Federal-Aid Highway Program: Impact of the District of Columbia Emergency
Highway Relief Act (Letter Report, 06/30/97, GAO/RCED-97-162).

Pursuant to a legislative requirement, GAO reviewed the District of
Columbia's efforts to implement the District of Columbia Emergency
Highway Relief Act, focusing on: (1) the extent to which the District
took advantage of the opportunity for the federal government to pay 100
percent of the eligible projects' costs expended during the waiver
period; (2) whether the District's efforts to streamline its contract
award process have reduced the time frames to process and execute
federal-aid highway contracts; and (3) the status of the District's
efforts to implement the Federal Highway Administration's (FHwA)
recommendations for improving the District of Columbia Department of
Public Work's (DPW) capabilities to carry out its federal-aid highway
program.

GAO noted that: (1) the District used the waiver authority for 62 of the
98 projects it designated as eligible for the waiver; (2) the federal
government reimbursed the District $55.5 million for the eligible
projects' costs expended during the 14-month waiver period; (3) of this
amount, the District's matching share waived by the act was $10.2
million; (4) the District's efforts to streamline its contract award
process have improved the time frame to execute federal-aid highway
contracts over $1 million; (5) when the District agreed to implement a
pilot program to streamline the external review and approval process in
June 1996, the District's goal was to shorten the time frame for the
process to 45 days, which is typical for other recipients of federal-aid
highway funds; (6) for contracts processed since the act became law, the
average time to execute contracts over $1 million decreased, from 183
days to 92 days, and the average time to execute contracts under $1
million increased slightly; (7) unless efforts are made to streamline
DPW's internal contract award procedures, the District has little chance
of achieving the 45-day contract award goal; (8) the District has
implemented two of the seven agreed-upon priority recommendations in
FHwA's April 1996 technical assistance report involving changes made to
contract award process and to project programming and tracking; (9) DPW
has not taken action on the other five priority recommendations, which
include modifying its budget implementation process, increasing funding
for operations and maintenance, increasing its staff levels, developing
and implementing staff-training programs, or procuring additional
computer and software support; (10) according to District officials, the
District government's budget and personnel ceiling constraints affect
the District's ability to implement some recommendations; (11) District
officials acknowledged that they have not focused attention on these
recommendations but, instead, on restructuring DPW's organization,
including developing a performance-based management system, and
addressing a White House proposal for changes in the District's
transportation program; (12) the District has neither developed a plan
to systematically implement the recommendations nor monitored the
implementation of the technical assistance recommendations; and (13) in
response to GAO's review, District officials have recently begun to det*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-162
     TITLE:  Federal-Aid Highway Program: Impact of the District of 
             Columbia Emergency Highway Relief Act
      DATE:  06/30/97
   SUBJECT:  Federal aid for highways
             Public roads or highways
             Road construction
             State and local procurement
             Contracting procedures
             Municipal governments
             Intergovernmental fiscal relations
IDENTIFIER:  FHwA Federal-Aid Highway Program
             District of Columbia
             National Highway System
             
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Cover
================================================================ COVER


Report to Congressional Committees and Subcommittees

June 1997

FEDERAL-AID HIGHWAY PROGRAM -
IMPACT OF THE DISTRICT OF COLUMBIA
EMERGENCY HIGHWAY RELIEF ACT

GAO/RCED-97-162

D.C.  Emergency Highway Relief Act

(342924)


Abbreviations
=============================================================== ABBREV

  DCDPW - District of Columbia Department of Public Works
  FHWA - Federal Highway Administration
  GAO - General Accounting Office
  NHS - National Highway System

Letter
=============================================================== LETTER


B-274377

June 30, 1997

Congressional Committees and Subcommittees

During 1995, the District of Columbia's financial crisis deteriorated
to a point where it severely hampered the District's ability to fund
its transportation program, which includes the design, engineering,
construction, and maintenance of streets, bridges, and highways.  The
District's need to use local funds to help pay past bond obligations
resulted in a lack of funds for local highway projects and eventually
culminated in a lack of matching funds for securing funds under the
Federal-Aid Highway Program.\1

With the urging of the Federal Highway Administration (FHWA), the
Congress passed the District of Columbia Emergency Highway Relief
Act, which the President signed into law on August 4, 1995.  The act
provided a temporary waiver of the matching share requirement for
funds expended for eligible federal-aid highway projects from August
4, 1995, through September 30, 1996--a 14-month window of opportunity
for the District.  The act requires the District to establish a
dedicated highway fund to repay the temporarily waived amounts and
make future matching share payments and requires that we annually
audit and report on the financial condition and operations of the
highway fund.  The act also requires that we review and report on the
District's implementation of the act's requirements to (1) process
and execute federal-aid highway contracts expeditiously; (2) ensure
that the necessary expertise and resources are available to plan,
design, and construct highway projects and make administrative and
programmatic reforms required by the Secretary of Transportation; and
(3) establish an independent revolving fund account for highway
projects. 

In June 1996, we issued an interim report, and as agreed with your
offices, we continued to monitor the District's efforts to implement
the act's requirements.\2 This report addresses (1) the extent to
which the District took advantage of the opportunity for the federal
government to pay 100 percent of eligible projects' costs expended
during the waiver period, (2) whether the District's efforts to
streamline its contract award process have reduced the time frames to
process and execute federal-aid highway contracts, and (3) the status
of the District's efforts to implement FHWA's recommendations for
improving the District of Columbia Department of Public Works' (DC
DPW) capabilities to carry out its federal-aid highway program.  Our
audit report on the financial condition and operations of the
District's highway fund (highway and revolving fund accounts) will be
issued separately. 


--------------------
\1 The Federal-Aid Highway Program is a reimbursable program whereby
the federal government reimburses a state (or, in this case, the
District) only for costs actually incurred.  To start a project,
states use their own money; that is, they provide front-end financing
for the project and receive cash for the federal share of the
project's cost as work is completed.  For most federal-aid highway
projects, the federal government pays 80 percent of the project's
cost, and the state pays a matching share of 20 percent. 

\2 See D.C.  Emergency Highway Relief Act (GAO/RCED-96-R, June 28,
1996). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The District used the waiver authority for 62 of the 98 projects it
designated as eligible for the waiver.  The District did not make a
financial commitment to, or expend funds for, the remaining 36
eligible projects either because it lacked funding to commit to the
projects or because of delays in awarding contracts during the waiver
period.  The waiver allowed the District to restart many projects
that had been on hold for up to 2 years and to initiate new
federal-aid highway projects.  The federal government reimbursed the
District $55.5 million for the eligible projects' costs expended
during the 14-month waiver period.  Of this amount, the District's
matching share waived by the act was $10.2 million.  Currently, the
District has about $112 million of federal-aid highway projects under
construction. 

