Effective Delivery of Small-Scale Federal-Aid Projects (2011)

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19 CHAPTER THREE EFFECTIVE SMALL-SCALE PROJECT DELIVERY: BY PROJECT PHASE resulted in high risk or very high risk (“4” or “5” ratings) for each project characteristic. TABLE 6 HIGH-RISk CHARACTERISTICS OF SMALL-SCALE FEDERAL-AID PROJECTS REPORTED BY FOCUS STATES Roughly half of the states rated earmarks, ROW con- cerns, and Environmental Impact Statements (EIS) as a “4” (high-risk) or “5” (very high-risk). However, many aspects of a federal-aid project appear to present high risks. Del- DOT did not rate any characteristic higher than “3” (moder- ate risk) and stated that no particular aspect of a federal-aid project presents more than this level of risk to project com- pletion; the DOT is completely involved in the LPA process, which it cites as reducing the risk of misunderstandings between different levels of authority in the state. A rep- resentative from the FHWA Iowa division reported that the projects that present the most risk are the smaller ones awarded to LPAs that are not accustomed to dealing with federal funds. These include cities or towns with a popula- tion under 50,000 that have no MPO. Projects that consume the most time are any local projects that involve a request for access to an interstate, whereas those that consume the most money are usually new or replacement bridges and new interchange projects. New Jersey DOT avoids proj- ects with environmental assessments to be completed in an effort to quickly move through the implementation proce- dure. In Minnesota, multiple counties are working together to implement projects to lessen the risk placed on the DOT and the local agencies involved. INTRODUCTION This chapter presents information on how the focus states define and account for risks in project delivery, and provides examples of effective delivery of small-scale projects per each delivery phase. The focus on this chapter is more on routine small-scale federal-aid projects, such as roadway and bridge improvements, rather than on projects supported by the special federal-aid programs presented in chapter two. It is based primarily on the survey results and case study interviews. A section on risk analysis highlights how focus states elect to allocate resources to handle the many phases of small-scale project delivery. The chapter also discusses approaches used by state and local governments to effectively address federal requirements relative to routine federal-aid projects, and opportunities for improving and streamlining small-scale federal-aid project delivery. It includes further information on agencies that have effectively grouped small- scale projects under a single environmental document to satisfy NEPA process and agencies that have grouped small- scale projects in some other manner to improve efficiency. The chapter is subdivided into sections covering preliminary development through final project phases. RISK ANALYSIS It is critically important to capture how states allocate risk and better allocate resources because these efforts permeate throughout each stage of project delivery. Through the use of the survey questionnaire or interview guides, a member of both the FHWA division office and state LPA office was asked to identify elements of risk in the delivery of small- scale federal-aid projects. Based on case study interviews with various officials, states tend to have varying opinions on what makes a project high-risk to the DOT. Several items were common among the various agencies. A survey question was created to identify high-risk fea- tures of locally administered projects, such as nature of fed- eral regulations to be met, phases of project delivery, and other characteristics of project delivery that may incur bud- get or scope creep and scheduling delays. The question asked LPA coordinators to rate several factors as having no risk (a rating of “1”) to very high risk (a rating of “5”). Table 6 presents the number of responses from the focus states that

20 LPA coordinators stated that one element that can increase the risk level during project implementation is the extent of consultant knowledge of federal-aid program requirements. Table 8 displays the results of a survey question regarding the focus states’ opinions of consultant knowledge for key federal regulations ranging from a rating of “1” (completely unfamil- iar), “2” (vaguely familiar), “3” (working knowledge), “4” (well-versed with occasional assistance from DOT), and “5” (intimately familiar, no assistance from DOT). A majority of responses indicate that consultants possess a working knowl- edge, or a rating of “3,” of the outlined regulations. One trend shown by the data is that consultant knowledge of Titles VI and VII varies from a rating of “1” (completely unfamiliar) to a rating of “3” (working knowledge) of these regulations. One of the most important variables in determining proj- ect cost is time to completion. A survey question asked LPA administrators to estimate which programs tend to take the longest to complete. Figure 2 shows that respondents con- sistently answered that bridge projects and HPP projects required the most time to complete. Follow-up discussion with DOT staff interviewed indicated that bridge projects tend to take longer because of the environmental sensitivity of these projects and the permits required from various agen- cies. With regard to HPPs, local agencies have an indefinite amount of time to complete the project because the fund- ing does not expire. As the program has not been affected by new transportation authorization legislation or deobliga- tion (so far), these projects are allowed to take many years to complete. It is also important to note that the responses were wide ranging, proving that different states have differ- ent program implementation issues. State DOT LPA administrators were also asked to esti- mate the number of years needed to complete a project within a specific federal-aid program. Table 9 displays the responses provided in terms of number of responses out of ten focus To ensure that a project will be completed, certain states conduct risk assessments to aid in the project selection pro- cess. If risk assessment is being practiced either at the DOT, MPO, or local agency level at the time of application, it may be possible to address major concerns before selection so that time and money may be saved. If the risk presented is high enough as to make a project infeasible, the state or local agency could either reject the application or seek alternative funding before the project is selected. A series of questions were asked of LPA administrators regarding risk assessment at the state and local levels. Table 7 displays the status of conducting risk assessment for LPA projects in each of the focus states. Half of respondents conduct risk assessment at the DOT level, and fewer than half of the focus states have MPOs that formally practice risk assessment for federal- aid projects. Another question pertained to risk evaluation at the local agency level. The data indicated that half of respondents indicated that local agencies do not practice risk assessment techniques, while three other LPA administra- tors were not certain as to whether local agencies may or may not be doing risk assessments. TABLE 7 PERCENTAGE OF AGENCIES IN FOCUS STATES THAT PERFORM RISk ASSESSMENTS FOR SMALL-SCALE FEDERAL-AID PROJECTS Agency Within Each Focus State Percentage of Agencies That Perform Risk Assessments for Small-Scale Federal-Aid Projects Yes No Don’t know DOTs 50 40 10 Metropolitan Planning Organizations 10 60 30 Local Agencies 10 50 40 TABLE 8 FOCUS STATES’ RATING OF CONSULTANT kNOWLEDGE OF kEY FEDERAL REGULATIONS

21 to the LPA program and included FHWA full oversight for some projects costing less than $50,000, some design- build projects, and some regular contracts. To develop an organized risk-based approach to handle the large num- ber of projects and urgent nature of the ARRA program, FHWA-FL reported that it first defined its view of “high risk” according to an assessment. It started with a list of all certified local agencies in the state and selected full oversight projects according to the following attributes: (1) projects assigned to a LPA that had not done a feder- ally funded project before, (2) the size of project cost, (3) the work type or complexity of the project (e.g., a bridge replacement vs. a bike trail), and (4) projects with congres- sional interest. FHWA-FL addressed projects not picked for full federal oversight by creating a checklist as part of program account- ability reviews to see how projects will meet the federal ARRA funding requirements. To accomplish this major undertaking, FHWA-FL hired an engineer fully dedicated to perform the accountability reviews on LPA projects. Another effort included FDOT’s statewide local agency teleconferences, in-person meetings, and web-based train- ing that involved 3 to 4 hours of FHWA-FL representatives speaking to local agencies and FDOT district offices about federal requirements in an attempt to get the LPAs up to speed on the ARRA program. FHWA-Iowa indicated it has allowed the grouping of small-scale federal-aid projects through the use of project agreements. These project agreements are based on whether the local governments for the different projects agree to let their projects be joined. The advantage stated was that this grouping allows the Iowa DOT to view the string of projects as a single one in the work program. states per each program or activity. Based on the results, TE, CMAQ/RSTP, and NSB projects take in excess of 3 years to complete. Additionally, Mn/DOT indicated that NTPP proj- ects take about 5 years to complete. Survey respondents gave several reasons for why these projects take longer to com- plete, such as type and number of permits needed, intensity of environmental document review, and rating of the “con- struction-readiness” of projects. According to interviewees, these factors can delay projects for several years, causing the average time to completion to rise as well. TABLE 9 AVERAGE TIME TO COMPLETION FOR SMALL-SCALE FEDERAL-AID PROJECTS PER PROGRAM, AS REPORTED BY FOCUS STATES Some state agencies use a risk-based approach to project oversight by varying the level of resource allocation depend- ing on the complexity of the project, experience level of local agency staff with federal-aid projects, and the like. Risk-Based Project Management The FHWA Florida Division Office (FHWA-FL) reported that in 2010, 400 out of 500 ARRA projects were assigned FigURe 2 survey responses rating the LPA projects that tend to require the most amount of time to complete.

22 In Pennsylvania, the Delaware Valley Regional Planning Commission (DVRPC) assesses the risk level of potential federal-aid projects by examining certain criteria, such as the project’s suitability in the regional plan, funding expira- tion date, and percentage of design completed. In the Phila- delphia area, workshops are planned through DVRPC when a funding “round” is about to begin. These sessions address federal regulations and introduce local agencies to the fed- eral-aid process and programs before the projects begin, thereby reducing the risk of projects becoming noncompli- ant. Additionally, a complete list of all consulting firms with prior experience with DOT design standards and federal-aid projects is sent to local agencies upon request, after their projects have been selected. A similar list exists for inspec- tion firms; full-time inspection of all federally funded LPA projects is required. Firms can be removed from the list if the DOT or local agency experience repeated poor perfor- mance by the company, in order to promote the best-per- forming firms in handling LPA projects. Maintaining this list of experienced firms can reduce the risk of problems in small-scale federal-aid projects in Pennsylvania. PLANNING PHASE This section captures efficiencies in the planning phase reported by agencies, such as qualifications of federal fund- ing applicants, statewide transportation improvement pro- gram/transportation improvement program (STIP/TIP) prioritization of small-scale projects by MPOs, and MPO bundling of projects. Iowa Many state representatives stated that they establish advi- sory committees during the project selection process to dis- cuss eligibility requirements and evaluate risks presented to the DOT, as well as rank the applicant projects for selec- tion. For example, in Iowa an advisory committee headed by the Iowa DOT includes specific representatives familiar with small-scale projects for CMAQ, TE, RTP, NSB, and SRTS. Another committee member is assigned from the HPP and ARRA sectors in an effort to represent all fac- ets of LPA projects in the state. LPA project selection for the core LPA federal-aid programs in Iowa is made by the RPAs and MPOs. However, for certain federal-aid programs (TE, SRTS, RTP, CMAQ, and NSB), projects are selected by the Iowa DOT using a well-organized and documented application process. Iowa DOT reported that this process helps to clarify the expectations regarding federal and state requirements upfront and provides the necessary informa- tion to “get LPAs off to a good start in the project develop- ment process.” In addition, local agencies can only receive money from one federal grant program per year because it finds that the number of projects requested is 5 to 15 times greater than the amount available for funding. Also, in the Risk-Based Program Management Based on the survey questionnaire results, all ten focus states have entered into a Stewardship and Oversight Agree- ment with FHWA, which addresses the risk-based concept of delegation of authority. The level of delegation of authority for all programs in these agreements, including LPA, var- ies slightly. However, in most cases the DOT assumes the primary role of implementing and managing federal-aid programs for local agencies. The survey results captured different levels of oversight applied on the LPA program. The focus states were asked if a decision matrix existed as a method to evaluate the level of oversight required per feder- al-aid project. Only one of the focus states currently uses a standard approach to determine project-level oversight. Several members of the FHWA Division Offices in the focus states were interviewed as part of the synthesis effort. In each case, staff interviewed indicated the importance of the FHWA-DOT stewardship agreements and the effective- ness of oversight reviews. Each FHWA Division completes an annual program risk assessment for its state’s LPA pro- gram to gauge which areas are posing the most challenge and to help FHWA determine the actions that might be taken to strengthen the program. As an example of program-level risk assessment, FHWA-ND completed a joint review of the Recreational Trails Program in 2009 with the North Dakota DOT and the North Dakota Parks and Recreation Department. The goal of the review was to improve its internal written procedures and develop a new applicant handout. The review reported that the collaborative effort resulted in a streamlined applicant pro- cess and limited the risk involved in having a project come up as nonparticipating from the FHWA perspective. All parties were satisfied with the success of the RTP program review and are using the same approach to review the TE program and develop an internal procedural guide in 2010. Other past reviews completed by FHWA-ND include administration of federal-aid to local public agencies, financial administration of locally administered projects, and construction and con- tract administration of locally administered projects. LPA projects are determined to be added for full involvement and oversight on the basis of project complexity. Another example of risk-based program management, in the last 5 years the FHWA-FL conducted a statewide ROW review of the LPA program after it was found to be “high risk” during an annual program risk assessment. As a result of the review, a Real Estate Acquisition Guide for Local Agencies document was distributed to all local agencies in the state, although it is important to note that in recent years FDOT has handled all local ROW acquisition. Also, the find- ings of the review led the FHWA-FL to present training on ROW acquisition in both the 2007 and 2010 statewide LPA conferences.

