Effective Date: 

 June 28, 2005 

SUBJ: Airport Improvement Program Handbook 

1. PURPOSE. This Order provides guidance and sets forth policy and procedures to be used in 

the administration of the Airport Improvement Program. Several FAA Orders and Advisory 

Circulars are referred to in this directive. The references appear as the basic publication 

number without any suffix. However, the latest issuance of the publication should be used as 

the reference. 

2. DISTRIBUTION. This Order is distributed electronically to all addresses of the

ZRP-510 special distribution list and to all Airports District Offices. 

3. CANCELLATION AND EXPLANATION OF CHANGES. Order 5100-38B, Airport 

Improvement Program Handbook, dated May 31, 2002, and Change 1, dated 

January 8, 2004, are cancelled. In addition, Order 5100-38B, Change 2 dated May 16, 2005 

replaced in its entirety. Except for an updated cover, Order 5100-38C is identical to the 

 Change 2, which both include new policy changes within Vision 100 – Century of 

 Flight Authorization Act of 2003, Public Law 108-176. 

4. FORMS AND REPORTS. Virtually all forms and reports are generated by the Airport 

Improvement Program grants management system. Eventually, all forms will be automated 

as we move to e-commerce. Most of the forms depicted in the Appendices are in digital 

format and can be completed in a word processing program. Hard copies of many of the 

forms will continue to be available as long as needed. When we transition to electronic 

processing of the grant program, all forms will be available on the web and will be available 

for sponsors to complete and submit online. 

Dennis E. Roberts 

Director, Airport Planning 

 and Programming 

Distribution: Electronically to ZRP-510: A-FAS-1 (MAX) Initiated By: APP-520

U.S. DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION ORDER 

5100.38C

1
 

RECORD OF CHANGES DIRECTIVE NO. 

5100.38C REC NO 

CHANGE 

TO BASIC SUPPLEMENTS OPTIONAL CHANGE TO BASIC SUPPLEMENTS OPTIONAL 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
June 28, 2005 Order 5100.38C

FOREWORD 

1. PURPOSE. This Order provides guidance and sets forth policy and procedures to be used in the 

administration of the Airport Improvement Program. Several FAA Orders and Advisory Circulars are 

referred to in this directive. The references appear as the basic publication number without any 

suffix. However, the latest issuance of the publication should be used as the reference. 

2. DISTRIBUTION. This Order is distributed electronically to all addressees of the ZRP-510 special 

distribution list and to all Airports District Offices. 

3. CANCELLATION AND EXPLANATION OF CHANGES. Order 5100.38B, Airport Improvement 

Program Handbook, dated May 31, 2002, and Change 1, dated January 8, 2004, are cancelled. In 

addition, Order 5100.38B, Change 2 dated May 16, 2005 is replaced in its entirety. Except for an 

updated cover, Order 5100.38C is identical to the Change 2, which both include new policy changes 

within Vision 100 - Century of Flight Authorization Act of 2003, Public Law 108-176. 

4. FORMS AND REPORTS. Virtually all forms and reports are generated by the Airport Improvement 

Program grants management system. Eventually, all forms will be automated as we move to 

e-commerce. Most of the forms depicted in the Appendices are in digital format and can be 

completed in a word processing program. Hard copies of many of the forms will continue to be 

available as long as needed. When we transition to electronic processing of the grant program, all 

forms will be available on the web and will be available for sponsors to complete and submit online.

Dennis E. Roberts

Director, Airport Planning 

 and Programming 

Page i
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page ii
June 28, 2005 Order 5100.38C

Table of Contents 

Chapter 1. Introduction 1

Section 1. General 1

1. Purpose......................................................................................................................................... 1

2. Authorizing Legislation. ................................................................................................................. 1

3. Policy. ........................................................................................................................................... 1

4. Application of Policy and Guidance Principles. ............................................................................. 2

5. Waivers. ........................................................................................................................................ 3

6. Handbook Format. ........................................................................................................................ 3

7. - 19. Reserved............................................................................................................................. 3

Section 2. Title 49 United States Code 3

20. Grant Authority............................................................................................................................ 3

21. Revenue Sources........................................................................................................................ 3

22. AIP Authorized Funding Levels................................................................................................... 4

23. Types of Airports and Airport Activities. ...................................................................................... 4

24. Changes in Airport Classification. ............................................................................................... 8

25. Distribution of Funds. .................................................................................................................. 8

26. Federal Share of Project Costs. ................................................................................................ 12

27. Maximum Allowable Grant Increases........................................................................................ 14

28. - 29. Reserved......................................................................................................................... 14

Section 3. Overview of the Grant Process and Program Funding 15

30. The Grant Process.................................................................................................................... 15

31. Restrictions on Lobbying and Influencing Federal Employees.................................................. 15

32. Limitations on Regional Airports Division Authority................................................................... 15

33. The AIP Funding Process. ........................................................................................................ 16

34. Project Approval and Congressional Notification. ..................................................................... 17

35. Office of Management and Budget (OMB) Circular A-102. ....................................................... 17

36. Mandatory Standards................................................................................................................ 19

37. Use or Transfer of Entitlement Funds. ...................................................................................... 19

38. State Block Grant Program. ...................................................................................................... 20

39. Letters of Intent. ........................................................................................................................ 20

40. Military Airport Program. ........................................................................................................... 20

41. Other Federal Assistance.......................................................................................................... 20

42. Financial Statements................................................................................................................. 20

43. Change in the AIP Processes. .................................................................................................. 20

44. - 199. Reserved....................................................................................................................... 20

Chapter 2. Sponsor Eligibility 21

200. General. .................................................................................................................................. 21

201. Legal and Financial Responsibility. ......................................................................................... 21

202. Co-Sponsor............................................................................................................................. 21

203. Agents..................................................................................................................................... 22

204. Planning Agencies. ................................................................................................................. 22

205. Designation of Eligible Planning Agencies. ............................................................................. 22

206. Public Agencies Owning Airports ............................................................................................ 23

207. Public Agencies not Owning Airports ...................................................................................... 23

208. Private Airport Owners. ........................................................................................................... 23

209. State Sponsorship of Airport Projects. .................................................................................... 24

210. Other Sponsor Eligibility.......................................................................................................... 25

211. - 299. Reserved..................................................................................................................... 25

Page iii
June 28, 2005 Order 5100.38C

Chapter 3. Project Eligibility, Allowable Costs, Priority, and Donations 27

Section 1. Project Eligibility 27

300. General Project Eligibility Requirements ................................................................................. 27

301. Prohibitions ............................................................................................................................. 27

302. Environmental Requirements.................................................................................................. 28

303. Off Airport Work. ..................................................................................................................... 28

304. Works of Art ............................................................................................................................ 29

305. Relocation or Modification of FAA Facilities. ........................................................................... 29

306. Pavement Evaluations. ........................................................................................................... 30

307. Equipment Procurement under Planning Grants..................................................................... 32

308. - 309. Reserved..................................................................................................................... 32

Section 2. Allowable/Nonallowable Costs 32

310. Allowable Project Costs. ......................................................................................................... 32

311. Nonallowable Project Costs. ................................................................................................... 35

312. - 319. Reserved..................................................................................................................... 37

Section 3. Priority System 37

320. National Priority System.......................................................................................................... 37

321. - 349. Reserved..................................................................................................................... 37

Section 4. Donations, Contributions, and Loans 37

350. General. .................................................................................................................................. 37

351. Land Donated to Sponsors...................................................................................................... 37

352. Labor, Material, Equipment, and Services Donated to Sponsors............................................ 39

353. Treatment of Donation Credits in the Grant Agreement. ......................................................... 39

354. - 399. Reserved..................................................................................................................... 40

Chapter 4. Planning Projects 41

Section 1. Planning Project Scope and Eligibility 41

400. The Planning Process. ............................................................................................................ 41

401. Eligible Planning Projects........................................................................................................ 42

402. The Airport Capital Improvement Plan (ACIP)......................................................................... 43

403. Planning Work Scope Requirements. ..................................................................................... 43

404. Eligible Study Elements and Activities. ................................................................................... 45

405. System Planning Elements. .................................................................................................... 46

406. Master Planning Elements. ..................................................................................................... 48

407. - 409. Reserved..................................................................................................................... 51

Section 2. Planning Project Application 51

410. General. .................................................................................................................................. 51

411. Pre-Planning Conference........................................................................................................ 51

412. Preparation of Application. ...................................................................................................... 52

413. Review and Approval of Application........................................................................................ 53

414. - 419. Reserved..................................................................................................................... 54

Section 3. Planning Project Accomplishment 54

420. Consultant Contracts............................................................................................................... 54

421. FAA Role in Consultant Selection. .......................................................................................... 54

422. Contract Review and Approval................................................................................................ 54

423. Procurement Deficiencies. ...................................................................................................... 54

424. Purchase of Equipment........................................................................................................... 55

425. Project Monitoring, Coordination, and Reports........................................................................ 55

426. Suspension and Termination................................................................................................... 56

427. Final Planning Reports............................................................................................................ 56

428. FAA Approval Actions. ............................................................................................................ 56

429. FAA Acceptance of Projects.................................................................................................... 59

Page iv
June 28, 2005 Order 5100.38C

430. Audits. ..................................................................................................................................... 59

431. - 499. Reserved..................................................................................................................... 59

Chapter 5. Airfield Construction and Equipment Projects 61

Section 1. General Eligibility and Project Requirements 61

500. Project Eligibility...................................................................................................................... 61

501. Reconstruction Versus Maintenance....................................................................................... 61

502. National Airspace System Requirements................................................................................ 62

503. Transition to Satellite Navigation............................................................................................. 63

504. Innovative Technology and Finance........................................................................................ 63

505. Airfield Project Justification. .................................................................................................... 64

506. Project Standards and Design................................................................................................. 64

507. Commissioning and Decommissioning Airfield Facility. .......................................................... 65

508. Life-Cycle Airport Costs. ......................................................................................................... 65

509. Reserved................................................................................................................................. 65

Section 2. Site Preparation 66

510. General. .................................................................................................................................. 66

511. Existing Facility Improvements................................................................................................ 66

512. New Airport, Major Runway Projects, and Military Airport Conversions. ................................. 66

513. Safety Areas............................................................................................................................ 66

514. Site Preparation for F&E Installations. .................................................................................... 67

515. Utilities and Fuel Farms. ......................................................................................................... 67

516. Proration of Site Preparation Work.......................................................................................... 68

517. - 519. Reserved..................................................................................................................... 68

Section 3. Management of Airfield Paving Projects 68

520. General. .................................................................................................................................. 68

521. Runways. ................................................................................................................................ 70

522. Helicopter and Tilt-Rotor Facilities. ......................................................................................... 70

523. Ultralight Facilities................................................................................................................... 70

524. Seaplane Bases...................................................................................................................... 70

525. Taxiways. ................................................................................................................................ 71

526. Apron Areas and Related Facilities......................................................................................... 71

527. Airfield Service Roads............................................................................................................. 72

528. - 529. Reserved..................................................................................................................... 72

Section 4. Airfield Lighting and Surface Movement 72

530. General. .................................................................................................................................. 72

531. Airfield Marking and Remarking. ............................................................................................. 73

532. Airfield Signage....................................................................................................................... 75

533. Installation and Alteration of Airfield Lighting........................................................................... 75

534. Runway, Heliport, and Vertiport Lighting................................................................................. 75

535. Taxiway and Apron Lighting.................................................................................................... 76

536. Surface Movement Guidance and Control System. ................................................................ 77

537. Other Airfield Lighting and Marking. ........................................................................................ 77

538. Electrical Power. ..................................................................................................................... 78

539. Reserved................................................................................................................................. 79

Section 5. Safety, Security, and Related Projects 79

540. Federal Aviation Regulation Part 139 and Title 49 CFR, Part 1542. ....................................... 79

541. Safety Equipment.................................................................................................................... 79

542. Security Projects. .................................................................................................................... 81

543. Snow and Ice Control Equipment............................................................................................ 83

544. Aircraft Ground Deicing and Anti-Icing Equipment. ................................................................. 83

545. Friction Measuring Devices..................................................................................................... 83

546. Training Systems. ................................................................................................................... 84

Page v
June 28, 2005 Order 5100.38C

547. Safety, Security, and Related Facilities................................................................................... 84

548. - 549. Reserved..................................................................................................................... 87

Section 6. Airport and Terminal Area Navigation Aid Facilities 87

550. General. .................................................................................................................................. 87

551. FAR Part 171. ......................................................................................................................... 87

552. Simplification of Non-Federal Navigation Aid Projects. ........................................................... 87

553. Supporting Agreements to Implement NAVAID Projects......................................................... 89

554. Airport Approach and Landing Systems.................................................................................. 89

555. Airport Navigation Aid Equipment. .......................................................................................... 90

556. Airport Approach Lighting Systems......................................................................................... 91

557. Terminal NAVAID Facilities..................................................................................................... 92

558. Special Condition. ................................................................................................................... 94

559. Reserved................................................................................................................................. 94

Section 7. Communications, Surveillance, and Air Traffic Control 94

560. General. .................................................................................................................................. 94

561. Communications Equipment. .................................................................................................. 94

562. Radar. ..................................................................................................................................... 95

563. Airport Traffic Control Towers. ................................................................................................ 95

564. - 569. Reserved..................................................................................................................... 96

Section 8. Aviation Weather Equipment 96

570. General. .................................................................................................................................. 96

571. Wind Indicators and Recording Anemometers........................................................................ 97

572. Automated Weather Observing System (AWOS).................................................................... 97

573. Low-Level Wind-Shear Alert System (LLWAS). ...................................................................... 98

574. Runway Visual Range (RVR).................................................................................................. 98

575. - 579. Reserved..................................................................................................................... 98

Section 9. Aviation Hazards and Environmental Mitigation 98

580. General. .................................................................................................................................. 98

581. Objects in Runway Protection Zone. ....................................................................................... 99

582. Airport Hazards. ...................................................................................................................... 99

583. Hazardous Waste.................................................................................................................... 99

584. Wildlife Hazards. ................................................................................................................... 100

585. Low Emission Systems and Other Air Quality Projects. ........................................................ 100

586. Wetlands. .............................................................................................................................. 101

587. Water Quality Projects. ......................................................................................................... 102

588. - 589. Reserved................................................................................................................... 102

Section 10. Miscellaneous 102

590. Blast Fences. ........................................................................................................................ 102

591. Equipment Lease, Repair, Modification, and Disposal. ......................................................... 103

592. Landscaping and Turf. .......................................................................................................... 103

593. Purchase, Relocation, or Demolition of Ineligible Facilities. .................................................. 103

594. Replacement Facilities. ......................................................................................................... 105

595. Construction Project Signs.................................................................................................... 105

596. - 599. Reserved................................................................................................................... 105

Chapter 6. Terminals, Landside, and Terminal Access Projects 107

Section 1. Terminal Development 107

600. General Eligibility. ................................................................................................................. 107

601. Terminal Development. ......................................................................................................... 107

602. Terminal Security Projects. ................................................................................................... 108

603. Other Eligible Terminal Development.................................................................................... 110

604. Expanded Terminal Eligibility and Parking Lots. ................................................................... 110

Page vi
June 28, 2005 Order 5100.38C

605. Americans with Disabilities Act of 1990 (ADA)...................................................................... 111

606. Expanded Eligibility under the Military Airport Program (MAP). ............................................ 111

607. Energy Assessment. ............................................................................................................. 112

608. Value Engineering................................................................................................................. 112

609. Utilities. ................................................................................................................................. 112

610. Relocation of Air Traffic Control Towers and Navigational Aids. ........................................... 112

611. Eligibility Limitations. ............................................................................................................. 113

612. Multimodal Terminal Buildings. ............................................................................................. 116

613. Proration of Terminal Building Work...................................................................................... 116

614. Terminal Development Bond Retirement. ............................................................................. 117

615. - 619. Reserved................................................................................................................... 117

Section 2. Terminal Access 117

620. Access Road Eligibility. ......................................................................................................... 117

621. Walkways.............................................................................................................................. 118

622. On Airport Rapid Transit Systems......................................................................................... 119

623. - 629. Reserved................................................................................................................... 119

Section 3. Other Terminal Landside Construction. 119

630. General. ................................................................................................................................ 119

631. Establishment of Structures on Federally Obligated Paved Areas........................................ 119

632. - 639. Reserved................................................................................................................... 120

Section 4. AIP/PFC Program Disparities 120

640. General. ................................................................................................................................ 120

641. - 699. Reserved................................................................................................................... 120

Chapter 7. Land Acquisition Projects 121

Section 1. Land Acquisition 121

700. General. ................................................................................................................................ 121

701. Land Acquisition for Current Airport Development. ............................................................... 122

702. Treatment of Unneeded Real Property. ................................................................................ 123

703. Retention of Excess Land for Noise Purposes...................................................................... 123

704. Relocation and Real Property Acquisition Assurances. ........................................................ 123

705. Land Acquisition for Future Airport Development.................................................................. 123

706. Land Acquisition for Noise Compatibility. .............................................................................. 124

707. Acquisition of a Private Airport by a Public Sponsor. ............................................................ 125

708. Land Acquisition at a Privately-Owned Public Use Airport . .................................................. 125

709. Land Acquisition from a State/Local Public Agency. ............................................................. 126

Section 2. Title and Property Interest 126

710. Title Requirement.................................................................................................................. 126

711. Title for Landing and Building Areas. .................................................................................... 126

712. Title for Off-Airport Areas. ..................................................................................................... 126

713. Determination of Adequate Title............................................................................................ 127

714. Title Requirement prior to Notice to Proceed. ....................................................................... 127

715. - 719. Reserved................................................................................................................... 127

Section 3. Land Costs 127

720. General. ................................................................................................................................ 127

721. Relocation Cost..................................................................................................................... 127

722. Reimbursement for Land Previously Acquired. ..................................................................... 128

723. Land Acquired through Condemnation.................................................................................. 130

724. Land Exchange. .................................................................................................................... 130

725. Land Leases.......................................................................................................................... 130

726. Nonallowable Land Costs. .................................................................................................... 130

727. - 729. Reserved................................................................................................................... 130

Page vii
June 28, 2005 Order 5100.38C

Section 4. Disposal of Unneeded Land 130

730. Disposal of Land. .................................................................................................................. 130

731. Uses of Airport Revenue. ...................................................................................................... 131

732. - 799. Reserved................................................................................................................... 131

Chapter 8. Noise Compatibility Projects 133

Section 1. General 133

800. General. ................................................................................................................................ 133

801. Project Eligibility.................................................................................................................... 133

802. Sponsor Eligibility.................................................................................................................. 134

803. Cosponsor............................................................................................................................. 134

804. Applicability of the Airport and Airway Improvement Act (AAIA) Provisions. ......................... 134

805. Environmental Considerations. ............................................................................................. 134

806. Agreements for Noise Compatibility Projects on Public Property not Owned by the 

Sponsor. ........................................................................................................................... 134

807. Projects on Privately Owned Property - Condition in Grant Agreement. ............................... 136

808. Easement in Conjunction with Soundproofing....................................................................... 136

809. Revenue from Noise Compatibility Projects. ......................................................................... 136

Section 2. Noise Compatibility Projects 136

810. General. ................................................................................................................................ 136

811. Acquisition of Land or Interests in Land for Noise Compatibility............................................ 137

812. Noise Insulation Projects....................................................................................................... 140

813. Noise Monitoring Equipment/Systems. ................................................................................. 142

814. Noise Barriers. ...................................................................................................................... 143

815. Miscellaneous Noise Compatibility Projects.......................................................................... 144

816. Allowable Project Costs. ....................................................................................................... 145

817. - 819. Reserved................................................................................................................... 145

Section 3. Use of Proceeds from Sale of Noise Compatibility Land 145

820. Disposal Requirement........................................................................................................... 145

821. Use of Funds......................................................................................................................... 145

822. Evaluating Reinvestment Proposals...................................................................................... 145

823. Requirements For Reinvestment........................................................................................... 145

824. Conversion to Airport Development Land. ............................................................................ 146

825. - 899. Reserved................................................................................................................... 146

Chapter 9. Procurement and Contract Requirements 147

Section 1. Procurement 147

900. General. ................................................................................................................................ 147

901. Review of Proposed Procurements....................................................................................... 147

902. FAA Review of Contract Documents..................................................................................... 148

903. Competition in Procurements................................................................................................ 149

904. Procurement Methods........................................................................................................... 149

905. Procurement of Equipment.................................................................................................... 151

906. Price or Cost Analysis. .......................................................................................................... 153

907. Professional Service Retainers. ............................................................................................ 153

908. Procurement of Engineering, Architectural, and other Professional Services for 

Several Projects................................................................................................................ 154

909. Solicitations Containing both Eligible and Ineligible Work. .................................................... 154

910. Life Cycle Costs in Competitive Sealed Bids......................................................................... 155

911. Bonding................................................................................................................................. 156

912. Award to Other than Apparent Low Bidder............................................................................ 156

913. Alternate Bids........................................................................................................................ 157

914. Bid Protests........................................................................................................................... 157

915. Specific Situations................................................................................................................. 158

Page viii
June 28, 2005 Order 5100.38C

916. - 919. Reserved................................................................................................................... 159

Section 2. Traditional Contracts 159

920. General. ................................................................................................................................ 159

921. Nonallowable Practices......................................................................................................... 159

922. Required Federal Provisions................................................................................................. 160

923. - 929. Reserved................................................................................................................... 162

Section 3. Alternative Delivery Methods 162

930. General. ................................................................................................................................ 162

931. Design Build.......................................................................................................................... 163

932. - 939. Reserved................................................................................................................... 165

Section 4. Change Orders and Supplemental Agreements 165

940. Change Orders and Supplemental Agreements.................................................................... 165

941. - 949. Reserved................................................................................................................... 165

Section 5. Suspension and Debarment 165

950. General. ................................................................................................................................ 165

951. Applicability of Title 49 CFR, Part 29..................................................................................... 165

952. Nonprocurement List............................................................................................................. 166

953. Designations. ........................................................................................................................ 166

954. Procedures for Suspension and Debarment. ........................................................................ 166

955. - 999. Reserved................................................................................................................... 166

Chapter 10. Project Formulation, Requests for Aid, and Letters of Intent 167

Section 1. Project Formulation 167

1000. General. .............................................................................................................................. 167

1001. Project File. ......................................................................................................................... 167

1002. Project Engineering............................................................................................................. 167

1003. Contract Engineering Services............................................................................................ 167

1004. Force Account Engineering Services. ................................................................................. 168

1005. Coordination and Approval of Plans and Specifications...................................................... 168

1006. Intergovernmental Project Review. ..................................................................................... 169

1007. Public Hearing..................................................................................................................... 170

1008. ALP Review......................................................................................................................... 171

1009. Value Engineering (VE)....................................................................................................... 171

Section 2. Requests for Aid 172

1010. General. .............................................................................................................................. 172

1011. Supporting Documents........................................................................................................ 172

1012. Timing of Submission.......................................................................................................... 173

1013. - 1019. Reserved............................................................................................................... 173

Section 3. Sponsor Certification 173

1020. General Certification Requirements. ................................................................................... 173

1021. Relation of Assurances and Certification. ........................................................................... 173

1022. Required Sponsor Certification Forms. ............................................................................... 174

1023. Timing of Sponsor Certification Process. ............................................................................ 175

1024. Sponsor Certification Forms and Procedures...................................................................... 175

1025. Areas with Standard Forms................................................................................................. 176

1026. Areas Excluded from Routine Certification Forms............................................................... 176

1027. False and Inaccurate Certifications. .................................................................................... 176

1028. - 1029. Reserved............................................................................................................... 177

Section 4. CIP and Application Review and Evaluation 177

1030. General. .............................................................................................................................. 177

1031. Project Evaluation Report and Development Analysis. ....................................................... 177

Page ix
June 28, 2005 Order 5100.38C

1032. - 1039. Reserved............................................................................................................... 180

Section 5. Project Approval/Disapproval and Allocation 180

1040. Project Approval.................................................................................................................. 180

1041. Notice of Disapproval or Deferral. ....................................................................................... 180

1042. Washington Coordination.................................................................................................... 180

1043. Notice of Allocation. ............................................................................................................ 181

1044. Schedule for Sponsor Development of the Project.............................................................. 181

1045. - 1049. Reserved............................................................................................................... 183

Section 6. Application Review and Approval 183

1050. General. .............................................................................................................................. 183

1051. Project Summary................................................................................................................. 183

1052. Determination of Reasonableness of Costs. ....................................................................... 183

1053. Review for Bid Improprieties. .............................................................................................. 184

1054. - 1059. Reserved............................................................................................................... 184

Section 7. Modification of Approved Programs 184

1060. Program Changes. .............................................................................................................. 184

1061. Procedures.......................................................................................................................... 184

1062. Announcement of Changes to Approved Program.............................................................. 185

1063. - 1069. Reserved............................................................................................................... 185

Section 8. Letters of Intent 185

1070. General. .............................................................................................................................. 185

1071. Eligibility. ............................................................................................................................. 185

1072. Factors in Considering LOIs:............................................................................................... 185

1073. Issuance of LOI................................................................................................................... 186

1074. Procedures.......................................................................................................................... 187

1075. LOI Funds Allocation........................................................................................................... 189

1076. Post-LOI Actions. ................................................................................................................ 189

1077. LOI Grant Application and Offer.......................................................................................... 189

1078. Administration of Letters of Intent........................................................................................ 190

1079. Amendments to Letters of Intent. ........................................................................................ 190

1080. Additional Letter of Intent. ................................................................................................... 190

1081. - 1089. Reserved............................................................................................................... 190

Section 9. Block Grant Procedures 190

1090. General. .............................................................................................................................. 190

1091. Calculating Amounts for Grant Agreements........................................................................ 191

1092. Maximum State Flexibility.................................................................................................... 192

1093. Airport Eligibility and Allowable Cost. .................................................................................. 193

1094. Accomplishment of Airport Projects. ................................................................................... 194

1095. Standard Assurances and Regional Agreements................................................................ 195

1096. Authorities Retained by FAA. .............................................................................................. 196

1097. Reporting and FAA Regulatory Oversight. .......................................................................... 197

1098. Suspension of Block Grant.................................................................................................. 198

1099. Termination of State Block Grant or Program. .................................................................... 198

Chapter 11. Grant Offer, Agreement, and Amendment 200

Section 1. Grant Offer 200

1100. General. .............................................................................................................................. 200

1101. Project Description. ............................................................................................................. 200

1102. Multi-Year Grants. ............................................................................................................... 200

1103. Standard Conditions............................................................................................................ 201

1104. Final Clearance of Grant Offer. ........................................................................................... 202

1105. Letter of Intent..................................................................................................................... 202

Page x 
June 28, 2005 Order 5100.38C

1106. - 1109. Reserved............................................................................................................... 202

Section 2. Variations and Transition to Electronic Grants 202

1110. General. .............................................................................................................................. 202

1111. - 1119. Reserved............................................................................................................... 202

Section 3. Special Conditions 202

1120. General. .............................................................................................................................. 202

1121. Special Conditions to be Included in Grant Agreements. .................................................... 202

1122. Other Subjects which May Require Special Conditions. ..................................................... 202

1123. - 1129. Reserved............................................................................................................... 203

Section 4. Acceptance of Grant Offer 203

1130. General. .............................................................................................................................. 203

1131. Time Limit for Acceptance of Offer...................................................................................... 203

1132. Distribution and Notification of Grant Agreement. ............................................................... 203

1133. Revision of Grant Offer. ...................................................................................................... 203

1134. - 1139. Reserved............................................................................................................... 204

Section 5. Grant Amendments 204

1140. General. .............................................................................................................................. 204

1141. Amendments Involving a Change in the Work Description.................................................. 204

1142. Amendments Involving a Change in the U.S. Obligation..................................................... 205

1143. Acceptance of Amendment. ................................................................................................ 207

1144. Numbering Amendments..................................................................................................... 207

1145. Informal Letter Amendments............................................................................................... 208

1146. - 1149. Reserved............................................................................................................... 208

Section 6. Suspension and Termination of the Grant 208

1150. General. .............................................................................................................................. 208

1151. Suspension of the Grant...................................................................................................... 208

1152. Termination for Cause......................................................................................................... 209

1153. Termination for Convenience. ............................................................................................. 209

1154. Request for Reconsideration............................................................................................... 209

1155. Funds Recovery. ................................................................................................................. 209

1156. Distribution. ......................................................................................................................... 209

1157. - 1199. Reserved............................................................................................................... 210

Chapter 12. Project Accomplishment 212

Section 1. Pre-construction Activities 212

1200. General. .............................................................................................................................. 212

1201. Sponsor Certification........................................................................................................... 212

1202. Assurances and Certifications............................................................................................. 212

1203. Land Title Requirement....................................................................................................... 212

1204. Authorization of Notice to Proceed...................................................................................... 212

1205. Delay in Construction Start.................................................................................................. 213

1206. Pre-construction Conference............................................................................................... 213

1207. Scope and Agenda.............................................................................................................. 213

1208. Labor and Civil Rights Requirements.................................................................................. 214

1209. - 1219. Reserved............................................................................................................... 214

Section 2. Construction Procedures 214

1220. FAA Responsibilities. .......................................................................................................... 214

1221. Sponsor’s Responsibilities. ................................................................................................. 215

1222. Change Orders and Supplemental Agreements.................................................................. 216

1223. - 1229. Reserved............................................................................................................... 216

Page xi
June 28, 2005 Order 5100.38C

Section 3. Sponsor’s Force Account 216

1230. General. .............................................................................................................................. 216

1231. Justification and Approval. .................................................................................................. 217

1232. Sponsor Funds.................................................................................................................... 217

1233. Cost Allowability. ................................................................................................................. 217

1234. Performance of Construction............................................................................................... 218

1235. - 1299. Reserved............................................................................................................... 218

Chapter 13. Project Payment, Closeout, and Audit 220

Section 1. Project Payment 220

1300. General. .............................................................................................................................. 220

1301. Letter of Credit. ................................................................................................................... 220

1302. Payment by Treasury Check or Electronic Funds Transfer - General. ................................ 220

1303. Payment by Treasury Check or Electronic Funds Transfer - Forms.................................... 220

1304. Payment by Treasury Check or Electronic Funds Transfer - Approval................................ 221

1305. Withholding Payment. ......................................................................................................... 221

1306. - 1309. Reserved............................................................................................................... 222

Section 2. Grant Closeout Procedures 222

1310. General. .............................................................................................................................. 222

1311. Audit Relationship to Closeout. ........................................................................................... 222

1312. Work Completion Requirements for Closeout. .................................................................... 222

1313. Administrative Requirements for Closeout. ......................................................................... 223

1314. Financial Requirements for Closeout. ................................................................................. 223

1315. Final Project Report. ........................................................................................................... 224

1316. Financial Settlement............................................................................................................ 224

1317. Reports to FAA Headquarters............................................................................................. 224

1318. Reclaim for Suspended Costs after Final Settlement.......................................................... 224

1319. Reserved............................................................................................................................. 224

Section 3. Audits 224

1320. General. .............................................................................................................................. 224

1321. Audit Responsibilities - General. ......................................................................................... 225

1322. Audit Responsibility - FAA Airports Office. .......................................................................... 225

1323. Audit Responsibility - Public Sponsor.................................................................................. 226

1324. Audit Responsibility - OIG. .................................................................................................. 226

1325. Private Sponsor Audit. ........................................................................................................ 227

1326. Grants Less than $300,000................................................................................................. 227

1327. Supplemental Audits. .......................................................................................................... 227

1328. Audit Costs.......................................................................................................................... 227

1329. Release of Audit Reports. ................................................................................................... 227

1330. - 1399. Reserved............................................................................................................... 228

Chapter 14. Enforcement of Labor and Civil Rights Requirements 230

Section 1. Enforcement of Labor Requirements 230

1400. General. .............................................................................................................................. 230

1401. Enforcement Responsibility................................................................................................. 231

1402. FAA Examinations and Investigations................................................................................. 231

1403. Investigation Report. ........................................................................................................... 231

1404. Review and Sponsor Notification. ....................................................................................... 231

1405. Sponsor Corrective Action................................................................................................... 231

1406. Withholding Grant Payments............................................................................................... 231

1407. Action on Investigation Reports........................................................................................... 232

1408. Department of Labor Investigations. ................................................................................... 232

1409. Liquidated Damages under the Contract Work Hours and Safety Standards Act. .............. 232

1410. - 1419. Reserved............................................................................................................... 233

Page xii
June 28, 2005 Order 5100.38C

Section 2. Enforcement of Civil Rights Requirements 233

1420. General. .............................................................................................................................. 233

1421. The Civil Rights Requirements with which Sponsors, Contractors, and 

Subcontractors must Comply............................................................................................ 233

1422. Disadvantaged Business Enterprises (DBE) Program. ....................................................... 235

1423. Section 47123 of the Act. .................................................................................................... 236

1424. Executive Order (E.O.) 11246............................................................................................. 237

1425. Rehabilitation Act of 1973 (P.L. 93.112).............................................................................. 237

1426. Aircraft and Air Carrier Facility Accessibility........................................................................ 238

1427. Americans with Disabilities Act (ADA) of 1990.................................................................... 239

1428. - 1499. Reserved............................................................................................................... 239

Tables and Figures

Table 1 Aviation Taxes........................................................................................................................ 4

Figure 1 Typical Correlation between Yearly Authorization and Appropriation Levels ........................ 5

Table 2 Yearly AIP Authorizations and Appropriation Limitations (In Millions) .................................... 5

Table 3 Definition of Airport Categories .............................................................................................. 7

Figure 2 Typical Percentage Distribution of AIP................................................................................ 12

Table 4 Fiscal Year 2003 Distribution of AIP Grants ......................................................................... 13

Figure 3 Typical AIP Grant Process .................................................................................................. 18

Table 5 AIP-Funded Airfield Lighting and Surface Movement Equipment......................................... 73

Table 6 AIP-Funded Safety, Security, and Related Equipment......................................................... 81

Table 7 Limitations on AIP-Funded Airport Navigation Aid Equipment ............................................. 91

Table 8 Limitations on AIP-Funded Terminal Navigation Aid Equipment .......................................... 93

Table 9 AIP-Funded Communications, Surveillance and Air Traffic Control Equipment ................... 94

Table 10 Limitations on AIP-Eligible Aviation Weather Equipment ................................................... 97

Table 11 AIP-Funded Aviation Hazard and Environmental Mitigation Equipment............................. 99

Table 12 Limitations on AIP-Eligible Relocation of FAA Equipment................................................ 105

Table 13 Terminal Eligibility by Commercial Service Airport Type .................................................. 114

Table 14 Terminal Eligibility by General Aviation and Special Airport Categories........................... 115

Page xiii
June 28, 2005 Order 5100.38C

Appendices 

Appendix 1. Non-Allowable Items (1 page)

Appendix 2. Reserved (1 page)

Appendix 3. Standard Form 424 (2 pages)

Appendix 4. Part II – Project Approval Information (FAA Form 5100-100) 

(Development Projects) (10 pages)

Appendix 5. Project Approval Information (FAA Form 5100-101) (Planning Projects) 

(8 pages)

Appendix 6. Grant Agreement (FAA Form 5100-37) (3 pages)

Appendix 7. Grant Special Conditions (6 pages)

Appendix 8. Project Evaluation Review and Development Analysis Checklist 

(FAA Form 5100-109) (1 page)

Appendix 9. Construction Progress and Inspection Report (FAA Form 5370-1) (2 pages)

Appendix 10. AIP Final Inspection Report (FAA Form 5100-17) (1 page)

Appendix 11. Title VI Reverter Clauses (1 page)

Appendix 12. Labor Standards Interview and Summary of Labor Standards Investigation 

Reports (Forms DOT F 4220.5 and 4220.6) (2 Pages)

Appendix 13. Examples of Increasing Maximum Obligation (4 pages)

Appendix 14. Grant Amendment (FAA Form 5100-38) (2 pages)

Appendix 15. Informal Letter Amendment (2 pages)

Appendix 16. Entitlement Transfer Agreement (FAA Form 5100-110) (1 page)

Appendix 17. Multi-Year Letter Amendment (Suggested Text) (1 page)

Appendix 18. Federal Cash Transactions Report (SF 272) (3 pages)

Appendix 19. Request for Advance or Reimbursement (SF 270) (2 pages)

Appendix 20. Outlay Report and Request for Reimbursement for Construction Programs 

(SF 271) (2 pages)

Appendix 21. Letter of Intent and Amendment (3 pages)

Appendix 22. Agreement on State Sponsorship and Airport Sponsor Obligations (2 pages)

Appendix 23. Adjustments of Federal Shares at Certain Airports (1 page)

Appendix 24. Reserved (1 page)

Appendix 25. Standard Sponsor Certification Forms (12 pages)

Appendix 26. Block Grant Application (1 page)

Appendix 27. Block Grant Agreement (4 pages)

Appendix 28. AIP Grant Status Report (FAA Form 5100-107 - Electronic Version) (1 Page)

Appendix 29. Finance Template for LOI Applicants (1 Page)

Appendix 30. Obligations in Block Grant Suspension or Termination (1 Page)

Page xiv 
June 28, 2005 Order 5100.38C

Chapter 1. I NTRODUCTION

Section 1. GENERAL

1. PURPOSE. 

This order provides guidance and sets forth policies and procedures for the administration of the 

Airport Improvement Program (AIP) by the Federal Aviation Administration (FAA). 

2. AUTHORIZING LEGISLATION. 

a. The AIP is authorized by Chapter 471 of Title 49 of the United States Code (U.S.C.), which is 

referred to as the “Act”. Previously, the AIP was authorized by the Airport and Airway Improvement Act 

of 1982 (P.L. 97-248, as amended), which was repealed in 1994 by Public Law 103-272 (July 5, 1994), 

Codification of Certain U.S. Transportation Laws at Title 49 U.S.C. and the provisions were recodified as 

Chapter 471. No substantive changes were made in the recodification. Since the original authorization 

the Act has been amended in 1994, 1996, 1999, 2000, 2001, 2002 and again in 2003, to change the 

annual authorizations for fiscal year 1994 through FY 2007 as well as numerous other program changes. 

The Act’s broad objective is to assist in the development of a nationwide system of public-use airports 

adequate to meet the current needs and the projected growth of civil aviation. The Act provides funding 

for airport planning and development projects at airports included in the National Plan of Integrated 

Airport Systems (NPIAS). 

b. The Act also authorizes funds for noise compatibility planning and to carry out noise compatibility 

programs as set forth in the Aviation Safety and Noise Abatement Act of 1979 (P.L. 96-143). Public Law 

103-272 (July 5, 1994), Codification of Certain U.S. Transportation Laws at Title 49 U.S.C., also 

repealed the Aviation Safety and Noise Abatement Act of 1979, as amended, and recodified it without 

substantive change at Title 49 U.S.C. 

c. Several notable name changes were contained in the recodification language. The term 

“enplanements” was replaced with the term “passenger boardings.” The codification also refers to 

passenger facility fees instead of passenger facility charges. These terms, when used in a discussion of 

legislative provisions and program objectives, are interchangeable. 

3. POLICY. 

The highest aviation priority of the United States is the safe and secure operation of the airport and 

airway system. Policy statements in enabling legislation address minimizing noise impacts on nearby 

communities; developing reliever airports; developing cargo hub airports; developing systems that use 

various modes of transportation; protecting and enhancing natural resources; and reducing aircraft 

operation delays. In addition, such policies address converting former military air bases to civil use or 

improving additional joint-use facilities; and implementing a variety of other provisions to ensure a safe 

and efficient airport system. 

The FAA supports the policies by giving highest priority to projects that enhance safety and security 

of our airport system. Other major policy objectives are advanced by assigning high priority to the award 

of AIP funds to maintain airport infrastructure and increase the capacity of facilities to accommodate 

growing passenger and cargo traffic. The United States’ aviation policies are strengthened by statutory 

provisions that direct specific funding to help minimize current and projected noise impacts; convert 

current and former military air bases that are available for civil use; preserve and enhance capacity, 

safety, and security at primary and reliever airports; and ensure continued funding availability to general 

aviation and nonprimary commercial service airports. Discussion of these funding designations is 

provided in the sections that follow dealing with apportioned and discretionary funds. 

Page 1
June 28, 2005 Order 5100.38C

Title 49 U.S.C., Section 47103 requires the Secretary of Transportation to publish a national plan for 

the development of public use airports in the United States. This plan, the NPIAS, lists development 

considered necessary to provide a safe, secure, efficient, and integrated airport system meeting the 

needs of civil aviation, national defense, and the U. S. Postal Service. An airport must be included in 

this plan to be eligible to receive a grant under the AIP. The latest published edition of the NPIAS, 

before the issuance of this order, covered 2005-2009. It was transmitted to Congress on September 30, 

2004. That report identified 3,344 existing airports of significance to air transportation and included 

estimates that $39.55 billion in AIP-eligible development is needed over the 5-year period of 2005-2009 

to meet the needs of all segments of civil aviation. 

4. APPLICATION OF POLICY AND GUIDANCE PRINCIPLES. 

The contents of this handbook are similar to prior versions based on principles below. 

a. Unless it is considered necessary to achieve standardization in grant program administration 

across the country, procedures and requirements not dictated by legislation, regulation, or factors 

beyond FAA control are left to the discretion of the regions. It is recognized that the diversity among the 

regions of program needs, available resources, and Airports Division organizational structures dictate 

that flexibility must be given Airports Division Managers for efficient grant program administration. At the 

same time, however, the AIP must be perceived by the aviation community as an even-handed program 

administered uniformly in every State. This principle results in the inclusion in the handbook of standard 

"special conditions" to be used in frequently encountered grant conditions and in greater reliance on 

regional discretion in project management. 

b. The handbook attempts to summarize appropriate information from other guidance material 

when possible, so that direct reference to the original material is seldom needed. However, some of 

these documents are so closely related and applicable to day-to-day grant activity that they should be 

considered companion documents to this handbook and should be, in fact, a part of each program 

manager's tools for daily program administration. One source of frequently referenced guidance 

material used in this handbook is advisory circulars (AC’s). The FAA issues advisory circulars to inform 

the aviation public in a systematic way of nonregulatory material of interest. The following guidance 

should be used in conjunction with this handbook: 

(1) Title 49 CFR, Part 18, "Uniform Administrative Requirements for Grants and Cooperative 

Agreements for State and Local Governments;" 

(2) Title 49 CFR, Part 26, “Participation by Disadvantaged Business Enterprises in Department 

of Transportation Programs;” 

(3) FAA Order 5100.20, "Program Control and Reporting Procedures - Airport Grant Programs;" 

(4) Advisory Circular 150/5100-6, "Labor Requirements for the Airport Improvement Program;" 

(5) Advisory Circular 150/5100-15, "Civil Rights Requirements for the Airport Improvement 

Program;"

(6) Advisory Circular 150/5100-16, "Airport Improvement Program Grant Assurance Number 

One - General Federal Requirements:” 

(7) FAA Order 5090.3, “Field Formulation of the National Plan of Integrated Airport Systems 

(NPIAS);” 

(8) FAA Order 5100.37, "Land Acquisition and Relocation Assistance for Airport Development 

Projects;" 

(9) FAA Order 5050.4, "Airport Environmental Handbook;" 

Page 2 
June 28, 2005 Order 5100.38C

(10) FAR Part 150, "Airport Noise Compatibility Programs;" 

(11) FAA Order 5100.39, “Airports Capital Improvement Plan;” 

(12) Other advisory circulars, orders, agency directives, regulations, etc., are referenced in this 

handbook for guidance in particular areas. They may be consulted when more details are required. 

c. Where possible, the administrative procedures for both the region and the sponsors have been 

simplified with a view toward reducing the workload for the regions and field offices as well as reducing 

burdensome detail and paperwork for sponsors. If there are any areas in this handbook where further 

progress toward this goal can be made (within the purview of the FAA), they should be brought to the 

attention of the Airports Financial Assistance Division, APP-500; ATTN: Airport Improvement Program 

Branch, APP-520. 

5. WAIVERS. 

Except where options are specifically noted in this order or where non-mandatory language is used, 

e.g., "may" or "as determined by the field office", the procedures and requirements are mandatory in 

nature. Any deviation from them must be approved by the Director of the Office of Airport Planning and 

Programming or designee. All requests for deviations should be sent to the Director of the Office of 

Airport Planning and Programming for processing. 

6. HANDBOOK FORMAT. 

a. The handbook is arranged beginning with explanation, definition, and description of major kinds 

of projects and overall requirements followed by the step-by-step process in carrying out a typical grant 

from project formulation to grant closeout. The final chapter covers Civil Rights/Labor enforcement. 

b. Similar subject matter in different chapters is cross-referenced to avoid text duplication and to 

lead the reader through the applicable guidance. A subject index at the end of certain previous editions 

of the handbook has been omitted since electronic search engines may replace this guide for users. 

c. Except as noted, the appendices to the handbook contain all forms normally used in the grant 

process as well as standardized language to be used for special conditions. Standard language and 

forms used for Civil Rights and Labor requirements are to be found in the two advisory circulars on those 

subjects. Forms for program control and reporting are found in FAA Order 5100.20. 

d. Guidance newly issued as a Program Guidance Letter (PGL), which is appropriate for inclusion 

in the handbook, will be included in subsequent handbook changes. PGLs will continue to be issued for 

items that are not appropriate handbook material, for example short-term policy guidance or detailed 

information on particular subjects, and to provide interim guidance between handbook changes. 

