Economic Recovery Home > Questions & Answers > Issues Raised by State DOTs

Questions & Answers on American Recovery and Reinvestment Act of 2009 (ARRA)
Issues Raised by State DOTs

Originally issued: 1/23/09
Revision history:
1/30/09: Question 48 and Answer 48 have been updated.
2/2/09: Two new Questions and Answers have been inserted under the Funding and Eligibility category as numbers 38 and 39.
2/6/09: The response to Question 5 has been updated.
2/9/09: A new Question and Answer 8 has been added.
2/18/09: Questions and Answers 20, 30, 38 and 53 have been updated. New Questions and Answers have been added as numbers 40, 41, 42 and 61.
2/19/09: The response to Question 40 has been updated.
2/19/09: A new Question and Answer 9 has been added.
2/20/09: A new Question and Answer 62 has been added.
2/23/09: Questions and Answers 30 and 41 have been updated.
2/23/09: A new Question and Answer 31 has been added.
2/24/09: The response to Questions 16, 22, 29, 35, 40, 53, 60, and 61 have been updated.
2/25/09: New Questions and Answers have been added as numbers 34, 56, 63 and 64.
2/26/09: The response to Questions 9, 49, and 50 have been updated. New Questions and Answers have been added as numbers 24, 25, 26, 27, 32, and 33.
2/27/09: A new Question and Answer 36 has been added.
3/6/09: New Questions and Answers have been added as numbers 43, 44, 65, 66 and 67.
3/11/09: Question 44 and Answer 44 have been revised.

Planning and Environment

Question 1: What should local agencies be doing to ensure their projects are "ready to go" as part of the American Recovery and Reinvestment Act of 2009 (ARRA)?

Answer 1: In order for a surface transportation infrastructure project to advance for Federal funding, it must be included in the relevant metropolitan Transportation Improvement Program (TIP) or Statewide Transportation Improvement Program (STIP). Therefore, we strongly encourage you to reach out to your Metropolitan Planning Organization (MPO) or State Department of Transportation (State DOT) to begin work as soon as possible to ensure your projects are included in an approved TIP or STIP, so they are ready and available to advance upon the President signing economic recovery legislation. Please note that transit related projects should be coordinated with the relevant transit operating agency as well as relevant MPOs or State DOTs.

Question 2: Can the State and MPOs do public involvement; demonstrate fiscal constraint; determine conformity and other planning process steps that are needed for various scenarios prior to passage by Congress so MPOs can vote approval literally hours after the President signs the bill?

Answer 2: Yes, the State and the MPOs can do the necessary planning work such as model runs; analysis work needed for conformity, if necessary; and public involvement prior to the passage of the recovery bill by Congress. This work should have already begun. If it has not, it should be started immediately. These planning activities are eligible for SPR and PL funds. For purposes of fiscal constraint, it is reasonable to assume a doubling of Federal highway dollars based on last year's program size. Once the planning and necessary conformity work has been completed, the MPO policy boards and State DOTs may amend their plans, TIPs and STIPs even before the recovery bill is passed. FHWA, in coordination with FTA, can make any necessary conformity findings on the amended plans and TIPs, and approve the STIP amendment request prior to the bill's passage.

Question 3: Can the States and MPOs use the funds expected from the ARRA to demonstrate fiscal constraint?

Answer 3: Yes, the funds expected from the ARRA can be used to demonstrate fiscal constraint.

Question 4: Can ARRA funds be used to replace State funds in the first year of the STIP to allow that money to be used on another project?

Answer 4: Yes, provided that the State funds are then used for another transportation project within the total timeframe specified by the ARRA.

Question 5: Can ARRA funds be substituted for other Federal funds?

Answer 5: Yes, provided that the project on which the funds are to be used has not yet been obligated.

Question 6: Can the actions in Questions 4 and 5 be taken administratively?

Answer 6: Yes, provided that the action involves only a change in the source of the funds.

Question 7: Is it possible for FHWA/FTA to make conditional STIP approvals?

Answer 7: No, FHWA/FTA cannot make conditional STIP approvals, since conditional STIP approvals are not allowed under existing regulations. The planning regulations (23 CFR 450.218(b)) do allow FHWA/FTA to:

1. Approve the entire STIP;
2. Approve the STIP subject to certain corrective actions being taken; or
3. Under special circumstances, approve a partial STIP covering only a portion of the State.

However if the States and MPOs complete the steps detailed in question #1, FHWA/FTA can approve the STIP amendments immediately.

