Office of Planning, Environment, & Realty (HEP)
Section 1904 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) amended 23 U.S.C. 106 and made several significant changes to the requirements for Major Projects. The monetary threshold for classification as a Major Project was lowered from an estimated total cost of $1 billion to $500 million or greater. A Project Management Plan (PMP) and a Finance Plan are required for all Major Projects. In addition, projects with a total cost between $100 million and $500 million, while not classified as Major Projects, require the preparation of Finance Plans that must be made available to FHWA upon request. The following series of questions and answers provide guidance for complying with the Major Projects requirements.
A project with a total estimated cost of $500 million or more that is receiving Federal financial assistance is designated as a Major Project. While the Project Owner is generally the State Transportation Agency (STA), projects can be developed by other State Agencies (Toll Agencies), Local Public Agencies, and/or Private Ventures (Public Private Partnership's (PPP) for example).
Yes, FHWA has the discretion to designate a project receiving Federal financial assistance with a total cost of less than $500 million as a Major Project. The FHWA may choose to exercise this discretion in situations that include, but are not limited to, where FHWA determines that the project requires either a substantial portion of a State Transportation Agency's (STA) program resources, has a high level of public or congressional interest, is an unusually complex project, or is likely to exceed $500 million in total cost during the life of the project.
Yes, any amount of Federal financial assistance can trigger the Major Project requirements.
Yes, any recipient of Federal financial assistance for a project exceeding $500 million must comply with Major Project requirements.
All costs associated with the project from the NEPA phase through final construction must be included regardless of the source of funding. The cost of the project must include adequate contingencies and reserves for all cost elements. These costs must be expressed in year of expenditure dollars and estimated using a risk based approach, which is consistent with current FHWA Cost Estimating Guidance located at http://www.fhwa.dot.gov/ipd/project_delivery/. The FHWA will conduct cost estimate reviews as appropriate at critical stages throughout the project to reveiw the cost estimate.
The STA provides all cost estimates and documentation for the project. In addition, the FHWA will schedule the review at a mutually agreeable time with the STA. At the review, the STA will provide project personnel that can answer questions concerning all parts of the estimate.
The scope of the project is defined in the Record of Decision (ROD), Finding Of No Significant Impact (FONSI), or Categorical Exclusion document (CE) and includes all work associated with implementing the project.
Yes, on a case-by-case basis, the scope of work described by the ROD, FONSI or CE can be divided into multiple projects that correspond to operationally independent phases of work (as described in question number 9) which will be built non-concurrently. The FHWA Division Office will consult with the FHWA Major Projects Team prior to making this determination. In cases where the scope of the work is divided into multiple projects, Major Project requirements will apply only to the individual projects meeting the Major Project designation requirements, as described above.
An operationally independent phase of work is a portion of the work described in the environmental document that can be built and function as a viable transportation facility even if the rest of the work described in the environmental document is never built. Environmental commitments associated with the phase of work to be built must be implemented as part of the project. Multiple contracts developed for bidding by the Owner for contract administration purposes or due to funding shortfalls are generally not considered to be operationally independent.
Section 106(h) of title 23, as enacted by SAFETEA-LU, requires the recipient of Federal financial assistance for Major Projects to prepare and submit to FHWA a Project Management Plan and Finance Plan with annual updates.
Section 106(h)(2) of Title 23, as amended by SAFETEA-LU, states that a Project Management Plan shall document the procedures and processes that are in effect to provide timely information to the project decision makers to effectively manage the scope, costs, schedules, and quality of, and the Federal requirements applicable to, the project. A Project Management Plan shall also document the role of the agency leadership and management team in the delivery of the project. It is essential that the Project Management Plan establishes the metrics by which success of the project is defined. The FHWA has developed Project Management Plan guidance that describes topics that form the basic contents of a Project Management Plan that meet the SAFETEA-LU requirements. This guidance is intended to be a general framework for the Project Management Plan, but not a prescriptive format. This guidance is located at www.fhwa.dot.gov/ipd/project_delivery/.
A draft Project Management Plan should be submitted to FHWA by the recipient of federal financial assistance prior to the ROD, FONSI or CE determination. A final Project Management Plan should be submitted to FHWA within 90 days after the ROD, FONSI or CE determination.
