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Good Practices For the Oversight of Federal-aid Projects
Administered by Local Public Agencies
1. BACKGROUND
As the recipient (grantee1) of Federal-aid funds for the state, the State Transportation Agency
(STA) is responsible for ensuring that all Federal-aid funds are expended in accordance with
applicable laws and regulations2. The STA is not relieved of this responsibility in cases
where the funds are passed through to another State agency, local government agency,
Metropolitan Planning Organization (MPO), State university, or non-profit entity (where
such entity is an eligible sub-recipient under State law). The following information provides
good practices in defining the roles and responsibilities of FHWA, the STA and the Local
Public Agency (LPA) in administering Federal-aid projects consistent with current statutory
and regulatory authority.
2. LEGAL AND REGULATORY AUTHORITY
As specified in 23 CFR 630.112(a), when a STA signs a project agreement the STA ―agrees
to comply with the applicable terms and conditions set forth in title 23, U.S.C., the
regulations issued pursuant thereto, the policies and procedures promulgated by the FHWA
relative to the designated project covered by the agreement, and all other applicable Federal
laws and regulations‖. Among these laws and regulation related to oversight of LPA
administer projects are:
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1
23 U.S.C. § 106(g)(4)(A)(i) and (ii) [as amended by SAFETEA-LU section 1904] 3
OMB Circular A-133 in general and specifically:
 Subpart D, §___.400(d)(2) and (3)
49 CFR Part 18 in general and specifically:
 49 CFR 18.3
 49 CFR 18.26(b)(1) and (2)
 49 CFR 18.37(a)(1) and (2)
 49 CFR 18.40(a)
Grantee means the government to which a grant is awarded and which is accountable for the use of the funds
provided. [49 CFR 18.3, Definitions]
2
In a few cases under the Federal-aid highway program, the grantee may be an agency other that the STA. For
example for the Recreational Trails program, the grantee is a State agency other than the STA. Similarly, in some
States, the grantee for Transportation, Community and System Preservation program funds may be a Metropolitan
Planning Organization, local government or other eligible grantee. In such cases, the other agency has the same
oversight responsibilities that a STA has for funds passed through to a subgrantee.
3
23 U.S.C. 106(g)(4)(A) IN GENERAL.—The States shall be responsible for determining that subrecipients of Federal
funds under this title have—
(i) adequate project delivery systems for projects approved under this section; and
(ii) sufficient accounting controls to properly manage such Federal funds.
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3. FEDERAL ROLE
a. Stewardship of LPA Projects
Each FHWA Division is responsible for monitoring the effective and efficient use of
funds authorized to carry out title 23 and is required by law to periodically review the
monitoring of subrecipients by the STA. (23 U.S.C. 106(g)(1), 106(g)(4)(B) 4). Pending
issuance any necessary regulations, Division offices should discuss LPA good practices
with their respective STA partner and discuss the adoption of good practices. In the
event that your review of LPA projects within the State reveals a history or pattern of
unsatisfactory performance, whether good practices have been adopted or not considered,
special conditions or restrictions associated with the LPA may be imposed consistent
with and pursuant to existing regulatory authority related to information furnished by the
State in 23 CFR 1.5 and relating to high risk grantees in 49 CFR 18.12.
Some states have either developed or are in the process of developing a stewardship/oversight
agreement that describes how the State will ensure projects carried out by another agency (e.g.,
LPA) will be administered with financial integrity and in accordance with Federal-aid
requirements. Such agreements include such topics as monitoring, qualifications, staffing, and
technical manuals. The agreement (which may take the form of an Appendix or an Addendum)
may be incorporated as a supplement to the overall Stewardship/Oversight agreement that each
FHWA Division and STA has entered into. Information on the overall FHWA Division and
STA Stewardship/Oversight agreement can be found in FHWA’s May 8, 2006 memo titled,
―Guidance on Developing Future Stewardship/Oversight Agreements‖
b. Program Oversight
The type, extent and number of reviews of project activities conducted by FHWA to
ensure that federal requirements are being met on locally administered projects should be
established based on results from each office’s risk assessments and other internal review
selection processes. Functional areas that are identified as high risk and subsequently
contain project or program reviews as a part of the risk reduction strategy should include
locally administered projects as part of the review and as required by 23 U.S.C.
106(g)(4)(B). These reviews may be conducted in cooperation with the STA. For high
risk projects administered by an LPA, consideration should also be given to increasing
the level of STA and/or Federal oversight consistent with the requirements in 49 CFR
18.12.
A periodic review that examines whether the STA is adequately monitoring locally
administered projects shall be conducted in accordance with 23 U.S.C. 106(g)(4)(B).
