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Stewardship and Oversight Agreement for Arizona

Introduction

Guiding Legislation

This Agreement outlines the roles and responsibilities of both the Federal Highway Administration (FHWA) Arizona Division and the Arizona Department of Transportation (ADOT) in the oversight and administration of the federal-aid highway program (FAHP) in Arizona.

Since 1991, federal transportation legislation has provided flexibility in delegating certain FAHP program and project-level responsibilities to states. The Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991, the Transportation Equity Act for the 21st Century (TEA-21) of 1998, and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) of 2005 provided flexibility to FHWA and the states in ensuring project actions are carried out in accordance with applicable laws, regulations, and policies. TEA-21, Section 1305 (a), required that FHWA and the state enter into an agreement showing the extent of the state's assumption of responsibilities of the Secretary of Transportation. These laws allowed the states to assume greater program and project responsibilities, and accountability in the management of the FAHP. With the passage of SAFETEA-LU, greater flexibility was granted for FHWA and the states to enter into a more comprehensive agreement that covers all aspects of the FAHP and mechanisms to effectively and efficiently execute the federal-aid program relating to program and project delivery, including financial integrity.

Pursuant to 23 USC 106(c), only certain project-level actions and authorities, as further defined in this Agreement, can be delegated; these involve: design, plans, specifications, estimates, contract awards, and inspections of projects. However, actions under the following non-Title 23 authorities cannot be delegated: National Environmental Policy Act (excepted as permitted under Title 23); Uniform Relocation Assistance & Real Property Acquisitions Act; Civil Rights Act of 1964 and Clean Air Act. Also, the non-Title 23 requirements apply to all projects. In those situations where ADOT has assumed responsibility for project oversight through the delegations provided in Title 23 USC 106, ADOT is responsible acting in the relative role of FHWA and is expected to provide judgment on behalf of FHWA. FHWA and ADOT further understand that nothing contained herein shall relieve them from ultimate accountability for compliance with federal and state laws, and regulations with respect to the expenditure of FAHP funds in the State of Arizona, including those funds passed through to local governments. This Agreement does not preclude the FHWA access to, and review of, federal-aid projects at any time, and does not replace the provisions of Title 23. While federal law allows a state to assume certain project responsibilities, FHWA is ultimately accountable for assuring that the FAHP is delivered consistent with established requirements. Delegation authority to the state can be withdrawn at anytime if the state operates in a manner which violates federal laws or regulations.

23 USC 106(b) also permits states to approve, on a project-by-project basis, plans, specifications, and estimates for projects to resurface, restore, and rehabilitate highways on the National Highway System (NHS), and further permits the states to request that the Secretary no longer review and approve highway projects on the NHS (including the Interstate) with an estimated construction cost of less than $1,000,000.

FHWA recognizes there are some projects on the Interstate System that are routine and inherently low risk that are generally non-controversial and in which the state DOTs have a high-level of experience and documented procedures and processes in place for ensuring compliance with federal requirements. It is also mutually desirable for the FHWA to streamline the approval process of these routine and inherently low-risk projects. For that reason, the FHWA issued guidance on February 22, 2007, that allows for evaluation and revision of the $ 1,000,000 threshold and the shifting of responsibilities to the states for inherently low-risk projects on the Interstate.

Accordingly, this Agreement incorporates inherently low-risk projects on the Interstate System on the basis of the following:

