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Stewardship and Oversight Agreement

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1.0 PURPOSE, BACKGROUND AND INTRODUCTION, TERMINOLOGY AND SCOPE

1.1 PURPOSE

The Stewardship & Oversight Agreement (SOA) documents the extent to which the New Mexico Department of Transportation (NMDOT) assumes the responsibilities of the Federal Highway Administration (FHWA) and where FHWA retains responsibility for administering the Federal-aid Highway Program (FAHP). Generally, the FAHP is a state administered program and FHWA provides oversight through a risk-based approach at the project and program level.

This Agreement outlines the framework by which FHWA and NMDOT will administer the FAHP to maintain New Mexico’s National Highway network, improve operation, improve safety, provide for national security, protect and improve our environment while delivering quality services and transportation products to the traveling public and taxpayers of New Mexico.
Under this Stewardship Agreement, FHWA and NMDOT acknowledgement that they are responsible for the effective and efficient use of Federal funds and will share the responsibility for oversight of programs and projects using FAHP funds. The Stewardship Agreement between FHWA and NMDOT is intended to be a living document and supersedes all previous oversight agreements. In order to ensure that the Agreement stays current; a team from NMDOT and FHWA will review the document periodically or when:

1.2 BACKGROUND AND INTRODUCTION

FHWA is responsible for all aspects of Federal-aid programs and the provisions of this Agreement do not preclude FHWA's access to and review of a Federal-aid project at any time and do not replace the provisions of Title 23, USC.

Federal funding is provided to assist States to provide transportation services through the FAHP. By law, the nature and the majority of these Federal programs is in the form of Federal assistance for State administered programs. MAP-21 and prior Highway Bills have allowed States to assume the U.S. Department of Transportation's responsibilities for design, plans, specifications, estimates, contract awards, and inspection of FAHP projects. FHWA and NMDOT enter into this SOA pursuant to: Title 23 of the United State Code, section 106(c)(3), to document the State's assumption of responsibilities.

1.3 TERMINOLOGY

In order to ensure that the Stewardship Agreement is consistently interpreted, the following definitions have been established:

Stewardship

The efficient and effective management of the public funds that have been entrusted to the FHWA to deliver the FAHP as well those public funds entrusted in NMDOT for a safe and efficient transportation system. Stewardship reflects FHWA's responsibility for the development and implementation of the FAHP. It involves all FHWA activities in delivering the FAHP, such as leadership, technology deployment, technical assistance, problem solving, program administration and oversight.

Oversight

Means the act of ensuring that the FAHP is delivered consistent with laws, regulations and policies. Oversight is the compliance or verification component of FHWA stewardship activities that ensures high-quality transportation projects. Narrowly focused, oversight activities ensure that the implementation of the FAHP is done in accordance with the applicable laws, regulations, and policies. More broadly focused oversight activities enable NMDOT and FHWA to ensure the effective delivery and operation of the transportation system envisioned in our base statutes.

FHWA project level oversight

Means that FHWA will participate in the project development and construction process during specific milestones to ensure compliance with Federal regulations, policies, procedures, and standards. This will also ensure that Federal dollars are being spent appropriately.

NMDOT project level oversight

Includes assumption of FHWA responsibilities for all reviews and approvals associated with design and construction, including final inspection, of FAHP projects.

Risk-based Approach

Is a joint FHWA/NMDOT risk management process using a tool for focusing limited resources to efficiently manage programs through improved communication.

Risk

Is a future event that may or may not occur and has a direct impact on the program. Applying the principles of risk management to look at decisions being made about delivery of FAHP projects will make it possible to identify threats, opportunities, and assess and prioritize those threats and opportunities. This will serve to identify strategies enabling us to decide how to deal with future issues affecting the FAHP.

1.4 SCOPE

The SOA outlines the roles, responsibilities, and processes in place to ensure that all project and program actions will be carried out according to the appropriate laws, regulations, and policies. These responsibilities also apply to projects administered by local agencies.

FHWA utilizes the Program of Oversight Initiatives (POI) which captures risk-based initiatives associated with its oversight responsibilities to respond to various reviews and audits, and to insure reasonable and consistent oversight. The POI is prepared annually as a part of FHWA's performance planning process.

The FHWA and NMDOT administer the FAHP through continuous program/project evaluation, and utilize a number of management tools to monitor the health of the FAHP such as NMDOT and FHWA Process Review program, NMDOT OIG Audits, and FHWA's Financial Integrity Review and Evaluation (FIRE) Program. Program and process reviews are conducted annually based on perceived risk.

Additionally, FHWA and NMDOT will jointly review and evaluate the program Performance Compliance Indicators. This review will be performed by the applicable Program Managers from both NMDOT and FHWA to ensure the FAHP is delivered in accordance with applicable laws, regulations, policies, and consistent with good business practices.

The FHWA and/or NMDOT will provide oversight and stewardship on the following FAHP programs:

Project Execution Progression

Support Programs

1.4.1. Reporting Responsibilities

FHWA and NMDOT have agreed to report annually on Program Area Stewardship / Oversight Indicators. Annual reporting will be prepared by NMDOT by the end of each calendar year. Additionally, each program area has different reporting requirements that are detailed in the section 3.0 Responsibility by Program Area.

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