23 Florida FDOT reported that the MPOs include a description of their individual prioritization process within the actual TIP docu- ments. Appendix D contains links to the TIPs for each of the MPO websites. Washington State Washington State DOT (WSDOT) combines multiple local federal-aid projects at the planning phase, particularly proj- ects that tie together utility work and construction. The loca- tion and logical termini are given as the main criteria for deciding which projects to bundle together. WSDOT men- tioned efficiencies in pricing, contract administration, and constructability of small-scale federal-aid projects resulting from the bundling method used at the planning stage. Pennsylvania An effective practice found in Pennsylvania is using federal dollars for construction and local dollars for design work. This approach was described as having a streamlining effect, as the LPA project design can be near completion before federal funds are appropriated. A portion of the local funds required for the construction phase match are derived from toll revenue, which can be used to cover the match required for the construction phase of a federal-aid project. Another fiscal measure being taken by the state to aid the local agen- cies in project funding is to use toll credits to provide up to half of the local funding match. ENVIRONMENTAL PHASE (NEPA) This section discusses various activities that state agencies are pursuing in order to facilitate project compliance with the environmental regulations described in Appendix E, such as Section 106, Section 4(f), Title VI, and Endangered Species Act. Agency personnel were queried on how they efficiently incorporate consideration of concurrence from stakeholders, special interest groups, State Historic Preservation Officers (SHPOs), and other state and federal resource agencies such as USDA Forest Service, U.S. Fish and Wildlife Service, National Park Service, and state departments of environ- mental protection. A practice found among several states is use of an agree- ment between FHWA and the DOT to create streamlined methods for documenting projects as categorical exclusions (Anderson 2010). The FHWA has reached agreement with some states to establish streamlined procedures for classi- fying and documenting projects as CEs. The programmatic categorical exclusion agreement provides a process by which many projects seeking federal funding can be exempted from extensive federal environmental impact review (i.e., case of multiphase trail projects, Iowa DOT requests that project sponsors delay submitting new federal-aid project applications until significant progress on existing awarded projects has been made. California In California, state legislation allows for rural and some urban counties to use state-aid funds instead of federal-aid funds to deliver projects through the STP program. The amount of state funds available for “fund swapping” is determined through a formula outlined in California’s state legislation. This approach was cited as an effective prac- tice that relieves some of the small-scale projects from the administrative burden and costs associated with complying with all federal regulations. Another practice used by Cali- fornia DOT (Caltrans) is to group similar projects (defined by the criteria of no increased capacity and no decrease in air quality) into the STIP under a single item. The MPOs maintain the details on each project separately, rather than listing each project individually within the STIP, allowing more flexibility for updating the funding levels within the grouped LPA projects. For example, rather than listing a series of simple projects (those done within the same foot- print of existing road and no environmental issues) individ- ually in the STIP, a group project listing for “overlay projects in Los Angeles County, $15 million” or “signal upgrades in the city of Los Angeles, $150,000” might be used instead. This approach has been used primarily for safety and pave- ment rehabilitation projects and has resulted in both time and budget savings. Oregon ODOT identified an effective practice that affects all proj- ects at a program level during STIP development. Once ARRA, TE, and other state-aid programs project applica- tions are screened, ranked, and selected, all project data are inserted into agreements with local agencies as soon as they are programmed into the STIP. All LPA project agree- ments are assigned a date by which local agencies must respond. Local agencies that do not return signed project agreements to ODOT by the assigned deadline stand to lose their funds, which will be given to another local agency whose agreement was already submitted. Typically, ODOT batches 10 to 15 TE project agreements at one time. Its most significant time savings was the batching of 140 ARRA project agreements at one time immediately after STIP programming. Minnesota The Mn/DOT allows for STIP amendments to combine two LPA projects to get only one approval/authorization. MPOs work proactively with the Mn/DOT to help move amend- ments through the process more efficiently.

