Memorandum

Subject:	INFORMATION: Major Project Guidance and the Division Right-of-Way Function	Date:	February 6, 2006
	ORIGINAL SIGNED BY:
From:	E. Joseph Edwards Field Services Team Leader Office of Real Estate Services	Reply to Attn. of:	HEPR
To:	Division Realty Professionals

The purpose of this memorandum is to provide guidance concerning the roles of Division Realty and the Office of Real Estate Services Staff regarding the management of Major Projects and in particular Federal Highway Administration's (FHWA) memorandum "Issuance of Interim Major Project Guidance" dated January 27, 2006 (copy attached).

Guidance:

The FHWA memorandum, "Issuance of Interim Major Project Guidance" was transmitted to Division Administrators on January 27, 2006. In part, the memorandum provides guidance concerning actions to be taken by FHWA Division Offices to "...strengthen the State transportation agency's (STA) specific Major Project management team's ability to forecast challenges and proactively manage the project, so that decisionmakers will have the ability to recognize the need for (and then act upon) meaningful and timely changes, when necessary."

In order to insure that the States' Project Management Plans and Financial Plans adequately address

right-of-way project development activities and costs it is suggested that Division Realty Staff consider the following:

Right-of-Way Staff will be a member of the Division's Major Projects Team (MPT) and will provide:

Ongoing monitoring and assistance to the State to insure that right-of-way and related project development processes are carried out in a manner consistent with the stated purpose of the Project Management Plan. That Plan's purpose is "...to clearly define the roles, responsibilities, processes, and activities, which will result in the Major Project being completed on time, within budget, with the highest degree of quality and safety, and in a manner in which the public trust, support and confidence in the project will be maintained."
Guidance concerning the State's Right-of-Way cost estimating process and its utilization.
Review of the right-of-way cost estimate submitted by the State for each Major Project to include an assessment of its accuracy and reliability.

As part of, or coincidental to, the environmental impact statement (or other study) Division Realty Staff should require the State to provide a right-of-way cost estimate for each project alternative. As part of its review of the Final EIS, the Division right-of-way staff must insure that a reliable assessment of right-of-way costs associated with the preferred alignment alternative is provided. This evaluation could be completed by the Division right-of-way staff or an entity independent of the State's project development team.

Prior to authorization of the Major Project's right-of-way phase Division right-of-way staff shall insure that the Project Management Plan and Finance Plan accurately reflect projected right-of-way costs in accordance with FHWA standards for such estimates.

The Office of Real Estate Services staff is available to assist Division Office right-of-way staff in evaluating States' cost estimating processes or in any capacity as appropriate.

The interim guidance of January 27, 2006, may be amended as FHWA gains in experience with Major Projects. Accordingly, the roles of Division and Real Estate Services staff may also change.

Background:

As discussed in FHWA's memorandum " Issuance of Interim Major Project Guidance" dated January 27, 2006, the requirement for Project Management Plans (PMP) and Annual Financial Plans are contained in section 1904(a) of SAFETEA-LU. This provision amends 23 U.S.C. 106(h), as follows:

"(h) MAJOR PROJECTS.-

"(1) IN GENERAL.-Notwithstanding any other provision of this section, a recipient of Federal financial assistance for a project under this title with an estimated total cost of $500,000,000 or more, and recipients for such other projects as may be identified by the Secretary, shall submit to the Secretary for each project-

"(A) a project management plan; and

"(B) an annual financial plan.

"(2) PROJECT MANAGEMENT PLAN.-A project management plan shall document-

"(A) the procedures and processes that are in effect to provide timely information to the project decision makers to effectively manage the scope, costs, schedules, and quality of, and the Federal requirements applicable to, the project; and

"(B) the role of the agency leadership and management team in the delivery of the project.

"(3) FINANCIAL PLAN.-A financial plan shall-

"(A) be based on detailed estimates of the cost to complete the project; and

"(B) provide for the annual submission of updates to the Secretary that are based on reasonable assumptions, as determined by the Secretary, of future increases in the cost to complete the project...."

Also attached are additional documents that you may find useful in understanding the guidance covered in the memorandum.

Check List of Major Project Questions
Memorandum: Projects Financial Plan Requirements Under SAFETEA-LU
Project Develop Process
Template for Reporting Planning Cost Estimates

Questions on this guidance may be directed to the Office of Real Estate Services Point of Contact serving your Division, or Joseph Edwards, Field Services Team Leader, at (202) 366-2042 (e-mail joseph.e.edwards@fhwa.dot.gov).

Attachment