This is the accessible text file for GAO report number GAO-04-644R entitled 'District of Columbia's Department of Transportation's Reorganization and Use of Federal-Aid Funding' which was released on June 01, 2004. This text file was formatted by the U.S. General Accounting Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. 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. 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. May 14, 2004: The Honorable Ernest J. Istook, Jr. House of Representatives: Subject: District of Columbia's Department of Transportation's Reorganization and Use of Federal-Aid Funding: The District of Columbia's (the District) transportation system is critical to the District's residents and businesses, the federal government, and the millions of tourists who visit the nation's capital annually. For example, the District's transportation system serves nearly 600,000 residents and almost 500,000 workers who commute into and out of the city each day and is also utilized by many of the capital's nearly 20 million visitors each year. Along with the Washington Metropolitan Area Transit Authority's mass transit system, the District's nearly 1,500 miles of road and 213 highway bridges are important components of the District's transportation system and are vital to the region's mobility and security. To help build and maintain its bridges and roads, the District receives federal highway funds from the Federal Highway Administration (FHWA). All of the District's bridges and about 30 percent of its roads are eligible for these funds; the remaining roads are maintained under the local transportation program using District funds. In 2003, the District expended a total of about $242 million on its bridge and road infrastructure, of which almost $158 million were federal-aid expenditures. To better manage its transportation services, the District reorganized its transportation infrastructure functions, creating a stand-alone Department of Transportation in 2002. According to the Volpe National Transportation Systems Center (Volpe Center),[Footnote 1] a lack of resources and inadequate attention to emerging infrastructure problems allowed local road conditions to decay to the point that in 1999, nearly 50 percent of local roads were rated fair or poor by FHWA. In addition, the District Department of Transportation's (DDOT) stakeholders believed that the organization was reactive, lacked vision, failed to communicate with citizens, and was unable to quickly respond to problems. Furthermore, we noted in 2000[Footnote 2] that according to FHWA, the District's average processing times for transportation: infrastructure design and construction contracts were lengthy--over 25 and 21 months, respectively, from notification of obligation ceiling to notice to proceed. To bring enhanced attention to transportation planning and management functions, as well as to improve processing times and overall performance, the Department of Transportation separated from the Department of Public Works and adopted a project management team approach to improve the planning, design, and construction of infrastructure projects. The reorganization is expected to provide more focus and leadership on transportation services and increase accountability for service delivery. In 2000 and 2001,[Footnote 3] we provided you two reports that contained information on the District's use of federal-aid funds and its plans to reorganize the transportation department to improve performance. In your most recent request, you asked us to provide information on (1) the District's reorganization of its transportation department, (2) the department's performance measurement system, and (3) the District's use of federal-aid funds, including the average time frames for processing design and construction contracts. To provide information on the reorganization, we interviewed senior officials, including the Director of DDOT, and reviewed documents on the establishment of the new department and its structure. To obtain information on the performance measurement system, we spoke with officials from DDOT and the District's Office of Deputy Mayor/City Administrator. To obtain information on the District's use of federal- aid funds, we interviewed DDOT and FHWA officials and obtained federal- aid funding and contract data from DDOT officials. We determined that the federal-aid data were sufficiently reliable for the purposes of our review. We conducted our work from January 2003 through March 2004 in accordance with generally accepted government auditing standards. This report summarizes the information we provided to your staff during our March 26, 2004, briefing. The briefing slides, which provide more details about our analysis, are attached as enclosure I. Background: The District Department of Transportation Establishment Act of 2002 created a cabinet-level agency responsible for the management of transportation infrastructure and operations.