Question 8: If a State wanted to move a project, up or back, within the 4 year TIP/STIP period, would this action require a TIP/STIP amendment? Also, would this change require a new conformity determination in air quality nonattainment and maintenance areas? (added 2/9/09)

Answer 8: Projects in an approved TIP or STIP are not required to go through an amendment if the scheduled implementation of the project is changed within the four year period of the TIP or STIP. An Administrative Modification is sufficient for changing the schedule of a project in the TIP or STIP within that four year period. (23 CFR 450.220 and 450.330) In air quality nonattainment and maintenance areas, if a project is moved within the four years of the TIP timeframe using an Administrative Modification, a new conformity determination would not be required. (58 FR 62202)

However, if, through the interagency consultation process, it is agreed that the proposed changes of a non-exempt project would require a TIP amendment, then a new conformity determination is required.

If a non-exempt project is moved from the Long Range Transportation Plan into the TIP, a TIP amendment and a new conformity determination are required.

Answer 9: Since Congress has given State Highway Agencies (SHA’s) the authority to prioritize and select projects (in consultation with their MPO partners if projects are located in an MPO area), FHWA does not intend to develop or prescribe a uniform procedure for the application of this provision of the ARRA. There are multiple ways that SHA’s could decide to implement this provision.

However, FHWA has developed a diagnostic self-assessment tool that can easily be used by interested parties to determine if a state has been responsive to this requirement that Congress has included in the Act. That tool utilizes a map that depicts project locations relative to economically distressed counties.

• Example Map with Projects Added
• HEPGIS General Information Maps

Question 10: How should Federal Lands Highway (FLH) Program projects be handled?

Answer 10: FLH projects will need to follow the State STIP process as well. Work with your FLH Division offices as part of your early outreach efforts described in Question #2. In most cases, FLH program projects are in addition to the lists provided by the States. The FLH Divisions, working with the Federal partners, have identified approximately $400-500 million in potential projects nationally.

Question 11: Can FHWA adopt "Emergency" rules with regard to environmental processing to save time? Can 404/401 permits be expedited or Nationwide or Regional permits be expanded by USACE for these projects?

Answer 11: No, FHWA cannot adopt emergency procedures. The emergency action procedures referred to in 23 CFR 771.131 only apply to emergency circumstances addressed in the Council on Environmental Quality (CEQ) regulations 40 CFR 1506.11. CEQ is unlikely to consider all ARRA projects as emergency, unless they are true emergencies under unique circumstances.

As for Clean Water Act Section 404 permits and 401 authorizations, many minor projects do not require permits or already qualify under Nationwide permits. Many States have funding arrangements and agreements with the Corps of Engineers and the State environmental agencies, and they can address expedited processes for projects in the recovery package through prioritization. It will not be practical to get Section 404 processes altered solely for the economic recovery package.

Question 12: Can all Categorical Exclusions (CE) be delegated to the States?

Answer 12: No. We will have to stay within the bounds of the statutory provisions. CE delegation is addressed in SAFETEA-LU, and most States did not see an advantage in pursuing such delegation. Many minor projects may already be covered under the Programmatic Categorical Exclusions as per agreements with the States. For the remaining projects, the documentation preparation is more time consuming than the FHWA approvals at the Division office.

Question 13: What if FHWA or the States are challenged on the cumulative impacts of such a large investment package like this? Are we prepared to address this issue?

Answer 13: The ARRA provides funding for delivering the "ready-to-go" projects. The package itself cannot be challenged under NEPA, as it will be an Act of Congress. Individual projects are subject to legal provisions and can be challenged like any other project that is outside of the recovery package. "Ready-to-go" may have been advanced through environmental processes already or do not require any major environmental review. For these reasons, they are unlikely to be challengeable solely because they are part of a large investment package.

Question 14: To the extent that projects are dependent on permitting to go forward, what can be done from HQ to work with the resource agencies to expedite the permitting process?

Answer 14: FHWA will meet with each of the resource agencies primarily involved in the project level permitting of highway projects, and discuss how they can help expedite the permit process for the potential ARRA. We will pass on any advice to the Division offices based on our discussions with the resource agency personnel.

Question 15: Are there any streamlining measures or waivers that can be granted when post-NEPA right-of-way acquisition has not been completed?

Answer 15: Yes. The regulations at 23 CFR 635.309 allows for an authorization to be issued while the State DOT continues to acquire the necessary right-of-way post-NEPA. In those cases where the right-of-way acquisition may not be finalized the bid documents should clearly specify those parcels that may not be available along with estimated dates for possession. State DOTs should consider the actual construction start date to determine when the property will actually be needed. For those parcels that have occupants of residences, businesses, farms or non-profit organizations who have not moved from the right-of-way, the bid proposal must include provisions to protect them from disturbance or inconvenience. The State DOTs are encouraged to consider the use of incentives to assist in right-of-way acquisition and relocation. Such incentives could include administrative settlements, acquisition and relocation incentive payments when allowed by State law, temporary moves or other innovative measures as the State DOT may propose.

Funding and Eligibility

Question 16: Will the ARRA funds be 100% Federal share? (updated: 2/24/2009)

Answer 16: Yes, at the option of the recipient, ARRA funds may be used for up to 100% of the total cost.

