Tools & Programs: SEP-15
Federal Highway Administration - Special Experimental
Project 15 Implementation Procedure
- Organizational Structure
- Implementation Procedure
- Project elements, milestones and products
The following sets forth the Federal Highway Administration's
(FHWA) procedure for the implementation of the Special Experimental
Project Number 15 (SEP-15) program. Questions or clarifications
regarding the content of this document should be directed
to the Public-Private Partnership Office.
- 23 U.S.C. §502(a).
- Federal Register Notice October 6, 2004 (Volume 69, Number
- Frederick G. Wright memorandum "SEP-15 Application
Process" October 14, 2004.
- Background - The FHWA has long promoted
the use of innovative project delivery methodologies and
practices through the application of the provisions of
Special Experimental Project Number 14 (SEP-14). Since
the inception of SEP-14 in 1990, many processes that were
once considered experimental including design-build, cost-plus-time
bidding, lane rental and the use of warranties have become
mainstream practices across the country. These new areas
of interest include alternative ways to accomplish NEPA
environmental compliance, right of way acquisition, and
financing. Many of these areas offer promise for innovations
that may be applicable to the broad project delivery process.
In order for FHWA to accommodate these new and beneficial
activities, it became incumbent upon the FHWA to establish
the SEP-15 program. SEP-15 allows for the use of experimental
features on Federal-aid projects that will test an innovative
project delivery technique that is prohibited by a current
provision of title 23 of the United States Code, FHWA regulations
or policy.1 SEP-15
does not replace SEP-14, which is still available to evaluate
experimental contract administration methods. The creation
of SEP-15 provides a process and the tools for the application
of these strategies in an environment that encourages innovation
while still maintaining the fundamental objectives of title
23 of the United States Code.
In establishing the SEP-15 program, the FHWA recognizes
that its specific procedures should not be so narrowly
construed that they prevent or unnecessarily inhibit a
possible project or program where opportunities may exist
for innovation. SEP-15 should be seen by all as a means
to facilitate, not inhibit, innovation.
The SEP-15 procedure can be utilized both for a specific
project as well as a corridor or a program of projects.
In each case, the SEP-15 Application and Early Development
Agreement (EDA) will be different and will be tailored
to suit the unique circumstances of the project. When applied
to a project, the requirements will be focused on a more
defined set of elements. When SEP-15 is used for a corridor
or program composed of multiple projects, the provisions,
applications, and approval processes will be more general
in nature with specificity added as each project progresses
through the development process. Amendments to an EDA may
be expected and required under such circumstances.
The tendency for most programs would be to establish
a template or form for each corridor or project considered
under the provisions of the SEP-15 program. Because the
SEP-15 program is intended to respond to the unique circumstances
of individual projects and a project's specific needs,
neither FHWA nor the applicants should endeavor to create
such a template. Rather, this procedure and the philosophy
behind SEP-15 have been developed to maximize flexibilities
with title 23 of the United States Code and to encourage
the cultivation of innovation. The FHWA does not want the
intent of SEP-15 to be stifled due to mandatory formats
or procedural requirements. For example, it is likely that
project objectives around the same development element
(e.g. finance, right of way, etc.) may be different from
one SEP-15 project to another. In addition, current and
future SEP-15 project approvals should not be constrained
by past practices or procedures. Rather, past experience
should serve to refine innovations and result in more targeted
and effective innovations. It is the philosophy of finding
ways to make proposed innovations successful that will
bring the most benefits to the transportation industry
across the country.
It should be noted that the role of FHWA will include
both its traditional regulatory activities stipulated under
title 23 of the United States Code and a responsibility
for advancing innovations in the project delivery process.
Consequently, much of what will be done by FHWA staff in
relation to the SEP-15 program will be consultative in
nature. The Division Offices, Resource Centers, and headquarters
staff will serve as a resource to the applicants in developing
their innovations and experimental efforts.
- Objectives - The
primary objectives of the SEP-15 program are as follows:
- To encourage tests and experimentation in the entire
project development process leading to increased project
management flexibility, more innovation, improved efficiency,
timely project implementation and potentially new revenue
- To identify impediments to current laws, regulations,
and practices to the greater use of public-private partnerships
and private investment in transportation improvements;
- To develop procedures and approaches addressing
these impediments; and
- To evaluate and propose administrative and statutory
recommendations to remove these impediments.
SEP-15 was established pursuant to the authority granted
the Secretary of Transportation by United States Congress
in 23 U.S.C. §502(a).