7. - 19. RESERVED. 

Section 2. TITLE 49 UNITED STATES CODE

20. GRANT AUTHORITY. 

Title 49 U.S.C., Section 47104(a) authorizes the Administrator to make grants for airport planning 

and development in the United States and certain other entities as described in Paragraph 25. The 

grants assist the development of public-use airports served by air carriers, commuters and general 

aviation. 

21. REVENUE SOURCES. 

The Airport and Airway Trust Fund, which was established by the Airport and Airway Revenue Act of 

1970, provides the revenues used to fund AIP projects. The Trust Fund concept guarantees a stable 

Page 3
June 28, 2005 Order 5100.38C

funding source whereby users pay for the services they receive. In 1997, Congress enacted new taxes 

that fund the Trust Fund. Each component of the taxes and the percentage of the total revenue derived 

from them during FY 2003 are shown in Table 1. The percentages show relative contributions of taxes. 

Table 1 Aviation Taxes 

AVIATION COMPONENT COMPUTATION FORMULAE PERCENT

Domestic Passenger Ticket Tax 

(Including Areas of Canada and Mexico 

Not More Than 225 Miles 

from the Continental United States)

7.5% from October 1, 1999, to September 30, 2007 49 

Domestic Passenger Flight Segment $3 per Segment during Calendar Year (CY) 2002 

Indexed to Consumer Price Index (CPI) after CY 2002 20 

Passenger Ticket Tax at Rural Airports

(Having Less Than 100,000 Boardings and 

More Than 75 Miles from an Airport 

with 100,000 Boardings)

7.5% of Ticket Cost Beginning Oct. 1, 1997 

(Excludes Flight Segment Component) 1 

International Departure 

and Arrival Taxes 

(Where Domestic Tax Does Not Apply)

$12 Per Person Departure Tax Plus 

$12 Per Person Arrival Tax Beginning Oct. 1, 1997 

Indexed to CPI Beginning Jan. 1, 1999 

Special Rule for Flights between 

Continental US and Alaska or Hawaii 

$6 Departure Tax for International Facilities 

Indexed to CPI Beginning Jan. 1, 1999 

Plus a Portion of the Domestic Passenger Ticket Tax

15 

Frequent Flyer Tax 7.5% of Frequent Flyer Award Value 2 

Waybill Domestic Freight and Mail 6.25% of Shipment Cost 5 

Commercial Fuel Tax 4.3¢ Per Gallon 6 

General Aviation Fuel Tax Aviation Gasoline – 19.3¢ Per Gallon 

Jet Fuel – 21.8¢ Per Gallon 2 

22. AIP AUTHORIZED FUNDING LEVELS. 

The Act, as amended, authorizes the use of monies from the Airport and Airway Trust Fund to make 

grants under the AIP on an annual fiscal year basis. Figure 1 and Table 2 depict amounts (in millions) 

that were authorized and subsequently limited by appropriations acts for the AIP. Appropriation 

limitations generally fall short of authorized levels. 

Funds authorized but remaining after a fiscal year, due to appropriations limitations, carry forward to 

future fiscal years unless the Congress takes specific action to limit such amounts. During the annual 

appropriations process, Congress may also limit the funding that may be obligated for grants to an 

amount that differs from the annual authorization. (See Paragraph 32.) Rescissions may be enacted as 

a bookkeeping device reducing the authorized level to the amount limited by appropriations acts. 

23. TYPES OF AIRPORTS AND AIRPORT ACTIVITIES. 

The only airports, or portions thereof, eligible for AIP funding are public use airports that serve civil 

aviation. The definition for airports in the law refers to any area of land or water used or intended for 

landing or take-off of aircraft. This includes, within the five categories of airports listed below, special 

Page 4 
June 28, 2005 Order 5100.38C

types of facilities including seaplane bases, heliports and facilities to accommodate tilt rotor aircraft. An 

airport includes an appurtenant area used or intended for airport buildings, facilities, as well as rights of 

way together with the buildings and facilities. 

When aircraft operators are exempt from paying the aviation taxes described in Table 1, their airport 

activity would not be included in the justification or design for an AIP project. (For instance, certain 

Federal agencies that operate Government-owned aircraft for fire fighting do not contribute to the Airport 

and Airway Trust Fund.) An exception to this general rule has been identified within 49 USC 47504(c)(6) 

for approved noise compatibility programs involving military aircraft. The statute authorizes use of AIP 

funds where military aircraft are the primary cause of noise provided FAA approved the compatibility 

program with that activity as justification. 

Yearly AIP Authorizations 

 and Appropriation Limitations

$3,300

$3

$1,90

$1

$1

$3,295

$3,223

$3,140

$1,851

$1,950

$1,700

$1,450$1,450

$1,460

$1,690

$1,800

$450

$805$800

$925

$885

$1,025

$1,269

$1,400

$1,425

$1,800

$1,900

,400

$2,161

$2,214

$2,280

$2,970

$2,025

0

$1,800

$1,700

$1,700$1,700

$450

$994$987

$2,347

$800

,017

,017

$2,410

$2,475

$3,200

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Fiscal Years

$ in Millions

 Congressional Authorization Appropriations Act Limitation on Obligations

Figure 1 Typical Correlation between Yearly Authorization and Appropriation Levels 

The law defines airports by categories of airport activities, including commercial service, primary, 

cargo service, reliever, and general aviation airports. Categories in Table 3 are defined as follows: 

Commercial Service Airports are publicly owned airports that have at least 2,500 passenger 

boardings each calendar year and receive scheduled passenger service. Passenger boardings refer 

to revenue passenger boardings on an aircraft in service in air commerce whether or not in scheduled 

service. The definition also includes passengers who continue on an aircraft in international flight that 

stops at an airport in any of the 50 States for a non-traffic purpose, such as refueling or aircraft 

maintenance rather than passenger activity. Passenger boardings at airports that receive scheduled 

passenger service are also referred to as Enplanements. A pilot program on airport privatization may 

apply to individual commercial service airports, in which case, some private rather than public ownership 

provisions are allowed. Questions on it should be directed to the Airport Compliance Branch, AAS-400. 

Table 2 Yearly AIP Authorizations and Appropriation Limitations (In Millions) 

Page 5
June 28, 2005 Order 5100.38C

FISCAL

YEAR

CONGRESSIONAL

AUTHORIZATION

APPROPRIATIONS ACT LIMITATION 

ON OBLIGATIONS

1982 $ 450.00 $ 450.00 

1983 $ 800.00 $ 804.52 

1984 $ 993.50 $ 800.03 

1985 $ 987.00 $ 925.00 

1986 $1,017.00 $ 885.24 

1987 $1,017.20 $1,025.05 

1988 $1,700.00 $1,268.70 

1989 $1,700.00 $1,400.00 

1990 $1,700.00 $1,425.00 

1991 $1,800.00 $1,800.00 

1992 $1,900.00 $1,900.00 

1993 $2,025.00 $1,800.00 

1994 $2,970.30 $1,690.00 

1995 $2,161.00 $1,450.00 

1996 $2,214.00 $1,450.00 

1997 $2,280.00 $1,460.00 

1998 $2,347.00 $1,700.00 

1999 $2,410.00 $1,950.00 

2000 $2,475.00 $1,850.60 

2001 $3,200.00 $3,140.00 

2002 $3,300.00 $3,223.00 

2003 $3,400.00 $3,295.00 

(1) Nonprimary Commercial Service Airports are Commercial Service Airports that have 

at least 2,500 and no more than 10,000 passenger boardings each year. 

(2) Primary Airports are Commercial Service Airports that have more than 

10,000 passenger boardings each year. Hub categories for Primary Airports are defined as a 

percentage of total passenger boardings within the United States in the most current calendar year 

ending before the start of the current fiscal year. For example, calendar year 2000 data are used for 

fiscal year (FY) 2002 since the fiscal year began 9 months after the end of that calendar year. Table 3 

depicts the formulae used for the definition of airport categories based on statutory provisions cited 

within the table, including Hub Type described in 49 USC 47102. 

Page 6 
June 28, 2005 Order 5100.38C

b. Cargo Service Airports are airports that, in addition to any other air transportation services that 

may be available, are served by aircraft providing air transportation of only cargo with a total annual 

landed weight of more than 100 million pounds. “Landed weight” means the weight of aircraft 

transporting only cargo in intrastate, interstate, and foreign air transportation. An airport may be both a 

commercial service and a cargo service airport. 

Table 3 Definition of Airport Categories 

AIRPORT CLASSIFICATIONS

HUB TYPE: 

PERCENTAGE OF ANNUAL

PASSENGER BOARDINGS

COMMON NAME

Large:

1% or more Large Hub

Medium: 

At least 0.25%, 

but less than 1%

Medium Hub

Small: 

At least 0.05%, 

but less than 0.25%

Small Hub

Primary: 

Have more than 

10,000 passenger 

boardings each year

§47102(11)

Nonhub: 

More than 10,000, 

but less than 0.05%*

Nonhub Primary

Commercial 

Service: 

Publicly owned 

airports that have at 

least 2,500 passenger 

boardings each 

calendar year and 

receive scheduled 

passenger service

§47102(7)

Nonprimary 

Nonhub: 

At least 2,500, 

and no more than 10,000* 

Nonprimary 

Commercial Service

Reliever §47102(18)

Nonprimary (Except Commercial Service)

General Aviation 

Other than Passenger Classification Cargo Service 

§47114(c)(2)

*Nonhub Airports – Locations having less than 0.05 percent of the United States passengers, including any nonprimary 

commercial service airport, are statutorily defined as nonhub airports. For some purposes we separate primary 

locations within this hub type, although more than 100 nonhub airports are currently classified as a nonprimary 

commercial service airport.

c. Reliever Airports are airports designated by the FAA to relieve congestion at Commercial 

Service Airports and to provide improved general aviation access to the overall community. These 

may be publicly or privately-owned. 

d. The remaining airports, while not specifically defined in Title 49 USC, are commonly described 

as General Aviation Airports. This airport type is the largest single group of airports in the U.S. 

system. The category also includes privately owned, public use airports that enplane 2500 or more 

passengers annually and receive scheduled airline service. The airport privatization pilot program 

authorized under Title 49 U.S.C., Section 47134, may affect individual general aviation airports. Under 

this program, some private rather than public ownership provisions are allowed, and questions on it 

should be directed to AAS-400. 

Page 7
June 28, 2005 Order 5100.38C

24. CHANGES IN AIRPORT CLASSIFICATION. 

a. Primary Airports. Any apportioned funds earned by an airport whose classification has 

changed from primary to nonprimary commercial service airport will be available to that airport for the 

entire 3-year (4-year in the case of nonhub primary airports) life of those apportionments regardless of 

any subsequent change in airport classification. See Paragraph 25a below. Should a primary airport be 

inadvertently or erroneously classified as a nonprimary in the annual announcement of apportionment 

distribution, a sum equivalent to the earned apportionments may be made available to the airport from 

discretionary funds. 

b. Reliever Airports. Regions may designate airports as relievers (assuming they meet criteria for 

relievers) at any time during the year. 

c. Other Airports. A few airports change from general aviation to commercial and vice versa 

during a year. For funding classifications for these borderline airports, consult with APP-520. 

25. DISTRIBUTION OF FUNDS. 

Statutory provisions require that AIP funds be apportioned by formula each year to specific airports 

or types of airports. Such funds are available to airports in the year they are first apportioned and they 

remain available for additional fiscal years as described in Paragraph 33l. Among the recipients of 

apportioned funds are primary airports, cargo service airports, states (including nonprimary 

apportionments when applicable) and insular areas (see subparagraph d below), and Alaskan Airports. 

Figure 2 and Table 4, both at the end of this paragraph, depicts how the funds are divided between 

funding categories. See Paragraphs 25e for limiting factors concerning apportionment of funds to 

nonprimary airports. 

a. Primary Airports. Each primary airport apportionment is based upon the number of passenger 

boardings at the airport. If full funding is made available for obligation, the minimum amount apportioned 

to the sponsor of a primary airport is $650,000, and the maximum is $22,000,000, in accordance 

with Title 49 U.S.C., Section 47114(c)(1)(B). These funds are calculated as follows: 

• $7.80 for each of the first 50,000 passenger boardings 

• $5.20 for each of the next 50,000 passenger boardings 

• $2.60 for each of the next 400,000 passenger boardings 

• $0.65 for each of the next 500,000 passenger boardings 

• $0.50 for each passenger boarding in excess of 1 million 

Also, in any fiscal year in which the total amount made available under Title 49 U.S.C., 

Section 48103 is $3.2 billion or more the amount to be apportioned to a sponsor shall be increased by 

doubling the amount that would otherwise be apportioned under the formula, the minimum 

apportionment to a sponsor under (a) above will be increased to $1,000,000 rather than $650,000, and 

the maximum apportionment to a sponsor under (a) above shall be increased to $26,000,000 rather than 

the $22,000,000. 

b. Small Airport Fund. In 1990, legislation was enacted that allows public agencies controlling 

commercial service airports to charge each boarding passenger using the airport a $1, $2, or $3 

passenger facility charge (PFC). Public agencies wishing to impose a PFC must apply to the FAA for 

such authority and meet certain requirements. The Wendell H. Ford Aviation Investment and Reform 

Act for the 21st Century (AIR 21) made provision for the imposition of a $4.00 or $4.50 PFC as described 

within Order 5500.1. 

Title 49 U.S.C., Section 47114(f) requires that AIP funds apportioned to a large or medium hub 

airport be reduced if a PFC is imposed at that airport. For a PFC of $3.00 or less the apportionment for 

Page 8 
June 28, 2005 Order 5100.38C

a fiscal year is reduced by 50 percent of the forecast PFC revenue in that fiscal year, but not by more 

than 50 percent of the apportionments calculated for that fiscal year. In the case of a fee of more than 

$3.00, the apportionment for a fiscal year is reduced by 75 percent of the projected revenues from the 

fee in the fiscal year but not by more than 75 percent of the amount that otherwise would be 

apportioned. This reduction takes place in the fiscal year following the year in which the collection of the 

fee imposed under Title 49 U.S.C., Section 40117 is begun. 

The apportionments that are withheld as a result of PFC collections are distributed, in accordance 

with Title 49 U.S.C., Section 47116(b) as follows: 

• 12.5 percent to the AIP discretionary fund; and 

• 87.5 percent to the “small airport fund”. 

Of the 87.5 percent distributed to the small airport fund, one seventh (1/7) (12.5 percent of the total 

PFC-reduced apportionment funds) must be spent at small–hub primary airports, and the remaining 

divided as follows: 

(1) one–third (25 percent of the total PFC-reduced apportionment funds) is distributed to 

general aviation (including reliever) airports, and 

(2) the remaining two–thirds (50 percent of the total PFC-reduced apportionment funds) is 

distributed to nonhub commercial service airports. 

c. Cargo Service Airports. Airports qualified as cargo service airports share the 3.5 percent of 

AIP apportionment made available to them in accordance with Title 49 U.S.C., Section 47114(c)(2). 

Cargo funds are apportioned to each cargo service airport in the same proportion as its proportion of 

landed weight of cargo aircraft to the total landed weight of cargo aircraft at all qualifying airports. No 

cargo service airport is entitled to more than 8 percent of the total amount apportioned to all-cargo 

service airports. 

Beginning in 1997, the Secretary has been authorized to make a portion of the cargo funds available 

to airports not qualifying for these funds if the Secretary finds the non-qualifying airports will be served 

primarily by aircraft providing air transportation of only cargo. Contact APP-520 for assistance on this 

provision. 

d. States/Insular Areas. 

Funds commonly described as State apportionments are made available within states under various 

conditions. 

(1) If AIP has funding available under $3.2 billion, a total of 18.5 percent of the annual amount 

made available for obligation is apportioned for use at nonprimary commercial service, general aviation, 

and reliever airports within the States and insular areas in accordance with Title 49 U.S.C., 

Section 47114(d). Of this 18.5 percent, 99.34 percent is apportioned for airports based on an 

area/population formula within the 50 States, the District of Columbia, and Puerto Rico, while the 

remaining 0.66 percent is apportioned for airports in the insular areas (Guam, American Samoa, the 

Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands). 

(2) If AIP has funding available equal or more than $3.2 billion, 20 percent of the annual amount 

made available for obligation is apportioned for use at nonprimary commercial service, general aviation, 

and reliever airports within the States and insular areas. Of this, a direct apportionment will be made to 

nonprimary airports in accordance with Paragraph e. below. Of the funds remaining after deduction of 

the nonprimary apportionment, 99.38 percent is apportioned for airports based on an area/population 

formula within the 50 States, the District of Columbia, and Puerto Rico, while the remaining 0.62 percent 

Page 9
June 28, 2005 Order 5100.38C

is apportioned for airports in the insular areas (Guam, American Samoa, the Commonwealth of the 

Northern Mariana Islands, and the U.S. Virgin Islands). 

(3) Although the apportionment is designated for use in these political entities, the FAA has the 

responsibility for determining which airports should receive grants in jurisdictions not funded through the 

State Block Grant Program. Funds apportioned for use within the states and insular areas remain 

available for the fiscal year in which first authorized and the three fiscal years immediately following. 

(4) A special rule under 49 USC 47114(d)(4) provides that amounts apportioned as described 

within this subparagraph for airports of Alaska, Hawaii and Puerto Rico may be used at any primary or 

nonprimary airport in addition to other designated entitlements. This flexibility in using funds applies 

under subparagraph f below to the Alaskan supplemental apportionment as well. 

e. Nonprimary Airports. In the event that AIP is funded at $3.2 billion or more, a portion of the 

funds apportioned in Subparagraph d(2) is apportioned directly to sponsors of nonprimary airports. The 

amount of these individual nonprimary airport apportionments is – 

(1) 20 percent of the 5-year cost of the need listed for a particular airport in the most recently 

published NPIAS; or 

(2) an overall cap of $150,000. 

f. Alaska Supplemental Funds. Funds are apportioned for certain Alaskan airports to ensure that 

Alaska receives at least as much as these airports were apportioned in FY 1980 under previous grant-inaid legislation in accordance with Title 49 U.S.C., Section 47114(e). 

g. Discretionary Fund. Remaining funds form the “discretionary fund.” These funds are of two 

types. One type is discretionary set-aside funds, which are more fully described in Paragraph h below. 

The other type consists of those funds remaining after the apportionments are made and the set-asides 

are accommodated. Of these remaining funds, 75 percent, known as capacity/safety/security/noise 

(C/S/S/N), is to be used for preserving and enhancing capacity, safety, security, and carrying out noise 

compatibility planning and programs at primary and reliever airports. The remaining 25 percent, known 

as remaining or pure discretionary funds, may be used for any eligible project at any airport. 

(1) Projects funded with any discretionary funds should be based on the national priority system 

in Paragraph 320. Ordinarily a project with a high numerical score will not be deferred in order to fund 

lower priority work. Regions should document project files if a higher priority project has been deferred 

to a later fiscal year in favor of other work. For instance, when new information becomes available 

projects in the current year Airport Capital Improvement Plan may be unexpectedly delayed for a variety 

of reasons. If this happens, regions should notify APP-520 of deferral and the reason. See 49 USC 

47115(d)(2)(A). 

(2) The sponsor must be able to commence the work on projects using discretionary funds 

during the same fiscal year as the grant agreement or within 6 months, whichever is later. Regions 

should ensure project schedules are realistic. (When a project has been delayed, see Paragraph 1151 

on suspension of the grant, if appropriate.) For purposes of this provision, regions should construe 

“commence the work” to mean – 

(a) Initiation of the effort for projects with planning or design; 

(b) Initial title search or other preliminary work for land projects; 

(c) Physically underway for construction or noise compatibility implementation; and 

(d) Execution of the purchase contract for equipment projects. 

Page 10 
June 28, 2005 Order 5100.38C

h. Set-Aside Funds. Portions of AIP funds are set-asides designed to achieve specified funding 

minimums. A minimum amount of funding is directed to the noise, MAP, and reliever set-asides. 

(1) Noise. An amount equal to 35 percent of the discretionary fund is reserved for noise 

compatibility planning and implementing noise compatibility programs under Title 49 U.S.C., 

Section 47501 et seq. (formerly the Aviation Safety and Noise Abatement Act of 1979). Such minimum 

can be met with apportioned or discretionary funds. Eligible projects for the noise set-aside funding 

include: 

(a) Noise compatibility planning under 49 USC 47505(a)(2); 

(b) Noise compatibility implementation programs under 49 USC 47504(c); 

(c) Noise mitigation projects approved in an environmental record of decision for an AIP 

airport development project even if the sponsor has not met Part 150 requirements; 

(d) Compatible land use planning and projects carried out by State and local governments 

around large and medium hub airports under 49 USC 47141; and 

(e) Clean Air Act projects as defined by 49 USC 47102(3)(F), 47102(3)(K), and 47102(3)(L) 

except for constructing or purchasing capital equipment that would benefit primarily a revenue-producing 

area of the airport used by a non-aeronautical business. 

(2) Military Airport Program (MAP). Four percent of the discretionary fund is used for the 

MAP. 

(3) Reliever. If the AIP is funded at $3.2 billion or above, 0.66 percent of the discretionary fund 

is available for a limited number of reliever airports with: 

(a) More than 75,000 annual operations; 

(b) A runway with a minimum usable landing distance of 5,000 feet; 

(c) A precision instrument landing procedure; 

(d) At least 100 based aircraft; and 

(e) At least 20,000 hours of annual delays in commercial passenger aircraft takeoffs and 

landings at the airport relieved. 

Page 11
June 28, 2005 Order 5100.38C

Page 12 

i. Minimum Discretionary Funds. The Act states that, beginning in FY 1997, not less than 

$148 million, plus an amount equal to payments from the discretionary funds for LOIs issued prior to 

January 1, 1996, must be available as discretionary funds (capacity/safety/security/noise and remaining) 

after all apportionments and set-asides are satisfied. If less than this amount remains, all 

apportionments (except for Alaska supplemental funds) and set-asides are to be reduced by the same 

percentage to ensure that this amount is available for discretionary grants. 

 Airport Improvement Program

Fiscal Year 2003

Formula Distribution

$3.4 B Appropriation and Reductions*

Resulting in $3,294,823,530

* Includes 0.65% Rescission, $63,206,470 for FAA Airports Operations

and $19,870,000 for Small Community Program.

Reliever

0.16% Noise

8.40%

Non Hubs

6.68%

Cargo

3.00%

Undesignated 

Discretionary

3.79%

Cap/Safety/

Sec/Noise

11.36% Military 

Airport Program

0.99%

Non Comm 

Svc (GA/RL)

3.34%

Small 

Hubs

1.67%

Protected 

Apportionments

10.77%

State 

Apportionment, 

Area/Population

9.65%

State 

Apportionment, 

Nonprimary 

Entitlements

10.35%

Alaska 

Supplemental 

0.65%

Passenger 

Entitlements

29.19%

Funding Categories

Apportioned

Restricted

Discretionary

Figure 2 Typical Percentage Distribution of AIP 

j. Additional Airports. The small airport and discretionary funds may be used to provide grants 

during FY 2004-07 for sponsors of airports located in the Republic of the Marshall Islands, Federated 

States of Micronesia, and Republic of Palau. Using up to $2.5 million of discretionary funds in any fiscal

year during FY 2004-07, the Secretary of Transportation may enter into a reimbursable agreement with 

the Secretary of Interior for airport development projects at Midway Island Airport. 

26. FEDERAL SHARE OF PROJECT COSTS. 

a. The Federal share of the allowable project costs is determined by requirements in 49 USC 

47109. An upward adjustment to these rates applies at some airports in certain states due to the large 

amount of federally owned land area within the State. For applicability of these upward adjustments, 

see Appendix 23. The appendix should be used for calculation of the Federal share whenever rates 

within it are higher than in this subparagraph. In other cases, the rates are as follows: 

(1) For large and medium hub airports, the Federal share is 75 percent. However, for noise 

program implementation at large and medium hubs, the Federal share is 80 percent under 49 USC 

47504(c)(4)(A). 
June 28, 2005 Order 5100.38C

Table 4 Fiscal Year 2003 Distribution of AIP Grants 

FUNDING CATEGORY TOTAL $ AMOUNT 

AVAILABLE* 

PERCENTAGE 

OF TOTAL

APPORTIONMENTS 

Passenger Entitlements $ 961,721,388 29.19 

Cargo Entitlements $ 98,844,706 3.00 

Alaska Supplemental Apportionment $ 21,345,114 0.65 

State Apportionment for Nonprimary Entitlements $ 341,036,416 10.35 

State Apportionment Based on Area and Population $ 317,928,290 9.65 

Carryover $ 354,986,941 10.77 

SMALL AIRPORT FUND

 Small Hubs $ 55,030,653 1.67 

Nonhubs (Nonhub Primary and Nonprimary Commercial Service) $ 220,122,611 6.68 

Nonprimary (Except Commercial Service) $ 110,061,306 3.34 

DISCRETIONARY FUND

 Capacity/Safety/Security/Noise $ 374,323,209 11.36 

 Pure Discretionary $ 124,774,403 3.79 

SET ASIDES

Noise $ 276,673,676 8.40 

Military Airport Program $ 32,549,844 0.99 

Reliever $ 5,424,974 0.16 

AVAILABLE APPROPRIATION $3,294,823,530 100.00 

*Based on FY 2003 law rather than obligations – 

• Reductions from $3.4 billion appropriation limited the 

AIP grants: FAA Operations ($63,206,470), Small 

Community Program ($19,870,000), and the amount 

of the Rescission ($22,100,000). 

• Double entitlement with $26 million maximum and $1 

million minimum entitlement. 

• State apportionment 20% of AIP. Cargo 3% of AIP. 

Non-primary entitlement = 150K or 1/5 of need 

published in FY 98-02 NPIAS, whichever was less. 

Noise set-aside could include apportionments. 

Reliever set-aside two-thirds of 1% of discretionary. 

• PFC airports returned 50% or 75% of entitlements. 

• Double Alaska. 

• Carryovers resulted from non-use by the airport 

sponsor during the fiscal year in which they were 

apportioned. They were protected for two or three 

subsequent years. Nonhub airports qualified for the 

three-year period. Unused apportionments in the 

current fiscal year were converted for use as 

discretionary in the current year. However, the 

protected status reduced discretionary levels in 

subsequent fiscal years. 

Page 13
June 28, 2005 Order 5100.38C

(2) For block grants, the Federal share of individual airport projects is not more than 90 percent 

as described in Paragraph 1092e. A temporary increase the same as Paragraph 26(a)(5) allows 

Federal shares to be up to 95 percent in State block grant individual airport projects. 

(3) The Federal share of costs associated with integrated airport system planning is 90 percent. 

A temporary increase the same as Paragraph 26(a)(5) allows Federal Shares to be 95 percent. 

(4) The pilot program on private ownership of airports includes a Federal share of 70 percent. 

(5) For all other airports – 

(a) Temporarily between FY 2004 and FY 2007, the Federal share is 95 percent; and 

(b) Starting in FY 2008, the Federal share is 90 percent. 

b. The Federal share of the allowable project costs may be further adjusted as follows: 

(1) Projects under the innovative finance demonstration program may have flexible Federal 

shares. 

(2) Section 601b of P.L. 98-454 (United States Insular Areas of Appropriation Authorization) 

requires waiver of up to $200,000 of the sponsor's share of a grant issued after March 12, 1980, to 

American Samoa or the Northern Mariana Islands. For FY 2004-2007, a grant of up to $4 million at the 

95 percent participation rate under this rule would require no contribution from the sponsor. 

27. MAXIMUM ALLOWABLE GRANT INCREASES. 

When increasing the project cost allowable in grant agreements, regions should consider provisions 

of Paragraph 1142, Appendix 13 and related limitations, such as discretionary fund restrictions 

described by Tables 14 and 15. 

a. Airport Development before December 30, 1987. The United States maximum obligation 

under a grant agreement made prior to December 30, 1987, shall not be increased by more than 10 

percent for development projects or, in the case of land acquisition, by more than 50 percent of the total 

increase in the allowable project costs attributable to the acquisition. 

b. Airport Development between December 31, 1987, and September 30, 1992. The United 

States maximum obligation under a grant agreement shall not be increased by more than 15 percent for 

both airport development projects and land acquisition. 

c. Airport Development after September 30, 1992. The United States maximum obligation under 

a grant agreement shall not be increased by more than 15 percent for both airport development projects 

and land acquisition at primary airports. For land acquisition at other than primary airports, the 

maximum obligation may be increased by either the 15 percent of the original grant or 25 percent of the 

increase in total allowable project costs based upon credible appraisals or court award, whichever is 

greater. 

d. Planning Elements. The United States maximum obligation separated under a planning grant 

or such elements with the project cost separately itemized in any grants cannot be increased even when 

the scope of work changes. 

28. - 29. RESERVED. 

Page 14 
June 28, 2005 Order 5100.38C

Section 3. OVERVIEW OF THE GRANT PROCESS

AND PROGRAM FUNDING

30. THE GRANT PROCESS. 

Figure 3 represents the steps taken by the FAA and the sponsor for a typical AIP construction 

project. Not all of these steps are necessary for each project since requirements differ depending upon 

the work involved, the type of sponsor, project size, etc. The starting point within the project 

development stage is capital improvement planning, which should receive early attention of regions to 

ensure the succeeding steps in the process work well. Except for the Congressional notification process 

and the approval of projects exceeding the dollar limits delegated to the regions, all actions shown for 

FAA are carried out in the regions and field offices. Details on requirements and procedures for each of 

the steps are found in ensuing chapters of this handbook. 

31. RESTRICTIONS ON LOBBYING AND INFLUENCING FEDERAL EMPLOYEES. 

Title 49, Code of Federal Regulations (CFR), Part 20, contains requirements regarding lobbying and 

influencing Federal employees by a private entity, association, State, authority, or local government. 

See paragraph 311l. 

a. Certification regarding such lobbying is incorporated by reference within the standard grant 

assurances. For the purposes of the AIP, this certification is made when signing the grant agreement. 

b. The disclosure form that reports these activities by sponsors if lobbying or influencing Federal 

employees occurs using other than AIP funds must be provided by sponsors. Regions must forward the 

disclosure forms to APP-520 upon receipt. Standard Form-LLL, “Disclosure of Lobbying Activities,” is 

the applicable standard form, and instructions with it are contained in Title 49 CFR, Part 20. 

c. If a region becomes aware of these regulated activities by a sponsor, the region must take action 

to ensure that the sponsor provides the disclosure forms. 

32. LIMITATIONS ON REGIONAL AIRPORTS DIVISION AUTHORITY. 

Order 1100.154, Delegations of Authority, places certain limitations on the authority of the regional 

Airports Division Managers applicable to implementation of the AIP. Modifications of that directive and 

Order 1100.5, FAA Organization - Field, have been approved in the interim by the Associate 

Administrator for Airports (ARP-1). The limitations address critical authority, and delegations under 

separate directives also remain in effect. 

While internal controls are currently in place to prevent some of these actions, regional Airports 

Division Managers may not undertake the following without prior approval of APP-1: 

a. Add a new item of development or planning effort to a programmed AIP project without APP-1 

approval when Washington review indicates that concurrence is required (See Paragraph 1060); 

b. Divert any AIP funds to an airport site other than that for which it was intended when the 

allocation was approved; 

c. Terminate any Grant Agreement on planning or development for cause without the prior approval 

of APP-1 when concurrence is requested upon Washington review; 

d. Increase an allocation when funding requires an increase in funds of another Federal agency 

until that other agency has agreed to the increase in its grant (See Paragraph 311k); and 

e. Change or modify the standard terms or provisions of the form of Grant Agreement and 

Application for Federal Assistance (Standard Form 424). 

Page 15
June 28, 2005 Order 5100.38C

33. THE AIP FUNDING PROCESS. 

This process is covered in more detail in Order 5100.20, "Program Control and Reporting 

Procedures for Airport Grant Programs". However, the following description of funding terms and 

procedures will give the reader a broad overview of the process from funding authorization to grant 

payments and recoveries. 

a. Authorizing Legislation. The Airport Improvement Program is authorized by Title 49 U.S.C., as 

amended. 

b. Authorizations. The enabling legislation contains authorization in the form of "contract 

authority" in dollars. 

c. Appropriations. In the absence of further Congressional action, the contract authority may be 

used to fund grants. However, Congress has always included language in annual appropriations acts 

that has the effect of limiting annual grant funds to either the authorized level or to any different level 

determined by Congress to be suitable for economic requirements. These limitations are known as 

obligation limitations. Short term appropriations legislation sometimes is enacted in the form of a 

"Continuing Resolution". 

d. Apportionments. There are two actions referred to as apportionments: 

(1) The Act requires an apportionment of funds to be made each October to sponsors and 

states based on formulas in the Act. This notifies sponsors and states that these funds are available for 

eligible work, but does not involve any transfer of funds. These apportionments are more commonly 

referred to as "entitlements." (See Paragraph 25, above.) 

(2) The other type of apportionment is made by the Office of Management and Budget (OMB) 

and it allows the FAA to obligate congressionally authorized AIP funds. The OMB apportionment is 

formally requested by the FAA, which provides a financial plan for orderly use of the funds. The financial 

plan is based on regional submission of annual program plans as requested by the APP-1 annual airport 

grant programming guidelines issued each spring. The OMB apportionment may contain restrictions on 

the use of funds such as restrictions on the amount that may be used quarterly. 

e. Entitlements. The term "entitlements" refers to the passenger, cargo service, and state 

apportionments (including nonprimary apportionments when applicable) available to sponsors and states 

based on formulas in the Act. See d(1) above. 

f. Planning Figures. APP-1 will issue planning figures in the annual airport grant programming 

guidelines and via telephone throughout the year. The planning figures do not constitute a transfer of 

funds but anticipate and usually will be followed by corresponding allotments. Planning figures issued in 

advance of Congressional appropriations may have to be revised if obligation limitations are higher or 

lower than expected. 

g. Allotments. After the FAA receives an OMB apportionment, APP-1 will request the budget 

office to make an allotment of funds to regions to support previously issued planning figures. Allotments 

and adjustments to allotments will be made throughout the year as required. 

h. Allocations. After a project is fully processed and approved, regions notify sponsors of an 

allocation of funds for the project. This is merely a notification of intent to grant (obligate) funds and 

does not involve a transfer of funds. Total allocations by a region can never exceed funds made 

available by headquarters to a region in either planning figures or allotments. Allocations based only on 

planning figures issued in advance of obligation limitations and apportionments may have to be 

withdrawn if final congressionally approved program levels are lower than originally expected. 

Page 16 
June 28, 2005 Order 5100.38C

i. Obligations. The execution of a grant agreement with a sponsor constitutes an obligation of the 

U.S. Government to pay the amounts specified in the grant. Obligations of funds are processed through 

regional accounting offices in two steps: A "reservations of funds" is made before the grant is signed 

and an "obligation" is reported when the grant is signed. Total obligations in a region may never exceed 

the total of funds allotted to a region. 

j. Payments. Payments to a sponsor are made either through processing of requests submitted by 

a sponsor to the FAA or via a Letter of Credit arrangement. (See Chapter 13.) 

k. Recoveries. As adjustments are made based on actual payments, funds may be recovered (deobligated) from existing obligations and under certain circumstances may be re-obligated for new 

projects or for upward adjustments to existing projects. For block grants, funds are not normally 

recovered. They may be used within the block grant for other eligible projects. See Paragraph 1094h 

about block grant recoveries. For further information, contact APP-520. 

l. Carryover. Funds apportioned for large, medium and small hubs, or states and Alaskan airports, 

remain available for obligation during the fiscal year for which the amount was apportioned and the two 

fiscal years immediately after that year. Funds apportioned for any non-hub or non-primary airport 

remain available for obligation during the fiscal year for which the amount was apportioned and the three 

fiscal years immediately following that year. Apportioned funds that have been unused are protected 

and carryover for the airports through the three or four year periods. Cargo entitlement funds carryover 

based on the airport’s other categories as described above. See Table 4. 

34. PROJECT APPROVAL AND CONGRESSIONAL NOTIFICATION. 

Upon final approval by the Associate Administrator for Airports, the project is forwarded to the Office 

of the Secretary (Office of Congressional Affairs). That office provides notice of the project details to the 

appropriate congressional delegations as a courtesy so that they may notify their constituents. The 

timing of these notices to Congress is determined by the Secretary and tends to involve unanticipated 

delays. When appropriate notifications have been completed, the Secretary notifies APP-520. Regional 

offices are then notified so that further grant award actions can begin. For further information, see 

Order 5100.20. 

35. OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR A-102. 

a. OMB Circular A-102 (Revised), Grants and Cooperative Agreements with State and Local 

Governments, is addressed solely to the federal agencies. It establishes consistency and uniformity 

among federal agencies in the management of grants as well as cooperative agreements with State, 

local, or federally recognized Indian tribal governments. The revised OMB Circular A-102 became 

effective on August 29, 1997. 

b. OMB Circular A-102 is supplemented by a Government-wide regulation. It is directed to 

sponsors. The regulation applicable to the AIP is in Title 49, CFR, Part 18, Uniform Administrative 

Requirements for Grants and Cooperative Agreements to State and Local Governments. Title 49 CFR, 

Part 18 became effective October 1, 1988, except certain provisions on equipment and procurement, 

and prior versions of OMB Circular A-102 apply to earlier grants unless otherwise authorized. 

c. The principal standards in Title 49 CFR, Part 18 of the regulations, as they pertain to AIP, are 

summarized in Advisory Circular 150/5100-16A. Attachments to the previous version of OMB Circular 

A-102, which provided fiscal and administrative standards governing grants to sponsors, have been 

incorporated into Part 18 with few changes. In addition, detailed guidance on meeting these standards 

is found in appropriate places throughout this Order. 

Page 17
June 28, 2005 Order 5100.38C

Figure 3 Typical AIP Grant Process 

Page 18 
June 28, 2005 Order 5100.38C

36. MANDATORY STANDARDS. 

In complying with Assurance 34, a sponsor is required to comply with all appropriate technical 

guidelines incorporated into identified advisory circulars, and these standards become mandatory for the 

project being funded. The list of the advisory circulars is published electronically on the World Wide 

Web. Any guidance that needs to be specifically required for a project, other than that identified in the 

headquarters list of current advisory circulars, should be added to the project as a special condition. 

Standards in effect on the date of allocation of AIP funds to a project apply to that project. Standards 

that become effective after the date of allocation may be applied to the project by mutual agreement 

between the FAA and the sponsor. As allowed in Title 49 U.S.C., Section 47105(c), where states have 

established and the Secretary has approved airport development standards at nonprimary, public-use 

airports (other than standards for safety of approaches) the applicable State standards shall be used. 

Any modification to the technical standards of the advisory circulars identified must be processed in 

accordance with the procedures of FAA Order 5300.1, “Approval Level of Modification of Airport Design 

Standards”. 

37. USE OR TRANSFER OF ENTITLEMENT FUNDS. 

Several arrangements allow use of entitlement funds at a different location than the entitled airport 

so unused amounts are not carried over each year for airports with no planned project. In addition, 

sponsors may have other reasons for using entitlements at a different airport that would be allowed 

under the law. 

a. Use at Airports Owned by Primary Airport Sponsor. A sponsor may use primary entitlements 

for any airport owned by the sponsor that is in the NPIAS in accordance with 49 USC 47117(c)(1). 

b. Transfer to Other Airports. A sponsor may enter into an agreement with the FAA to waive 

receipt of all or part of its entitlement funds provided the waived amounts are made available to the 

sponsor of another eligible airport in accordance with 49 USC 47117(c)(2). 

(1) Funds included in a transfer should be primary, cargo service or nonprimary entitlements. 

State apportionments are not transferable. Each agreement should specify entitlements of only one 

airport. If nonprimary entitlements are proposed for transfer to a primary airport, contact APP-520. 

(2) The receiving airport must be in the same State or geographic area as the airport of the 

sponsor making a waiver. In this paragraph, a “geographic area” means a multi-state area where the 

receiving airport is in the same or an adjacent Standard Metropolitan Area as the airport of the sponsor 

making a waiver. 

(3) The waiver must be in writing using the form within Appendix 16 and include the following 

information: 

(a) Name of sponsor (or other eligible entity such as a State) which is to receive the 

entitlement funds; 

(b) Fiscal year of funds being transferred; 

(c) Date by which transferred funds must be obligated if different than date such funds 

would be converted to the discretionary fund under provisions of the Act; and 

(d) Sponsor attorney’s certification that the waiver complies with all applicable laws and 

represents a legally binding commitment by the sponsor making the waiver. 

(4) The sponsor waiving funds and the sponsor receiving funds may make separate agreements 

concerning the transfer that they feel are needed. For example, the sponsor waiving funds may specify 

the projects or that amounts be repaid in the future with the receiving airport’s entitlements. However, 

Page 19
June 28, 2005 Order 5100.38C

airports shall not transfer entitlements in return for a consideration or future obligation that is ineligible 

under the AIP. A copy of such a separate agreement should be included within the project file. The 

grant agreement with the receiving sponsor for a project including these transferred funds should include 

a special condition prohibiting unallowable consideration or future obligation as specified above. 

(5) The transferred funds continue to be the entitlement funds of a transferee. Guidance on the 

use of such entitlement funds found in this Order is applicable. 

38. STATE BLOCK GRANT PROGRAM. 

Title 14 CFR, Part 156 sets forth regulations to implement the State Block Grant Pilot Program under 

Title 49 U.S.C., Section 47128, as amended. Policy and procedures for the program are individually 

arranged with the participating States. See Chapter 10 for specific block grant procedures. 

39. LETTERS OF INTENT. 

Processing an application for a letter of intent (LOI) is similar to the conventional grant application 

process. LOI approval is at the Washington headquarters level and immediately precedes the 

OST/Congressional notification. See Chapter 10, Section 8 for specific LOI procedures. 

40. MILITARY AIRPORT PROGRAM. 

Title 49 U.S.C., Section 47118 of the act states the Secretary can designate up to 15 current or 

former military airfields for inclusion in the Military Airport Program. These general aviation, commercial 

service, or reliever airports can receive grants for projects necessary to convert them to civilian use or to 

reduce congestion. Fuel farms, parking lots, hangars and certain other facilities are eligible for AIP 

funding participation under this program somewhat beyond that at other airports. 

41. OTHER FEDERAL ASSISTANCE.

 When airports need Federal financial assistance other than the AIP, regions might refer the airport 

to the Catalog of Federal Domestic Assistance at http://www.cfda.gov/ . This Web site provides 

information on individual Federal funding programs. 

42. FINANCIAL STATEMENTS.

AIP funding is included in FAA financial statements annually. Financial statements are 

independently audited to validate the accuracy of the statements of the FAA and the results reported by 

OMB to Congress. 

43. CHANGE IN THE AIP PROCESSES.

Certain airport innovations and non-conventional technologies may require changes to the policy or 

procedures in this order. Increased use of new capital improvement concepts reflecting evolution of the 

technology and aviation system structure may affect airport design, development or operation. 

Impacts on airport safety and Federal requirements resulting from changes may need to be 

evaluated or tested before a change is made. An example of a shift in program emphasis that has 

occurred over many years is the project eligibility and procedures for approving certain projects 

traditionally funded under the Facilities and Equipment program. If a change requires waiver from 

procedures in this order, see paragraph 5 on the requirement for approval by APP-1. For changes 

involving airport planning, finance, or construction, see paragraphs 400 and 504. Regions are 

encouraged to consult with APP-520 on potential changes in the AIP processes at an early stage to 

allow maximum flexibility. 

44. - 199. RESERVED

Page 20 
June 28, 2005 Order 5100.38C

Chapter 2. SPONSOR ELIGIBILITY

200. GENERAL. 

Eligibility to receive funds under the AIP is contingent upon the type of sponsor and the type of 

activity for which funds are sought. The different types of sponsors that are eligible to receive funds are: 

a. Planning agencies; 

b. Public agencies owning airports; 

c. Certain public agencies not owning airports (as defined in Paragraph 207); and 

d. Certain private airport owners/operators (as defined in Paragraph 208). 

A state, whether it owns an airport or not, may sponsor development at airports within the state. If 

the state is not the owner of the airport, please refer to Paragraph 209 below regarding policies and 

conditions that apply. 