24 ects such as safety, lighting, and mill-and-fill projects. In the case of the TE program, NDDOT allows some TE projects to be tied to projects with other work types if it is in the same location. NDDOT explained that this is an effective practice because it reduces the amount of paperwork and man-hours for small-scale federal-aid projects. For example, NDDOT described a situation in which an inconsistency in wetland delineation that was identified. A task team of NDDOT envi- ronmental program managers and local government assis- tance managers, U.S. Fish and Wildlife Service, U.S. Army Corps of Engineers representatives, and FHWA was quickly formed to generate a wetland delineation process that would satisfy Section 404 permit needs. The task group established a consolidated approach to wetland delineation that will work for both state and locally sponsored projects. Ohio The Ohio DOT district offices write the environmental docu- ment plan for local agencies rather than allowing consultants to write them. This approach ensures that all federal require- ments are captured to prevent future delays with projects. DESIGN PHASE Several interview questions focused on the effective use of design standards and specifications for small-scale federal- aid projects. Minnesota Mn/DOT requires local agencies to use state-aid design standards, rather than Mn/DOT or federal standards for LPA projects that are off the NHS ROW. Mn/DOT identified this practice as streamlining delivery of projects, as local agen- cies are more familiar with the state-aid process. Ohio The Ohio DOT requires that local agencies include the appli- cable Ohio DOT specification template in every LPA contract to help encourage consistency with specifications. However, for projects where Ohio DOT is administering them in the construction phase, the LPA location and design manual for LPA project allows local agencies to do plan development on their own. This approach is explained as saving both time and resources by not requiring the local agencies to do the very intensive Ohio DOT plans development. Washington State WSDOT has developed a standard specification for highway and municipal construction along with a lower-complexity local agency general specification with participation from city and county representatives. The generation of a separate preparation of an EIS) if they meet various requirements demonstrating a likelihood of minimal infrastructure, envi- ronmental, or historical resources impacts. These exemp- tions offer a route to greatly reduce the financial burden on local agencies and the total amount of time required for completion. Federal Highway Administration A number of FHWA Division Offices have allowed pro- grammatic CEs for certain work types defined as “low risk” in their FHWA-DOT stewardship agreements as allowed by 23 CFR 771.117(c). For example, the FHWA-ND stated that programmatic categorical exclusions tend to streamline the process of project development for many small-scale proj- ects. FHWA-ND provided an example: as long as a local public agency stays within the limits of where the work is being performed and within the same scope of work (e.g., seal coat application, thin lift asphalt overlays), the LPA is not required to do a project concept study, but can instead use the straightforward three-page programmatic CE check- list. Other work types that fit the current programmatic agreement include roadway surface treatments, preventive maintenance concrete pavement repair, grinding, mudjack- ing, deck rehabilitation, abutment repair, structure painting, bridge rail retrofit, approach slabs, deck replacement, guard- rail removal, resetting or installation, fencing, signing, and rumble strips. Another streamlining procedure has recently been adopted for emergency relief projects that affect both the state and local agencies. Washington State Another streamlining effect at local level presented by FHWA-WA was the inclusion and coordination of resource agencies at a very early stage of the NEPA process. Rep- resentatives of resource agencies are included even before documents are submitted to FHWA, which helps to make FHWA’s environmental process go smoother and carry less risk. Minnesota The Mn/DOT allows local agencies to propose a project that encompasses a similar work type project with multiple locations under a single environmental document. This exercise reduces the review time and number of approv- als to be obtained, which helps these projects be delivered more quickly. North Dakota North Dakota DOT (NDDOT) bundles projects during the environmental phase by allowing two projects located next to each other to be tied as one in both rural and urbanized areas. Typically this method is used for less complex types of proj-

