Submitting OIG:
Report Description:
What We Looked At
The Federal Highway Administration (FHWA) oversees about $52 billion in Federal-aid Highway Program funds for fiscal year 2022. The Agency makes these funds available to State Departments of Transportation for highway and infrastructure projects. Modifications to a project’s contract specifications are frequently done through change orders, which are an important component of the Federal-aid Highway Program since they can affect projects’ cost, schedule, design details or specification requirements, or a combination of these key elements. Given the possible risks to program oversight posed by change orders, we initiated this audit to assess FHWA’s oversight of contract change orders.
What We Found
We found data limitations that could impact FHWA’s ability to monitor and oversee change orders. Furthermore, FHWA’s methodology for its compliance assessment program (CAP) reviews can lessen the reviews’ usefulness for oversight and monitoring of change orders. The Agency also lacks a consistent definition of change order as well as clear guidance on what constitutes a major change. Lastly, FHWA’s policy and guidance on change orders in its Contract Administration Core Curriculum (CACC) Manual are outdated, and its guidance for monitoring and tracking its change order reports and associated findings lacks clarity.
Recommendations
We made recommendations to help FHWA strengthen its oversight role and help to mitigate potential exposure to risks related to change orders. FHWA concurred with four recommendations and partially concurred with the other two. We consider all six recommendations resolved but open pending completion of planned actions.
Date Issued:
Wednesday, July 20, 2022
Agency Reviewed / Investigated:
Submitting OIG-Specific Report Number:
ST2022031
Component, if applicable:
Federal Highway Administration
Location(s):
Agency-Wide
Type of Report:
Audit
Questioned Costs:
$0
Funds for Better Use:
$0
Number of Recommendations:
6
Additional Details Link: