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Section 5: State Letter of Authority and Federal Project Authorization and Agreement

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Overview

The State Letter of Authority (SLOA), a Notice to Proceed or an authorization to commence work must be issued by TxDOT on all LG projects whether the work is competitively bid or performed by the local government (LG).

A Federal Project Authorization and Agreement (FPAA) is required in addition to the SLOA for all federally funded projects (it is not required for projects that only include local and/or state funds). The primary function of this form is to obligate federal funds for the project by phases. By completion of the FPAA, federal funds are authorized through an agreement between the Federal Highway Administration (FHWA) and TxDOT for reimbursement of eligible costs. The FPAA is required prior to TxDOT issuing a SLOA for each phase of a project that includes federal funds.

For LG-performed transportation projects that include construction involving state or federal funding, up to three SLOAs (and FPAAs, if federal funding is involved) may be required by TxDOT and issued during the course of the project. The first SLOA (and FPAA, as appropriate) is required prior to the Preliminary Engineering phase, the second SLOA (and FPAA, as appropriate) is required prior to the acquisition of right of way or the accommodation of utilities and the third is required prior to initiation of advertising for construction.

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  • The first SLOA (and FPAA, as appropriate) is requested and issued after the execution of the AFA and prior to any work being performed on the project.
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  • The second SLOA (and FPAA, as appropriate) is requested and issued upon completion of the Environmental Compliance phase of the project. The SLOA (and FPAA, as appropriate) initiates the Right of Way and Utility phase of the project. It is required prior to the acquisition of any right of way or other land for the project and prior to moving forward with utility accommodations.
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  • The third SLOA (and FPAA, as appropriate) must be signed and dated prior to advertisement of the project, or prior to commencement of construction when the LG is doing work by force account. This authorization is generated upon approval of the final plans at the end of the plans, specifications and estimates (PS&E) phase of the project.
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Obtaining Authorization

General

The SLOA, FPAA and Notice to Proceed (or authorization to commence work) are provided to the LG so it may continue with various phases of a project. The forms commit the expenditure of state or federal funds. For federal-aid projects, TxDOT becomes a recipient and the LG becomes a sub-recipient of the federal funding and must follow the rules contained in 2 CFR Part 25. This regulation requires TxDOT to verify all sub-recipients register in the System for Award Management (SAM) database, maintain an active SAM registration with current information and provide a DUNS (Data Universal Numbering System) number with ZIP+4 prior to the time of award. A DUNS number identifies an entity by assigning it a unique nine-digit identification number. The ZIP+4 is the zip code plus an additional four digits based on the entity’s physical address. TxDOT and FHWA consider the “time of award” to be the execution of the FPAA. In practice, the TxDOT district must obtain and verify the DUNS number prior to requesting a FPAA. The LGPM Guide provides additional information regarding the procedures required by 2 CFR Part 25.

In addition, prior to obtaining any of the described authorizations, an overall period of performance for the project must be established, including a project period start and end date. The sub-recipient must comply with these start and end dates, and must obtain written confirmation from TxDOT for any revisions to either date. Regarding the expiration of a existing project end date, reimbursement for project expenditures incurred subsequent to the end date cease being reimbursable without further consideration by TxDOT and FHWA.

Federal Requirements

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  1. 23 CFR Part 630 Subpart A – Requires TxDOT to obtain authorization from FHWA before work begins on any federally funded project.
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  2. 23 CFR Part 630 Subpart B – Prescribes procedures to be followed for preparation, submission and approval of PS&E, and supporting documents for federally funded projects.
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  3. 23 CFR Part 635 Subpart C – Requires authorization before a federally funded project may be advertised for receipt of bids. PS&E approval is a pre-requisite of authorization for design-bid-build projects. For design-build projects, FHWA’s approval of the Request for Proposals document will constitute FHWA’s project authorization; however, phased authorizations may be given under certain conditions contained in 23 §CFR 635.309(p).
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  4. 2 CFR Part 25 – Requires recipients and sub-recipients of federal funds to:
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    1. be registered in the SAM database;
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    2. maintain an active SAM registration with current information; and
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    3. provide a DUNS number to the agency awarding the funding prior to award.
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  5. 2 CFR Part 170 – Requires recipient’s reporting of information on sub-awards of federal funds as required by the Federal Funding Accountability and Transparency Act of 2006 (Public Law 109-282).
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  6. 2 CFR §200.1 – Requires the establishment and reporting of project period start and end dates by recipient prior to federal or state authorization of any reimbursable expenditures.

State Requirements

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  1. 43 TAC §15.56 – Requires projects on the state highway system to be designed in accordance with TxDOT manuals, procedures, standards and guidelines. Additionally requires approval of the PS&E by TxDOT prior to advertisement for receipt of bids for projects on the state highway system.

Required Practices

The LGPM Guide describes the procedures and responsibilities associated with requesting and obtaining an SLOA. In general, the LG works with the district to receive authorization to proceed with various phases of the project as detailed in the LGPM Guide.

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