Locally administered projects may be included as an integral part of the Division’s
financial management oversight program which is established in the provisions of the
Financial Integrity Review and Evaluation (FIRE) Order, which can be viewed at
www.fhwa.dot.gov/legsregs/directives/orders/45601a.htm.
4
23 U.S.C. 106(g)(4)(B) PERIODIC REVIEW.—The Secretary shall periodically review the monitoring of
subrecipients by the States.
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c. Staffing
In FHWA Headquarters, a Local Project Oversight Coordinator position has been
established in the Office of the Associate Administrator for Infrastructure. At the FHWA
Division level, each Division Administrator needs to designate a contact person to serve
as the focal point for monitoring of Federal-aid projects administered by LPAs. These
duties and the resources devoted to them may vary considerably among the Division
Offices, commensurate with the volume and the amount of federal investment in LPA
administered projects within the individual States, the capabilities of the LPAs, and the
effectiveness of the State’s monitoring program. These Division contacts, along with the
Headquarters Local Project Oversight Coordinator, will form a core network for
dissemination of guidance, along with the sharing of ideas, issues, programs, and
experiences to assist in the effective monitoring of LPA administered projects.
4. STATE TRANSPORTATION AGENCY ROLE
Under the definition of grantee in 49 CFR 18.3 the STA is accountable to FHWA for the use of
the federal funds, and shall be responsible for determining whether subrecipients of federal funds
have adequate project delivery systems and accounting controls under 23 U.S.C. 106(g)(4)(A).
a. Agreements Between STA and LPAs
Some states have taken steps to expressly document the roles and responsibilities of the
STA and any subrecipient of Federal-aid funds. These agreements have taken the form
of detailing each agency’s roles and responsibilities, including the identification of the
agency responsible for required approval actions. The established roles and
responsibilities in these agreements are tailored to and recognize the LPA’s experience
and capabilities, such as program management including: project eligibility, billing
submittals and payment, record keeping and retention, consultant selection, and
monitoring of project development activities; project development including: document
reviews i.e. quality assurance verse quality control, design standards, design exceptions,
contract specifications, and PS&E development; right of way, including: appraisal,
acquisition, and relocation; environment (purpose and need, documentation, and
responsibility including applicability of programmatic agreements); contract
administration (bidding and award, required contract provisions, overall management and
oversight, and DBE goal setting; construction (responsible charge, quality control/quality
assurance, and qualification and staffing of inspection personnel).
b. Project Standards
In accordance with 23 CFR 625.3, design and construction standards of highway projects
on the NHS are to be approved by the FHWA in cooperation with the STAs, regardless of
funding source. In addition, Federal-aid projects not on the NHS are to be designed,
constructed, operated, and maintained in accordance with State laws, regulations,
directives, safety standards, design standards, and construction standards. The STA is
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responsible for assuring that these regulatory requirements are met on all Federal-aid
projects. Therefore, it would be advantageous for the STA to review and approve any
design and construction standards used by LPAs (either programmatically or project-byproject). An example of State approved design standards for LPA projects can be found
in Chapter 42 of the ―WSDOT Local Agency Guidelines Manual.‖
c. Monitoring Program
Many STAs will effectively accomplish their stewardship of the LPA administered
projects by actively providing engineering expertise, technical assistance, technology
deployment, program assistance, program delivery, and oversight to assure accountability
for the use of Federal funds. The STA oversight responsibilities assure the program is
carried out in accordance with all applicable laws, regulations, and policies, but also may
involve continual program and process evaluation and improvement. A comprehensive
approach to this effort could include a combination of quality assurance, project reviews,
program reviews and evaluation. An example of a State quality assurance program can
be found in Chapter 8 of the Florida DOT ―Local Agency Program Manual.‖ Ideally, a
STA monitoring program would also include a follow-up component to ensure that local
agencies maintain the appropriate level of expertise to adequately deliver federal projects
while at the same time have sufficient accounting controls to properly manage federal
funds as provided by 23 U.S.C. 106(g)(4)(A). Good practices of an effective STA
monitoring program generally include:
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Sufficient project level oversight to assure compliance with all project
requirements usually detailed in a project specific monitoring plan
Sufficient program level oversight to establish areas for improvement and training
needs
An evaluation of the effectiveness of the qualifications of the LPA
A review to assure sufficient accounting controls are in place to properly manage
Federal funds
The State and the Division office are encouraged to work collaboratively on the
monitoring program.
d. Staffing
Appropriate STA staffing is important to ensure that satisfactory project delivery systems
and sufficient accounting controls are in place to properly manage federal funds for LPAadministered projects, and to accomplish its stewardship responsibilities imposed by 23
U.S.C. 106 (g)(4)(A). Good practices include demonstrating a commitment to adequate
staffing, a State monitoring program which may be described in the STA/FHWA
Stewardship Agreement or in a separate document and a description of the staffing
dedicated to monitoring subrecipients of Federal funds including such specifics as the
number, location, titles, and duties of the State staff devoted to the various program
elements discussed in this document. A general description of the organization of the
subrecipient monitoring staff, along with the relationship to the overall STA organization,
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may also be included. Focus is on both Project level oversight by the STA as well as
program level oversight.
