Chapter 16: FHWA Oversight Requirements

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Section 1: Background

On May 21, 2015, the U.S. Department of Transportation – Federal Highway Administration (FHWA) and the Texas Department of Transportation (TxDOT) signed the Stewardship and Oversight Agreement on Project Assumption and Program Oversight (S&O Agreement). The intent and purpose of this agreement is to document the roles and responsibilities of the FHWA’s Texas Division Office (FHWA or Division) and the Texas Department of Transportation (the Department) with respect to project approvals and related responsibilities, and to document the methods of oversight that will be used to efficiently and effectively deliver the Federal-Aid Highway Program (FAHP). The agreement includes program and project responsibilities, governing Code of Federal Regulations (CFR) and United States Code (USC) titles, and funding and monitoring requirements detailing the delegation and acceptance of oversight responsibilities that will meet or exceed Federal regulations on all Federal-Aid projects. (See S&O Agreement, Attachments A and B.)

The Department assumes full responsibility for all Title 23 approval actions for project levels from design through construction on all federal-aid projects except as modified by FHWA’s risk-based assessment for projects in any given FHWA fiscal year (FY). A fiscal year is defined as beginning in October of a current year through September of the subsequent fiscal year (October 1 to September 30). The State’s compliance agreement is specified in detail in the Department’s manuals. The applicable agreements, policies, manuals, and reports for each Program Area are listed in the S&O Agreement, Attachment C.

One of the main components of the Risk-Based Project Stewardship and Oversight are projects classified as Texas Division Involved Projects (TxDIP), formerly known as Projects of Division Interest (PoDI). In short, TxDIPs may have an elevated risk in one or more core functions (as defined in S&O Agreement, Attachment D), and FHWA has made a risk-based decision to retain project approval actions or conduct S & O activities for the project as provided for in 23 USC 106. FHWA develops a TxDIP Plan for each project based on the perceived risks and conducts oversight activities. In addition to TxDIPs, FHWA also administers the Compliance Assessment Program (CAP) through reviews to evaluate joint risk assessments for various project functions. These are usually desk reviews wherein FHWA will request copies of various project record documents. FHWA representatives may also request an on-site project visit as part of a CAP review. The FHWA representatives will review the requested project record documents for compliance with regulations and policies and issue a report of findings. All federal-aid projects are subject to CAP reviews, including local government projects that have federal funding.

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Basic Federal-Aid Project Checklist (Construction and Civil Rights Core Functions)

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Final Environmental Clearance – Required for all federal-aid projects. Work closely with District environmental staff, Environmental Affairs Division (ENV), and the District Environmental Quality (DEQC) Coordinator for total compliance with federal regulations.

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Material Deficiencies Clearance – Required for all federal-aid projects. Work closely with Area Office (AO) Record Keeper, the materials lab, and the District Construction Office (DCO) Auditor for total compliance with federal regulations.

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MAT Certification – Required for all federal-aid projects. The Area Engineer (AE) or Director of Construction (DOC) must submit a “ Materials Certification Letter”(internal access only) at final acceptance of the project. Any material represented by an acceptance test that does not meet the criteria contained in the plans and specifications is considered an exception. Exceptions must be listed in the materials certification letter. For projects with federal-aid funding, submit the materials certification letter to MTD_MATERIALS_CERT@txdot.gov

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Refer to the Guide Schedule and Quality Assurance Program (QAP) Design-Bid Build (DBB) Projects for more information.

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Final Labor Issues Clearance – Required for all projects. Work closely with the contractor, AO Record Keeper, and the District Disadvantaged Business Enterprise (DBE)/Historically Underutilized Business (HUB) coordinator for total compliance of federal labor- related issues.

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Final CIV Clearance – Required for all projects if there is a DBE goal.

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Final Auditor Clearance – Required for all projects. Work closely with the DCO Auditor for total compliance of federal requirements.

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Interim Project Reviews (30%, 60%, 90% completion based on dollar value) – Required for all federal-aid projects. Consist of informal field inspections and audits (coordinate with applicable DCO Auditor) that assist the AO with interim evaluations of project compliance with all federal regulations and cover an array of requirements. (See S&O Agreement, Attachment B).

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Final Project Review – Required for all federal-aid projects. Consists of formal field inspection that covers an array of requirements. (See S&O Agreement, Attachment A.)

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Change Orders (CO’s) – All change orders to be internally reviewed and approved by the department for federal participation.

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Buy America – Ensure compliance with all Buy America requirements as stated in the contract. Refer to Chapter 6, Section 3 for additional information.

Refer to the FHWA Contract Administration Core Curriculum Manual for additional detail regarding federal requirements.