  1. Inherently low-risk oversight projects include those that are routine, low-risk projects and generally non-controversial in which the state DOTs have a high-level of experience and documented procedures and processes in place for ensuring compliance with federal requirements. These projects would not include complex or unique engineering features, would not traditionally involve major changes in scope or cost, would satisfy design standards, and would not jeopardize the safety or operation of the Interstate System. Complex projects that are classified as "major projects," involve new partners (public/private partnerships), or new, innovative contracting methods are viewed as high risk, are not considered inherently low-risk oversight projects. For purposes of this agreement, inherently low-risk oversight projects include all Interstate projects under $75,000,000 in the Phoenix metropolitan area and $25,000,000 for the rest of the state. In addition, the following class of Interstate projects is considered to be inherently low-risk for oversight purposes: 3R (resurfacing, restoration, and rehabilitation).
  2. For the projects listed in paragraph 1, FHWA is granting its approval, in advance of the actual delivery of the projects, for the state DOT to approve these projects' designs, plans, specifications, estimates, contract awards, contract administration, and inspections. These advance approvals are not deemed to occur until after the completion of the National Environmental Policy Act (NEPA) process and the satisfaction of other related environmental laws and procedures.
  3. For the projects listed in paragraph 1, FHWA's oversight will be satisfied by a risk management framework and process/program reviews. It is understood that FHWA's approval of funds for these projects at either the preconstruction or construction phase constitutes a determination that the project in question is eligible for the federal-aid funding and that the appropriate federal requirements have been met to date or defined steps are to be taken to ensure that requirements will be met. Notwithstanding this determination, FHWA continues to retain overall responsibility for all aspects of federal-aid programs and, as such, shall be granted full access to review any aspect or record of a federal-aid project at any time.

Overview

Stewardship and oversight, as outlined in this Agreement, are exercised through program management and project level activities. Stewardship and oversight are defined as follows:

Stewardship is the efficient and effective management of the public funds that have been entrusted to the FHWA. Stewardship is a joint responsibility for the development and implementation of the FAHP. It involves all the FHWA activities in delivering the FAHP such as leadership, technology deployment, technical assistance, problem solving, program administration and oversight. Stewardship activities include continuous process improvement initiatives, technology assistance, technology deployment, performance measurement, project involvement activities, and sharing best practices. Stewardship can be considered "how" we meet program goals.

Oversight is the act of ensuring that the Federal-aid program is delivered in accordance with applicable laws, regulations, and policies. Oversight is the compliance or verification component of the FHWA stewardship activities. Narrowly focused, oversight activities ensure that the implementation of the FAHP is done in accordance with the applicable laws, regulations, and policies. Broadly focused, oversight activities enable both agencies to ensure the effective delivery and operation of the transportation system envisioned in our governing laws and regulations. Oversight activities include process reviews, program evaluation, program management activities, and project involvement activities.

This Agreement outlines a consistent risk-based approach for the FHWA to effectively and efficiently manage public funds and to ensure the FAHP is delivered in accordance with applicable laws, regulations, policies, and consistent with good business practices. It includes stewardship responsibilities for program and project level actions. The Agreement takes into account the FHWA and ADOT resources and capabilities, and the federal requirements where FHWA has a mandated role in the oversight process. It also forms the principal basis for monitoring and evaluating the quality of ADOT's federal-aid program, and the continued disbursement of federal funds based upon ADOT policies, practices, and staffing resources.

The Agreement can be modified when needed to incorporate additional legislation, additional processes, or other changes to improve program and project delivery in the State of Arizona. It serves as a continuing plan of program and project oversight responsibilities for each agency covering the following functional program areas:

  • Planning
  • Environment
  • Design
  • Major Projects
  • Right-of-Way
  • Utility Relocation and Accommodation
  • Civil Rights
  • Construction and Contract Administration
  • Finance
  • Maintenance
  • Local Public Agency (LPA) Projects
  • Pavement and Materials
  • Research, Development, and Technology
  • Safety
  • Bridge/Structures
  • Intelligent Transportation Systems (ITS)

Program management ensures federal program requirements are met while proactively seeking opportunities to add value during routine program actions. Program management can include on-site project visits, participation on joint program or project committees and task forces, joint quality improvement teams, providing technical assistance, and assisting transportation stakeholders in the overall delivery of the FAHP.

FHWA's stewardship and oversight of specific projects, where applicable, will include early involvement in project decisions combined with an assessment of the quality of the products produced during the project development process. ADOT will follow its project development process to ensure proper communication and coordination occurs between ADOT and FHWA.

FHWA will use a variety of techniques, including project (on-site visits) and program reviews, to manage, monitor, and assess performance of those projects where ADOT has assumed responsibilities, as well as evaluate the fulfillment of the responsibilities outlined in this Agreement.

