Chapter 2: Planning Contract Development

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Section 1: State and MPO Interaction

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The relationship between the Texas Department of Transportation (TxDOT) and the Metropolitan Planning Organizations (MPOs) is that of a long-term partnership. For this reason, TxDOT will support open communication with the MPOs to:

  • Guide and assist MPOs as needed.
  • Inform MPOs of new or different requirements and practices.
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Example Planning Contracts

It is the purpose of a planning contract to make provisions for cooperative mutual determination of responsibilities in carrying out the metropolitan transportation planning process. These responsibilities should be clearly identified in a planning contract between the MPO, TxDOT, and the fiscal agent serving the metropolitan planning area, often a city.

The department and the MPO also enter into a contractual agreement to establish the terms and conditions for performance and payment. This contract is commonly referred to as an MPO planning contract. Three example planning contracts are provided in this manual:

TPP is the office of primary responsibility for current versions of the contracts' templates.

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Contract Execution

TPP coordinates with the district office who obtains the MPO policy board's and fiscal agent's signatures. The director of TPP then executes the planning contract with the final signature and date. TPP provides the contract copies to the district, MPO, and MPO fiscal agent.

Once the contract is executed, the approved UPWP is incorporated into the existing planning contract by reference (Article 7.1). This incorporation occurs when the approved UPWP refers to the existing, executed planning contract.

The planning contract is executed by the following entities:

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Authorized Signatory


  • State of Texas
  • TPP Director
  • Oversight for Planning Process Program
  • MPO
  • MPO Policy Board Chair
  • Decision Making for the MPO
  • City, or
  • Council of Government (COG)
  • City in MPO Area, or
  • Local Council of Government (COG), or
  • North Central Texas COG
  • Fiscal Agent for the MPO

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Contract Period

The planning contract is written to be as flexible as practical. At the end of the contract's initial six-year period, it may either be terminated and re-negotiated, or extended for no more than two years. The contract is automatically terminated if the MPO loses its designation as the metropolitan area's designated transportation planning organization. All existing contracts prevail until new ones are negotiated. If all terms and conditions of the contract remain viable and no amendment to the existing contract or new contract is required, a letter from the department to the MPO will constitute renewal of the contract.

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Contract Amendments

Execution of amendments is required when changes to one or more of the terms and conditions of the contract are necessary. Changes in operation are not valid unless agreed to by the parties and made in writing before implementation.

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Contract Monitoring

TxDOT requires cost information documenting salary, benefits, indirect cost rates, and other direct costs to be provided for review to satisfy 23 CFR §420.113(b), 49 CFR §18.22, and OMB Circular A-87. If at any time the district or division determines that a need exists for a review of any current MPO’s costs, the department or its authorized representative will perform the review.

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Letter of Authorization

After receiving federal apportionments for metropolitan transportation planning activities, the director of the Transportation Planning and Programming Division (TPP) will issue a letter of authorization to each MPO receiving the funds. The letter will indicate the available funding and the work authority for approved planning activities.

If unexpended funds are available from the previous year, TPP will send out a subsequent letter of authorization that releases the carryover funds to the MPO. See an example letter of authorization here.

MPOs must follow these requirements as noted in a TPP letter of authorization:

  • All metropolitan planning work must be outlined in the approved UPWP.
  • Work must occur within the noted federal fiscal year (October 1 through September 30).
  • All FTA Section 5303 funds must be depleted before the FHWA PL funds.
  • Charge numbers for FTA Section 5303 funds and FHWA PL funds must be correctly referenced on documents, including Form 132, Billing Statements.

In summary, the letter of authorization will provide the following information:

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Funding Source

Authorization (Dollars)

Contract Number

Charge Numbers

CFDA Number

Fiscal Year (Federal)






October 1 – September 30

FTA Section 5303




October 1 – September 30

CFDA. The Catalog of Federal Domestic Assistance (CFDA) is a government-wide compendium of federal programs that provide assistance or benefits to the American public. TxDOT must track and report all CFDA funds, including metropolitan planning funds.

Each TxDOT letter of authorization to the MPOs must indicate the CFDA number for the metropolitan planning funds.

CFDA numbers for metropolitan planning funds are shown in the CFDA table here:

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Funding Category

CFDA Title

CFDA Number


Highway Planning


FTA Section 5303 Funds

Federal Transit Metropolitan Planning Grants


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MOA with Transit Operators

An example Memorandum of Agreement (MOA) is available in the TxDOT Forms System that may be used to address requirements of 23 CFR §450.314. The regulations require that the MPO, the state, and the public transportation operator(s) cooperatively determine their mutual responsibilities to carry out the metropolitan transportation planning process. FHWA has recommended a single written agreement between all parties to accomplish that task.

TPP is the office of primary responsibility for the example MOA form. The district office may suggest use of the form to the MPO, who may or may not already have an MOA.

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