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Stewardship and Oversight Plan

The FHWA and ADOT Stewardship and Oversight Agreement for Arizona

• Table of Contents
• Abbreviations
• Introduction
  • Guiding Legislation
  • Overview
• Synopsis
• Program Level Oversight
• Establishment of Project Oversight Levels
  • Additional Screening Criteria
• Project Level Oversight
• Performance Measures
• Dispute Resolution Procedure
• List of Tables
  • Table 1 - FHWA Program Responsibility Chart
  • Table 2 - Delegated Oversight Responsibilities by Agency for Federal-aid Projects
  • Table 3 - FHWA Project Responsibility Chart
• Appendix A - Performance Measures

Abbreviations

• AA/EEO - Affirmative Action/Equal Employment Opportunity
• AASHTO - American Association of State Highway & Transportation Officials
• AC - Advanced Construction
• ADA - Americans with Disabilities Act
• ADOT - Arizona Department of Transportation
• Agreement - The FHWA and ADOT Stewardship and Oversight Agreement for Arizona
• ALISS - Accident Location Information and Surveillance System
• ANSI - American National Standards Institute
• ARRA or Recovery Act - American Recovery and Reinvestment Act
• BAC - Blood Alcohol Content
• CE - Categorical Exclusion
• CFR - Code of Federal Regulations
• COA - Change of Access
• COOP - Continuity of Operations Plan
• CRI - Condition Rating Index
• CY - Calendar Year
• DBE - Disadvantaged Business Enterprise
• DOT - Department of Transportation
• EA - Environmental Assessment
• EIS - Environmental Impact Statement
• ER - Emergency Relief
• FAHP - Federal-aid Highway Program
• FAPG - Federal-aid Program Guide
• FARS - Fatal Accident Reporting System
• FHWA - Federal Highway Administration
• FIRE - Financial Integrity Review and Evaluation
• FFY - Federal Fiscal Year
• FMIS - Financial Management Information System
• FONSI - Finding of No Significant Impact
• FTA - Federal Transit Administration
• HBP - Highway Bridge Program
• HPMS - Highway Performance Monitoring System
• HQ - Headquarters
• HSIP - Highway Safety Improvement Program
• ISTEA - Intermodal Surface Transportation Efficiency Act of 1991
• ITS - Intelligent Transportation Systems
• LPA - Local Public Agency
• LRTP - Long-range Transportation Plan
• LTAP - Local Technical Assistance Program
• MAG - Maricopa Association of Governments
• MPO - Metropolitan Planning Organization
• MUTCD - Manual on Uniform Traffic Control Devices
• NBI - National Bridge Inventory
• NBIS - National Bridge Inspection Standards
• NEPA - National Environmental Policy Act
• NHS - National Highway System
• NHTSA - National Highway Traffic Safety Administration
• NOI - Notice of Intent
• OJT - On the Job Training
• OMB - Office of Management and Budget
• PAG - Pima Association of Governments
• PE - Preliminary Engineering
• PIF - Public Interest Finding
• P.L. - Public Law
• PS&E - Plans, Specifications and Estimate
• PSR - Present Service Rating
• QC/QA - Quality Control/Quality Assurance
• 3R - Resurfacing, Restoration and Rehabilitation
• 4R - Resurfacing, Restoration, Rehabilitation and Reconstruction
• ROD - Record of Decision
• ROW - Right of Way
• Secretary - Office of the Secretary, U.S. Department of Transportation
• SAFETEA-LU - Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users
• SEP-14 - Special Experimental Project-14
• SHPO - State Historic Preservation Office
• SHSP - Strategic Highway Safety Plan
• SHS - State Highway System
• SPR - Statewide Planning and Research
• STIP - Statewide Transportation Improvement Program
• TEA - Transportation Enhancements
• TEA-21 - Transportation Equity Act for the 21st Century
• TERO - Tribal Employment Rights Office
• TIP - Transportation Improvement Program
• TMA - Transportation Management Area
• Uniform Act - Uniform Relocation Assistance and Real Property Acquisitions Act
• UPWP - Unified Planning Work Program
• USC - United States Code
• USDOT - United States Department of Transportation
• VE - Value Engineering
• VMT - Vehicle Miles Travelled
• WLS - Western Legal Services

The Stewardship and Oversight Agreement

Pursuant to Title 23, United States Code (USC), Section 106 (c), a state may assume the responsibilities of the Secretary of Transportation under this title for design, plans, specifications, estimates, contract awards, and inspections of projects unless the state or the Secretary determines that such assumption is not appropriate. The FHWA and ADOT Stewardship and Oversight Agreement/or Arizona (hereafter referred to as the "Agreement") also covers projects on the Interstate System that are considered to be inherently low risk, as further defined in this Agreement. As a condition of accepting federal-aid highway funds, the Arizona Department of Transportation (ADOT) agrees to follow applicable federal-aid program and project requirements when administering or implementing elements of the federal-aid highway program.

In signing this Agreement, ADOT and the Federal Highway Administration (FHWA) Arizona Division agree to adhere to the provisions and responsibilities set forth in this Agreement and agree to carry out their responsibilities in a true spirit of cooperation and partnership in implementing the federal-aid highway program (FAPH) in Arizona.

