Construction Costs - Using Federal vs. Local Funds

Costs of highway construction projects have been rising with rising prices of construction materials such as asphalt, concrete and steel. Identifying cost saving strategies is one of the ways of efficient utilization of available funds (federal and local) by the state Department of Transportations (DOTs) and Local Public Agencies (LPAs). A case study comprising of a sample pair of projects (a federal-aid project and a 100% locally funded project) constructed in Elkhart County, Indiana was undertaken to compare construction costs when sources of funding vary. Based on analysis of cost details from these two projects and discussions with the general contractor involved with these projects and other contractors in Indiana, possible reasons of cost differences between the projects were identified. Pavement evaluation tests were conducted to compare the pavement conditions of the road sections built under the two sample projects. This report presents some observations regarding cost differentials between federally funded projects vs. 100% locally funded projects, and provides some suggestions for future investigation and study.