The District's efforts to streamline its contract award process have
improved the time frame to execute federal-aid highway contracts over
$1 million.  When the District agreed to implement a pilot program to
streamline the external review and approval process in June 1996, the
District's goal was to shorten the time frame for the process to 45
days, which is typical for other recipients of federal-aid highway
funds.  The pilot program was fully implemented on October 8, 1996. 
For contracts processed since the act became law, the average time to
execute contracts over $1 million decreased from 183 days under the
prepilot program's procedures to 92 days under the pilot program's
procedures.  The average time frame to execute contracts under $1
million increased slightly--from 103 days under the prepilot
program's procedures to 108 days under the pilot program's
procedures.  These time frames are far longer than the District's
45-day contract award goal.  Unless efforts are made to streamline
the Department of Public Works' internal contract award procedures,
the District has little chance of achieving the 45-day contract award
goal. 

The District has implemented two of the seven agreed-upon priority
recommendations in the Federal Highway Administration's April 1996
technical assistance report involving changes made to the contract
award process and to project programming and tracking.  The
Department of Public Works has not taken action on the other five
priority recommendations, which include modifying its budget
implementation process, increasing funding for operations and
maintenance, increasing its staff levels, developing and implementing
staff-training programs, or procuring additional computer and
software support.  According to District officials, the District
government's budget and personnel ceiling constraints affect the
District's ability to implement some recommendations.  District
officials acknowledged that they have not focused attention on these
recommendations but, instead, on restructuring the Department of
Public Works' organization, including developing a performance-based
management system, and addressing a White House proposal for changes
in the District's transportation program.  The District has neither
developed a plan to systematically implement the recommendations nor
monitored the implementation of the technical assistance
recommendations.  In response to our review, District officials have
recently begun to determine the status of each recommendation and to
develop and document their plans for implementing each. 


   BACKGROUND
------------------------------------------------------------ Letter :2

DC DPW is responsible for managing the District's transportation
program.  FHWA has full oversight responsibility for federally aided
highway projects in the District.  FHWA oversees the DC DPW's
management of projects and administers funding through its division
office located in the District.  FHWA's approval of a federal-aid
highway project occurs incrementally throughout the planning,
environmental review, design and property acquisition, and
construction stages.  However, FHWA does not make a contractual
commitment to obligate federal funds to finance a project until it
approves the project's plans, specifications, and cost estimates. 
These become part of the project authorization--the agreement between
FHWA and the District that permits the project to be advertised for
bids.  FHWA must formally concur with the District's decision on whom
to award the contract to and the contract price.  A project agreement
is then executed between FHWA and the District to identify the
location, scope, and estimated cost of the project; the conditions of
the District's acceptance of federal funds; and the adjusted amount
of federal funds obligated.  The District starts a project using its
own money; that is, it provides front-end financing for the project. 
As construction proceeds, the District submits vouchers to FHWA for
the reimbursement of the federal share of a project's cost. 

In 1995, FHWA was becoming increasingly concerned about the
District's inability to provide matching funds and to effectively and
safely maintain its existing highway system.  To address these
concerns, on June 29, 1995, FHWA and the District signed a memorandum
of agreement stipulating that in exchange for FHWA's efforts in
seeking legislation to waive the matching fund requirement for a
period of time, the District would provide DC DPW with the authority
to process procurements, hire and retain staff, and establish a
revolving fund.  By the late summer of 1995, the District had not
advertised any construction contracts for the previous 20 months;
nearly $180 million in federal-aid funds had been obligated but not
expended because the District lacked matching funds; an additional
estimated $170 million in federal-aid funds had been obligated but
not expended not only because of a lack of matching funds, but also
because of environmental litigation; and the maintenance of the
existing roadway system had been drastically curtailed.  Moreover,
the District was in jeopardy of losing over $80 million in obligation
authority for fiscal year 1995 because it lacked the matching funds
to certify that it could obligate federal highway funds. 

Given these conditions, the Congress passed the District of Columbia
Emergency Highway Relief Act, which the President signed into law on
August 4, 1995.  The act enabled the District to obligate its federal
highway funds for fiscal year 1995.  In December 1995, the District
established a Highway Trust Fund to repay the waived amounts and make
future matching share payments.  To be eligible for the act's
temporary waiver, a District highway project had to be a part of the
National Highway System (NHS)\3 or of regional significance as
determined by the Secretary of Transportation, and the federal share
of the project's costs had to have been obligated\4 prior to or
during the waiver period.  In addition, the District was required to
certify that sufficient funds were not available to pay the
nonfederal share of the participating costs of the project. 

In response to an August 21, 1995, request by DC DPW for technical
assistance in implementing the act's requirements, FHWA and DC DPW
established a review team that assessed DC DPW's ability to carry out
its federal-aid highway program.  FHWA's April 1996 report presented
recommendations for improving DC DPW's organization, systems, and
resources.\5 The team's report included more than 100
recommendations, of which DC DPW and FHWA agreed to the following 7
priorities:  (1) modifying the contracting process to reduce the
involvement of agencies external to DC DPW, (2) greatly reducing the
role of the District's Capital Budget Office in the budget
implementation process, (3) improving project programming and
tracking so that work is scheduled and funds are used in a timely
manner, (4) increasing funding for operations and maintenance, (5)
increasing levels for staff and salary to address the previous
decline in staff, (6) developing and implementing an Individual
Development Plan for each employee to address the core skills
necessary for job performance, and (7) procuring computers and
software support by using a dedicated funding source and billing back
projects for their proportionate share of costs. 


--------------------
\3 Designated in 1995, the 160,000-mile National Highway System
consists of the Interstate System and other principal arterial routes
that serve major population centers, international border crossings,
national defense requirements, and interstate and interregional
travel needs.  Other highways and roads make up the 4 million miles
of roads in the United States. 

\4 An obligation is the federal government's commitment to pay,
through reimbursement to the states, the federal share of a project's
eligible cost. 

\5 Summary Report of Technical Assistance Provided to the District of
Columbia Department of Public Works (FHWA DC Technical Assistance
Team, Apr.  1996). 


   ACT'S WAIVER PROVIDED A JUMP
   START FOR THE DISTRICT'S
   DORMANT FEDERAL-AID HIGHWAY
   PROGRAM
------------------------------------------------------------ Letter :3

The District used the waiver authority for 62 of the 98 projects it
designated as eligible for the waiver.  The District failed to make a
financial commitment to or expend funds for the remaining 36 eligible
projects.  According to DC DPW officials, several factors limited
their ability to expend funds and take fuller advantage of the act's
waiver.  In any event, the waiver helped the District's federal-aid
highway program return to a level similar to the one experienced
before the District's fiscal crisis. 

The 62 eligible projects had total estimated costs of over $225
million.  Of this amount, the federal share totaled about $201
million, and the District's matching share, or the potential amount
to be waived, totaled about $24 million.  As shown in table 1, the
District expended a total of $61.6 million for these 62 projects
during the waiver period and was reimbursed $55.5 million.  About
$45.3 million was related to the federal share of the projects'
eligible costs, and about $10.2 million was related to the District's
matching share.  The remaining $6.1 million was related to the
District's expenditures for costs not eligible under the federal-aid
highway program, such as the costs for cleaning sewers, improving
storm drains, and constructing retaining walls. 