Question 17: Is there a problem with the definition of obligation for MPO activities?

Answer 17: Because there is no statutory definition for obligation as it relates to planning, the Divisions should work with the States to be as flexible as possible on this issue based on each MPO's Unified Planning Work Program.

Question 18: Will FHWA have the ability to advance ARRA funds to States and local governments to accommodate States that don't have the cash up front to proceed?

Answer 18: Federal-aid program funds are provided to the State on a reimbursement basis only.

Question 19: Can States use these funds for winter or other maintenance?

Answer 19: Federal-aid funds may not be used for routine maintenance activities. However, activities considered to be preventative maintenance are eligible for Federal-aid funding. The term "preventative maintenance" is defined as those activities that are a cost-effective means of extending the useful life of a Federal-aid highway

Question 20: If the State wants to take projects that are currently funded with State transportation dollars (in this case State funds that, by law, can only be spent on transportation) and make them ARRA projects and then move their State transportation funds to other transportation projects is that still considered supplanting State funds? (updated: 2/18/2009)

Answer 20: Under the scenario described, if the State's maintenance of effort is not decreased, the ARRA funding would be considered to supplement and not supplant the State funds provided that the State funds are then used for another transportation project within the timeframe specified by the ARRA.

Question 21: How will the States consider local projects in this identification of ARRA projects?

Answer 21: In general terms, local projects are eligible for Federal-aid funds. Therefore, the States will need to provide outreach to the local agencies to ensure that their projects are considered and programmed, as appropriate.

Question 22: If these are General Fund dollars, what specific Title 23 requirements apply? Will FHWA "relax" other Title 23 Federal requirements in order to move these projects quickly? (updated: 2/24/2009)

Answer 22: The ARRA funded projects are required to follow all normal Federal-aid funding requirements. In addition, all ARRA funded projects must include Davis-Bacon wage rates.

Question 23: Section 101 of Title 23 provides a specific list of eligible construction activities. Can you provide a similar list for the ARRA Program? Are preliminary engineering and ROW eligible for recovery dollars?

Answer 23: The list of eligible construction activities in Section 101 of Title 23 will apply, including projects for preliminary engineering, right-of-way acquisition, intelligent transportation systems, traffic signalization, and signage.

Question 24: Does the American Recovery and Reinvestment Act of 2009 (ARRA) provide additional funds for the Highway Safety Improvement Program (HSIP)? (added: 2/26/2009)

Answer 24: No. While the ARRA does not provide funding specifically for the HSIP, HSIP eligible activities, as contained in 23 U.S.C. 148(a)(3)(B) are eligible for ARRA funding. The ARRA provides an additional $27.5 billion for restoration, repair, construction, and other activities eligible under the Surface Transportation Program (STP): 23 USC 133 (b). These funds can be used for highway safety infrastructure improvements and programs on all public roads.

Question 25: Are highway safety projects explicitly eligible for ARRA funding?(added: 2/26/2009)

Answer 25: Yes. A state may obligate STP funds for construction and operational improvements, highway safety improvements (e.g., rumble strips) and programs (e.g., data system improvement, strategic highway safety planning), hazard eliminations, projects to mitigate hazards caused by wildlife, railway-highway grade crossings, traffic control measures (e.g., improved signs and markings), intersections on federal-aid highways with high accident rates, and other surface transportation projects.

Question 26: Do safety projects funded by ARRA need to comply with 23 CFR Part 924? Must the project be included in the state Strategic Highway Safety Plan? If a project was initially planned as a High Risk Rural Roads Program (HRRRP) project, must it meet HRRRP criteria?(added: 2/26/2009)

Answer 26: No. ARRA projects will follow rules for STP. However, any funding the state is spending on safety should, in theory, be aligned with the priorities and strategies in their SHSP.

Question 27: Are there funds in the highway portion of the Act intended for behavioral safety program activities?(added: 2/26/2009)

Answer 27: No. There are no ARRA funds directed at behavioral safety program activities, but HSIP funds, under certain conditions, can be used to support behavioral strategies that are included in the State Strategic Highway Safety Plan.

Question 28: Is there a requirement that last year's special bridge funding be obligated before ARRA funds are used for bridge work?

Answer 28: No.

Question 29: What happens to ARRA funds that have not been obligated by the due date? (updated: 2/24/2009)

Answer 29: There are redistribution requirements after certain timeframes. For most types of funding, funds not obligated by September 30, 2010 will lapse and funds not expended by September 30, 2015 will expire. See the implementing guidance for more details.

Question 30: Can ARRA funds be used to convert Advance Construction (AC) balances, particularly when a State is experiencing or anticipating cash flow problems? (updated: 2/23/2009)

Answer 30: No. AC conversions or AC authorizations may not exist on any part of a project funded by ARRA, including via a separate project number.