e. Qualification Program for Local Public Agencies
If a STA elects to have an LPA administer all or part(s) of Federally funded project(s), it
is the responsibility of the STA to ensure that the LPA complies with all applicable
Federal requirements. To mitigate against the possibility of non-compliance and to
minimize State staff resources necessary for the State to fulfill its oversight
responsibilities, STA’s have found it beneficial to develop program qualification criteria
for LPAs to assure that the LPA is fully qualified to manage project activities. STAs, in
cooperation with FHWA have found it useful to develop a list of project delivery
elements that may be undertaken by the LPA along with specific evaluation criteria that
will be used to determine the ability of the LPA to adequately administer those elements.
The project delivery elements, evaluation criteria, and resulting implementation
procedures necessary to institute this activity should be developed collaboratively with
the FHWA Division Office. A training component may be included in the qualification
program to assist LPAs in obtaining the necessary skills and knowledge needed to
administer the program as well provide a basis for evaluating staff abilities. Some
example items that could be included in a Qualification and Training Programs are listed
below. A more detailed description of the Qualification and Training Programs can be
found in Appendix A and Appendix B, respectively.
1. Program Elements
a. General Grant/subgrant Administration Requirements
b. Program Management
c. Planning / Programming
d. Procurement
e. Design
f. NEPA /Environment
g. Right Of Way Plans
h. Right Of Way Appraisal / Acquisition
i. Contract Administration
j. Construction Oversight
k. Finance
2. Evaluation Elements
a. Previous Project Experience
b. Audit Findings
c. Authority to function
d. Assurance of no conflict of interest
e. STA and LPA Public Employees in Responsible Charge
f. STA has approved ROW procedures that address LPA delegated actions of the
Uniform Act.
g. The LPA has STA approved Contract Administration Procedures
h. The LPA has STA approved Consultant Procurement Procedures
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i. Staff Expertise and knowledge of federal-aid highway program requirements (refer
to Core training listing)
j. Have written project administration processes. Not limited to but covering such areas
as:
i. Consultant Agreement Administration
ii. Construction Contract Administration
iii. Assurances that all environmental permits are secured and environmental
commitments are satisfied.
iv. Assurance that the contractor’s work is properly and independently inspected
v. The materials/work used is sampled/tested according to project specifications
vi. All changes to project i.e. design, specification, and project scope receive the
necessary approval(s).
vii. All required finance, accounting and record keeping requirements are met
f. LPA Practice and Resource Manual
LPA manuals provide a valuable means for a STA to describe the processes, documents,
and approvals necessary to administer local transportation projects using Federal-aid
funds. The LPA manual is a compilation of information from many sources and is a
reference source for administrative and field personnel in any governmental agency. To
serve the needs of local agencies, the manual may describes development requirements
and outlines procedures for obtaining approval when local conditions warrant departures
from adopted standards. For ease of use, the LPA manual may be organized to reflect the
flow of a project through the major phases of development and to incorporate the
differing developmental needs of different projects. A good practice approach would
generally involve each FHWA Division office working collaboratively with their STA to
develop their LPA guidance manual or similar other document. The following States
have developed manuals that may serve as a base model for LPA administration:
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California Department of Transportation
Colorado Department of Transportation
Florida Department of Transportation
Iowa Department of Transportation
Ohio Department of Transportation
Washington State Department of Transportation
The LPA manual may be referenced as part of the project specific agreement to assure
that each agency clearly understands their responsibility in the Federal-aid process and
define the consequences that result if there is a failure to follow required processes.
Given that the needs in each State will very significantly and the content of a LPA
manual will be commensurate with the size of the Local Agency Program, the following
is offered for consideration in developing the content of the LPA manual, however the
FHWA Division office and STA should work collaboratively to agree upon Local
Agency needs for the Guidance. Examples of LPA existing manuals can be found in
Appendix C.
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1.
2.
3.
4.
5.
6.
Overview
General Project Development (Applicable to All Projects)
Special Project Development (Applicable to Some Projects)
Design Requirements and Contracting Processes
Construction and Post Construction Requirements and Processes
Miscellaneous
5. IMPLEMENTATION OF LOCAL PROJECT OVERSIGHT PROGRAM
As the need for rulemaking is evaluated, the division offices must continue to monitor their
STAs to ensure that the STAs do in fact establish and carry out a comprehensive LPA project
oversight program as soon as possible. The timing of such implementation will vary
depending on the amount of effort that must be undertaken to develop the Local Project
Oversight Program. The topics covered in this resource document may assist the Divisions
in this effort.