                                Table 1
                
                   District's Expenditures Related to
                 Eligible Projects From August 4, 1995,
                       Through September 30, 1996

                         (Dollars in thousands)

Expenditures related to               1995          1996         Total
----------------------------  ------------  ------------  ------------
Federal share of eligible          $13,446       $31,875       $45,321
 cost
District's share of eligible         2,174         7,990        10,164
 cost (waived by act)
Ineligible costs                         0         6,136         6,136
======================================================================
Total expenditures                 $15,620       $46,001       $61,621
----------------------------------------------------------------------
Our analysis indicates that DC DPW's expenditure rate related to the
eligible projects from August 1995 through September 1996 was
generally consistent with FHWA's spend-out rates for federal-aid
highway projects nationwide.  During the 14-month period, DC DPW
expended $61.6 million, or 27 percent, of the $225 million total
estimated costs related to the 62 projects.  FHWA's spend-out rates
for federal-aid projects indicate that about 26 percent of a
project's costs will be incurred in the first 14 months of
construction. 

During the waiver period, DC DPW designated 98 projects as eligible
to receive 100-percent federal funding.  Of the 98 projects, funds
for 20 projects were not obligated in the District's Financial
Management System because contracts were not awarded before the
waiver expired on September 30, 1996.\6 Although funds for the
remaining 78 projects were obligated, DC DPW made no expenditures
during the waiver period for 16, or about 21 percent, of the 78
projects. 

According to DC DPW officials, several factors limited their ability
to expend funds and take fuller advantage of the act's waiver.  The
act was signed in August 1995, leaving the District only 14 months to
realize the benefits of the waived local match.  During the waiver
period, DC DPW had to restart projects that had been on hold for
nearly 2 years.  In addition, the District still lacked the funding
necessary to pay contractors before seeking reimbursement from FHWA. 
The District borrowed from the U.S.  Treasury to, among other things,
pay contractors for projects that were critical and could not be
stopped.  Payments for other projects were stopped or slowed until
FHWA granted DC DPW an advance on 14 critical projects.  DC DPW was
then able to seek reimbursement from FHWA for the 100-percent federal
share.  Furthermore, uncertainties caused by changes in the process
of awarding new contracts resulted in delays and expenditures that
were smaller than what they might have been.  Finally, the severe
winter of 1995 shortened the construction season by 4 months, further
limiting DC DPW's ability to expend funds. 

Currently, DC DPW has about $112 million worth of federal-aid
projects under construction.  This amount of construction activity
returns the District's federal-aid highway program to a level similar
to that experienced before the District's fiscal crisis. 


--------------------
\6 Whereas FHWA commits funds when the plans, specifications, and
cost estimate for a federal-aid highway project are approved for
advertisement, DC DPW obligates funds after the contract bid has been
awarded. 


   TIME FRAME TO PROCESS AND
   EXECUTE CONTRACTS OVER $1
   MILLION HAS IMPROVED
------------------------------------------------------------ Letter :4

A key component of the act, also enumerated in the June 29, 1995,
memorandum of agreement between the District and FHWA, requires the
District to expeditiously process and execute contracts to implement
the Federal-Aid Highway Program.  The memorandum highlights the
District's agreement to expedite work by delegating the necessary
authority for federal-aid highway projects to the Director, DC DPW. 
The act did not define the term expeditiously; thus, the definition
was left to FHWA.  According to FHWA officials, the time to process
federal-aid highway contracts from bid opening to contract execution
should normally take 45 days or less--a time frame that most states
are achieving and one that District officials also accepted as their
goal.\7

On June 6, 1996, the District, FHWA, and the Financial Responsibility
and Management Assistance Authority (Authority) entered into a
memorandum of agreement to establish a federal-aid highway pilot
program for DC DPW.  The purpose of the agreement was to establish a
process that would allow federal-aid highway contracts to be awarded
more expeditiously.  The pilot program emphasizes streamlining
reviews and approvals, especially those external to DC DPW, and is
intended to move the District closer to the 45-day contract award
goal.  DC DPW fully implemented the federal-aid contract award
process under the pilot program for all contracts with bid openings
on or after October 8, 1996. 

Overall, our analysis of the contracts processed since the act's
signing under the prepilot program's and the pilot program's
procedures shows that the District has reduced the average time to
execute contracts over $1 million--from 183 to 92 days.  The average
time to execute contracts under $1 million increased slightly--from
103 to 108 days.  Table 2 shows the average number of days required
for the District's contract award process under the prepilot
program's and the pilot program's procedures. 



                                Table 2
                
                   Average Number of Days to Execute
                  Contracts Processed Since August 4,
                1995, Under Prepilot Program's and Pilot
                          Program's Procedures

                         (Dollars in millions)

                                                               Average
                                                             number of
                                                             days from
                                                           bid opening
                                 Number of     Amount of   to contract
Contract type                    contracts     contracts     execution
----------------------------  ------------  ------------  ------------
Contracts under $1 million
----------------------------------------------------------------------
Prepilot program                        16         $10.8           103
Pilot program                            2           1.9           108

Contracts over $1 million
----------------------------------------------------------------------
Prepilot program                        14          81.4           183
Pilot program                            5           5.6            92
----------------------------------------------------------------------

--------------------
\7 The contract bids that are received are opened publicly at the
time, date, and place designated in the invitation for bid.  A
contract is executed on the date that the contracting officer signs
it. 


      PROCESS PRIOR TO PILOT
      PROGRAM WAS LENGTHY
---------------------------------------------------------- Letter :4.1

Prior to the pilot program, DC DPW was authorized to process and
execute federal-aid contracts under $1 million.  However, federal-aid
contracts over $1 million had to be approved by the Mayor, which
entailed a series of reviews by the District's Procurement Review
Committee, Department of Administrative Services, Office of
Corporation Counsel (two legal sufficiency reviews), and City
Administrator.  In addition, the Mayor was required to formally
submit these federal-aid contracts to the District's City Council and
the Authority for approval. 

In June 1996, we reported on the time it took for DC DPW to process
and execute nine construction contracts from the act's signing on
August 4, 1995, through June 3, 1996.  From June 4, 1996, until the
pilot program was implemented on October 8, 1996, DC DPW processed an
additional 21 construction contracts.\8 Table 3 shows the District's
contract processing time frames for construction contracts processed
from the date of the act and our June 1996 report and from our June
1996 report and the start of the pilot program. 