Question 31: Can a State cancel a prior AC authorized project and obligate ARRA appropriations and/or other Federal-aid funds on a project that meets Federal Requirements? (added: 2/23/2009)

Answer 31: AC authorizations approved prior to February 17,2009, that have not incurred any obligations of Federal-aid funds (i.e. no "conversions") may be cancelled (withdrawn) by the Division and then a new authorization/obligation of ARRA funds may be established which covers the anticipated contract costs under project agreement (including projects funded with both ARRA funds and other Federal-aid funds). Note that such authorizations may not include an effective date prior to the date of obligation of the ARRA funds and may only include work performed after obligation of funds.  Also, a new AC project may not be authorized as part of a project authorized with ARRA funds.  Note also that the ARRA “maintenance of effort” requirements must be considered for any state funds that have been freed up.

See Question 41 for more details concerning split funding.

Question 32: May normal federal-aid funds be de-obligated from a project to obligate ARRA funds?(added: 2/26/2009)

Answer 32: Only under extremely limited circumstances for projects that were authorized for Federal-aid funding prior to passage of the ARRA and if the State provides documentation to the Division Office that demonstrates that the ARRA funds cannot be fully utilized except through de-obligation of other Federal-aid funds on a project may this be considered under one of the following circumstances:

• The project must not have been advertised, or

• the project has been withdrawn from advertisement before opening of bids, or

• bids have been opened on the project but there was no successful and responsive bidder identified.

Bids that have been opened with a successful and responsive bidder cannot have the funding authorizations changed in this manner. The effective date of the new authorization is the date of obligation for ARRA funds and only cost incurred after the date of obligation of ARRA funds may be reimbursed. No AC may be used as a funding source on the project. Also, "maintenance of effort' requirements must be considered for the overall State program.

Question 33: Can non federal-aid funded projects be converted to ARRA funded projects if it has met all federal requirements?(added: 2/26/2009)

Answer 33: Yes. Non Federal-aid funded projects may be converted to ARRA funded projects only if the projects meet and have documented compliance with all Federal-aid requirements. The effective date of eligibility of ARRA funds is the date of obligation of such funds and no prior expenditures may be reimbursed. If all federal-aid requirements have not been met, then the project cannot be "federalized" and use ARRA funds.

Question 34: Can bond projects authorized under 23 U.S.C. 122 use ARRA funding? (added 2/25/2009)

Answer 34: Similar to the response in Question 31 concerning the use of AC, projects that utilize bond and other debt instrument financing can only use ARRA financing if there has been no "conversions" and no AC is authorized on the project.

Question 35: If the ARRA package extends over multiple years, how will multi-year projects that have construction components set to go in 2009 be treated? Would the recovery funds be eligible to substitute for the State funds (not just a cash strapped situation) – a.k.a. AC conversion – for the 2009 construction or later elements? (updated: 2/24/2009)

Answer 35: Any unobligated balances will be withdrawn after one year and redistributed. No AC authorizations/conversions are permitted on ARRA projects. See the implementing guidance for more details. No funds will be available for additional obligation after 9/30/2010.

Question 36: If AC was used on earlier phases of a project (i.e., PE, ROW), can a separate ARRA funded contract/project authorization be executed for the construction phase? (added: 2/27/2009)

Answer 36: Yes. A separate and new project authorization can be executed using ARRA funds even if prior phases have used AC provisions. A separate Federal-aid project authorization/agreement should be used for the ARRA project. Again, no conversion of the AC work on the other phases can occur with ARRA funding and ARRA funding is only eligible for costs incurred after obligation of ARRA funds.

Question 37: Beyond advancing pure construction projects what other types of projects or operational considerations should the States be considering?

Answer 37: The use of operational strategies to mitigate the traffic impacts of the expanded program, and inclusion of ITS or other operational elements in larger infrastructure-oriented projects are important considerations which should be examined during the identification and development of recovery projects.

The investment in ARRA will likely result in a significant increase in work zones over the next couple of years. We should make every effort to avoid degrading the safety and operations of the system and assure that the economic benefits of the recovery are not offset by work zone delays. The Divisions should be advocating the concepts and tools of the Work Zone Mobility Final Rule, use of Traffic Incident Management techniques, and improvements in traveler information systems. These can significantly reduce the potential network congestion which might occur when a large number of projects are on the system at the same time.

There is also an opportunity to include operational elements in larger projects or advance them as stand alone projects. Examples include traffic signal upgrades, traffic monitoring and weigh-in-motion equipment, ramp metering, dynamic message signs, road weather information systems, and similar projects. Many operational investments require limited or no environmental review time, making them very attractive for quick deployment.

The HQ Offices of Transportation Operations and Transportation Management are prepared to assist the Division offices in advancing these operational investments.

Answer 38: The link below provides a chart that shows how funds will be suballocated under the ARRA.

