departments of transportation use the 

published summaries primarily to cross-check other state highway construction cost 

data. After we raised this concern, an FHWA official said that FHWA is considering 

how to advise states and other users about the quality of the data that it is reporting. 

 

Conclusions 

As we were examining the use of FHWA’s bid price data to determine whether it 

could be used to compare states’ highway construction costs, FHWA officials alerted 

us to their concerns about the quality and usefulness of its bid price data. We agree 

with FHWA that it is wasteful to collect and disseminate data that is not used. 

However, there may be other state construction data that FHWA could collect that 

would be useful to stakeholders. Until FHWA decides whether it will discontinue, 

supplement, or supplant bid price data collection, the quality of the bid price data 

that FHWA reports to the public could be improved through use of more systematic 

quality control procedures, such as through standard error-checking routines and 

keypunching verification required by departmental guidelines. 

Recommendations for Executive Action 

In order to determine whether continued federal and state efforts to provide and 

analyze state construction cost data are warranted, we recommend that the Secretary 

of Transportation direct the Federal Highway Administrator to determine whether 

the bid price data collected by FHWA is useful to transportation stakeholders and, if 

not, to discontinue collecting the data. Further, we recommend that the Secretary 

direct the Federal Highway Administrator to determine whether it would be useful 

and feasible to collect and disseminate other state construction cost data that could 

supplement or supplant FHWA’s bid price data. 

While FHWA continues to collect and disseminate bid price data, we recommend that 

the Secretary direct the Federal Highway Administrator follow departmental 

guidelines for systematic quality control procedures, such as standard error-checking 

routines and keypunching verification, to improve the accuracy of the data reported. 

 

8

In commenting on a draft of this report, FHWA told us that the state reported the $7 million contract 

amount as $7 billion. The state did not respond to our requests for information. 
Page 6 GAO-04-113R States’ Highway Construction Costs 

Finally, until the quality of the bid price data is improved, we recommend that the 

Secretary of Transportation direct the Federal Highway Administrator to disclose its 

limitations in any published distribution of the data. 

Agency Comments and Our Evaluation 

We obtained oral comments on a draft of this report from the Department of 

Transportation. The department did not provide an overall opinion about our draft 

report or directly comment on our proposed recommendations. The department 

commented that in situations where data is provided by nondepartmental sources 

such as states, the department’s options for ensuring the accuracy of the original 

source data are limited. In these situations, departmental guidelines emphasize 

disseminating information to users about data quality, the department’s processing 

methods, and analysis methods. Exploring ways to ensure the accuracy of data 

submitted by others, such as states, was beyond the scope of our effort. Therefore, 

we cannot comment on whether the department’s options are limited or whether 

cost-effective means and incentives exist to better ensure data accuracy and 

completeness. However, the department’s comment that its guidelines emphasize 

communicating to users about data quality suggests that it agrees with the proposed 

recommendation in our draft report (and included in this final report) that it disclose 

the limitations of its bid price data in any published distribution of the data. 

The department also suggested that the report recognize FHWA’s recent efforts to 

determine if collecting bid price data should continue. We added this information to 

this final report. The department also provided a number of technical and clarifying 

comments, which we incorporated where appropriate. 

Scope and Methodology 

To identify whether FHWA collects information on states’ highway construction costs 

that could help it and other stakeholders in overseeing federal-aid highway programs, 

we contacted officials in FHWA and the Bureau of Transportation Statistics in the 

Department of Transportation. They identified FHWA’s bid price data as the only 

data set that included both quantity and cost information.9

 To understand the nature 

of the bid price data and their uses, we interviewed officials in FHWA’s Office of 

Program Administration; reviewed data collection forms and instructions; reviewed 

FHWA documentation on how bid price data are compiled into reports; and reviewed 

the primary public summary of the data in Price Trends for Federal-Aid Highway 

Construction. 

As part of our work to determine how FHWA’s bid price data help it and other 

stakeholders understand how states’ costs to build federally financed highways 

compare, we (1) examined how FHWA ensures the quality of its bid price data, (2) 

tested the quality and reliability of the data, and (3) asked selected stakeholders 

 

9

FHWA also requires that contractors provide it with certain labor cost information. However, an 

FHWA official believes that few contractors submit this information. 
Page 7 GAO-04-113R States’ Highway Construction Costs

 

about their perceptions of the data’s usefulness. Regarding how FHWA ensures the 

quality of its bid price data, we discussed with FHWA officials in its Office of 

Program Administration how the data are submitted to FHWA and how the data are 

entered and maintained in the database. We also discussed quality control 

procedures, such as ensuring accuracy and completeness of data submissions and 

ensuring accuracy of data entered into the database. We also contacted four states 

for which FHWA’s database did not contain any contract information for 2000, 2001, 

or 2002, to ask if they had submitted data. These states were the District of 

Columbia, Kentucky, Minnesota, and New Hampshire. Finally, we reviewed 

departmental guidelines for processing statistical data: The Department of 

Transportation’s Information Dissemination of Quality Guidelines and Guide to 

Good Statistical Practices in the Transportation Field. 