- Applicant - An applicant will be a State
Department of Transportation (DOT). In some cases a project
may be initiated by a third party including another governmental
entity, a private entity or some kind of public-private
organization, but in all cases the application shall flow
through the respective State DOT to FHWA as described in
- Corridor - A corridor may be comprised
of multiple projects which may or may not have unique characteristics
and that may be developed in different ways under the procedures
of the SEP-15 program. Similar to a program of projects,
there may be reasons to have an initial SEP-15 Application
processed and an EDA established for the corridor itself
followed by amendments to EDA based on specific project
needs within the corridor.
- Early Development Agreement (EDA) -
An EDA is a document that is developed jointly between
the State DOT and FHWA and describes the parameters for
the implementation of experimental features of the SEP-15
project, such as project planning and design, environmental
review, right of way acquisition, procurement method, regulatory
compliance, timelines, financing, construction and operation.
For each experimental feature identified in the EDA there
will be specific roles identified for all parties, procedures
defined, timeframes established and other attributes described
that will set forth the manner in which the project will
be administered under SEP-15.
- Experimental Feature - An experimental
feature is a law, regulation, or FHWA policy or practice
from which a State seeks a waiver under SEP-15. Areas in
which a State may choose to pursue an experimental feature
include, but are not limited to:
- Requests for Proposals.
- Unsolicited Proposals.
- Project elements.
- Proposal evaluation processes and procedures.
- Finance plans.
- Short listing processes and procedures.
- Program - Under some circumstances an
applicant may desire to apply the SEP-15 process to a program
of projects. In this instance, the process must be modified
to ensure that the individual experimental features are
properly applied on individual projects and that specific
differences from one project to another are documented
in the EDA. A program of projects may differ from a corridor
in that its composite projects may not be physically adjacent
to one another.
- Project - A single project with defined
limits and elements, a program of projects, or a corridor.
- SEP-15 Application - The SEP-15 Application
is the formal documentation of an applicant's request for
the use of an experimental feature in the project development
process. It shall be prepared by the applicant.
- SEP-15 Concept Paper - The SEP-15 Concept
Paper is a short narrative which articulates the basic
elements of the applicant's proposed use of SEP-15 and
provides the basis for FHWA to offer the applicant a preliminary
assessment of the viability of potential experimental features.
An applicant may bypass the Concept Paper component of
the SEP-15 process without penalty and prepare an Application.
6. Organizational Structure
- General - Specific roles for individuals
within FHWA will be key to achieving the broadest application
of the SEP-15 program and advance innovations in project
delivery methods. The roles of the FHWA are described as
- Co-facilitators - The co-facilitators
shall be appointed by the Deputy Administrator with one
being the Division Administrator from the applicant State
and the other being a member of the SEP-15 Steering Committee
or an individual holding a senior leadership position within
FHWA. They shall have responsibility for overseeing the
development and execution of the EDA and will provide guidance,
consultation, and assistance with the administration of
a SEP-15 project. They shall report to the Deputy Administrator.
The term of service shall extend until the submission of
the final report on the SEP-15 project.
- Deputy Administrator - The Deputy Administrator
has overall responsibility for the SEP-15 program. The
Deputy Administrator shall:
- Chair the SEP-15 Steering Committee.
- Shall make the final decision on all SEP-15 Applications
and approve all EDAs.
- Shall appoint the co-facilitators and approve membership
on the SEP-15 Steering Committee.
- D. SEP-15 Steering Committee - The SEP-15
Steering Committee shall be established by the Deputy Administrator
and shall have broad responsibility for the implementation
of the SEP-15 program.
Core members of the SEP-15 Steering Committee are as
- Associate Administrator for Planning, Environment
- Associate Administrator for Infrastructure;
- Chief Counsel;
- Associate Administrator for Policy;
- A representative of FHWA's Division Offices;
- The Public-Private Partnerships ( P3) Program Manager;
- Other members as determined appropriate by the Deputy
Duties of the SEP-15 Steering Committee shall include:
- Rotating responsibility for review of SEP-15 Concept
Papers and Applications;
- Proposing SEP-15 project co-facilitators;
- Providing recommendations regarding SEP-15 Applications
to the Deputy Administrator;
- Managing the development of documents, promotional
materials and other informational items relevant to
the SEP-15 process; and
- Developing training courses relevant to the administration
of SEP-15 projects.
- Overview - The SEP-15 process will be
unique for every project and is a reflection of the variable
nature of experimental features that may be proposed by
the States. Thus, the SEP-15 process has been specifically
designed to provide maximum flexibility on the part of
FHWA and the State DOT's to achieve the objectives of the
SEP-15 program. The following sets forth the SEP-15 process,
including submission of Concept Papers and Applications,
development of an EDA, project oversight, and project performance
- Process - The following describes the
various steps in pursuing a project under the SEP-15 program
(All references to a project may be also applied to a program
of projects or a corridor unless otherwise noted):
- Once an applicant has selected a project and the project
development elements that require approval through the
SEP-15 program, the applicant may consult with the local
FHWA Division Administrator and the SEP-15 Steering Committee
on the specific actions being proposed and how best to
frame them for presentation and approval.