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APPENDICES
Appendix A: LPA Qualification Considerations
Appendix B: Training for LPAs
Appendix C: Example of Detailed LPA Manual Contents
Appendix D: Other Resources
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Appendix A
LPA Qualification Considerations
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LPA Qualifications
Background
When operating in the capacity of the STA, the LPA has to be adequately staffed and suitably
equipped to undertake and satisfactorily complete the work. Should the LPA elect to use a
consultant to fulfill its authorized duties, the LPA must provide a full time public employee to be
in responsible charge. One way to assure that LPA are sufficiently staffed and suitably equipped
is to have a formalized qualification program.
In order to ensure a higher level of success in project delivery, the STA and LPA should possess
a minimum organizational structure, credentialed employees, as well as certain processes and
experience. These considerations apply to more than just the specific project development
disciplines associated with design and construction, but also an understanding of fiscal
accountability and stewardship of public resources.
The following sections provide a sound framework for implementing a qualification program for
the administration of Federal-Aid projects and may assist the STA in developing written
practices that define the essential components of a qualification program.
STA Prerequisites for Authorizing Work Performed by an LPA
The oversight responsibility and delegation of authority from the FHWA Division Offices to the
STA for ―State Authorized‖ projects is contained in individual State Stewardship Agreements
developed in accordance with 23 U.S.C. 106. For these projects, the STA has been delegated
both pre-construction and construction related responsibilities. The STA has the option of
authorizing some or all of this work to qualified local agencies, state or Federal agencies, or
Tribal governments. A STA may employ a consultant to provide construction engineering
services, such as inspection or survey work on a project; however, the STA must provide a fulltime employed State engineer to be in responsible charge of the project.
Good practices suggest that several conditions should exist within the STA organization prior to
authorizing capable LPAs to administer projects. The STA generally has established policies and
procedures, accountability, program direction, monitoring, and continuous improvement for the
LPA agencies. The STAs often establish a formal LPA program office or focal point within its
organization to oversee LPA administered projects, provide technical assistance and to
institutionalize State directives, standards, procedures, and guidance documents. The
effectiveness of the LPA administered projects should be periodically accessed using STA and/or
FHWA experts as measured against the requirements in 23 U.S.C 106(g)(4)(A). The STA
should commit sufficient staff and other resources to project and program administration to
ensure that all applicable state and Federal requirements are met, and the work is accomplished
efficiently.
The STA may also provide formal training and set benchmark proficiency requirements for its
Local program staff. The LPA should also maintain training records that show Local Programs
staffs, whom are listed as qualified, have the proper education and experience, and that they have
completed all qualification requirements. Training records should also show that Local
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Programs staffs have completed all re-qualification requirements at specified time intervals. The
examination process must challenge the staff sufficiently to verify the proper level of knowledge
of all qualification areas and test the Local Program staff’s technical understanding of Federalaid requirements, Federal and State processes, judgment and decision-making abilities, and
ability to communicate expectations to the LPA.
The STA is accountable to FHWA for ensuring that activities delegated to LPA are completed in
conformance with Federal and State requirements. See 49 CFR 18.3. Where FHWA has not
delegated final approval, STA should monitor LPA activities and makes recommendations to
FHWA. The STA should also provide assistance to the local agencies in interpreting the
regulations, manuals and guidelines as they apply to specific project conditions. Environmental
issues, ROW concerns, hazardous wastes, labor compliance, equal employment opportunity,
Title VI and DBE are among these areas where assistance may be needed. The STA should
strongly consider retaining approval authority for the following regardless of LPA Qualification:
 Right of Way Certification
 Sole Source Justification Approval
 DBE Goals
 Owner Force Account Work
 Reject of Bids
 Labor Compliance Enforcement
 Project Cost Eligibility
 Project Final Inspection and Acceptance
 Federal-aid Payments
A tiered approached to qualifying LPAs is recommended. This approach would allow for greater
flexibility in the administration of LPA projects by allowing STAs to focus resources on those
agencies that need the most assistance in administering Federal-aid projects. It would also
provide a way for LPAs that have experience in managing Federal-aid projects to have more
control over their projects.
An LPA accepted for Tier 1 management of a Federal-aid project would utilize the full oversight
by the STA. All the approvals for the project would be made by the STA. The LPA would
shadow the STA and participate in all project decision-making. The STA would assist the LPA
in technical analysis and the development of project documentation. All new LPAs must
administer a minimum of one project under the direction of the STA.