• Distribution of Highway Funds under American Recovery and Reinvestment Act of 2009

Answer 39: The President's agenda for homeland security includes an area called Build-in Security under the Modernize America's Aging Infrastructure Section. Therefore, it might be prudent to add security and emergency response enhancements to projects that are undertaken with ARRA funds. Some enhancement examples are:

• Security:

  • Adding lighting, fencing, cameras, other surveillance capability to deter/deny access to facilities and structures;
  • Developing standoff from and barriers to critical structures and key components;
  • Shielding critical components.

• Emergency Management:

  • Improving contra flow capability by building cross-over lanes, adding access denial gates/barriers, and installing opposite lane signage;
  • Increasing bridge weight capacity on routes used for emergency response vehicles and equipment;
  • Replacing/improving structures that are repeatedly subject to seasonal event failure (i.e., bridges and roads that wash out annually due to flooding).

Question 40: If a project under-runs and frees up ARRA funds within the period of availability of the funds, does that money go back into the available funds to reobligate on other projects in the State? Also, will States be able to use project under-runs to cover project over-runs after the period of availability? (updated: 2/24/2009)

Answer 40: Funds remain available through September 30, 2010, but are subject to redistribution requirements contained in the ARRA. Deobligated funds are available for reobligation to another ARRA eligible activity within the State only during the period of availability. Once the period of availability has expired, funds will not be permitted to be reobligated. Obligated balances are available for expenses incurred until September 30, 2015, at which point any remaining balance will be canceled.

Question 41: Will there be a restriction on using both regular funds and ARRA funds on the same project? (revised: 2/23/2009)

Answer 41: Projects may be split funded with ARRA funds and other Federal-aid funds with the exception of using AC provisions. More specifically, no AC of any Federal-aid Funds may be included on any project that includes ARRA funds (including under separate project number).  The federal share for each funding category is subject to its own limitations.  Please note that ARRA funds cannot be used as the non-federal match for other Federal funds.

Question 42: Are projects eligible for construction funding with ARRA funds if right-of-way was acquired with State and local funding (through advance or early acquisition and in advance of the project agreement and/or final environmental approval)? If so, is the right-of-way cost incurred by the State or local government eligible for federal-aid reimbursement? (added: 2/18/2009)

Answer 42: Yes, these projects would be eligible for ARRA funding provided applicable statutory and regulatory requirements have been met. The regulations at 23 CFR Part 710 provide the requirements applicable for hardship acquisitions, protective buying, and early acquisitions that may be available to expedite the delivery right-of-way for ARRA projects (see 23 CFR 710.501 and 23 CFR 710.503). As is true for all federal aid eligible projects, acquisition must be undertaken in compliance with the requirements of Title 23 and Title 49 of the U.S. Code and implementing regulations. This necessitates, among other requirements, that the acquisitions comply with the Uniform Act and not affect the Project's environmental assessment. Federal reimbursement for the value of the right-of-way previously acquired or donated to the project is permitted only to the extent described in those regulations.

Question 43: What are the specific deadlines for obligating funds prior to the required 120-day and one-year redistributions of funds under the ARRA? (added: 3/6/2009)

Question 44: How does Section 1602 differ from the FHWA-specific redistribution provisions? (revised: 3/11/2009)

Answer 44: Section 1602 of the ARRA states that "recipients shall give preference to activities that can be started and completed expeditiously, including a goal of using at least 50 percent of the funds for activities that can be initiated not later than 120 days after the date of the enactment of this Act." This is in essence an advisory general provision for consideration. The more specific obligation deadlines and redistribution requirements under the FHWA-specific heading under Title XII of the Act are the requirements that must be met for highway funding (see Q43).

Project Authorization and Contracting

Question 45: What design elements or standards can be waived or streamlined?

Answer 45: The projects funded under the bill will need to be developed and designed in a manner that complies with the design standards adopted by the State DOT and approved by FHWA. Current law and regulations does not allow for design standards or design exceptions to be waived.

All new construction, reconstruction and resurfacing, restoration, and rehabilitation (3R) type of projects that use Federal-aid funding on multilane limited access freeways, including Interstates on the National Highway System (NHS) must comply with the FHWA adopted design standards. The design standards adopted by the FHWA can be found in 23 CFR 625. Non-freeway 3R projects may be constructed in accordance with FHWA-approved AASHTO standards for new and reconstruction projects, or in accordance with FHWA-approved individual State standards developed pursuant to 23 U.S.C. 109(o) and 23 CFR 625. For projects that are not on the NHS, Title 23 USC 109 provides that these projects shall be designed, constructed, operated, and maintained in accordance with State laws, regulations, directives, safety standards, design standards, and construction standards. Americans with Disabilities Act requirements are applicable.

Question 46: Will FHWA consider waiving or expediting any steps in the consultant contracting process to help States move these projects more quickly?

