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Publication Number:  FHWA-HRT-19-002    Date:  Winter 2019
Publication Number: FHWA-HRT-19-002
Issue No: Vol. 82 No. 4
Date: Winter 2019


Innovation Corner

by Cindi Ptak

Introducing SEP-16: New Opportunity to Innovate

On September 20, 2018, the Federal Highway Administration released a Federal Register Notice establishing a new Special Experimental Project (SEP) that provides States with an opportunity to explore new responsibilities in the management of the Federal-aid Highway Program. A SEP is an opportunity for States to collaborate with FHWA to innovate the process and improve the delivery of the Federal-aid Highway Program.

This SEP, named SEP-16, tests the delegation of program-level responsibilities of the Federal-aid highway system to States. The term “program-level” in SEP-16 means programmatic decisions that apply generally to projects in a State and broadly affect its Federal-aid highway system. However, this excludes federally inherent functions relating to eligibility, obligation, reimbursement, authorization, and compliance.

Through existing Stewardship and Oversight Agreements between FHWA and State departments of transportation, States are already exercising project-level responsibilities for design, plans, specifications, estimates, contract awards, and inspections for projects that receive Federal funding, including those on the Interstate System. To help implement Section 1316 of the Fixing America’s Surface Transportation (FAST) Act, FHWA released a Federal Register Notice soliciting feedback from States and other stakeholders on the possibility of additional project-level authorities. The responses indicated that States were interested in assuming program-level responsibilities.

“A SEP is an opportunity for States to collaborate with FHWA to innovate the process and improve the delivery of the Federal-aid Highway Program.”

“The States are asking to assume more authority and flexibility in implementing their programs, and this experiment could provide that opportunity,” says Tony Furst, FHWA chief innovation officer and director of the FHWA Office of Innovative Program Delivery. “That puts SEP-16 in line not only with State interests, but also FHWA priorities. We look forward to the States’ proposals.”

How It Works

Based on the feedback received from the Federal Register Notice regarding Section 1316 of the FAST Act, FHWA anticipates that States are interested in experimenting with actions such as approval of design standards, noise policies, preventive maintenance programs, and real property acquisitions and disposals.

SEP-16 provides a three-tiered process for States that would like to explore this opportunity:

Step 1. The first step is a letter of interest detailing the specific legal authorities being requested for delegation.

Step 2. If accepted, the next step is a five-page concept paper with a narrative describing the State’s proposal.

Step 3. The third step is a detailed proposal that will lead to an evaluation plan and a memorandum of understanding between FHWA and the State DOT to carry out the experiment.

FHWA, with the State, will evaluate each step and determine if the proposal can proceed to the next step.

Lessons learned from SEP-16 will inform FHWA and the States regarding what would be necessary for States to assume program-level authorities.

Logo with an image of a lightbulb with gears inside it, representing innovation. Beside the image it reads SEP-16.

Past SEP Successes

SEP-16 is not the first time FHWA has asked States to experiment with new processes. The successful and still active SEP-14 was launched nearly 30 years ago. SEP-14 includes innovative contracting practices, many of which went on to be codified in Federal law. In addition, SEP-15 started in 2004 and broadened the scope of SEP-14 to include testing of public-private partnership approaches. These SEPs are still available to test and evaluate innovative practices.

“Previous SEPs have laid the groundwork for significant, lasting changes in the way we do business,” says Mark Sullivan, director of the FHWA Center for Innovative Finance Support. “Approaches such as design-build and public-private partnerships were brought into our practice this way. The results of SEP-16 remain to be seen, but it opens the door to innovation.”

For more information, contact Cindi Ptak at 202–366–8408 or visit https://www.federalregister.gov/documents/2018/09/20/2018-20347/new-special-experimental-project-sep-16-to-evaluate-proposals-for-delegation-of-certain-program-wide.

Cindi Ptak is the managing director of FHWA’s Office of Innovative Program Delivery.




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