	DOT’s Leadership Role in Surface Transportation Research

ISTEA expressed the need for a new direction in surface transportation research, finding that despite an annual federal expenditure of more than $10 billion on surface transportation and its infrastructure, the federal government lacked a clear vision of the role of federally funded surface transportation research and an integrated framework for the fragmented surface transportation research programs dispersed throughout the government. While the Department has established councils and committees to coordinate its research, the lack of a departmental focal point and an inadequate strategic plan may limit its leadership role. Until all these issues are addressed, the Department may not be able to respond to ISTEA’s call for an integrated framework for surface transportation research and assume a leadership role in surface research. ITS Program Holds Potential for Innovation If Deployment Obstacles Can Be Resolved

ISTEA also reflected congressional concerns about the adequacy of the funding for advanced transportation systems, suggesting that too little funding would increase the nation’s dependence on foreign technologies and equipment. Since 1992, the ITS program has received through contract authority and the annual appropriations process about $1.3 billion. The national architecture, which identifies the components and functions of an ITS system, was completed in July 1996. We also found that the lack of widespread deployment of integrated ITS systems results from insufficient knowledge of ITS systems among state and local transportation agencies; limited data on the costs and benefits of ITS; and inadequate funding in light of other transportation investment priorities. Second, it will take time for state and local transportation officials to understand the architecture and supplement their traditional approach to solving transportation problems through civil engineering strategies with the information management and telecommunications focus envisioned by an integrated ITS approach. Innovative Financing Through State Infrastructure Banks

Until recently, states have generally not been able to tailor federal highway funding to a form other than a grant. Thus projects with potential revenue streams will be needed to make a SIB viable. SIB financial assistance is intended to complement, not replace, traditional transportation grant programs and provide states increased flexibility to offer many types of financial assistance. DOT has not yet selected additional states for the program. Of particular note is FHWA’s special project to test and evaluate the use of design-build contracting methods under the agency’s authority to conduct research. Proponents of design-build have identified several benefits. One difficulty in implementing design-build lies in state laws limiting its use. The survey identified 17 states that did not permit the use of combined design and construction contracts. In addition, a 1995 Study by the Building Futures Council noted that some states indirectly preclude design-build by requiring separation of design and construction services—construction services being awarded to the lowest bidder only after the design is complete.
Why GAO Did This Study

GAO discussed how innovation in federal research, financing and contracting methods has the potential for improving the performance of the nation's surface transportation system, focusing on three reports it completed for the Senate Committee on Environment and Public Works' deliberations on the reauthorization of the Intermodal Surface Transportation Efficiency Act (ISTEA).

What GAO Found

GAO noted that: (1) investments in surface transportation research have provided benefits to users and the economy; (2) the Department of Transportation (DOT) has a critical role to play by funding research, establishing an overall research mission with objectives for accomplishment and priorities for allocating funds, and acting as a focal point for technology transfer; (3) DOT's organizational structure and lack of both a strategic plan and a departmental focal point may limit its impact on research; (4) until these issues are addressed, DOT may not be able to respond to ISTEA's call for an integrated framework for surface transportation research; (5) DOT's Intelligent Transportation System (ITS) Program has received $1.3 billion to advance the use of computer and telecommunications technology that will enhance the safety and efficiency of surface transportation; (6) although the program envisioned widespread deployment of integrated multimodal ITS systems, this vision has not been realized for several reasons: (a) the ITS national architecture was not completed until July 1996 and ITS technical standards will not be completed until 2001; and (b) the lack of knowledge of ITS technologies and systems integration among state and local officials, insufficient data documenting the cost effectiveness of ITS in solving transportation problems and competing priorities for limited transportation dollars will further constrain widespread ITS deployment; (7) before DOT can aggressively pursue widespread deployment of integrated ITS, it must help state and local official overcome these obstacles; (8) State Infrastructure Banks (SIBs) offer the promise of helping to close the gap between transportation needs and available resources by sustaining and potentially expanding a fixed sum of federal capital, often by attracting private investment; (9) specifically, these banks provide states increased flexibility to offer may types of financial assistance; (10) some state officials and industry experts that GAO talked with remain skeptical that SIBs will produce the expected benefits; (11) the Federal Highway Administration (FHwA) is testing and evaluating the use of an innovative design-build contracting method for highway construction; (12) proponents of design-build see several advantages to the approach; however, FHwA's authority to implement design-build is limited and 17 states have laws which, in effect, prevent the use of design-build; and (13) while design-build may result in the faster completion of projects, it may also require an accelerated revenue stream to pay for construction.