Regarding testing the quality and reliability of FHWA’s bid price data, we obtained 

electronic files from FHWA for 2000, 2001, and 2002. Our tests focused primarily on 

checking 

• contract award dates, to make sure they fell within the year in which they 

were being reported (e.g., that all contracts in the 2000 database had a start 

date within 2000); 

• contract award amounts for apparent extreme (high or low) amounts; and 

• the number of contracts reported by each state in each year, to see if they 

were relatively consistent from year to year and to see if some states had not 

reported any contracts for at least 1 year. 

We then discussed the results of our tests with FHWA officials. When we found 

examples of incomplete data or inaccurate data, we did not attempt to determine 

whether states submitted incorrect data or whether FHWA incorrectly entered the 

data into its database. 

Regarding understanding the usefulness of FHWA bid price data to transportation 

stakeholders, we contacted private associations, state highway officials, and federal 

agencies. We discussed the practical applications, if any, of the FHWA bid price data. 

The private associations we contacted were the Association for the Advancement of 

Cost Engineering International, American Road and Transportation Builders 

Association, and American Association of State Highway Transportation Officials. 

We contacted the state departments of transportation in California, the District of 

Columbia, Hawaii, Illinois, Kentucky, Louisiana, Minnesota, Nevada, New Hampshire, 

North Dakota, Ohio, and Wyoming. We selected these states because (1) they 

represented states with either a large, medium, or small number of contracts in the 

database, or (2) we were contacting them anyway about whether they had submitted 

bid price data from 2000 through 2002. The federal agencies were the Bureau of 

Transportation Statistics and the Congressional Research Service. 
Page 8 GAO-04-113R States’ Highway Construction Costs 

Finally, we reviewed recent reports by the Department of Transportation’s Office of 

Inspector General and by us on FHWA cost oversight issues.10 We conducted our 

work from July through October 2003 in accordance with generally accepted 

government auditing standards. 

_ _ _ _ _ _ 

As arranged with your offices, unless you publicly announce its contents earlier, we 

plan no further distribution of this report until 30 days after the date of this letter. At 

that time, we will send copies of this report to congressional committees with 

responsibilities for highway issues; the Secretary of Transportation; the Federal 

Highway Administrator; and the Director, Office of Management and Budget. We will 

also make copies available to others upon request. This report will be available at no 

charge on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact either James 

Ratzenberger at ratzenbergerj@gao.gov or me at guerrerop@gao.gov. Alternatively, 

we may be reached at (202) 512-2834. Key contributors to this report were Jay 

Cherlow, Hiroshi Ishikawa, Jennifer Popovic, Robert Parker, and James 

Ratzenberger. 

Peter Guerrero 

Director, Physical Infrastructure Issues 

Enclosure 

 

10See, for example, our recent reports: Transportation Programs: Opportunities for Oversight and 

Improved Use of Taxpayer Funds, GAO-03-1040T (Washington, D.C.: July 22, 2003); Federal-Aid 

Highways: Cost and Oversight of Major Highway and Bridge Projects—Issues and Options, GAO03-764T (Washington, D.C.: May 8, 2003); and Transportation Infrastructure: Cost and Oversight 

Issues on Major Highway and Bridge Projects, GAO-02-702T (Washington, D.C.: May 1, 2002). 
Page 9 GAO-04-113R States’ Highway Construction Costs

 

Enclosure 

States’ Highway Construction Costs

Briefing for the Chairman 

Subcommittee on Financial Management, 

the Budget, and International Security

Senate Committee on Governmental Affairs

September 11, 2003
Page 10 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

2

Objective

Our objective was to determine whether Federal Highway Administration 

(FHWA) data can help transportation stakeholders understand how states’

highway construction costs compare.

During our review, we became aware of significant issues regarding the 

quality of the data that FHWA collects and reports. This topic is also 

covered in this briefing.
Page 11 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

3

Background

• States, with support from localities, are primarily responsible for 

building, reconstructing, and maintaining the nation’s highways, 

roads, and bridges (termed “constructing highways” for this 

briefing).