                                Table 3
                
                   Average Number of Days to Execute
                   Contracts Processed Under Prepilot
                          Program's Procedures

                         (Dollars in millions)

                                                        Average number
                                                          of days from
                                                        bid opening to
                                 Number of   Amount of        contract
Contract type                    contracts   contracts       execution
------------------------------  ----------  ----------  --------------
Contracts under $1 million
----------------------------------------------------------------------
Aug. 4, 1995 to June 3, 1996             7        $4.3             104
June 4, 1996 to Oct. 7, 1996             9         6.5             102
======================================================================
Total, all contracts                    16       $10.8             103

Contracts over $1 million
----------------------------------------------------------------------
Aug. 4, 1995 to June 3, 1996             2       $32.5             168
June 4, 1996 to Oct. 7, 1996            12        48.9             186
======================================================================
Total, all contracts                    14       $81.4             183
----------------------------------------------------------------------
As shown in table 3, a comparison of the contracts processed from the
date of the act through our June 1996 report with that of those
processed after our report until the start of the pilot program shows
that the average time between bid opening and contract execution for
contracts over $1 million increased from 168 to 186 days.  This
increase occurred between the time that the contractor was notified
of the intent to award the contract and the time that the contract
was executed.  During this period, DC DPW's Office of Management
Services prepared the contract documents, and the District's Office
of Corporation Counsel reviewed these documents for legal
sufficiency.  The average time to process and execute contracts under
$1 million was basically the same--104 days for the earlier period,
and 102 days for the later period. 

The major difference in the average time frames for the 21
construction contracts processed since our June 1996 report occurred
during the bid evaluation phase--the time from bid opening until the
purchase requisition is completed and funds can be obligated.  This
phase of the contract award process averaged 50 of the 102 days for
contracts under $1 million and 97 of the 186 days for contracts over
$1 million.  We also noted a large difference in the average time
between the completion of the bid evaluation phase and the time that
DC DPW issued the notice of intent to accept a contractor's bid. 
This phase of the contract award process averaged 16 of the 102 days
for contracts under $1 million and 51 of the 186 days for contracts
over $1 million.  This difference occurred because of the time needed
for the review and approval of contracts over $1 million by the
Mayor, City Council, and Authority. 


--------------------
\8 Although nine contracts were actually executed after the pilot
program's implementation, they were not processed under the pilot
program's procedures because their bid openings occurred before the
pilot program was implemented. 


      PILOT PROGRAM REDUCED THE
      TIME TO PROCESS AND EXECUTE
      CONTRACTS OVER $1 MILLION
---------------------------------------------------------- Letter :4.2

The contract award process under the pilot program is more
streamlined than the prior process.  Previously, federal-aid highway
contracts were submitted individually for review and approval by the
Mayor, City Council, and Authority.  Under the pilot program, DC DPW
submits an annual program of federal-aid highway projects to the City
Council and the Authority for their review and approval.  Once the
annual program is approved, each individual contract related to the
projects in the program is considered approved.  However, the pilot
program reserves the right for the (1) District's Chief Financial
Officer to certify the availability of funds for individual contracts
and (2) Authority to review individual contracts at its discretion. 
According to the 1996 agreement, these reviews and certifications
should, whenever possible, take no more than 3 business days.  DC
DPW's program of transportation construction and consultant services
contracts for fiscal year 1997 included 94 contracts totaling about
$170 million and has been approved by the City Council and the
Authority. 

In implementing the pilot program, Mayoral Order 96-130, dated August
20, 1996, established procedures to expedite the review, award, and
execution of federal-aid highway project contracts.  As a result of
the Mayoral Order, the Office of the City Administrator waived its
review of federal-aid highway contracts, and the Department of
Administrative Services agreed to perform its required review after a
contract's award.  In addition, to further expedite the process, the
Office of Corporation Counsel approved a standard solicitation
package consisting of contract forms, clauses, provisions,
certifications, and other standard contract documents that DC DPW
will use in federal-aid highway project contracts.  The Corporation
Counsel, thus, will review only those individual federal-aid highway
contracts that deviate from the standard solicitation package.  For
each contract award, the Director, DC DPW, must certify that (1) the
standard solicitation package, including any special provisions and
significant addenda that were approved by the Corporation Counsel,
was incorporated into the invitation for bids and has not been
modified and (2) the proposed contract award conforms in all respects
with the requirements of the District and applicable federal law. 

Subsequent to the Mayoral Order, the District's Chief Financial
Officer established a Contracting Pricing Review unit as part of the
Office of Budget and Planning.  As of February 10, 1997, the unit was
responsible for reviewing all applicable contracts, including
federal-aid highway contracts, for cost and price sufficiency.  Since
May 1997, DC DPW has also been required to submit all contract
advisements for the Chief Financial Officer's review before contracts
can be executed. 

Since the implementation of the pilot program on October 8, 1996,
through May 23, 1997, DC DPW processed and executed seven
construction contracts totaling over $7.5 million--five contracts
over $1 million totaled over $5.6 million, and two contracts under $1
million totaled about $1.9 million.  DC DPW averaged 92 days to
execute the five contracts over $1 million, which is far shorter than
the 183 days averaged to execute contracts over $1 million prior to
the pilot program.  DC DPW averaged 108 days to execute the two
contracts under $1 million, which is longer than the 103-day average
time for such contracts prior to the pilot program.  According to a
DC DPW official, this delay in processing occurred because one of the
contractors took longer than normal to return the signed contract and
bonding forms. 

In addition, 19 contracts with bids totaling $45.3 million were in
the review and approval phase of the award process during this time. 
Of these 19 contracts, 6 totaling about $4.4 million are under $1
million, and 13 totaling $40.9 million are over $1 million.  As of
May 7, 1997, these contracts had been in processing an average of 54
days for contracts under $1 million and 90 days for contracts over
this amount.  These data suggest that the average time to execute
these contracts will exceed the 92 days averaged by the five
contracts executed thus far under the pilot program. 


      DEPARTMENT OF PUBLIC WORKS
      NEEDS TO STREAMLINE ITS
      INTERNAL PROCESSES TO REDUCE
      TIME FRAMES FURTHER
---------------------------------------------------------- Letter :4.3

DC DPW has little chance of achieving the 45-day contract award time
frame envisioned by both the June 1996 memorandum of agreement and
Mayoral Order 96-130 without continued improvements to its internal
processes.  The pilot program, with its emphasis on reducing or
eliminating reviews and approvals external to DC DPW, has reduced the
average time to process contracts over $1 million to 92 days, which
is still far longer than the 45-day goal.  As shown in table 4, the
time for DC DPW to complete the bid evaluation phase--that is, the
time between bid opening and completion of the purchase requisition
to obligate funds--averaged 43 days for the seven contracts processed
under the pilot program. 