Program Level Oversight

FHWA and ADOT will work collaboratively to manage the FAHP, and review, monitor, and approve activities as necessary in the designated areas of responsibility to comply with applicable laws, regulations, directives, and standards. The FHWA Program Responsibility Chart (Table 1) identifies the functional program areas, including the various approval actions specified in federal regulation, notification and approval requirements.

Table 1 - Program  Responsibility Chart
Approval Action Reference Receive Approve Remarks
Planning
State Planning & Research (SPR) Work Program 23 CFR 420.111 FHWA FHWA ADOT annually develops work program
Long-Range Statewide Transportation Plan 23 CFR 450.214 FHWA ADOT FHWA reviews and comments on LRTP. No official approval action is taken.
Statewide Transportation Improvement Program (STIP) 23 CFR 450.216 FHWA & FTA FHWA & FTA Covers a 4 year period; update required every 4 years, but ADOT traditionally updates annually.
MPO Indirect Cost Allocation Plan 23 CFR 420
OMB Circular A-87
ADOT ADOT Annual Submission. ADOT forwards approvals for FHWA information.
MPO Unified Planning Work Programs (UPWP) 23 CFR 450.308 ADOT FHWA & FTA FHWA & FTA MPO annually develops UPWP
Metropolitan 20-Year Long-Range Transportation Plan (LRTP) 23 CFR 450.322 ADOT FHWA & FTA MPO FHWA, FTA & ADOT review and comment on Metropolitan LRTPs but do not approve. However, FHWA/FTA must make an air quality conformity determination.
Metropolitan Transportation Improvement Plan (TIP) 23 CFR 450.324 ADOT FHWA & FTA ADOT Covers a 4 year period; update required every 4 years, however can be updated more frequently.
Transportation Management Area (TMA) Certification of MAG and PAG 23 CFR 450.334 FHWA & FTA FHWA & FTA FHWA and FTA jointly certify every 4 years
Highway Performance Monitoring System (HPMS) Annual Data Submittal from State and Field Verification Review and Report (including Traffic Volume Monthly ATR Data and Annual Truck Weight Data) 23 CFR 420.105 FHWA FHWA Certifies FHWA annually conducts a field verification review for funding apportionment and allocation purposes. ADOT submits required ATR and other data reports directly to FHWA HQ
Highway Statistics: 500 Series Reports 23 CFR 420.105 FHWA None ADOT is required to submit several Highway Statistics forms periodically. Form 551-M for motor fuel is submitted monthly.
Certification of Public Road Mileage 23 CFR 460.3 FHWA FHWA HQ Due by June 1st of each year. The Governor has delegated certification authority to the ADOT Director.
Environment
Programmatic approval authority for specific categorical exclusions 23 CFR 771.109 FHWA ADOT ADOT has been granted pre-approved authority for specific categorical exclusions
ADOT acts as FHWA's non-federal representative for Section 7 (Endangered Species Act) consultation 23 CFR 771.109 FHWA FHWA  
ADOT acts as FHWA's non-federal representative for Section 106 (National Historic Preservation Act) consultation 23 CFR 771.133 FHWA FHWA  
ADOT public involvement procedures 23 CFR 771.111(h)(1) FHWA FHWA Current approved procedures are in the 1988 Action Plan
Noise Abatement Policy 23 CFR 772
HQ Memo 6/12/95
FHWA FHWA FHWA approves ADOT's noise abatement policy & updates
Contract Administration and Design
ADOT Contract Award and Administration Rules and Procedures (Consultant Selection Procedures) 23 CFR 172 FHWA FHWA Approval of State Consultant Selection Procedures is outlined in 23 CFR 172.9 and approval takes places as ADOT updates their procedures.
ADOT ECS Procurement Program 23 CFR 172 FHWA FHWA
certifies
Joint decision between ADOT and FHWA to review the program on a four year cycle