• From fiscal year 1998 through 2001, the nation spent more than 

$80 billion each year for capital construction and maintenance on 

its highways.

• Of this amount, the federal government provides nearly $30 

billion each year to states and local governments to help build 

and maintain highways.
Page 12 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

4

Background

• FHWA officials identified one database that FHWA maintains--bid price 

data--that contains both materials quantity and price data, both of which 

are needed to compare construction costs across states.

– FHWA requires that states provide it with quantity and price information (bid price data) for contracts on all federally financed 

highway projects costing more than $500,000 on the National 

Highway System. FHWA collects this information under its general oversight authority.

– FHWA collects this information on the (1) installed costs (materials, labor, overhead, and profit) of seven materials (common and 

unclassified roadway excavation, structural reinforcement and 

structural steels, bituminous and Portland cement concrete surfaces, 

and structural concrete), (2) total roadway and bridge contract 

amounts, and (3) location of the project.

– According to FHWA, the bid price data are limited to seven materials because the materials are common to all states; therefore, they can 

act as good indicators for changes in prices of principal work items.
Page 13 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

5

Background

• FHWA collects bid price data to 

– monitor changes in the purchasing power of the federal-aid highway construction dollar and

– use as one factor in developing projections of future highway funding needs.

• FHWA makes a summary of this information available to the 

public in its quarterly Price Trends for Federal-Aid Highway 

Construction and in its annual Highway Statistics publications. 

• FHWA’s report shows how much an individual state’s costs have 

changed over time (for the materials reported) and

shows national price trends for the reported materials.
Page 14 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

6

Scope and Methodology

• We examined the availability of data collected by FHWA to make 

state-by-state comparisons of highway construction costs.

• We discussed FHWA’s bid price data with transportation 

stakeholders regarding the usefulness of the data for 

understanding highway construction costs.

• We discussed the quality of the bid price data with FHWA and 

with state departments of transportation and performed reliability 

tests. 

• We reviewed recent products by the Department of 

Transportation’s Office of Inspector General and by GAO on 

oversight of cost issues related to federally financed highway 

projects.
Page 15 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

7

Comparing States’ Construction 

Costs Using Bid Price Data

• FHWA’s database that contains its bid price data allows for 

comparisons of an individual state’s costs over time but does not 

allow comparisons between states.

– The database assigns each state’s costs an index value of 

100 for the base year, 1987. The index value of 100 may 

represent different levels of costs for different states, thus 

preventing any comparison. 

– In addition, FHWA officials told us that the installed cost of 

materials can vary significantly, for example, due to the 

quality of the material or the installation specification (e.g.,

smoothness of the surface). FHWA’s bid price data do not 

contain this information. 
Page 16 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

8

Comparing States’ Construction 

Costs Using Bid Price Data

• In order to collect data that would allow meaningful insights, 

FHWA would have to be able to identify the factors that have the

greatest ability to explain cost differences (e.g., understanding 

differences due to labor costs, different specifications for 

materials, and topographic conditions).

• In addition, the benefits from collecting information on factors that 

influence highway construction costs would have to be weighed 

against the costs and feasibility of collecting it.
Page 17 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

9

Usefulness of Data

• We contacted 12 states, the Bureau of Transportation Statistics,

and several industry associations about the usefulness of 

FHWA’s bid price data. They told us they generally do not use 

these data. For example, a few states told us that they compile

more extensive and complete cost data for their own use, and the

information requested by FHWA is not compatible with their own 

systems. 

• FHWA has estimated that, annually, it takes a total of about 975

hours for states to report bid price data, based on 37 states 

reporting on a total of about 1,300 contracts each year.

• FHWA is considering whether to discontinue collecting bid price 

data because of the (1) apparent lack of use of the data and (2)

level of effort to collect the data. FHWA has not set a date for 

making this decision.
Page 18 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

10

Quality of FHWA’s Bid Price Data 

• Regarding data quality, FHWA officials are concerned about the 

reliability of the bid price data primarily as a result of underreporting and, 

to a lesser degree, inconsistent information contained in its database. 

• Regarding underreporting, FHWA officials believe that states do not 

report all contracts over $500,000 for projects on the National Highway 

System, but they have not attempted to determine the extent of 

underreporting.

– We found that 7 states did not report any contracts for 1 or more 

years during the 3-year period we reviewed, 2000-2002. 

