Chapter 9: Forms and Agreements

Anchor: #CHDJIIHB

Section 1: Overview

Anchor: #i1003951

Comparison

The following chart compares requirements of lump sum and actual cost agreements.

Anchor: #i1003109Table 9-1: Comparison Chart of Actual Cost vs. Lump Sum Agreements

Actual Cost

Lump Sum

No limitation

Limited to $500,000.00

Detailed estimate

Very detailed estimate

Detailed itemization of billing

No itemization of billing

Partial payments

No partial payments

Audit required

No audit required

10% retained until audit

100% reimbursement at billing

One review of plan and estimate

One review of plan and estimate

Reconcile final billing to approved plan and estimate



Anchor: #i1003960

Actual Cost Agreements

Agreements are approved on an estimated cost basis that will be adjusted to reflect the actual cost of the adjustment at the time of billing and be verified by audit. If any costs are incurred for a reimbursable utility adjustment before an approved agreement, TxDOT will not reimburse the utility for those costs.

Federal Utility Procedure (FUP). All utility adjustments are eligible for reimbursement by State law for Interstate projects. Districts will ensure that appropriate funds are programmed in the STIP for maintenance operations. The necessity for, and justification of, interstate adjustments depends on whether the existing facilities need to be adjusted to accommodate the highway and are in the best interests of the public. The ROW Division has been empowered by the FHWA to act in its capacity and must be consulted concerning all proposed adjustments on interstate highways. The approval authority of the agreement assembly lies with the District. The agreement assembly must contain the following:

In order to verify that the adjustment is necessary, justified, feasible, economical, and UAR-compliant, utility plans will be reviewed by the District.

A utility may estimate the cost of work to be performed by contract forces without securing bids. However, the utility must include a reasonable basis for estimating the contract work. The plans and estimates should also reflect the necessity for the adjustment.

State Utility Procedure (SUP). Utility adjustments on Federal-aid (non-interstate), Off-System, State, and FM highway projects require a determination of eligibility. The justification for cost participation depends on whether the existing facilities have real or compensable property rights, in addition to the need to be adjusted to accommodate the highway, and are in the best interests of the public. The ROW Division has been empowered by the FHWA and State to approve all such adjustments and can be consulted before approval. The Districts have been empowered by ROW Division to approve the estimate, plans, and general agreements. The agreement assembly must contain the same information required for the Federal Utility Procedure above, plus the following:

To verify that the adjustment is necessary, justified, feasible, economical, and UAR compliant, utility plans will be reviewed by the District.

A utility may estimate the cost of work to be performed by contract forces without securing bids. However, the utility must include a reasonable basis for estimating the contract work. The plans and estimates should also reflect the necessity for the adjustment.

Local Utility Procedure (LUP). On local public agency (LPA) projects with TxDOT cost participation, a written agreement between TxDOT and the utility is not required. TxDOT does not require the LPA to execute a formal contract with the utility, but it is recommended. The responsibility for approval of payments rests with ROW Division. Before any payments to the LPA can be made, an audit will be made to a make a determination of upper limit. The LPA must furnish the same information as required for an agreement under the State Utility Procedure above. Upon project release by ROW Division, the LPA can initiate the utility adjustment. Negotiation, communication, and coordination of work with the utility, relative to accommodation and/or reimbursement, are the LPA’s responsibilities.

To verify that the adjustment is necessary, justified, feasible, economical, and UAR compliant, utility plans will be reviewed by the District. For adjustments that are less than fully eligible for State cost participation, the plans must clearly show the explanations and calculations used in deriving the particular eligibility percentage.

A utility may estimate the cost of work to be performed by contract forces without securing bids. However, the utility must include a reasonable basis for estimating the contract work. The plans and estimates should also reflect the necessity for the adjustment.

Anchor: #i1004094

Lump Sum Agreements

Agreements are approved based on very detailed plans and supported estimates of cost that will not be adjusted to reflect changes in costs or be verified by audit. Requirements for a lump sum agreement are:

    Anchor: #XRWOUVVY
  • plans must be of sufficient detail to allow verification of placements, methods of placement and materials used and removed;
  • Anchor: #PMLLJBBC
  • a highly itemized cost estimate (or actual bids) plus supporting documentation must be included;
  • Anchor: #KBKMABPK
  • Utility Joint Use Acknowledgements must be executed, if applicable;
  • Anchor: #GSWRCASS
  • the estimate must contain appropriate credits for salvage and betterment, and accrued depreciation value, if applicable;
  • Anchor: #QBEPTVWU
  • no contingency or miscellaneous items in the estimate are allowed;
  • Anchor: #LYTUKFCA
  • quitclaims, if applicable, must be supplied at the time of billing;
  • Anchor: #ADGPXHJE
  • Form ROW-U-48, Statement Covering Utility Construction Contract Work, must reflect that portion of the work to be performed by contract forces;
  • Anchor: #QVPDPMAI
  • bids shall not be awarded before agreement approval.