ADOT Procurement Procedures and standard language 49 CFR 18.36(a) FHWA ADOT FHWA reviews and comments to ensure federal terms and conditions are included in project contracts following the Arizona Procurement Code
ADOT Standard Drawings for Road and Bridge Construction (Construction, Bridge, Traffic Signing & Marking, and Traffic Signals & Lighting Standard Drawings) 23 CFR 625 & 630 (b) FHWA FHWA Design standards are covered by 23 CFR 625, approval of ADOT design standards is derived from 23 CFR 630(b) and takes place as ADOT updates their standards.
ADOT Standard Specifications (stored specs) for Road and Bridge Construction 23 CFR 625 & 630 (b) FHWA FHWA
ADOT Project Design Development Process Manual 23 CFR 625 FHWA ADOT FHWA to receive this documents but no approval needed since they do not specifically establish Design Standards.
ADOT Roadway Design Guide 23 CFR 625 FHWA ADOT
Statewide Public Interest Findings (PIFs) 23 CFR 635.411 FHWA FHWA  
Value Engineering (VE) Program 23 CFR 627.1 FHWA ADOT ADOT shall assure VE analysis is completed on all applicable projects
Right of Way (ROW)
ADOT Right-of-Way Procedural Manual 23 CFR 710.201 FHWA FHWA Required a minimum of every 5 years. Currently, ADOT has agreed to provide annually in February of each year.
Highway Beautification (MPSS) 23 CFR 750.304 FHWA FHWA As needed
Relocation/Acquisition Statistical Data (OMB Form 2125-0030) 49 CFR 24.9 (c) and App B FHWA FHWA Annually (fiscal year)
Utilities        
ADOT Policy for Accommodating Utilities on the Highway Right-of-Way and updates 23 CFR 645.215 FHWA FHWA As needed. Current version was approved on July 9, 1998
Utility Accommodation on Interstates 23 USC 123 FHWA FHWA  
Utility and Railroad Engineering Section Procedures Manual 23 CFR 645 & 646 FHWA FHWA  
Civil Rights
ADOT Disadvantaged Business Enterprise (DBE) Program and annual overall DBE goal 49 CFR 26.41 FHWA FHWA Every three years, by August 1st (starting with  8/1/2011)
Title VI/Non-discrimination Program, plans and annual accomplishment report. 23 CFR 200.9 FHWA FHWA Annually, by October 15th
State internal EEO affirmative action plan (Title VII), accomplishments and goals and updates 23 CFR 230.311 FHWA FHWA Annually, by August 15th
State Employment Practices Report (EEO-4) 23 CFR 230.313 (III)(B) FHWA FHWA Annually, by August 15th
EEO Contractor  Compliance review reports (form FHWA 86) 23 CRF 230.409 & 230.413 FHWA FHWA Within 30 days of compliance review
Labor Compliance Data on the 1392 report 23 CFR 230.121(a) FHWA FHWA Annually by September 15th, ADOT will submit FHWA for review, and forward to FHWA HQ.
On-the-Job-Training Programs 23 CFR 230 FHWA FHWA As needed - ADOT will review and approve in coordination with FHWA
ADOT Americans with Disabilities Act (ADA) Transition Plan 28 CFR 35.150 FHWA FHWA State and local governments must make their programs accessible
Construction
ADOT Construction Manual 23 CFR 635 FHWA ADOT The ADOT Construction Manual covers many of the requirements defined in 23 CFR 635. FHWA to receive this document.
Finance        
Federal Integrity Review and Evaluation (FIRE) FIRE Order 4560.1a FHWA None or FHWA ADOT will assist and provide feedback to FHWA on all aspects of FIRE
Federal-aid Current Billing (RASPS Weekly Billings) 23 CFR 140 & 635.122 FHWA FHWA FHWA will be conducting billing reviews as needed to be in compliance with FIRE and other federal regulations
State Indirect Cost Allocation Plan 23 CFR 420 FHWA FHWA  
Accounting Process for the payroll additive rates and indirect cost rates 49 CFR 18
2 CFR 225
FHWA FHWA ADOT has opted to develop an indirect cost plan and, therefore, will seek reimbursement for indirect costs.