Once a STA is confident that the LPA understands the Federal-aid process as a Tier 1 agency,
the STA may grant Tier 2 status to the LPA. The Tier 2 status would only be in the core element
areas that the LPA has met the specialized expertise requirements. The STA would be
responsible for full oversight in core element areas not granted Tier 2 status. The STA would be
required to provide periodic project reviews to assure construction-related activities are
performed in accordance with State policies, practices, and standards, and in accordance with all
requirements of Title 23, USC.
Tier 3 status should be granted by STA when the LPA has specialized experience in all core
element areas. Upon qualification the LPA will be authorized to provide full oversight in all
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areas of project delivery. The STA will only be responsible for approval in those areas identified
above. The STA will need to audit the performance of the LPA on a cyclic basis that is no less
than once every 3 years. These compliance-based reviews should establish or improve control
processes and documents for functional areas of responsibility (environment, design,
construction, etc.), ensure Federal-aid funds are properly managed and effectively used in
accordance with Federal policies, and make certain that safeguards are in place to minimize
fraud, waste, and abuse.
Capabilities of the Local Public Agencies – A Tiered Approach
Under a tiered approach, a qualified LPA would generally administer only those parts of project
delivery that have been authorized by the STA based on the qualifications of the LPA. A LPA
can only move to a higher tier of responsibility when the lower tier criteria have been
successfully met and the LPA has received the approval of the STA. If a consultant is providing
the specialized expertise, the LPA will need to specify the qualifications of the consultant,
related experience, time availability or commitments to the tier activity, and the terms and
duration of the contract when available.
The program might require that a Tier 1 (Beginner) LPA be under the direct supervision of the
STA and all project approvals will be the responsibility of the STA. All LPAs should administer
a minimum of one project under the direct supervision of the STA prior to moving to Tier 2. The
LPA will need to show (1) personnel expertise which includes education, documented training or
proficiency, and past experience; (2) policies, procedures, and processes that comply with
applicable State and Federal law; and (3) record keeping and accounting systems. The LPA
should be in good standing with the State Auditor, STA, and FHWA relative to its accounting
practices and fiscal operations. The LPA must also designate a full-time public employee within
the local government’s organization to be in responsible charge. The named public official will
actively participate with the STA in project decision-making as the project progresses.
A qualified LPA with a Tier 2 (Practiced) qualification will have the past experience of a Tier 1
LPA and will have demonstrated technical expertise necessary for the review and approval of
various phases or functional areas associated with project development certifying that they are in
conformance with applicable State and Federal law. Technical competencies could be used to
determine if the LPA has the specialized expertise needed. This specialized expertise may be
provided by the LPA personnel, consultant, or other as agreed to with the STA. A Tier 2
qualified LPA may be in one or more functional areas.
A Tier 3 (Proficient) LPA will have the past experience of a Tier 2 LPA and a minimum number
of years of total experience participating in a local oversight program and documented
experience of a minimum of three Tier 2 capitol improvement projects with full time experience
of two staff members including one supervisor. Documentation could include a narrative of the
three relevant projects specifying responsible staff and their experience, a description of relevant
project tasks, methods for overcoming technical obstacles and additional training obtained by
staff. Prior to qualification, an evaluation of the LPA should be completed and documented by
the STA. In the event that the STA cannot approve an LPA for Tier 3 participation, the STA
could provide in writing to the LPA the deficiencies identified as well as what the STA must do
to overcome these deficiencies. The LPA qualification should remain in good standing with the
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STA. If substantive findings are found on State audits or program reviews, the STA will
withdraw its determination of Tier 3 qualification.
Following a determination of qualification, if resources available to a LPA changed such that the
LPA can no longer conduct or oversee project delivery activities, the LPA would be required to
notify the STA within 30 days of the change. The STA should make its own determination of
the impact to the LPA’s qualification.
Personnel Expertise Requirements
LPA personnel designated to perform project delivery activities should have the educational
background and technical expertise sufficient to perform the activities described above. For
example, competency statements could identify three levels defined as:
Novice level has basic knowledge of or exposure to the subject or process adequate to discuss the
subject or process with individuals of greater knowledge.
Journeyman or Working level has the knowledge required to monitor and assess
operations/activities, to apply standards of acceptable performance, and to reference appropriate
materials and/or expert advice.
Expert level has a comprehensive, intensive knowledge of the subject or process sufficient to
provide advice in the absence of procedural guidance.
Project Delivery Elements
Tier 1
Tier Qualification
Tier 2
Tier 3
Program Management
Planning / Programming
X
Procurement
Design
X
NEPA /Environment
X
Right Of Way Plans
X
Right Of Way Appraisal / Acquisition
X
Contract Administration
Construction Oversight
X
Finance
 The LPA’s should have specialized experience that meet the core element technical
competencies to qualify for the Tier.
X A LPA may qualify in one or more of these core element areas to qualify for Tier 2.