25 specification for local agencies helps to streamline the design process for smaller, less complex federal-aid projects that do not need to be held to high-type design standards. Web-only Appendix G contains a sample from the local agency general specification for asphalt paving. Florida FDOT incorporated an effective practice by creating an opportunity for LPAs to use local agency-select specifications for various items created by FDOT. This transition from the full FDOT specifications was found to simplify the design process for delivery of LPA projects containing asphalt, con- crete, earthwork, or landscaping. Any projects not classified as “critical” (cost more than $10 million) can follow either individual LPA specifications or the FDOT local agency-se- lect specifications, resulting in less materials testing required and allowing local agencies to select their own consultants or testing laboratories. Appendix E presents a sample from the local agency landscaping specification. FDOT also uses an Electronic Review Comment system that tracks comments on design plans for local agency projects and can be accessed by FDOT, local agencies, and consultants who have been assigned a login by the FDOT district office. RIGHT-OF-WAY ACQUISITION A series of case study interview questions focused on effec- tive navigation of the Uniform Act for locally administered projects. They also explored ways in which the DOT can assist local agencies in obtaining permits from various part- nering agencies, such as the U.S. Coast Guard, U.S. Army Corps of Engineers, state or regional water management dis- tricts, or railroad companies. A practice that DelDOT has found most effective for streamlining the delivery of the ROW phase of small-scale federal-aid project delivery is requiring ROW donations (according to the Uniform Act) from project sponsors. Del- DOT asks for any property and/or easements needed for the construction of the project through donation (sponsor- owned lands or residential lands). Typically, these projects fall under the TE activities and are designed for the better- ment of the community. DelDOT works with the affected property owner to process the necessary documentation. In the case where permanent easements are needed, DelDOT processes the necessary paperwork for recording purposes on behalf of the project sponsors. This requirement is par- ticularly important to gain vested interest by the LPA in their project because DelDOT handles all the project work from “cradle to grave.” Through this practice, DelDOT is able to place more responsibility on the local agencies to give their support in the planning process and especially after project completion ensuring proper upkeep and maintenance of the end product. CONSTRUCTION PHASE Contract administration requirements such as Davis–Bacon prevailing wage rates, Buy America (<0.1% foreign steel allowed), and other items in the FHWA 1273 were included as part of case study interviews. Interviewees were also asked to describe their effective practices regarding inspec- tion requirements and staff involved, quality assurance approaches, and approval methods for change orders. Contract Administration Iowa The Iowa DOT has established a letting process that allows multiple projects to be combined on a single construction contract. It reported that most federal-aid programs must be let through the Iowa DOT, but some small-scale LPA projects are allowed to be let locally because they tend to be smaller in size and often involve nonhighway construction trades. Ohio ODOT classifies LPA projects into two categories: (1) local agency administers entirely, or (2) local agency administers until completion of design and ODOT administers all let and post-let construction. This is done to reduce the risk of com- plex LPA projects, such as bridge projects, being subjected to time delays or budget creep. Another effective practice pre- sented by Ohio DOT was the requirement that local agencies use DOT-prequalified contractors. Ohio DOT explained that this requirement helps streamline delivery of LPA projects because the prequalified contractors are familiar with work- ing on federal contracts and will be cognizant of requirements such as DBE and Davis–Bacon, and violations are less likely to occur that would result in denial of federal reimbursement. Ohio DOT also provides local agencies with a bid document template that must be in every LPA project file to maintain consistency at the advertisement stage. Finally, change orders approval and claims processing is delegated down to the local agencies, as long as their procedures are approved by Ohio DOT up front during the certification process. Washington State WSDOT allows the use of statewide contracts (that are compet- itively bid) for materials procurement (e.g., signal controllers). In this manner, materials can be purchased on a statewide basis after a public interest finding is approved to streamline the pro- cess for LPA projects. FHWA-WA noted that a streamlining effect at local level comes about by the local agencies can using their own forces instead of competitively bidding projects, as long as a public interest finding has been completed. Stream- lining occurs as a result of the locals not having to comply with the state legislation, which does not permit in-house forces to be used on projects that cost more than $50,000.

