1 FHWA/Caltrans Stewardship and Oversight Agreement Congress has charged Caltrans and FHWA with effectively and efficiently managing the public funds that have been entrusted to them…

2 Where did it all begin? OIG and GAO concerns with oversight with respect to cost and schedule Congress implements changes through the passage of SAFETEA-LU FHWA issues new Stewardship and Oversight Agreement Guidance –Current D.O. agreements are inconsistent –On May 8, 2006, FHWA issues new guidance to implement a more consistent and comprehensive approach to developing stewardship agreements.

3 Challenges with the Old Stewardship Agreement New SAFETEA-LU requirements have changed oversight responsibilities Resources are not strategically focused (currently focused on the Interstate) “Full Oversight” is resource intensive Resources are directed to routine activities rather than focused on activities that add value Resources are focused on project oversight instead of program management

4 New Stewardship & Oversight Agreement Development Process initiated in August 2006 Done in collaboration with Caltrans Signed by Will Kempton, Caltrans Director, and Gene Fong, FHWA Division Administrator, on September 4, 2007 Agreement became effective November 1, 2007

5 What Does Stewardship and Oversight Mean? Stewardship – the effective and efficient management of the public funds that have been entrusted to FHWA and Caltrans Oversight – the act of ensuring that the Federal-aid highway program is delivered consistent with laws, regulations, and policies

6 Comparison of Agreements Old Agreement –Full Oversight –State Authorized New Agreement –Strategic Oversight –Delegated Projects

7 Oversight Thresholds Old Agreement –On the Interstate –Greater than $1 million –New or Reconstruction New Agreement –Risk Based –Joint Selection

8 Actions Delegated or Withheld Old Agreement –Actions were fixed –Applied to all federal-aid projects New Agreement –Actions are now fluid –Apply to federal-aid projects

9 Delegated Responsibilities Strategic Project Oversight Universe of Projects Full Oversight High Profile Projects State Authorized Delegated Projects

10 What is the foundation of the new Stewardship Agreement? Caltrans & FHWA Strategic Plans Performance Measures Compliance Indicators Collaborative Multi- Year Plan Strategic Stewardship and Oversight Comprehensive Risk Based Approach

11 Components of New Stewardship Agreement 1.Joint Strategic Planning Process 2.Performance Indicators/Measures 3.Multi-Year Plan 4.Strategic Stewardship and Oversight –Program Reviews –Program Assessments –Strategic Project Oversight

12 Joint Strategic Planning Process Caltrans & FHWA Strategic Plans Align desired objectives Align desired outcomes Influence both Strategic Plans

13 Performance Indicators/Measures Continuously monitor FAHP elements at a programmatic level (not at a project level) Revisited on a systematic basis Output used in the Program Assessments

14 Multi-year Plan 3-year list of strategies Current list of High Profile Projects Significant Accomplishments Collaborative Multi-Year Plan

15 Strategic Stewardship and Oversight Strategic Stewardship and Oversight Strategic Project Oversight Program Assessment Program Reviews

16 Strategic Stewardship and Oversight Program Assessment –Methodology for each program element Program Analysis Assess risk Prioritize risk events Identify and implement response strategies

17 Strategic Stewardship and Oversight Program Reviews –FHWA, Caltrans and other stakeholders –Often outcome of Program assessments –Purpose Gauge compliance Identify opportunities and best practices Recommendations for improvement –Follow Up

18 Strategic Stewardship and Oversight Strategic Project Oversight –Step 1: Caltrans/FHWA jointly determine High Profile Projects based on criteria –Step 2: Within the High Profile Projects, further delegate low risk activities

19 Strategic Project Oversight- Criteria (Step 1) High Profile Projects –Controversial and/or Congressional Interest –Demonstration and pilot programs (i.e. Value Pricing, Design Sequencing, Buses on Shoulders, Quiet Pavements) –Executive Order projects –Interstate Projects Projects with Design Exceptions related to the 13 controlling criteria Interchanges that are removed, new, or require modification Innovative Contracting Methods

20 Strategic Project Oversight- Criteria (Step 1) –Invitational (by Caltrans) projects –Major ITS projects –Major Projects (> $500M) –Non-traditional Revenue Sources projects –Special Experimental Projects (SEP 14) – Alternative Contracting –Special Experimental Projects (SEP 15) – Public Private Partnerships –Unusual bridge and structure projects

21 Strategic Stewardship and Oversight Overview (Step 2) Formal agreement written for each High Profile project Each project phase will be revisited to determine level of FHWA involvement –Update Agreement Agreed upon delegated and non- delegated approval authority will only change when extremely high risks are identified

22 High Profile Project Agreement

23 High Profile Project Agreement

24 High Profile Project Agreement

25 Mutual Benefits Demonstrated ability to step “out of the box” and lead national efforts Ability to leverage resources (time, staff, and budget) Strategic use of resources to optimize value added Effective utilization of existing measures

26 Mutual Benefits continued… –Partnership approach to Program Management –Performance based Management –Intelligent Risk Management –Paradigm shift from project oversight to program management –Show greater accountability for the entire program

27 Questions? Abraham P. Geevarghese Realty Specialist FHWA California Division 650 Capitol Mall, Ste Sacramento, CA (916)