FHWA > Federal-aid Program Administration > Major Projects > Manual for Oversight Managers > 10/5/01 Memo |
Major Projects
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As discussed with the Division Administrators at the May 2001 Business meeting, the FHWA is responsible for implementing improvements in our oversight and management of major transportation projects. Attached to this memorandum is the FHWA implementation plan. As evidenced by the plan, the improved management of major projects will rely on the sound implementation of the restated Stewardship and Oversight policy and FHWA technical assistance and technology deployment in addition to specific initiatives that will be implemented for the oversight of major projects. The plan was developed to take advantage of our existing partnerships with each State and AASHTO to allow flexibility in the actual tools and processes used to achieve sound project management. The DOT Task Force Report on the Oversight of Major Infrastructure Projects, discussions between FHWA and the Office of Management and Budget, and experiences gained in the administration of current major projects have influenced the development of the attached implementation plan. To provide additional information on the goals of Federal oversight of major infrastructure projects, the DOT Task Force Report is also attached to this memorandum. This report was shared with all division offices via email in April 2001. As you work with your State partners, please be aware of the task force recommendations, and work with your State partners to ensure that the planned development and management of these projects includes processes to achieve sound management of these projects. The existing FHWA/State Stewardship agreements, the documented State project development and financial procedures in existence in each State, and the FHWA Financial Plan guidance provide the foundation for the implementation of these recommendations. Each major project should be reviewed at its initiation to see if there are unique features or unique roles or relationships between the project sponsors that require additional documentation to ensure that these roles and responsibilities and the resultant project management processes are identified and implemented. If you have questions regarding this implementation plan, or the DOT Task Force recommendations, please feel free to contact Carol Jacoby at 202-366-1561. 2 Attachments Implementation PlanThe Federal-aid highway programs is unique in the Federal arena since the law provides the framework for the distribution of the majority of the Federal-aid funding back to the States and specifies that the States will determine which projects will be funded with the Federal-aid funds. The FHWA involvement in the review and approval of a project for funding is to verify that the project has been developed in compliance with the requirements for Federal-aid funding. The status of an individual project being funded with Federal-aid funds does not affect the amount of money a State receives in Federal-aid funding unless the proposed project is being funded through a discretionary program. The framework of the Federal-aid funding has led FHWA oversight to be done mostly in the form of program and process management oversight in lieu of project oversight, and has resulted in a State/FHWA sharing of the management of the review processes that are tailored to each State program's needs and developed to ensure projects selected for Federal-aid funding comply with all Federal regulations and policies. The benefits of program oversight is that it is an effective use of limited Federal resources, supports well managed State processes for all projects since the processes typically conform to Federal-aid requirements so there is flexibility on which projects will be funded with Federal funds, and ensures that the majority of all the transportation projects implemented have been developed with environmental considerations and extensive public involvement, and safety and operational improvements. With that as background information, the FHWA approach to improving the management of major transportation projects has four major elements:
ONE-DOT Task Force
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DOT Recommendation | FHWA Recommended Action | FHWA Lead Person | Target Implementation Date | Status |
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A.1 Incorporate Oversight of Mega Projects into DOT Strategic and Performance Plans |
FHWA discussing ways to include oversight of all projects into Strategic and Performance Plans | CM SBU | FY 2002 Performance Plan | Organizational Excellence performance plan includes items in response to Stewardship and Oversight. |
Policy SBU | New FHWA Strategic Plan - schedule not available | FHWA Quality journey includes the Division offices implementing Key Process Measures in 2002 that will provide data to guide the Divisions on the quality of the implementation of the program. | ||
A.2 DOT Executive Council provide oversight of mega projects.
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Dwight Horne has been designated to be FHWA representative. | Done | No activity by DOT Exec Council since initial meeting in calendar year 2001.
FHWA supporting bimonthly reporting process through OST. FHWA Major Project team notifies David Napoliello of FHWA Project Manager once NEPA document/ROD signed. FHWA created process for tracking projects annually for full update; quarterly updates for projects active within fiscal year. |
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Assume DOT Executive Council will discuss format of database and FHWA will implement update process. | ||||
A.3 OIG conduct an evaluation of ONE DOT mega project oversight program (implementation of ONE DOT recommendations) | ||||
B.1 Designate a dedicated DOT Mega Project Oversight Manager for each mega project who: is accountable to Senior Operating Administration officials; serves in consulting role to DOT Executive Council; is responsible for the analysis of all information on the status of the mega project. Appropriate credentials highly recommended. |
Designated Project Managers are identified for all projects and listed on project status updates. | Division Offices | Done | |
Identify training materials and providers on project management. | Major Projects Team | Done | Materials will be first installment in a Major Project Management Resource Manual. | |
Train all FHWA designated project managers. | Division Offices | See B.2 below. | If the DOT Executive Council does not provide guidance on core competencies, FHWA will develop competency framework in 2002. | |
B.2 Establish Core Competencies for DOT Mega Project Managers |
DOT Executive Council lead. | |||
B.3 Establish and charter integrated project teams under the direction of the project manager |
FHWA encourages multi-discipline approach to project development - including disciplines within sponsoring agency as well as multi-agencies.
No further action required. |
Done | Draft TIFIA program guidance will require project management plans and agency oversight agreements.