[Footnote 4] Prior to the formation of DDOT, the responsibility for these functions was within the Department of Public Works (DPW). The impetus for the reorganization was to bring enhanced attention to transportation planning and management functions and elevate transportation issues to a cabinet-level status. The District worked with the Volpe Center to develop a plan on how to structure the new department. On the basis of the Volpe Center's review of organizational structures and practices in other cities and state transportation agencies of similar size[Footnote 5] and on interviews with stakeholders, DDOT adopted a project management team approach--teams are now responsible for transportation projects from inception to completion.[Footnote 6] DDOT believes that this new approach will result in a departmentwide change in the delivery of transportation goods and services by providing faster delivery of services to customers and strengthening relationships with stakeholders. DDOT provides transportation functions for the District in its dual capacity as a city and a state. Because DDOT is considered a state DOT, it receives funding for roadway construction and improvement projects through various programs collectively known as the Federal-Aid Highway Program.[Footnote 7] Federal funding is made available to the states and the District at the start of each fiscal year through apportionments from FHWA that are based on formulas provided in law.[Footnote 8] With few exceptions, the funds that the federal government provides to the states and the District for highways must be matched by funds from other sources--in the District's case, local revenues. The funding requirement for most federal highway programs is 80 percent federal and 20 percent state/local funding. According to FHWA, highway construction projects may take as few as 3 years or as many as 20 years to complete, depending on the size and complexity of the project. Summary: In summary, we found the following: DDOT is making significant progress with its organizational transformation efforts. In 2003, we reported on the results of a forum to identify and discuss useful practices and lessons learned from major private and public sector organizational mergers and transformations.[Footnote 9] The result of this work was the identification of key practices that have consistently been followed throughout successful transformations. According to DDOT officials, the agency is implementing many of the organizational transformational practices, including establishing core values and a new performance management system linked to the agency's goals. Even though DDOT is off to a good start, several transformational challenges remain. For example, DDOT is still in the midst of establishing a more results- oriented culture, in essence shifting from an environment of "it's not my job" to "how can I help you." DDOT is still in the process of aligning its workforce to its mission and establishing more effective recruitment and retention programs. We have reported that a change of culture is at the heart of a successful organizational transformation. In addition, DDOT faces the challenge of updating and improving its information systems for performance measurement, personnel recordkeeping, and workforce planning. DDOT is planning, or has plans to address, many of its remaining challenges; however, the agency has not developed an overall plan to support a fully integrated and successful organizational transformation. Because a transformation is a substantial commitment that could take years to complete, it requires long-term planning and leadership commitment to ensure success. We believe, and DDOT officials agree, that DDOT could benefit from a comprehensive transformational plan that would include implementation goals, measures, and a time line to show progress toward its transformation. * DDOT is in the process of developing a comprehensive performance measurement system that is relevant to its organizational mission and incorporates industry best practices. DDOT officials reported that a number of past performance indicators were narrow in scope and difficult to measure. For example, one measure was to identify the total number of trips by persons on bicycles in the District. DDOT officials acknowledged that the performance system utilized in fiscal year 2003 did not provide its customers with an accurate measurement of how DDOT is performing in terms of its overall goals--such as safety and mobility. (See enc. II for additional information on DDOT's FY 2003 performance indicators.) While DDOT officials also indicated that the quality of the performance data varied, they also noted that the quality of some performance data was poor. This affects the department's ability to accurately measure its performance. According to these officials, the majority of the performance data are entered manually and vary widely in their accuracy, completeness, and reliability. DDOT officials recognize these problems and have sought to remedy the situation by seeking guidance about industry best practices. As a result, DDOT is developing a new performance measurement system to obtain information about overall performance and to establish a connection between strategic goals and the results of day-to-day operations. This new performance system will contain six broad strategic goals including safety, infrastructure, customer service, mobility, environment, and operations, which will be supported by 60 key result measures[Footnote 10] such as a reduction in the number of pothole