26 Washington State WSDOT regional offices are responsible for contract over- sight. They perform detailed reviews on contracts and design plan reviews for noncertified agencies. However, because of the agency certification process, they are only required to carry out a cursory review of certified agency project con- tracts. This method allows WSDOT to delegate more respon- sibility to the certified agency to meet compliance with DBE, contract language, and so on. WSDOT headquarters sets the DBE participation requirements and does an additional check that the apparent low bidder is responsive to the DBE requirements. WSDOT rates the agency certification pro- cess as resulting in actual benefits for LPA project delivery because it reduces the administrative burden on the DOT. Florida FDOT has incorporated various activities at the district level that recognized the importance of quality assurance in LPA programs. One effort to improve FDOT administration of the LPA during construction was to hire general engineering consultants to assist in performing inspections, coordinat- ing environmental and permitting activities, and perform- ing design reviews. In many cases, the district construction offices (in collaboration with LPA administrators) randomly select projects on local routes on which to perform qual- ity assurance reviews. FDOT initially assesses LPA qual- ity assurance programs during the certification process; however, FDOT follows up with quality assurance reviews to ensure that local agencies are following their own LPA specifications for construction and materials testing. This approach was reported as an effective practice because the local agencies are not required to follow the intensive FDOT testing requirements designed for large complex jobs, reduc- ing project costs by not requiring the use of FDOT-certified laboratories and technicians. It also allows local agencies to use their own specifications, resulting in more efficient proj- ect delivery. Quality assurance efforts are also reported at the local agency level in Florida (McCarthy 2007). DeSoto County includes a quality control plan and verification/assurance procedures in their contracts for geotechnical materials test- ing included in any LPA projects. In Volusia County, county inspectors are trained at FDOT State Materials Office courses for field testing. County project engineers “pop-in” to inspect consultant testing labs as per open-access agree- ments set up as part of the lab contract. They also watch consultant personnel as they run materials tests in order to review the process. Bay County adopted standardization for LPA construction projects by using FDOT’s official form for inspections, and pre-video each LPA project location and retain photos for each project. The city of Lakeland Depart- Florida FDOT central office personnel are continually working with their district LPA counterparts to reduce the complexity and time involved with the contract and construction phase of LPA. Their most recent effort was to draft a new construc- tion oversight document for LPA projects. In addition, FDOT and FHWA jointly revised the FDOT Final Inspection and Final Acceptance form to clarify signature approval require- ments. An effective procedure was created to address the use of consultants for accepting construction work on behalf of local agencies who do not have an engineer on staff. In this procedure, a public agent of the local agency (e.g., mayor, public works director) must sign off on final acceptance, but a memorandum from a licensed engineering consultant can be attached that shows a valid signature for final inspection. Another effective practice presented by FDOT was the bun- dling, or tying together, of multiple projects in the construc- tion phase at the time of bid advertisement. Projects must be advertised for a minimum of 21 days. FDOT described this streamlined approach as “an economies of scale efficiency,” in that the projects can be advertised all at once rather than individually. FHWA-FL reported that it delegates all supplemental agreement, change order, and Concurrence-in-Award activi- ties for projects that are off the NHS (off-NHS) to FDOT (as written into the FHWA-FDOT partnership agreement). In doing so, the routine project review and approval process is delegated down to the LPA level and has a streamlining effect by reducing the number of people involved in post-de- sign approvals. FDOT in turn delegates all phases of project delivery to certified local agencies, except for the environ- mental and ROW approvals (final signature on both docu- ments is required from FDOT). Quality Assurance Minnesota The Mn/DOT requires one process for materials quality assurance for both Mn/DOT and LPA projects. FHWA- Minnesota indicated that this effective practice ensures one consistent process, instead of evaluating the effectiveness of several different local quality assurance processes. Ohio The Ohio DOT provides quality assurance reviews of LPA projects through their district offices. Ohio DOT indicated that the reviews result in recommendations to improve the program and are implemented by local agencies. Findings are included immediately through updates to the LPA man- ual and issuance of new guidance.

27 monitors each LPA project pay quantities before providing signature approval on payment requests from local agencies. One flexibility in the TE program allows local agencies to request reimbursement within 30 days by state law. This is considered an effective practice because the local agen- cies are not held to a structured pay schedule; however, it ultimately depends on the ability of the LPA to finance the project. Washington State At WSDOT, final inspection of LPA projects is done by regional local projects engineering staff. WSDOT does not use consultants for conducting LPA project final inspections because the inspections are considered as a compliance activ- ity. The WSDOT local program office stated that deciding how detailed the inspection should be has to do with the per- formance history of the local agency completing the project. For example, certified agencies with good performance track records may not require more than “windshield” inspec- tion on low-risk projects because they have demonstrated high-quality work and compliance with design standards previously. This