1. Perspectives on a Performance-Based Federal-aid Highway Program Jeffrey F. Paniati Executive Director, Federal Highway Administration January 12, 2010

2. 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

3. Considerations Key performance areas Most appropriate performance measures National goals State performance targets Accountability for performance Transition to performance-based program

4. Goals of Performance-Based Program Improve performance in key areas of national interest  Shift emphasis of Federal oversight from process to performance  Improve decision making and resource allocation  Improve accountability

5. 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

6. Performance Measure Criteria Directly related to highway investment Outcome oriented Reflect most important aspects of performance Not unduly burdensome to collect Understood by public Change within acceptable timeframe

7. Evolution of Performance Measures 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

8. 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

9. 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 resources State targets should recognize differences among States Annual milestones or interim targets required for effective oversight

10. 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

11. Accountability 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

12. Phased Implementation Aggressive but realistic timeframe Improve States’ capabilities to link investment to performance in key areas Improve data required to measure performance Phase in measures to promote improved performance Perhaps institute pilot programs for more advanced States

13. 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

14. 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

15. On-Going FHWA Efforts Currently developing framework for implementing performance-based Federal-aid program Two major research projects One to provide support for developing legislative language Another to provide technical basis for regulations to implement performance-based program Must get both right to be effective

16. 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