- The applicant may prepare a SEP-15 Concept Paper if
there are uncertainties about whether potential experimental
features are appropriate for the SEP-15 program.
- If the applicant chooses to prepare a SEP-15 Concept
Paper it shall be submitted to the Division Administrator
who will forward it to the P3 Program Manager. If necessary,
the P3 Manager may coordinate review of the concept paper
with the SEP-15 Steering Committee and Division Administrator.
The Division Office should forward the application immediately
upon receipt to the P3 Program Manager. The Division
Office will be asked to forward comments when requested
by the P3 Program Manager.
- The SEP-15 Concept Paper can be an important step in
the process of advancing a SEP-15 Application. It allows
the applicant to articulate the basic element of their
proposal while offering the FHWA an opportunity to critique,
offer guidance, and provide other information that may
be helpful to the applicant's decision to submit a project
for consideration for administration under SEP-15. The
SEP-15 Concept Paper should not be seen as a final product
but rather as an overview of the experimental feature(s)
the State DOT would like to evaluate and the types of
project(s) on which these feature(s) would be tested.
- The SEP-15 Steering Committee, in coordination with
the appropriate Division Administrator, will review the
Concept Paper and determine if the proposed approach
is appropriate for the SEP-15 program. After review and
consideration, the Division Administrator, with the concurrence
of the SEP-15 Steering Committee, will respond to the
applicant. In this response to the applicant, the Division
Administrator will make a statement regarding the applicability
of the proposed elements contained in the SEP-15 Concept
Paper to the SEP-15 program. Additional comments may
include recommendations and information based on lessons
learned from other SEP-15 projects. The purpose for FHWA's
consideration of the SEP-15 Concept Paper is to expedite
the review of a SEP-15 Application, offer guidance/consultation
to enhance opportunities for innovation and the ultimate
success of the project. The response shall not be construed
as an endorsement or commitment from FHWA concerning
the ultimate approval of proposed experimental features.
The timeframe for the SEP-15 Steering Committee and Division
Administrator to provide their comments to the applicant's
SEP-15 Concept Paper is 60-days after receipt of the
Concept Paper by the Steering Committee. This response
is strictly informational in nature and the applicant
is under no obligation to incorporate the guidance or
recommendations into their final application.
The applicant shall submit a SEP-15 Application that
shall provide the following:
- Brief project description;
- A concise description of each experimental feature;
- An explanation of why the State is seeking to undertake
the experimental feature, including a description of
why the experimental features are beneficial to the
development of the project and the expected value to
be achieved from the experimental feature; and
- An explanation of how the areas of experimentation
vary from requirements found in title 23 U.S.C., FHWA
regulations, or FHWA policy and practices.
- The SEP-15 Application shall be submitted to the Division
Administrator. Immediately upon receipt, the Division
Administrator will forward the application to the P3
- The P3 Program Manager will coordinate the review of
the application with the SEP-15 Steering Committee and
the Division Office. The review will be focused on assessing
whether the proposed experimental features are appropriate
for administration under the SEP-15 program or whether
they are precluded from further consideration due to
legal or policy constraints.
- Either the applicant or FHWA may request a formal presentation
if there are significant questions that could affect
the overall viability of a project under SEP-15. If additional
information or clarification is needed then this will
be requested from the applicant. Once all information
is gathered, the SEP-15 Steering Committee and the Division
Administrator will prepare a recommendation for the Deputy
Administrator within 60-days of receipt in Headquarters
of the SEP-15 Application by the Steering Committee.
- The SEP-15 Steering Committee will make a recommendation
on the merits of a SEP-15 Application to the FHWA Deputy
Administrator. If the Deputy Administrator accepts a
project for administration under the SEP-15 program,
he will inform the head of the State DOT of his decision
in writing. At this point, acceptance of a project is
only a commitment not to declare the project ineligible
for Federal-aid funding. Until there is formal FHWA project
approval and the execution of an EDA, the FHWA retains
the right to declare the project ineligible for Federal-aid
funds at anytime.
- If the SEP-15 Steering Committee does not recommend
acceptance of the application, they shall brief the Deputy
Administrator. If the Deputy Administrator concurs with
the recommendation not to accept a SEP-15 application,
the Deputy Administrator shall notify the State DOT.
- Nothing in this procedure shall inhibit the free and
open communication between FHWA and the applicant. The
primary purpose of the review process is to strengthen
the applications and improve the opportunities for successful
application of innovations.