The qualification program might require a training component to be STA approved curricula and
regularly audited by the STA to verify compliance with State and Federal regulations, policies,
and procedures. The responsibility of obtaining approved training should remain with the STA
or LPA for their employees. It should be noted, that independent training organizations may be
utilized by STA/LPA having inadequate resources and/or facilities to conduct training
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themselves. It is important that statements of exam successes and/or certificates of satisfactory
completion of a training course be issued by such organizations.
Competencies for Program Management, Finance, and Construction Oversight are included here
as examples.
Construction Oversight Technical Competencies (Example)
Construction Oversight personnel should demonstrate a
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Novice level knowledge of techniques, equipment, and documentation of survey and
establishing control points
Journeyman level knowledge of the principles and construction methods associated with
grading, paving, and drainage for site preparation
Journeyman level knowledge of techniques for preparing cost estimates
Journeyman level knowledge of techniques for scheduling construction projects
Journeyman level knowledge of contract law applicable to contract specifications and
drawings
Journeyman level knowledge and ability to read and interpret engineering construction
drawings
Journeyman level knowledge of the application of Federal regulations to construction
project
Journeyman level knowledge of construction methods and accepted construction
practices for pavements and structural elements
Novice level knowledge of the basic principals and concepts of geotechnology as applied
to soils, erosion, foundations, and earth embankments
Novice level knowledge of the basic concepts of hydrology
Novice level knowledge of systems for sanitary waste treatment and storm drains
Journeyman level knowledge of the following laws related to environmental protection,
safety, and health: National Environmental Policy Act (NEPA), Endangered Species Act
(ESA), Clean Water Act (CWA), Clean Air Act (CAA), Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and relevant State laws.
Journeyman level knowledge of quality assurance processes and procedures applicable to
construction management
Journeyman level knowledge in the application of construction management principals
for constructability reviews, planning, and performance measurement of a construction
project
Journeyman level knowledge of assessment techniques, reporting and follow-up actions
used to evaluate contractors
Journeyman level knowledge to interact with Federal, State, Local and public stakeholder
representatives
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Finance Technical Competencies (Example)
Finance Personnel should demonstrate:
 Novice – basic knowledge of accounting principles, auditing standards and billing
requirements in accordance with AICPA, GAAP, GAO standards, OMB Circulars and
Federal requirements.
 Novice – level of knowledge and ability to work in general accounting, pre-payment
reviews, and billing procedures.
 Journeyman - level of knowledge and ability to conduct independent billing reviews and
project cost audits, in accordance with guidelines to verify and support the eligible of
contractor claims for reimbursement purposes.
 Journeyman - level of knowledge and ability to assist in performing program specificaudit reviews that determine the adequacy of internal controls that have an effective on
Federal-aid project activities.
 Journeyman – knowledge and ability to draft findings and recommendations, follow-up
on open issues to resolve questioned or unsupported costs.
 Journeyman – knowledge and ability to participate in the final estimate review and
project closing procedures and drafting of final audit report.
 Expert – level of knowledge and ability to design, plan and manage project cost audit and
comprehensive billing processes, or program-specific reviews.
Program Management Technical Competencies (Example)
Program Management personnel should demonstrate a
 Expert level knowledge to manage programs and projects effectively and in compliance
with State and Federal processes and procedures (scheduling, cost estimates, budgets,
procurement, resources, Davis-Bacon, etc…)
 Expert level knowledge and ability to represent the LPA on civil/structural engineering
activities during oversight and management of the capitol improvement program
 Journeyman level knowledge of contract provisions necessary to provide oversight and
assessment of contractor performance
 Journeyman level knowledge to conduct peer review of structural analysis and
computations and to verify and assess field operations
 Journeyman level knowledge of the application of environmental standards, laws, and
regulations
 Journeyman level knowledge of quality assurance policies, programs, and procedures
 Journeyman level knowledge of training and qualifying personnel to establish and
maintain technical competency
 Journeyman knowledge of problem identification, solving, and decision making
techniques
 Journeyman knowledge of contract management to assess contractor performance
Monitoring
As part of the LPA qualification process, the STA should perform annual monitoring and
periodic program review of individual LPAs and self assess its own management of the LPA
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program. The self assessments are recommended to ensure laws, regulations, departmental
policies, and standard operating procedures are implemented in a uniform manner, to identify
where noncompliance exists, and to provide guidance and assistance in order to achieve
operational uniformity. The self assessments should be performed annually.
Prior to qualifying an LPA program, the STA should determine if the LPA is in good standing
relative to its accounting and practices and fiscal operations, and determine if the LPAs
policies, procedures, and processes comply with applicable State and Federal law. To make
theses determinations, the program review should focus on four primary areas: (1) assessing
the risk associated with the LPA’s current operations; (2) reviewing the financial processes of
the LPA; (3) evaluating the LPA organizational structure and staff; and (4) assessing the
LPA’s overall management.
