Section 5: Funding Program OverrunsAnchor: #i1016023
This section discusses
- Project selection process description
- Implications of erroneous estimates
- Pre-letting overrun approval.
Project Selection Process Description
The Commission authorizes projects in the Unified Transportation Program (UTP) in several different ways. One way is to authorize program amounts (usually once a year) for activities which reflect the Commission’s intentions to address a specific activity such as rehabilitation or preventative maintenance. The program amounts for a particular program may be allocated to the districts by a formula (with the formula also approved by the Commission), with eligible projects selected by the districts or by the MPO on an as-needed basis within their allocation. For other programs, such as safety or railroad signals, the program amounts are distributed on a statewide basis by the TxDOT division office responsible for the administration of that program after the division office has evaluated, ranked, prioritized, and selected projects for the program. For more information on the funding process, see the Transportation Programming and Scheduling Manual in the Transportation Planning and Programming Collection.
Specific projects listed in the UTP are ranked by indices such as cost per vehicle mile, congestion relief index, bridge condition, or fatalities/injuries. Generally, the lower the ranking index calculated for the project the higher the priority or rank that project will receive in its program since it will be considered more cost effective. Most of these indices require the estimated cost as part of their calculation.Anchor: #i1016070
Implications of Erroneous Estimates
During the programming stage, funds are earmarked for specific projects. An inaccurate estimate significantly exceeding what will actually be bid (underrun) will appear less cost effective in the program. The projects which appear to be more cost effective will be scheduled and let, whereas the project which is actually more cost effective may be delayed.
An inaccurate estimate less than what will actually be bid (overrun) will appear more cost effective than it actually is by causing the ranking index to be lower than it actually should be. This project will be ranked higher than it should be and, as a consequence, could jeopardize the letting of more cost-effective projects. An inaccurate preliminary estimate may also cause the designer to under-design or over-design a project in order to arrive at approximately the same overall cost as the preliminary estimate.Anchor: #i1069594
Pre-Letting Overrun Approval
The current governing procedures for approving construction estimate increases as approved by the Texas Transportation Commission (Commission) on June 29, 2000, by Minute Order 108241, needs to be revised to address new categories established in the 2004 Unified Transportation Program (UTP).
The following outlines the specific categories and the appropriate level of approval for the amount of construction cost estimate increase as compared to total programmed amount prior to letting:
Category I - Preventive Maintenance and Rehabilitation and Category II - District Discretionary are categories whose projects are selected by the districts and limited by the allocation of funs for specific programs. All programmed project estimate increases/decreases are credited debited to the district programs. These categories will have the following approval criteria:
- The District Engineer may approve all increases that do not exceed the district’s authorized funding in these categories.
Category 2 - Metropolitan Area (TMA) Corridor Projects, Category 3 - Urban Area (Non-TMA) Corridor Projects, Category 4 - Statewide Connectivity Corridor Projects and Category 6 - Structures Replacement and Rehabilitation are categories whose projects are approved by the Commission as part of the UTP. These categories will have the following approval criteria:
- The appropriate division director may approve all increases not to exceed $2.5 million. The Executive Director may approve all increases up to an amount not to exceed $25 million. The Commission will consider all increases in excess of $25 million.
Category 5 - Congestion Mitigation and Air Quality Improvement and Category 7 - Surface Transportation Program, Metropolitan Mobility Rehabilitation are projects selected by specific Metropolitan Planning Organizations (MPO). All programmed project estimate increases/decreases are credited/debited to the program’s allocation. These categories will have the following approval criteria:
- The District Engineer may approve all increases within the limits outlined in the MPO’s Transportation Improvement Program, otherwise only with MPO approval not to exceed the MPO’s allocation for these categories.
Category 8 - Safety, Category 9 - Transportation Enhancements (Safety Rest Areas) and Category 10 - Supplemental Transportation Projects are categories whose projects are selected by the responsible district engineer, division director or agency director based on applicable program criteria approved by the Commission for that Program. All programmed project estimate increases/decreases are credited/debited to the program’s allocation. These categories will have the following approval criteria:
- The appropriate district engineer, division director or agency director may approve all increases that do not exceed the program’s allocation.
Category 9 - Transportation Enhancements and Category 12 - Strategic Priority are categories whose projects are selected by the Commission based on specific program criteria. These categories will have the following approval critera:
- All increases require Commission approval.