Inactive Obligation Reports 23 CFR 631.106 (a) FHWA None FHWA will submit quarterly reports to ADOT Finance so they are aware of where they are on inactive obligations
Maintenance
FHWA must ensure the federal-aid highway system is being adequately maintained by ADOT 23 CFR 633.208 None FHWA  
STIP includes financial plan to demonstrate adequate operations & maintenance of federal-aid highways 23 CFR 450.216 (m) FHWA FHWA Annually
TIPs include financial plan to demonstrate adequate operations & maintenance of federal-aid highways 23 CFR 450.322 (f) FHWA FHWA Annually
Emergency Relief        
Concur in disaster eligibility on a statewide basis which includes estimated cost for emergency repair and permanent restoration. 23 CFR 668 FHWA FHWA  
Local Public Agency (LPA)        
Local Public Agency Manual 23 CFR 1.11(e) & 635.105 FHWA FHWA  
Certification Acceptance (CA) Agreements and revisions 23 CFR 1.11(e) & 635.105 FHWA FHWA Concurrence  
Pavements and Materials        
Pavement Management System 23 CFR 500.106 FHWA FHWA As needed
ADOT Quality Assurance Program 23 CFR 637 (B) FHWA FHWA As needed
Research, Development and Technology        
State Planning & Research (SPR) Work Program, Part II 23 CFR 420.111 FHWA FHWA Annually (transitioning to state fiscal year)
Local Technical Assistance Program (LTAP) 23 USC 504 (b)(1) & (2) FHWA FHWA ADOT annual develops work plan
ADOT Research Manual 23 CFR 420.209 FHWA FHWA Annually by March 1
ADOT Research Implementation Report 23 CFR 420.117 FHWA ADOT Annually
Safety
Strategic Highway Safety Plan (SHSP) 23 CFR 924.9 (a)(ii)
23 CFR 924.13 (2)
FHWA FHWA Concurrence Approve initially and reassess as appropriate
Highway Safety Improvement Program (HSIP) Manual 23 CFR 924.5 (b)      
Highway Safety Improvement Program (HSIP) Project/Program Eligibility 23 CFR 924.5 (b) FHWA FHWA (State)
ADOT (Locals)
On a project/program basis
HSIP Reporting Requirement: HSIP program, High-Risk Rural Roads, Rail Crossing Improvement Projects, and the 5% - Transparency Report 23 CFR 924.15 FHWA FHWA ADOT submits to FHWA by Aug 31st
FHWA forwards to FHWA HQ by Sept 30th
HSIP 10% Flex Provision Eligibility 23 CFR 924.11 (b) FHWA FHWA ADOT will submit a written request for approval to FHWA each federal fiscal year, if requesting.
Drug Offenders Certification 23 UCS 159 FHWA FHWA HQ ADOT provides to FHWA, FHWA to provide to FHWA HQ by Dec 31st
MUTCD Conformance  23 CFR 655.603 (b) ADOT/FHWA FHWA Substantial conformance within 2 years of effective date of final rule
ADOT Work Zone Safety and Mobility Implementation Guidelines 23 CFR 630.1014 FHWA FHWA Concurrence Requires FHWA concurrence and reassessment at appropriate intervals
ADOT Work Zone Safety and Mobility Process Review 23 CFR 630.1008 (c) FHWA None At least every 2 years. ADOT to conduct a review in which FHWA will participate. Results will serve as feedback into Policy, Procedures and Guidelines.
Bridge
Compliance with the National Bridge Inspection Standard (NBIS) 23 CFR 650 (C) ADOT
FHWA HQ
FHWA Annually; compliance review copied to FHWA HQ
National Bridge Inventory (NBI) data 23 CFR 650.315 FHWA HQ None Annually; Reviewed and accepted by FHWA HQ
Bridge Unit Cost Data 23 USC 144 (e) FHWA None Annually; Compiled by FHWA HQ, to be reviewed by FHWA and forwarded to FHWA HQ
Data showing at least 15% of HBP (Highway Bridge Program) funds spent off-system 23 CFR 650.413 (c) FHWA FHWA Annually; ADOT submits data to FHWA
HBP Selection List (structures eligible for HBP funds) 23 CFR 650.409 (b) ADOT FHWA Annually; FHWA provides to ADOT
Intelligent Transportation Systems (ITS)
Regional ITS architectures must be developed and maintained. 23 CFR 940.9 FHWA FHWA Concurrence Arizona has 3 Regional Architectures (MAG, PAG, & Statewide)