complaints per mile. (See enc. III for additional information on DDOT's new performance system.) Many states, such as Maryland and Pennsylvania, have implemented similar performance frameworks. To complement this new framework, DDOT officials are implementing a technology plan that addresses the quality of the performance data. This plan, which they expect to be fully implemented in 2 years, will automate data entry and update and integrate the information systems. * The District's total expenditures for transportation projects increased from about $123 million in fiscal year 1999 to about $242 million in fiscal year 2003 (see enc. IV). For fiscal years 1989 through 2003, none of the District's federal-aid highways apportionments lapsed, and the District used all funds up to its obligation ceiling,[Footnote 11] with the exception of $2.2 million in 1994 that was not obligated because a project was dropped from its plans (see enc. V). In addition, DDOT officials told us that their obligated unexpended federal-aid balance decreased to $330.8 million as of June 26, 2003, down from $530.5 million as reported in our 2000 report.[Footnote 12] An unexpended federal-aid balance can result from bridge projects that incur expenses over several years. Finally, our recent review of construction contract processing times showed that average time frames have improved from 21.6 months in fiscal year 1997 through fiscal year 1999 to an average of 19 months in fiscal year 2000 through fiscal year 2002.[Footnote 13] We did not assess processing times for design contracts because only two design contracts were awarded in fiscal year 2000, and none were awarded in fiscal year 2001 due to the ebb and flow of design and construction work. A new process for design contracts was implemented in fiscal year 2002 that utilizes open-ended contracts from which multiple task orders can be issued. DDOT now issues task orders as needed instead of issuing individual contracts, which involves a more lengthy process. In addition, DDOT officials told us that they are implementing an automated procurement system and a software system that will enhance DDOT's ability to manage its transportation programs. Conclusions: DDOT is in the early stages of its reorganization and is off to a good start. It is important that DDOT fully implement its information technology plan and apply the organizational transformation key practices to ensure success. In addition, the agency could benefit from a transformational strategy that effectively makes the case for what type of organization DDOT believes it should become and provides a road map for getting there. An effective transformation strategy would include implementation goals, measures, and a time line to show progress made. Recommendation: We recommend that the Mayor of the District of Columbia direct and support the Director of the District Department of Transportation as he develops and implements a comprehensive plan for its transformation that reflects key practices and addresses the challenges the agency is facing. Such a comprehensive plan should include implementation goals, measures, and a time line to show progress toward the agency's transformation. Agency Comments and Our Evaluation: We provided a draft of this report to DDOT and the Mayor's Office for their review and comment. DDOT's Special Assistant for Management Support provided us with comments from the Mayor's Office and DDOT. They generally agreed with our findings and recommendation and provided some technical comments, which we have incorporated into this report where appropriate. Scope and Methodology: To provide information on the reorganization of the transportation department, we interviewed District and federal officials, including the Director of DDOT, on the status of and issues related to the reorganization and reviewed documents on the establishment of the new department and its structure. To provide information on the Department's performance management system, we conducted interviews with officials from DDOT, the District's Office of the Inspector General, and the District's Office of Deputy Mayor/City Administrator on the new department's performance indicators. To provide information on the District's use of federal-aid funding, we interviewed DDOT and FHWA officials and obtained federal-aid and contract data from DDOT officials. FHWA verified figures related to the federal-aid monies. We also interviewed DDOT officials concerning the data provided, applied logical tests to the data, and found no obvious errors of completion or accuracy. In addition, we reviewed DDOT's financial audits, which did not identify any findings regarding the federal-aid monies. Along with the corroborating evidence, we believe that the federal funding data are sufficiently reliable for the purposes of our review. As agreed with your staff, unless you publicly announce the contents of this report earlier, we plan no further distribution until 14 days from the date of this letter. At that time, we will provide copies to the Chairmen and Ranking Minority Members of Senate and House Subcommittees with jurisdiction over District of Columbia matters. We are also sending copies to the Mayor of the District of Columbia, the Interim Inspector General of