201. LEGAL AND FINANCIAL RESPONSIBILITY. 

Sponsors must: 

a. Be legally, financially, and otherwise able to assume and carry out the certifications, 

representations, warranties, assurances, covenants and other obligations required of sponsors which 

are contained in the AIP project application and grant agreement forms; and 

b. Have the authority to act as a sponsor. An opinion of the sponsor's attorney as to its legal 

authority to act as a sponsor and carry out its responsibilities under the grant agreement will be required 

when deemed necessary or desirable. 

202. CO-SPONSOR. 

Any two or more public agencies desiring to participate in accomplishing a project may co-sponsor a 

project provided such public agencies jointly or severally meet the requirements of Paragraph 201a. 

above. 

a. The terms and conditions of the grant agreement will jointly and severally bind cosponsors 

unless their respective rights and obligations with respect to an approved AIP project are otherwise set 

forth in a written agreement. A true copy of such agreement must be incorporated in or made a part of 

the project application submitted to the FAA office in whose jurisdiction the airport is located. The 

agreement shall, as a minimum, set forth: 

(1) The responsibilities of each cosponsor to the other(s) with respect to the accomplishment of 

the proposed development, operation, and maintenance of the airport; 

(2) The obligations which each will assume to the United States; and 

(3) The names of the sponsor or sponsors who will accept receipt of and disburse grant 

payments. 

b. A public agency that desires only to contribute funds to a sponsor need not become a sponsor or 

an agent of the sponsor. However, any funds contributed become funds of the sponsor(s) for purposes 

of the project. 

Page 21
June 28, 2005 Order 5100.38C

c. Any other entity not meeting the requirements of Paragraph 201a may co-sponsor a 

development project only if an eligible sponsor co-signs the grant, and a written agreement must bind 

that sponsor to the terms and conditions of the grant. 

203. AGENTS. 

A public agency authorized by state or local law may act as an agent of the public agency that owns 

and operates the airport without participating financially in the project or becoming a sponsor. The terms 

and conditions of the agency and the agent's authority to act for the sponsor must be set forth in an 

agreement that is satisfactory to the Administrator, a true copy of which must be submitted for approval 

with the project application. Such agent may accept, on behalf of the sponsor, a grant only if that 

acceptance has been specifically authorized by resolution or ordinance of the sponsor's governing body 

and such authority is specifically spelled out in the agreement. 

204. PLANNING AGENCIES. 

A planning agency means an agency designated by the FAA Administrator that is authorized by laws 

of the State or states or political subdivisions concerned to engage in area-wide planning for the areas in 

which the grant assistance is to be used. For purposes of this paragraph, states include the District of 

Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, the Government of 

the Northern Mariana Islands, and Guam. 

a. Typical State Planning Agencies. Typical state agencies that are authorized by state law to 

engage in state airport system planning normally include planning offices, aeronautics commissions, and 

departments of transportation. In some cases, state law may authorize a system planning effort to be 

undertaken directly by the office of the governor. A legal opinion, supplied by the state agency applying 

for the grant and showing that state law permits the applicant to undertake the Federally assisted 

project, is a sufficient basis for determining eligibility. If the suitability of the applicant to undertake the 

effort is in question, the Administrator's designation of the planning agency will be based on: 

(1) Comments from the state Single Point of Contact (SPOC); 

(2) Comments from the governor; and 

(3) The capability of the applicant to undertake airport system planning in a comprehensive 

statewide planning framework. 

b. Typical Metropolitan Planning Agencies. Typical planning agencies, which are authorized by 

state or local laws to engage in metropolitan area airport system planning, include Metropolitan Planning 

Organizations (MPOs), Councils of Government (COGs), Regional Planning Commissions, (RPCs) and 

other similarly organized agencies. In most cases, the planning agency will be in existence and have 

established boundaries. When it exists, the MPO designated by the governor shall be the sponsor or 

co-sponsor for metropolitan and/or system planning projects. If the MPO is not capable of engaging in 

area wide planning for the area in which the grant assistance is to be used, a co-sponsor agreement 

shall be worked out between a planning agency that has the capability to do area wide airport system 

planning and the MPO. This arrangement is needed to insure that airport planning is properly 

considered in the overall transportation planning process for the metropolitan area and vice versa. 

205. DESIGNATION OF ELIGIBLE PLANNING AGENCIES. 

Eligible planning agencies may receive grants for system planning. 

a. Designation. All sponsors for system planning projects must be designated by the FAA 

Administrator. This designation authority is delegated to the Airports Division Manager and is implicitly 

accomplished when a grant request is approved. 

Page 22 
June 28, 2005 Order 5100.38C

b. Conflicting Applications. Where more than one agency applies for a grant for the same or 

similar planning project, and where identification of the appropriate agency empowered to do the 

planning is not clear, the FAA will designate the eligible applicant based on which one is most 

acceptable to do the planning. All parties should be requested to work through the FAA-designated 

grantees where they desire to conduct planning elements or activities. 

206. PUBLIC AGENCIES OWNING AIRPORTS

a. A public agency means a state, the District of Columbia, the Commonwealth of Puerto Rico, the 

Virgin Islands, American Samoa, the Government of the Northern Mariana Islands, and Guam or any 

agency of them; a municipality or other political subdivisions; or a tax-supported organization; or an 

Indian tribe or pueblo: 

b. Public agencies owning public-use airports are eligible to receive grants for: 

(1) Airport master planning; 

(2) Noise compatibility planning; 

(3) Noise program implementation projects; and 

(4) Airport development projects. 

c. Under systems planning projects, states may assist to identify appropriate public agencies and 

airport sponsorship arrangements for airports within their jurisdictions (See Paragraph 405w). 

207. PUBLIC AGENCIES NOT OWNING AIRPORTS

a. See 206a above for the meaning of public agency. 

b. Public agencies not owning public-use airports are eligible to receive grants for: 

(1) Airport master planning to obtain necessary agreements and FAA site approval to acquire 

existing airports or develop a new airport; 

(2) Compatible land use planning in areas around a large or medium hub provided the airport 

has not submitted a Part 150 program to the FAA (or has not updated its approved airport noise 

compatibility program within the preceding 10 years); 

(3) Noise program implementation where such projects are for educational/medical buildings 

within the noise impact area at a public airport (or are included within the airport’s Part 150 program 

approved by the FAA) and the compatible land use projects resulting from (2) above. See Chapter 8 

about noise compatibility projects; and 

(4) Acquisition of existing airports or development of a new airport. 

c. The designation of public agencies not owning a public-use airport as eligible to receive a grant 

may be reviewed in system plan projects. See paragraph 405w. Designation is implicitly accomplished 

when a grant request is approved, and therefore needs careful consideration before issuance of grants 

to ensure proposals meet Federal requirements. 

208. PRIVATE AIRPORT OWNERS. 

a. This may be an individual, a partnership, corporation, etc., that owns a public-use airport used or 

intended to be used for public purposes that is a reliever airport or an airport that has at least 2,500 

passenger boardings each year and receives scheduled passenger aircraft service. 

Page 23
June 28, 2005 Order 5100.38C

b. A privately owned airport sponsor, as defined in a. above, is eligible for funding for: 

(1) Airport development projects; 

(2) Airport master planning; 

(3) Noise compatibility planning; and 

(4) Noise program implementation projects. 

209. STATE SPONSORSHIP OF AIRPORT PROJECTS. 

a. Title 49 U.S.C., Section 47105(a)(1)(B) allows State sponsorship of development projects, 

including master planning, for one or more airports. This provision is subject to three statutory 

conditions: 

(1) The sponsor of each airport shall consent in writing to State sponsorship; 

(2) There shall be administrative merit and aeronautical benefit to the State sponsorship; and 

(3) An agreement acceptable to FAA shall exist to assure compliance with appropriate grant 

conditions and assurances. 

b. This provision could reduce FAA and State/sponsor workload by combining many grants into 

one and could provide economies of scale where appropriate through sole State sponsorship rather than 

numerous sponsorships. For instance, equipment could be acquired in quantity at potentially lower cost, 

several small and similar construction projects could be combined, or related airport master or layout 

plans could be prepared. 

c. To simplify and promote national uniformity in the grant program, the FAA has developed a 

standard agreement (Appendix 26) to be signed by the sponsor of each airport included in a State 

sponsored grant. The signed agreement(s) should be provided by the State to FAA with the preapplication package. This will satisfy requirements in the statute that airport sponsors consent in writing 

to State sponsorship of work at their airports and assure compliance with grant conditions and 

assurances. Should the State wish to retain one or all obligations, sufficient details should be spelled 

out as an addendum to the standard agreement in the form prescribed by Paragraph 202 a. 

d. Field offices should encourage State sponsorship if they determine there are administrative merit 

and/or aeronautical benefit in issuing a single grant for a number of related projects. This determination 

must be referenced in the project folder. When a project has mixed airport categories (types), each 

airport category and the associated discretionary and/or entitlement funds shall be reported to APP-520 

when funds are reserved for the project. 

e. Co-sponsorship of projects in accordance with Paragraph 202 remains an alternative to this 

procedure if all parties believe this to be more efficient. 

f. State block grants, as described in Chapter 10, Section 9, are an alternative to State sponsorship 

of airport projects. The block grant projects are restricted to States having been selected for the 

program. A block grant requires more capability within the State aviation agency. The main difference 

between the block grant and State sponsorship of airport project requirements under Title 49 U.S.C., 

Section 47105(a)(1)(B) is responsibility for project selection. States select airport projects funded by the 

block grants. Under the State sponsorship provision, the FAA selects the projects. For the States that 

express interest in the block grant program prior to having been selected for such, regions should 

encourage its sponsorship of airport projects as a transition in the event that the State may be added to 

the program. 

Page 24 
June 28, 2005 Order 5100.38C

210. OTHER SPONSOR ELIGIBILITY. 

For information on the status or eligibility of other project sponsor arrangements such as described 

in Paragraph 25, contact APP-520. 

211. - 299. RESERVED. 

Page 25
June 28, 2005 Order 5100.38C

This page left intentionally blank 

Page 26 
June 28, 2005 Order 5100.38C

Chapter 3. P ROJECT ELIGIBILITY, ALLOWABLE COSTS, 

P RIORITY, AND DONATIONS

Section 1. PROJECT ELIGIBILITY

300. GENERAL PROJECT ELIGIBILITY REQUIREMENTS

a. Chapters 3 through 7 provide guidance on the AIP eligibility of various items, including planning, 

airport development, land acquisition, and noise program implementation projects. No attempt has been 

made to identify every possible project as eligible or ineligible. Consequently, if the eligibility of an item 

is not specifically stated, it is incumbent upon the Airports field personnel to determine if the item meets 

the general guidelines of these chapters or to consult with the Airport Improvement Program Branch 

(APP-520) if the eligibility is uncertain. However, no project grant application may be approved unless 

the Secretary is satisfied that: 

(1) The project sponsorship requirements have been met; 

(2) The project is reasonably consistent with the plans of planning agencies for the 

development of the area in which the airport is located; 

(3) Sufficient funds are available for that portion of the project not paid for by the United States; 

(4) The project will be completed without undue delay; 

(5) The airport location is included in the current version of the NPIAS; and 

(6) The project involves more than $25,000 in AIP funds unless, in the judgment of the 

responsible Airports office, it would be in the best interest of the Government to award a grant of a lesser 

amount. 

b. The Act allows the separate funding of projects for the preparation of plans and specifications, 

including field investigations incidental thereto. These will be funded only if they result in the complete 

preparation of plans and specifications for airport development work that has every expectation of 

beginning within two years. Projects involving only field investigations, such as pavement evaluation, 

will not be funded on a “stand alone” basis except in planning projects. Separate projects that involve 

construction design for completed work will not normally be allowed. Contact APP-520 if airports 

propose reimbursement for engineering costs exceeding a maximum increased United States obligation 

described in Paragraph 1142. 

c. A current airport layout plan (ALP) that depicts the proposed project and which has FAA 

approval from the standpoint of safety, utility, and efficiency of the airport shall be required before a 

development project is approved. ALPs may be funded as part of master planning which is discussed in 

Paragraph 406g. ALPs may be funded retroactively upon grant approval as project formulation cost to 

add the work of the project onto the ALP and reflect actual conditions existing on the airport. If current 

design standards for the airport need to be reflected on the ALP, this work is eligible as project 

formulation cost. If an environmental assessment is needed for the project, the assessment is also 

eligible as project formulation cost. ALP approval requirements and conditions as well as FAA approval 

actions related to environmental impacts are discussed in Paragraph 428. 

301. PROHIBITIONS

a. Legislative Determination. The Act specifically prohibits using AIP funds for decorative 

landscaping (See Paragraph 592), the provision or installation of sculpture or works of art, and for the 

construction, alteration, or repair of: 

Page 27
June 28, 2005 Order 5100.38C

(1) Public parking facilities for passenger automobiles; 

(2) A hangar except at nonprimary airports; or 

(3) Any part of an airport building except components associated with eligible facilities and 

those buildings. 

The prohibition against public parking facilities does not apply to non-revenue facilities at nonhub 

primary airports or at nonprimary airports as described in Paragraph 526. In addition, the prohibitions 

contained in subparagraphs a(1) and a(2) above do not apply to airports designated by the Secretary 

under the Military Airport Program (MAP). See Paragraph 606. 

b. FAA Policy Determination. Headquarters will make a determination on the eligibility of unusual 

projects on a case-by-case basis and based on FAA's interpretation of the intent of Congress. 

Appendix 1 lists those projects or work items found ineligible for funding. To insure a consistent national 

program, field offices must follow this guidance. 

302. ENVIRONMENTAL REQUIREMENTS

a. All AIP projects, including projects for plans and specifications, require environmental processing 

prior to FAA approval. Every project will fall within one of the following categories: 

(1) Those requiring an environmental assessment or preparation of an environmental impact 

statement (EIS) or a finding of no significant impact (FONSI); or 

(2) Those that are categorically excluded. 

b. Detailed guidance on the environmental process is provided in Order 1050.1, “Policies and 

Procedures for Considering Environmental Impacts” and in Order 5050.4, “Airport Environmental 

Handbook”. 

303. OFF AIRPORT WORK. 

Work items must be located within the airport boundary to be eligible. The only exceptions to this 

requirement are: 

a. Removal of obstructions; 

b. Outfall drainage ditches. The correction of any damage resulting from construction of ditches is 

an eligible cost; 

c. Relocation of roads and utilities constituting airport obstructions; 

d. Relocation of roads and utilities to allow eligible airport development; 

e. Installation or relocation of navigational aids (NAVAIDs), including markers; 

f. Construction and installation of utilities; 

g. Lighting and marking of obstructions; 

h. Airport waste-water treatment plants; 

i. Noise program implementation projects; 

Page 28 
June 28, 2005 Order 5100.38C

j. Environmental mitigation measures required as a condition of environmental approval (e.g., 

wetlands replacement); and 

k. Aircraft Rescue and Fire Fighting Training Facility. 

304. WORKS OF ART

a. General. It is FAA policy to support projects that contribute to the architectural and cultural 

heritage of local communities. In accordance with this policy, airport sponsors are encouraged in their 

early planning procedures to use design, art, and architecture to reflect local customs and history of the 

community or other cultural emphasis. This can be accomplished without impairing function, safety, and 

efficiency of the facility. 

b. Definitions. 

(1) Design. The process of arranging works of art, physical spaces, materials, and objects to 

perform specific airport functions. 

(2) Art. Airport objects for aesthetic effect. 

(3) Architecture. The design and construction of airport objects, including the character, 

structure, or site planning. 

c. Art Eligibility and Limitations. Architectural treatment of the inside and outside of buildings to 

reflect local custom, style, or cultural attitudes is eligible. For example, the application of an adobe finish 

on the exterior and interior walls of a terminal in the Southwest would be eligible. Structural 

requirements that may be needed for works of art are also eligible. Examples of the ineligible costs in 

an airport development project include: 

(1) Any art feature for areas not seen or used by the general public; and 

(2) Art works for the sole purpose of aesthetic enhancement. 

305. RELOCATION OR MODIFICATION OF FAA FACILITIES. 

a. The relocation of an FAA radar facility or airport traffic control tower (ATCT), or modification in 

lieu of relocation is eligible when necessitated by an AIP or PFC development project on the airport. 

Other relocations or modifications are handled on a case-by-case basis. The sponsor is responsible for 

the cost of relocating or modifying these facilities under Order 6030.1,”FAA Policy on Facility 

Relocations Occasioned by Airport Improvements or Changes”. The term "modification" as used in this 

paragraph is limited to those modifications that are required as a result of eligible airport development 

projects; for example, the installation of a directional localizer in lieu of relocating the localizer. Other 

modifications are chargeable to the Facilities and Equipment Program. The relocation of NAVAIDs and 

other public facilities for the convenience of the owner, or to increase their capability for use, is not 

eligible. If the FAA elects to install a new NAVAID in lieu of relocating the existing one, the sponsor's 

responsibility and, consequently, AIP participation is limited to the estimated relocation cost. 

b. The acquisition and installation of interim NAVAIDs will be eligible when the regional office 

determines they are necessary to provide instrument capability during an extended period of time for 

construction. 

c. For relocation of airport traffic control towers, if the ATCT is sponsor-owned, see Paragraph 

593c; and where the facility may be owned by another non-Federal entity, see Paragraph 593a. If the 

ATCT is FAA-owned, see Paragraph 593b. 

d. Consult APP-520 before approving relocation projects exceeding $500,000. 

Page 29
June 28, 2005 Order 5100.38C

306. PAVEMENT EVALUATIONS. 

a. Pavement Condition Surveys. Pavement condition surveys are eligible as project engineering, 

master planning, or system planning. A pavement condition survey is a procedure for visually inspecting 

pavement surfaces, both flexible and rigid, for signs of distress resulting from the influence of aircraft 

traffic and climatic conditions. The procedure is described in Advisory Circular 150/5380-6. The 

purposes of a pavement condition survey include: 

(1) Determining present condition of the pavement in terms of apparent structural integrity and 

operational surface condition; 

(2) Providing the sponsor with a pavement condition index (PCI) for comparing condition and 

performance of pavements at airport(s); 

(3) Providing the sponsor with a rational basis to justify, prioritize, and program airport 

development projects; and 

(4) Providing feedback on pavement performance for validation and improvement of current 

pavement design. 

b. Pavement Management Programs. A pavement condition survey is only an indicator of 

pavement condition at a point in time, and it involves little evaluation or systematic management of 

pavements. To be more useful for identifying cost-effective maintenance and rehabilitation, the 

pavement condition survey may be used in conjunction with a systematic approach to inventory and to 

evaluate data. As described in Advisory Circulars 150/5320-17 and150/5380-7, pavement data may be 

evaluated at both the network and project levels. 

(1) Network Level. The network level considers total pavements in a system or master 

planning context and examines general alternatives and time frames to maximize benefits. It is directed 

toward keeping acceptable performance while minimizing maintenance and rehabilitation costs. 

Network level evaluation may be for one or more airports. 

(2) Project Level. Project level pavement evaluation usually focuses on one airport and results 

in detail appropriate to development project formulation, not planning projects. The objective is to 

assess causes of pavement deterioration, determine potential solutions, assess benefits of specific 

alternatives, carry out life cycle costing, and select the solution. At this level, sufficient information must 

be obtained to evaluate the pavement's structural capacity and determine the causes and extent of 

pavement deterioration. 

(3) Eligible Work. Sponsors of planning studies desiring to establish a network pavement 

management program may properly request funding under that broad heading or some related title. The 

level of detail proposed should be reviewed to determine eligibility for system or master planning. More 

detailed studies at the project level are reserved for development projects. 

(a) System and Master Planning. A pavement management program at the network level 

is eligible as systems or master planning. Work activities are limited to the following. 

1. Network definition to divide pavement data into components for storage, retrieval, and 

evaluation; 

2. Pavement condition survey to inspect pavement surfaces for signs of distress 

resulting from aircraft traffic or climatic conditions and development of a PCI; 

3. Construction history including dates and pavement structure of new construction, 

overlays, and rehabilitation work. A determination should be made on an airport by airport basis that 

FAA pavement files are not current before funding this element; 

Page 30 
June 28, 2005 Order 5100.38C

4. Traffic inventory and load intensity for each pavement section; 

5. Inspection scheduling based on minimum PCI levels and pavement deterioration 

rates; 

6. Pavement condition projections based on rating network deterioration or improvement 

to determine the impact of deferring maintenance and rehabilitation; 

7. Priority scheme and ranking of pavement sections by condition within various 

grouping options; 

8. Maintenance and rehabilitation cost scheduling to develop average unit costs based 

on surface type, PCI ranges, and distress severity; 

9. Budget planning to develop minimum target PCI levels for each pavement type in the 

network; and 

10. Acquisition of available software dedicated to the study, e.g. Micro-PAVER, and the 

cost of computer time to store, process, and evaluate the data. Customizing of commercially available 

software is eligible only if reasonable in terms of the overall product needed. 

(b) Master Planning Projects. Pavement testing is eligible primarily as an engineering 

cost in development projects. Master planning pavement tests may be approved by the region when 

costs of such testing are warranted based on a visual inspection. 

(c) Development Projects. Activities at the project level of pavement evaluation are 

normally eligible under development projects as follows: 

1. Friction surveying and friction measuring devices; 

2. Nondestructive testing such as deflection testing, ground penetrating radar, and video 

logging; 

3. Destructive testing such as soil borings, pavement cores, and soil strength tests; 

4. Detailed evaluation of alternatives and development of engineering solutions; and 

5. Engineering design work. 

(4) Ineligible Work. The following pavement management activities are ineligible: 

(a) Development and unnecessary customizing of software beyond that commercially 

available. This is research, not planning or design. The limit on customizing software is a judgment that 

depends upon use of the final product and overall value for the airport(s). For instance, the products of 

pavement management programs under system or master plan projects need to be individually 

compatible with other planning activities; 

(b) Computer hardware and common use software, e.g. word processing; 

(c) Pavement management programs at airports not in the National Plan of Integrated 

Airport Systems; and 

(d) Day-to-day operational costs of running a pavement management program beyond 

periodic updating of the pavement management program. 

Page 31
June 28, 2005 Order 5100.38C

c. Scope and Use of Pavement Evaluation under Planning Projects. Pavement condition 

surveys and pavement management programs under planning projects require special consideration: 

(1) Normally, pavement evaluation should be accomplished through master planning at major 

airports, with the State system plan covering other airports the State wishes to cover; 

(2) Pavement evaluation and updates for a particular airport should be accomplished in either 

the system plan or master planning. Duplication of pavement evaluation activities at a given time is 

ineligible; 

(3) Once a pavement evaluation program is undertaken, the sponsor must commit to keeping 

the data current through an update of the entire program or any other reasonable approach. For 

instance, a phased approach with one-third done each year is reasonable; and 

(4) Airport development identified through a pavement evaluation program should be reflected 

in the sponsor's capital improvement program. 

d. Cost Guidance for Pavement Evaluation. The cost of pavement condition surveys and 

pavement management programs has varied widely. The methodology of each proposal should be 

reviewed carefully to determine that costs and employee-hours are necessary and reasonable. 

Questions about the cost of pavement evaluation should be addressed to AAS-200. 

307. EQUIPMENT PROCUREMENT UNDER PLANNING GRANTS. 

In general, the purchase of any equipment as part of a planning project is ineligible. This policy 

applies to the purchase of computer equipment as set forth in Paragraph 405u, office equipment, or any 

hardware even though its use is necessary to perform the planning work. Contact APP-520 for 

assistance on specialized instruments or hardware needed for planning projects. 

308. - 309. RESERVED. 

Section 2. ALLOWABLE/NONALLOWABLE COSTS

310. ALLOWABLE PROJECT COSTS. 

OMB Circular A-87, Cost Principles for State and Local Governments, describes requirements on 

allowable project costs. The Single Audit Act of 1984, implemented by OMB Circular A-133, Audits of 

State, Local Governments, and Non Profit Organizations, establishes procedures to ensure uniformity in 

the process for making sponsor audits and allowable cost determinations by the Federal Government. 

a. Direct and Indirect Costs. Subparagraph 310b provides indirect cost guidance and the 

remaining subparagraphs are on direct costs. For the purpose of computing the amount of an AIP grant, 

allowable project costs are a direct or indirect cost in accordance with OMB Circular A-87 paid or 

incurred under a planning project, an airport development project, or a noise program implementation 

project, which, in the opinion of the Administrator: 

(1) Is necessary for the accomplishment of the project in conformity with the approved plans 

and specifications, approved program narrative, and terms and conditions of the grant agreement; 

(2) Is reasonable in amount (or be subject to partial disallowance to the extent the FAA 

determines it is unreasonable). Review of a sponsor’s price or cost analysis as described in Paragraph 

907 provides a basis for determining reasonableness of costs in airport development projects based on 

bids. The review of plans and specifications as described in Paragraph 1005 provides a basis for 

determining reasonableness of costs in airport development projects based on estimates. For other 

projects, a reasonableness of cost determination should be based on similar work within other recent 

grants, the land appraisals, and the region’s judgment about project negotiations or the scope of work; 

Page 32 
June 28, 2005 Order 5100.38C

(3) Is supported by satisfactory evidence; and 

(4) Was incurred after the date of execution of a grant agreement; except that project cost 

incurred prior to execution of a grant agreement may be reimbursed in the following instances: 

(a) Study design necessary for a planning project; 

(b) Costs necessary to formulation of a development project, such as preparation of plans 

and specifications, preparation or revision of an ALP, environmental assessment, performance of a 

benefit-cost analysis and field surveys; 

(c) Land acquisition; 

(d) FAA-approved noise compatibility programs; 

(e) Work accomplished after the issuance of letters of intent (see Paragraph 1070); or 

(f) Costs incurred after September 1996 in the case of the funds apportioned to a sponsor 

as entitlements. 

b. Indirect Costs. Indirect costs are allowable only if the sponsor has an approved cost allocation 

plan and, when required, an executed indirect cost rate agreement in accordance with OMB 

Circular A-87. Advisory Circular 150/5100-10, Accounting Records Guide for Airport Aid Program 

Sponsors, contains the basic instructions needed by the sponsor to prepare and submit the cost 

allocation plans and indirect cost rate proposals. 

(2) A cognizant agency process is used whereby one Federal agency approves indirect cost 

allocation plans and rates on behalf of all other Federal agencies. This agency is generally the Federal 

agency that has the greatest dollar involvement with a given sponsor. Cognizant administrative 

responsibility within DOT is determined by the Office of Acquisition and Grant Management, M-60, in 

conjunction with the Office of Inspector General (OIG) and the operating administration involved. 

(3) The FAA's responsibilities are included in Paragraph 1322. Responsibility for approving cost 

allocation plans and negotiating and executing the indirect cost rate agreement is delegated to the 

regional Airports Division Manager. The regional Airports Division should use Order DOT 4600.11, 

Principles for Determining Costs Applicable to Grants and Contracts with State and Local Governments. 

Cost Principles and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for 

Agreements with the Federal Government, ASMB C-10, developed by the United States Department of 

Health and Human Services, dated April 8, 1997, also contains guidance for cost allocation plans as well 

as indirect cost rate agreements. Copies of ASMB C-10 may be purchased from the Superintendent of 

Documents, U.S. Government Printing Office, Washington, D.C. 20402. 

(4) Local governments are required to submit cost allocation plans and indirect cost rate 

proposals for review and approval. Regions should use Paragraph 1322 for additional guidance 

regarding audit responsibilities. 

c. Project Administrative Costs. Necessary and reasonable direct administrative costs are 

allowable. No administrative costs can be allowed in connection with the accomplishment of a project 

unless supported by evidence that such costs were actually incurred by the sponsor and were necessary 

to the accomplishment of the project. When a sponsor intends to claim direct administrative costs, an 

Administrative Cost Plan may be required. This plan should be prepared to show the personnel, how 

the cost is specifically related to the project, and the type of documents or other evidence that will 

indicate the action is a direct involvement. 

Page 33
June 28, 2005 Order 5100.38C

(1) Administrative costs incurred in connection with a project regardless of whether or not 

incurred by regular and continuing employees of the sponsor may be allowed only if they are properly 

supported and substantiated. Arbitrary or prorated administrative costs that are not or cannot be 

supported and substantiated, as having been incurred for the project shall not be considered as 

allowable project costs. 

(2) Administrative services provided by contract are allowed if the contract meets the 

procurement standards of Title 49 CFR, Part 18. 

(3) Project formulation costs incurred by a sponsor in the preparation of the pre-application and 

application and the necessary documentation including surveys, title examination, appraisals, relocation 

plan, preparation of environmental assessments, public hearing expenses, other necessary legal work, 

and administrative expenses are allowable. 

(4) Sponsor attorney fees charged to a project must be reasonable. A breakdown of such fees 

must be submitted showing the portion of the total fee allotted to each class or type of service rendered 

and the appropriate amount of time devoted to each class or type of service. A determination is also 

needed that the legal expenses are attributable to State or local project issues rather than Federal 

requirements. 

d. Study Design and Planning Costs. See Chapter 4. 

e. Engineering, Construction Design and Project Formulation Costs.

The costs of engineering services needed in connection with an airport development or noise 

program implementation project are allowable provided they are reasonable. If not, only such amount as 

is determined to be reasonable shall be considered an allowable cost. 

(1) Engineering costs can normally include the preparation of plans and specifications, initial 

field investigations, preliminary design, testing, cost estimating, preparation of bid documents, bid 

evaluation services, construction inspection, and technical consulting services to the sponsor. 

(2) All contracts for engineering and planning services and force account (See 

Paragraph 1230 for a definition of force account) proposals must be submitted for FAA approval before 

execution of a new contract or extension of an existing contract or before performance of force account 

work. If appropriate, this may be accomplished by sponsor certification procedures as outlined in 

Chapter 10, Section 3. FAA should select contractors that prepare an environmental impact statement 

as described in Advisory Circular 150/5100-14. 

(3) The costs of development of plans and specifications for items of eligible development 

included in a notice of allocation, but excluded from a grant offer, are allowable costs under the project. 

Federal participation in such costs, however, should be deferred until it is reasonably certain that the 

excluded development will be included in a grant agreement within two years. If such costs are included 

in the current grant agreement, procedures must be established to preclude duplication in a future grant 

for the development work itself. 

f. Construction/Equipment Costs. The costs of construction or equipment necessary to complete 

the project according to the plans and specifications are allowable to the extent that they are reasonable. 

(1) Force Account. Construction by sponsor's force account is considered construction done 

without the benefit of a contract or the services of a contractor. Sponsor's force account construction 

costs will not be allowed unless construction by that method has been approved in advance by the FAA. 

(See Chapter 12, Section 3.) 

Page 34 
June 28, 2005 Order 5100.38C

(2) Temporary Construction. If the FAA makes a determination that uninterrupted operation 

of the airport is necessary and that such operation could not be continued without temporary 

construction, costs of temporary construction are allowable even though a portion of the work cannot be 

salvaged. The cost of temporary measures needed to protect air and water quality is also allowable. 

(3) Non-eligible Buildings or Facilities Removal and Relocation. The costs of removal and 

relocation of non-eligible buildings or facilities constituting airport hazards or which must be moved to 

carry out an AIP project are allowable up to the appraised value. See Paragraphs 582 and 593. 

g. Legal Fees and Litigation Costs. Legal fees and related litigation costs determined to be 

necessary to the accomplishment of an AIP project and reasonable in amount are allowable. Legal fees 

expended by a sponsor defending a specification are not allowable. The Regional Airports Division 

Manager is responsible for determining what services are necessary for the accomplishment of a project 

and the reasonableness of legal fees and litigation costs under $l00,000. Legal fees and related court 

costs (including settlement amounts) of $l00,000 or more must be submitted to APP-1 for review and 

approval. In forwarding such matter for review, the region should include its analysis of the situation, its 

recommendation, and proposed method for payment. See Paragraph 310c(4). 

h. Land and Relocation Assistance Costs. See Chapter 7. 

i. Noise Compatibility Project Costs. See Chapter 8.

j. Audit Costs. See Chapter 13. 

k. Special Situations. Where accomplishment of an airport development project cannot be carried 

out unless certain actions are taken, e.g. a court order or mitigation measure in an environmental 

program specifically stated as a prerequisite or a legal agreement between the airport sponsor and 

another party, the cost of taking such action may be eligible. If no precedent for these costs being 

eligible exists, APP-500 should be consulted on a case-by-case basis. 

l. Program Administration Costs. Such costs are ineligible unless specifically allowed by a grant 

of exemption from the regulation. The program administration costs are those costs that are associated 

with administrative requirements of several individual AIP airport project grants. The program 

administrative costs described in this subparagraph are different than the project administrative costs 

within Paragraph 310c. For instance, the project administration costs are allowable under block grants, 

although the FAA does not normally allow a state’s overall program administrative cost (such as 

preparation of airport grant information for sponsor’s, reviewing the sponsor’s grant application, or 

accounting for program expenditures). 

311. NONALLOWABLE PROJECT COSTS. 

The following costs are not allowed (See Appendix 1): 

a. That part of the cost of acquiring an existing private airport that represents the cost of acquiring 

public parking facilities for passenger automobiles, hangars, and all other buildings not eligible as airport 

development. (The land on which these facilities are located is eligible if required for airport purposes.) 

b. The cost of material and supplies owned by the sponsor or furnished by a source owned by the 

sponsor if the materials and supplies were used for airport development before the grant agreement was 

executed, or the cost of eligible material and supplies that is not supported by proper evidence of quality, 

quantity, and value. 

c. The cost of non-expendable machinery, tools, or equipment owned by the sponsor and used 

under a project by the sponsor's force account, except the fair rental value of such machinery, tools, or 

equipment for the period it is used on the project. 

Page 35
June 28, 2005 Order 5100.38C

d. Prorated share of otherwise eligible metropolitan area or statewide airport planning as an airport 

development project item. 

e. Any costs incurred in connection with raising funds by the sponsor, including interest and 

premium charges and administrative expenses involved in conducting bond elections and in selling 

bonds. Such costs are ineligible unless specifically allowed by statute, regulation, or a similar provision. 

f. The cost of preparation and adoption of an airport zoning ordinance except as part of an airport 

master plan or noise compatibility program. 

g. Interest charges, except payment of interest directed by a court in a condemnation proceeding, 

which then becomes part of the condemnation award and allowable. However, where the amount 

deposited in court as fair market value was adequate and could have been withdrawn by the property 

owner without prejudice to his/her rights in the condemnation proceeding, such interest payment is not 

allowable. Participation in a mortgage (including lease-purchase or an installment land contract 

inherently involving the payment of interest) is ineligible except as allowed in Chapter 7. However, 

acquisition of life estate interests as described in Order 5100.37, Paragraph 3-10, is allowable. 

Negotiated agreements for deferred possession of real property assuring the payment of just 

compensation (e.g. sale/leaseback) may also be acceptable (Order 5100.37, Paragraph 1-45). 

h. The cost of tuition, travel, and subsistence for a sponsor's planning personnel to attend airport 

planning courses, seminars, or conferences except conferences dealing exclusively with the approved 

work program. The grant program may not be directed toward training sponsor or contractor personnel. 

If the FAA is providing management or technical training, sponsor personnel may be allowed to attend 

on a space-available basis only after coordination with APP-1 or the Academy, although such costs are 

not allowable (in the same way as if the training had been undertaken by a non-FAA provider). 

However, if program administrative costs have been allowed under Paragraph 310k, training (as an 

element of such costs) may be eligible. See Chapter 5 for a discussion on the interactive training 

system. 

i. The cost of obtaining liability insurance covering an airport sponsor (whether paid for by the 

sponsor or the contractor) is not an eligible cost under the AIP. This applies both to cases in which the 

insurance requirement is listed as a separate cost item in an invitation for bid (IFB) and in which the 

sponsor requires such coverage as a factor in bidder qualification. In either case, the inclusion in an IFB 

of the requirement for liability insurance coverage of a sponsor by a contractor is a shift of operating 

expenses into a grant project and must be either removed from the IFB or be bid as a separate cost item 

and disallowed. The costs for coverage to protect the contractor against losses related to the project, 

such as property and casualty insurance and additional liability coverage, insofar as they are reasonable 

components of overhead, are eligible for reimbursement under the AIP. 

j. Costs incurred prior to a future grant agreement unless allowed by Paragraph 310a(4). The rule 

is that work cannot be accomplished prior to a grant agreement unless allowed in Paragraph 310a(4). 

Regions should also exercise care to ensure AIP funds are not approved for previously completed 

phased development or ineligible work. 

k. Costs of other Federal programs. While joint Federal planning and decision-making should be 

encouraged, combining Federal project funding is illegal without specific authority to do so. Each of the 

Federal programs is supported by appropriations, and the legislated funding is a limitation on that 

activity. Certain exceptions to this provision have been made and are described within Paragraphs 514 

and 557. In determining certain FAA reimbursement and accounting arrangements, such as in the use 

of these exceptions, general administrative overhead costs that represent the cost to the agency of 

indirect expenses should be waived for AIP planning and development projects. Contact APP-520 for 

guidance on planning or development projects proposed for AIP funding that are normally carried out 

and funded by another Federal entity (or for procedures required to obtain waiver of administrative 

overhead). Such project costs may represent improper Federal budget augmentation. 

Page 36 
June 28, 2005 Order 5100.38C

l. Activities associated with the lobbying for a project or influencing Federal employees as described 

in Paragraph 31. While the regulations on lobbying or influencing Federal employees do not restrict 

technical negotiations involving AIP projects, costs are unallowable except as provided within Paragraph 

310. See Paragraphs 405n, 405o, 406n, 406o, and 922d. 

312. - 319. RESERVED. 

Section 3. PRIORITY SYSTEM

320. NATIONAL PRIORITY SYSTEM

A priority system for funds distributed at the discretion of the Secretary has been established to 

provide uniform criteria so that the funding is used more efficiently. The priority system is also available 

for considering use of entitlement funds and block grants. Projects are favored that best carry out the 

purpose of the Act, with highest priority given to safety, security, reconstruction, standards, and capacity, 

in that order. See 49 USC 47120 and 47128(d). The priority system does not consider all factors that 

states, local governments, or private sponsors use within their priorities. However, so that the objectives 

of non-federal entities are considered in project selection, the application of the national priority system 

is flexible as allowed under Order 5100.39, Airport Capital Improvement Plan. 

321. - 349. RESERVED. 

Section 4. DONATIONS, CONTRIBUTIONS, AND LOANS

350. GENERAL. 

The value of land, labor, materials, and equipment donated or loaned to a sponsor may be credited 

toward the sponsor's share provided the donation is necessary to accomplish the project (except land as 

noted in Paragraph 351, below) and is one for which the sponsor otherwise would have paid. Proposed 

donations on which grant payments will be requested must be identified and a valuation agreed upon 

between the regional field office and the sponsor. This agreed upon valuation shall be set forth in the 

grant application. The project file must contain information used in arriving at this agreement. 

Donated land implies a gift to the airport owner by another party for use by the airport for 

aeronautical purposes. The value of donated land is based on an appraisal by a competent appraiser 

and is the fair market value of the land at the time of conveyance to the sponsor. 

Property currently owned and originally purchased by the sponsor cannot be treated as donated 

land. By definition, the sponsor cannot donate purchased land to himself or to the FAA. This 

transaction, involving previously purchased land, is considered as a project credit. Handling the 

valuation of the credit varies by type of airport sponsor and is covered in detail in Paragraph 722. 

351. LAND DONATED TO SPONSORS. 

Although determination of value of donated land involves some latitude, this discretion is limited to 

how much land can be included in the grant if it is not needed for the current grant. The FAA also must 

be confident that it is an "arm's length" transaction in which the donor receives no exclusive benefit or 

consideration as a result of the transaction. If there is or was any direct consideration flowing to the 

donor, the transaction is unallowable as a donation. 

a. For land donations only, the regional field office may at its discretion agree to allow credit of 

donated land not associated specifically with the proposed grant project if it is AIP eligible land that the 

regional field office supports as needed for the airport and the FAA would have otherwise been willing to 

participate in its acquisition. If the established value of the donated land exceeds the local share of the 

project to which it is to be credited, the regional field office, at its option, may agree to carry over for 

future credit against another eligible project the unused portion of the value of the donated land. 

Page 37
June 28, 2005 Order 5100.38C

b. The value of the donated land that FAA will allow to be credited towards the sponsor's share of a 

project will be determined using a conservative approach. The maximum value allowable for donated 

land is the market value of the land at the time of conveyance to the sponsor. The market value is 

established by an independent qualified appraiser selected by the sponsor and approved by the FAA. 

The FAA should carefully review the appraisal before agreeing to the recommended value to ensure it 

appropriately reflects the value at the time of conveyance to the sponsor. A final determination of both 

the validity and value of the donation will normally be based on the following information, as applicable: 

(1) Validity of the Donation.

(a) All documents pertaining to the transaction, including: 

1. Whether the donation has been consummated or is prospective; 

2. The identity of the donor; 

3. Financial condition of the donor; 

4. How the land was acquired by the donor; 

5. The actual relationship between the donor and the sponsor, whether personal, 

contractual, or otherwise; and 

6. Identification of any benefit or consideration flowing to the donor as a result of the 

transaction. 

(b) After the necessary information has been collected, the following must be considered in 

determining the validity of the donation: 

1. If the donor is or was, in fact, acting as agent or otherwise for the sponsor in obtaining 

and conveying the land to the sponsor, the transaction is not a donation, and no part of the claimed 

value will be allowed; 

2. Any provision for reversion of the donated land to the donor will make the transaction 

unallowable as a donation except where the reversion is only to be effective if and when the donated 

land is no longer used for airport purposes. In this event, the impact of the reversion provision should be 

reflected in the value established for the donation; 

3. If there is or was any direct consideration flowing to the donor (excluding tax benefits 

or future appreciation to other land owned by the donor in the vicinity of the airport), the transaction is 

unallowable as a donation. If the donor conveys an airport or the site to a public agency without 

monetary consideration, but restricts the use of the land for airport purposes and reserves to himself the 

right to exclusive use of a certain portion for the conduct of a fixed base operation together with the right 

of use of the landing area and other public use facilities in the conduct of his business, the transaction 

will not be considered a donation; and 

4. The reservation of only a right of use of the public use facilities of the airport, in 

common with others, is not objectionable because that is a right of the donor, as a member of the public. 

(c) Value of the Donation.

1. Copy of the deed conveying the land to the sponsor; 

Page 38 
June 28, 2005 Order 5100.38C

2. Copy of any agreement between the donor and the sponsor relating to the 

conveyance or to any rights reserved by or granted to the donor in connection with the future use of the 

land or the airport; 

3. Date of acquisition by donor and price paid by donor, or if property was acquired by 

the donor through inheritance or gift, the value affixed to such property for tax purposes at the time of 

acquisition; 

4. Whether the land has been improved since acquisition by the donor, and if so, the 

nature and cost of the improvements and when and by whom made; and 

5. Other available pertinent information relating to the value of the land at the time of 

conveyance to the sponsor and the circumstances surrounding the transaction. 

352. LABOR, MATERIAL, EQUIPMENT, AND SERVICES DONATED TO SPONSORS. 

Similar to donated land, the validity and value of the donation should be determined using a 

conservative approach. The evaluation should be based on the following: 

a. Validity of the Donation.

(1) Where the donor receives a reciprocal benefit from the airport as a result of the donation, 

the donation cannot be considered valid. An example of this is the dumping of excess material on an 

airport site by a party who is doing so for the primary purpose of clearing or excavating and is, in fact, 

abandoning such material. In such a case, the excess material is not an item for which the contributor 

would have made a charge. As another example: Where a utility company removes a utility line from a 

location where it conflicts with airport development or operations, and such removal is undertaken by the 

utility company to serve its own purpose rather than at the request of the airport owner, the removal shall 

not be considered a donation; and 

(2) If the donor is or was, in fact, acting as agent or otherwise for the sponsor in obtaining the 

equipment, labor, services, or material, the transaction is not a donation, and no part of the claimed 

value will be allowed. 

b. Value of Donation.

(1) The value of the donation should be determined in the same manner as sponsor force 

account work, as outlined in Paragraph 1233, except for personnel costs. 

(2) The current prevailing wage rate for the various classes of labor in the particular locality 

should be paid for donated labor, except in those cases where it is determined that a lower wage scale 

is proper in view of the lack of skill and experience of the donors of the labor. 

(3) The same principle is applicable to other types of donated personal services such as 

engineering services, legal services, etc., in that the applicable prevailing fee for each type of service 

may be considered the fair value of the service rendered. 

(4) Donated material, equipment, and supplies shall be valued at current market value at the 

time they are donated to the project. 