Establishment of Project Oversight Levels

In accordance with 23 USC 106(c) project-level actions and authorities can be delegated; these involve: design, plans, specifications, estimates, contract awards, and inspections of projects. FHWA recognizes some projects are routine, inherently low risk, and are generally non-controversial. These projects can be delegated to ADOT who has a high-level of experience and documented procedures and processes in place for ensuring compliance with federal requirements.

Action under the following non-Title 23 authorities cannot be delegated: National Environmental Policy Act (excepted as permitted under Title 23); Uniform Relocation Assistance & Real Property Acquisitions Act; and Clean Air Act. Also, the non-Title 23 requirements apply to all projects.

Project Oversight Levels

Interstate Projects

The FHWA Arizona Division retains full FHWA oversight and approval authority for all projects on the Interstate System that involve new construction or reconstruction that cost over $75 million in the Phoenix metropolitan area or $25 million across the rest of the state. All other projects on the Interstate System will be administered by ADOT following FAHP procedures. This includes Interstate projects that involve new construction or reconstruction and cost $25 million or less and all 3R (pavement preservation and similar rehabilitation projects) regardless of cost. However, the FHWA Arizona Division retains responsibility and authority to approve all design exceptions involving the AASHTO Design Standards (13 controlling criteria) on the Interstate System. In addition, FHWA must approve all actions involving changes of access (COA) approval on the Interstate System regardless of funding source.

All Other Projects

The FHWA Arizona Division retains full FHWA oversight and approval authority for all non-Interstate projects funded under the FAHP that cost over $75 million in the Phoenix District or $25 million elsewhere in Arizona. However, the FHWA Arizona Division retains responsibility and authority to approve all design exceptions involving the 13 controlling criteria (AASHTO Design Standards) on the National Highway System (NHS). ADOT may establish design standards for all projects off the NHS and may approve all design exceptions for all projects off the NHS.

Designation of Oversight

Projects that have been determined to require full FHWA oversight are denoted by the following letters placed at the end of the Federal-aid Project Number:

N - Full FHWA Oversight on the National Highway System (NHS)

X - Full FHWA Oversight off the NHS

A - Projects where oversight responsibilities are delegated to ADOT

Effective April 28, 2012 FHWA began issuing new alpha letters to designate the level of oversight on projects, and created new categories of oversight to specifically identify projects being administered by a local agency.  This change is in designation only; there will be no changes to full or delegated oversight procedures on projects. 

S - Full FHWA Oversight (State Administered)

F - Full FHWA Oversight (Local Agency Administered)

T - Projects where oversight responsibilities are delegated to ADOT (State Administered)

D - Projects where oversight responsibilities are delegated to ADOT (Local Agency Administered)

Z - Other

It should be noted that federally funded Design will be full oversight if it is anticipated that project construction will be full oversight.

In those situations where ADOT has assumed responsibility for project oversight, ADOT is responsible for acting in the relative role of FHWA and is expected to provide judgment on behalf of FHWA. While federal law allows a state to assume certain project responsibilities, FHWA is ultimately held accountable for assuring that the FAHP is delivered consistent with established requirements. Delegation authority to the state can be withdrawn at anytime if the state operates in a manner which violates federal laws or regulations.

Additional Screening Criteria

FHWA and ADOT will work cooperatively to identify appropriate stewardship and oversight initiatives using a combination of dollar value thresholds and risk-based screening criteria.

The following screening criteria are to be used by FHWA Arizona Division in partnership with ADOT to determine whether individual projects require adjustment to the oversight level.

Screening criteria include elements such as:

Staff will use their knowledge of the project and professional judgment to evaluate these criteria and make a determination as to whether the project should be designated as a full oversight or delegated project. The FHWA Field Operations Team Leader will review the decision and either concur with the recommendation or work with staff to reach consensus. Decisions changing the oversight level should be documented and placed in the project file.

On occasion, FHWA and ADOT may determine that an oversight level appropriate for the initial phase(s) of a project is not appropriate for later phase(s) and may revise the project's oversight level. For example, a project may be identified as full oversight in the environmental and design phases, yet, due to the routine nature of the construction phase the project may change designation to an ADOT oversight project. Documentation of any change in oversight level should be placed in the project file.

 

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