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Section 2: Local Government Projects Overview

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Local Government Use of the LGPP Manual

As described in Chapter 1 – Introduction, the term local government (LG) includes municipalities, counties, county and regional toll authorities, metropolitan planning organizations (MPO), regional mobility authorities (RMA) and some private entities. A LG should adopt and use the contracting procedures found in the Local Government Project Management Guide (LGPM Guide) to comply with the state and federal laws, rules and policies for transportation projects as presented in this Manual. This Manual provides the regulations and policies related to LG project initiation, preliminary design, bid document preparation, letting and award, contract execution, contract administration and other aspects of a construction or non-construction transportation project.

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Federal Funding Requirements for LG Projects

This Manual and the LGPM Guide apply to projects involving both state (TxDOT) and Federal Highway Administration (FHWA) funds. They do not apply to projects involving public transportation, aviation or other projects funded through the Federal Transit Administration, Federal Aviation Administration or Federal Railroad Administration. Federal regulations apply to all federally funded projects and are referenced throughout this Manual. Title 23 CFR (Highways) is the primary regulatory reference; however, other titles have applicability, such as Title 49 CFR (Transportation) and Title 29 CFR (Labor). FHWA directives may be found on the FHWA Legislative Resources website. All federal regulations can be searched on either the U.S. Government Publishing Office e-CFR website or the Government Publishing Office Federal Digital System website.

FHWA funds managed by TxDOT on LG projects are part of the Federal-aid Highway Program. The Federal-aid Highway Program is primarily a reimbursement program – not a grant program where the LG receives funds prior to their expenditure. Eligible costs incurred in compliance with the regulations will be reimbursed to the LG by TxDOT. Then TxDOT will receive reimbursement from FHWA. TxDOT and FHWA have an oversight and monitoring responsibility on projects with federal funds directly administered by LGs. If any of the federal share of project costs are incurred without following the pertinent federal regulations, they are subject to being declared non-participating and will not be reimbursed. This includes Pass-Through Finance projects (also called Pass-Through Toll projects). Pass-Through Financing is one method of the LG incurring costs for development of a transportation project and then obtaining reimbursement from TxDOT over an extended time period after construction is complete. TxDOT may seek reimbursement from FHWA after reimbursing the LG. All state and federal regulations outlined in this Manual apply to Pass-Through Finance project agreements for either design-bid-build projects or design-build projects.

The LG is responsible for ensuring all project requirements are met so federal funding is not jeopardized. This provision is covered in the TxDOT/LG Advanced Funding Agreement for the project, which is described later in this chapter.

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General Contracting Requirements for LG Projects

In order for federal or state funds to be spent on a transportation project in partnership with a LG, a written contract must first be executed between TxDOT and the LG. An Advance Funding Agreement (AFA) is the form of contract most frequently used for development of projects with LGs. The AFA specifies whether the LG or TxDOT is performing each stage of the work for the project or program. For all activities performed by the LG, TxDOT maintains an oversight responsibility. TxDOT’s district offices are the primary points of contact for the LGs throughout the project development process, although the TxDOT Transportation Planning and Programming Division (TPP) will provide oversight for non-construction projects with an MPO acting as the LG. Details of the AFA procedures are contained in Section 4 of this chapter of this Manual.

Many contracting requirements depend largely upon the funding source for the LG project. Projects may include federal, state LG or even private funds. Federal funds impose specific requirements. State funds may impose different requirements. Both federal and state requirements will apply if a contract involves federal funding. State requirements will prevail if the contract involves only state and local funding. If a project involves any federal or state monies, applicable federal or state requirements take precedence over local contracting requirements. Typically the most restrictive requirement prevails in order to ensure compliance with all.

The Manual provides guidance on a wide variety of project delivery methods available to TxDOT and LGs. This document provides information related to TxDOT district and division responsibilities associated with the administration and oversight of highway improvement contracts and related transportation projects let or administered by the LG as well as non-construction projects and/or programs. Available project construction delivery methods include those allowed by law, which may include design-bid-build and design-build.

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LG Project Oversight

TxDOT’s goal is to allow a LG flexibility to effectively administer a project while minimizing the use of TxDOT resources. However, TxDOT has a stewardship responsibility for all LG projects involving federal or state funds or impacting the state highway system (SHS). The degree to which TxDOT monitors these projects depends primarily on a combination of funding source, highway system, statutory requirements, demonstrated competence of the LG personnel and resources, and the potential risk posed by non-compliance. TxDOT monitoring of construction projects on the SHS with state or federal funds will focus on proper geometric design, application of TxDOT material and construction quality standards, and compliance with statutory requirements. TxDOT monitoring for projects on the SHS with funding involving only local or private funds should have the same focus on geometric design and construction quality; however, TxDOT may place less emphasis on certain statutory requirements. In this case, the LG will assume more responsibility for compliance with statutes. In summary, TxDOT will tailor the level of monitoring to the relative potential risk to TxDOT.

The requirement for TxDOT approval is referenced in many areas throughout this Manual. If no specific office is referenced, the appropriate TxDOT district office should be contacted for coordination of TxDOT approval.

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