the District of Columbia, the Chief Financial Officer of the District of Columbia, and other interested parties. In addition, the report will be: available on the GAO web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at goldsteinm@gao.gov or at (202) 512-2834. Individuals making key contributions to this report are listed in enclosure VI. Sincerely yours, Mark L. Goldstein: Director, Physical Infrastructure Issues: Enclosures: Enclosure I: [See PDF for slides] [End of figure] [End of section] Enclosure II: DDOT's FY 2003 Performance Measurement System: [See PDF for image] [End of figure] [End of section] Enclosure III: DDOT's New Performance Measurement System Comprises of 6 Strategic Goals and 60 Key Result Measures[Footnote 14]: Strategic Goal 1: Safety: Maintain a safe transportation system: Strategic Goal 1: Safety: Maintain a safe transportation system : * Combined metric: - Reduce total vehicle, pedestrian, and bike fatalities and injuries by 4 percent each year; - Maintain a relatively low ratio of fatalities per 100 million vehicle miles traveled (VMT) . * Vehicles: Improve vehicular safety: - Reduce the number of vehicular fatalities; - Reduce the number of vehicular crashes; - Reduce the number of alcohol-related crashes. * Pedestrians: Improve pedestrian safety: - Reduce the number of pedestrian fatalities; - Reduce the number of crash-related pedestrian injuries. * Bikes: Improve bicyclist safety: - Reduce the number of bicyclist fatalities; - Reduce the number of crash-related bicyclist injuries. * Prevention: Enhance preventive measures that result in greater safety conditions for vehicles, pedestrians, and bicyclists: - Percent of malfunctioning signals repaired within 24 hours (80 percent); - Percent of damaged stop or yield signs responded to within 24 hours (100 percent); - Maintain a high level of seat belt usage within the District (87 percent); - Reduce the number of crashes at targeted/top 10 intersections; - Number of pedestrian crosswalks improved and constructed. Strategic Goal 2: Infrastructure: Maintain a secure and high-quality transportation infrastructure: * Combined metric: - Maintain acceptable level of combined Infrastructure Quality Index. * Streets and sidewalks: Improve the ride quality of the District’s roads and the overall quality of its sidewalks: - Increase the District’s Pavement Quality Index (72 percent); - Achieve desired percent of blocks repaved; - Reduce the percent of streets that have low Pavement Quality Index scores; - Complete stated number of blocks to be paved within the year (200); - Number of sidewalk blocks created, repaired, or repaved; - Percent of potholes filled within 72 hours (95 percent). * Bridges: Improve the structural security of the District’s bridges: - Reduce the percent of bridge deck on bridges that are structurally deficient or at risk of deficiency; - Reduce the number of bridges on major commuter routes that are structurally deficient or at risk of deficiency. * Trees: Improve the status of the District’s tree population: - Interact with a targeted percentage of the District’s urban tree population (21 percent); - Maintain a lower percent of empty “plantable” urban tree spaces; - Maintain a low percent of dead or diseased trees; - Resolve tree complaints not related to a major storm, within acceptable time frames. * Streetlight / Traffic system: Maintain a reliable streetlight and traffic infrastructure: - Number of streetlight complaints; - Percentage of streetlight repairs completed within established time frame; - Level of streetlight illumination within tested areas; - Number of new streetlights installed; - Percentage of traffic signals that are Light Emitting Diode (LED). Strategic Goal 3: Mobility and flexibility: Enhance transportation mobility, access, and alternatives: * Vehicle mobility: Improve traffic mobility: - Maintain an acceptable relative delay rate on tested routes; - Ratio of peak to off-peak travel time or speed on tested routes; - Percent of excavation permitees completing projects within 45-day time frame (85 percent). * Alternatives: Promote accessible transportation options: - Increase the number of mass transit riders in the District (1 percent); - Increase the numbers of commuters biking to work on tested routes; - Increase the percent of people who walk, bike, or transit to work; - Increase the number of miles of dedicated bikeways in the District; - Number of metrobus vehicle miles traveled; - Number of D.C. Transit Commute Benefits Program participants; - Number of School Transit Subsidy Travel Cards issued by DDOT. * Incident management: Reduce the impact of recurring incidences on traffic mobility: - Respond to crashes and restore full traffic on (roadway operations patrol) ROP-patrolled routes within established time frames; - Ensure that major roads are passable within 12 hours after a snow event (85 percent). Strategic Goal 4: Environmental stewardship: Manage the transportation system in an environmentally friendly manner: * Air and water quality: Decrease the amount of pollutants in the District: - Reduce the quantity of air pollutants in the District (3 percent/ year); - Reduce the quantity of water pollutants on District streets (3 percent/year). * Environmental policies: - Begin implementation