– We contacted 4 of these states. One told us that submitting bid

price data was too much work. The other three states told us that 

they supplied cost information to FHWA state offices, who compiled 

it for inclusion in the database. (We did not attempt to verify if 

information was provided to FHWA or how FHWA compiled it.) 
Page 19 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

11

Quality of FHWA’s Bid Price Data

• We also contacted 8 states that reported information to FHWA for each of the 3 years, 2000 through 2002. Six of the 

states told us that they believe that the information in 

FHWA’s database includes all information required to be 

reported. The other two states told us that FHWA state 

offices compiled information from the states and they did not 

check on the information included in the database. (We did 

not attempt to verify the information submitted by states or 

how FHWA state offices acted on it.)

• Finally, we found instances in which states that received relatively more highway funds from FHWA reported far fewer 

contracts (and contract amounts) than states that received 

significantly less funds from FHWA, suggesting that states 

that received more funds may be underreporting.
Page 20 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

12

Quality of FHWA’s Bid Price Data

• FHWA officials are also concerned about the accuracy of its bid 

price data.

– They told us that they review the submitted data for obvious errors and return the data to states for correction.

– They told us that they do not follow standard error-checking procedures, such as those contained in departmental 

guidelines, for reviewing submitted reports. An FHWA official 

told us that FHWA is reluctant to invest time and money into 

improving the quality of its data until it decides whether it will 

continue to collect the data.
Page 21 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

13

Quality of FHWA’s Bid Price Data

• We found a number of inconsistencies in FHWA’s database for the 

years we examined (2000-2002). Among other things: 

– About 19 percent of the data included for any one year was for a

year other than the one being reported on. 

– Most often, these incorrect data were for the previous year and 

were submitted late, according to FHWA. FHWA officials told us 

that they included the previous year’s data (1) to add robustness to 

the data reported for the reporting year and (2) because the 

information for the previous years had already been published, 

rather than adjusting previous years’ results.

– We found other obvious inconsistencies, such as data reported for 

1900, 1906, and 1921 in the 2000-2002 period. 

– We found one instance where a $7 million contract was entered 

into the database as a $7 billion contract, potentially seriously 

skewing some of the results for that state.

• We did not attempt to determine whether the states submitted incorrect 

information or whether FHWA incorrectly entered it into its database. 
Page 22 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

14

Quality of FHWA’s Bid Price Data

• FHWA’s Price Trends for Federal-Aid Highway Construction and 

Highway Statistics do not disclose FHWA’s concern about its 

data. 

• An FHWA official told us that most state departments of 

transportation are aware of the flaws with its bid price data and 

use it primarily as a comparison with other data they maintain.
Page 23 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

15

State Study of Highway 

Construction Costs

• Although FHWA’s bid price data cannot presently be used to 

compare states’ construction costs, a 2002 Washington State 

Department of Transportation (WSDOT) study sheds some light 

on this issue.

– WSDOT asked other state departments of transportation to 

provide cost information for constructing a highway 

interchange that it deemed would be universal for all states.

– Some costs, such as right of way acquisition, were not 

included because they vary depending on project location.

– WSDOT provided the design specifications and quantities to 

be used for each material.

– WSDOT received responses from 24 other states.
Page 24 GAO-04-113R States’ Highway Construction Costs 

Enclosure 

16

State Study of Highway 

Construction Costs

• WSDOT found:

– Reported costs ranged from about $1 million to $8.5 million 

per lane mile.

– The median reported cost was about $1.6 million per lane 

mile.

– Five states reported costs significantly higher than other 

states—ranging between about $3.1 million and $8.5 million 

per lane mile. (See fig. 1.)

• We did not assess the reliability of the data reported in the 

WSDOT study.
Page 25 GAO-04-113R States’ Highway Construction Costs 

 

Enclosure 

17

State Study of Highway 

Construction Costs

Figure 1: Cost to Build a Lane Mile of a Specified Type of Highway Interchange 

in 25 States

(545039) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
GAO’s Mission The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability of the

federal government for the American people. GAO examines the use of public 

funds; evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good 

government is reflected in its core values of accountability, integrity, and 

reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web 

site daily. The list contains links to the full-text document files. To have GAO email this list to you every afternoon, go to www.gao.gov and select “Subscribe to 

e-mail alerts” under the “Order GAO Products” heading. 

The first copy of each printed report is free. Additional copies are $2 each. A 

check or money order should be made out to the Superintendent of Documents. 

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to

a single address are discounted 25 percent. Orders should be sent to: 

U.S. General Accounting Office 

441 G Street NW, Room LM

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800 

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

Obtaining Copies of 

GAO Reports and

Testimony 

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Public Affairs