ADOT agrees that where it assumes delegated Title 23 oversight roles and approval responsibilities, it is responsible for ensuring that projects are developed and constructed in compliance with federal requirements, as defined under Title 23, Section 106, and that appropriate corrective action is taken when found to be in non-compliance with applicable federal requirements. FHW A may be consulted at any time regarding matters related to or impacting federal requirements.

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 ofFAHP funds in the State of Arizona, including those funds passed through to local governments. This Agreement does not preclude the FHW A access to, and review of, federal-aid projects at any time, and does not replace the provisions of Title 23.

The Agreement is intended to be a living document that can be modified when needed to incorporate additional legislation, additional processes, or other changes to improve program and project delivery. The FHWA Arizona Division Administrator or the ADOT Director may initiate amendments to this Agreement at any time as appropriate.

Approved by:

Robert E. Hollis /s/
Division Administrator, Arizona
Federal Highway Administration
3/24/2010

John S Halikowski /s/
Director
Arizona Department of Transportation
3/24/2010

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 21^stCentury (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; 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. 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 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, by programmatic agreement, 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 $25,000,000. 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 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.

The purpose of this Agreement is to provide a roadmap to effectively and efficiently manage the FAHP both in terms of program and project delivery. It defines roles and responsibilities, outlines authorities, and assures accountability.

Synopsis

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 pr oject 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.

• Project Reviews - Project reviews are generally project-specific, comprising those elements shown in the enclosed Project Responsibility Chart (Table 3), and may involve on-site field visits and inspections.
• Program Reviews and Assessments - Program reviews are a thorough analysis of key functional program processes and procedures used by the state to manage the program. The reviews are conducted to ensure compliance with federal requirements and identify opportunities for process improvements and highlight exemplary practices. Program assessments includes a variety of techniques such as joint risk assessments, self-assessments and program evaluations, to identify strengths, weaknesses, opportunities and best practices - all aimed at continuous improvement of the program.

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, illustrates various approval actions specified in federal regulation, notification and approval requirements.

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. 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.

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 $25 million. 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.

Non-Interstate 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.

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

FHWA recognizes some projects are routine, inherently low risk, and are generally noncontroversial. 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.

• A - Projects where oversight responsibilities are delegated to ADOT

In those situations where ADOT has assumed responsibility for project oversight, ADOT is responsible acting in the relative role 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.

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 table (Table 2) summarizes the respective roles and responsibilities of FHWA and ADOT in the administration and oversight of FAHP projects in the State of Arizona.

Additional 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 established by Table 2.

Screening criteria include elements such as:

• New or modified access,
• Complexity and/or constructability,
• Controversy and/or public resistance,
• Innovative contracting,
• Congressional interest,
• Level of environmental review,
• Demonstration or high priority project,
• Administering agency's familiarity with the FAHP, and
• Other considerations.

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 FHWA full or state oversight project. The FHWA Senior Engineering Manager will review the decision and either concur with the recommendation or work with staff to reach consensus. Decisions changing the oversight level established by Table 2 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.

¹Interstate projects with a cost ≤ $25 million are delegated by programmatic agreement.
² Primary oversight rests with ADOT unless the project meets other project scope thresholds.

Project 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 as defined in the FHWA Project Responsibility Chart (Table 3).

Performance Measures

Specific performance measures will be used to track the health of the FAHP. These performance measures will be developed cooperatively between the FHWA Arizona Division and ADOT. The performance measures will be developed, reassessed, and/or revised as necessary on an annual basis. These measures will be used to track performance trends, assess the overall delivery of the FAHP, evaluate compliance with Federal-aid highway procedures, identify opportunities, and implement processes to bring about improvement to the FAHP in Arizona. Current performance measures can be found in Appendix A. Each year the measures will be reviewed and evaluated to determine if the performance measures are still the best representation of program health and enable true monitoring of the program, or if they need to be redefined.

Notes:

• ALL BLANKS CELLS REPRESENT: No
• Note 1: Comments will be supplied to ADOT as appropriate
• Note 2: Indicate the following on the authorization cover letter: right-of-way, utility, environmental clearance dates (including details on type of clearance) and whether a design exception was needed. If a design exception was approved please provide approval date. Additionally, if a local agency requested to self administer a project provide date of FHWA's concurrence.
• Note 3: Yes for ARRA (Recovery Act) Projects only

Definitions:

• N Project: Full oversight (FHWA) on the NHS
• X Project: Full oversight (FHWA) off the NHSz
• A Project: State administered (ADOT)

• Receive: Please submit appropriate document to FHWA.
• Review: FHWA will review document.
• Action: FHWA will approve or disapprove the document.

Dispute Resolution Procedure

While most requests by ADOT for FHWA approval result in a positive response within the anticipated turn-around time, there are occasions when the agencies will disagree. This section of the Agreement provides a template for escalating issues that have reached an impasse at the operations level.³

It is expected that nearly all issues should be resolved between FHWA area engineers, or program specialists, and the ADOT representative who submitted the request. Since time is nearly always an important factor, escalation to the next level should be accomplished by the respective units, as soon as it has been determined that the issue cannot be resolved at the level at which a question or issue is at an impasse.

Should none of the above negotiations result in a satisfactory resolution, the FHWA Division Administrator and the ADOT Director will determine the final outcome. All decisions reached must be in compliance with all federal laws and regulations.

³This template represents the ADOT ITD structure. Equivalent positions may be used to represent the appropriate ADOT Division Structure.