Answer 46: The projects funded under the bill will need to be procured, negotiated and managed in a manner that complies with the Federal laws and FHWA regulations. In addition these projects will also need to comply with the adopted State laws and procurement policies and procedures (as per the provisions specified in the Uniform Administration Requirements for Grants and Cooperative Agreements to State and Local Governments (49 CFR 18)) as previously approved by FHWA. Current Federal laws and FHWA regulations do not allow for the normal waiving of procurement and contracting requirements.

Question 47: Can we assume by the answer to Question 46 that the Brooks Act, Simplified Acquisition and other requirements would be applied as they are currently?

Answer 47: Yes. That was our intent in the "… in a manner that complies with the Federal laws and FHWA regulations" and other portions of the original answer.

Question 48: How should recipients administer their DBE programs in the context of the potentially large increases in funding that may become available as the result of the proposed ARRA package?

Answer 48:

• The DBE program and regulations will apply to Federally-assisted contracts receiving funds from the ARRA. All of a recipient's funds - whether derived from SAFETEA-LU or the recovery package - should be viewed as part of a single, combined funding base to which DBE goals apply.

• Given the flexibility built into the DBE regulations, recipients can successfully administer their DBE programs under these rules in the context of funding increases provided by the recovery legislation. Particularly because a major purpose of the legislation is to increase opportunities for businesses and workers in a challenging economic climate, the Department expects recipients to do so.

• The Department is aware of concerns expressed by recipients that there may not be sufficient availability of certified DBEs to meet existing overall goals, as applied to recipients' expanded programs.

• To help address such concerns, recipients should begin, as soon as possible, outreach to affected persons. This outreach should include dialogue with representatives of the contracting industry and the DBE community to begin to understand recipient-specific issues. This outreach will allow recipients and DOT operating administrations to be better prepared to react to Congressional direction in new legislation.

• Recipients should make use of race-neutral measures, such as small business programs, owner-provided insurance, technical and financial assistance, and unbundling of contracts to increase the ability and capacity of DBEs and other small businesses to perform contracts receiving recovery package funding. The Department of Transportation's Office of Small and Disadvantaged Business Utilization also operates a short-term lending program, which can help to increase DBE capacity.

• Recipients should take steps to mobilize underutilized DBE capacity:

  • Recipients should reach out to firms that may potentially be eligible for DBE certification, but are not yet part of the program, urging them to apply.

  • Recipients should expedite the processing of applications for certification.

  • In many cases, there are substantial numbers of certified firms that are seldom used on contracts. This can be an additional source of DBE capacity. Recipients should make vigorous efforts to work with such firms and prime contractors to take advantage of this resource.

  • Recipients and prime contractors should be as inclusive as possible in utilizing all available DBE firms, not ruling certified firms out based on preconceptions about their competence to do a particular job.

• Recipients should use existing regulatory tools to address concerns about capacity:

  • Recipients can take the projected availability of DBEs for any particular contract into consideration in determining the contract goal for that contract. This is consistent with the existing regulation (see 49 CFR 26.51(e)(2)).

  • If a bidder on a prime contract cannot find sufficient certified DBE participation to meet a contract goal (e.g., because all DBE capacity for the types of work involved is absorbed by other projects), the bidder can meet DBE requirements by documenting its good faith efforts to find DBE participation. This is also consistent with the existing regulation (see 49 CFR 26.53(a)(2)).

  • The Department believes that modifications to overall goals will be needed rarely, if at all, to deal with administration of recovery package funds. It is important to remember that recipients are not penalized for failing to "hit the number" with respect to overall goals, as long as they are operating their programs in good faith (see 49 CFR 26.47). However, if a recipient believes it necessary to adjust an overall goal, it could propose such an adjustment to the relevant DOT operating administration. The requirements of 49 CFR 26.45 would apply to such an adjustment.

• Recipients should communicate regularly with DOT agencies concerning operating their DBE programs in context of recovery package funding. If a recipient believes that is has problems or issues that are not addressed by the DOT regulations or program guidance, the recipient should contact the relevant operating administration to discuss the matter.

49 CFR 26.45, 26.47, 26.51, 26.53

Question 49: What is the most expeditious timeframe that the States can use to advertise projects? (updated: 2/26/2009)

Answer 49: Although the States may have their own laws that require a longer period, under Federal regulation, Division Administrators have the discretion to allow States to use a reduced timeframe, based on the provision, as follows:

23 CFR 635.112 Advertising for bids and proposals.

(b) The advertisement and approved plans and specifications shall be available to bidders a minimum of 3 weeks prior to opening of bids except that shorter periods may be approved by the Division Administrator in special cases when justified.

In general, contracting agencies should consider advertising periods longer than three weeks for large complex projects with difficult scheduling, construction sequencing or cost estimating issues. Contracting agencies may consider advertising periods less than three weeks for relatively small, simple projects, such as resurfacing projects. In most circumstances, a time period of less than 14 days is not reasonable to gain responsive bids.