Federal Utility Procedure (FUP). 23CFR, §645.113f permits reimbursement of utility relocation costs based on an estimated lump sum amount. However, ROW Division has placed a ceiling of $500,000.00 on all lump sum agreements. This level of authority may be increased, if requested, in writing, by the District Engineer to ROW Division. The option to use the lump sum method rests with the utility company. This applies to the State Utility Procedure and Local Utility procedure as well.

State (SUP). The State permits reimbursement of utility relocation costs based on a lump sum amount with the same requirements as stated for an Federal Utility Procedure Lump Sum agreement with the exception that the eligibility of costs for reimbursement must have been determined and approved by the Districts and are based on real and compensable property rights.

Local (LUP). A contractual agreement between the State, LPA, and utility must be executed, and the Districts must approve the agreement.

If work is to be accomplished by contract labor, copies of the bids must be attached to the lump sum agreement to support the actual cost of contract work.

Anchor: #i1004167

Advance Funding Agreements (AFAs)

Utility work to be included in the highway construction contract may include items that are ineligible for TxDOT cost participation. Therefore, it will be necessary for the utility to place the estimated amount of ineligible costs in escrow with TxDOT. A statement should be added to the highway PS&E, in the section where utility items are addressed, stating that the ineligible utility items are financed by an AFA which is included in the Utility Agreement with the utility.

Any changes or revisions to the work in the approved utility agreement may require the betterment percentage and/or escrow amount to be recalculated. After district review, this information should be forwarded with the district's recommendation to ROW Division for review and handling.

Close coordination with the appropriate district design section is required to ensure plans are adequately incorporated into the highway PS&E.

Federal Utility Procedure (FUP). AFAs will be processed by Finance Division after ROW Division, acting on behalf of FHWA, has approved the plans and methods of installation.

    Anchor: #TACQAWQS
  • The District must submit a letter recommending the work be included in the construction plans.
  • Anchor: #AYTXHACC
  • Two sets of plans and explanations of need must be sent to ROW Division
  • Anchor: #XIYOQDPL
  • Any changes or revisions in the approved work may require that the betterment percentage and/or escrow amount be recalculated.

State (SUP). Information must be obtained from the utility showing the need for inclusion in the construction contract and funds obtained to cover the costs of the work. This information should be forwarded to ROW Division for review and handling along with:

    Anchor: #JURIALLD
  • two set of plans detailing the type and method of installation,
  • Anchor: #BKADAKCQ
  • statements of explanations of the need, and
  • Anchor: #MCBPFBTF
  • a letter from the District recommending approval of the inclusion in the construction contract.

AFAs will be processed by the Finance Division after ROW Division has approved the plans and methods of installation.

Appropriate funds will be placed in escrow

Local (LUP). Utility adjustments may be included in the plans, specifications, and estimates (PS&E) of the TxDOT highway contract. The LPA will execute a Local Public Advanced Funding Agreement ( LPAFA) with TxDOT, which will refund to or request additional funds from the LPA according to the contract. However, if the funding agreement is executed with the utility, utility work included in the TxDOT highway contract must be coordinated with ROW Division. The submission for an AFA for the LPA will be the same as for the State with the exception that:

    Anchor: #KFOKSRSW
  • The LPA and the State must have executed a contractual agreement.
  • Anchor: #EYOOTYNG
  • The LPA must submit a request to the District requesting that the work be included in the highway contract.
  • Anchor: #RFMJTVOT
  • The LPA pays 100% of the total cost of escrowing funds with TxDOT.
  • Anchor: #UEEIXFKR
  • When job is complete, the LPA is reimbursed a percentage of the eligible costs, based on the funding agreement.
  • Anchor: #UODVCYNA
  • All betterments will be addressed through agreement between the LPA and utility.

Further information regarding AFAs may be obtained from the ROW Division.

Previous page  Next page   Title page