Construction cost inflation is affecting many state highway agencies including the Texas Department of Transportation. While some of this increase can be attributed to factors such as soaring cost of energy, reports of large variations in cost of bid items among different districts indicate that the problem is more complex. Indeed, there are many other factors affecting the recent increase in construction cost including design requirements, work restrictions, bidding procedures, and competition. The goal of this research is to identify these factors, or the root causes contributing to the increase in construction cost, and propose the methods that can address them. The research approach is based on four sequential steps: identification of the methods, collection of the data from the interim workshops, assessment of the impact of the methods on adopted performance measures, and development of recommendations and guidelines on how to modify construction projects to reduce or contain the construction cost while maintaining quality. The results from a Delphi study show that the cost reduction methods (both on a project and program level) could be used to reduce or contain the cost of highway construction.