process also follows along the same lines with the shifting of additional delegation of risk to certified agencies because WSDOT does not perform a full review of agency design plans. Only a brief check is done to ensure compliance with FHWA requirements. However, project- level quality assurance is done by WSDOT on mostly acces- sibility projects and pavement jobs, or other work types that WSDOT has determined to be more high risk. For example, WSDOT performs detailed inspections on all accessibility projects to match grade requirements and the like. State and regional WSDOT levels both perform independent assur- ance reviews to ensure compliance and identify system- atic training needs. Training needs identified are handled through LTAP newsletters or DOT-sponsored training for local agencies. WSDOT regional staff members perform a final documentation review on every LPA project at the completion of construction to ensure that the local agency built the project in accordance with the approved design plans and contract. If deficiencies or difficulties are found, WSDOT regional staff will conduct one-on-one training with the local agency. WSDOT headquarters staff conducts program management reviews to assess the local agency’s compliance (rather than project-level compliance) and check that documentation is done appropriately. If a local agency is found to be out of compliance, then the agency is placed on “probational status” or revoked and more WSDOT oversight is assigned immediately. WSDOT indicated in the case study interviews that it will then take two or three successful proj- ects completed by the particular local agency before they are reinstated to full delegation of authority. Pay quantities are part of the documentation reviews performed by WSDOT regional staff. Pay quantity files are checked more frequently on projects being conducted by noncertified agencies (e.g., at 10%, 30%, and 90% complete in construction depend- ment of Public Works produces a complete contract file for each LPA project that contains before-and-after project pho- tos and both as-planned and as-built aerial photos. Collier County keeps detailed daily inspection reports on standard- ized documents, along with a complete photo-log that chron- icles construction at the site from the beginning to the end of each federally funded project. PROJECT CLOSEOUT A series of questions focused on effective practices used by DOTs during the last step of project delivery, including details on final signature approval for completed projects, pay quantities, and the reimbursement process for federal- aid funding. Iowa In some areas, effective project closeout practices include creating a distinct, uniform process. In Iowa, the DOT pro- vides several checklists that outline the final review process. Before project closeout, Iowa DOT Administering Office staff spends a day inspecting and analyzing documents for each LPA project. With regard to payment quantities and reimbursements, local agencies work with contrac- tors to determine if change orders are needed and the DOT reviews all materials, tickets, and approves any necessary change orders. Reimbursement requests in Iowa are typi- cally input every month, but some projects submit requests less frequently. Florida The FDOT LPA Manual includes a comprehensive chapter on financial management that covers invoicing procedures for submitting, reviewing, and paying for local federal-aid project activities. In addition, eligible and allowable costs are defined in this chapter along with a discussion of eligi- bility requirements. Final cost reviews are performed at the FDOT district level prior to submission to the FDOT Central Office Comptrollers project closeout audit. A recent fiscal review of the Florida LPA program reported that informa- tion provided by local agencies was sufficient to establish that local agencies have an adequate degree of financial poli- cies, procedures, and practices to produce valid claims for reimbursement (McCarthy 2007). Ohio Ohio DOT provides quality assurance reviews of close-out on LPA projects through its district offices. An auditor in the finance section completes ten to 15 full financial audits each year (both random and additional upon request), looking at items such as the cost accounting program compliance at local agencies. Ohio DOT district construction office staff

28 SUMMARY Table 10 presents the major findings noted in this chapter. More detailed organization of all the chapters is included in Table C1 in appendix C. ing on the quality of documentation found at early reviews) and includes a sampling of pay items. LPA projects being performed by certified agencies are checked for payment quantities only as part of the PMR and on a sampling basis through documentation reviews. TABLE 10 EFFECTIVE PRACTICES USED DURING VARIOUS PHASES OF FEDERAL-AID PROJECT DELIVERY, AS REPORTED BY FOCUS STATES Project Phase Effective Practices States Risk Analysis Avoid projects with environmental assessments/environmental impact statements Risk assessment during project selection Decision matrix to rate level of oversight needed Ensure that local funding matches are available before project selection Multiple counties work together or pool resources to implement projects DE, FL, MN, ND, NJ, PA, OR, OH Planning Prequalifying applicants MPO STIP/TIP prioritization and bundling of small-scale projects Standard project ranking procedures CA, FL, IA, MN, PA, WA Environmental Streamlined method for categorical exclusions Project bundling State lead on environmental documents Multiple Design Separate or less stringent local agency design standards and construction specifications DE, FL, MN, OH, WA Right-of-Way After project alignment set and ROW impacts located, DelDOT works with each affected property owner to acquire easements conforming to the Uniform Act DE Construction Multiple projects let on single project Contracts let locally LPA projects let by state Statewide contracts for materials procurement Local approval of change orders Quality assurance reviews CA, DE, FL, IA, ND, OH Project closeout Quality assurance on project closeout Checklists Project-level quality assurance on high-risk projects (e.g., accessibility, pavement, bridge) FL, IA, OH, WA TIP = transportation improvement program; STIP = statewide transportation improvement program.