353. TREATMENT OF DONATION CREDITS IN THE GRANT AGREEMENT. 

The project description should clearly reflect the phrase "credit as the complete (or partial, if 

appropriate) local share the donation of ..." with a specific description of the land, labor, material, 

services, or equipment donated. The description for donated items should not read "acquire or 

reimburse" since neither is appropriate. The amount to be credited, where the sponsor's complete local 

Page 39
June 28, 2005 Order 5100.38C

match is to be covered by the credit, must reflect a value that covers the additional local match required 

for the donated item. As an example, assume a project consists of construction of a runway extension 

and the sponsor proposes to use donated runway protection zone land as its local match. If the location 

receives 90 percent Federal participation and the value of the land is $50,000, the maximum value of the 

project (runway extension and land) would be $500,000 and the AIP grant would be $450,000. If the 

runway extension itself cost $500,000, then the minimum value of the donated land would have to be 

10 percent of the combined value of the land plus runway extension or $55,555. This value can be 

determined by dividing 10 percent of the value of the runway extension project cost by 90 percent. On 

page 2 of FAA Form 5100-37, Conditions, the maximum obligation shall be restricted to the resultant 

Federal share of the project; and the breakout in Condition 1 shall reflect the airport development item 

and not the donated item to be credited as the local share. In general, except as noted above, the 

project application rather than the grant agreement will be the vehicle to clearly identify the pertinent 

facts associated with the credited item. In the case of donated land to be credited, the Exhibit “A” should 

clearly identify the portion of land credited and the AIP project to which it applies. This allows record 

keeping if unused land is approved in the future in accordance with Paragraph 351. 

354. - 399. RESERVED. 

Page 40 
June 28, 2005 Order 5100.38C

Chapter 4. PLANNING P ROJECTS

Section 1. PLANNING PROJECT SCOPE AND ELIGIBILITY

400. THE PLANNING PROCESS. 

Airport planning should lead to the effective use of airport resources in developing an efficient 

network of airports for current and forecast needs. The planning process should produce a plan of 

action to develop airports consistent with local, State, and national goals. The planning process 

precedes development and will include analysis of the interrelationship of some or all of the project 

elements described in Paragraphs 405 and 406 to achieve plan implementation. To ensure the effective 

outcome of the planning process, the major airport issues that concern the FAA, the sponsors, airport 

users, and the community shall be clearly identified prior to the initiation of planning projects. 

a. Airport Planning. The AIP process focuses on the area-wide system plan and individual airport 

master plans to accomplish rigorous analysis of proposed development. Airport planning is frequently a 

complex endeavor that involves a wide array of decision makers at various levels in the public and 

private sectors. For instance, coordination with the Operational Evolution Plan process for the airports 

having significant demand-capacity issues will harmonize activities and foster agreement on a collective 

course of action within the aviation community. 

b. Problem Solving. The central concern of airport planning should be the issues identified by 

government and industry leadership. Each of the AIP planning projects should provide plans or other 

products linked with existing programs to solve the identified problems or satisfy airport needs. The 

basis for initiating a planning project should be an assessment that the current airport plan is 

inadequate. While there are common components to most plans, the scope, scale, timing, analytical 

techniques, and organization of study participants should relate to the specific set of problems the study 

must resolve. The intent is to ensure airport preparedness on specified objectives for the future. 

c. Intergovernmental Coordination. The planning process should be continuing, cooperative, 

and comprehensive to the degree appropriate based on the complexity of airport or transportation 

problems. See Title 49 U.S.C., Section 47101(g)(1) about this “3-C” planning process that is also used 

for surface transportation programs. Plans must be coordinated with state aviation agencies, airport 

management, Title 49 CFR, Part 1542 regulatory agents and FAR 139 inspectors, as well as appropriate 

technical analysis involving each component of the airport transportation system. 

d. Satellite Navigation. Problem solving in airport studies should address transition to satellite 

navigation and be consistent with the current version of the National Airspace System Architecture. 

Policies, procedures, budgets, authorization, and organizational arrangements may be expected to 

change during the transition to the global positioning system. Regions must continue planning with 

these changes and use of applicable current requirements, such as the designation of instrument 

runways as described in Order 7400.2 on handling airspace matters. 

e. Intermodal Planning. Intermodal planning activities to achieve the policy of efficiently 

connecting different forms of transportation are described in Title 49 U.S.C., Section 47101(g)(2) and the 

Clean Air Act amendments of 1990. Funds administered by the Federal Highway Administration are 

directed through the metropolitan planning organization (MPO). Airports are encouraged to become 

involved in MPO system planning. Federally funded airport access projects should be coordinated by 

the MPO and listed in its transportation improvement program under 23 CFR Part 450 to promote a 

seamless airport intermodal transfer. Airports are encouraged to complete planning projects that are 

consistent with system forecasts, ground access and air quality studies, land use planning, as well as 

other MPO information, procedures, plans, or policies. 

Page 41
June 28, 2005 Order 5100.38C

401. ELIGIBLE PLANNING PROJECTS. 

Eligible planning projects include integrated system plans for a network of airports within States or 

metropolitan areas, and master plans for an existing or new individual airport. Specific study elements 

of system and master planning projects, such as an airport capital improvement plan (ACIP) or a noise 

compatibility program, are eligible as a supplemental project. System and master planning projects may 

be based on short-, intermediate-, and long-range forecasts of aviation demand, usually 5, 10, and 

20 years. This relates the various projects in phased master plans, plan updates, and continuous 

planning. However, supplemental projects for specific study elements may rely on any of the above 

forecast periods or may be developed without reference to timing. 

a. General. No specific amount is set aside for planning, although approximately 2 percent of 

funds made available annually for airport grants since 1970 have been used for those projects. 

Notwithstanding other statutory provisions limiting State apportionment funds to nonprimary airports, 

system plan projects may be funded from that category even if they involve one or more primary 

locations in accordance with Title 49 U.S.C., Section 47114(d)(6). 

b. State Airport Systems Planning. An integrated State airport system plan is the representation 

of aviation facilities required to meet immediate and future needs as well as achieve overall goals of the 

State. It recommends the general role, location, and characteristics of new airports or the nature of 

expansion for existing ones. It shows the timing and estimated cost of development, provides a 

mechanism to prepare ACIP as well as NPIAS data, and can relate to objectives of the State. (NPIAS 

data includes based aircraft, passengers, service level, annual service volume, development projects, 

and project costs.) Where the State contains areas for which metropolitan airport system plans are to be 

prepared, it is necessary that those be integral components of the State’s plan. State system plans 

provide a basis for the preparation of detailed airport master plans. Guidance for the airport system 

planning process is contained in Advisory Circular 150/5070-7. 

c. Metropolitan Airport Systems Planning. A metropolitan airport system plan usually covers 

one or more metropolitan statistical areas defined by the Office of Management and Budget, a State 

planning region, or other areas. A metropolitan system plan should become a part of a State system 

plan as indicated in Paragraph 401b. Metropolitan agencies may request separate financial assistance 

from the FAA to supplement State planning if airport problems require a higher level of effort in the local 

area than would be provided as a part of State-wide analysis. Metropolitan areas with a hub airport that 

annually has 0.25 percent or more of United States enplanements (medium and large hubs) are 

routinely eligible for system planning grants. Exceptions to this hub airport criterion may be considered 

on a case-by-case basis and shall be coordinated with APP-400. Guidance for the preparation of 

metropolitan airport system plans is described in Paragraph 401b. 

d. Continuous Systems Planning. Routine activities conducted on an ongoing basis, in addition 

to infrequent major updates, can qualify as system planning. Continuing surveillance and coordination, 

periodic plan reevaluation, special studies, and interim or formal updates may be included. 

(1) Annual Planning Products. When continuous planning is approved, it shall be structured 

to produce specified end products to document the planning process. As a minimum, annual ACIP and 

NPIAS data will be required. Public participation should be recommended. 

(2) Planning Cycle. Each system planning project should generally be limited to work which is 

to be completed within one year. The annual projects are accomplished on a continuing basis with a 

complete cycle of elements and updates typically requiring three to five years. 

e. Airport Master Planning. An airport master plan represents the sponsor-approved actions to 

be accomplished for phased development of the airport. It presents the research as well as logic from 

which the plan evolved and displays the plan in a graphic and written report. Master plans address the 

modernization or expansion of existing airports and site selection as well as planning for new airport 

Page 42 
June 28, 2005 Order 5100.38C

locations. Elements included in master plan projects must be linked to whatever system planning 

perspective has been established, especially for visible issues such as airport surface access and 

military base reuse. Master plans should include preparation of ACIP and NPIAS data. Guidance for 

the preparation of airport master plans is contained in Advisory Circular 150/5070-6. 

(1) Planning Sponsorship. Airports are normally the sponsors of master planning projects. 

State or MPO sponsorship of detailed master planning as described in Paragraph 405z is an eligible 

system plan project subject to written agreements with airport sponsors. The agreements should 

establish concurrence on the scope of work, responsibilities of the participants, and uses of plans. 

However, the agreements do not need to be in the form specified in Paragraph 209. Master planning for 

an airport should be limited to work that is not available or current in existing plans. 

(2) Master Planning Updates. Periodic updates of master plan elements are typically needed 

on a five-year cycle for active airports, although timing may vary. For airports with relatively stable 

aeronautical activity, a ten-year cycle may be adequate. However, unusual aeronautical activity 

changes, and a change in design standards, may signal the need for a special planning study in less 

than five years. 

f. Airport Noise Compatibility Planning. Noise compatibility planning for an airport generally 

includes the preparation of noise exposure maps and a noise compatibility program in accordance with 

FAR Part 150. Airport noise compatibility planning may be accomplished as part of airport master plan 

projects or as a separate project, although it must consider the master plan. A noise compatibility 

program needs to be a stand-alone document if submitted to FAA for approval in accordance with 

Part 150. 

402. THE AIRPORT CAPITAL IMPROVEMENT PLAN (ACIP). 

A capital improvement program is the compilation of planned projects for the next three to five years 

including the priority, costs, and expected funding sources for each project. Capital improvement 

programming may be accomplished as a part of airport system or master planning projects and in a 

supplemental project. 

a. Required ACIP Activities. The individual airport and/or State capital improvement programs 

are used as a basis for the FAA’s annual ACIP. The FAA should work closely with sponsors and require 

the use of ACIP procedures as described within Order 5100.39 to establish an overall financial plan for 

airports that is realistic. Regions should normally approve any planning project application for capital 

improvement planning/programming unless the proposed work is ineligible, untimely, or unwarranted 

(See Paragraph 428f). 

b. Justified Airport Development. The NPIAS contains the airports eligible to receive Federal 

funds and identifies the warranted facility development for a ten-year period. The sponsor’s capital 

improvement program should focus on identifying funding sources for all types of airport development 

rather than relying exclusively on the AIP. The ACIP should selectively include the work forecast to be 

justified over a three to five-year period (See Paragraph 428a). Projects that are ineligible or currently 

insufficiently justified by local demand and forecasts should not be included in the ACIP. Since airport 

development project approval is dependent upon established aeronautical demand, planning projects 

should clarify timing and sizing of facilities so sponsors understand when AIP funding may be justified. 

The FAA should normally request business planners for airport tenants to provide written input at the 

planning stage to identify their requirements rather than simply using the sponsor’s interpretation of 

them. 

403. PLANNING WORK SCOPE REQUIREMENTS. 

No airport planning project activity shall be approved unless it meets the following requirements, 

which ensure each product will be appropriate for FAA approval actions described in Paragraph 428. 

Page 43
June 28, 2005 Order 5100.38C

a. Study Design and Structure. The structure and work scope of a planning study should be 

tailored according to the individual requirements for the airport or system of airports being studied. For 

most simple projects, this involves identification of issues and selection of appropriate work elements 

relying heavily on Paragraphs 405 and 406. FAA should concur on the proposed cost of the study 

design prior to preparation of the study design. 

(1) Complex Projects. A more extensive study design is recommended in complex projects to 

specifically identify project goals, the level of effort for each activity, and participants based on the 

community decision-making structure. The study design and goal setting should normally be 

accomplished by a combined consultant-sponsor effort. 

(2) Selection of Work Elements and Activities. Paragraphs 405 and 406 describe the 

elements that should be considered for a study. The enumerated elements generally involve subelements or activities. However, the work scope need not include all the elements listed, or the 

elements may be very abbreviated. (For example, rather than develop new forecasts or capacity 

analyses in a master plan for a small airport, it may be desirable to obtain these from system planning 

and other current sources. Consequently, the work scope would not contain a detailed forecast or 

capacity element.) Each item in the work scope should contribute to defining and resolving specific 

problems. Items in the planning advisory circulars that are not relevant to a study should be omitted. 

Elements not listed in Paragraphs 405 and 406 are ineligible unless approved by APP-520. 

(3) Supplemental Projects. Study elements (such as an ACIP or noise compatibility plan) 

may be funded as supplemental projects if they are required to satisfy a specific airport need (See 

Paragraph 300b). Supplemental projects shall be designed to supplement a basic system or master 

plan (as defined in Paragraphs 405 and 406) that FAA has determined to be current in other respects. 

(4) Relation to Airport Development. The system/master planning should affect the official 

recommendations for establishing or revising the planned airport role and/or development and facilitate 

informed decision-making on such plans. The tasks required only for the sponsor’s administrative, 

management, or operational purposes are not eligible. 

b. Planning Phases and Products. The work scope for system and master planning projects 

must show that complete, cohesive, as well as usable plans or other products will be produced. The 

form of the products expected must be well-defined, e.g. technical analysis, drawings, reports, or 

approval by appropriate agencies. 

(1) Project Phasing. A planning project should normally be separated into several phases if it 

involves uncommitted airline service, site selection, intensive environmental assessment, system plans, 

or unusual resources. Each phase may be a separate grant. This will facilitate review of plans or 

elements, such as site selection studies and environmental assessments, to ensure progress is made 

before new funds are committed. Generally, no more than three planning projects under the same 

sponsorship for a location or area should be open at one time. When multiple planning projects are 

undertaken, each shall specifically recognize the relationship between products of previous and ongoing 

studies so they can be clearly separated in the grant agreements. 

(2) Approval at Key Points. Tentative approval of products by the sponsor and FAA may be 

required by the region at key decision points or milestones before proceeding with a study. Changes in 

the structure of the study may be required. FAA review should ensure that products in the study will be 

usable, timely, and complete. 

c. Force Account Work. Force account may be requested for some work to establish and 

maintain a local or State aviation planning capability. If force account is proposed, there should be a 

clear understanding with the sponsor prior to the grant that FAA will fund only work associated with 

planning for airport development. The scope of planning shall be consistent with guidelines described in 

Paragraph 310c on administrative costs. 

Page 44 
June 28, 2005 Order 5100.38C

d. Coordination and Jurisdiction. The sponsor should coordinate the draft work scope with FAA 

and other interested parties to establish the availability of existing data or to delete activities better 

accomplished by other agencies. This will help ensure the products are mutually useful for each local, 

MPO, State, or Federal program and that airport development funding sources are identified. The work 

scope for planning by more than one agency for the same airport/area needs special coordination during 

study design. This may occur whenever State and metropolitan system plan projects coexist, and when 

sponsors propose transportation or land use planning outside the airport boundaries. Planning grants 

are frequently the first AIP projects approved for a sponsor. Therefore, the FAA review should 

determine that the proposed sponsor has appropriate jurisdiction to carry out or influence the planning 

recommendations and is capable of implementing the plan (See Paragraph 201). 

e. Study Area. The basic organization, work scope, and approach of system or master planning 

shall focus on a study area that will be useful in solving airport problems. (For instance, planning a new 

airport in a metropolitan area may involve geographic areas beyond the jurisdiction of any single 

governmental entity.) Cooperation in the form of interagency agreements with adjacent local 

jurisdictions and/or States should be required by the FAA whenever airport site requirements go beyond 

the sponsor’s jurisdiction. Where specific study areas are unknown, the sponsor should establish a 

policy for achieving coordination with other jurisdictions. 

f. Action Plan. The work scope should include an action-oriented plan and/or program that will 

lead to implementation where the FAA and sponsor agree such a plan would be beneficial in carrying 

out recommendations. The action plan should identify activities and responsibilities at a level of detail 

appropriate to the nature and timing of the recommendations. (For example, an action plan should 

always be included with pavement management studies.) 

g. NPIAS Airports. For master plan projects, an airport must be included in the National Plan of 

Integrated Airport Systems. However, alternative site evaluations for replacement or supplemental 

airports may be funded without a new airport being added to the NPIAS pending a determination that the 

new location is justified and/or feasible. For system plan projects, non-NPIAS airports may be included 

where the cost of a work activity is nominal, e.g. general inventories, forecasting, or facility requirements. 

System planning activities involving significant cost, such as pavement or obstruction surveys, are 

ineligible at airports not in the NPIAS. 

h. Standards and Priorities. Measures of airport standards, activity, condition, and performance, 

or indicators for goal achievement, should be evaluated to ensure safe and efficient operations, add 

capacity, and minimize environmental impact. The national priority system described in Section 3, 

Chapter 3, or the procedures and criteria in it, should be the basis for evaluating airport development 

projects. State standards and priorities, which have received endorsement by the FAA, may be included 

within a work scope. Standards or priority systems other than those approved by the FAA may also be 

identified within the work scope. Use of several sets of standards and priorities in a planning project 

may be necessary in such cases to evaluate the plans. 

i. Military Base Closures. Work scopes must include consideration of former military bases where 

that may be appropriate. Former military airfields that may not appear to have immediate aeronautical 

use should be considered under State or metropolitan system planning effort to determine alternative 

uses. 

404. ELIGIBLE STUDY ELEMENTS AND ACTIVITIES. 

The elements that are eligible for funding as part of airport system and master planning projects are 

described in Paragraphs 405 and 406. Although many system and master planning elements are similar 

in name, they differ in scope or detail. System planning is area-wide in nature and intended to set the 

framework for master plans. Master planning elements contain far greater detail than system plans and 

serve as the basis for design as well as engineering (See Paragraph 1002). Planning to meet 

requirements for airport development may be a project formulation cost. Except for study design or 

Page 45
June 28, 2005 Order 5100.38C

FAA-approved noise compatibility programs, the cost of work performed on planning projects will not be 

allowed unless incurred after the date of the grant agreement. Contact APP-520 if a sponsor proposes 

the use of their entitlement funds for cost reimbursement of planning projects under Title 49, U.S.C., 

Section 47110(b)(2)(C). 

405. SYSTEM PLANNING ELEMENTS. 

A basic airport system plan normally includes items described in Paragraphs 405a through 405q, 

and special studies may cover the remaining elements as needed. However, projects should include 

only those of the following elements or activities required to produce a plan that meets the sponsor’s 

needs: 

a. Study designs to identify the framework, parties involved, organizational arrangements, major 

airport problems to be resolved, specific objectives, scope of work, time schedules, and cost 

breakdowns for projects; 

b. General site inspections, inventories, and surveys, including goals, airports, user preferences, 

and secondary socioeconomic data. This is limited to collection of data to be used for analysis in 

planning projects; 

c. Forecasting for justification of proposed airport development in terms of existing or forecast 

aviation activity levels and aircraft mix. Forecasting is limited to simple methods and assumptions that 

establish the components or dynamics of demand for aircraft operations, based aircraft, passengers, 

cargo, and/or ground access. A high and low range of forecasts in addition to the preferred forecast is 

eligible to identify consequences of uncertainties such as decisions on economic developments or new 

airline service. Application of complex statistical forecasting techniques or market research is eligible 

only to the extent that costs do not exceed those of simple methods above (See Paragraph 428a); 

d. Capacity analysis of airport systems based on airfield, terminal area, and surface access to 

provide for determination of capacity values, identify causes of delay, analyze alternatives, or develop 

input to a capacity enhancement plan; 

e. Capacity analysis of airspace based on air navigation aids, communication facilities and natural 

or man-made obstructions that affect the use of airspace. This is limited to that needed to support 

airport system development. Contact the regional Air Traffic Division and the Director of Operations 

Planning Performance Analysis (ASC-1) for assistance on airspace policy, airport capacity, or en-route 

issues; 

f. Facility requirements determination including analysis of the suitability, expansion possibilities, 

and safety deficiencies of existing airports; the general location and need for land bank programs or new 

airports; and analysis of the compatibility of airports with surface access plans and comprehensive 

planning. This includes evaluation of satellite navigation opportunities, airport or terminal navigation 

aids, and airport traffic control facilities; 

g. Analysis of a reasonable number of alternative airport systems including feasibility and sensitivity 

analysis, contingency plans, as well as evaluation of safety, efficiency, environmental impacts, energy 

considerations, or cost; 

h. Preparation and adoption by the sponsor of the airport system plan for forecast periods (as 

defined in Paragraph 401) including airport role assignment, design type, major facilities, and cost 

estimates; 

i. General land use, noise, air quality, and other environmental studies to consider the impact of 

airport development on the environment and the protection of airports from neighboring areas. This is 

limited to work for area-wide application or specific classes of airports, except in site selection or master 

plan studies; 

Page 46 
June 28, 2005 Order 5100.38C

j. Schedules of plan implementation describing the staging of airport land acquisition and 

development based on aviation demand forecasts; 

k. Projection of funding required from public agencies as well as the financial community or other 

private sources to implement the plan and revenue generated from improvements. This includes a 

financial plan linking AIP, Passenger Facility Charge program, Facilities and Equipment program, 

contract airport traffic control tower program, or other such Federal, State, local, and private sector 

funding; 

l. Capital improvement programs (See Paragraphs 402 and 428f); 

m. Preparation of NPIAS documentation for airports meeting entry criteria (See Paragraph 428f); 

n. For areas with a hub airport that has 0.25 percent of enplanements (medium and large hubs), 

regular meetings of local, MPO, and State agencies, sponsors and other participants. The meetings 

may be required to discuss capacity problems, facilitate the progress of official planning or other actions, 

and make informed decisions. This is appropriate only when representatives of local, MPO, and State 

agencies agree to participate. Any task with the primary intent to influence people or lobby for a project 

is ineligible; 

o. Study coordination and reports. For small hub or smaller areas, a limited number of meetings 

will be allowed for a single advisory committee to exchange information or negotiate between elected 

decision makers, other officials, and/or representative technical advisors. Public hearings and 

community involvement sessions that facilitate informed decisions are eligible as is the printing of a 

reasonable number of reports and graphics. The number of copies of technical documents should be 

limited through wide distribution of summary reports. Videotape or similar audio/visual presentations are 

eligible only to the extent they are used to replace or supplement printed material that would have been 

prepared in conjunction with public information briefings, executive summaries, or similar briefing 

activities of the study (See Paragraph 412d(3)(c)). Any task with the primary intent to influence people 

or lobby for a project is ineligible; 

p. Continuous planning activities that relate to elements of ongoing or existing system plans (See 

Paragraph 401d); 

q. Action plans (See Paragraph 403f); 

r. Airport surface access programs and plans that indicate the proposed routing to central business 

districts or arteries. The work should be based on other airport access studies that take into account 

traffic demand, existing and potential access problems, surface transportation facilities, heliports, and 

remote terminal facilities. Airport coordination and the analysis of procedures for transfer of passengers 

or baggage to bus, van, taxicab, rental car, automobile parking as well as innovative access facilities are 

eligible. Proposals for surface origin-destination surveys, corridor studies, ground traffic management, 

and similar work not directly related to airport coordination or intermodal transfer facilities should be 

forwarded to APP-520 (See Paragraph 400e). 

s. Preparation of State standards for development at nonprimary airports. This is limited to State 

system plan projects; 

t. Site selection and feasibility studies of the general area (excluding the specific airport 

configuration) for new, replacement, supplemental, or joint-use airports. This is limited to cases where 

existing public airport sponsors agree to participate or an area-wide agency has been required or 

authorized by State or local law to do the planning (See Paragraph 428b); 

u. Acquisition, licensing, and use of commercially available computer software including simulation 

models and other applications dedicated to the study when warranted to accomplish an approved 

Page 47
June 28, 2005 Order 5100.38C

planning purpose. For instance, an information management system may be eligible if directly related to 

eligible airport planning elements. Customizing of commercially available software is eligible. Software 

development, including customizing, paid for, in part, with grant funds shall be in the public domain and 

shall be made available to any user without cost beyond handling costs. The purchase of computer 

equipment is not eligible for planning projects, nor is the cost of ongoing computer operations or 

software for general clerical, administrative, or airport management purposes; 

v. Economic studies to measure the impact of airport activity and benefit of interrelated 

developments in the network of airports. This is limited to methods such as those developed by the 

FAA. Contact APP-400 for assistance on economic study methods. Video presentations or printed 

materials on the economic impact of airports are not eligible unless it is necessary for the public’s 

understanding needed during the decision process. Studies for the promotional or competitive 

marketing of an airport are not eligible. Vertiport studies for tilt-rotor aircraft are eligible pending 

development of the technology. However, vertiport applications other than a nominal part of another 

planning project should be forwarded to APP-520; 

w. Identification of appropriate airport sponsorship arrangements such as for a new airport, airports 

that have inappropriate ownership, or where interagency agreements are needed; 

x. Policy analysis for specific airport development proposals, such as that for State aviation taxes 

or land use. This must be coordinated with APP-520; 

y. Establishing performance indicators or priority systems for pavement management and capital 

improvement programs; and 

z. Participating in or conducting master plan projects at airports provided the airport sponsors agree 

in writing to the scope of work (See Paragraph 401e). This includes any of the elements and activities 

described in Paragraph 406 or the review of airport sponsor master plans to ensure system 

requirements have been met. 

406. MASTER PLANNING ELEMENTS. 

A basic airport master plan normally includes items described in Paragraphs 406a through 406p, 

and special studies may cover the remaining elements as needed. However, projects should include 

only those of the following elements or activities required to produce a plan that meets the sponsor’s 

needs: 

a. Study designs as described in Paragraph 405a; 

b. Site inspections, inventories, and surveys including goals, policies, historic information, user 

preferences, meteorological data, obstructions, environmentally sensitive features, or information on 

area-wide planning. This is limited to collection of data to be used for analysis in planning projects; 

c. Forecasting as described in Paragraph 405c; 

d. Demand/capacity analysis for airspace, airfield use, terminal area, airway facilities, and surface 

access facilities to provide for determination of capacity values, identify causes of airport delay, analyze 

alternatives, or develop a capacity enhancement plan. Contact the regional Air Traffic Division and the 

Director of Operations Planning Performance Analysis (ASC-1) for assistance on airspace policy or 

airport capacity; 

e. Facility requirements determination to establish a list of needs for the size and number of 

runways, taxiways, gates, aprons, lights, terminal buildings, cargo buildings, utilities, air traffic control 

facilities, navigation aids, parking spaces, airport surface access, and other eligible development. This 

includes studies on limited subjects, such as coordination with the FAA Runway Incursion Action Team 

Page 48 
June 28, 2005 Order 5100.38C

to identify infrastructure required for reducing runway incursions. Airport surface movement guidance 

and control system plans are eligible; 

f. Analysis of a reasonable number of airport development alternatives including feasibility and 

sensitivity analysis, contingency plans, and evaluation of safety, security, efficiency, public protection, 

environmental impacts, safety area determinations, modification of standards, cost of the alternate 

airport designs, and energy considerations; 

g. Preparation and adoption by the sponsor of airport role assignment as well as layout plans. 

These should establish dimensioned layouts for existing and future runways, safety areas, taxiways, 

aprons, terminal building areas, roads, utilities, fences, property and relocation of persons, airport 

airspace, runway protection zones, air navigation facilities, and non-aeronautical use areas (See 

Paragraph 428d); 

h. Noise contours for existing conditions and reasonable forecast periods (See Paragraph 428e 

and 813); 

i. Land use plans or reuse studies for areas within the boundaries of the airport and for areas 

outside the boundaries that are environmentally impacted by airport operations. Participation in 

commercial or industrial park studies is normally limited to delineating and inventorying areas available 

on the airport for non-aeronautical use. However, urban land use studies of areas acquired for noise 

compatibility are eligible (See Paragraph 815c). Studies of compatible land use zoning or other similar 

controls are also eligible for the entire airport site, the impacted airport vicinity, and terminal airspace. 

Aerial photography for land use studies is eligible only if the information is not otherwise available in an 

adequate form; 

j. Schedules of plan implementation as described in Paragraph 405j; 

k. Estimates of development cost proposed in the master plan; 

l. Preparation of financial statements or business plans for the long-term development and 

operation of the airport. This includes financial plans for airport operational revenue, general obligation 

bonds, revenue bonds, taxation, government assistance (such as the AIP, PFC, F&E, or the contract 

airport traffic control tower programs), other donations, and realistic combinations thereof. The 

preparation of a disadvantaged business enterprise plan under Title 49 CFR, Part 26 is eligible; 

m. Capital improvement programs and preparation of NPIAS documentation for the airport (See 

Paragraphs 402 and 428f); 

n. Regular meetings as described in Paragraph 405n; 

o. Study coordination and reports as described in Paragraph 405o; 

p. Action plans (See Paragraph 403f); 

q. Former military airfield concept studies. AIP planning projects may be used to initiate 

cooperative planning on joint use airports, surplus Federal property, and restricted airspace. Proposals 

for the conversion of former military airfields, or dual use of such current airports, should be coordinated 

early during the discussion stages with APP-420. Orders 5150.2 and 5170.1 describe U.S. Government 

surplus property for public airport purposes or the transfer of other Federal lands. 

r. Site selection studies for new airport locations including the study of airspace, environmental 

factors, community growth, surface access, availability of utilities, land appraisals, and development 

considerations that affect site costs (See Paragraph 428b); 

Page 49
June 28, 2005 Order 5100.38C

s. Environmental assessment for consideration of the effects of proposed airport development in 

order to provide a basis for the preparation of environmental impact statements or findings of no 

significant impact (See Paragraphs 310d(2) and 428c). The assessment may identify environmental 

consequences of ultimate airport development, mitigation policies, categorically excluded projects, and 

permits required. Wildlife hazard assessments and wildlife management plans required under FAR Part 

139 are eligible whenever airport development actions may result. Cultural resources surveys, required 

to meet archeological, historical, architectural and similar requirements are eligible. Air or water quality 

planning for sponsor compliance with the Clean Air Act of 1970, as amended, and Federal Water 

Pollution Control Act of 1972 (FWPCA), as amended, are also eligible. This includes preparation of the 

water quality permit applications required under the FWPCA, hydraulic modeling, facility design, and 

water quality studies, testing, or inspection related to pollution prevention plans. Air quality studies or 

plans must be coordinated with the MPO and APP-520. (See Paragraph 400e.); 

t. Building area plans for the overall terminal-apron complex and components within that complex 

such as terminal building, cargo building, gates, hangars, shops, service roads, service buildings, 

motels, aircraft rescue and fire fighting buildings, automobile parking, entrance roads, and intermodal 

connections. The plans are limited to conceptual analysis and drawings that include dimensioning of 

overall plans, building restriction lines, height limitations, shadow studies, and schematic drawings of 

profiles necessary to picture concepts and ensure that safety and operational factors are considered. 

The review of individual lease arrangements within the terminal or building areas from the standpoint of 

grant assurances and preparation of airline competition plans are eligible. Studies for specific facilities 

such as locating an airport traffic control tower are eligible. If the FAA is to perform the work, a 

reimbursable agreement with the airport may be desirable. (See Paragraphs 311k, 553 and 563.) Air 

traffic control services are ineligible; 

u. Airport surface access plans that indicate the proposed routing to central business districts and 

to existing or planned arteries. The plan should be based on other airport access studies that take into 

account traffic demand, existing and potential access problems, surface transportation facilities, 

heliports, and central business district terminal facilities. MPO coordination and analysis of procedures 

for transfer of airport passengers or baggage to pedestrian, bicycle, rail, bus, van, taxicab, rental car, as 

well as parking facilities are eligible. Proposed surface origin-destination surveys, corridor studies, 

ground traffic management, and similar work not directly related to coordination with the MPO or 

multimodal facilities should be forwarded to APP-520 (See Paragraph 400e). Orders 1110.86 and 

5000.3 describe intermodal transportation planning and coordination with the Federal Highway 

Administration. Preparation of airport emergency response studies to provide analysis of airport facility 

requirements (roads, safety area grading, or other access issues) for aircraft rescue and fire fighting 

vehicles is eligible; 

v. Computer applications as described in Paragraph 405u; 

w. Pavement management programs to evaluate pavements and establish annual priorities (See 

Paragraph 306); 

x. Preliminary feasibility studies for the designation of instrument runways (See Order 7400.2 on 

procedures for handling airspace matters) and establishment of navigation aids. This includes 

evaluation of satellite navigation opportunities and preparation of preliminary instrument approach 

procedures directly related to airport development that is shown on the airport layout plan. Field 

surveys, e.g. determination of runway coordinates and elevation, are eligible if they have not been 

scheduled to be completed by the FAA. Contact APP-520 for a current schedule of FAA geodetic 

surveys. A flight check of a preliminary approach procedure to a non-Federal navigation aid is eligible 

under a reimbursable agreement with the Flight Procedures Office. Re-testing is not allowable in the 

event that the system fails the flight check or alternate procedures need to be considered; 

y. Airport noise compatibility planning involved in developing noise exposure maps and a noise 

compatibility program. These activities are described in FAR Part 150 (See Paragraph 428e). Planning 

Page 50 
June 28, 2005 Order 5100.38C

for noise demonstration programs is not eligible as a master plan project. Contact APP-600 for 

assistance on noise policy, Part 150 planning, and Part 161 studies; 

z. Economic analysis to measure the impact of airport activity and benefit or present worth of 

airport investments. This is limited to methods such as those developed by the FAA. Contact APP-400 

for assistance on economic study methods. The evaluation of risk associated with airport plans and 

economic decision analysis for alternatives is eligible. Benefit-cost analysis (BCA) is eligible when it is 

appropriate to conduct these studies. Guidance about how to perform a BCA is contained in a Federal 

Register notice dated December 15, 1999 on page 70107 (See Paragraph 428f). Operational studies or 

planning, such as an airport certification manual or airport emergency plan update, are ineligible unless 

required under FAR Part 139 and airport development actions may result. Use of a formal value 

engineering task team is ineligible except on major new airports or for unusually complex projects of 

greater than average costs (See Paragraph 1009). Sophisticated video presentations or printed material 

on economic impact of an airport, which are basically competitive marketing material for a sponsor, are 

not eligible unless needed for the decision process. Operations research is not eligible; and 

aa. Airport security programs under Title 49 CFR, Part 1542 for the protection of passengers, 

baggage, and aircraft within civil aviation. The eligible security planning includes accommodation of preboard passenger and baggage screening, fencing/access arrangements for airport areas, threat 

evaluation, blast analysis, updates of the plan, as well as the other requirements of the regulation. The 

coordination of requests with the Transportation Security Administration may be needed if questions 

arise on whether airports are covered by Title 49 CFR, Part 1542. For the airports not covered under 

Title 49 CFR, Part 1542, security planning is eligible if it would be incidental to other master planning. 

Prior to the public involvement in a request or study on security, regions should coordinate with the 

Transportation Security Administration to identify material that must be protected under Title 49 CFR, 

Part 1520, which governs release of such information. 

407. - 409. RESERVED. 

Section 2. PLANNING PROJECT APPLICATION

410. GENERAL. 

The application process for planning projects includes an optional conference between the sponsor 

and the FAA, preparation and review of the application, and issuance of a grant offer by the FAA. 

Sponsors may use Standard Form 424 or any written format they choose for information to be provided 

in applications. A planning project request may be included with a sponsor’s pre-application for other 

development. However, the sponsor normally will submit a separate application. A draft scope of work 

and breakdown of project costs may be required. 

411. PRE-PLANNING CONFERENCE. 

Depending on project complexity, an airport inspection and conference to discuss the study can be 

arranged between the sponsor, State, MPO, consultant, and FAA before final preparation of the 

application. The conference may be used to discuss and/or negotiate the following and facilitate 

decision making before starting work on the project: 

a. For first time sponsors, the grant assurances and procedures for airport development; 

b. Specific objectives, such as navigable airspace or airport design issues; 

c. Relationship of the project to local, MPO, State, and national airport planning and development; 

d. Planning process and organizational arrangements; 

e. Intergovernmental project review (See Paragraph 1006); 

Page 51
June 28, 2005 Order 5100.38C

f. Civil rights requirements (See Advisory Circular 150/5100-15); 

g. Scope of work, FAA expectations, and time schedules; 

h. Project costs and eligibility; 

i. Force account work; and 

j. Special grant conditions and compliance with grant assurances. 

412. PREPARATION OF APPLICATION. 

The sponsor may elect to submit selected information within Standard Form 424 and FAA Form 

5100-101, Parts II, III and IV, contained in Appendices 3 and 5. The information is to be completed in 

accordance with instructions on the back of the forms. For sponsors not using the Standard Form 424, 

comparable information to that described in this paragraph must be provided. 

a. Standard Form 424 Application for Federal Assistance. This form and/or appropriate 

agreements should be completed and duly signed by each sponsor (See Paragraphs 202, 203, and 

209). 

b. FAA Form 5100-101, Project Approval Information (Part II). Only items 4 and 5 need be 

completed. The “yes” will be marked within item 4 when requested assistance requires approval under 

State or local laws authorizing a public or planning agency to act as agent for sponsors. The terms and 

conditions of the agency’s authority to act for the sponsor should be submitted as an attachment 

together with any endorsement required. 

c. FAA Form 5100-101, Budget Information (Part III). This part requires budget information, and 

particular attention should be directed to the sections of the form below. 

(1) Section B, Budget Categories. The total cost of consultant contracts should be 

aggregated and listed in line f of Section B. 

(2) Section F, Other Budget Information. Section F is to be an attachment and should 

include a separate breakdown for costs by the specific elements and work activities in the study. This 

breakdown should be prepared on an employee-hour and a cost per employee-hour basis, taking into 

account categories of employment to be used for each element or activity. Force account and work that 

will be accomplished under third-party contracts should be listed separately in the breakdown. 

d. FAA Form 5100-101, Program Narrative (Part IV). A program narrative outlining the structure 

of the study is to be submitted as an enclosure and should contain the items below. 

(1) Objectives. This is an itemized list of major problems, issues, and objectives in applying for 

the grant. 

(2) Benefits Anticipated. A statement of benefits anticipated from the planning effort should 

include a summary of significant areas to be addressed and the previous planning updated as the result 

of the new effort. 

(3) Approach. This item should include detailed information for each element or work activity 

to be performed in the planning project. 

(a) Scope of Work. The proposed scope of work should reflect the study elements 

identified in the system or master planning advisory circulars. 

Page 52 
June 28, 2005 Order 5100.38C

(b) Schedule for Accomplishment. The time schedule proposed for each element should 

be included. 

(c) Study Coordination and Evaluation. Coordination of study drafts with the public, 

community organizations, airport sponsors, users, the financial community, local and State agencies, 

Federal program offices, and other interested parties is required. Names and affiliations of proposed 

advisory committee members should also be identified in the work program. For instance, the sponsor 

shall coordinate with the Air Transport Association (ATA) and/or Regional Airline Association (RAA) in 

airport system and master planning at airports that have ATA/RAA member carriers. Likewise, 

coordination with Aircraft Owners and Pilots Association may be desired at sites having general aviation 

activity where a regional representative is available and agrees to participate. Other special interest 

groups, such as National Air Transportation Association (at the airports with significant air taxi activity), 

may be appropriate to participate depending on the specific location. 

(d) Organizational Responsibilities. A list of organizations, consultants, and key 

personnel anticipated to work on the project with their respective responsibilities should be itemized. 

(4) Geographic Location. A brief delineation is to be provided of the area served by the 

airport. For a system plan project, the boundaries of the planning area should be identified. 

(5) Additional Information. If the sponsor proposes to accomplish the project with its own 

forces or those of another public or planning agency, this fact shall be so stated in the application. The 

qualifications of key personnel shall be included and costs for force account as well as related overhead 

should be identified. 

(6) Sponsor’s Representative. This item should identify the name, title, address, and 

telephone number of the person representing the sponsor in the planning study. 

e. Sponsor Assurances. The appropriate set of grant assurances shall be attached to the 

application (See http://www.faa.gov/arp/financial/aip/assurances.cfm?ARPnav=aip). The airport sponsor 

assurances are used for master planning projects. Use of planning agency sponsor assurances is 

limited to system planning projects. 

413. REVIEW AND APPROVAL OF APPLICATION. 

The responsibility for review and initiating the approval or disapproval of the planning grant 

application rests with the region. The sponsor’s consultant contract should be reviewed and approved, if 

appropriate, at this time (See Paragraph 422). Sponsor use of force account should also be approved, if 

appropriate, based on the information made available as described in Paragraph 412d. 

a. Review of Application. FAA personnel should ensure the application is complete and a project 

evaluation report shall be prepared (See Paragraph 1031). FAA review should determine whether the 

project was adequately structured, elements are eligible, time schedule is realistic, and the work scope 

will be commensurate with costs. The review should identify special conditions, if required, for the grant 

based on project issues. 

b. Revision of Application. If the FAA determines that the application needs revision, the sponsor 

should be advised of required corrective actions. 

c. Project Approval and Grant Offer. The region is responsible for approving planning project 

applications. Upon notice of regional approval, APP-500 will coordinate with the Office of the Secretary 

and inform the region upon completion of Congressional notice. A grant offer to the sponsor may be 

issued after this notification. Each project file will contain the following or equivalent documents: 

(1) AIP Grant Status Report, FAA Form 5100-107 (See Appendix 28); 

Page 53
June 28, 2005 Order 5100.38C

(2) Project Evaluation Report and Development Analysis, FAA Form 5100-109 and 

(3) Application for Federal Assistance, Standard Form 424, as well as FAA Form 5100-101 

(See Appendices 3 and 5). 

d. Disapproval of Application. If the FAA determines that the application should be disapproved, 

it shall be returned to the sponsor along with an explanation of the disapproval. Contact APP-520 for 

assistance with disapproval of applications. 

414. - 419. RESERVED. 

Section 3. PLANNING PROJECT ACCOMPLISHMENT

420. CONSULTANT CONTRACTS. 

The firm fixed price contract is the preferable method for contracting with consultants. Other 

contractual methods, such as a cost-plus-a-fixed-fee contract, may be used but should be discouraged 

unless there are substantial reasons for their use. Any of these methods shall be carried out in 

accordance with procedures in Chapter 9 of this order, Title 49 CFR, Part 18.36, and Advisory 

Circular 5100-14. 

421. FAA ROLE IN CONSULTANT SELECTION. 

Since some sponsors are unfamiliar with consulting firms that have capability in aviation planning, 

they may seek the advice of FAA personnel. The role of FAA personnel in this respect is: 

a. Aid the sponsor in developing the general scope of services, division of responsibilities, and 

guidance on expected costs as outlined in Advisory Circular 150/5100-14; 

b. For planning to be accomplished in stages, ensure the initial advertisement includes subsequent 

projects that are expected within five years, if desired; 

c. Depending on the size of the project, advise the sponsor to avoid over-solicitation and to use the 

competitive procurement process for contracts over $100,000 as outlined in Chapter 9; 

d. If appropriate, suggest that the sponsor establish a consultant selection panel to interview the 

consultants and/or evaluate their qualifications or proposals (the FAA will not recommend consultants or 

participate in the interview and decision, although records of the consultant selection process may be 

requested by the region); 

e. Advise the sponsor that the FAA reserves the right to disapprove employment of consultants and 

subcontractors or the scope and cost of professional services (See Paragraph 310d(2)); and 

f. For planning projects, regions should forward a copy of formal complaints about the consultant 

selection process described in Advisory Circular 150/5100-14 to AAS-100. 

422. CONTRACT REVIEW AND APPROVAL. 

FAA offices administering planning projects may require sponsors to submit proposed consultant 

contracts for approval as necessary to carry out the FAA’s responsibilities described in Paragraph 421. 

423. PROCUREMENT DEFICIENCIES. 

Sponsors may use their own procurement regulations reflecting applicable state and local law, rules, 

and regulations provided they also meet the requirements of Title 49 CFR, Part 18. If, at any time, the 

FAA becomes aware of deficiencies based on these requirements (as a result of contract reviews, 

Page 54 
June 28, 2005 Order 5100.38C

audits, or special reviews), the sponsor shall be notified in writing and changes needed to achieve 

compliance should be specified. 

424. PURCHASE OF EQUIPMENT. 

The purchase of recording anemometers, activity counters, noise monitors, computers, or other 

equipment shall not generally be included in a planning grant. However, under certain circumstances, 

specialized equipment that is not a permanent installation may be approved. See 

Paragraphs 307, 571, 813, and 900. 

425. PROJECT MONITORING, COORDINATION, AND REPORTS. 

FAA should maintain ongoing involvement with the sponsor during accomplishment of the study and 

ensure each activity will lead to plans that can be approved or actions specified in the work scope. 

Responsibilities of the sponsor and FAA may need to be shared during project monitoring as well as 

coordination activities to a substantial degree. 

a. Sponsor Responsibility. The sponsor has the responsibility for continuous monitoring of the 

project. The sponsor shall ensure the time schedules are being met, work activities and coordination are 

accomplished satisfactorily, expenditures are reasonable as well as justified, and other performance 

goals are achieved. 

(1) Interim Project Reports. Interim project reports or products identified in the scope of work 

should be sent to the FAA, State, MPO, and other study participants for review. 