Question 50: Will FHWA provide assistance to the States to address the need to use consultants to do materials testing Quality Assurance (QA)/Quality Control without detailed State oversight? (updated: 2/26/2009)

Answer 50: Funding for consultant services should be from the State's Federal-aid dollars related to each project. As always, States have been able to hire consultants to manage their QA program, however, 23 CFR 637 requires that the States are ultimately responsible. The consultant technicians are required to be qualified. The State's consultant lab must be qualified and the State has to provide oversight of the consultant lab and review their data. In addition, the technicians have to be included in the states Independent Assurance program. The state will need someone responsible for QA but they themselves do not have to do the testing or the analysis only the review.

Question 51: How will FHWA view a design-build project as meeting the timing requirements? (updated: 2/26/2009)

Answer 51: Timing requirements of the ARRA for redistribution of funds is based on obligation of funds. The ARRA requires in general that "priority shall be given to projects that are projected for completion within a 3-year time frame" and also "recipients shall give preference to activities that can be started expeditiously..."

Question 52: Can the State utilize the AC provisions in order to advertise a project at their own risk while retaining the ability to "Federalize" the project when the recovery funds become available?

Answer 52: No. The ARRA contains a prohibition from use of those funds on AC projects. See Question 53 for the process to use to pursue the ARRA projects before funding becomes available.

Question 53: How can the State advertise a project at their own risk while retaining the ability to "Federalize" the project when the recovery funds become available? (updated: 2/24/2009)

Answer 53: The State can proceed at its own risk to advertise a project without Federal authorization in anticipation that the ARRA funds will be provided. When the ARRA funds are made available, the State could obligate ARRA funds provided the project meets all requisite Federal requirements. The State would be reimbursed for costs incurred from the point at which ARRA funds are obligated for the project. In order to address the requirements of 23 CFR 635.112(a), the Division offices should provide prior written concurrence (by letter or memo) of the State's intent to proceed with advertisement of the projects. Note: ARRA funds are not eligible for costs incurred prior to obligation of the ARRA funds.

Question 54: Based on past practices of authorizing funds for large and significant projects with multiple conditions, we have obligated funds on prior "high priority" projects with conditions such as not having an approved finance plan, an approved project management plan, incomplete design exceptions, typical sections, and incomplete portions of the RFP to be added later thru addendums. How far are we willing to go with the ARRA projects?

Answer 54: It is not appropriate to provide a blanket waiver of FHWA project requirements for ARRA projects. Again, case-by-case situations should be considered and programmatic waivers of requirements should be avoided.

Question 55: Can FHWA authorize funds after RFP's have been released for bid for design build projects, or after the PS&E has been advertised for low bid? Or, can FHWA authorize funds if the project has been awarded but notice to proceed has not been issued and no costs incurred?

Answer 55: See Question 53 for information related to this question.

Question 56: Can ARRA funds be used on local roads and rural minor collectors? (added 2/25/2009)

Answer 56: In accordance with 23 U.S.C. 133(c), the funds may not be used on roads functionally classified as local or rural minor collectors except as follows:

• Such roads that were on a Federal-aid highway system on January 1, 1991 (23 U.S.C. 133(c));
• Bridges on public roads of any functional classifications (23 U.S.C. 133(b)(1));
• Carpool projects, fringe and corridor parking facilities and programs, bicycle transportation and pedestrian walkways in accordance with section 217, and the modification of public sidewalks to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) (23 U.S.C. 133(b)(3));
• Highway and transit safety infrastructure improvements and programs, hazard eliminations, projects to mitigate hazards caused by wildlife, and railway-highway grade crossings (23 U.S.C. 133(b)(4));
• Transportation enhancement activities in accordance with 23 U.S.C. 101(a)(35) (memorandum dated July 28, 1999, approved October 25, 1999);
• As approved by the Secretary (i.e., earmarks and transportation enhancement activities) (23 U.S.C. 133(c)); or
• Projects eligible under 23 U.S.C. 601(a)(8) in accordance with Division A Title XII of the ARRA.

Section 1108(f) of TEA-21 is not applicable to ARRA funds.

Project Management and Oversight

Question 57: Do MPOs have the capacity to help with the oversight and management of these projects if funding is provided directly to the locals within MPO boundaries without passing through the State?

Answer 57: The MPOs in nearly all cases do not have the capacity to help with the oversight and management of projects as the MPO's primary function is almost always limited to planning and programming, not project management. They simply don't have the experience or expertise. The responsibility for oversight and management of individual projects resides with the State DOT and the designated recipient transit agencies. In some cases, a larger local government may have some ability to oversee and administer a Federal-aid highway project; however it is ultimately the responsibility of the State DOT to see that Federal requirements are being met on a highway project.

Question 58: Will there be any implications from the ARRA on how indirect costs are allocated?