Assuming the LPA is qualified at Tier 1, the STA should provide annual monitoring in
addition to full oversight of the project. This annual evaluation is defined as continually
appraising the LPA’s ability through their program, processes, procedures, and personnel.
As an LPA moves to the Tier 2 qualification, the STA should add quality assurance, program
reviews, and core element reviews. Both program level and core element reviews help determine
the overall health of the program and should be used as a part of a risk reduction effort. Each of
these review types should be prioritized based on an overall program assessment that is
conducted annually. The core element reviews for Tier 2 would only be in those areas the LPA
has the required competency and has been authorized to administer. An LPA cannot be qualified
for Tier 3 without both a program and core element review completed.
The Tier 3 qualification level would require the STA to continue the process of program and core
element reviews. Evaluations of Tier 3 LPAs should typically include an assessment of
organizational structure, staffing levels and resources, roles and responsibilities, standard
operating procedures, staff training and expertise. These reviews should provide a reliable,
predictable framework in which to carry out LPA activities resulting in a minimization of long
term risk.
Example LPA Qualification Programs
The following LPA Qualification Programs are intended to provide example to STAs and LPAs
and not intended as a required template. It is noted that some of the examples refer to
―Certification.‖ The examples included are from several STAs:
 Florida Department of Transportation (FDOT) - ―Becoming Certified To Administer
Federal Aid Projects‖:
www2.dot.state.fl.us/proceduraldocuments/procedures/bin/525010300/ch01s03.pdf
 Ohio Department of Transportation (ODOT) – ―LPA Participation Requirements‖:
www.dot.state.oh.us/local/FORMS/Manual%20Revisions/2-LPA%20Requirements.PDF
 Washington State Department of Transportation (WSDOT) – ―Certification Acceptance
Program‖: http://www.wsdot.wa.gov/TA/Operations/LAG/Lag13.pdf
Page 17 of 23
Appendix B
Training for LPAs
Page 18 of 23
Training for LPAs
Overview
In order to ensure that locally administered projects are carried out in accordance with Federal-aid
requirements, Local Public Agencies (LPA) needs to have sufficiently trained and experienced
staff. Additionally, it is important for LPAs to maintain a minimum education level for each staff
member responsible for implementing any portion of a FHWA-funded project. Due to the
enormity of the area of training and the varying resources available to each LPA, the purpose of
this section is to generally outline a training structure by referencing examples readily available
nationwide.
Competency Framework
FHWA has created a universe of Programs associated with Federal-aid funded projects. These
Programs include Air Quality, Civil Rights, Environment, Finance, Geometric Design, etc. A
complete listing of these Programs may be found at the following FHWA internal website:
http://intra.fhwa.dot.gov/opt/training/ccf/cmpframe.htm. Each Program has been further
described through a Program-specific Competency Framework. Within each Program-specific
Competency Framework, the Program is subdivided. For example, the Rights-of-Way (ROW)
Program is divided into the following areas: Appraisal, Relocation, Property Management,
Highway Beautification, and Environment. Additionally, for each sub-element, available
Training Courses and Workshops and the need for Developmental Assignments are listed to
provide a minimum proficiency level.
Examples of Available STA Training Programs
The following STA Training Programs are intended to provide examples to STAs and LPAs and
not intended as a required template. These examples are readily available on-line. The examples
included are from Ohio DOT, and Washington State DOT:
 California Department of Transportation (CALTRANS) – CALTRANS offers a wide
array of training for LPAs. A listing of the courses offered can be found at the following
website: www.dot.ca.gov/hq/LocalPrograms/training/training.html
 The Ohio Department of Transportation (ODOT) and the FHWA Division Office have
partnered with the Ohio LTAP Center to provide a Roads Scholar Program. This
Program offers workshops and courses to maintain a two-tiered competency for
transportation and public works practitioners. For more information, please visit the
following website: www.dot.state.oh.us/ltap/
 Washington State DOT (WSDOT) has established a Training Program for LPAs.
Additionally, WSDOT makes available 20% of available seating within WSDOT
Employee Training Classes for LPAs. For more information, please visit the following
website: www.wsdot.wa.gov/TA/T2Center/Training/ .
Page 19 of 23
Appendix C
Example of Detailed LPA Manual Contents
Page 20 of 23
Example of Detailed LPA Manual Contents
1. Guidelines Overview:
 Purpose and objectives of the LPA manual.
 List of acronyms and a list of FHWA funding programs for local projects.
 Process for becoming qualified by the STA to administer FHWA projects.
 Procedure for coordinating local transportation programs with area wide planning
agencies.
 Overview of the project development process.
 Flow chart summarizing major activities required to develop a transportation project.