(2) Quarterly Performance Reports. The sponsor may be required to provide quarterly 

performance reports for the FAA as described in Paragraph 1221c. 

b. FAA Responsibility. The FAA should review sponsor performance and project reports to 

ensure that activities or elements of work contained in the grant agreement are treated adequately. FAA 

involvement in key planning meetings is necessary to provide national perspective for decision-makers, 

facilitate clear communication of agency requirements, and avoid unrealistic expectations. 

(1) Coordination. The FAA should ensure that the sponsor and its consultant adequately 

coordinate the study as described in Paragraph 412d. The scope of work and products of the study 

should be coordinated with the FAA regional divisions by the field office as appropriate. Order 1110.117 

describes regional committees and inter-division working group arrangements. 

(2) Reporting Requirements. The FAA should inform the sponsor about reporting 

requirements including any that are beyond those identified in the work scope and the type of 

information needed. 

(3) Plan Review. On initial completion of project elements, the sponsor will submit copies of 

the planning reports and graphics in draft to the FAA for review and coordination. To avoid 

unreasonably delaying the sponsor and consultant during the project, the FAA site inspections and 

review of reports should be completed expeditiously on a schedule satisfactory to all concerned. 

Sponsors should be held accountable for each draft product identified in the scope of work. Sponsors 

shall be provided an explanation in writing of deficiencies in the project, preferably at one time during the 

review of each draft product. For instance, regions should notify the sponsor when letters from airport 

users are needed to justify an airport development project. 

(4) Disclaimer Statement. The consultant, or sponsor in the case of force account work, shall 

be notified to include a disclaimer and the project number within the front pages of each report. The 

following statement shall be used: 

Page 55
June 28, 2005 Order 5100.38C

“The preparation of this document may have been supported, in part, through the Airport 

Improvement Program financial assistance from the Federal Aviation Administration (Project 

Number ___) as provided under Title 49 U.S.C., Section 47104. The contents do not necessarily reflect 

the official views or policy of the FAA. Acceptance of this report by the FAA does not in any way 

constitute a commitment on the part of the United States to participate in any development depicted 

therein nor does it indicate that the proposed development is environmentally acceptable or would have 

justification in accordance with appropriate public laws.” 

426. SUSPENSION AND TERMINATION. 

See Chapter 11, Section 6, for suspension and termination of grants. 

427. FINAL PLANNING REPORTS. 

The sponsor’s final planning reports or other products shall be reviewed and coordinated within FAA 

as necessary to ensure previous comments have been addressed adequately. 

a. Completion of Project Elements. On completion of a planning project, phase, or element, the 

sponsor will submit copies of the final reports and graphics to the FAA. Sponsors should be held 

accountable for each final product identified in the scope of work. 

b. FAA Distribution of Plans. Each completed product shall be distributed within FAA for use as 

appropriate. In addition, a copy of final summary documents for system plan projects and final master 

planning reports with the ALP for hub airports that have 0.25 percent of enplanements (medium and 

large hubs) shall be transmitted to APP-400. 

c. Incomplete Planning. Sponsors should be notified of incomplete planning in the project at the 

time of FAA approval actions described in Paragraph 428. 

428. FAA APPROVAL ACTIONS. 

FAA approval of project elements is an opportunity to properly establish the national implications of 

State, MPO, and local airport decisions. The FAA should limit its formal approvals to elements of a 

study that may require FAA action. FAA review and approval of sponsor submissions should consider 

whether the report content and format are adequate. Sponsor and FAA approvals may be required by 

the field office at key decision points during the planning process to facilitate plan implementation. 

a. Aviation Forecasting. Sponsor-approved aviation forecasts establish the justification for 

approval of the airport layout plan and development projects. FAA should review sponsor forecasts to 

ensure they are appropriate and provide an adequate justification for the airport planning and 

development. The study should include data supporting the forecasts, including information that can be 

used as a basis to update the Terminal Area Forecast (TAF). When the forecast is different from the 

TAF (5-year differences of 10 percent and more, or 10-year differences of 15 percent and more, or any 

difference that affects timing and/or cost of development in the NPIAS/ALP), differences must be 

resolved. If the variance does not result in such change, then the FAA may accept the forecast without 

further coordination. 

(1) Required Documentation. Legitimate policy differences exist between local, MPO, State, 

and national or private organizations that will result in different aviation forecasts. To resolve a 

significant difference, planning forecasts may be forwarded to APP-400 for review. Resolution of the 

differences may result in changes in the TAF, the planning study, or both. 

(a) Letters of support should be requested from airport users whenever a proposal is beyond 

that justified by a lease or commitment to use the project. Users should be asked to describe their plans 

or anticipated activity by the most demanding airplane, or “critical aircraft.” More than one critical aircraft 

may control the design of any specific airport’s different facility features, such as runway length, strength 

Page 56 
June 28, 2005 Order 5100.38C

of paved areas or lateral separations in airfield layout. A critical design aircraft is that airplane using (or 

is highly likely to use) the airport on a regular basis. A regular basis is at least 500 annual itinerant 

operations. See critical aircraft approach speed, wingspan, and weight in Chapter 1, AC 150/5300-13. 

(b) In the absence of appropriate documentation, sponsors should be notified about the 

forecast differences and information required to receive FAA endorsement for a project. 

(2) Endorsement of Forecasts. Forecasts adopted by a sponsor should receive some form of 

FAA concurrence (or non-concurrence) before subsequent elements of the study are initiated to facilitate 

the follow-on planning work (See Paragraph 403b). The degree of FAA endorsement of project 

justification will determine NPIAS entry, changes in airport role, approving development on the ALP, and 

work included in the current year ACIP. The activity levels used for accepting the NPIAS roles apply to 

forecast endorsement, and Order 5090.3 describes procedures for field formulation of the NPIAS. If 

appropriate coordination of forecasts is not completed, the inaction may cause problems with later 

airport development projects. The lack of FAA acceptance of forecasts may delay any further planning 

or capital improvements depending on them. 

b. Site Selection. Planning projects that include site selection as an element in a full master plan 

study normally require a tentative approval of the site before proceeding with subsequent elements. 

(1) Site Approval Process. Site approval should be made by the sponsor and FAA after 

considering the airspace determination, field inspection, site utility, preliminary environmental findings, 

public testimony, and other pertinent factors (See Paragraph 403b). Completion of the tentative FAA 

site approval process is necessary before permitting the sponsor to proceed with subsequent master 

planning. It may also be appropriate to use multi-grant procedures, such as focusing on aeronautical 

aspects initially and completing detailed environmental assessment when alternatives have been 

narrowed. Once a tentative or final site approval is made, the sponsor should be notified in writing. If 

approval is conditional for environmental or other reasons, this fact should be clearly stated. 

(2) Prior Federal Involvement. Many airport sites are identified within the NPIAS and other 

FAA documents as “new” locations because the approval has not been made. However, site approval 

may be determined to be unnecessary for sites with substantial federally approved development or prior 

involvement. For instance, a former military airport would need a base conversion study rather than the 

sponsor’s site approval process. 

c. Environmental Assessment. An environmental assessment (EA) is normally prepared for 

proposed airport development when it appears likely that a project requiring the EA will occur within five 

years. When such a report is submitted as part of a planning project, it should be completed and 

processed in accordance with Orders 1050.1 and 5050.4 on policies as well as procedures for 

considering environmental impacts. FAA may elect to delay the processing of an EA. In such a case, 

the sponsor should be informed of reasons for the delay. Reevaluation of the EA is necessary in 

accordance with the time limitations prescribed in Order 1050.1. 

d. Airport Layout Plan. A current ALP that has sponsor and FAA approval from the standpoint of 

the safety, utility, and efficiency of the airport is required by Title 49 U.S.C., Section 47107(a)(16). ALPs 

are the key documents for coordinating between off-airport parties, private users, the financial 

community, airports, local or State agencies, and Federal program offices. The ALP is needed by many 

Federal offices including Flight Standards, Flight Procedures, Airway Facilities, NAS Implementation, Air 

Traffic, Runway Safety, Logistics, Civil Aviation Security, and the Transportation Security Administration 

(TSA). The Airports Division is responsible for inter-division coordination of airport layout planning. 

Adequate review and coordination of airport plans prior to FAA approval establishes the basis for use of 

the ALP. 

(1) ALP Preparation. The sponsor’s ALP should incorporate an airport airspace plan (See 

Advisory Circular 150/5300-13), runway protection zone plan, and a property inventory map (See Order 

Page 57
June 28, 2005 Order 5100.38C

5190.6 on airport compliance requirements). ALPs are normally current for a five-year period unless 

major changes at the airport have been made or are planned. ALPs may be determined to be current 

beyond that period without revisions if no changes have occurred or are planned and if the ALP meets 

current design standards. 

(2) Review and Coordination. FAA review and coordination of the ALP will cover Federal 

interests and must consider any required coordination that was not completed at the local or state level. 

FAA may request additional information from sponsors, preferably at one time within the review period, 

to add detail needed for ALP approval. Airport sponsors should be alerted to the delay or disapproval of 

agency action when requested information is not provided. 

(3) Timing of Approval. Due to the length of time involved for Federal ALP approval actions, 

several forms of letters or notices to the sponsor approving airport development on layout plans may be 

used (See Paragraph 403b). 

(a) Conceptual Approval. Conceptual approval may be made, if necessary, to avoid 

unreasonably delaying the sponsor in the absence of detailed planning. 

(b) First-Time Approval. First-time approval actions may be taken for those airports 

where an ALP has not been previously approved. First-time approval is normally the culmination of a 

major study process, including interagency review and discussion between the interested parties. 

(c) Informal Revisions. The informal revisions of a minor nature should be noted on the 

ALP by pen and ink based on supporting documentation referenced on the drawing rather than 

frequently re-approving as-built conditions. The supporting documentation should identify sponsor and 

FAA documents that approve the revision, and any safety implications of the change must be described. 

Regions may require revisions of drawings at any time to provide working tools that would not be 

approved. For instance, an ALP drawing with a small building that is not identified within the approved 

plan could be sent before or after the FAA’s conduct of airspace studies and determination for it. 

Likewise, a similar sheet could be provided with minor new airport engineering or geodetic surveying 

data that needs to be noted on the approved ALP by pen and ink as well as reflected within the FAA’s 

airport master record. 

(d) Formal Revisions. Formal revisions shall be approved periodically for major changes 

to the airport and the existing ALP. Several years may lapse between each formal revision since it 

normally involves the substantial degree of study, review, and discussion as first-time ALP approval. 

(4) Approval Conditions. Conditions of ALP approval will be explained in writing to the 

sponsor and clearly indicated on the plan. Approval of an ALP must be in accordance with 

environmental criteria in Order 5050.4 (the airport environmental handbook) and current regulations and 

design standards unless modified as prescribed in Order 5300.1 (approval level for modification of 

agency airport design and construction standards). The approval letter must include the disclaimer 

statement regarding Federal financial participation in Paragraph 425b. Statements should be added 

concerning sponsor action required on land use planning for the airport vicinity and the need for airport 

layout planning to be compatible with Federal facilities (See standard grant assurances). A statement 

should also identify proposed development that is not sufficiently justified. 

(5) Use of ALP. ALPs are the graphic representation of policies on current and future airport 

development as formally adopted by the sponsor and approved by FAA. Planning, budgeting, and 

implementation for FAA activities on airports will be based on the sponsor’s ALP. Before the Federal 

action on new development depicted on the ALP, appropriate conditions of ALP approval must be 

satisfied. FAA plans and programming must be changed to reflect each newly approved ALP as 

appropriate. 

Page 58 
June 28, 2005 Order 5100.38C

e. Noise Planning. Guidance on noise control planning is contained in Order 1050.11. Noise 

exposure maps and noise compatibility programs that result from FAA-funded projects should be 

completed by the sponsor and provided to the FAA. This does not necessarily constitute a formal 

submission to FAA for determinations under FAR Part 150. Submission of noise exposure maps and 

noise compatibility programs for determinations under Part 150 are not required by the grant. However, 

if the sponsor decides upon completion of the noise planning to make a submission under Part 150, a 

letter so stating should be provided. 

f. NPIAS and ACIP Data. Airport data, such as development requirements and schedules, shall be 

verified by the FAA prior to inclusion in the NPIAS and ACIP. Sponsors, MPOs, and States should be 

provided an explanation in writing concerning data considered unacceptable. Benefit-cost analysis, 

when required, is to be prepared by airport sponsors, transmitted to regions for a completeness review, 

and sent to APP-520 where that office, in consultation with APO-200, will review the BCA analysis. 

Regions will verify consistency with the approved aviation forecasts, FAA guidance on BCA 

methodology, the master plan, the ALP, the critical aircraft justification, and life cycle cost 

considerations. Regions will ensure the costs, benefits, and schedules are reasonable. The region 

must coordinate with APP-520 if a project would have special circumstances in calculating the BCA that 

is inconsistent with current guidance. (See Paragraph 550b for navigation aid projects.) 

429. FAA ACCEPTANCE OF PROJECTS. 

See Chapter 13, Section 2, for project acceptance and grant closeout procedures. 

430. AUDITS. 

See Chapter 13, Section 3, for audits. 

431. - 499. RESERVED.

Page 59
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 60 
June 28, 2005 Order 5100.38C

Chapter 5. AIRFIELD CONSTRUCTION AND 

EQUIPMENT P ROJECTS

Section 1. GENERAL ELIGIBILITY AND PROJECT REQUIREMENTS

500. PROJECT ELIGIBILITY. 

No airfield construction or equipment acquisition project can be approved unless it meets 

requirements of Paragraph 300 and conforms with standards established by the Administrator, including 

standards for site location, airport layout, site preparation, paving, lighting, and safety of approaches. 

FAA determination on eligibility of safety and security facilities as well as other airport development 

items is based on a policy that airport standards, if fully met by a sponsor, provide for adequate facilities 

and equipment to meet public needs. Any development beyond those standards or requirements would 

not be eligible for Federal funding. This policy is reflected in the general ineligibility of aircraft rescue 

and fire fighting equipment beyond that required by Part 139 and the funding limits on construction of 

pavement longer, wider, or stronger than specified in advisory circulars. Furthermore, no airport 

development project may be approved unless the following conditions have been met: 

a. Good Title and Property Inventory Map (Exhibit A). The sponsor, a public agency, or the 

Government must hold good title to the areas of the airport used or intended to be used for the landing, 

taking off, or surface maneuvering of aircraft, or good title will be acquired. A good title is a marketable 

title, free and clear of all liens and encumbrances (except those specified and usually agreed to by the 

government in advance). If the airport is acquiring land in the project, a property inventory map (Exhibit 

A) should be updated unless it is part of the approved airport layout plan. 

b. Airport Layout Plan (ALP). The project must be consistent with a current ALP, which is 

approved by the FAA, and the interests of the community located near the project should be given fair 

consideration. 

c. Airfield Lighting and Marking. The project must provide land required for installing approach 

light systems, touch-down zone and centerline runway lighting, or high intensity runway lighting, that the 

Secretary decides are necessary under Title 49 U.S.C., Section 47106(b)(3) for safe and efficient use of 

the airport by aircraft, considering the airport category and the kind and volume of traffic. The project 

must provide airfield marking if existing markings are obliterated by the construction or construction 

equipment. 

d. Useable Unit of Work. A safe, useful, and usable unit of work must result from the project. In 

the case of development to be accomplished in stages, a safe, useful, and usable unit must be provided 

at least upon completion of the final stage. 

e. Reducing Incursions. The project must provide airfield paving, lighting, and/or surface 

movement items where determined by the FAA Runway Incursion Action Team or formal inspection to 

be required for reducing runway incursions and aircraft accidents if the work involves runways/taxiways. 

The specific requirements of this initiative are identified within Sections 3 and 4 of this Chapter. 

501. RECONSTRUCTION VERSUS MAINTENANCE. 

The reconstruction, rehabilitation, pavement overlays, or major repairs of facilities and equipment 

are defined as eligible capital costs generally considered permanent with a 20-year life expectancy. The 

maintenance activities needed on a continuing basis to preserve the airfield in good condition, work 

involving regular cleaning operations, as well as minor repairs of facilities and equipment are defined as 

ineligible costs. For example, while the complete rehabilitation of power sweepers may be eligible, 

regular maintenance of it or sweeping operations for pavement areas are ineligible. However, routine 

pavement maintenance at nonprimary airports is eligible based on the requirements described in 

Page 61
June 28, 2005 Order 5100.38C

Paragraph 520. This nonprimary airport maintenance is the major exception allowing the use of AIP 

funding for operations and maintenance costs as defined in this paragraph. In addition, when life-cycle 

costs are considered in procurement as described in paragraphs 508 and 911, certain operation or 

maintenance costs may be funded. 

502. NATIONAL AIRSPACE SYSTEM REQUIREMENTS. 

The FAA must constantly sustain and modernize the National Airspace System (NAS). AIP 

construction and equipment projects shall be consistent with the NAS Architecture, which details 

operational concepts, mandatory schedules, system requirements, human and physical resources, and 

regulatory policies essential for maintaining the safety as well as capacity of the NAS. AIP projects in 

the NAS include, but are not limited to, navigation, runways, lighting, weather equipment, and security. 

These components are defined in the current version of the NAS Architecture document. The NAS 

Architecture document is a dynamic document that is updated on an as-needed basis. A more thorough 

discussion on the NAS Architecture can be found at http://www.faa.gov/nasarchitecture. 

a. National Plan of Integrated Airport Systems. Airfield construction and equipment included 

within the NPIAS are AIP eligible. NPIAS airports are considered major service providers and essential 

to the NAS. They must meet applicable standards to ensure the safe and efficient use of airspace by 

aircraft anywhere within the NAS. Other airports are occasionally treated as NAS components for 

various purposes, although those smaller airfields remain ineligible under the AIP. 

b. Related Funding Sources. AIP grants are one among many related financing programs for 

airport improvements. Joint planning and decision making with other NAS funding sources is frequently 

critical to project implementation. The regions should ensure that the appropriate Airport Capital 

Improvement Plan includes a notation about the financing required to complete projects. For instance, 

when the FAA’s Facilities and Equipment (F&E) program is needed to provide an airport traffic control 

tower as part of commissioning a new runway, the status of the F&E work must be carried with the AIP 

project information throughout the life of the airfield project. This applies to funding from the PFC 

program, other Federal programs, States, local governments, airport revenue, project borrowing, and 

contributions by private entities. 

c. Reformed Acquisition Management System. The installation of certain NAS air traffic control, 

communications, navigation, surveillance, and weather facilities are usually the responsibility of the FAA 

rather than airports. The FAA’s reformed Acquisition Management System (AMS) acquires NAS 

facilities in five steps: mission analysis, investment decisions, solution implementation, in-service 

management, and service life extension. Without further authorization about shifting FAA costs to 

airports, this is accomplished mainly through the F&E program. Under some limited circumstances, the 

traditional F&E equipment may also be AIP funded, and requirements for these projects are identified 

below. When projects can be accomplished through both programs, the AIP and F&E program 

requirements are the same, which means an airport should not view a grant as a means of 

accomplishing a project that is otherwise unqualified for F&E funding. 

d. Facilities and Equipment Program Budgets. Any project included in an approved F&E 

program budget is ineligible for an AIP grant, and the FAA cannot use AIP funds to augment the F&E 

budget without specific statutory authority. (See Paragraph 311k.) Regions should check questionable 

equipment projects with the Airway Facilities division to ensure that duplication of project funding is 

avoided. The FAA should approve few traditionally F&E or National Airspace System Implementation 

Program (ANI) funded projects under grants, except instrument landing systems (ILSs) and associated 

lighting as described in Paragraphs 555 and 556. The AIP grants may involve site preparation required 

to meet airport standards separate from the F&E projects when the work is ancillary to such a project. 

Projects traditionally funded under the F&E program are facilities and equipment for navigation, weather 

reporting, communications, surveillance, and air traffic control. Contact APP-520 for assistance on 

eligibility of work primarily related to an approved F&E project. 

Page 62 
June 28, 2005 Order 5100.38C

e. Off-Airport Projects. Off-airport construction and equipment projects are eligible only to the 

extent that they accomplish the exceptions described in Paragraph 303. Such projects need to be 

clearly justified as airfield related on the FAA approved airport layout plan. 

503. TRANSITION TO SATELLITE NAVIGATION. 

The emphasis of many airfield construction and equipment projects is the FAA transition from the 

existing ground-based navigational aids to the satellite navigation (SATNAV) technology for airport 

instrument approach service in the NAS. 

a. Augmentation and Revision of Standards. The FAA expects to meet the future airport 

approach and landing system requirements with the global positioning system (GPS), which will be 

augmented by the Wide Area Augmentation System (WAAS) and the Local Area Augmentation System 

(LAAS). Due to many differences between the GPS-based procedures and the traditional instrument 

landing system (ILS), airport standards are undergoing revision. Many airfield construction and 

equipment projects should be designed based on SATNAV requirements even though some advisory 

circulars retain dated material. (See Paragraph 506.) 

b. Instrument Landing System and Backup Systems. After sufficient time has passed to allow 

for installation of SATNAV avionics in aircraft as well as experience with WAAS and LAAS, a phasedown in ground-based navigation aids will begin. In the interim, the ILS and other backup systems will 

continue to be deployed based on reduced life-cycle benefits. Airfield construction and equipment 

projects must be evaluated in light of the continuing cost for ground-based systems with these reduced 

benefits. 

c. SATNAV Airport Facility Enhancement Team. During the transition to SATNAV, a focus 

group has been established within the Airports program to provide additional assistance that may be 

necessary. The SATNAV Airport Facility Enhancement Team (SAFET) has representation from the 

aircraft, avionics, and navigation systems integrated product team (AND-700) and each headquarters 

division within Airports. Contact AAS-100 for assistance from SAFET. 

504. INNOVATIVE TECHNOLOGY AND FINANCE. 

Airports should employ innovative technologies in accordance with Title 49, U.S.C., 

Section 47101(a)(11), or concepts that will promote safety, capacity, and efficiency improvements. 

However, implementation of AIP airfield construction and equipment projects must use demonstrated 

materials, procedures, and standards, except as noted above. Innovative financing mechanisms for 

airport development may also be considered within the context of overall aviation funding and 

demonstration projects authorized for that purpose. 

a. Project Approval Levels. Regions may authorize any innovative technology implementation 

project that does not require approval of a modification of standards at a level above the region. Contact 

AAS-100 for other questions on approving projects using new pavement or equipment technology. 

b. Demonstration Projects. Demonstration projects are occasionally authorized within legislation 

on new construction, management, or financing arrangements for airport planning and development. 

The AIP does not include significant numbers of such demonstrations because prior evaluations have 

concluded that the program is already flexible enough to accommodate many innovations. However, 

regions needing further information on a demonstration project should contact Airports Financial 

Assistance Division, Airport Improvement Program Branch (APP-520). 

c. Research, Engineering, and Development Budgets. Any project included in an approved 

Research, Engineering and Development (RE&D) program budget would be ineligible under the AIP. 

The FAA cannot use AIP funds to augment the RE&D budget without specific statutory authority. (See 

Paragraph 311k.) Work may be proposed in the developmental or demonstration stage of innovation, 

which would be more appropriate as RE&D projects. Where the limited deployment of innovations is 

Page 63
June 28, 2005 Order 5100.38C

anticipated, a project should be considered a candidate for research that includes a follow-up report. 

Regions may contact APP-520 for assistance on eligibility of work primarily related to an approved 

RE&D project. 

505. AIRFIELD PROJECT JUSTIFICATION. 

The facility size, strength of pavement, and other determinants of project cost must be adequately 

documented to allow an independent assessment that the amount of work is realistically justified. See 

Paragraph 320. 

a. Aviation User Requirements. The general eligibility of work is not the same as justification 

based on current airport user needs. Letters of support should be requested from airport users 

whenever a proposal is beyond that justified by a lease or other firm commitment to use the project. 

Airport users should be asked to describe their plans and the anticipated public use activity level by a 

specific aircraft, including the approach category as well as airplane design group. In some cases, there 

may be more than one critical aircraft. For instance, pavement strength and layout are frequently 

dependent upon different aircraft. Except as otherwise noted, the activity levels used for accepting 

NPIAS airport roles apply to project justification, and Order 5090.3 describes procedures for field 

formulation of the NPIAS. 

b. Documented Aeronautical Need. The simple endorsement of a project by the airport sponsor 

or a forecast of activity is not adequate by itself to establish justification for the work. Forecasts should 

be realistic and supported by the information and documentation provided by the sponsor. Formal 

justification by aviation users may have been previously documented in an airport planning report. 

When reviewing a proposal, the region should evaluate the work required upon completion of the project 

and forecast to occur at some future time. The sponsor’s forecasts should be compared to the existing 

Terminal Area Forecast (TAF) and any substantial differences should be resolved. The FAA’s TAF is to 

be used in accordance with Paragraph 428a. Economies of scale may be obtained by allowing a project 

to be expanded for the five-year forecast if, in the judgment of the FAA, the airport is growing sufficiently 

to necessitate that. However, no project should be approved for funding without analysis of the specific 

requirements for development and documentation of aeronautical demand used to justify the work. 

506. PROJECT STANDARDS AND DESIGN. 

If FAA Advisory Circular 00-2.15, Advisory Circular Checklist, identifies an Airports standard for the 

work proposed, a project must be carried out in accordance with the applicable FAA standards and 

designs in order to be eligible, except as described within this paragraph. See Paragraph 311. Grant 

assurance 34 normally limits applicable requirements based on a list of current advisory circulars for AIP 

eligible projects. This current list, which has fewer documents than the FAA advisory circular checklist, 

is available on our web site. If, in the view of the region, a proposal requires recently issued standards 

or requirements other than on the current list to make the project eligible, the additional requirement can 

be included as a special condition. 

a. Development Exceeding Design Standards. New facilities exceeding FAA design standards 

are not eligible except as noted in Paragraph 505b, although AIP work may be combined with an 

ineligible project provided the airport pays the extra costs. See Paragraph 613. In addition, a project for 

rehabilitation of existing airfield facilities (or repairing equipment) that exceed FAA design standards may 

be eligible for AIP participation if it meets the other applicable requirements and the following: 

(1) The project is otherwise eligible; 

(2) The cost in excess of that required to achieve facilities/equipment that meet FAA design 

standards is justifiable in the view of the region for preserving or enhancing the existing capability; and 

(3) Operational experience has established a continuing need for the existing facility or 

equipment to accommodate occasional airport users requiring it. 

Page 64 
June 28, 2005 Order 5100.38C

b. State Standards. FAA approval of State standards may have been accomplished for certain 

projects at nonprimary airports, although such a standard cannot be approved with respect to safety of 

approaches. If a sponsor proposes to apply a State’s standards that have not been approved, the 

region may encourage the State to prepare standards under an AIP system plan project. However, use 

of the State standards is generally not permitted until they have FAA approval. Additionally, State 

highway specifications are permitted for airfield pavement construction using funds made available 

under Section 47114 of the Act at nonprimary airports with runways of 5,000 feet or shorter serving 

aircraft that do not exceed 60,000 pounds gross weight if the Secretary determines that (i) safety will not 

be negatively affected; and (ii) the life of the pavement will not be shorter than it would be if constructed 

using FAA standards. However, there is one limitation. An airport may not seek funds under this 

provision for runway rehabilitation or reconstruction of any such airfield pavement constructed using 

state highway specifications for a period of 10 years after construction is completed unless the FAA 

determines that the rehabilitation or reconstruction is required for safety reasons. 

c. Projects without Standards. Some eligible projects, such as power sweepers for debris 

control, have no corresponding FAA scope of work, requirements, procedures, policy, plans, standards, 

and/or specification. Contact APP-520 for assistance on project eligibility. Contact AAS-100//300 for 

evaluation of project design. 

507. COMMISSIONING AND DECOMMISSIONING AIRFIELD FACILITY. 

The regional Airports divisions are the FAA lead organization responsible for commissioning and 

decommissioning AIP airfield facility construction or equipment projects. The work scope must include 

updating aeronautical publications to reflect all alterations to an airport’s infrastructure both during and 

after the project. 

a. Coordination of Airport Alterations. Project coordination is required to close runways and 

reopen them, for instance, so that the public can be made aware of the changes. The sponsor is 

required to coordinate with the airport traffic control tower and contractors. The sponsor is also required 

to obtain a non-objectionable determination from the FAA region. Timeliness is important due to safety 

and liability issues. To maintain the required level of safety and security during construction, the airport 

must comply with guidelines in Advisory Circular 150/5370-2. 

b. Designating Temporary Runways. Operational safety on the airfield during construction, 

including airport ground vehicle/aircraft movement coordination, is important for many AIP projects. 

Designation of taxiways as temporary runways in accordance with FAA Order 7110.19, and other 

temporary features, must be included in the project. (See Paragraph 525c on converting runways to 

taxiways.) 

c. Notice to Airmen. Regions are responsible for determining that airport operators provide 

accurate information for notices to airmen (NOTAM) in accordance with Advisory Circular 150/5200-28. 

508. LIFE-CYCLE AIRPORT COSTS. 

Life-cycle costs shall be considered in AIP procurement where specified in bidding documents. This 

is a requirement of Title 49, Code of Federal Regulations, Part 18. Life-cycle costs are defined to 

encompass the entire period facilities or equipment progress through a budget, including the stages for 

the airport planning, construction, commissioning, operating, management, maintenance, repair, 

improvements, and activities on decommissioning the project. Regional personnel should exercise care 

to treat life-cycle airport costs fairly for sponsors without requiring unreasonable initial capital 

expenditures. For additional information on the features or applications of life cycle cost analysis, see 

Paragraphs 501 and Section 6 of this chapter. See also Paragraphs 591 and 911. 

509. RESERVED. 

Page 65
June 28, 2005 Order 5100.38C

Section 2. SITE PREPARATION

510. GENERAL. 

Work necessary to prepare the site for eligible airport development or to meet applicable design 

standards is eligible. Site preparation may include clearing, grading, grubbing, and installing drainage 

facilities or utilities. In the case of seaplane facilities, dredging of the seaplane anchorage and channel 

is eligible. 

511. EXISTING FACILITY IMPROVEMENTS. 

Any site preparation to bring an existing airfield facility into conformance with applicable airport 

design standards is eligible. These improvements may be required at existing nonstandard airports or 

due to a change in standards since the airport was constructed. See Paragraph 512 on major runway or 

extension projects. 

512. NEW AIRPORT, MAJOR RUNWAY PROJECTS, AND MILITARY AIRPORT CONVERSIONS. 

Major new airport improvements involve the need for more elaborate coordination between FAA 

organizations, states, the airport, and other parties than do less significant projects at existing facilities. 

A coordination process should be well underway to establish the site selection agreement or airport 

layout plan and to determine project eligibility before approval of a project for site preparation work. The 

use of the Operational Evolution Plan (OEP) process for projects involving significant demand-capacity 

issues will harmonize the activities and foster agreement on a collective course of action within the 

aviation community. New improvements at smaller airports may be outside the OEP. For these 

projects, the region should consider undertaking similar coordination on a reduced scale.

a. New Airports. An inter-division working committee (IWC) in accordance with Order 1110.117 or 

similar team, including possibly a separate office, should be established and used by regions for building 

major new airports to ensure initial site preparation eligibility issues are consistent with FAA policy. The 

IWC or other coordination process may continue throughout the development project phases.

b. Runways and Extensions. Major runway and extension projects should involve a similar IWC 

or other coordination mechanism as used for a new airport prior to site preparation. Redesign of 

facilities, revision of air traffic procedures, and related changes require formal coordination to ensure the 

airport is modernized consistent with FAA policy.

c. Military Airports. The conversion or joint use of former military airport areas is frequently as 

significant as building new airports. Therefore, a similar IWC should be established and used for former 

military airports as part of the project to ensure site preparation eligibility issues are consistent with FAA 

policy. 

513. SAFETY AREAS. 

Safety areas are a substantial site preparation requirement for airport development projects. Safety 

area or shoulder requirements are eligible. However, the standards for runway and taxiway safety areas 

may not relate directly to the risk of accidents for purposes of justifying improvements. A feasibility 

determination is needed by the FAA if costs are excessive. Refer to Order 5200.8, Appendix 2 for 

considerations in evaluating alternatives. 

a. Runway Safety Area Program. The runway safety area program described in Order 5200.8 

applies to AIP projects that involve construction of new runways and lengthening, widening, 

strengthening, or leveling of an existing runway. For work related to Facilities and Equipment projects, 

see Paragraphs 514 and 593. 

Page 66 
June 28, 2005 Order 5100.38C

b. Engineered Materials Arresting Systems. Engineered materials arresting systems (EMAS) 

described in Advisory Circular 150/5220-22 are not equivalent to a runway safety area, although the 

installation or repair of EMAS should be considered in the analysis of the improvements. 

(1) Primary Airports. The analysis should consider the role of the airport, characteristics of 

unpaved surface areas surrounding the runways, airport activity, future plans for instrument approach 

procedures, and alternative operational requirements. EMAS is eligible where nonstandard situations 

exist for primary airport runway safety areas and it may be part of a determination by the FAA. Contact 

AAS-100 for assistance with EMAS. 

(2) Nonprimary Airports. Where the standard safety area for a nonprimary airport is not 

practical, the project should be documented using the factors described above for primary airports. 

Regions should exercise additional care for airports with only smaller and lower speed aircraft pending 

more experience with EMAS at these locations. 

c. Taxiway Safety Areas. Safety areas for parallel, bypass, or connecting taxiways and 

turnarounds as well as holding bays are eligible. The evaluation of taxiway safety areas may need to 

consider airport planning and alternatives in a similar way as described above for the runway safety 

area. 

514. SITE PREPARATION FOR F&E INSTALLATIONS. 

Site preparation for navigation aids may involve large areas on an airport. The site for an F&E 

installation may be prepared in connection with an eligible airport development project provided the 

grant agreement specifies that this work will be funded entirely by the F&E program. Except as 

specifically identified below, site preparation for F&E installations is ineligible. 

a. Clearing, Grading, and Grubbing. Clearing, grading, grubbing, or related work for eligible 

airport development items may result in the site preparation of an F&E project. For example, clearing of 

the safety area and runway protection zone will prepare the site for an airport approach lighting system. 

This type of site preparation is eligible provided that: 

(1) The work must be included as part of the site preparation for eligible airport development. 

Grants should not be issued for clearing of existing or future F&E sites exclusively (for instance, an item 

to remove existing non-frangible approach lighting equipment or procure and install frangible systems) 

outside a related airport development project. See Paragraphs 513 and 593; 

(2) The cost of preparing a slightly larger area so NAVAID installations can be located outside 

safety areas must be determined as incidental to eligible site preparation costs for airport development 

in which the F&E equipment is included. See Paragraph 516; and 

(3) The site preparation must meet airport design standards that would be applicable without the 

NAVAID. 

b. Installation of Ducts. Installation of ducts or utilities to support an F&E project is not normally 

eligible for funding under the AIP. In cases where it is documented that ducts and utilities for F&E 

facilities can be more economically installed incidental to an AIP construction or equipment project, the 

installation may be funded if requested by the sponsor. An example is the placement and marking of 

sufficient conduits for planned requirements under runways and taxiways before initial paving to avoid 

the need for repeatedly cutting new trenches at a later time. 

515. UTILITIES AND FUEL FARMS. 

The installation, improvement, reconstruction, or repair of water, gas, electric utilities, drainage and 

wastewater treatment facilities will be eligible to the extent they are needed to serve areas eligible for 

AIP assistance. The allowable cost of any utility installation serving both eligible and ineligible areas or 

Page 67
June 28, 2005 Order 5100.38C

facilities will be a prorated share of the total cost, the method to be determined by the FAA Airports 

Office as in Paragraph 613. Aircraft fueling facilities at an apron surface or below are incidental to the 

pavement project and eligible. See Paragraphs 538, 541, 586, 591, and 594. 

a. Fuel Farms and Other Aeronautical Support Facilities. The installation of new fuel farms 

may be eligible at nonprimary airports using entitlements. Regions should ensure the sponsor has made 

adequate provisions for financing higher priority airfield projects that are currently required before this 

revenue-producing work. Contact APP-520 about proposals for the construction, alteration and repair of 

revenue-producing aeronautical support facilities other than any project clearly allowed in paragraph 526 

or a new fuel farm at nonprimary airports. See 49 USC 47110(h).

b. Military Airport Program. Separate rules apply to the utilities or the fueling facilities for certain 

joint use and former military airports. An airport currently participating in Military Airport Program (MAP) 

has been given additional eligibility not to be confused with that at other military or joint use airports. For 

MAP, eligible work includes construction, improvement, or repair of all existing airport utilities even if that 

would not otherwise be allowable. This includes upgrading electric utilities or such systems in hangars 

and terminal buildings to meet electrical codes. This also includes fuel farms for non-exclusive use by 

the flying public. Projects cannot exceed certain funding levels at each airport for fuel farms, utilities and 

various related projects as described in Paragraph 606.

c. Ineligible Utilities. Installation or rehabilitation of utilities for areas not eligible are ineligible 

unless the work is specifically eligible under the Military Airport Program. Ineligible work includes 

installation or rehabilitation of fueling fixtures above the surface of an apron and fuel farms at primary 

airports. 

516. PRORATION OF SITE PREPARATION WORK. 

In some cases, a sponsor may determine that it is beneficial to undertake site preparation for both 

eligible and ineligible development through one construction contract. In these cases, the costs shall be 

prorated between the eligible and ineligible development items unless the cost of the unallowable work 

is incidental to the eligible development items. The determination of whether or not to prorate the costs 

must be made on a case-by-case evaluation. 

a. Prorated Work. A sponsor may propose, for example, to include in a building five additional 

bays and substantial local government administrative space beyond that needed to house snow removal 

equipment. The cost of the site preparation for the ineligible space might be greater than 10 percent 

when compared to the overall eligible part of the building. It would not be an incidental part of the 

eligible development items. A prorated share for the allowable project cost should be calculated using 

methods similar to that in Paragraph 613. 

b. Incidental Work. In another example, site preparation for an eligible apron requires fill. The 

sponsor proposes to obtain an equal amount of the fill by grading (and thereby preparing the site for) an 

adjacent area designated on the approved airport layout plan for aircraft hangars. Site preparation of 

the hangar area may be considered incidental to the work on the apron if the region determines it 

represents an effective and logical source for the fill. See a similar example in Paragraph 514a(2). 

517. - 519. RESERVED. 

Section 3. MANAGEMENT OF AIRFIELD PAVING PROJECTS

520. GENERAL. 

Management of airfield paving projects has expanded beyond the determination of eligibility for the 

original project itself to include consideration of the life-cycle operation and maintenance issues. See 

Paragraph 306 on pavement evaluations as well as Advisory Circulars 150/5380-6 and 150/5380-7. 

Page 68 
June 28, 2005 Order 5100.38C

Paving for reducing runway incursions may need coordination with the FAA Runway Incursion Action 

Team. 

a. Airfield Paving. Eligible work items under airfield paving include construction, reconstruction, or 

rehabilitation of runways, taxiways, and apron areas. This may include aggregate-turf pavement or 

other than the FAA standard for specifying construction at airports, as with the FAA-approved State 

standards. Specific programming criteria on the individual work items are provided in the subsequent 

paragraphs. Under Title 49 U.S.C., Section 47105e, the sponsor must assure the airport has 

implemented procedures for a pavement maintenance management program for any project to replace 

or reconstruct pavement. A special condition for pavement quality control is contained in Appendix 7. 

The basic requirements for the pavement maintenance management program are defined in Advisory 

Circular 150/5380-6. 

b. Pavement Strengthening. The airport owner has a commitment to prevent overstressing of 

airfield pavements. If the owner is not prepared to strengthen the pavement, then its use must be limited 

to aircraft operations that will preclude such overstressing. The FAA does not consider such a limitation 

to be a noise restriction within the meaning of Title 49 U.S.C., Section 47524. Should pavement failure 

occur because the sponsor failed to take timely corrective action after being advised by the FAA of 

problems, any subsequent AIP project will be limited to the cost of such work as would have been 

required for strengthening had failure not occurred. Independently conducted pavement evaluations by 

the State as well as FAA, or those contained in airport master plan projects, may be used for advising 

sponsors and in making these determinations. See Paragraph 505 for justification of pavement design. 

c. Seal Coats. The application of asphalt seal coats or resealing of joints in concrete pavements is 

a capital cost eligible for Federal participation under certain conditions. The region must analyze the 

need for seal coats and be satisfied that the sponsor has complied with assurances on regular 

maintenance. The following guidance will apply: 

(1) The preparation of the pavement surface, including cleaning and filling of cracks, is eligible 

with a seal coat project. 

(2) Eligible types of seal coats include those using aggregate, sand, emulsified asphalt slurry, 

coal tar pitch emulsion, rubberized material, or some combination of the these methods. See the 

advisory circulars and engineering briefs, or contact AAS-100 for advice on other applications. 

d. Friction Surface Treatment. Friction surface treatments, such as grooving, aggregate seal 

coats or porous friction courses, to minimize hydroplaning and improve skid resistance are eligible 

capital costs. In accordance with Title 49 U.S.C., Section 47101(f)(2), surface treatment for primary and 

secondary runways at commercial service airports serving turbojet aircraft is high priority, and 

documentation for the project files should include an explanation when it is not accomplished. Portions 

of taxiway systems and apron areas are eligible for friction surface treatments where the increased skid 

resistance is needed to enhance safety. 

e. Shoulders and Blast Pads. The treatment of areas adjacent to eligible pavement is eligible in 

accordance with applicable airport design standards to support the weight of aircraft or other surface 

vehicles. Shoulders and blast pads are eligible to prevent soil erosion from thrust effects of turbojetpowered aircraft or to improve the existing conditions such that regular maintenance will be facilitated. 

f. Nonhub and Nonprimary Airport Pavement Maintenance. Nonhub and nonprimary airports 

have separate eligibility rules related to airfield pavement maintenance. 

(1) Under Title 49, U.S.C., Section 47102(3)(H), the nonhub and nonprimary airports are eligible 

for certain cost effective routine pavement maintenance projects. Notwithstanding grant assurances, 

sponsors must be unable to fund maintenance using their own resources, which include transfer of funds 

to the airport from other sponsor accounts. The sponsor or State must implement a pavement 

Page 69
June 28, 2005 Order 5100.38C

maintenance management program based on Advisory Circular 150/5380-6. Routine maintenance is 

defined as cleaning, filling, and/or sealing of longitudinal and transverse cracks, grading pavement 

edges, maintaining drainage systems, pavement patching, seal coats, and remarking paved areas. 

(2) Routine maintenance projects are ineligible for any airport category where the region 

determines a capital improvement project is required when pavement condition has deteriorated to such 

a point that a maintenance project would not be considered cost effective. See Paragraph 501. The 

costs of routine maintenance are, likewise, ineligible for what may be frequent operations to remove 

mud, dirt, sand, aggregate, debris, foreign objects, water, snow, ice, loose contaminants, and rubber 

deposits, or the mowing of turf areas. 

521. RUNWAYS. 

Runways are eligible for development consistent with FAA design and engineering standards. 

Typical runway development includes construction of new runways and lengthening, widening, 

strengthening or leveling of existing runways. In accordance with 49 USC 47116(d), under certain 

conditions priority consideration should be given to the use of certain small airport funds for runway 

extensions that support turbine powered aircraft and to multi-year projects for new capacity runways. 

AIP participation may be limited to a single runway at an airport based on the criteria below. 

a. Airspace Review of Landing Areas. Order 7400.2 on procedures for handling airspace 

matters contains the coordination and review that is required to designate an instrument runway as a 

change to the airport layout plan. The designation of an existing or proposed runway as an instrument 

runway makes it eligible to receive project grant funds under the AIP. 

b. Parallel and Crosswind Runways. Additional runways are eligible if the volume of airport 

operations would justify the development (in accordance with Advisory Circular 150/5060-5 on capacity 

and delay) and the proposed airfield layout will expedite traffic. If the primary runway is subject to 

weather conditions that exceed airport design standards in Advisory Circular 150/5300-13, the minimum 

required crosswind runways to achieve adequate wind coverage are eligible. 

c. Other Runways. AIP participation in runway development will be limited to a single instrument 

runway at an airport unless additional runways can be justified. A visual runway having airspace 

coordination and review will be eligible if in the judgment of the region an instrument runway is not 

required within the foreseeable future. An additional runway may be necessary to accommodate 

operational demands, minimize adverse wind conditions, or mitigate impacts identified in an approved 

environmental finding. Use criteria contained in the latest issue of AC 150/5300-13, Airport Design, to 

determine if the additional runway is justified. Any development (such as marking or lighting) related to 

or on an ineligible runway is also not eligible. 

522. HELICOPTER AND TILT-ROTOR FACILITIES. 

The paving to accommodate helicopters is eligible provided the facilities are located at eligible 

heliports or airports. Projects for development of tilt-rotor facilities must be coordinated with APP-520. 