                                Table 4
                
                   Average Number of Days to Execute
                Contracts Process Under Pilot Program's
                               Procedures

                                 Average number of days from
                        ----------------------------------------------
                               Bid  Requisitio
                        opening to        n to   Notice of         Bid
                        requisitio   notice of   intent to  opening to
Contract type                    n      intent   execution   execution
----------------------  ----------  ----------  ----------  ----------
Contracts under $1              31          40          37         108
 million
Contracts over $1               48          18          26          92
 million
Average, all contracts          43          25          29          97
----------------------------------------------------------------------
Concurrent with DC DPW's bid evaluation activities during this phase,
the District's Chief Financial Officer certifies the availability of
funds for individual contracts, and FHWA concurs in the contract's
award.  The Acting Director, DC DPW, told us that delays in the Chief
Financial Officer's funding approval directly affect a contract's
award time.  For the seven contracts processed under the pilot
program, FHWA's concurrence review averaged about 21 days, or 15
business days, and the Chief Financial Officer's certification
averaged about 22 days, or 16 business days.  According to data from
the Office of Budget and Planning, under the Chief Financial Officer,
five of the seven contract packages received from DC DPW contained
errors that had to be corrected before processing could begin, which
delayed their processing time.  In addition, the data indicated that
it took, on average, over 4 business days for the Office of Budget
and Planning to receive the contract packages from DC DPW after DC
DPW had entered the contract data into the District's Financial
Management System.  Excluding the time for delivery, the Office of
Budget and Planning's statistics indicate that the typical average
processing time for all transportation facilities projects is
slightly less than 10 business days.  Since FHWA's concurrence review
and the Chief Financial Officer's certification are done concurrently
with DC DPW's bid evaluation activities, it is unclear whether they
have a significant impact on the time to process contracts. 

DC DPW has recently taken several steps to improve its bid evaluation
process.  For example, DC DPW's Office of Contract Administration was
responsible for initiating construction contracts and determining if
bids were responsive.  Project managers in DC DPW's Bureau of
Transportation Construction Services determined if contractors were
responsible and competent to perform the work.  Since the
implementation of the pilot program, these responsiveness and
responsibility determinations have been consolidated into the Office
of Contract Administration.  In March 1997, DC DPW established a task
force to look at the process for establishing project budgets,
including ways to reduce the time required to process purchase
requisitions.  Finally, DC DPW recognizes the need to increase
project efficiency and is looking for opportunities to consolidate a
large number of road-resurfacing contracts with small contract
amounts into fewer contracts with larger contract amounts. 


   LIMITED PROGRESS MADE IN
   IMPLEMENTING FHWA'S TECHNICAL
   ASSISTANCE RECOMMENDATIONS
------------------------------------------------------------ Letter :5

FHWA's April 1996 technical assistance report contained many
recommendations for improving DC DPW's organization, systems, and
resources.  Subsequent to the report's issuance, FHWA and DC DPW
officials met to determine if the recommendations were acceptable and
doable.  FHWA and DC DPW then identified seven priorities among the
recommendations:  procurement, budgeting, project programming and
tracking, operations and maintenance, personnel, training, and
computer systems.  The District has implemented recommendations under
only two of the seven categories--modifying DC DPW's contracting
process to reduce the involvement of agencies outside DC DPW (as
discussed in the prior section) and improving project programming and
tracking.  According to DC DPW and FHWA officials, the failure to
implement the remaining five priority recommendations is due, in
large part, to the District's continuing financial crisis and the
resultant resource and management limitations placed on DC DPW. 

Neither DC DPW nor FHWA is systematically monitoring the
implementation of any of FHWA's recommendations.  Both the District
and FHWA view FHWA's technical assistance recommendations as a
resource for DC DPW to use in its efforts to identify and achieve
support from the District government for changes to improve its
transportation program.  Although some discussions occurred, the
District and FHWA never came to closure on which of FHWA's
recommendations would be implemented within specified time frames. 
DC DPW has not made the implementation of FHWA's recommendations a
priority, has not assigned responsibility for implementing each
recommendation, and until recently, was not monitoring the
implementation status of these recommendations.  In April 1997, in
response to our review, DC DPW began developing a process for
monitoring each of the technical assistance report's recommendations. 
This process includes delineating the report's recommendations,
identifying which recommendations DC DPW agrees with, and determining
and documenting, for each agreed-to recommendation, the
implementation status and schedule and the responsible DC DPW
offices. 

FHWA's Division Office officials told us that they have not followed
up on whether the District has implemented FHWA's recommendations
because the recommendations were provided at the District's request
and were considered a tool--not a mandate--to be used by DC DPW. 
FHWA officials compared FHWA's role regarding the technical
assistance recommendations with that of a consultant to DC DPW and
stated that as such, FHWA should not necessarily be expected to
follow up on the results of this work.  FHWA's Division Office
officials stated, however, that they--informally and
individually--attempt to keep up with changes that are made. 

Additionally, both DC DPW and FHWA officials stated that their
priorities since the April 1996 technical assistance
report--restructuring DC DPW's transportation organization and
developing a proposal by the administration for changes to the
District's transportation program--will address many, if not all, of
the report's recommendations.  The officials consider the
reorganization and administration's proposal to be prerequisites for
implementing many of the recommendations. 


      PROJECT PROGRAMMING AND
      TRACKING PROCEDURES ADDRESS
      RECOMMENDATIONS
---------------------------------------------------------- Letter :5.1

FHWA recommended that DC DPW strengthen its methods to (1) translate
its project-planning documents into priorities and schedules and (2)
adjust the annual work plan and project schedules to address
variances between planned and actual project costs and schedules
throughout the fiscal year.  DC DPW reviewed its existing project
programming and tracking procedures and believes that its procedures
are already responsive to the recommendations.  DC DPW has annual and
multiyear planning documents that are systematically used by DC DPW
as the basis for developing annual budgets and federal-aid obligation
plans.  DC DPW also produces monthly project status reports for
projects in the design and construction phases that provide data on
the projects currently in each of these phases. 


      EXTERNAL INVOLVEMENT IN
      BUDGET IMPLEMENTATION
      PROCESS IS INCREASING
---------------------------------------------------------- Letter :5.2

FHWA determined that the District Budget Office's involvement beyond
the approval of DC DPW's annual transportation budget is (1)
unnecessary, because other controls are in place to ensure that the
total transportation budget authority is not exceeded, and (2) an
implementation barrier to DC DPW's federal-aid highway program.  FHWA
recommended that DC DPW be given more control over the management of
its budget once the annual budget is approved, and that, upon
approval of the total budget authority for the transportation
program, the Budget Office not be involved in distributing this
authority among individual projects.  However, throughout fiscal year
1997, the Budget Office has required DC DPW to provide the Office
with project-specific financial updates that it has used to modify
project budgets as part of its efforts to manage the District's
overall budget.  And the District's plans for fiscal year 1998 are to
further increase the Budget Office's role through the Office's
systematic involvement in monitoring and managing DC DPW projects on
a subproject level. 