The financial recipient must prepare the Project Management Plan. However, the Project Management Plan should document State DOT roles and responsibilities and management controls in place. The STA should provide the private entity with all necessary information.
The FHWA Division Office approves the Project Management Plan in consultation with the FHWA Headquarters Major Projects Team. Once the ROD, FONSI or CE determination has been made for a project, FHWA may withhold any further project approvals until the Project Management Plan is approved.
Yes, the Project Management Plan is to be a living document in which revisions will be issued as the project progresses in order to add, modify, or delete provisions that will result in the most effectively managed project. The Project Management Plan will be updated prior to authorizing Federal-aid funds for construction and updated throughout the life of the project.
Section 106(h)(3) of Title 23 states that a Finance Plan shall be based on detailed estimates of the cost to complete the project and provide for the annual submission of updates that are based on reasonable assumptions, as determined by the Secretary, of future increases in cost to complete the project. The FHWA has developed Finance Plan guidance that describes the contents of a Finance Plan necessary to meet the requirements of 23 U.S.C. 106. This guidance is intended to be a general framework for the Finance Plan, but not a prescriptive format. This guidance is located at www.fhwa.dot.gov/ipd/project_delivery/.
SAFETEA-LU did not change the requirement that recipients of Federal financial assistance for Major Projects must submit a Finance Plan. The recipient of Federal financial assistance should submit the Finance Plan to FHWA when all elements of the Plan are fully completed, but no later than prior to requesting authorization of Federal-aid funds for construction. For design build projects, the Finance Plan must be approved prior to award of the design build contract. Finance plan updates shall be submitted annually once the initial Finance Plan is approved until construction is substantially complete.
As was the case prior to the enactment of SAFETEA-LU, if a project ceases to receive Federal financial assistance at any point prior to the construction phase, the project sponsor may be released from the requirement to submit a Finance Plan. The STA must notify the Division Office in writing that it will not request Federal funding for future phases of the project. The Division Office, in consultation with the Major Projects Team, will determine whether future activities are subject to the requirements set forth herein. If the STA is released from the requirement to submit a Finance Plan prior to the authorization of Federal-aid funds for construction, no Federal funding may be authorized for any subsequent phases of the Project. The STA must continue to comply with all other Federal requirements that flow from the use of Federal-aid funds for any pre-construction phase of the Project. It should be noted that the requirement to keep the Project Management Plan current continues even if the recipient has been released from the requirement to submit a Finance Plan.
The FHWA Division Office will approve the initial Finance Plan with prior concurrence from the FHWA Headquarters Major Projects Team. The FHWA Division Office will approve annual updates to the Finance Plan with prior concurrence for the Major Projects Team on an as requested basis by either office. The FHWA will not approve the award of a Federal-aid construction contract without an approved initial Finance Plan, and may withhold future Federal-aid contract awards subject to the approval of required annual updates.
No, the TIFIA Finance Plan can be used to satisfy the Major Project requirements. However, TIFIA requires the preparation of a Finance Plan earlier than Major Project requirements do. Also, Finance Plans for TIFIA loans have additional requirements. Consult the TIFIA Project Oversight and Credit Monitoring Guidance located at http://tifia.fhwa.dot.gov/ for more information.
According to TIFIA requirements, the private entity will prepare the Finance Plan. As stated above, this Finance Plan can be used to satisfy the Major Project requirements.
The SAFETEA-LU requires the recipients of Federal financial assistance for projects with a total cost of $100 million to $500 million that are not designated as Major Projects to prepare a Finance Plan. Project Management Plans are not required for these projects.
The scope of the project is defined in the same way as for Major Projects described above.
The FHWA Division Office and the STA will formally agree on the process for making these determinations. If the STA assumes the responsibility of making these determinations, the FHWA Division Office will monitor conformance to this guidance through periodic program reviews.
No, however, these Finance Plans should be consistent with the FHWA Finance Plan Guidance and shall be made available to FHWA upon request. The FHWA Division Office may monitor compliance with this requirement on a project basis or through periodic program reviews.