By applying program-specific statutory and administrative criteria, program staff screen and prioritize project applications for each discretionary program. The second phase of the selection process begins after FHWA’s Office of Engineering provides the Office of the Administrator with a report for each discretionary program that lists the eligible projects and includes other information, such as what funding the states received in prior years through the discretionary programs and any congressional interest or support for specific projects. The two phases differ in the extent of documentation available to explain how decisions are made—that is, how program staff apply the criteria to group the projects and how the Office of the Administrator makes the final selections. Staff Priorities and Office of the Administrator’s Final Selections Differ

The current process to select projects under the discretionary programs has been in place since fiscal year 1995. In general, under the current process, the Office of the Administrator relies more on its discretion in making the selections than it did under an earlier process that relied almost entirely on program staffs’ analyses and recommendations. As displayed in figure 2, the Office of the Administrator selected over 98 percent of all the projects that the program staff recommended in fiscal years 1992-94 (180 projects selected from 183 staff recommendations). According to FHWA’s Acting Deputy Administrator, the Office of the Administrator found it difficult to make equitable decisions using the rank order lists and thus made the change to the groupings. The official also said that the process did not give the Office of the Administrator enough flexibility to take into account other equally important considerations, such as the geographic distribution of funding. In fiscal year 1995, 92 percent of the projects that the Office of the Administrator selected were projects that staff had categorized as “promising” or “most promising”; 69 percent in fiscal 1996; and 59 percent in fiscal 1997—about 73 percent overall for the 3-year period. The Office of the Administrator selected 100 percent of the projects recommended by the program staff during fiscal years 1992-94 and 100 percent of those that the staff placed in the most promising category during fiscal 1995-97. The information from FHWA described the number and dollar amount of projects submitted for funding, the statutory and administrative criteria for eligibility and selection, and the Office of the Administrator’s final project selections. To determine how changes in the process have affected which projects DOT selects for discretionary funding, we examined the staffs’ analysis of the projects submitted for funding in each program, as well as the Office of the Administrator’s subsequent project selections. The act also provided that the Federal Highway Administration (FHWA) establish a formal process to rank and select discretionary bridge projects for funding.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Transportation's (DOT) project selection process for five federal discretionary programs, focusing on: (1) the selection process and criteria DOT uses to fund projects under its discretionary highway programs; and (2) how DOT's process has changed and how the changes may have affected which projects DOT selects for discretionary funding.

What GAO Found

GAO noted that: (1) DOT uses a two-phase process for selecting and funding transportation projects for the five discretionary programs GAO reviewed; (2) in the first phase, Federal Highway Administration (FHwA) program staff in the field and headquarters compile and evaluate the applications that states submit for discretionary funding; (3) program staff screen the applications by applying eligibility criteria established by statute or administratively; (4) on the basis of written criteria, program staff group the projects into four categories that range in priority from most promising to not qualified and submit the groupings to the Office of the Administrator; (5) the submission to the Office of the Administrator provides information on each candidate project, data on discretionary funds that each state received during prior years, and the current level of congressional interest; (6) in the second phase, the Office of the Administrator uses the information submitted by the program staff, as well as other factors, to evaluate the projects and make the final selections; (7) according to FHwA's Acting Deputy Administrator, the Office of the Administrator has tried to ensure that the dollars are spread fairly among all the states and that the interests of members of Congress are addressed; (8) in contrast to the analyses that the program staff complete in the first phase, the Office of the Administrator does not document the factors it uses to select the final projects or its rationale for making the final selections; (9) DOT is authorized to establish procedures for reviewing and selecting transportation projects under its discretionary programs; (10) GAO's review of the selection process revealed that under the current process, in place during fiscal years 1995-1997, the Office of the Administrator relied more on its discretion and less on the program staff's input and analyses than it did under an earlier process used during fiscal years 1992-1994; (11) under this new process, which was designed to provide the Office of the Administrator with more flexibility in taking into account items such as the geographic distribution of funding, 73 percent of the projects that the Office of the Administrator selected were categorized as "most promising" or "promising"; (12) the Office of the Administrator selected a declining portion of projects from these categories over the 3-year period; and (13) during fiscal years 1992-94, when staff ranked projects in order of priority and recommended specific projects and funding amounts, the Office of the Administrator selected over 98 percent of all projects that the program staff recommended.