523. ULTRALIGHT FACILITIES. 

Construction for ultra-light operations at an existing airfield is eligible if necessary for safety or 

capacity purposes and the airport would be eligible for grant funding. Contact AAS-400 for information 

about establishing airport areas for blimps, balloons, parachutes, and model airplanes. 

524. SEAPLANE BASES. 

Ramps and other paving are eligible facilities at eligible seaplane bases or airports with a seaplane 

ramp. Advisory Circular 150/5395-1 provides guidance on constructing seaplane bases. 

Page 70 
June 28, 2005 Order 5100.38C

525. TAXIWAYS. 

Taxiways to expedite the flow of traffic between runways and aircraft parking areas available for 

public use are eligible. See Paragraph 526. Typical taxiway development includes the construction of 

new taxiways and lengthening, widening, strengthening or leveling of existing taxiways to meet FAA 

design/engineering standards for the critical aircraft. 

a. Parallel, Bypass, and Connecting Taxiways. A full-length parallel taxiway connected to each 

end of an eligible runway is eligible. A partial parallel taxiway may be considered at general aviation 

airports where cost to construct the full length is excessive and the benefits do not warrant it. 

b. Turnarounds and Holding Bays. Turnarounds and holding bays are eligible. Holding bay 

design standards can be found in AC 150/5300-13, Airport Design, Paragraph 409. 

c. Converting Runways to Taxiways. Development related to the conversion of an ineligible 

runway to a taxiway will be eligible only if it can be justified on the basis of the costs involved and 

continuing use is assured. Such projects must be identified on the airport layout plan and taxiway 

marking should be included with the project. (See Paragraph 507b on designating temporary runways.) 

526. APRON AREAS AND RELATED FACILITIES. 

The construction, alteration, and reconstruction of public use apron areas are eligible. If the sponsor 

elects to establish aircraft parking facilities or areas in locations other than approved by the region as 

reasonable and economical, only a portion of the pavement for such area would be eligible. For 

example, the distance of a proposed parking area from the existing taxiway should be reasonable based 

on the standards and approved airport layout plan rather than factors related to non-aeronautical uses. 

Apron areas for the exclusive and near exclusive use of an air carrier, fixed base operator, or other 

tenant are not eligible. (For purposes of this paragraph, the definition of near exclusive use is that the 

airport has no procedures for the management and operation of the apron to ensure prompt access by 

each potential user.) Exclusive use of apron areas, and any determination that such is ineligible, in turn 

involves eligibility of associated terminal buildings. (See Chapter 6.) Additionally, the apron and related 

taxiway areas for use of a tenant not furnishing service to the general public are ineligible. 

a. Parking Area Taxiways and Taxi-Lanes. Taxiways on, or connecting to, aprons available for 

use by the general public are eligible. If available for use by the public, this may include taxiways to 

aircraft storage, hangar, and service areas. Taxiways or taxi-lanes connecting the individual T-hangars 

to the public taxi-lane are eligible at nonprimary airports subject to determinations in d(1) below. (See 

Paragraph 525.) 

b. Aircraft Ground Deicing Areas. A paved aircraft parking area for ground deicing or anti-icing 

activities is eligible if the improvements are to be owned by the airport and will become available on a 

non-exclusive use basis. Storage areas on AIP-funded pavement and foundations for ineligible deicing 

buildings are not eligible. See Paragraphs 544, 547, and 631. 

c. Cargo Aprons. Special consideration may be given to low activity aprons used by cargo-only 

operators since they contribute to the Airport and Airway Trust Fund. Only one such carrier may serve 

the airport, although the apron for freight activity would be eligible provided the entire area or not all 

hours of operation are leased to that operator. The opportunity for another carrier to serve the airport in 

the future at fairly competitive terms must be provided. 

d. Hangars and Other Support Facilities. The construction of certain support facilities or 

structures to house aircraft may be eligible at nonprimary airports using entitlements. Separate 

conditions apply to various projects as described below. 

(1) Construction of new revenue-producing hangar projects at nonprimary airports may be 

eligible under 49 USC 47110(h) using entitlements. The region should ensure that the sponsor has 

Page 71
June 28, 2005 Order 5100.38C

made adequate provisions for financing airfield projects that are currently required before revenueproducing work. Alteration and repair of existing facilities depends upon potential environmental issues 

and whether such facilities have an adequate remaining useful life. If the proposal is for acquisition, 

alteration or repair of existing hangars, contact APP-520. 

(2) Certain other revenue-producing aeronautical support facilities at nonprimary airports may 

be allowable using entitlements. Contact APP-520 about such proposals other than the new fuel farms 

described in paragraph 515 and new hangars. 

(3) Non-revenue-producing automobile parking lots associated with a passenger terminal 

building or hangar at nonprimary airports may be allowable under 49 USC 47119(b)(5). The airport must 

certify any needed airport development project affecting safety, security or capacity will not be deferred 

due to the project. See paragraph 604 for additional eligibility criteria for nonprimary and other airports. 

527. AIRFIELD SERVICE ROADS. 

Internal service roads located within the airfield area may be eligible if the road meets design 

standards and has resulted from a formal inter-division coordination. Also, see Chapter 6 about terminal 

area access roads and surface vehicle parking facilities. 

a. Service Roads. Service roads in airfield locations identified on the airport layout plan are 

eligible to separate airplanes and ground vehicles where desirable due to traffic volume, occasional 

mixing of surface vehicle with aircraft activity, or other safety considerations. Service roads may also be 

necessary for: 

(1) Aircraft rescue and fire fighting as determined by the airport certification safety inspection or 

an airport emergency response study; 

(2) Security in accordance with an FAA approved Title 49 CFR, Part 1542 plan; 

(3) Operation and maintenance of the airport; 

(4) Access to AIP-funded safety, security, and related facilities, including navigation aids 

approved under the AIP; and 

(5) Temporary access to the airfield for construction equipment; and 

(6) Necessary to improve runway safety and reduce the possibility of runway incursions. 

b. Roads Ineligible for Funding. Airfield roads along the airport fence, perimeter area, or not 

required for the functions described in Paragraph 527a, are ineligible unless the ineligible access is 

incidental to an approved AIP project. Other examples of ineligible roads include: 

(1) Access to F&E-funded facilities or equipment exclusively for operating and maintaining FAA 

projects; and 

(2) Roads exclusively serving non-aeronautical properties, areas, or facilities. 

528. - 529. RESERVED. 

Section 4. AIRFIELD LIGHTING AND SURFACE MOVEMENT

530. GENERAL. 

Eligibility of airfield lighting equipment and other surface movement projects is dependent upon the 

visibility conditions under which the airport operates. Sponsors may choose to install retro-reflective 

Page 72 
June 28, 2005 Order 5100.38C

signs and edge markers if traffic is such that they provide sufficient and safe guidance to aircraft 

operators. Part 139 certificate holders that have an approved airport certification manual are required to 

install the minimum level of equipment approved in that document. More guidance on this is covered in 

the advisory circulars listed in Table 5, which outlines current types of AIP funded airfield lighting and 

surface movement equipment, the principal standard requirements, as well as routing of the office of 

primary interest (OPI). This equipment has traditionally been considered an airport responsibility 

associated with construction of new pavements and lengthening, widening, strengthening or leveling 

existing pavement. Certain items of this equipment have been funded under the F&E program only to 

the extent that it would be used as a part of other FAA projects. 

The inter-relationship of these projects requires that they be coordinated to ensure consistency of 

the work with airfield operational requirements. Scheduled air carrier operations when visibility is less 

than 1,200 feet runway visual range (RVR) requires a Flight Standards Division approved surface 

movement guidance and control system (SMGCS) plan. The SMGCS plan contains operational 

requirements and the identification of physical airport systems required for those operations. The 

inclusion of work within a SMGCS plan assures eligibility provided the other layout planning and 

coordination are complete, such as with the FAA Runway Incursion Action Team. In those cases 

without a SMGCS plan (or where the plan does not include a particular system) eligibility should be 

determined in accordance with Paragraphs 531-535. Please see AC No. 120-57, Surface Movement 

Guidance and Control System, and Paragraph 536 for additional information. 

531. AIRFIELD MARKING AND REMARKING. 

The initial marking of the eligible runways, heliports, taxiways, and apron areas is eligible. The 

markings must comply with Advisory Circular 150/5340-1 or the other applicable design standards for 

marking the airport and the terminal apron complex. 

a. General. Under Title 49 U.S.C., Section 47101(f), runway edge marking for primary and 

secondary runways at each commercial service airport shall be given a high priority for programming. 

b. Holding Position and ILS Critical Area Marking. Special holding position and ILS critical area 

markings for taxiways or apron areas are eligible in accordance with operational requirements. 

c. Service Roads. The initial marking of service roads is eligible on aprons or in other airfield 

areas. During the construction phase of an AIP project, marking temporary service roads for routing 

equipment on paved areas is also eligible. 

d. Remarking. Since the airport is required to remark the paved areas based on compliance and 

certification obligations, routine remarking is normally an ineligible maintenance item, except as 

described within Paragraph 520f. However, the remarking of the eligible paved areas will be eligible if 

required by the airport certification safety inspector, a restoration of markings has been determined to 

reduce the probability of runway incursions, or new operational requirements are established in 

accordance with the airport layout plan. Other examples of eligible remarking include: 

(1) The present markings are obsolete or incomplete under the current FAA standards; and 

Page 73
June 28, 2005 Order 5100.38C

Table 5 AIP-Funded Airfield Lighting and Surface Movement Equipment 

EQUIPMENT PRINCIPAL STANDARD OPI ROUTING

Runway Edge Lights Title 49 U.S.C., §47101(f), AC 150/5340-24 AAS-100 

Runway Touchdown Zone Lights Title 49 U.S.C., §47106(b)(3), 

AC 150/5340-4 AAS-100 

Runway Centerline Lights Title 49 U.S.C., §47106(b)(3), 

AC 150/5340-4 AAS-100 

Land And Hold Short Lighting AC 150/5340-29 AAS-100 

Taxiway Centerline Lights AC 150/5340-28 AAS-100 

Runway Guard Lights AC 150/5340-28 AAS-100 

Stop Bars AC 150/5340-28 AAS-100 

Clearance Bars AC 150/5340-28 AAS-100 

Tilt-Rotor Facility Lighting AC 150/5390-3 AAS-100 

Heliport Lighting AC 150/5390-2 AAS-100 

Taxiway Edge Lights Title 49 U.S.C., §47101f, AC 150/5340-24 AAS-100 

Apron Edge Lights AC 150/5340-24 AAS-100 

Apron Area Lighting AC 150/5300-14, AC 150/5360-13 AAS-100 

Construction Area Lighting AC 150/5370-2 AAS-300 

Segmented Circles AC 150/5340-5 AAS-100 

Airfield Signage Title 49 U.S.C., §47101f, AC 150/5340-18 AAS-300 

Electrical Power Sources AC 150/5340-17 AAS-100 

Electrical Power Support Contact OPI AAS-100 

Airfield Marking AC 150/5340-1 AAS-300 

Retro-Reflective Centerline Markers AC 150/5345-39 AAS-100 

(2) The present marking is obliterated by construction, alteration, or similar work included in an 

approved AIP development project. 

e. Retro-Reflective Edge Markers. Retro-reflective markings in lieu of pavement edge lights or 

runway threshold lighting are eligible if traffic is such that it provides sufficient and safe guidance. 

Contact AAS-300 for assistance on marking and retro-reflective edge markers. 

f. Retro-reflective Centerline Markers. Retro-reflective runway and taxiway centerline markers 

are eligible if traffic is such that it provides sufficient and safe guidance. Contact AAS-100/300 for 

assistance with marking and retro-reflective centerline markers. 

Page 74 
June 28, 2005 Order 5100.38C

532. AIRFIELD SIGNAGE. 

Reflective airfield signage that is mandatory, or signs necessary to provide information or guidance 

to pilots, will be eligible when designed in accordance with Advisory Circular 150/5340-18, Standards for 

Airport Sign Systems. See Paragraphs 534 - 537 for additional information on lighted signs. Contact 

AAS-300 for assistance with the standards for airfield signage. 

a. Runway Signage. Runway signage, including intersection and runway distance remaining 

signs, is eligible at all airports. Runway distance remaining sign eligibility is limited to only those primary 

and secondary runways used by turbo-jet aircraft. 

b. Taxiway Guidance Sign System. Taxiway or taxi-lane signage, intersection, and destination 

signs, are eligible at all airports. 

c. Service Road Signs. Signing for ground vehicles on eligible airfield service roads is eligible. 

533. INSTALLATION AND ALTERATION OF AIRFIELD LIGHTING. 

The installation, alteration, and rehabilitation of airfield lighting equipment and related electrical work 

is eligible in accordance with Paragraphs 500, 530, 532 and 534-538, provided they conform to FAA 

design and engineering standards. 

a. Lighting Equipment Controls. Electronic equipment allowing the airport to remotely control the 

functioning of airfield lighting is eligible. See Paragraphs 536 and 538. 

b. Non-mandatory Lighting. Although airfield lighting is considered part of the fundamental 

airport configuration, its inclusion in a project is not mandatory unless required under Paragraph 500c. 

534. RUNWAY, HELIPORT, AND VERTIPORT LIGHTING. 

Under Title 49 U.S.C., Section 47101(f), edge lighting and distance remaining signs for primary and 

secondary runways at each commercial service airport shall be given a high priority for programming. 

Any runway or helicopter landing area eligible for paving is also eligible for lighting in accordance with 

the criteria below. See Paragraph 521. 

a. Runway Edge Lighting. Runway edge lighting projects are eligible and must be closely 

coordinated with operational requirements of the airport. The runway edge lighting system must be 

designed in accordance with Advisory Circular 150/5340-24, Runway and Taxiway Edge Lighting 

System, or the other design standards that may apply. Designated instrument runways meeting the F&E 

criteria for the installation of a navigation aid for a specific approach procedure within 5 years should be 

coordinated with the Flight Procedures Office to determine lighting intensity requirements. 

b. Touchdown Zone Lights. Touchdown zone lighting systems are eligible on runways 

designated for landing operations below 2,400 feet runway visual range (RVR) and when designed in 

accordance with Advisory Circular 150/5340-4, Installation Details for Runway Centerline Touchdown 

Zone Lighting Systems, or the other applicable design standards. 

c. Runway Centerline Lights. Runway centerline lighting systems are eligible when designed in 

accordance with Advisory Circular 150/5340-4, Installation Details for Runway Centerline Touchdown 

Zone Lighting Systems, on runways meeting the following requirements: 

(1) Landing operations below 2,400 feet runway visual range; 

(2) Use by aircraft with approach speeds exceeding 140 knots or if the runway has a width 

greater than 170 feet; or 

Page 75
June 28, 2005 Order 5100.38C

(3) Takeoff operations below 1,600 feet RVR. 

d. Land and Hold Short Lighting. Land and hold short lighting systems are eligible when 

designed in accordance with Advisory Circular 150/5340-29, Installation Details for Land and Hold Short 

Lighting Systems, for airports conducting land and hold short operations under Order 7110.118. 

e. Tilt-rotor Facilities. Lighting projects for tilt-rotor facilities should be forwarded to APP-520 

unless the costs of the proposal are incidental relative to the total project cost. 

f. Heliports. Heliport lighting will be eligible provided the heliport/airport is eligible and the lighting 

system meets FAA standards. 

535. TAXIWAY AND APRON LIGHTING. 

As described further in this paragraph, the eligibility of lighting for the taxiways or aprons that are 

eligible to be paved is dependent upon an associated eligible runway being lighted. See Paragraphs 

525, 526, and 536. 

a. Taxiway Edge Lighting. The taxiway edge lighting system is eligible when designed in 

accordance with Advisory Circular 150/5340-24, Runway and Taxiway Edge Lighting Systems. Taxiway 

lights at commercial service airports shall be given a high priority for programming. 

b. Taxiway and Apron Sign Lighting. Lighted taxiway guidance signs are eligible. (See 

Paragraph 532.) Under Title 49 U.S.C., Section 47101(f), the taxiway sign system at each commercial 

service airport shall be given a high priority for programming. ILS critical area taxiway and apron signs 

are also eligible based on operational requirements. 

c. Taxiway Centerline Lighting. The taxiway centerline lighting system is eligible when designed 

in accordance with Advisory Circular 150/5340-28, Low Visibility Taxiway Lighting Systems, and under 

the following conditions: 

(1) The taxiway connects to a Category II/III runway or a runway used under Category II/III 

conditions; 

(2) A taxiway guidance problem exists during poor visibility conditions; 

(3) Other lighting causes confusion; 

(4) New or existing taxiways that will be associated with Category I runways, if the field office 

determines the runway will likely have Category II or Category III minimums within 5 years; or 

(5) In additional instances where a taxiway guidance problem is documented. For example, a 

unique taxiway layout may cause pilot disorientation. 

d. Clearance or Stop Bars and Runway Guard Lights. Clearance or stop bars and runway 

guard lights are eligible if designed in accordance with Advisory Circular 150/5340-28, Low Visibility 

Taxiway Lighting Systems, and where determined as necessary to prevent runway incursions. See 

Paragraph 536. 

e. Taxi-Lane and Apron Lighting. Apron or taxi-lane lights are eligible for eligible areas when 

designed in accordance with Advisory Circulars 150/5340-24 and 150/5340-28. Apron area lighting 

needed for airport security or to identify the perimeter of aprons, and terminal gate position lead-in lights, 

are ineligible unless coordinated with AAS-100 ensuring the project will not cause confusion for aircraft 

operations. 

Page 76 
June 28, 2005 Order 5100.38C

536. SURFACE MOVEMENT GUIDANCE AND CONTROL SYSTEM. 

SMGCS establishes eligibility of airport lighting and related systems for low visibility conditions when 

scheduled air carriers are authorized to conduct operations. 

a. SMGCS Plans. To ensure aircraft and ground vehicle traffic safety, SMGCS plans are required 

for airport movement areas when visibility is less than 1,200 feet runway visual range (RVR) in 

accordance with Advisory Circular 120/57. If the SMGCS plan has not been approved, individual 

components below should be programmed only when they are required for another reason in the 

judgment of the region. Low visibility taxiway lighting systems are described in Advisory Circular 

150/5340-28. 

b. Approval of Taxi Routes. If a SMGCS plan has not been approved, tentative FAA approval of 

taxi routes, including coordination with the Flight Standards division, is necessary for AIP stop bar 

projects. 

c. Approval of Individual SMGCS Components. At airports implementing a SMGCS plan, 

approval of individual visual aid components, which are described in detail within the paragraphs above, 

may include: 

(1) Taxiway lighting and reflectors; 

(2) Stop bars or runway guard lights at access points to active runways; 

(3) Clearance bars and holding position markings on the taxiways; 

(4) Taxi guidance signage and marking; 

(5) Instrument landing system critical area signage and marking; and 

(6) Equipment to monitor the SMGCS components in the airport traffic control tower. 

537. OTHER AIRFIELD LIGHTING AND MARKING. 

Other airfield lighting and marking may be eligible. For instance, the eligibility of lighted signs 

serving ground vehicles on service roads that are eligible to be paved is dependent upon an associated 

eligible runway being lighted. See Paragraph 527. Certain airport navigation aid equipment may also 

be eligible on a temporary basis during construction projects. See Paragraph 555. Miscellaneous 

airfield lighting and marking includes: 

a. Segmented Circles. The segmented circle airport marker system that provides basic airfield 

information for pilots is eligible when designed in accordance with Advisory Circular 150/5340-5. 

b. Wind Indicators. Lighted wind indicators are eligible when necessary for the operation of the 

airfield at night and designed in accordance with Advisory Circulars 150/5340-21 on miscellaneous 

lighting visual aids and 150/5340-23 for the supplemental wind cone. See Paragraphs 570 and 571. 

c. Airport Hazards. Marking and lighting of an obstruction or hazard is eligible when designed in 

accordance with Advisory Circular 70/7460-1 if located within navigable airspace for a civil airport and 

required under FAR Part 77 or for an approach procedure needed at the airfield. See Paragraph 582. 

d. Runway Closure Marking. Portable equipment to light and mark a runway closure on a 

temporary basis during maintenance or construction is eligible. See Paragraph 580. 

e. Emergency and Construction Lighting. Mobile lighting, such as that used for emergency or 

unusual circumstances in airfield areas and associated with aircraft rescue and fire-fighting vehicles, is 

Page 77
June 28, 2005 Order 5100.38C

eligible. See Paragraphs 540 and 541. Lighting equipment may be required in construction areas for 

night work. The sponsor or its contractor is responsible for coordinating with the airport traffic control 

tower. The sponsor is also responsible for ensuring notices to airmen and a regional non-objectionable 

airspace determination for use of construction lighting equipment. 

538. ELECTRICAL POWER. 

The installation, alteration, and rehabilitation of airfield electrical work are eligible provided it 

conforms to FAA standards. See Paragraph 515 on participation in electric utilities and separate rules 

that apply to the airports designated in the Military Airport Program. The criteria below include 

requirements for certain landside development projects as described in Chapter 6. Power services and 

sources related to the airfield lighting or navigation aids owned by the airport are the airport’s 

responsibility. The FAA may own other facilities at the same location and is responsible for providing 

electrical requirements related to them. Where provision of power to any facilities is incidental to a 

current AIP project, it may be funded if requested by the airport. 

a. Redundant Electrical Power Supply Policy. The interconnection of redundant power supplies 

may be determined to be necessary by the region at any airport eligible for airfield and/or terminal 

building lighting where there is a history of cable cuts, extraordinary meteorological conditions, 

maintenance of remote facilities, or a record of commercial utility interruptions. Orders 6030.20 and 

6950.2 describe the electrical power policy implementation at certain facilities within the NAS. See 

these directives for identification of the requirements for alternate prime sources of power related to 

specific facilities. Under the policy, a single source of power may be appropriate when the prolonged 

loss of electric service would impose a minor impact with no derogation of safety or significant delays to 

airport users. In those cases, only a single power source for the airfield or terminal building is eligible. 

b. Emergency Power Sources. The installation of standby engine generators with the necessary 

capacity are eligible as specified in the above electric policy directives to provide redundant external 

supplies. Standby power requirements for eligible airport lighting systems not owned by the FAA are 

identified in Advisory Circular 150/5340-17. 

c. Continuous Power Airports. For any Continuous Power Airport designated in Order 6030.20, 

power must be automatically transferred within 15 seconds after failure of the prime source from the 

emergency source to the airport equipment. Continuous Power Airports and designated continuous 

power runways are required to have airway facilities and runway/taxiway lights operating for the safe 

landing of aircraft in the event of an area-wide power failure. In addition to the facilities required to be 

covered within Order 6950.2, uninterrupted emergency or alternate power meeting the 15 second 

requirement is eligible for the following: 

(1) Runway touchdown-zone, centerline, and edge lights on runways designated for continuous 

operations; 

(2) Taxiway edge lights, as well as SMGCS equipment, for taxiways serving continuous power 

runways; and 

(3) Lighting of eligible areas within the terminal building and on the apron. See Chapter 6. 

d. Category II/III Operations. For runways with Category II/III operations, including those on a 

Continuous Power Airport, power must be transferred in not more than one second from the emergency 

electrical plant to the airport equipment in accordance with the above directives. In addition to the 

facilities required to be covered within Order 6950.2, uninterrupted emergency or alternate power 

meeting the one second requirement is eligible for the following: 

(1) Runway touchdown-zone, centerline, and edge lights on runways designated for Category 

II/III operations; 

Page 78 
June 28, 2005 Order 5100.38C

(2) Land and hold short lighting related to Category II/III runways; 

(3) Taxiway edge lighting for taxiways serving Category II/III runways; 

(4) SMGCS equipment; and 

(5) Lighting of eligible areas within the terminal building and on the apron. 

e. Electrical Power Support. Items such as electrical panels and transformer vaults necessary to 

support operation of eligible lighting are eligible. This includes equipment necessary for the operation of 

radio activated lighting systems. Contact AAS-100 for assistance with electrical power support 

equipment. 

f. Deviation from Power Requirements. The revised standard power configurations in Order 

6950.2 were effective with updating of the directive on 10/1/98. The new standard may differ from 

existing systems, and there is no requirement to change configurations that are already in operation. 

Standard configurations will be required for the proposed facilities covered in this paragraph unless 

waived by APP-500/AOS-100. 

539. RESERVED. 

Section 5. SAFETY, SECURITY, AND RELATED PROJECTS

540. FEDERAL AVIATION REGULATION PART 139 AND TITLE 49 CFR, PART 1542. 

This section provides guidance on the eligibility of safety and security capital improvements that 

have been determined as necessary to support the operation of airports. Typical items include security 

equipment required by Title 49 CFR, Part 1542, safety equipment required by FAR Part 139, buildings to 

house the equipment, and other related projects. Under Title 49 U.S.C., Section 47102(3)(B)(ii), 

expanded safety and security equipment may be eligible. Airports not regulated under Part 139 or 

Title 49 CFR, Part 1542 may be eligible under the limited conditions described within Title 49 U.S.C., 

Section 47102(B)(ii) for safety, security and other related equipment. The continuing provisions of the 

Aviation and Transportation Security Act, and the required project coordination with the Transportation 

Security Administration (TSA), are described in Paragraphs 542 and 547. Table 6 outlines current types 

of federally funded safety, security, and related equipment, the principal standard requirements for that 

equipment, as well as identification (routing) of the office of primary interest. 

541. SAFETY EQUIPMENT. 

Acquisition of safety equipment to meet the requirements within FAR Part 139 is eligible. Items 

customarily involved with the procurement specifications, such as that to test vehicles and assure initial 

operational readiness, are eligible when purchased as components of the equipment. However, 

equipment in excess of that necessary to achieve the protection and level of safety required by Part 139 

is not eligible except as provided in this paragraph. (See Paragraph 547 about the safety facilities.) 

a. Aircraft Rescue and Fire Fighting (ARFF) Vehicles. Part 139 sets forth minimum 

extinguishing agents and water required for ARFF vehicles. However, airports may acquire ARFF 

vehicles as well as extinguishing agent and water supply systems that meet levels specified in Advisory 

Circulars 150/5210-6 and 150/5220-4 and it will be fully funded under the AIP (even if levels are higher 

than in the regulation). The number of eligible vehicles is based on the airport index in accordance with 

the criteria specified in Part 139 for conditions forecast within five years. This is an exception to the 

policy as stated in Paragraph 500. 

(1) Acquisition of ARFF vehicles and water supply systems required for airport certification 

under Part 139 is eligible. 

Page 79
June 28, 2005 Order 5100.38C

(2) ARFF vehicles are ineligible at locations with no airport operating certificate under Part 139 

except as provided within Paragraph 546. 

b. Other Rescue or Fire Fighting Vehicles. Mobile command vehicles are only eligible if an 

element of an approved Part 139 emergency plan. Water rescue equipment, such as boats, air cushion 

vehicles, and helicopters, is eligible to meet the requirements of Part 139 in accordance with Advisory 

Circular 150/5210-13. Structural fire fighting vehicles are eligible for buildings at airports with a Part 139 

airport operating certificate if the response time for off airport units is expected to exceed 10 minutes. 

Contact AAS-300 for assistance with this equipment. 

c. Driver’s Enhanced Vision Systems. The driver’s enhanced vision system (DEVS) in ARFF 

vehicles is eligible for airports with a Part 139 certificate that have operations below 1200 feet runway 

visual range. However, eligibility is limited at this time to two vehicles per qualifying airport for the full 

DEVS in accordance with Advisory Circular 150/5210-19, except as provided in Paragraph 541d. This 

will provide DEVS equipment within ARFF/command vehicles plus one additional vehicle. In addition, 

one more vehicle is eligible for each fire station beyond the first. For instance, this means an airport with 

two fire stations is eligible for three DEVS. The ineligible items include non-ARFF command and various 

operations vehicles, extended warranties, or other components (including displays- that can possibly be 

requested by the airport traffic control tower as described within material on DEVS). 

d. Forward-Looking Infrared Systems. The forward-looking infrared system (FLIRS) is a 

component of DEVS. A stand-alone FLIRS is eligible for AIP eligible ARFF vehicles in accordance with 

Advisory Circular 150/5210-19. 

e. Forcible Entry Tools. One set of forcible aircraft entry tools used on ARFF vehicles is eligible 

for each eligible vehicle. For assistance on this equipment, contact AAS-300. 

f. Protective Clothing. The purchase of airport fire/rescue personnel protective clothing and 

apparatus in accordance with Advisory Circular 150/5210-14 is an eligible item based on the following 

criteria: 

(1) One suit for each fire fighter employed full-time to fight aircraft fires; and 

(2) One suit for each position less than full-time subject to the limitation that the total number of 

suits does not exceed two for lightweight vehicles and five in large type vehicles. These limitations may 

be exceeded if field personnel believe it to be justified. 

The replacement of protective clothing is eligible as described within Paragraph 591c if required as a 

result of a Part 139 compliance inspection. 

g. Power Sweepers. Power sweepers for the control of debris on airports are eligible. Eligibility is 

limited to one vehicle unless the area requiring maintenance is greater than 500,000 square yards or the 

annual airport traffic exceeds 40,000 aircraft operations. See Paragraph 543 on similar equipment for 

snow removal. (Contact AAS-100 for assistance with standards.) 

h. Expanded Safety Equipment Eligibility. Other equipment may be eligible. For instance, 

ARFF vehicles may be equipped with specialized equipment. The basic criteria for eligibility of 

equipment will be that it is needed to meet a safety requirement at a particular airport. The sponsor’s 

justification or reasoning to acquire the equipment with documentation of the features and costs, as well 

as the field office recommendation, should be sent to APP-520. Decisions on funding of safety 

equipment contributing significantly to the safety of persons and property at an airport will be referred on 

a case-by-case basis to AAS-300. 

Page 80 
June 28, 2005 Order 5100.38C

i. Ineligible Items. Aircraft removal equipment is ineligible. Expendable items, e.g. extinguishing 

agents (except for one test charge and one refill), are ineligible. Training of rescue and fire fighting 

personnel is not eligible except as provided in Paragraph 546. 

Table 6 AIP-Funded Safety, Security, and Related Equipment 

EQUIPMENT PRINCIPAL STANDARD OPI ROUTING

Aircraft Rescue and Fire Fighting (ARFF)

Vehicle 14 CFR 139, AC 150/5220-4 AAS-300 

Water Rescue Equipment 14 CFR 139, AC 150/5210-13 AAS-300 

Structural Fire Fighting Vehicle Contact OPI AAS-300 

Driver’s Enhanced Vision System (DEVS) AC 150/5210-19 AAS-300 

Forward Looking Infrared System (FLIRS) AC 150/5210-19 AAS-300 

Protective Clothing AC 150/5210-14 AAS-100 

Forcible Entry Tool Contact OPI AAS-300 

Emergency Lighting Contact OPI AAS-300 

Training System AC 150/5210-18 AAS-100 

Security System Title 49 CFR, Part 1542, Contact OPI TSA 

Power Sweeper Contact OPI AAS-100 

Snow and Ice Control Vehicle AC 150/5220-20, AC 150/5200-30 AAS-100 

Runway Surface Condition Sensor AC 150/5220-13 AAS-100 

Aircraft Ground Deicing System AC 150/5300-14 AAS-100 

Aircraft Ground Anti-icing System Contact OPI AAS-100 

Friction Measuring Device AC 150/5200-30, AC 150/5320-12 AAS-100 

542. SECURITY PROJECTS. 

Security equipment projects should be examined closely to ensure sufficient Federal resources are 

available to meet basic security needs at all airports. This includes reliance on master plans to develop 

alternatives, phasing opportunities, and cost effectiveness of various options for accomplishing the 

required level of security. The acquisition of equipment under the AIP for requirements within Title 49 

CFR, Part 1542, in the air operations area or other sterile areas, is eligible subject to the conditions 

below. (See Paragraph 547 about the security facilities and Chapter 6 regarding security equipment in 

terminal building areas.) 

a. Title 49 CFR, Part 1542 Security Requirements. The proposed security project or specific 

piece of security equipment must be identified in the TSA approved airport security program as being a 

component or integral part of the overall security system for the airport. TSA approved security 

programs may include equipment and facilities not required under Title 49 CFR, Part 1542 standards. 

Page 81
June 28, 2005 Order 5100.38C

Therefore, the TSA, or its designee, must assist in identifying a project as containing only 

equipment/facilities to meet requirements in Title 49 CFR, Part 1542, and a written determination shall 

be included within the project file. Equipment specifically identified within the airport security program 

approved by the TSA is eligible. A determination may also be made that equipment is a supporting 

element of the airport security program. The approved airport security program, for example, may 

indicate in only simple terms that an airport perimeter will be secured at a property line. In such a case, 

specific projects for perimeter fence, associated closed circuit television at key points, and similar 

elements may be considered. 

(1) Approved Security Program. The projects justified as an access control requirement at a 

Title 49 CFR, Part 1542 airport (category X and I-IV) and contained in the approved security program, 

Federal security directive, or emergency amendments to rules, are eligible. While work may have been 

previously reviewed for the security program, these projects need concurrence from the TSA at the time 

of project formulation. Examples include door controls, lighting of fencing/gates, one-time replacement 

of key locks and cores, vehicle checkpoints, or explosive detection devices. An explosives transport 

vehicle or disposal equipment is eligible. With appropriate analysis, barriers to deflect bomb blasts and 

protective window film would also be eligible. 

(2) Projects Requiring Additional Justification. A project not required in an approved 

program by the regulation where an airport believes it will significantly enhance security needs 

additional, convincing justification, e.g. perimeter fence higher than 7 feet (plus three strands of barbed 

wire on top of the fence). Justification for fuel farm security might be if it is near where ignition or 

explosion may create imminent danger to passengers, baggage, or aircraft. Completion of project 

coordination will provide the justification in some cases, e.g. when design of equipment requires an initial 

determination about how the TSA expects to operate at the airport. 

(3) Projects Exceeding Requirements. The portion of a project exceeding Title 49 CFR, 

Part 1542 requirements may be unrelated to movement or protection of passengers, baggage, and 

aircraft. Projects that support a local law enforcement function, such as patrolling for purposes of 

protection against theft and vandalism or detection of traffic/parking violations, must not be confused 

with the need for air transportation security and are ineligible. A determination of the number of police 

vehicles required under Title 49 CFR, Part 1542 for patrols to secure the airport perimeter would identify 

eligible vehicles. A redundancy such as computerized access control combined with guard booths also 

requires scrutiny. Prorating this equipment based on discussions between an airport and TSA can 

define eligible work on national airport system security requirements (as well as Federal crimes) in 

contrast to ineligible projects for enforcing State, local, or airport laws/regulations. 

b. Expanded Security Equipment Eligibility. Other security equipment may be eligible. For 

instance, there have been changes over time in the explosive detection devices and universal access 

systems that are proposed by sponsors for airport use only. The basic criteria for eligibility of equipment 

will be that it is needed to meet a security requirement at a particular airport. The sponsor’s justification 

or reasoning to acquire the equipment with documentation of the features and costs, as well as the field 

office recommendation, may be sent to APP-520. Decisions on funding of security equipment 

contributing significantly to the security of individuals and property at an airport will be referred on a 

case-by-case basis to the Washington headquarters of TSA. 

c. Biological Explosives Detection Systems (BEDS). AIP funds may also be used on a limited 

basis to support the explosive detection canine teams for airport participants in Explosive Detection 

Canine Team Program of the TSA. Requests must be reviewed within regions of that agency. These 

projects will be forwarded to their Washington headquarters for approval. Procurement and training of 

BEDS is eligible to the extent it was not otherwise funded by the Federal Government and to the extent 

that applicable certification requirements and Federal standards are met. The storage of retrieved 

explosives and security systems or vehicles to support canine operations are also eligible. 

See Title 49 CFR, Part 1542. 

Page 82 
June 28, 2005 Order 5100.38C

d. Fingerprinting Equipment. Electronic equipment to submit fingerprints for criminal history 

checks on airport employees that have unescorted access to the Security Identification Display Area is a 

Federal requirement. The type of equipment and quantity to permit processing of 3 employees per hour 

is eligible provided the airport has that turnover rate. Equipment certified by the Federal Bureau of 

Investigation is listed at http://www.fbi.gov/hq/cjisd/iafis/cert.htm.

e. Airports Not Covered by Title 49 CFR, Part 1542. Early coordination of requests with TSA 

may be required where questions arise on whether the airfield is covered under Title 49 CFR, Part 1542. 

A security project at airports not covered by Title 49 CFR, Part 1542 is normally ineligible unless it would 

be incidental to other approved work.

f. Ineligible Items. Except as provided in this paragraph, any security equipment beyond that 

required by Title 49 CFR, Part 1542 is ineligible. Airfield operations and maintenance costs, or 

expendable items, are ineligible. Training for security personnel is not eligible except as specified in 

Paragraph 546.

g. Public Release of Security Planning. Before public involvement in a request or study on 

airport security, regions should coordinate with a TSA official to identify planning and material that must 

be protected under Title 49 CFR, Part 1520, which governs the release of such information.

543. SNOW AND ICE CONTROL EQUIPMENT. 

Equipment required for clearing snow and ice from the runways, principal taxiways, aprons, and 

airport roads is eligible in accordance with Advisory Circular 150/5200-30. Eligibility is limited to the 

minimum requirements recommended by the FAA advisory circulars unless the volume of traffic requires 

additional equipment. (See Paragraph 547 about the snow and ice control facilities.) 

a. General. The region may decide on a case-by-case basis the validity of the justification to fund 

equipment for snow and ice control on paved areas. Assistance can be obtained from AAS-100. 

b. Runway Surface Condition Sensors. Runway surface condition sensors, which transmit 

airfield conditions used to determine the timing of chemical application for treatment, are eligible. Local 

conditions determine the need for this equipment and the number of sensors required. Normally, three 

or four sensors should be sufficient for a runway in accordance with specifications and guidance within 

Advisory Circular 150/5220-13 on surface condition sensor projects. 

c. Ineligible Items. Expendable items such as sand, chemicals, fluids, and other types of deicing 

materials are ineligible. 

544. AIRCRAFT GROUND DEICING AND ANTI-ICING EQUIPMENT. 

Vehicles, gantries, or other equipment for aircraft deicing and anti-icing on the ground are eligible at 

any NPIAS airport. The equipment must be owned by the airport and be available on a non-exclusive 

use basis for any aircraft owner. Under Title 49 U.S.C., Section 47102(3)(B)(v), the aircraft deicing fluids 

and storage facilities for the equipment or fluids are ineligible. See Paragraphs 526, 547, 586, and 631. 

Contact AAS-100 for assistance on aircraft deicing equipment. 

545. FRICTION MEASURING DEVICES. 

Friction measuring devices are eligible when designed to meet the specifications in Advisory 

Circulars 150/5200-30 and 150/5320-12 on measurement, construction, and maintenance of skid 

resistant airport pavement surfaces. 

a. Eligible Sponsors. Commercial service airports and those holding a Part 139 Airport Operating 

Certificate with scheduled turbojet operations are eligible to acquire a friction measurement device in 

accordance with the advisory circulars mentioned above. Regions should coordinate with neighboring 

Page 83
June 28, 2005 Order 5100.38C

airports about purchasing the device for more than one airport since this equipment can effectively be 

used at several locations. State aviation agencies may be encouraged to sponsor such projects. 

b. Type of Device. A self-contained friction measuring device, a towed device, or such equipment 

along with an adequate tow vehicle are eligible. This may include space in a building to house and 

protect a grant-funded friction-measuring device if that is incidental to an approved AIP project. If a 

towed device is funded alone, the sponsor must provide assurance that it has or will have available a 

tow vehicle that meets the specifications of the towed device manufacturer. 

c. Special Condition. The special condition for friction measuring devices in Appendix 7 will be 

included in the grant agreement. 

546. TRAINING SYSTEMS. 

While training is normally an ineligible administrative cost, the capital projects for safety, security, 

and certain related training systems below are eligible. See Paragraph 310. 

a. Interactive Training Systems. The acquisition of equipment as well as software for interactive 

training of airport personnel in accordance with Advisory Circular 150/5210-18 is eligible if they are to be 

used for federally mandated safety and security requirements. Interactive training systems related to the 

Americans with Disabilities Act and the Clean Air Act are also eligible. Personnel costs or rental of 

systems is ineligible. 

b. Mobile ARFF Training Equipment. Mobile training equipment meeting Part 139 requirements 

is eligible for acquisition by airports required by the rule to comply with Index A and B ARFF standards if 

the airport is more than 100 miles from the nearest area-wide training facility. Mobile training equipment 

is also eligible for acquisition by States if it will benefit more than one airport. Contact AAS-100 

regarding this equipment. 

c. Area-Wide ARFF Training Facilities. An area-wide ARFF training facility is eligible when 

designed in accordance with standards for either flammable liquid hydrocarbon or propane fuel as 

described in Advisory Circular 150/5220-17. Projects may include land, the burn area, maneuvering 

areas, a control center, a dual-agent ARFF vehicle with capacity not to exceed 1500 gallons for foam 

production, the vehicle bay(s), utilities, maintenance facilities, environmental protection, fencing, the 

access road, as well as a building for classrooms, showers, and lockers. One additional ARFF vehicle 

may be eligible if justified in the view of the region based on the mix of area airport indices. Proposals 

for such an area-wide training facility should be coordinated with near by facilities to ensure 

inappropriate duplication is avoided. Not all states need such a facility, but if the region determines 

several area-wide training facilities in a State are required due to the area served, contact APP-500 for 

additional assistance. 

547. SAFETY, SECURITY, AND RELATED FACILITIES. 

The construction of safety and security facilities is eligible if required to house or maintain eligible 

equipment. Certain related facilities are eligible subject to the conditions within this paragraph. (See 

Paragraphs 541-545 on safety and security equipment.) 

a. General. Buildings should be designed on a functional, safe, and efficient basis but in a manner 

that is consistent with the policy on design and architecture stated in Paragraph 304. Only provisions for 

basic utilities, such as heat, water, and electricity necessary for maintaining the equipment in an 

operational state of readiness or carrying out the activities related to the safety of persons/property on 

the airport is eligible. (See Paragraph 607 for energy assessments.) If a proposed building will include 

space in excess of that eligible for Federal participation, the cost of the building should be prorated in 

accordance with Paragraph 613. 

Page 84 
June 28, 2005 Order 5100.38C

b. ARFF Equipment Buildings. At airports without a Part 139 certificate, a minimal structure to 

house and protect the grant funded ARFF vehicle is eligible. At airports with a Part 139 certificate, the 

following criteria apply: 

(1) The number of bays eligible shall be limited to that necessary for housing ARFF equipment 

required by regulation or forecast to be needed within 5 years. Space for a structural fire truck is eligible 

when such a truck is assigned to the unit to provide backup support for ARFF trucks and protection of 

airport buildings. 

(2) The type of fire fighting requirements at the specific airport should determine eligible 

administrative space and personnel facilities. 

(3) Bays for fire trucks that are stationed on the airport, but primarily provide protection to 

buildings outside the airport boundaries, are ineligible. 

c. Snow and Ice Control Equipment Buildings. Funding snow and ice control buildings is limited 

to facilities necessary for eligible equipment in Paragraph 543 as well as storing abrasive or chemicals 

used in treatment of paved areas. At the time the building is programmed, the eligible equipment must 

be owned, on order, or budgeted by the airport. Regions should ensure that the snow and ice control 

abrasive or chemicals are to be used for airport pavement rather than aircraft in accordance with 

Paragraph 547d. 

d. Aircraft Ground Deicing and Anti-icing Facilities. At commercial service airports, 

construction or reconstruction of aircraft deicing, anti-icing, and ice inspection facilities on the ground, 

including pavement, drainage, fluid collection, and environmental mitigation to reduce storm water 

discharge contamination, is eligible when designed in accordance with Advisory Circular 150/5300-14. 

See Paragraphs 526, 586, and 631. Eligible facilities include infrared ground deicing systems that 

obtain approval of the Flight Standards District Office. 

(1) Structures on Obligated Paved Areas. An airport may construct a locally funded deicing 

or anti-icing structure on a Federal agreement taxi-lane or apron provided it is on an approved ALP, 

subject to a reasonable fee schedule, and not operated on an exclusive use or near-exclusive use basis. 

(2) Ineligible Deicing Facilities. Under Title 49 U.S.C., Section 47102(3)(G), the storage areas 

or facilities for aircraft deicing equipment and fluids are ineligible. For example, a garage for the deicing 

or vacuum trucks is ineligible. See Paragraph 547c on eligibility of storing abrasive or chemical material 

for snow and ice control of airport-paved areas, which has separate justification. 

e. Maintenance Facilities. Maintenance or service facilities for maintaining required safety and 

security equipment at airports with a Part 139 certificate may be funded up to a maximum of 1500 

square feet in an existing, new, or free standing building. 