      MINOR INCREASES HAVE BEEN
      MADE IN OPERATIONS AND
      MAINTENANCE FUNDING BUT ARE
      STILL WELL BELOW 1994 LEVELS
---------------------------------------------------------- Letter :5.3

FHWA recommended that the District increase its funding for
transportation operations and maintenance, including adding new
dedicated revenue sources if possible.  Although operations and
maintenance spending for fiscal year 1997 is projected to increase to
$3 million from its $2.8 million level in fiscal year 1996, funding
for operations and maintenance is not projected to return to its
fiscal year 1994 level of $4.9 million until fiscal year
2006--ultimately reaching $6.7 million in fiscal year 2010.  No new
revenue sources have been dedicated to operations and maintenance. 
The lack of sufficient funding for transportation operations and
maintenance was cited by FHWA as the reason the transportation system
had deteriorated to the point of "functioning at no more than a
minimum level."


      SHORT-TERM STAFFING TARGETS
      WERE MET, LONG-TERM STAFFING
      TARGETS WERE NOT, AND
      ORGANIZATIONAL CHANGES ARE
      STILL IN PLANNING STAGE
---------------------------------------------------------- Letter :5.4

FHWA recommended that DC DPW increase its transportation staff by 42
in the short-term (6-12 months) and 82 in the long-term (beyond 12
months).  In fiscal year 1996, DC DPW temporarily added 49
transportation staff by reassigning staff from other DC DPW
functions.  According to DC DPW officials, these reassignments became
permanent in fiscal year 1997.  Also in fiscal year 1997, DC DPW's
total authorized staffing level increased by three full-time
positions from the level for fiscal year 1996, bringing the total
transportation staff increase to 52.  However, DC DPW has not met the
recommended target of 82 additional transportation staff, though 12
months have lapsed since this recommendation was made.  DC DPW and
FHWA officials attribute the continued staffing problems to budget
limitations and personnel ceiling limits imposed by the District
government. 

FHWA recommended in its technical assistance report that DC DPW
consider forming a District Department of Transportation, which would
consolidate all of the city's transportation functions, to provide an
improved focus and emphasis on transportation within the District
government.  The DC DPW reorganization plan is under development, as
is an implementation schedule.  DC DPW's reorganization plan is
expected to create a single Division of Transportation within DC DPW,
merging the three main branches of DC DPW's transportation
program--the Office of Policy and Planning, the Office of Design
Engineering and Construction Administration, and the Office of Mass
Transit.  DC DPW and FHWA are also investigating the possibility of
transferring some DC DPW project management responsibilities to FHWA,
which would reduce DC DPW's staffing requirements.  DC DPW officials
are hopeful that DC DPW's reorganization plan, when finalized and
approved, will result in an increase in transportation staffing
levels. 


      NO EFFORTS HAVE BEEN MADE TO
      DEVELOP AND IMPLEMENT STAFF
      TRAINING PROGRAMS
---------------------------------------------------------- Letter :5.5

DC DPW has not undertaken any efforts to develop training plans and
programs for all transportation staff, although this was identified
as one of the seven priority recommendations.  FHWA determined that
employee training at DC DPW is critical to the success of the
District's transportation program because of understaffing, staff
functioning in positions for which they are not trained, and
personnel constraints that result in the increased use and management
of consultants/contractors.  The training of DC DPW's transportation
staff continues to occur on an ad hoc basis, as funds are available. 
DC DPW has provided procurement and contracting training to DC DPW
contracting staff, five of whom are now Certified Professional Public
Buyers. 

Although FHWA recommended that DC DPW develop an Individual
Development Plan for each employee in the transportation program and
dedicate a percentage of overhead funds to provide the associated
employee training, such plans have not been developed, and there is
no specified training budget for DC DPW's transportation staff.  DC
DPW officials stated, however, that they expect to develop plans for
senior staff as part of the performance-based management under their
proposed transportation reorganization.  The officials stated that
they will develop an Individual Development Plan for other staff once
the reorganization is finalized and new responsibilities have been
identified.  The officials also noted that the entire annual training
budget for the District is only about $4 million for 27,000 employees
(i.e., less than $150 per employee).  FHWA officials told us,
however, that they have offered to provide DC DPW employees with
training at no cost to the District but that DC DPW generally has not
taken advantage of this offer. 


      COMPUTER PROCUREMENT IS
      SPORADIC, AND PROJECTS ARE
      STILL NOT CHARGED FOR
      COMPUTER COSTS
---------------------------------------------------------- Letter :5.6

FHWA found the need for modern computer hardware and software to be
urgent and universal to DC DPW's transportation functions (especially
given the need to make existing personnel more productive to help
alleviate critical labor shortages) and recommended that DC DPW
procure modern computer hardware and software support and provide
staff with proper training in its use.  Although a computer-aided
design and drafting system has since been implemented, this system
was under way prior to FHWA's recommendation.  No organized effort
has been undertaken by DC DPW to identify, prioritize, fund, or meet
its computer system needs.  DC DPW has obtained some new computers
since the April 1996 FHWA recommendation, but these computers were
procured on the basis of individual employee/office initiatives and
the availability of funds at the time. 

In addition to recommending that a dedicated fund be established to
purchase or lease new computers, FHWA recommended that DC DPW bill
projects for their proportionate share of computer acquisition costs,
thereby helping repay the fund over the life of the system.  DC DPW
officials were not aware of any efforts to implement this
recommendation, although some computer costs are charged to projects. 
Additionally, many of DPW' computer needs are to provide financial
and other general administrative support, and under federal law, such
computer usage cannot be billed to FHWA. 


      ADMINISTRATION'S PROPOSAL
---------------------------------------------------------- Letter :5.7

In January 1997, the White House proposed changes to the relationship
between the federal government and the District, including its
transportation program.  FHWA officials stated that under the
proposal, as it existed on May 30, 1997, the federal government would
assume interim responsibility for the design, construction,
maintenance, and operation of the District's NHS.  Under the
proposal, federal transportation funding for the District would also
change and would include eliminating the local matching fund
requirement for NHS projects and allowing federal funds to be used on
all District roads, including local roads not currently eligible for
federal funding.  FHWA believes that these transportation changes
will allow the District to fully respond to most of FHWA's
recommendations, except, perhaps, those relating to increasing DC
DPW's staffing.  The impact of this proposal on DC DPW's
transportation program and the continued relevance of technical
assistance recommendations cannot be determined until legislation is
enacted to implement the administration's proposal. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

Although the District was slow to react to and did not take full
advantage of the temporary matching fund waiver, the waiver did
provide a jump start for the District's dormant federal-aid highway
program.  The District's current level of federal-aid project
construction is about $112 million, which returns the District's
federal-aid highway program to a level similar to that experienced
prior to the fiscal crisis. 

The District's efforts to streamline its contract award process have
reduced the time frame to process and execute federal-aid highway
contracts.  To date, most of these efforts have addressed eliminating
or limiting reviews and approvals external to DC DPW.  For contracts
executed under the pilot program, the average time decreased to about
92 days for contracts over $1 million and increased to about 108 days
for contracts under $1 million.  These time frames are far longer
than the 45-day contract award process established as a goal by the
District's pilot contract award program.  Unless efforts are made to
streamline DC DPW's internal contract award procedures, the District
has little chance of achieving the 45-day contract award goal.  For
example, DC DPW procedures to ensure that timely, error-free contract
packages are submitted to the Chief Financial Officer could help to
reduce the time to obtain certification of the availability of funds
for contracts. 