 Checklist of required approvals and tasks necessary to complete various project phases.
2. General Project Development (Applicable to All Projects):
 Project Prospectus - describes the project (proposed improvement) and serves as a
support document for authorization of Federal funds by FHWA.
 Local Agency Agreement – between STA and LPA, and covers all phases of work
involved in the project. Ensures that the Federal-aid funds are spent in accordance with
all applicable State and Federal laws and regulations.
 Progress Billings – includes billing procedures, number and timing of submittals, and
identification of Federal-aid participating and non-participating charges.
 Environmental Processes.
 Right-of-Way Procedures.
 Disadvantaged Business Enterprises.
 Equal Employment Opportunity and Training.
 Title VI.
3. Special Project Development (Applicable to Some Projects):
 Using Consultants – covers the use of various agreements.
 Developing Projects using special programs such as
o Railroad/Highway Crossing Program
o Emergency Relief Program
o Highway Safety Improvement Program (HSIP)
 Bridge Selection and Scoping – most states have a project selection process for using
Federal Bridge Replacement Funds. This details such processes.
4. Design Requirements and Contracting Processes

Minimum Standards to be used.

Location and Design Approval – describes requirements.

Plans, Specifications and Estimates – describes requirements.

State Advertising and Award Procedures - for when Local Agency desires to advertise
and award using the STA.

Local Advertising and Award Procedures – for when an agency that is qualified wants
to advertise and award construction contracts themselves.
5. Construction and Post Construction Requirements and Processes
 STA Administered Projects – when the STA administers the construction activities.
Page 21 of 23


Local Agency Administered Projects – for Local Agencies that are determined qualified
to administer their own construction activities.
Project Closure – details requirements for closing out a Federal-aid construction project
and STA oversight (management reviews, financial and compliance audits, etc).
6. Miscellaneous

Enhancement and Scenic Project Requirements.

The National Highway System Requirements.

Bridge Inspection Requirements.

Use of Management Systems.

Congressionally Designated Projects
Example LPA Guidance Manuals
The following LPA Guidance Manuals are intended to provide example to STAs and LPAs and
not intended as a required template. The examples included are from several STAs:
 California Department of Transportation (CALTRANS) – ―Local Assistance Procedures
Manual (LAPM)‖: www.dot.ca.gov/hq/LocalPrograms/lam/lapm.htm
 Florida Department of Transportation (FDOT) - “Local Agency Program Manual‖:
www2.dot.state.fl.us/proceduraldocuments/procedures/bin/525010300/525010300.pdf
 Ohio Department of Transportation (ODOT) – ―Locally Administered Transportation
Projects Manual of Procedures‖:
www.dot.state.oh.us/local/Local%20let%20Procedures.asp
 Washington State Department of Transportation (WSDOT) – ―Local Agency Guidelines
(LAG) Manual‖: www.wsdot.wa.gov/TA/Operations/LAG/LAGHP.htm
Page 22 of 23
Appendix D
Other Resources
Page 23 of 23
Other Resources
The following listed items are intended as resources to STAs and LPAs in the development of a
Local Project Oversight Program:
 California Department of Transportation (CALTRANS) – ―Local Assistance Home
Page‖: http://www.dot.ca.gov/hq/LocalPrograms/
 Colorado Department of Transportation (CDOT) – ―CDOT 2006 Local Agency
Manual‖:
http://www.dot.state.co.us/DesignSupport/Local%20Agency%20Manual/2006%20Local
%20Agency%20Manual/2006%20Local%20Agency%20Manual.htm
 Federal Highway Administration, Office of Real Estate Services – The Office of Real
Estate Services developed a Real Estate Acquisition Guide for Local Public Agencies that
is available through STAs and through FHWA’s internet website:
http://www.fhwa.dot.gov/realestate/index.htm.
 Florida Department of Transportation (FDOT) - “Local Agency Program‖ Home Page:
http://www.dot.state.fl.us/projectmanagementoffice/LAP/default.htm
 Georgia Department of Transportation (GDOT) - GDOT has developed and
implemented an audit program to review local payments and contract consultant
agreements on a routine basis. This assures project cost claims are adequately supported
for State and Federal reimbursement
 Iowa Department of Transportation (IDOT) - IDOT has an excellent website at
http://www.dot.state.ia.us/local_systems/index.htm for guidance on the administration of
local projects.
 Ohio Department of Transportation (ODOT) – ―Office of Local Projects Home Page‖:
http://www.dot.state.oh.us/local/
 Washington State Department of Transportation (WSDOT) – ―Highways and Local
Programs‖ Home Page: www.wsdot.wa.gov/TA/Operations/LAG/LAGHP.htm
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Pag 23 Good Practices For the Oversight of Federal-aid Projects