LPA Program Federal-aid Issues for Local Agencies Mike Morrow – December 10, 2010

FHWA – Who are we?

FHWA – What do we do? National Mobility Advocate highway system excellence. Formulate national program policy and content. Develop perspective and expertise to support and measure system performance. Stewards for National Highway Programs “Raise the bar” on highway and transportation system performance. Ensure financial accountability. Anticipate and meet national security needs. Deliver Federal-aid and Federal Lands Programs. Innovators for a Better Future Invest in and conduct transportation research Create an environment for, and deliver innovations in the transportation community through development of tools, technology transfer, training, and technical assistance.

Where do we hangout?

Why do we do it? Title 23 U.S.C. § 106(g)(4) (g) OVERSIGHT PROGRAM.- (4) RESPONSIBILITY OF THE STATES.- (A) The States shall be responsible for determining that subrecipients of Federal funds under this title have- (i) adequate project delivery systems for projects approved under this section; and (ii) sufficient accounting controls to properly manage such Federal funds.

TOP-TEN LISTOF LPA ISSUES 1) Based on several examples observed in multiple States, the rules of eligibility for projects should be communicated between the Division and States and local agencies. 2) Many States and LPAs have billing issues: –Some States do not review the project billings in a meaningful way, –Many LPAs are not billing in a timely manner and being slow to close out projects, –States sometimes rely on FHWA billing transaction sample reviews rather than a final project cost review.

TOP-TEN LISTOF LPA ISSUES 3) There is a lack of standardized record keeping requirements for local agencies. –Critical documents were missing from project files. (NEPA document, agency coordination letters, checklists, State LPA agreements, permits, change orders, preliminary engineering reports, construction records, diaries, records, material test reports, certified payrolls, labor compliance reviews, EEO reviews, etc) –When consultant forces are used for contract administration, the consultants typically keep the records associated with that administration after the project - leaving the owner with insufficient project documentation.

TOP-TEN LISTOF LPA ISSUES 4) Many LPAs lack the expertise to develop and implement Federal-aid projects and must hire consultants. Consultant Selection is an area filled with pitfalls. Additionally, many LPAs lack the staffing or expertise to manage their consultants and some state DOT’s were not assisting.

TOP-TEN LISTOF LPA ISSUES 5) Most States did not have a substantive review of the PS&E package prior to advertisement and award. –Required contract provisions not always checked, –Design quality and special provisions were rarely checked, –Frequently, the staffs responsible for LPA monitoring were not qualified to do substantive reviews or were assigned too many projects to accomplish reviews. 6) Design standards used by local agencies were not always approved by the STA.

TOP-TEN LISTOF LPA ISSUES Right-Of-Way 7) Several instances were observed that demonstrated problems with ROW negotiations. –Negotiations took place without the involvement of certified appraisers, –Negotiations involved a significant amount of barter- negotiations that consumed a significant amount of time resulting in project delivery delay, –In many cases, the actions were out-of-step with the Uniform Act.

TOP-TEN LISTOF LPA ISSUES Environment 8) There were multiple situations in which the environmental classification of projects appeared to understate the actual situation. –Projects were done under programmatic categorical exclusions, although it involved an historic site, recreational 4(f), sound walls, right-of-way purchase or adding capacity. –A project was done under programmatic categorical exclusion based on no ROW - although it involved 30 parcels of right of way, 18 of which had to be acquired by condemnation.

TOP-TEN LISTOF LPA ISSUES Contract Advertisement and Award 9) Clarification is often needed on what FHWA approvals can be delegated to SHAs and Local Agencies. –Use of Proprietary Products. –Shortened Advertisement period. –Procurement of construction by a method other than low bid (force account or in-house). –Use of unapproved construction specifications. –Eligibility of equipment purchased for state / local retention. –Warranty clauses –Work performed prior to FHWA authorization.

TOP-TEN LISTOF LPA ISSUES Construction Administration 10) Many state DOT’s performed limited or no construction inspections of LPA projects unless the project was on a State route. Limited or no review of change orders.

FY Magnitude of Issues, Problems and Concerns within each State (Map 3) Issues magnitude described as minor, not extensive, isolated, project specific, etc. Issues magnitude described as statewide, systemic, program wide, pervasive, extensive, etc.

Recommendations Stay the course on the Certification programs and. The most significant issue to surface is “adequate staffing”.

ARRA -Recovery Act National Review Teams – Conducting reviews on the implementation and stewardship of the Recovery Act as it pertains to LPA project administration oversight. OIG has been in efforts to gather information pertaining to our Agency’s LPA oversight reviews and initiatives. The OIG in relation to the Recovery Act has initiated a field audit. GAO

Questions?