The technical assistance provided by FHWA to improve DC DPW's ability
to carry out its federal-aid highway program has been largely
ineffectual.  Neither the District nor FHWA uses FHWA's
recommendations as a checklist against which DC DPW's improvements
can be measured.  And neither the District nor FHWA is monitoring the
status of these recommendations.  Modifying the contracting process
for federal-aid highway projects and improving project programming
and tracking are the only priority recommendations that have been
implemented to date.  Additionally, the President is developing a
proposal for the Congress to potentially alter the District's
transportation responsibilities and funding.  The impact of these
potential changes on DC DPW's management and the continued relevance
of FHWA's 1996 recommendations remain to be seen. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

We recommend that the Secretary of Transportation direct the
Administrator of FHWA to continue to work with the District to
evaluate DC DPW's internal contract award procedures and assist the
District in implementing changes needed to help reduce the time to
process and execute federal-aid highway contracts.  We also recommend
that the Secretary direct the Administrator to assist DC DPW in
establishing priorities, timetables, and a process for monitoring the
implementation of FHWA's April 1996 recommendations that are still
found to be worthwhile. 


   AGENCY COMMENTS AND OUR
   EVALUATIONS
------------------------------------------------------------ Letter :8

On May 16, 1997, we provided the Department of Transportation and the
District government with copies of a draft of this report for their
review and comment.  We met with FHWA officials, including the
Director, Office of Engineering, and the Administrator, District of
Columbia Division Office, on May 27, 1997, and with DC DPW officials,
including the Deputy Director, on May 23, 1997, who generally
concurred with the information and recommendations contained in the
report.  On June 6, 1997, and again on June 10, 1997, DC DPW's Acting
Director provided additional comments.  We have made a number of
changes to the report on the basis of new information provided by
both FHWA and DC DPW since the draft was provided to them for
comment. 

FHWA officials believed that the draft report overstated their
responsibility for monitoring DC DPW's implementation of the
recommendations in FHWA's April 1996 technical assistance report and
failed to recognize other FHWA efforts to assist DC DPW, including a
new agreement between FHWA and the District to implement the
administration's proposal when or if it is enacted into law.  FHWA
officials consider the technical assistance recommendations as
guidance rather than a mandate to be used by DC DPW and, therefore,
believe that they are not responsible for monitoring DC DPW's
implementation of the recommendations.  Our revised report does not
call for FHWA to monitor DC DPW's implementation of the technical
assistance report's recommendations but does point out that
monitoring is not occurring. 

DC DPW officials believed that the draft report did not reflect
recent federal-aid contracts executed under the pilot program that
show improvement in the average time to process and execute
contracts.  On the basis of new data provided by DC DPW subsequent to
our meeting, we updated our analysis of the average times to process
and execute contracts under the pilot program.  We revised the report
where appropriate to reflect that the District's efforts to
streamline its contract award process have improved the time frame to
execute federal-aid highway contracts over $1 million.  However, we
still recognize that these time frames are longer than the District's
45-day contract award goal and that DC DPW needs to streamline its
internal processes to further reduce the time frames. 

The Acting Director, DC DPW, commented that our draft report
inaccurately stated that the funding certification from the
District's Chief Financial Officer occurs concurrent with other DC
DPW contract processing because DC DPW cannot continue to process a
contract until it receives the certification.  While we agree that DC
DPW cannot continue to process a contract beyond the bid evaluation
phase until it receives the certification, our report addresses
activities during the bid evaluation phase--that is, the time between
the bid opening and the purchase requisition.  We were told that
during this phase, the Chief Financial Officer's certification and
FHWA's concurrence in the contract award overlapped DC DPW's bid
evaluation activities, such as making bid responsiveness and
contractor responsibility determinations, obtaining necessary tax
clearances for the contractor, and approving affirmative action
plans. 

DC DPW commented that in addition to improvements needed by DC DPW,
our report should reflect that the Chief Financial Officer and FHWA
need to improve their contract award procedures.  The Acting
Director, DC DPW, stated that delays in the Chief Financial Officer's
funding approval directly affect a contract's award time and that it
has taken an average of 41 days to obtain budget certification from
the Chief Financial Officer.  This estimate of the average time for
the Chief Financial Officer certification differs drastically from
the estimate that DC DPW officials told us at the May 23, 1997,
meeting--namely that certifications average about 24 calendar days,
or 18 business days.  However, the Office of Budget and Planning,
under the Chief Financial Officer, provided us with detailed data
showing that the total processing time averaged over 14 business
days, including over 4 days for DC DPW to submit contract packages to
the Chief Financial Officer after entry into the District's Financial
Management System and slightly less than 10 days for certifying the
availability of funds for contracts.  We did not reconcile the
differences in DC DPW's and Chief Financial Officer's average time
estimates.  Our analysis of the seven contracts processed under the
pilot program showed that certification averaged about 22 days, or 16
business days, and that FHWA's concurrence review averaged about 21
days, or 15 business days. 

Also, DC DPW officials believed that the draft report did not
thoroughly address DC DPW's efforts to implement FHWA's technical
assistance recommendations.  As a result of new information provided
by DC DPW officials during and after our meeting with them, we
revised the report to show that DC DPW has taken actions to implement
two of the technical assistance report's priority recommendations and
has made limited progress in implementing the other five priority
recommendations.  However, the Acting Director, DC DPW, believes that
our report should also reflect the implementation of the
recommendation that DC DPW modify its budget process because our
draft report indicated that DC DPW believes its planning and
budgeting procedures are consistent with FHWA's recommendations.  Our
report states that DC DPW believes that its project programming and
tracking procedures--not its budgeting procedures--are already
responsive to the technical assistance recommendation. 

DC DPW officials told us that the District government's budget and
personnel ceiling constraints have affected DC DPW's ability to
implement some recommendations.  The officials also said that they
have focused their efforts on other priorities that affect their
transportation organization and program instead of implementing the
technical assistance recommendations.  The officials added that in
April 1997, in response to our review, DC DPW began developing a
process for monitoring its implementation of FHWA's technical
assistance recommendations.  We revised our report where appropriate
to recognize the impact of these constraints and other priority
issues. 