(1) The eligible area will be determined by adding 10 feet to the length and 10 feet to the width 

of the largest ARFF vehicle serving the airport, then multiplying these two dimensions for the bay size 

and adding a like amount for support space. (FAA Chief Counsel (AGC) opinion dated 3/22/83 on 

eligibility of security and safety equipment facilities.) 

(2) If the proposed building is part of a snow equipment storage facility, ARFF facility, or other 

eligible structure, the square footage of the service bay and support facility is in addition to that eligible 

under Paragraphs 547b and c. For instance, new snow removal equipment maintenance areas are an 

eligible addition to a proposed ARFF building. 

f. Fencing. Contiguous perimeter fences encompassing the airfield facilities and terminal building 

areas are eligible. Fences must be of an appropriate type for the situation. For instance, fencing to 

discourage the access of wildlife, such as deer, to the airfield or terminal building are eligible, although 

Page 85
June 28, 2005 Order 5100.38C

the specific location, extent, type, and height must be designed for the purpose intended based on 

requirements for restraining the targeted animals. 

(1) Safety and Security Fence. Fencing of operational and/or secure areas as required to 

meet the requirements of FAR Part 139 and Title 49 CFR, Part 1542 is eligible. Fence requirements will 

be determined by the FAA airport certification safety inspector. The TSA office in the region, or its 

designee, should also be requested to approve fencing as required by the approved airport security 

program. Fencing at other airports must be identified on the approved airport layout plan to be eligible. 

(2) Gates and Locking Devices. Under many circumstances, only the installation of standard 

gate and mechanical locking devices is eligible. Where secured gates require the use of an electric 

locking device or an automatic gate, these systems will be eligible, subject to FAA approval of the 

system to be used. If the facility is for security purposes, it requires TSA approval. 

(3) Non-Airfield Fencing. Fencing of the AIP approved projects for off-airport navigation aids, 

road relocation, utilities, and wastewater treatment plants is eligible. In addition, fencing of area-wide 

ARFF training facilities is eligible. Fencing other areas outside the airfield or terminal building area 

should be carefully reviewed by the region. For example, fences in any area separate from the airfield 

or terminal building for purposes related to an environmental mitigation project would normally be 

ineligible unless specified as eligible within the environmental finding. Likewise, fencing to benefit nonaeronautical use areas of the airport that is not primarily for protection of the airfield or terminal building 

is ineligible without exceptional justification established by the region. The fencing of property not 

owned or leased by the sponsor, such as Federal navigation aid projects, is ineligible. 

g. Security Facilities. Airfield facilities work should be subject to the same scrutiny and 

requirements as security equipment prior to approving projects as described in Paragraphs 542 and 

547f. 

(1) Law Enforcement Facilities. The airfield facilities to provide for a law enforcement 

presence are eligible if required for air transportation security. 

(2) Command and Control Centers. Command and control centers are not specifically 

required under Title 49 CFR, Part 1542. Costs of eligible areas required for air transportation security in 

such centers must be prorated to separate out ineligible work on various other police facilities to support 

general law enforcement duties. 

(3) BEDS Facilities. Kennels and other canine facilities for biological explosives detection 

teams are eligible to the extent they were not otherwise funded by the Federal Government. 

(4) Security Coordination. The proposed airfield security facilities must be coordinated with 

TSA during project formulation to establish eligible and ineligible work. 

(5) Other Facilities. See Paragraph 602 about the security facilities within eligible passenger 

terminal building areas. The security facilities for air cargo building areas are subject to the same 

limitations as airfield and passenger terminal building projects. Requests on airfield security facilities 

involving military, general aviation, non-aeronautical, or other areas must be for eligible projects 

described in this paragraph unless the work is incidental to an approved project. Airfield security 

facilities located off the airport are ineligible. Security facilities in areas not owned or leased by the 

sponsor are ineligible. 

Page 86 
June 28, 2005 Order 5100.38C

548. - 549. RESERVED. 

Section 6. AIRPORT AND TERMINAL AREA NAVIGATION AID FACILITIES

550. GENERAL. 

Installation of a NAVAID, or any navigation aid used in the terminal area, will be accomplished 

primarily through the F&E program, but, under some circumstances, may also be funded under the AIP. 

a. Terminal Areas. In this context, a terminal area is the specific vicinity of an airport designated 

by the FAA for air traffic control (ATC), such as the Pittsburgh Terminal Area. 

b. Benefit-Cost Analysis. Order 7031.2, Airway Planning Standard Number One Terminal Air 

Navigation Facilities and ATC Services, is used in the F&E program. The benefit-cost analysis (BCA) in 

that directive applies to the AIP projects for navigation aids even if they are to be maintained by the 

airport and have been considered necessary to meet standards. The required BCA may be that 

obtained from the Flight Procedures Office, the regional Airway Facilities division, or APO-200 for the 

F&E program. Navigation aid exceptions to the BCA requirements are the airport rotating beacon and 

non-directional beacons. In some cases, the calculation of the BCA for a NAVAID project may involve 

special circumstances that are not addressed under Order 7031.2, and it must submitted to APP-520 for 

coordination. For instance, this added coordination is needed if there may be difficult-to-quantify 

benefits or when omitting the maintenance costs and making similar life-cycle cost exclusions would be 

appropriate in the BCA recommended to support a project (e.g. when the airport will maintain equipment 

as discussed in Paragraph 508). 

551. FAR PART 171. 

Part 171 contains regulations for the use of certain non-Federal navigation facilities in the NAS. 

NAVAIDs must meet FAA performance specifications within Part 171 to be commissioned as part of the 

NAS. NAVAIDs will also be maintained and operated in accordance with the FAA standards within 

Part 171. 

a. Part 171 Standards and Specifications. For eligible NAVAID models or types that are 

currently approved under Part 171, contact APP-520. For new models or types of navigation aids, the 

airport must exercise special care to ensure equipment can receive Part 171 approval before advertising 

for it. The approval process is complex, and no equipment is eligible unless it can be approved under 

Part 171. 

b. Other Standards. AIP standards for navigation aids that are not contained in Part 171 will 

normally be included within a memorandum or advisory circular. In the absence of such standards or 

specifications, competitive procurement for projects under the AIP will use advertisements that refer to 

FAA performance approval letters provided for equipment manufacturers. The requirement will be for a 

vendor to have the FAA performance approval letter by the date of bid opening. 

552. SIMPLIFICATION OF NON-FEDERAL NAVIGATION AID PROJECTS. 

When both the AIP and F&E (or FAA Airway Facilities division) programs are involved, simplification 

of navigation aid project requirements is needed so that the programs are clearly presented to airports. 

A joint Airports and Airway Facilities division position about each such airport project should be identified 

by dialog within the region and, where necessary, with Washington headquarters. If airports propose 

improvements having complex limitations as described in this section, options should be reviewed, 

including common sense solutions to achieve desired results. Airports may be able to negotiate a 

maintenance agreement with Airway Facilities division (for instance, in lieu of taking over a facility) when 

takeover is prohibited. Individual agreements involving trade-offs that are equitable and beneficial for 

both parties might be negotiated for a variety of FAA airport facilities. 

Page 87
June 28, 2005 Order 5100.38C

AIP navigation aids are federally funded projects. However, requirements on the establishment, 

operation, and FAA ownership of facilities are described in Order 6700.20, Non-Federal Navigational 

Aids and Air Traffic Control Facilities. AIP-funded projects are considered non-Federal facilities in that 

directive since they are not procured under the F&E program and may operate without FAA support. 

a. Frequency Reservation. The sponsor is responsible for obtaining from the regional office the 

reservation of available radio frequency spectrum for any electronic navigation aid requiring such and a 

non-objectionable airspace determination. 

b. FAA Takeover. Under Title 49 U.S.C., Section 44502(e), airports have the option of having the 

FAA take over maintenance for an instrument landing system (ILS) acquired with AIP funding and 

associated approach lighting as well as runway visual range (RVR) equipment that conforms to F&E 

performance specifications. Non-Federal proponents must contact the regional Airports/Airway Facilities 

office prior to procurement of these facilities to ensure a mutual agreement of the conditions under which 

a timely transfer of ownership would occur. Runway end identifier lights and visual glide-slope indicators 

are individually unqualified for takeover under Title 49 U.S.C., Section 44502(e). In addition, if a 

localizer (and other single or set of components) had been installed under the F&E program, completion 

of an ILS in an AIP project is unqualified for FAA takeover and the airport would be required to maintain 

the new equipment. The statute allows transfer of a grant funded ILS (and associated approach lighting 

and RVR equipment), not the individual components that are less than a complete system. See 

Paragraphs 553-557. 

(1) Life-cycle costs are a major feature of the F&E program funding decisions and a key 

component of the FAA’s reformed acquisition management system. When an AIP equipment project 

involves takeover by the FAA, life-cycle costs need to be considered even though the FAA does not 

normally include airport maintenance in grants. For instance, remote maintenance monitoring (RMM) 

enhancements should be considered in the takeover projects. The region may require RMM based on a 

determination of the Airway Facilities division that it is needed to permit the FAA to accomplish the 

takeover of equipment without delay. RMM includes the original equipment procurement and installation 

capital costs. Equipment operational cost, e.g. staffing, training, and on-going supply support, is 

ineligible unless specifically approved in another provision of this order. See Paragraphs 508 and 911. 

(2) If requested by the airport, the FAA will assume ownership and maintenance responsibility 

for an ILS procured under the AIP, provided it meets the requirements of this paragraph. Airport 

sponsors do not have the same statutory option with an ILS procured solely using Passenger Facility 

Charge program funds (for the FAA to take over the project operation and maintenance), although the 

Airway Facilities division may agree independently to that arrangement based on policy currently in 

effect. 

(3) An alternative to FAA assuming ownership in the case of some AIP projects may be a 

reimbursable maintenance agreement for the equipment. In this arrangement, the airport may agree to 

reimburse the FAA for costs of maintaining the equipment. Such a reimbursable maintenance 

agreement is not eligible. (See Paragraph 553.) 

(4) Written consent of the airport to waive the ILS (and associated approach lighting as well as 

RVR equipment) takeover is needed from airports determining not to exercise this option for such 

facilities. The written consent should document that the airport understands its maintenance obligations. 

In these cases, the airport must ensure maintenance of the equipment with alternative funding. 

(5) Pending eligibility of the systems, the FAA will consider the future takeover and maintenance 

of a local area augmentation system (LAAS) and associated equipment as an incentive for airports that 

plan to implement augmented global positioning system (GPS) projects rather than an ILS. 

(6) Each project for an ILS and/or associated equipment that includes FAA takeover will be 

coordinated with APP-520 before approval. Information needed includes the airport name, associated 

Page 88 
June 28, 2005 Order 5100.38C

city, description of the designated instrument runway, equipment specifications, estimated cost, benefitcost ratio, and related justification. Regions should also contact APP-520 before allowing the transfer of 

other than ILS and related facilities. 

553. SUPPORTING AGREEMENTS TO IMPLEMENT NAVAID PROJECTS. 

Reimbursable agreements and/or supporting contract arrangements between the FAA and airport 

are allowed under the AIP as well as F&E programs for NAVAID projects. In the context of reimbursable 

agreements, the FAA may provide work to the airport within a portion of a project and be paid or 

reimbursed for it under Title 49 U.S.C., Section 106(l), or vice versa in accordance with Title 49 U.S.C., 

Section 44502(a). Either the projects should be accomplished by the F&E program or AIP as described 

below rather than through joint funding. For instance, if the F&E program has warehoused inventory, a 

sponsor could use its airport revenue to install the equipment, but AIP projects for the installation work 

are ineligible as that would be illegal augmentation of a Federal budget. The mixing of these AIP and 

F&E funding sources is not allowed except as specifically provided within this paragraph. (See Tables 5, 

6, and 10, as well as Chapter 9.) Contact APP-520 for use of reimbursable agreements or other 

contractual arrangements proposed for NAVAID projects, such as the following acceptable practices and 

limitations: 

a. Airports may take advantage of cost savings by purchasing an ILS, runway visual range, or 

airport approach lighting equipment under existing F&E contract mechanisms. While the FAA is moving 

to commercial navigation aid performance standards rather than establishing separate specifications, 

there may be some costs savings even with this new procurement method. The FAA Airway Facilities 

division does not necessarily need to be a party to the AIP procurements using F&E contract vehicles. 

However, several arrangements are possible, including those involving an FAA-sponsor purchase 

agreement. This has been the subject of a limited demonstration. 

b. Site preparation for related airport requirements that are similar to navigation aid projects, such 

as runway safety area grading, may be the subject of reimbursable agreements. When the F&E 

program funds a NAVAID, see the limitations on use of AIP funding described in Paragraph 514. 

However, airport revenue may be used to reimburse the FAA for more extensive work. 

c. Equipment installation and inspection of AIP projects may be in reimbursable agreements to 

ensure the airport will meet FAA standards. Sponsors may use a portion of the grant to retain FAA 

services where there is no F&E project, especially as a means of ensuring takeover of equipment 

without delay. See Paragraph 311k for nonallowable costs. 

d. Upgrading and rehabilitation of FAA equipment would not normally require reimbursable 

agreements since that would be accomplished under an F&E project. However, improvement of 

sponsor-owned equipment or in-kind relocation of FAA projects may use reimbursable agreements 

provided other requirements have been met to ensure the new facility meets standards. 

e. Airport operation and maintenance costs in a reimbursable agreement not funded by the AIP 

may be an alternative to FAA assuming ownership of equipment under Section 44502(e) of Title 49 

U.S.C.. See Paragraph 551. 

554. AIRPORT APPROACH AND LANDING SYSTEMS. 

Airport approach and landing systems in the National Airspace System provide aircraft guidance 

during the most critical phase of flight. The FAA, in most cases, designates instrument runways during 

airport planning as described in Paragraph 521. 

a. Designation of Instrument Runways. Eligibility of airport approach and landing systems is 

dependent upon the region’s designation of instrument runways. The designation will consider safety 

requirements, relevant meteorological history, NAS-wide capacity, delays at individual airports, aviation 

activity forecasts, changes in the airfield and operational environment (including relocation of existing 

Page 89
June 28, 2005 Order 5100.38C

systems), as well as overall airport capital improvement costs regardless of the funding source. Only 

airport rotating beacons, runway end identification light systems, and visual glide-slope indicator 

systems do not require a designated instrument runway. 

b. Non-Precision Instrument Approaches. For the commercial service airports, a high priority 

shall be given to programming at least one non-precision instrument approach for each secondary 

runway to the extent justified. (See Paragraph 505.) Use of the term “non-precision” with only horizontal 

guidance is no longer retained in some directives for approval of instrument procedures. However, the 

aviation community continues to use those concepts, which are characterized by higher weather minima. 

c. Precision Approach System. For commercial service airports, a high priority shall be given to 

programming at least one precision approach system, vertical visual guidance system, and full approach 

lighting system for each primary runway to the extent justified. (See Paragraph 505.) Contact APP-520 

if, after the benefit-cost study and alternatives analysis, the airport capital improvement costs exceed 

benefits at any such location. 

d. Runway Visual Range. See Paragraphs 570 and 574. 

e. GPS Procedures. As a part of airport planning pending implementation of the systems, the FAA 

may facilitate early implementation of GPS procedures using the wide area augmentation system 

(WAAS) where an ILS cannot be approved. Airports identified in Appendix 24 will be the initial 

candidates for approach procedures and the related AIP projects based on WAAS. 

555. AIRPORT NAVIGATION AID EQUIPMENT. 

Table 7 outlines limitations on current types of federally funded airport navigation equipment and 

eligibility under the F&E since that is the basic vehicle for such projects. Table 7 also outlines principal 

standards (specifications, type acceptance, site requirements, and operational performance), routing of 

the office of primary interest (OPI), need for a BCA, use of remote maintenance monitoring (RMM), and 

FAA takeover potential. See Paragraphs 550b and 552b. 

a. Airport Rotating Beacon. The airport rotating beacon equipment is eligible in accordance with 

Advisory Circular 150/5340-21 on miscellaneous lighting aids when necessary for visual approaches to 

the airfield at night. In this order, “visual” approach means approaches conducted by visual reference to 

an airport whether with or without an Instrument Approach Procedure (IAP). 

b. Other Airport Navigation Aid. Other airport NAVAID equipment should be part of a 

coordinated plan based on visual aids for land and hold short operations, requirements of published 

approach procedures, temporary use during construction projects, or other operational features as 

described in the following paragraph. If temporary visual navigation aids, such as runway end identifier 

lights or the precision approach path indicator are proposed, the benefit-cost analysis must be 

completed using the salvage value reduction in project costs as described in Paragraph 550b. 

Page 90 
June 28, 2005 Order 5100.38C

Table 7 Limitations on AIP-Funded Airport Navigation Aid Equipment 

EQUIPMENT F&E PRINCIPAL STANDARD OPI 

ROUTING BCA RMM TAKEOVER

Airport Rotating Beacon No AC 150/5340-21 AAS-100 No No No 

Precision Approach Path 

Indicator (PAPI) Yes

Title 49 U.S.C., 

§47101f, 

AC 150/5345-28, 

AC 150/5345-52 

AAS-100 Yes No No 

Visual Glide-Slope 

Indicator No AC 150/5345-52 AAS-100 Yes No No 

Runway End Identifier 

Lighting System (REILS) Yes

Title 49 U.S.C., 

§47101f, 

AC 150/5340-14 

AAS-100 Yes No No 

Omni-Directional Title 49 U.S.C., 

Approach Lighting 

System (ODALS) 

Yes §47101f, 

AC 150/5340-14 

AAS-100 Yes No No 

Medium-Intensity 

Approach Lighting 

System (MALS) 

Yes

Title 49 U.S.C., 

§47101f, 

AC 150/5340-14 

AAS-100, 

AND-740 Yes No No 

Medium-Intensity 

Approach Lighting 

System with Runway 

Alignment Indicator 

Lights (MALSR) 

Yes

Title 49 U.S.C., 

§47101f, 

Contact OPI 

AAS-100, 

AND-740 Yes Yes

Yes

(if associated

with an ILS) 

Approach Lighting 

System with Sequenced 

Flashing Lights (ALSF)

Yes

Title 49 U.S.C., 

§47101f, 

Contact OPI 

AND-740 Yes Yes

Yes

(if associated

with an ILS) 

556. AIRPORT APPROACH LIGHTING SYSTEMS. 

Visual navigation aids for a runway are eligible depending upon the type of approach procedure. If a 

combined NAVAID and pavement project exceeds $5 million, benefit-cost analysis will include 

consideration of the runway plus visual navigation aid. For purposes of FAA takeover provisions under 

Title 49 U.S.C., Section 44502(e), approach lighting is not an instrument landing system (ILS), but 

associated equipment. Therefore, a stand-alone approach lighting system is not necessarily taken over. 

Airports cannot transfer ownership of these projects to the FAA unless it will be associated with an ILS 

funded under the AIP. Contact the Airway Facilities division for further guidance or about variations, 

such as the simplified short approach lighting facility or the medium-intensity approach lighting system 

(MALS) with sequence flashers. 

a. Approach Lighting System with Sequenced Flashing Lights (ALSF). The approach lighting 

system with sequenced flashing lights is eligible on runways that have or are planned within five years 

for a precision approach procedure. RMM equipment is eligible and may be required if the project is to 

be taken over by the FAA. Each project that must meet performance specifications and/or RMM 

requirements for FAA takeover will be coordinated with APP-520 before approval. (Contact the region 

Airway Facilities division for design and performance standards.) 

Page 91
June 28, 2005 Order 5100.38C

b. Medium-Intensity Approach Light System and Runway Alignment Indicator Lights 

(MALSR). MALSR is eligible based on all of the same requirements as described in Paragraph 556a. If 

required to reduce minimums, MALSR is also eligible on runways that have or are planned within five 

years for an instrument approach procedure. 

c. Omni-Directional Approach Lighting System (ODALS). If required to reduce minimums, 

ODALS designed in accordance with Advisory Circular 150/5340-14 about economy approach lighting 

aids is eligible on runways that have or are planned for an instrument approach procedure (IAP). MALS 

without the runway alignment indicator lights is eligible based on the same requirements as ODALS. 

The airport cannot transfer ownership of these systems to the FAA. 

d. Runway End Identification Light System (REILS). The stand-alone runway end identification 

light system designed in accordance with Advisory Circular 150/5340-14 is eligible for visual approaches 

(whether with or without an IAP) on runways not equipped with an approach light system. For 

commercial service airports, REILS on each runway without an approach light system shall be given a 

high priority for programming. REILS are not ILS “associated approach lighting” within the meaning of 

statutory authority permitting the takeover, and the airport cannot transfer ownership of these systems to 

the FAA. 

e. Visual Glide-Slope Indicator System. A precision approach path indicator is eligible to provide 

vertical guidance for visual approaches (whether with or without an IAP) and related operational 

requirements in accordance with Advisory Circulars 150/5345-28 and 150/5345-52. Visual glide-slope 

indicator systems are not ILS “associated approach lighting” within the meaning of statutory authority 

permitting takeover, and the airport cannot transfer the ownership of these systems to the FAA. The 

precision approach path indicator is the only visual glide-slope system eligible for funding at airports with 

a Part 139 certificate. 

557. TERMINAL NAVAID FACILITIES. 

Electronic navigation aids for a runway or runways are generally eligible based on the establishment 

criteria in Order 7031.2, including consideration of aviation requirements within five years. Table 8 

outlines limitations on current types of federally funded terminal navigation equipment and eligibility 

under the F&E since that is the basic vehicle for such projects. Table 8 also outlines the principal 

standards (specifications, type acceptance, site requirements, and operational performance), routing of 

the office of primary interest, need for benefit-cost analysis, applicability of remote maintenance 

monitoring, and FAA takeover potential. (See Paragraphs 550b and 552b.) 

a. Local Area Augmentation System (LAAS). LAAS facilities are currently ineligible, although it 

is anticipated that such will be eligible at a future time based on similar criteria as instrument landing 

systems. Further guidance on programming LAAS projects is pending approval of specifications, type 

acceptance, site criteria, and operational performance standards. LAAS is considered to be an ILS from 

the standpoint of takeover as defined in Title 49 U.S.C., Section 44502(e). Decisions on LAAS or ILS 

projects need to be based on the premise that many locations have a benefit-cost ratio greater than 1, 

which requires close coordination with the F&E program. If a location does not have a qualifying BCA, 

or equipment fails to meet conditions in Part 171, the navigation and landing requirements of the airport 

should be reviewed with the sponsor. The potential use of GPS and higher minima is discussed in the 

next subparagraph. 

b. Instrument Landing System (ILS). A new ILS is eligible on designated instrument runways 

under the AIP for a new runway or extension where that equipment is qualified and was not previously 

installed. The FAA may review funding arrangements and recommend combinations of sources or 

deferring such projects pending use of satellite navigation (SATNAV). However, the ILS or associated 

projects proposed to be jointly funded under the AIP and F&E program for other than cases described in 

Paragraph 514 are ineligible. ILS facilities include a localizer, a glide slope facility, marker beacons, and 

various monitors and controls. Each project that must meet performance specifications and/or RMM 

Page 92 
June 28, 2005 Order 5100.38C

requirements for FAA takeover will be coordinated with APP-520 before approval to ensure that benefits 

of projects exceed aviation system costs. 

(1) The FAA will initially screen proposed ILS candidate projects using Order 7031.2. 

Secondary screening of proposals will calculate a specific benefit-cost ratio in accordance with an FAA 

report entitled Establishment and Discontinuance Criteria for Precision Landing Systems (Phase II), 

FAA-APO-83-10. However, a shortened investment life cycle is being used based on WAAS and LAAS 

availability at particular airports. Category I project planning will utilize as the end of the life cycle the 

date WAAS service is scheduled to be available at the airport plus seven years. For runways planned to 

use LAAS for Category I approaches only and all Category II/III projects, the end of the life cycle will be 

the date LAAS service is scheduled to be available at the airport plus seven years. 

Table 8 Limitations on AIP-Funded Terminal Navigation Aid Equipment 

EQUIPMENT F&E PRINCIPAL

STANDARD

OPI 

ROUTING BCA RMM TAKEOVER

Partial Instrument Landing 

System (Localizer, Glide 

Slope, or Other Component) 

Yes

Title 49 U.S.C., 

§47101f, 

14 CFR 171,

Contact OPI 

AND-740 Yes Yes

Yes

(if it 

completes 

ILS) 

Instrument Landing System 

(ILS) Yes

Title 49 U.S.C., 

§47101f, 

14 CFR 171,

Contact OPI 

AND-740 Yes Yes Yes

Local Area Augmentation

System (LAAS) Yes

Title 49 U.S.C., 

§47101f, 

14 CFR 171,

Contact OPI 

AND-710, 

ASD-410 Yes Yes

Yes

(when it 

becomes

eligible) 

Non-Directional Beacon (NDB) Yes 14 CFR 171,

Contact OPI AND-740 No No No 

Distance Measuring 

Equipment (DME) Yes 14 CFR 171,

Contact OPI AND-740 Yes No No 

Very-High-Frequency OmniDirectional Range (VOR) Yes 14 CFR 171,

Contact OPI AND-740 Yes No No 

(2) The benefit-cost of the ILS proposals may be evaluated separately from the AIP runway 

work. Approach lighting and runway visual range may be separately evaluated from the ILS because 

that would also be used for GPS/WAAS/LAAS-augmented approaches. 

(3) The establishment of a full ILS on existing runways would be a low priority for an AIP project 

since current FAA policy is to accomplish this under the F&E program if the BCA is acceptable and other 

requirements are met. The localizer is an ILS component commonly planned as a stand-alone project 

for existing runways. However, for purposes of this directive, a “partial” ILS is the individual localizer, 

glide slope, or other grant supported components of the instrument landing system. In light of transition 

to SATNAV, a partial ILS project is ineligible unless it completes the instrument landing system. 

Furthermore, an airport cannot transfer ownership of a partial ILS to the FAA unless that will complete 

the instrument landing system with each component of it funded under the AIP. 

Page 93
June 28, 2005 Order 5100.38C

For extension of a runway with an existing FAA-owned ILS (to accommodate an approved AIP project or 

otherwise), an AIP project may include relocation costs. See Paragraph 593. 

(4) The costs of any upgrade or replacement of the FAA-owned ILS equipment that is obsolete 

are not eligible. However, where the upgrade and/or replacement will result in an essentially new ILS 

that would otherwise be justified by new air traffic (e.g. to fully realize the benefits of related AIP runway 

work), the region may determine it should be allowed. The costs of any upgrade or replacement of the 

airport-owned ILS that is obsolete will be subject to the same requirements as new equipment within this 

paragraph. 

(5) Airports identified in Appendix 24 with early benefit from WAAS should be requested by the 

region to study the feasibility of transitioning to SATNAV approach procedures rather than installing an 

ILS. 

c. Other Terminal Navigation Aid. The Office of Airports Planning and Programming has no 

substantial experience with AIP projects for the other types of traditionally F&E navigation aids, such as 

the distance measuring equipment (DME), the very-high-frequency omni-directional radio range facilities 

(VOR), non-directional beacons (NDB), or microwave landing systems (MLS). This equipment normally 

requires justification in terms of an instrument approach procedure and lower minimums that would be 

based on it. Contact APP-520 for requests on a DME, VOR, NDB, MLS, or other such equipment 

proposed under the AIP. 

558. SPECIAL CONDITION. 

Any grant including a navigation aid must include one of the special conditions on this subject in 

Appendix 7. 

559. RESERVED. 

Section 7. COMMUNICATIONS, SURVEILLANCE, AND 

AIR TRAFFIC CONTROL

560. GENERAL. 

The installation of communications, surveillance, and air traffic control facilities at airports is normally 

accomplished through the F&E program. Only the limited projects described below are accomplished 

under the AIP. Table 9 outlines current types of this equipment that are AIP eligible, the principal 

standard requirements, and routing of the office of primary interest. 

561. COMMUNICATIONS EQUIPMENT. 

Communications equipment to be used on certain ARFF vehicles and systems for the automated 

weather observing system (AWOS) are eligible for AIP funding. Communications equipment eligibility 

Table 9 AIP-Funded Communications, Surveillance and Air Traffic Control Equipment 

EQUIPMENT PRINCIPAL STANDARD OPI ROUTING

Transceiver AC 150/5220-16, 

AC 150/5210-7 AUA-400, AAS-100 

Telephone Answering Device AC 150/5220-16 AUA-400 

Air Traffic Control Items Contact OPI ATP-140 

Page 94 
June 28, 2005 Order 5100.38C

depends upon the underlying equipment being eligible and does not extend to a wide variety of other 

radios or telephones in use at the airport. Requirements of communications equipment projects include 

those of the ARFF or security vehicles and AWOS equipment. See Paragraphs 541, 542, and 572. 

a. AWOS Telephone Systems. The AWOS may be provided with an answering device using 

separate telephone systems, which allows pilots to call the system and receive a weather report. This 

device and a modem is eligible and recommended for AIP funded AWOS. The ongoing cost for leasing 

the telephone lines to service the modem is not eligible. However, the regional Airway Facilities 

divisions may reimburse certain costs and provide information about the current status of these essential 

weather data link programs. 

b. Data Link. Sponsors should be encouraged to connect with the FAA’s AWOS data acquisition 

system, which is evolving with the Aviation Surface Weather Observation Network. The network, 

located at each FAA air route traffic control center as well as the Air Traffic Control System Command 

Center, provides the data to pilots, FAA controllers, airline traffic managers, and other NAS weather data 

users. Acceptance of weather reports into the network by AAT-1 is required. 

c. Other Transmitters. FAA policy is to transmit AWOS output over the Unicom or voice channel 

of existing navigation aids, such as a VOR or NDB. If a separate very-high-frequency transmitter is 

needed, it is eligible. See Paragraph 552a on the airport’s responsibility for frequency reservation. 

d. Responsibility for Maintenance. The airport has responsibility for maintenance of this 

communications equipment because it cannot be taken over by the FAA under Order 6700.20. See 

Paragraph 572e. 

e. Remote Transmitter-Receiver (RTR). RTR projects are AIP ineligible because that is 

specialized FAA equipment serving airport traffic control towers and similar Federal facilities. Limitations 

on relocating RTR equipment is described in paragraph 593. 

562. RADAR. 

Eligibility for radar equipment under the AIP is limited to relocation required by another approved AIP 

project. Terminal Doppler weather radar, airport surface detection equipment, precision runway 

monitors, and airport surveillance radar are otherwise AIP ineligible. See Paragraph 593. 

563. AIRPORT TRAFFIC CONTROL TOWERS. 

Installation of air traffic control facilities in a terminal area will be accomplished primarily by the F&E 

program. An airport traffic control tower (ATCT) may also be funded under the AIP. If an ATCT is to be 

funded by the AIP, coordination between the Air Traffic, Airway Facilities as well as Airports divisions is 

needed to ensure the objective evaluation and clear presentation of project requirements for the 

sponsor. 

a. FAA-Owned Airport Traffic Control Towers. ATCT eligibility under the AIP for facilities owned 

by the FAA is limited to costs described in d below. 

b. Portable ATCT Facilities. Portable equipment to provide the temporary ATC services for using 

a runway during construction or special events, irrespective of ownership, is ineligible. 

c. Contract ATCT Facilities. Construction, improvement and relocation of the ATCT are eligible 

using entitlements for certain airports that are in the FAA Contract Tower program under 49 USC 47124. 

The project Federal share may be up to $1.5 million. Eligible costs include the ATCT structure and 

equipment inside it. Standards for ATCT equipment that is required within AIP projects are under control 

of Director of Terminal Safety and Operations Support (ATP-140). Modification of any equipment 

Page 95
June 28, 2005 Order 5100.38C

standard must be approved by the regional Air Traffic division and/or ATP-140. Standards for locating 

an ATCT are in Advisory Circular 150/5300-13. (See Paragraph 406t.) 

(1) For projects that were completed after October 1, 1996, retroactive funding of the ATCT and 

equipment is eligible provided the airport demonstrates statutory requirements were met. For instance, 

the project must have been accomplished using Disadvantaged Business Enterprise, minimum wage, 

Veteran’s preference, environmental impact assessment, and other requirements under 49 CFR 18. 

(2) If an airport proposes State apportionments for these projects, those funds may be used 

provided the region consults with the State aviation official and obtains the State’s support for the project 

as part of its airport capital improvement plan. State apportionment funds may only be used on projects 

that are to be undertaken in the future rather than for retroactive funding. The project file should include 

the State’s written advisory regarding its support. 

(3) For the airports that are not in the FAA Contract Tower program, the application procedures 

for projects include the sponsor requesting the Air Traffic division to add the location to that program 

before following procedures in subparagraph c(4) below. Contact regional Air Traffic divisions on how 

airports qualify for the FAA Contract Tower program. 

(4) The airports that are currently qualified for the FAA Contract Tower program must continue 

meeting statutory requirements administered by ATP-140 for eligibility under the AIP. The project file 

should include copies of the following documentation indicating general requirements have been met 

and talking points should cite the dates of it: 

(a) ATP-140 should provide a letter or comparable documentation stating that the airport 

was selected to be a participant in the FAA Contract Tower program or that the construction of the ATCT 

would qualify the sponsor to be added to the program. 

(b) Prior to issuing a grant, ATP-140 should provide evidence if not provided by processing 

under subparagraph c(4)(a) above that it will seek appropriations for and maintain the airport in the FAA 

Contract Tower program in the same manner and priority as other airports already in the program. 

(c) The sponsor must certify in the FAA operating agreement and the cost share agreement, 

if applicable, that it will pay its share of the cost to equip, maintain and operate the ATCT. The sponsor 

must also arrange to provide the State/local share of the AIP project. 

d. Other ATCT Facility Costs. For the facilities other than covered elsewhere in this paragraph, 

AIP eligibility is limited to relocation required by another approved AIP or Passenger Facility Charge 

project. For example, if an AIP or PFC project restricts a controller’s visibility in airport movement areas, 

improvement or relocation costs of the ATCT would be eligible to the extent required as mitigation. 

However, the statute does not otherwise allow the repair and replacement of F&E project equipment or 

FAA take over of maintenance for an ATCT funded under the AIP. (See Paragraphs 591 and 593.) 

564. - 569. RESERVED. 

Section 8. AVIATION WEATHER EQUIPMENT

570. GENERAL. 

Only the weather observation, detection, reporting, and communications projects described below 

may be accomplished under the AIP. Installation of such aviation weather or forecasting facilities at 

airports is normally accomplished through the F&E program. Table 10 outlines limitations on current 

types of AIP eligible aviation weather equipment, eligibility under the F&E, principal standard 

requirements (specifications, type acceptance, siting, and operational performance), routing of the office 

of primary interest OPI), requirement for benefit-cost analysis (BCA), applicability of remote maintenance 

monitoring (RMM), and FAA takeover. (Contact APP-520 on integrated terminal weather systems). 

Page 96 
June 28, 2005 Order 5100.38C

571. WIND INDICATORS AND RECORDING ANEMOMETERS. 

Recording anemometers are eligible. For assistance with standards, contact AAS-100. Wind tees 

and cones for the airfield are eligible in accordance with Paragraph 537. 

Table 10 Limitations on AIP-Eligible Aviation Weather Equipment 

EQUIPMENT F&E PRINCIPAL

STANDARD

OPI 

ROUTING BCA RMM TAKEOVER

Wind Tee No AC 150/5340-21 AAS-100 No No No 

Wind Cone No AC150/5300-21, 

AC 150/5340-23 AAS-100 No No No 

Recording 

Anemometers 

No Contact OPI AAS-100 No No No 

Runway Visual 

Range (RVR) 

(if information is provided 

directly to pilot and associated 

with precision approach) 

Yes Contact OPI AND-740 Yes No 

Yes

(if associat

with an IL

ed 

S)

Automated Weather 

Observing System 

(AWOS) 

No AC 150/5220-16 AUA-400 No Yes No 

Low-Level WindShear Alert System 

(LLWAS) 

Yes Contact OPI AUA-400 Yes Yes No 

572. AUTOMATED WEATHER OBSERVING SYSTEM (AWOS). 

The F&E program has installed AWOS projects, and the FAA still operates many such facilities. 

Automated surface observing system (ASOS) is now funded by the F&E program, which in combination 

with various weather sensor programs accomplishes similar data collection as the AWOS. AWOS 

designed in accordance with Advisory Circular 150/5220-16 may be eligible at any eligible airport if 

Airway Facilities division confirms such equipment and ASOS has not been operated or approved for the 

same location under the F&E program. AWOS cannot be taken over by the FAA under Order 6700.20. 

States may install and maintain the AWOS equipment under the State sponsorship of airport projects. 

Contact APP-520 for assistance on eligibility of weather observing equipment. 

a. Sensors. An airport may be eligible for any or all AWOS types in production, although the costs 

and benefits differ for each system. The different capabilities provided through individual sensors 

determine differences between the systems. The sponsor should procure the minimum system based 

on airport activity levels and certified weather reporting that is required for an Instrument Approach 

Procedure under instrument meteorological conditions. Benefit-cost analysis described in paragraph 

550b does not apply to AWOS within a grant even through Order 7031.2 has a section on such projects. 

The F&E program no longer funds new AWOS equipment. 

b. Communications Equipment. Automatic telephone answering systems or radio transmitters 

are eligible and recommended to fully benefit from the weather data link opportunities with an AWOS. 

See Paragraph 561. 

Page 97
June 28, 2005 Order 5100.38C

c. Options. The minimum required optional displays and printer systems are eligible for an AWOS. 

Regions should ensure the ancillary equipment is justified by an operational need and will be used. 

d. Operation and Maintenance. Sponsors are required to operate and maintain AWOS 

equipment during its lifecycle. The special condition required for navigation aid projects (Appendix 7, 

Paragraph 6) should be in each AWOS grant. Inspection for weather observing sensor compliance by 

the local System Management Office of the FAA may also be required. 

e. Automated Surface Observing System. The installation of the ASOS projects, which has 

been adopted as the F&E program standard for weather observation, is normally accomplished under 

that program. Any questions on the ASOS projects should be directed to the Airway Facilities division. 

573. LOW-LEVEL WIND-SHEAR ALERT SYSTEM (LLWAS). 

The installation of the LLWAS under the F&E program for wind direction and speed detection is 

accomplished for airports meeting the requirements contained in Order 7031.2. We have no experience 

with AIP projects for LLWAS. The data obtained from the equipment would need to be directly provided 

to pilots. Any equipment providing data only to air traffic control would not be eligible. Contact APP-520 

for assistance on AIP eligibility of the LLWAS. 

574. RUNWAY VISUAL RANGE (RVR). 

For precision approach systems, RVR equipment is eligible if the visibility information is made 

available directly to pilots. RVR benefit-cost analysis may be separated from the AIP runway work and 

instrument landing system projects. Under Title 49 U.S.C., Section 44502e, an AIP ILS project including 

associated RVR, is to be taken over by the FAA at the option of the airport. RVR is not an ILS facility, 

but associated equipment. The airport cannot transfer ownership of AIP RVR equipment to the FAA 

unless it will be associated with an ILS as described in Paragraph 552. Contact APP-520 for assistance 

with proposed RVR projects. 

575. - 579. RESERVED. 

Section 9. AVIATION HAZARDS AND ENVIRONMENTAL MITIGATION

580. GENERAL. 

This section includes information concerning the eligibility of projects to remove objects in the 

runway protection zones as well as certain airport hazards and environmental mitigation. See 

Paragraph 537 on airport hazard or runway closure marking/lighting and Chapter 7 for relocation caused 

by removal of hazards. See Chapter 8 on noise compatibility projects. Table 11 outlines current types 

of federally funded aviation hazard and environmental mitigation equipment, the principal standard 

requirements, as well as routing of the office of primary interest. 

a. ENVIRONMENTAL MITIGATION IN APPROVED PROJECT. An environmental mitigation project is 

eligible as airport development if it is a condition of approval of an environmental action associated with 

an AIP funded airport development project. However, if the development project for which the 

environmental mitigation project was a condition of approval is ineligible, the environmental mitigation 

would be ineligible. Frequently environmental impact statements include both eligible and ineligible 

projects. Therefore, inclusion of a mitigation measure in an environmental impact statement does not 

automatically make the mitigation measure eligible for Federal funding.

b. STAND-ALONE ENVIRONMENTAL PROJECT. Stand-alone environmental projects that do not 

depend upon an AIP funded airport development project are described in paragraphs 585 and 587. 

Page 98 
June 28, 2005 Order 5100.38C

581. OBJECTS IN RUNWAY PROTECTION ZONE. 

The runway protection zone (RPZ) is an area off the runway end to enhance the protection of people 

and property on the ground and to minimize aircraft damage if an airplane was to inadvertently leave the 

actual runway environment. See Paragraph 702 as well as Sponsor Assurances 20 and 21. 

a. Control of Land Use. For any AIP development project that involves acquiring the property 

and/or constructing/reconstructing the runway associated with a nonstandard RPZ, the region should 

consider fee simple for RPZ land acquisition projects as the preferred method but, if this is not feasible, 

the phased acquisition of RPZ land or less-than-fee interest to control land use may be acceptable. 

(1) An easement, lease, or restrictive covenant should be required if fee interest in a parcel is 

infeasible in the foreseeable future. For projects on new runways and extensions, a comprehensive 

analysis is necessary if it appears likely fee acquisition may not be attainable upon runway completion. 

In such a case, a study on alternative airport configurations, which may include airport site evaluation, 

may be necessary. At minimum, this study must identify costs of fee acquisition, legal constraints, and 

analysis comparing continued present use with potential reuse of the land. This study may result in a 

determination by the FAA to phase acquisition or approve less-than-fee property interests. 

Table 11 AIP-Funded Aviation Hazard and Environmental Mitigation Equipment 

EQUIPMENT PRINCIPAL STANDARD OPI ROUTING

Runway Closure Marking AC 150/5345-55 AAS-100 

Aviation Obstruction Lighting and Marking AC 70/7460-1 ATA-400 

Bird Hazard Reduction Equipment AC 150/5200-33 AAS-300 

Industrial Waste Treatment Facilities AC 150/5320-15 AAS-100 

Low Emission Systems Contact OPI APP-600 

(2) The special condition in Appendix 7 should be applied to the cases involving a nonstandard 

RPZ. 

b. Removal of Objects. The removal or relocation of any object located in the RPZ is eligible 

regardless of whether it constitutes an obstruction and/or airport hazard. When property within the RPZ 

is acquired under the AIP, structures and activities located on this land must be removed unless granted 

an exception by the regional Airports Division Manager or needed for air navigation facilities. 

582. AIRPORT HAZARDS. 

The removal, relocation, lowering, and other modification of any object (both natural and man-made) 

that constitutes an airport hazard as defined in Title 49 U.S.C., Section 47102 is eligible where an 

aeronautical study conducted under FAR Part 77 determines that action is required. Arrangements must 

be made that will preclude the problem from being recreated. 

583. HAZARDOUS WASTE. 

Land involving hazardous waste must be identified at the earliest possible time during the airport 

planning and development process. 

a. Due Diligence Audits. Emphasis should be placed on due diligence audits to determine the 

nature and responsibilities for hazardous waste as an AIP eligible activity of environmental assessment 

during airport planning. Solutions that identify acceptable remedial actions can frequently be established 

in such a study. Where no solution can be identified, airport site evaluation may be required. 

Page 99
June 28, 2005 Order 5100.38C

b. Ineligible Hazardous Clean Up. Clean up of hazardous waste is normally ineligible in airport 

development projects. Contact APP-500 for assistance on projects when hazardous waste is first found 

during the accomplishment of an AIP development project. See Paragraph 586. 

584. WILDLIFE HAZARDS. 

If wildlife hazards have been determined to exist (or may result because of planned construction or 

airport expansion) under procedures of Advisory Circular 150/5200-33, capital improvements to reduce 

the hazard within the airport boundary are eligible provided the actions will be designed to produce longterm solutions. 

a. Habitat Modification. Removal of wildlife attractants through improving airport drainage, 

elimination or modification of man-made structures used by birds for nesting or roosting, purchase of 

contiguous land or easements, or modification of the habitat, are eligible. APP-520 shall be consulted 

prior to programming any items in this subparagraph. 

b. Bird Hazard Reduction Equipment. Acquisition of equipment for bird patrols and wildlife 

hazard reduction on or adjacent to an airport is eligible. This includes cassette tape decks and public 

address systems for broadcasting distress calls, exploding gas cannons, shotguns, and pyrotechnic 

pistols. 

c. Ineligible Items. Expendable items such as the shotgun shells, chemicals, and pyrotechnic 

devices (other than pistols) are not eligible. Airport operations vehicles associated with wildlife control 

are ineligible. 