- If an application is accepted for administration under
the SEP-15 program, the Deputy Administrator will officially
appoint co-facilitators for the project. The co-facilitators
will establish an FHWA interdisciplinary team to assist
with the development of the provisions of the EDA.
Early Development Agreement (EDA)
- The EDA will contain parameters to guide such key elements
as project planning, design, environmental
review, right-of-way acquisition, method of procurement regulatory compliance,
timelines, financing, construction, and
operation. During this phase of the SEP-15 process, FHWA will also address
concerns regarding program or operation
aspects of the project. The EDA will also identify the performance measures
that will be used to evaluate the success
of the project. The parties will work to execute the EDA within 60 days
of the approval of the SEP-15 Application.
The time for approving EDAs may be shorter or longer depending on
the complexity of the experimental features.
Development of the EDA may involve one or more meetings between members
of the co-facilitators and FHWA interdisciplinary
team. The Deputy Administrator and the chief executive of the
State DOT shall sign and execute the
- Throughout the life of the project approved under SEP-15,
the co-facilitators shall be responsible for ensuring
that the project is coordinated within the Department
of Transportation and other stakeholders in Federal government.
If the project is one that is also being considered by
the President's Environmental Streamlining Task Force
created under Executive Order 13274, the co-facilitators
will work with members of the Task Force to help identify
any concerns other Federal agencies may have with the
project. They will assist the project applicant in addressing
- The Division Administrator will be primarily responsible
for monitoring the status of the project through the
life of the project and will ensure the FHWA actions,
approvals and other activities are provided in a timely
manner as outlined in the SEP-15 Application, and the
- Project documentation shall be completed in accordance
with the provisions of Section 9, Documentation.
8. Project elements,
milestones, and products
- Overview - The EDA shall list all SEP-15
project elements, including the experimental features,
the terms and conditions of the experimental features,
evaluation criteria, and reporting requirements. The contents
of the EDA will vary from project to project and the co-facilitators
shall work with the applicant to develop a list that is
appropriate for experimental features of each SEP-15 project.
In addition to specifying the elements, milestones, and
products, the EDA shall include roles, timeframes and commitments
for the applicant, FHWA, and third parties as appropriate.
In addition, the EDA shall identify specific performance
measures that will be used to evaluate the success of the
SEP-15 process and the experimental features of the project.
The co-facilitators shall approve or deny any changes to
the EDA that are requested by the State. The EDA will address
the potential consequences to a SEP-15 project should there
be a significant change in circumstances that results in
a violation of the terms of the EDA, title 23 of the United
States Code, or FHWA policy.
- Negotiation - The EDA will be negotiated
by the co-facilitators and the State DOT.
- Amendments - The EDA should be seen
as a valuable tool for optimizing the success of the SEP-15
approach and may be modified and amended after execution
with the approval of the co-facilitators to achieve this
- Purpose - Documentation shall be tailored
to meet the specific elements of projects being developed
or constructed under the provisions of the SEP-15 program.
This flexibility will allow the applicant and FHWA to provide
feedback and insights to assist other entities in their
efforts to bring innovation to their projects. The purpose
of the documentation element of this procedure is to provide
- Compliance with the approved features of the SEP-15
- Benefits of the applied SEP-15 process;
- Lessons learned for future SEP-15 experimental features;
- Recommendations for changes in FHWA practice, regulations,
or title 23.
- Documentation Requirements - The EDA
shall define the documentation requirements that specifically
apply to the SEP-15 project. At a minimum, the EDA shall
require documentation in the following areas:
- A matrix of project elements that were modified and
approved through the SEP-15 process;
- A specific means for measuring the benefits and impacts
that each of these elements had on the overall project;
- A means for determining accountability on the part
of the applicant for meeting requirements of the approved
- Lessons learned.
- Reporting - States are required to submit
at least one report on each approved experimental feature.
An independent third party must prepare any required report.
The EDA will include details about the number of required
reports, the contents of the report(s), and the frequency
by which the States must submit the report(s). The Division
Office shall determine a format to be used for any SEP-15
project report. The format should not only consider the
uniqueness of each project, but also facilitates FHWA's
ability to compile and use the information to benefit all
applicants under the SEP-15 program. The State will submit
all reports to the Division Administrator. The Division
Administrator will forward all reports to the SEP-15 Steering
Committee for review.
- Actions - Upon review of the individual
SEP-15 reports, the SEP-15 Steering Committee may offer
recommendations for modifying this procedure, changing
the organizational elements of FHWA and other components
of the SEP-15 program to further enhance innovation on
transportation projects, and identify training needs and
opportunities related to the development and administration
of SEP-15 projects.
projects cannot be used to modify environmental and other
requirements external to title 23 of the United States Code.