Considerations in Implementing a Performance

Perspectives on a Performance-Based
Federal-aid Highway Program
Jeffrey F. Paniati
Executive Director, Federal Highway
January 12, 2010
My Perspectives
• Time is right for performance-based program
• SAFETEA-LU Commissions, GAO,
Congressional Committees, AASHTO,
USDOT all agree
• Must not only refocus Federal program, but
also establish accountability for performance
• Clear expectation that performance approach
will be implemented aggressively
Key performance areas
Most appropriate performance measures
National goals
State performance targets
Accountability for performance
Transition to performance-based program
Goals of Performance-Based
• Improve performance in key areas of national
 Shift emphasis of Federal oversight
from process to performance
 Improve decision making and
resource allocation
 Improve accountability
Performance Areas
• What are the most appropriate areas to be
managed for performance?
• Want a relatively few performance areas that
broadly reflect national interests, e.g.,
 Safety
 Pavement and bridge condition
 Congestion
 Freight/economic competitiveness
 Environment/climate change
 Livability
Performance Measure Criteria
• Directly related to highway investment
• Outcome oriented
• Reflect most important aspects of
• Not unduly burdensome to collect
• Understood by public
• Change within acceptable timeframe
Evolution of Performance
• Data currently available on a consistent basis
may not be ideal in the long run (e.g., IRI)
• Don’t want to postpone performance
management until we have ideal data
• Foresee a process where new performance
measures may be added as improved data
become available
Performance Goals and Targets
• Who sets national goals: Congress?
USDOT? States? Collaborative process?
• My Perspective: National goals should be
set by USDOT in consultation with States
and other stakeholders
• State targets should be set locally in
consultation with USDOT.
• Collaboration is key to realistic goals and
shared accountability
Performance Goals and Targets
• Long-term goals (20 years) provide a vision and
direction for the program
• Shorter term national and State targets (covering the
authorization period) indicate what will be achieved
with the money being spent
• Short term targets should be aligned with available
• State targets should recognize differences among
• Annual milestones or interim targets required for
effective oversight
Performance Monitoring
• States should formally report on
performance annually
• Initial focus on whether States have the data
and tools to effectively manage performance
• As quickly as possible shift focus to actual
performance outcomes
• Should influence decision making
• Should be based on reasonable targets
and expectations
• Should be consequences for failure to
meet targets
• Options include funding flexibility and level
of oversight
• Loss of Federal funds generally not an
effective option
Phased Implementation
• Aggressive but realistic timeframe
• Improve States’ capabilities to link investment
to performance in key areas
• Improve data required to measure
• Phase in measures to promote improved
• Perhaps institute pilot programs for more
advanced States
Federal-State Relationships
• Could represent significant change in
Federal-State relationships
 FHWA traditionally has managed for
process, not performance
 Not necessarily more oversight, just a
different kind of oversight
 “Performance Partnership” with both
FHWA and the States being accountable
Performance Management in House
T&I Bill
• Performance orientation for major programs
– freight, safety, critical asset investment,
metropolitan mobility and access,
metropolitan and statewide planning
• Targets would be set in legislation for safety,
pavement and bridge condition
• Penalties for noncompliance
On-Going FHWA Efforts
• Currently developing framework for
implementing performance-based Federal-aid
• Two major research projects
• One to provide support for developing
legislative language
• Another to provide technical basis for
regulations to implement performance-based
• Must get both right to be effective
Implementation Will Require Internal
FHWA Changes
• FHWA has initiated effort to identify internal changes
needed to implement a performance-based program
 Organizational changes
• Headquarters
• Field offices
 Develop new skills
 Develop new approaches to oversight

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