DC DPW believes that our criticism of its failure to implement the
technical assistance recommendations within some unspecified schedule
is both unfair and unwarranted.  As part of the team that helped
develop the recommendations, DC DPW officials stated that DC DPW knew
that it would take additional resources and a number of years to
implement the recommendations and, therefore, had not committed
itself to specific milestones for implementation.  Our report
recognizes that the District and FHWA never came to closure on which
of FHWA's recommendations would be implemented within specific time
frames.  According to the technical assistance report, however, the
report's short-term recommendations needed to be addressed
immediately in order to allow the District's Federal-Aid Highway
Program to progress as expeditiously as possible and function at a
minimally acceptable level.  All the technical assistance
recommendations discussed in our report are short-term
recommendations, unless specifically noted as long-term. 
Furthermore, the technical assistance report states that the
short-term recommendations, including those with institutional
barriers outside DC DPW's control plus many self-imposed barriers,
would require 6 to 12 months to fully implement. 

DC DPW officials stated that their training efforts have focused on
developing performance measures and performance-based budgets as part
of their overall restructuring of transportation planning, design,
and construction into a unified Division of Transportation.  The
officials believe that these efforts are essential to create a basis
for the type of training recommended by FHWA.  In addition, the
officials stated that DC DPW has to replace its entire computer
platform and integrate it with the District's other computerized
information management systems before any meaningful improvement can
be realized.  We agree with DC DPW's long-term efforts to improve its
training and computer needs.  However, the technical assistance
report's recommendations deal with the more immediate needs to train
employees in the minimum core skills necessary to perform their jobs
and to procure computers and software support so that, given current
personnel shortages, existing personnel can be more productive. 

Finally, the Acting Director, DC DPW, commented that, to date, FHWA
has not provided DC DPW with any technical assistance.  Our report
states that the FHWA technical assistance study was done at DC DPW's
request.  In addition, FHWA officials informed us that their current
practice is to provide training for DC DPW staff, not to provide DC
DPW with FHWA staff.  Furthermore, the FHWA officials told us that
they have offered to provide DC DPW employees with training at no
cost to the District but that DC DPW generally has not taken
advantage of this offer. 

A copy of DC DPW's June 6, 1997, comments, without the attached
suggested editorial changes to our report (which were incorporated as
appropriate in the report along with those received from FHWA) and
its June 10, 1997, comments are included as appendixes II and III. 


---------------------------------------------------------- Letter :8.1

We conducted our review from August 1996 through June 1997 in
accordance with generally accepted government audit standards.  A
detailed discussion of our objectives, scope, and methodology appears
in appendix I. 

We are sending copies of this report to the Subcommittee on Oversight
of Government Management and the District of Columbia, Senate
Committee on Governmental Affairs; the Subcommittee on the District
of Columbia, House Committee on Government Reform and Oversight;
Delegate Eleanor Holmes Norton; the Secretary of Transportation; the
Administrator, FHWA; the Mayor, District of Columbia; the Director,
DC DPW; the Chairman, Financial Responsibility and Management
Assistance Authority; the Director, Office of Management and Budget;
and other interested parties.  We will make copies available on
request.  If you or your staff have any questions, please call me at
(202) 512-2834.  Major contributors to this report are listed in
appendix IV. 

John H.  Anderson, Jr.
Director, Transportation Issues


List of Congressional Committees and Subcommittees

The Honorable John H.  Chafee
Chairman
The Honorable Max S.  Baucus
Ranking Minority Member
Committee on Environment and Public Works
United States Senate

The Honorable John W.  Warner
Chairman, Subcommittee on Transportation
 and Infrastructure
Committee on Environment and Public Works
United States Senate

The Honorable Bud Shuster
Chairman
The Honorable James L.  Oberstar
Ranking Minority Member
Committee on Transportation and Infrastructure
House of Representatives

The Honorable Thomas E.  Petri
Chairman
The Honorable Nick J.  Rahall, II
Ranking Minority Member
Subcommittee on Surface Transportation
Committee on Transportation and Infrastructure
House of Representatives


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

The District of Columbia Emergency Highway Relief Act was signed into
law on August 4, 1995.  The act provided for a temporary waiver of
the District's matching share of funds expended for eligible
federal-aid highway projects from August 4, 1995, through September
30, 1996.  The act required, among other things, that we review and
report on the District's implementation of requirements to (1)
process and execute federal-aid highway contracts expeditiously; (2)
ensure that the necessary expertise and resources are available to
plan, design, and construct highway projects; and (3) make
administrative and programmatic reforms required by the Secretary of
Transportation.  In June 1996, we issued an interim report, and in
agreement with each congressional requester's office, we continued to
monitor the District's efforts to implement the act's requirements. 
Specifically, we agreed to examine (1) the extent to which the
District took advantage of the opportunity for the federal government
to pay 100 percent of the eligible projects' cost during the waiver
period, (2) whether the District's efforts to streamline its contract
award process have reduced the time frames to process and execute
federal-aid highway contracts, and (3) the status of the District's
efforts to implement the Federal Highway Administration's (FHWA)
recommendations for improving the District of Columbia Department of
Public Work's (DC DPW) capabilities to carry out its federal-aid
highway program. 

To determine the extent to which the District took advantage of the
act's waiver provision, we reviewed reports prepared by DC DPW to
identify the projects designated as eligible for the waiver and to
determine the amount of the District's expenditures related to these
projects during the waiver period.  We also interviewed FHWA and DC
DPW officials on the eligible projects that were not funded during
the waiver period to identify the factors that limited DC DPW's
ability to expend funds and take fuller advantage of the act's
waiver. 

To determine the time required to execute federal-aid highway
contracts, we focused our work on the construction contracts
processed since enactment of the August 1995 act.  We excluded
construction contracts processed and executed before the act's
signing because they include time when processing was suspended
because of a lack of matching funds.  We did not review individual
design and engineering agreements.  We reviewed individual
construction contract files to document the number of days taken to
process them through the various contract award review and approval
stages.  We reviewed documents and interviewed FHWA and DC DPW
officials to identify any measures taken by DC DPW to streamline its
internal contract award procedures and by the District to eliminate
or reduce external contract reviews and approvals. 

We reviewed FHWA's April 1996 report assessing DC DPW's expertise and
resources to plan, design, and construct federal-aid highway
projects.  Through the review of documents and interviews with DC DPW
and FHWA officials, we attempted to identify the District's actions
taken or planned to implement the report's recommendations or other
actions to improve its capability to carry out its federal-aid
highway program.  We discussed with DC DPW and FHWA officials their
reasons for not yet taking action on many of the recommendations. 

We performed our work primarily at FHWA's District of Columbia
Division Office and DC DPW's headquarters in Washington, D.C., from
August 1996 through June 1997 in accordance with generally accepted
government auditing standards. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE DISTRICT OF
COLUMBIA DEPARTMENT OF PUBLIC
WORKS DATED JUNE 6, 1997
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)




(See figure in printed edition.)Appendix III
COMMENTS FROM THE DISTRICT OF
COLUMBIA DEPARTMENT OF PUBLIC
WORKS DATED JUNE 10, 1997
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

Thomas E.  Collis
Helen T.  Desaulniers
Ralph W.  Lamoreaux
Phyllis F.  Scheinberg
Laurie S.  Zeitlin


*** End of document. ***