FHWA looks for indications of roles and responsibilities in the finance plans since these roles and responsibilities play into how entities will manage change. |
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B.4 Foster a culture within the Department and with recipients and other stakeholders that promotes sound project management |
FHWA distributes quarterly newsletter on mega project issues to FHWA Field offices. | Major Projects Team | Dec 2000 and June 2001 issued. | Newsletters have been prepared and distributed semiannually - since there was insufficient new information on a quarterly basis. |
Working to conduct outreach to others on project management tools | Major Projects Team for Coordination of Outreach | Requested technology deployment funds in 2002. | Major Project/Finance Plan presentations have been made at FHWA Management meetings (Dec 2000 and May 2001), FHWA/AASHTO Financial Managers meeting, and Auditing Subcommittee meeting.
Major Project team works with Divisions directly to discuss project management, status reporting processes, and leverages CA/T and others to work with Divisions in the early stages of their major project. |
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B.5 Establish Mega projects Award Program |
DOT Executive Council lead. | |||
C.1 Require recipients to submit Project Management Plans |
Interagency Project Agreements, FHWA Stewardship Agreement on Project, and Finance plans include elements of project management plan. | Division Offices | ||
FHWA to issue guidance on content of good project management plans to assist Divisions in formulating the above reference documents. | Major Projects Team | September 2002 | ||
C.2 Enter into written agreements with recipients that address the terms and conditions of Federal participation in the project; roles and responsibilities of the parties and the working relationships; and independent duty of third party experts |
Accomplished in FHWA Stewardship agreement. Where processes differ from Stewardship agreement, interagency project agreements provide that information. | Division Offices | Done | |
FHWA should make policy call on whether all major projects should have full FHWA project oversight. | December 2001 | Policy statement is needed for credibility and some clarity. Divisions still say some of these projects are normally exempt - we should be on record in saying any project over $1 billion will have full oversight. | ||
C.3 Conduct periodic, independent reviews under the direction of the Project Manager to ensure the recipient has the capability to efficiently and effectively complete the mega project without compromising the Federal government |
FHWA will issue new oversight policy Spring 2001 - that discusses FHWA independent review responsibilities for all projects. | Major Projects Team | July 2001 | Oversight policy issued June 22, 2001.
Major project team provides some additional oversight in their project monitoring activities (quarterly updates, review and discussion of monthly status reports - mainly tracking hot issues or FHWA commitments). Independent Government cost verification reviews conducted on standard Design-Bid-Build major projects. |
C.4 Operating Administrations should allow PE/Design to achieve 20-35% before approving funding for final design and construction |
For projects requiring FHWA project approval actions, FHWA does not approve construction funding prior to sufficient information for Design Build approval (typically 30% design) or completion of full design.
FHWA does approve design funding prior to 20-35% design, however final design cannot begin until NEPA process complete. |
Division Offices | Done | |
C.5 Conduct Financial Capacity Assessments prior to commitment of funds for final design and construction |
FHWA issued Financial Plan requirements in May 2000, which prohibit funding of construction prior to FHWA accepting the financial plan. | Done | FHWA Financial Plan is a plan for the project - and the impact of the proposed project on the statewide plan is reviewed to the extent necessary.
FHWA process is not a "capacity assessment" of an agency to fulfill all of its financial obligations. |
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C.6 Develop oversight processes that incorporate earned value management systems |
FHWA agrees with promoting the appropriate tools - but does not support mandating any one tool. | Major project team is building a resource manual of tools which will include earned value management. It will also include procurement options and other project management tools that provide timely reporting and resolution of issues. | ||
C.7 Designate "At Risk" when significant deviations from baseline schedule, cost estimate, funding, or significant tech/mgmt issues occur. |
FHWA has done this on CA/T; was under discussion with OST on WWB when States responded to Financial plan requirement.
FHWA will implement as needed on individual projects. |
HIF Program Manager recommends designation to FHWA Admin. | Done | |
C.8 Deny additional Federal funding awards where the recipient fails to correct deficiencies in "At Risk" - consider requiring reimbursement in extreme cases |
See comments C.7. | |||
C.9 Establish Mega projects Award Program |
DOT Executive Council lead. | |||
L.1 Provide funding for preliminary design separate from final design and construction |
DOT Lead with reauthorization proposal. | FHWA does not support. | ||
L.2 Provide financial incentives for recipients to implement comprehensive project management systems |
DOT Lead with reauthorization proposal. | |||
L.3 Authorize greater use of negotiated procurements on mega projects |
DOT Lead with reauthorization proposal | |||
L.4 Provide dedicated source of funds for Administrations to conduct independent reviews |
DOT Lead with reauthorization proposal | FHWA supports. Technical difficulty is how to provide for this since any FHWA funds can be used to fund a major project (funding not confined to single pot like FTA New Starts program). | ||
L.5 Amend TEA-21 to make it clear that FHWA has full oversight authority for all mega projects |
DOT Lead with reauthorization proposal | |||
L.6 Fund professional certifications for DOT employees engaged in mega projects |
DOT Lead with reauthorization proposal. | |||
L.7 Require recipients project management staff and outside experts to have professional credentials and be free from conflicts of interest. |
DOT Lead with reauthorization proposal |
Jim Sinnette
Office of Program Administration
202-366-0479
E-mail Jim