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Stewardship and Oversight Agreement Implementation Guidance

This document was superseded by Risk Based Stewardship and Oversight on 03/28/2014

Subject: ACTION: Stewardship and Oversight Agreement Implementation Guidance Date: December 19, 2013
From: /s/ Original signed by:
Walter C. Waidelich, Jr.
Associate Administrator for Infrastructure
Reply to Attn. of: HIPA-10
To: Directors of Field Services
Division Administrators

I am pleased to transmit the attached Stewardship and Oversight (S&O) Agreement Guidance, which is intended to provide a consistent approach to developing future agreements with State departments of transportation (DOTs). This revised guidance supersedes the memoranda of August 16, 2011 ("Guidance on Developing Future Stewardship/Oversight Agreements)," and April 2, 2013 ("Interim Revised Guidance on Stewardship and Oversight Agreements)."

Section 106 of Title 23, United States Code, requires the FHWA and each State department of transportation (DOT) to enter into an agreement documenting the extent to which the State will assume specific responsibilities under Title 23. The S&O Agreement formalizes these assumed responsibilities to address how the Federal-aid highway program (FAHP) will be administered in each State. Rather than specifying mandatory procedures, the attached guidance outlines the basic S&O concepts and approaches that division offices should follow.

Section 1503 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) contains changes to the requirements for oversight and approval of Federal-aid projects. These changes were the subject of our memorandum of April 2, 2013. Specifically, Section 106 eliminated the provision prohibiting States from assuming responsibilities for new construction and reconstruction projects on the Interstate System exceeding $1 million in cost. In addition, MAP-21 prohibits State DOTs from assuming responsibility for projects determined by FHWA to be high risk. The attached S&O Agreement Guidance implements these changes.

A significant change in FHWA's project-level S&O of the FAHP is the transition from "full-oversight" of projects to oversight activities primarily focused on areas of higher risk and opportunity. The FHWA's use of a risk-based approach for project S&O is intended to optimize the successful delivery of projects and to assure compliance with Federal requirements.

Risk-based project S&O has three main components:

  1. Required project approval actions,
  2. Data-driven compliance assurance, i.e., the Compliance Assessment Program, and
  3. Risk-based S&O of Projects of Division Interest and Projects of Corporate Interest.

Further guidance on FHWA's risk-based project oversight can be found at: http://our/office/fhwa.dfs/rbso/SitePages/Home.aspx.

This S&O Agreement Guidance also implements a process for conducting legal reviews of S&O Agreements by the FHWA Office of Chief Counsel before they are signed by the State DOTs and division offices. Upon completion of the legal review, Division Administrators are authorized to execute and sign S&O Agreements with their respective State DOT.

The Project Action Responsibility Matrix (Appendix A) is the cornerstone of the S&O Agreement for assumptions of project-level responsibilities. Deviations from this matrix need to be consistent with the six specific responsibilities that 23 U.S.C. 106 allows the State DOTs to assume from the FHWA. Further, such deviations require concurrence by the Office of Program Administration.

Performance measures, and a discussion of performance measures, are not included in this guidance document. Performance measures are being developed and a Notice of Proposed Rulemaking will be published shortly. The S&O Agreement may include S&O indicators as agreed to by the State DOTs and divisions to help in managing the FAHP.

Divisions should work with their State DOT partners to have a new S&O Agreement fully executed by the end of PY 2015. The Office of Program Administration will be hosting one or more Webinars in early calendar year 2014 to assist the divisions with any questions they may have. We also are planning to provide presentations through the DA/ADA meeting in 2014.

If you have any further questions or need immediate assistance regarding this guidance prior to our Webinar rollout, please contact Mike Duman at 916-498-5014 or David Bartz at 512-536-5906 or via e-mail. If you have questions regarding the legal sufficiency review, please contact Michael Harkins at 202-366-4928.

Attachment (.pdf, 1 mb)

Updated: 06/27/2017
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