of “Environmental Management System”; - Complete environmental assessment for Minnesota Ave. and TR bridge; - Complete studies on light rail demonstration project, K & H St. transitway, and N.Y. Ave. Intermodal Transportation. Strategic Goal 5: Customer service: Build a customer-friendly organization: * Customer requests: Respond to correspondence mail in a timely manner; - Response to correspondence from the Mayor’s Customer Service Unit (MCU) on time (95 percent: - Respond to U.S. mail on time (100 percent); - Rating of 4-5 on all four telephone service quality criteria: (1) courtesy, (2) knowledge, (3) etiquette and (4) overall impression; - Resolve and close Hansen (DDOT’s work order system) requests on time; - Percent of excavation permitees issued within 30 days of application; - Number of combined complaints. * Customer perceptions: Promote positive public perceptions: - Percent of individuals polled, in an annual survey, who rate the Department’s services as good or better (70 percent); - Reduction in the number of complaints per snow event; - Reduction in the number of pothole complaints per lane mile maintained. Strategic Goal 6: Financial and project management: Manage the District’s transportation resources responsibly: * Project financing: Utilize financial resources predictably and effectively: - Percent of projects obligated on schedule (90 percent); - Increase the amount of funds obtained from private/alternative sources; - Ratio of administrative to operational spending. * Project delivery: Deliver projects on time and on schedule: - Maintain an acceptable total cost vs. estimated cost ratio, excluding “acceptable” change orders (90 percent); - Percent of projects requiring no change orders due to design deficiencies or latent conditions (80 percent); - Percent of bid responses will be within 10% of engineer’s estimate (80 percent); - Maintain an acceptable total time vs. estimated time for project completion, excluding “acceptable” delays; - Maintain a high percentage of project phases authorized on time [End of section] Enclosure IV: District's Expenditures of Federal-Aid, Matching, and Local Funds for FYs 1989 through 2003 for Transportation Programs: [See PDF for image] Source: GAO analysis of DPW and DDOT data. [End of table] Enclosure V: Apportionments, Obligations, and Obligation Ceilings for the District's Federal-Aid Highway Program for FYs 1989 through 2003: [See PDF for image] Source: GAO analysis of DPW and DDOT data. [End of table] Enclosure VI: [End of section] GAO Contacts and Staff Acknowledgments: GAO Contacts:Mark Goldstein (202) 512-2834: Susan Fleming (202) 512-4431: Acknowledgments: In addition to the individuals named above, Daniel Hoy, Ronald King, Ron La Due Lake, Norma Samuel, Lisa Wright-Solomon, and Michael Yacura made key contributions to this report. (543040): FOOTNOTES [1] The Volpe Center is part of the U.S. Department of Transportation's Research and Special Programs Administration, and is known for its transportation and logistics expertise. [2] U.S. General Accounting Office, Historical Information on the District of Columbia's Department of Public Works Federal-Aid Highways Program (Washington, D.C.: July 7, 2000). [3] U.S. General Accounting Office, Restructuring of the District of Columbia Department of Public Work's Division of Transportation, GAO- 01-347R (Washington, D.C.: Mar. 16, 2001). [4] D.C. Law 14-137 (2002). [5] The eight cities included Cleveland, Columbus, Indianapolis, Jacksonville, Memphis, Milwaukee, San Francisco, and Seattle. In addition, four state DOTs were interviewed: Delaware, Maine, Rhode Island, and Vermont. [6] DDOT has restructured its infrastructure project management organization around ward-based teams. [7] Most of the funding for these programs is derived from highway user taxes, such as excise taxes on motor fuels and tires, taxes on the sale of trucks and trailers, and taxes on the use of heavy vehicles. [8] For highway programs that do not have apportionment formulas, funds are distributed through allocations to states with qualifying projects. [9] U.S. General Accounting Office, Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003). [10] According to a DDOT official, baseline performance data for the new performance system is still being developed. DDOT plans to produce its first public annual report on the results of these measures in the fall of 2004. Due to the District's budget cycles, these new performance measures will not be reflected in the agency's official performance contract until FY 2006, but they will be tracked and published at the end of FY 2004. [11] Obligation limitations act as a ceiling on the obligations that can be made in each fiscal year. [12] Barney Circle project money represented $143.3 million of the previous $530.5 balance. Barney Circle was a multipart transportation project that was rejected by the D.C. Council due to citizen opposition and environmental issues. [13] The average time frames for processing 40 construction contracts were calculated from FHWA's notification of obligation ceiling to the District's notice to proceed to the contractor. [14] DDOT's new performance measurement system is in development with its first public annual performance report expected in fall 2004.