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Section 2: Change Orders

Change orders (COs) must be reviewed for all federal-aid projects. The District Construction Office (DCO) assists the Area Office (AO) with the CO description and reason coding, if necessary, and coordinates with the District or Construction Division (CST) FHWA Liaison, and/or the FHWA Area Engineer (AE) as required, to confirm federal participation. The AE and /or DCO also coordinates with the District TP&D Financial Manager to procure funding for COs.

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PoDI Federal-Aid Projects

Time Extensions (TEs) and major CO work on PoDIs require, at a minimum, verbal or email concurrence from FHWA prior to work beginning. The FHWA AE signature is required on all PoDI project COs, with a copy filed in the project records.

COs on PoDIs are categorized as either major or minor, as defined in the table below. Major COs on PoDIs are not approved for federal participation until the CO is signed by the FHWA.

Minor COs on PoDIs may be approved retroactively; however, FHWA does require written approval of minor COs (i.e., FHWA AE signature on CO) before the project is completed.

Discuss work on all PoDI COs with the appropriate FHWA Area Engineer prior to approval.

Use the following table to determine if the CO is major or minor.

Anchor: #i1050425Major/Minor Change Orders for FHWA Oversight Projects

Type of Change

Scope of Change


  • Reduces the geometric design or structural capacity below project design criteria (any reduction in geometric design that would normally have required a design exception)
  • Increases the cost of the contract by 25% of the original cost or by $300,000, whichever is less
  • Changes project limits
  • Any change in the Traffic Control Plan that reduces the capacity as shown on the plans for the through traffic or the traffic on major cross streets
  • Settlement of a dispute1
  • Changes the access on a controlled access highway
  • Waives of modifies contract specification requirements


Everything not described above

1. For additional information, see Chapter 8, “Claims and Disputes”

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Non-PoDI Federal-Aid Projects

Assume FHWA oversight responsibilities on all projects that are not PoDIs. Use the  Federal-Aid Policy Guide to determine federal participation for TEs and COs. Approve CO work on non-PoDIs in accordance with the Changer Order Approval Policy given in Chapter 7.

Federal Participation

The Federal Project Authorization and Agreement (FPAA) must reflect accurate project limits. For COs that change project limits, include detailed drawings showing the new project limits.

Federal-aid funds may be used to participate in COs that are:

Federal-aid participation may be granted if:

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  • the work on the CO did not adversely affect the public and
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  • the Department acted in good faith and did not willfully violate a federal requirement and
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  • the work was performed in full compliance with federal and state laws and
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  • the federal participation does not exceed the cost that would have been incurred had full compliance been achieved and
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  • the work was performed according to the contract.

Federal Non-Participation

Examples of COs not eligible for federal participation are:

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  • work performed prior to the “effective date” provided in the Federal Letter of Authorization;
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  • work performed outside the project limits, unless the additional work is an emergency, is to provide a transition at the existing project limits, and is covered by a CST-reviewed and concurrence provided Public Interest Determination; 
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  • routine maintenance items that are the responsibility of either the contractor or the Department. Examples: graffiti removal, culvert cleaning, worksite maintenance, etc.

Examples of individual contract items not eligible for federal participation are:

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  • work performed by state forces or other “non-competitively bid” work, unless covered under an approved Public Interest Determination;
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  • completed work that is determined not to be in substantial compliance with the contract;
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  • materials that do not meet specifications (Federal participation may be allowed for the reduced price of materials determined to serve the intended purpose of the contract. Accept for federal participation minor deviations at the full price of materials.);
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  • additional time or cost caused by un-acquired ROW or incomplete utility adjustments;
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  • purchase of unused contractor materials placed in state stock (If the material is subsequently used on another federal-aid project, charge the material cost to that project.);
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  • negotiated prices that are determined to be unjustified;
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  • work done for the convenience of the contractor;
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  • unaudited claim settlements, unless the audit requirement is waived in writing; and
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  • contract work paid through another means, such as Incidental Construction.
Anchor: #i1055322Mandatory Non-Participating CO Reason Codes


Reason Code


1. Design Error or Omission


Design error or omission that resulted in delay, rework or inefficiencies (TxDOT Design)


Design error or omission that resulted in delay, rework or inefficiencies (Consultant Design)

2. Differing Site Conditions (Unforeseeable)


Unadjusted utility (unforeseeable). Used when unknown utilities impact the project. Participation can depend on circumstances and needs to be analyzed on a case-by-case basis.

3. TxDOT Convenience


Dispute resolution. Occurs at the district level and involves delays, inefficiencies; etc.


Addition of stock account. Buying material purchased by the contractor and not incorporated into the project.

4. Third Party Accommodation


These are very case dependent and need to be carefully reviewed to determine participation.

6. Untimely ROW/Utilities


ROW/Utilities not clear. Used for contractor impacts.

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Extending or Adding Project Limits to the Contract

Forward for CST review any CO for extending or adding project limits that do not meet the criteria given in Chapter 7. Once reviewed, the District will complete the CO Approval Process.

Communicate with FHWA regarding the proposed changes.

Federal Participation

FHWA will participate in the following types of added limit COs:

Exception for Allowing Federal Participation Related to Added Limits

An exception may be made when CST determines the added limits CO is in the public interest. To seek the exception, coordinate with CST and the applicable FHWA AE, in advance, and submit a request with justification along with the CO to CST’s Construction Section (CST/C).

To seek an exception for allowing federal participation for a PoDI, coordinate with the FHWA, in advance, and submit a request with justification along with the change order to CST/C for federal approval.

Submission Requirements Related to Added Limits

Approval of added limit change orders requires the following.

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