Answer 58: For a division who's State DOT recovers indirect costs via approved indirect cost allocation plans (ICAP), we recommend you begin discussions with your State to identify and mitigate potential effects the ARRA may have on your indirect cost allocations. By regulation, 2 CFR 225 Attachment E points out the need to properly account for "extraordinary or distorting expenditures" (see paragraphs B and C of Attachment E) in order to ensure an equitable distribution of indirect costs to all benefiting cost objectives (Federal and non-Federal awards/activities).

Not making allowances for the one-time infusion of significant amounts of Federal dollars into the Federal-aid Highway Program will likely result in a significant over-recovery of indirect costs in FY 2009 that will have to be recovered at a later time.

Even if your State does not use an ICAP, the ARRA may have an effect on local public agency (LPA) indirect cost recovery, and you may wish to also discuss this issue with your State for their consideration in reviewing, negotiating and approving rates of LPAs.

Question 59: Are there specific actions that States should be considering related to tracking these ARRA funded projects in case of audit?

Answer 59: In addition to the normal stewardship and oversight that is applied to the administration of projects, Division offices and States should engage in discussions about the plan of actions each will take to pay special attention to the ARRA funds. We suggest that attention is given to tracking the use of funds on projects from start to finish, e.g. types of projects (with some detail regarding the description or scope of work), when various project activities (like advertising, award, notice to proceed, etc.) begin and/or end, how many people are employed during the various of phases where these funds are used, etc. For this administrative effort, details are suggested versus streamlining. There will probably be requests for many different cuts of information regarding use of the ARRA funds and benefits to the economy. In addition, the Division offices and States should include the locally-administered projects in tracking the projects that use the ARRA funds.

Question 60: Within what timeframe will State funds need to be spent to demonstrate the "maintenance of effort" requirement? (update: 2/24/2009)

Answer 60: Within 30 days of enactment of the ARRA (February 17, 2009) the Governor of the State will certify "Maintenance of Effort." See the implementation guidance for additional details.

Question 61: If a project has already been authorized, let, and under construction using non-economic stimulus federal funding, can stimulus funding be used to fund a subsequent construction change order on the same project? (added: 2/24/2009)

Answer 61: Overall, ARRA funds may be added to a project authorized with other Federal funds for amounts over and above the original cost estimate, based upon a legitimate project milestone, such as contract award date, change orders, cost overruns, etc. ARRA funds are only eligible for change order costs incurred after the date that the funds are obligated to the project. As with any other Federal-aid funded project, it is important to determine if it is appropriate to add such work to an existing project or if it is appropriate to advertise the work as a separate contract. Caution should be used in exercising this option, since the project will be encumbered with the reporting requirements associated with all ARRA projects.

Answer 62: Yes, guidance is available for an MUTCD compliant construction sign that the States may use if they wish to sign ARRA projects. Additional information may be found at the links below:

• ARRA Sign Detail (351 KB pdf)
• ARRA Sign Guidance

Question 63: Does Davis-Bacon apply to truck drivers and off-site manufactured items? (added 2/25/2009)

Answer 63: Davis-Bacon prevailing wage requirements apply to all ARRA funded projects. All US Department of Labor policies for implementing Davis-Bacon provisions are applicable. Davis-Bacon provision are applicable to all truck drivers working on the site of the work (as defined in 29 CFR 5.2 - l ). Truck owner-operators are not are not covered by Davis-Bacon provisions. Davis-Bacon provisions would not extend to off-site facilities unless a significant portion of the construction took place at that facility (see 29 CFR 5.2 - l).

Question 64: Does force account work require reporting under S. 1554 (competitive bidding) of the ARRA? (added 2/25/2009)

Answer 64: Contractor force account work, whereby the contract was competitively bid and the contracting agency is issuing a change order to pay for work where the quantities are not known and/or difficult to estimate, will not require posting on the website. Any use of "public agency force account" would trigger the Section 1554 criteria, and require posting on the website.

Reporting

Question 65: How will data on direct jobs be collected? (added 3/6/2009)

Answer 65: FHWA, States and Federal Lands will utilize FHWA Form 1586 to collect data from contractors, subcontractors, engineering firms and the States themselves. For any project or activity that receives FHWA funds from ARRA, the employer must complete a Form 1586 for any month where associated employment occurs.

Question 66: How will indirect jobs be estimated? (added 3/6/2009)

Answer 66: FHWA will utilize the Form 1586 and Bid Data to estimate the indirect jobs. Individual States and projects should not estimate indirect jobs independent from FHWA. Only the FHWA estimated indirect jobs will be reported to Congress under ARRA Section 1201.

Question 67: How will employment associated with Local Project Authorities be handled? (added 3/6/2009)

Answer 67: The local project authorities are subject to the same maintenance of effort provisions of ARRA, and employees and contractors must complete FHWA Form 1586 and file it with the State that provided the funds.