585. LOW EMISSION SYSTEMS AND OTHER AIR QUALITY PROJECTS. 

Projects for low emission systems and the protection of air quality are eligible either for mitigation 

within a conventional airport development project in accordance with paragraph 580a or as stand-alone 

work. In addition to general requirements of Paragraph 505, the project file should contain relevant 

sections of the State implementation plans, environmental mitigation requirements within an airport 

development project, or the other documentation to justify the project. Contact APP-600 for assistance 

with air quality projects. 

a. Stand-Alone Projects. Stand-alone air quality projects as described within this subparagraph 

must result in the airport receiving appropriate Airport Emission Reduction Credit (AERC). The region’s 

approval of the stand-alone projects is contingent upon receipt of the State air quality agency letter of 

assurance to the FAA on the AERC credits under provisions of 49 USC 47139. Stand-alone projects 

may be authorized under any of several different statutory definitions, each with its own requirements: 

(1) Sponsor Compliance Responsibility. As defined by 49 USC 47102(3)(F), projects must 

be the sponsor’s compliance responsibility under the Clean Air Act of 1970 (CAA), as amended, and 

may include construction, reconstruction, repair, improvement or purchase of equipment to comply with 

Environmental Protection Agency (and State air quality agency) requirements; or 

(2) Voluntary Airport Low Emission (VALE) Program. VALE program system projects are 

eligible at commercial service airports located in a non-attainment or maintenance area defined under 

the CAA. See http://www.faa.gov/arp/environmental/vale for general information regarding low emission 

systems for that program. Systems must meet emission standards contained within the VALE technical 

report dated September 30, 2004. 

(a) Equipment. In the projects acquiring or providing for conversion to low emission 

systems, vehicles and equipment must be airport owned. In this paragraph, “equipment” means ground 

service or maintenance equipment used to support aeronautical and related activities at the airport that 

will remain in operation for its useful life. The vehicles and equipment cannot be used in non-airport 

Page 100 
June 28, 2005 Order 5100.38C

activities. See Appendix 7 for a special condition to be used on these projects. See 49 USC 

47102(3)(L). 

1. The vehicle and equipment technology must rely exclusively on alternative fuels 

that are substantially non-petroleum based, as defined by United States Department of Energy. 

However, this requirement does not exclude hybrid vehicles. 

2. If the vehicles would not otherwise be eligible, such as shuttle buses, incremental 

costs of low emission technology are the allowable portion of the project. 

(b) Facilities. For work necessary to construct or modify facilities to provide low-emission 

fuel systems, gate electrification and other related airport air quality infrastructure improvements, 

requirements of subparagraph a(2)(a) above apply except for the sentence about alternative fuels. See 

49 USC 47102(3)(K). 

b. Ineligible Work. Work benefiting non-aeronautical revenue producing airport areas and 

locations that are not at an airport is ineligible except as described in Paragraphs 303 and 502e. 

Ineligible portions may be prorated from eligible work in a project. Vehicles are ineligible if not operated 

within or in close proximity to the airport boundary and dedicated to the airport. 

586. WETLANDS. 

Wetland projects may be associated with separate justification related to wildlife hazards and water 

quality. See Paragraphs 584 and 587. In addition, similar wetland mitigation projects may be a 

requirement for coastal zones, endangered species, floodplains, and other environmental impacts 

included within the environmental documents for airport development. 

a. General. Wetland restoration, creation, enhancement or exchange projects are eligible only 

when required by an environmental finding for an approved AIP project. Sponsors shall not implement 

wetland wildlife attractions unless the mitigation project is located at a site remote from existing or 

planned airport development as defined within Advisory Circular 150/5200-33, Hazardous Wildlife 

Attractants on or Near Airports. Wetland preservation and related work is not eligible when it conflicts 

with aircraft operations. (See http://www.faa.gov/arp/environmental/5054a/wildhazmou.pdf for a 

discussion of minimizing aircraft-wildlife strike potential.) 

b. Monitoring Wetlands. Monitoring of wetland areas is eligible in a project for up to two years 

from the grant agreement (or the period projects are open for other project purposes) to determine 

whether the as-built conditions meet design objectives. A project should not be open beyond two years 

for the exclusive purpose of wetland monitoring. Two years is a common grant closeout objective. 

However, approved mitigation plans typically require a five-year oversight period. Such lengthy studies 

may be eligible for reimbursement of work accomplished prior to a grant and/or within multiple grants as 

follows: 

(1) A portion of wetlands evaluation already completed and reimbursable may be eligible subject 

to the limitations of Paragraph 311j. 

(2) A supplemental planning project continuing the wetland monitoring studies may be eligible 

after the initial grant is closed under provisions of Paragraph 406s. 

c. Mitigation Banking. Mitigation banks combine wetlands required for various current or future 

projects. Funding for mitigation banks is allowable for a specific airport development project the FAA 

intends to fund under the AIP within two years from the grant agreement for wetland banking. See 

http://www.faa.gov/aip/environmental/5054a/wetpol.html for information on mitigation banking. 

d. Environmental Trust Funds. Certain environmental trust funds or other similar devices that 

combine projects required for a variety of resources in addition to wetlands may be provided AIP funding 

Page 101
June 28, 2005 Order 5100.38C

subject to the same conditions as mitigation banks in lieu of financing specific wetland projects. The 

purpose of the AIP funds must be identified in these cases for the management entity below. 

e. Management Entity. Sponsors may not have wetland expertise or jurisdiction over the wetland 

areas. Therefore, the airport may prefer to work through a natural resource agency, conservation 

organization, or land trust to acquire and manage the land for project mitigation. In these cases, 

eligibility is dependent upon passing the airport’s obligations on to the management entity. The eligibility 

for operations of a management entity to monitor wetlands is limited to conditions in subparagraph b 

above. Any additional costs incurred by the management entity are considered administrative or 

maintenance costs and would be ineligible for AIP funding. 

f. Management Agreements. A formal agreement co-signed by the airport and proposed owner or 

management entity must be obtained to protect AIP funds. Agreements may be with public agencies or 

nonprofit organizations and should including the following information: 

(1) A commitment to use the property on a continuous basis compatibly with airport operations 

and not subject to undue liability or misuse in any way; 

(2) A wetland monitoring requirement for the period before, during or beyond the AIP project 

ensuring the property has at least value and function equal to that of the required mitigation as described 

in subparagraph b above; and 

(3) The understanding that the administration and maintenance of the property in accordance 

with applicable laws will be the sole responsibility of the management entity, which is AIP ineligible. 

587. WATER QUALITY PROJECTS. 

Projects for protection of water quality are eligible as stand-alone work or as mitigation within a 

conventional airport development project as described in paragraph 580a. In addition to the general 

requirements of Paragraph 505, the project file should contain an applicable National Pollutant 

Discharge Elimination System permit, environmental mitigation requirements within an airport 

development project, or the other documentation to justify the work. On proposed projects that involve 

deicing, see Paragraphs 544 and 547. 

a. Stand-Alone Projects. Stand-alone water quality projects must be a sponsor compliance 

responsibility under the Federal Water Pollution Control Act of 1972, as amended. The project may 

include any construction, reconstruction, repair, improvement or purchase of capital equipment for the 

airport necessary to comply with requirements of the U.S. Environmental Protection Agency and State 

agencies that have water quality jurisdiction. Advisory Circular 150/5320-15, Management of Airport 

Industrial Waste, describes eligible water quality equipment and facilities. (Contact AAS-100 for 

assistance on water quality projects not included in that advisory circular.) 

b. Ineligible Work. Work benefiting non-aeronautical revenue producing airport areas and 

locations outside of airport boundaries is ineligible except as described in Paragraphs 303 and 502e . 

Ineligible areas may be prorated from eligible work in a project. 

588. - 589. RESERVED. 

Section 10. MISCELLANEOUS

590. BLAST FENCES. 

Blast fences are eligible when they are needed for safety and are more economical than the 

acquisition of additional property interests or expansion of an apron. 

Page 102 
June 28, 2005 Order 5100.38C

591. EQUIPMENT LEASE, REPAIR, MODIFICATION, AND DISPOSAL. 

a. Lease/Purchase. In a lease/purchase plan between a sponsor and a vendor, funding is limited 

to the purchase portion of the arrangement, and a grant would be issued only after the sponsor decides 

to buy. In such cases, the original lease/purchase solicitation must meet requirements of Chapter 9. 

b. Refurbishing, Repair, or Modification. The cost to refurbish, repair, and/or modify eligible 

equipment and increase performance or extend its useful life may be eligible. Regions should carefully 

review the sponsor’s economic basis for each such project to ensure it is not, in fact, normal 

maintenance. For information purposes, APP-520 should be notified of all projects for refurbishing or 

modification of equipment, which might be due to design or specification shortcomings. 

c. Replacement of Equipment. The replacement of equipment acquired under the grant program, 

which has been destroyed accidentally, become obsolete, worn out, or may be otherwise deemed 

inoperable through no fault of the sponsor, is eligible. 

d. Spares. AIP project costs of any eligible airfield equipment may include an additional 10 percent 

of the cost of equipment for spare parts or minor replacement components of systems to be used by the 

airport in maintaining the system. If the region has reason to believe the airport will be unable to store 

and accurately account for the spare parts inventory, the additional cost is ineligible. 

e. Used Equipment. The acquisition of used equipment is eligible provided it meets FAA 

specifications and has an acceptable useful life based on the proposed purchase price. See also 

Advisory Circular 150/5150-2, Federal Surplus Personal Property for Public Airport Purposes. 

f. Disposal of Replaced or Unneeded Equipment. Equipment with a current per unit fair market 

value of $5,000 or more may be retained by the sponsor, sold for salvage, traded for replacement, or 

transferred to another eligible airport or sponsor. If retained and used for airport purposes, no 

reimbursement is required. If transferred to another sponsor, grant obligations shall also be transferred. 

There is no need for monetary consideration if the entity receiving the equipment would be eligible under 

the grant program. If a non-eligible sponsor or non-airport entity obtains the equipment, fair market 

value shall be required and used to reduce the amount of a subsequent grant for replacement 

equipment at the option of the FAA Airports Office. 

592. LANDSCAPING AND TURF. 

Landscaping and turf are only eligible to the extent that they are a cost associated with an AIP 

project and necessary for erosion control or State and/or local construction practices. See also 

exceptions based on noise in Chapter 8. Art or decorative landscaping for the sole purpose of the 

aesthetic enhancement are not an allowable costs. See definitions and examples in Paragraph 304. 

Where the sponsor desires to include landscaping for aesthetic effect with a project, the eligible costs 

must be prorated. 

593. PURCHASE, RELOCATION, OR DEMOLITION OF INELIGIBLE FACILITIES. 

AIP funds cannot be used for any part of an airport building, except eligible portions of terminal 

buildings, certain former military facilities, hangars and parts of buildings intended to house equipment or 

activities directly related to safety. (If an underground storage tank that meets current standards must 

be relocated due to an AIP project actually funded by a grant or with the PFC program, relocation is an 

allowable cost of the project. If an underground storage tank that does not meet current standards must 

be relocated because of such a project, the costs are allowable and the project must result in placement 

of a tank that meets the current standard.) Existing non-eligible buildings located on the airport that 

constitute aviation hazards or impede an AIP project actually funded by a grant or with the PFC program 

may be purchased and relocated or demolished subject to the criteria below. See Chapter 7. 

Page 103
June 28, 2005 Order 5100.38C

a. Non-Federal Structures. The purchase by an airport sponsor of a building from any owner 

other than the Federal Government is eligible. The market value and the costs associated with its 

demolition and removal are eligible, minus any salvage value. The relocation of the structure or facility 

to another location on the airport in lieu of purchase is eligible up to the market value of the facility. 

Nominal incidental costs of the relocation, e.g. extinguishing a lease or footings and floors, may be 

included. 

b. Federally Owned Facilities. The cost of moving buildings owned by the Federal Government 

that impede an AIP grant or PFC project is eligible. Table 12 outlines limitations on FAA equipment 

relocation eligibility since the F&E program is the basic vehicle for such projects. Table 12 also outlines 

principal standard requirements (specifications, type acceptance, siting, and operational performance), 

routing of the office of primary interest (OPI), need for benefit-cost analysis (BCA), applicability of remote 

maintenance monitoring (RMM), and FAA takeover potential. 

(1) Examples of relocating such Federal facilities include navigation aids, weather equipment, 

the airport traffic control tower (ATCT), the remote transmitter-receiver (RTR), terminal Doppler weather 

radar (TDWR), airport surface detection equipment (ASDE), the precision runway monitor (PRM), and 

airport surveillance radar (ASR). Under 49 USC 47110(b)(1), the projects may include military facilities 

or any other federally owned facility. 

(2) Rebuilt facilities must be of an equivalent size and type. Equivalent capability of buildings, 

pavements, and facilities may require different features than existing structures depending on proposed 

location. However, the allowable costs will cover in-kind move or replacement rather than an upgrade 

and rebuilding with current technology. Prorating eligible cost may be necessary. See Order 6030.1 

and Advisory Circular 150/5300-7 about FAA policy on ATCT, RTR, TDWR, ASDE, PRM, ASR, and 

other facility relocations occasioned by airport improvements or changes. See also Paragraphs 311k, 

513, 514 and 550-574. 

c. Sponsor Owned Facilities. A sponsor may choose to either remove or demolish a facility it 

owns. These costs are eligible minus any salvage value. The cost to the sponsor of extinguishing a 

lease is eligible. 

(1) When a structure acquired under an AIP project is to be removed later, such as in 5 years, 

the sponsor may use the structure for any incidental purposes it deems desirable provided it does not 

interfere with the purpose of the airport. Any revenue at fair rental value received during the period 

between acquisition and demolition of the structure constitutes airport revenue and is to be used 

according to Sponsor Assurance 25. If a decision is made not to demolish the structure, then the 

sponsor will be responsible for reimbursing the grant program the Federal share of the appraised value 

attributed to the structure. 

(2) The cost of a structure on land being acquired under the AIP is allowable if the building is to 

be used by the sponsor for a grant eligible facility, such as an ARFF building. 

(3) The costs of a structure on land that is to be acquired for airport purposes is not allowable if 

the structure is to remain on the land or is to be relocated and will be used by the sponsor for a purpose 

not grant eligible. However, if the structure is to be relocated because its present location constitutes an 

airport hazard or impedes eligible airport development, then such relocation would be eligible up to the 

estimated costs to demolish and remove the structure. Participation is limited to the cost of a like facility. 

Page 104 
June 28, 2005 Order 5100.38C

Table 12 Limitations on AIP-Eligible Relocation of FAA Equipment 

EQUIPMENT F&E PRINCIPAL STANDARD OPI

ROUTING BCA RMM TAKEOVER

Airport Navigation Aid 

Equipment Yes See Table 8 AAS-100, 

AND-740 Yes Yes Yes 

Terminal Navigation 

Aid Equipment Yes See Table 9 AND-700, 

ASD-400 Yes Yes Yes 

Weather Equipment Yes See Table 11 AUA-400 Yes Yes Yes 

Airport Traffic Control 

Tower (ATCT) Yes Contact OPI AUA-300 Yes No Yes 

Remote TransmitterReceiver (RTR) Yes Contact OPI AND-300 Yes No Yes 

Terminal Doppler 

Weather Radar 

(TDWR) 

Yes Title 49 U.S.C., 

§47101f, Contact OPI AUA-400 Yes No Yes 

Airport Surface 

Detection Equipment 

(ASDE) 

Yes Title 49 U.S.C., 

§47101f, Contact OPI AND-400 Yes No Yes 

Precision Runway 

Monitor (PRM) Yes Title 49 U.S.C., 

§47101f, Contact OPI AND-400 Yes No Yes 

Airport Surveillance 

Radar (ASR) Yes Title 49 U.S.C., 

§47101f, Contact OPI AND-400 Yes No Yes 

594. REPLACEMENT FACILITIES. 

AIP funds may not be used to replace a building on the airport except as described in this chapter. If 

the sponsor is responsible for utilities, an above ground utility may be replaced by an underground utility 

provided the sponsor certifies that the airport is legally obligated to fund the work. Replacement of 

underground storage tanks is ineligible, except for certain former military airports. (See Paragraph 593.) 

595. CONSTRUCTION PROJECT SIGNS. 

Project signs at an airport construction site are not required, but, if erected, may be an eligible cost if 

the construction includes at least $200,000 of Federal funds and will be underway for at least 3 months. 

Cost of the sign should be limited to $1,000. The sign shall contain a brief description of the project and 

the following statement: “Part of the funding for this project is being provided by a grant from the Airport 

Improvement Program, which is administered by the Federal Aviation Administration and financed 

through the Airport and Airway Trust Fund.” 

596. - 599. RESERVED. 

Page 105
June 28, 2005 Order 5100.38C

























This page left intentionally blank.



Page 106 
June 28, 2005 Order 5100.38C

Chapter 6. TERMINALS, L ANDSIDE, AND TERMINAL 

ACCESS P ROJECTS

Section 1. TERMINAL DEVELOPMENT

600. GENERAL ELIGIBILITY. 

This chapter includes information concerning eligibility or limitations for an airport terminal building, 

multi-modal terminal development, other landside projects, and surface access. See Paragraph 613 

about prorating of eligible and ineligible terminal building work. As general requirements for eligibility, 

sponsors must: 

a. Design all structures in accordance with the appropriate FAA Advisory Circulars attached to the 

project grant. At this time the FAA is initiating a revision to Advisory Circular 150/5360-13, Planning and 

Design Guidelines for Airport Terminal Facilities. This AC plays an important role in the understanding 

and analysis of airport terminal designs. It establishes requirements for airport terminal design for 

projects to be funded with AIP grants. It is also used to determine reasonableness of cost for Federal 

and federally approved funding. 

However, industry methodologies for determining terminal space requirements have changed since 

the research for the original AC was completed. For example, the AC presents the equivalent aircraft 

factor methodology, while a level of service or similar method as described by the International Air 

Transport Association (IATA) is currently used by many airport planning and design consultants. 

While AC 150/5360-13 continues to be the FAA standard for terminal planning and design, prudence 

should be applied when reviewing terminal building proposals. As an interim measure until the revision 

of the Planning and Design Guidelines AC is complete, we recommend methodologies following the 

IATA recommendations (“Airport Development Reference Manual”, 8th edition), and a review of existing 

terminals facilities at comparable airports be considered as well as the AC recommendations when 

making FAA determinations. (Contact APP-400 for additional guidance if required.) 

b. Submit with the grant application the required “Certification of Compliance with the Seismic 

Design and Construction Requirements of Title 49 CFR, Part 41”. This certification submitted by the 

sponsor or the Sponsor’s authorized representative states that the Sponsor will comply with the 

requirements set forth in Title 49 CFR, Part 41 in the design and Construction of the building(s) to be 

financed with the assistance of the Federal Aviation Administration; 

c. Certify the airport has, on the date of submittal of the project application, all the FAR Part 139 

safety and Title 49 CFR, Part 1542 security equipment required for certification of the airport; 

d. In the event that Part 139 does not apply to the airport, certify any needed airport development 

project affecting safety, security or capacity will not be deferred due to the project; and 

e. Provide access for passengers to enplaning and deplaning areas of aircraft other than air carrier 

aircraft. 

601. TERMINAL DEVELOPMENT. 

Except as noted by Paragraphs 602-606, “terminal development” is defined in this Chapter as 

development for non-revenue producing public-use areas that are directly related to the movement of 

passengers and baggage in terminal facilities within the boundaries of the airport. Typical eligible items 

include baggage claim delivery areas, automated baggage handling equipment (see Paragraph 602c for 

limitations), public-use corridors to boarding areas, central waiting rooms, restrooms, holding areas, and 

foyers and entryways, as well as passenger loading bridges and handicapped boarding assistance 

Page 107
June 28, 2005 Order 5100.38C

devices. Excluded would be those areas that are primarily revenue producing such as restaurants, 

concession stands, and airline ticketing areas. With exception to the terminal modifications in Paragraph 

602 regarding baggage makeup areas, only public-use areas associated with baggage claim delivery 

are eligible under the AIP program. See Table 13 on page 114, which describes terminal eligibility by 

commercial service airport type. 

a. For large, medium, and small hub airports, terminal development can only be funded from a 

sponsor’s passenger entitlement funds. 

b. For nonhub airports, funds from the discretionary or small airport fund may be used for terminal 

development. For nonhub primary airports, passenger entitlements may be used as well. 

c. Cargo entitlement funds may not be used for terminal development. 

d. Nonprimary commercial service airports cannot receive more than $200,000 of discretionary 

money in any fiscal year for allowable terminal development project costs. 

e. Reliever airports cannot receive more than $200,000 of discretionary funds in any fiscal year for 

allowable terminal development project costs. Typical eligible items include baggage claim delivery 

areas, automated baggage handling equipment (see Paragraph 602c for limitations), public-use 

corridors to boarding areas, central waiting rooms, restrooms, holding areas, and foyers and entryways, 

as well as passenger loading bridges and handicapped boarding assistance devices. See Table 14. 

602. TERMINAL SECURITY PROJECTS. 

Projects that are justified as meeting an access control requirement at Category I-IV and X, 

Title 49 CFR, Part 1542, (formerly 14 FAR Part 107) airports are AIP eligible. Projects to prevent the 

unauthorized intrusion of individuals near aircraft parked on aprons or in operation on taxiways and 

runways, or any other part of the air operations area (AOA) are also eligible. (See Section 542 for a 

more detailed discussion of eligible security projects.) Further, any sponsor who proposes a terminal 

security project that requires TSA staffing must have a written commitment by the TSA to provide the 

necessary personnel for operation of the equipment or manning of those facilities. These typical security 

projects are generally required in an airport’s Part 1542 security plan or required of an airport by the FAA 

in a security directive or emergency amendment to Part 1542. 

a. Other security projects that are generally considered eligible would include such things as finger 

printing equipment, computerized and noncomputerized door controls, perimeter security fencing and 

gates (including adequate lighting at gates), closed circuit television to monitor persons’ exiting from 

buildings to the AOA or vehicular and persons entering the AOA from public roadways and other 

landside locations, vehicle checkpoints on the AOA if secondary security is determined necessary, the 

one-time replacement of keylocks and cores after September 11th, and explosive detection devices to 

inspect and transport packages in the terminal environment outside the sterile area and explosive 

disposal equipment. 

b. Security for other facilities on the airport may be determined eligible with the submission of 

additional, convincing justification. One such area would be the security of fuel farms. Airports desiring 

AIP grants to provide increased security in a fuel farm area would need to demonstrate that the fuel farm 

is located in an area where the ignition or explosion of fuel would create an imminent danger to 

passengers or aircraft. The more remote the fueling facility is to terminals or the AOA, the more the 

project becomes one intended to prevent theft or vandalism, which is a local law enforcement issue 

rather than air transportation security. 

Another project might be the purchase of tow trucks to tow vehicles left within the secured area of a 

terminal. While not strictly required, these trucks could be a mitigation measure. TSA has indicated that 

frequent public announcements and adequate signage are also acceptable less costly mitigation 

Page 108 
June 28, 2005 Order 5100.38C

methods. Due to the fact that tow vehicles would inevitably be used for other purposes including general 

traffic control, parking violations unrelated to security and for vehicle assistance, the FAA has 

determined that these would not compete well for discretionary funds. Entitlement funds, however, may 

be used. 

Further, since tow charges are normally passed on to the violator rather than remaining an airport 

expense, and in those locations where adequate towing services are available, regions should consider 

the need for an airport owned tow truck. 

Other projects in this category may include public address systems and terminal improvements for 

checking baggage or passengers. For example, the replacement or installation of a general public 

address system, which will be used predominately for air carrier announcements and only periodically 

make required automatic security announcements, would not be eligible. However, the equipment 

necessary to make the automatic announcements and the feed to the public address system would be 

eligible. In the case of full replacement or installation, costs should be prorated in order to identify the 

required security costs. 

c. The Aviation and Transportation Security Act (ATSA) amended Title 49 U.S.C., Section 47102(3) 

to include terminal modifications necessary to accommodate the installation of Explosive Detection 

Systems (EDS) in baggage makeup areas as eligible for AIP funding. Note the amendment only 

provides for that development or reconfiguration necessary to accommodate the installation of bulk 

explosive detection equipment. It does not provide general eligibility for the baggage makeup area and 

baggage conveyor systems under the AIP program. Since passage of ATSA, projects were funded with 

either entitlement or discretionary funding. After FY 2003, the projects are limited to entitlements. Note 

the FY 2004 and FY 2005 Appropriations Act prohibit using AIP funds for baggage system, terminal 

building or other modifications in order to install EDS during each of those years. 

The project may include the replacement of baggage conveyor systems, and reconfiguration of 

terminal baggage areas, that are undertaken by an airport owner or operator and that the FAA 

determines necessary to install the bulk explosive detection devices. If replacement of an outdated 

baggage system is found necessary, project files must contain substantial justification that no feasible 

alternative exists to the complete replacement. The Regional Airports Division or ADO will consider the 

use of proration in order to determine an acceptable approximation of the costs of replacement due to 

explosive detection systems versus replacement due to age. If an entire baggage handling system must 

be replaced it must be available to all air carriers on a non-exclusive use basis and it must remain the 

property of the airport. Where the project is in the baggage makeup area only, either discretionary or 

entitlement funding may be used. 

d. A project to provide an efficient use of terminal space or even aesthetics in the public spaces of 

the terminal, such as enlargement of areas to permit more efficient queuing of passengers or to 

accommodate random screening, is considered to be terminal development and therefore can only be 

funded at large, medium and small hubs using entitlement funds (nonhub and reliever airports may use 

discretionary funds if available). Widening of the entrance to a concourse to accommodate additional 

screening lanes or construction of rooms to do random screening rather than performing the screening 

in the terminal for example are not security projects but may be considered terminal development. It 

should be noted here that the Federal share for terminal development projects, as well as this expanded 

eligibility, remains unchanged for these projects. 

In federalizing the screening activities at an airport, some security projects that were previously 

funded under AIP through Section 308 of the FAA Reauthorization Act of 1996 such as X-ray equipment, 

magnetometers, search wands and any similar equipment used by TSA screening agents are no longer 

eligible and cannot be funded. Also, projects that appear to exceed known requirements or are used to 

support law enforcement functions unrelated to air transportation security such as parking enforcement, 

and general traffic law enforcement patrol duties are ineligible for funding. 

Page 109
June 28, 2005 Order 5100.38C

603. OTHER ELIGIBLE TERMINAL DEVELOPMENT. 

Normally the following areas are considered eligible terminal development: 

a. Sufficient space is eligible to house necessary equipment/items and personnel to support the 

FAR Part 139 safety and Title 49 CFR, Part 1542 security operations at the airport. That area is limited 

to that required by Title 49 CFR, Part 1542 “Airport Security” and endorsed by the Manager, Regional 

Civil Aviation Security Division as facilities required to meet Title 49 CFR, Part 1542. Any non-public use 

area beyond that required by Title 49 CFR, Part 1542 is not eligible. This may necessitate a prorated 

cost procedure for the terminal. 

b. Emergency operation command centers may be located in a separate building or within the 

terminal building. These facilities can vary widely in cost and complexity. Since their use is directly tied 

to the occurrence of major emergencies on airports (hijacks, bomb threats, major accidents), the 

following rules should be followed in determining reasonable and necessary costs of eligible work: 

(1) Only special facilities and equipment directly necessary for dealing with emergencies during 

a major incident are eligible along with the normal ARFF and security equipment required by FAR 

Part 139 and Title 49 CFR, Part 1542. Other equipment and facilities used for day-to-day airport 

operations may not be funded under this type of project even though they may be used during a major 

emergency. 

(2) Where an emergency operation command center is co-located with the airport operation 

center, as is often the case, a means of pro-rating the cost of space and facilities between eligible and 

ineligible portions must be developed. 

(3) Austerity should be sought, since such facilities will be rarely used. Amenities such as 

dormitories or kitchenettes are not considered directly necessary and are not eligible. Please consult 

with APP-520 as soon as details of such proposed projects are known. 

c. Buildings devoted to aircraft safety (aircraft rescue and firefighting) are normally located on the 

airfield side. (See Chapter 5.) 

604. EXPANDED TERMINAL ELIGIBILITY AND PARKING LOTS. 

Generally the Act prohibits using AIP funds for decorative landscaping, the provision or installation of 

sculpture or works of art, and the construction, alteration, or repair of public parking facilities for 

passenger automobiles or any part of an airport building except those identified in Paragraphs 601, 602, 

603 and 606. The following two exceptions should be considered: 

a. The ATSA makes mitigation of an explosive blast that would significantly damage a terminal 

building eligible under AIP. This would include barriers to prevent vehicles from entering an area in 

close proximity to a terminal building, a guard facility for the purpose of inspecting vehicles, or an actual 

deflection device constructed as a result of a blast analysis. However, replacement of parking lots would 

not be considered an air transportation security project. 

b. Section 47110(d)(2) expands the area of allowable costs to include terminal development in 

revenue-producing areas and construction, reconstruction, repair and improvement of non-revenueproducing public parking lots at nonhub primary and nonprimary commercial service airports. Nonrevenue-producing parking lots associated with a passenger terminal building or hangar are also eligible 

at nonprimary airports that do not have commercial service under 49 USC 47119(b)(5) provided 

requirements described in paragraph 526d(3) have been met. See Tables 13 and 14. 

Section 47110(d)(2) does not specifically alter the requirement that allowable costs be directly 

related to the movement of passengers and baggage in air commerce. However, allowable costs 

attributable to other revenue-producing areas in a terminal at an airport in this category are likely to be 

Page 110 
June 28, 2005 Order 5100.38C

incidental with respect to the total project cost. Therefore, allowable costs in a project for terminal 

development may include, in addition to other allowable costs, incidental costs attributable to revenueproducing areas other than those directly related to the movement of passengers and baggage in air 

commerce. 

Examples of such areas include space for a snack shop or vending machines, an alcove for pay 

telephones, and wall or floor space to accommodate rental car, lodging reservation facilities, or public or 

travelers information booths. In addition, the costs necessary to provide utilities, heating, ventilating, 

and air conditioning for such space are allowable. Costs related to administrative (nonpublic use) space 

and any equipment, furnishings or facilities used in revenue production (e.g., snack bar equipment or 

furniture, vending machines, telephones, reservation lines) are not allowable costs under this provision. 

Non-revenue producing parking lots not associated with the passenger terminal building (or a hangar in 

the case of nonprimary airports) are ineligible. Employee parking lots are ineligible. The FAA has also 

determined that a project solely to provide a restaurant, for example, in an existing terminal is not an 

eligible project. 

605. AMERICANS WITH DISABILITIES ACT OF 1990 (ADA) 

Section 47102(3)(F), makes projects to comply with the Americans with Disabilities Act of 1990 

eligible under the AIP. See Advisory Circular 150/5360-14. 

The provision applies for any construction, reconstruction, repair or improvement of an airport (or 

any purchase of capital equipment) which is necessary for compliance with the responsibilities of the 

owner or operator of the airport and does not primarily benefit a revenue producing area used by a 

nonaeronautical business, most often referred to as a concession. 

It is important that projects of this nature be scrutinized to determine that they are in fact the 

responsibility of the airport owner or operator. Many access projects may be required for an airport 

tenant (air carrier or other aeronautical business) under Title I of the ADA for employment purposes or 

required under the Air Carrier Access Act. These projects are not the responsibility of the airport and 

would be ineligible. On the other hand, some projects that had not been considered eligible previously 

are now eligible under this section of the Act. (For example, an elevator to airport offices for public and 

internal meeting use had not been considered eligible as terminal development since the elevator was 

not “directly related to the movement of passengers and baggage in air commerce". Under this 

provision, the same elevator may now be eligible if it is determined to be necessary to comply with 

ADA.) Projects to comply with Title I for airport owners or operators would be eligible, even though Title 

I requirements for other than airport owners or operators are ineligible. 

The Federal Share for these projects is the same as other airport development for the airport. 

606. EXPANDED ELIGIBILITY UNDER THE MILITARY AIRPORT PROGRAM (MAP). 

Some expanded eligibility at MAP locations will facilitate the transition of military facilities to civil 

airports. The greatest obstacle to growth at current or former military airports designated by the 

Secretary to receive funds under MAP may be inadequate facilities that are ordinarily ineligible. The 

expanded projects may be funded from MAP discretionary funds. Discretionary funding of expanded 

items may not exceed an aggregate amount of $10 million per airport per year in FY 2004-2005. 

Thereafter that amount will be $7 million. 

a. Passenger Terminal Buildings. Section 47118(e) of the Act makes eligible the construction, 

improvement or repair of a terminal building facility, including terminal gates used for revenue 

passengers getting on or off aircraft. The gates must not be leased for more than 10 years. The gates 

must not be subject to majority in interest clauses. 

b. Related Projects. Section 47118(f) of the Act makes eligible the construction, improvement, or 

repair of airport surface parking lots, fuel farms, utilities, hangars and air cargo terminal building facilities 

Page 111
June 28, 2005 Order 5100.38C

of an area that is 50,000 square feet or less. MAP airports may be reimbursed using entitlements, 

discretionary funds, or the MAP discretionary funding for the cost of construction work for these items 

performed in FY 2003-2004 prior to a grant. 

(1) Parking Lots. Parking lot eligibility is limited to parking facilities serving passenger terminal 

buildings. Allowable size is limited to that area needed to support the forecast parking needs of the air 

carrier passengers and other terminal users, as specified in the airport master plan. Reference FAA 

Advisory Circulars 150/5360-9, Planning and Design of Airport Terminal Facilities at Nonhub Locations, 

and 150/5360-13, Planning and Design Guidelines for Airport Terminal Facilities, to determine the scope 

of the parking development as based on forecasts. Provisions of Paragraph 526 are superseded by the 

MAP eligibility. 

(2) Fuel Farms. Fuel farm eligibility includes new construction of fuel farms (based on 

forecasted needs) and rehabilitation of existing fuel farms to bring them up to operating standards 

established by the EPA or local permitting agencies. FAA participation is limited to those fuel farms, 

which will be operated by the sponsor or leased to or managed by a fixed base operator for nonexclusive use by the flying public. The branch of the military that operated or currently operates the 

military airport is responsible for cleanup of contamination. Cleanup that has occurred under civil 

ownership or operation is ineligible. See Paragraph 515. 

(3) Utilities. Utility eligibility is generally allowable subject to proration in accordance with 

Paragraph 613. The eligibility of utilities at MAP locations is expanded to allow the rehabilitation of 

existing utility systems to support the aeronautical use portions of the designated airports. Projects on 

the non-aeronautical, revenue-producing portions of an airport are ineligible under this provision. See 

Paragraph 515. 

607. ENERGY ASSESSMENT. 

Energy assessments on new buildings or on the expansion of an existing building are eligible as 

incidental elements when part of the building design. They are not eligible items of work under a master 

plan. 

608. VALUE ENGINEERING. 

Value engineering is the systematic application of recognized techniques that identify the function of 

a project or service and provide the best function reliably at lowest overall cost. See Paragraph 1009. 

609. UTILITIES. 

The installation of water, gas, and electric utilities and wastewater treatment facilities will be eligible 

to the extent they are needed to serve eligible airport development projects. The allowable cost of any 

installation serving both eligible and ineligible areas or facilities will be a prorated share of the total cost, 

the method to be determined by the FAA Airports Office as in Paragraph 612a. (See Paragraph 612 and 

Appendix 12, Paragraph 1 for special conditions, and Paragraph 515 for airfield utilities. Also, see 

Paragraph 605 for utilities on former military airports.) 

610. RELOCATION OF AIR TRAFFIC CONTROL TOWERS AND NAVIGATIONAL AIDS. 

Section 47102(3)(E) of the Act makes eligible the relocation of an air traffic control tower (ATCT) and 

any air navigation facility aid (NAVAID) (including radar) if such relocation is necessary to carry out an 

AIP or PFC project. Such a project, therefore, is eligible airport development under the AIP. (See 

Paragraph 593(b).) 

This provision applies in those circumstances where the facility physically impedes the construction 

or future use of an approved AIP project (i.e., shown on an approved airport layout plan and 

environmentally approvable as well). Relocation of ATCTs solely to correct existing line-of-site problems 

would not be eligible. Also, the Act is specific in using the term “air traffic control tower". Therefore, 

Page 112 
June 28, 2005 Order 5100.38C

terminal radar approach control (TRACON) facilities, air route traffic control centers (ARTCC’S), flight 

service stations (FSS) and automated flight service stations (AFSS) are not eligible for relocation; an ILS 

or TVOR is eligible. 

Allowable costs under the AIP are limited to the costs incurred by an in-kind relocation; costs 

incurred for any upgrade in equipment or facility size are not eligible. In addition, AIP Funds will not be 

used to relocate an ATCT or navigational aid (including radar) that is presently included in the Facilities 

and Equipment (F&E) budget or CIP for the current and next 3 fiscal years. 

The programming priority of facility relocation will be the same as the project for which it is required. 

The AIP participation rate for such relocation should be the same as for the development item with which 

it is associated; i.e., the rate would be 75 percent for relocation to accommodate terminal development 

at a large primary airport, and 90 percent if done in conjunction with construction of a runway at a 

reliever airport. 

AIP funds may (as well as PFC revenues) be used for relocation of an ATCT or NAVAID only if the 

project, which necessitated this relocation, is funded under either AIP or PFC. 

APP-520 must be consulted if an airport sponsor applies, or intends to apply, for a grant to relocate 

an ATCT or NAVAID. These proposed relocations will be reviewed on a case-by-case basis. 

611. ELIGIBILITY LIMITATIONS. 

Terminal development, as defined in Paragraph 601, is eligible. The Federal share of allowable 

project costs for large and medium hub primary airports shall not exceed 75 percent. At all other 

commercial service airports the Federal share is 95 currently percent. 

a. Except as noted in Paragraphs 603-605 eligibility is limited to non-revenue producing public-use 

areas that are directly related to the movement of passengers and baggage in air carrier and commuter 

service terminal facilities within the boundaries of the airport. Typical eligible items include baggage 

claim delivery areas, automated baggage handling equipment, public-use corridors to boarding areas, 

central waiting rooms, restrooms, holding areas, and foyers and entryways, as well as loading bridges. 

Excluded would be those areas that are primarily revenue producing such as restaurants, concession 

stands, and airline ticketing areas. With regard to baggage areas and equipment serving those areas, 

only public-use areas associated with baggage claim delivery are eligible. 

(1) The fact that public-use areas are subject to a lease where monies are recovered to defray 

amortization, depreciation, maintenance, or operation costs of the building will not make such areas 

nonpublic or revenue producing and thus ineligible. In addition, the fact that areas may be limited in use 

for reasons of security or processing international passengers shall not affect eligibility. 

(2) Incidental use of public space for display or advertising, vending machines for public 

convenience, or coin-operated locks in restrooms will not render areas ineligible. However, costs 

associated with building adaptation for installation of these items are not eligible. In addition, areas 

Page 113
June 28, 2005 

Page 114 

Table 13 Terminal Eligibility by Commercial Service Airport Type 

COMMON AIRPORT NAME* ELIGIBILITY 

FEDERAL

SHARE

(%)** 

DISCRETIONARY FUNDS 

RESTRICTION 

ENTITLEM

Large & Medium Hub Limited to public use, non-revenue producing areas §47110(d)(1) 75 None, §47119 (b) does not allow the use of discretionary funds Any am

funds for 

Small Hub Limited to public use, non-revenue producing 

areas §47110(d)(1) 95 

None, §47119 (b) does not 

allow the use of 

discretionary funds 

Any am

funds for 

Nonhub Primary

May include revenue producing areas and 

non-revenue public parking lots. Does not 

include equipment and final finishes of 

restaurants and retail spaces 

 §47110(d)(2) 

95 

Any amount of discretionary 

and small airport funds 

Secretary approves

Any am

funds for 

Nonprimary Commercial 

May include revenue producing areas and 

non-revenue public parking lots. Does not 

include equipment and final finishes of 

restaurants and retail spaces §47110(d)(2)

95 

$200,000 / FY 

§47119(b)(2)(B) and 

§47119(b)(4)*** 

Nonprim

Note: See Table 14 for terminal eligibility by general aviation and special airport categories.  *See Paragraph 23 for information on types of airports.  **See Paragraph 26 for variations in Federal share. ***This limits program costs to $25,000,000 per fiscal year per airport.
June 28, 2005 

Table 14 Terminal Eligibility by General Aviation and Special Airport Categories 

COMMON AIRPORT 

NAME* ELIGIBILITY 

FEDERAL

SHARE

(%)** 

DISCRETIONARY FUNDS 

RESTRICTION 

ENTITLEM

Reliever §47102(18) 

May include revenue producing areas and 

non-revenue public parking lots. Does not 

include equipment and final finishes of 

restaurants and retail spaces §47110(d)(2)

95 $200,000 / FY §47119(b)(2)(B) Nonprim

Military Airport 

Program §47118 (a) 

Construct, improve, or repair a terminal 

facility, including gates for revenue 

passengers. Gates may not be leased for 

more than 10 years or subject to majority in 

interest clauses §47118 (a)

95 

Not more than $10,000,000 

/ FY at each airport ’04 and 

’05; $7,000,000 thereafter 

§47118(e) and (f)

Any amo

sp

Cargo Service 

§47114(c)(2) None 95 

Depends on requirements 

based on the airport’s other 

airport types or categories

General Aviation 

May include revenue producing areas and 

non-revenue public parking lots. Does not 

include equipment and final finishes of 

restaurants and retail spaces §47110(d)(2)

and §47119(b)(5)*** 

95 None, limited to nonprimary entitlements §47119(b) Nonprim

Note: See Table 13 for terminal eligibility by commercial service airport type.  *See Paragraphs 23 and 40 for information on airport program categories.  **See Paragraph 26 on variations in Federal share.

***Contact APP-520 for revenue-producing support facility proposals other than hangars and fuel farms.

.
June 28, 2005 Order 5100.38C

designed to provide income by serving the public through coin machines and similar collection methods 

such as cleaning and laundry areas, game rooms, etc., are not eligible. 

b. Terminal Passenger vehicles that are used exclusively within the boundaries of the airport 

primarily to move passengers between airline terminals or gates and devices used to board airline 

passengers with mobility impairments are eligible. Vehicles to transport passengers to and from aircraft 

are also eligible. The fact that monies are recovered to defray the costs of amortization, maintenance, 

and operations will not make such vehicles ineligible. Also, see AC 150/5220-21, Guide Specification for 

Devices used to Board Airline Passengers with Mobility Impairments. 

c. The construction or improvement of public-use areas of Federal inspection facilities, including 

baggage-handling equipment is eligible, with the following exceptions: 

(1) Administrative office space is not eligible, and 

(2) Special purpose equipment such as, computers, radios, video monitors, telephones, and 

teletypewriters are not eligible. Also space, such as training rooms and employee break rooms, are not 

eligible. 

d. Fixed terminal facilities and equipment including ramps, mechanical lifts, or other suitable 

boarding devices required by Title 49 CFR, Part 27 for access to aircraft by persons with disabilities to 

any aircraft with a minimum seating capacity of 19 passengers are eligible provided: 

(1) They are an integral part of the design of new terminal construction or are incidental to a 

major terminal renovation; 

(2) They are not minor items of personal property such as telephones, teletypewriters, etc. 

(Legal opinion, AGC-130, Aug.20, 1980); 

(3) They do not serve an area exclusively leased to a single carrier and are not themselves 

exclusively leased; and 

(4) Other terminal development eligibility criteria are met. 

612. MULTIMODAL TERMINAL BUILDINGS. 

Subject to the requirements in guidance above, AIP funds may be used to develop a multimodal 

terminal located within the boundaries of the airport. 

a. Multimodal terminal buildings serve as an interchange for passengers and baggage between two 

or more modes of transportation that operate on a scheduled basis under a franchise or similar authority 

granted by a Federal, state, or local agency. 

b. Only the portions of the building, which are directly related to air commerce, are eligible. 

APP-520 shall be consulted prior to the programming of any multimodal terminal project. 

613. PRORATION OF TERMINAL BUILDING WORK. 

Terminal building projects will usually involve work in both eligible and ineligible areas (See 

Paragraph 601 and Appendix 7, for special conditions). Federal participation may be determined by the 

following or other methods, as appropriate (and may be used for other eligible airport buildings): 

a. Detailed Cost Analysis. A detailed analysis is undertaken by the sponsor’s design consultant 

during the design stage and prepared on the basis of assigning costs to eligible areas under the 

guidelines in Paragraph 602. This analysis would also prorate costs for items such as site preparation, 

Page 116 
June 28, 2005 Order 5100.38C

foundations, and utilities that contribute to public-use areas. This method of proration is particularly 

applicable to new terminal construction. 

b. Proration on a Square Footage Basis. Construction costs are prorated on the ratio of the 

square footage that the eligible area bears to the total usable square footage of the structure. The 

proration of costs for items that contribute to public-use areas such as site preparation, foundations, and 

utilities is based on this ratio. This method of proration is particularly applicable to determining 

retroactive financial assistance for existing terminal facilities. 

614. TERMINAL DEVELOPMENT BOND RETIREMENT. 

For most airports, see the information on the payment of interest in Paragraph 504b. Additional 

information within this paragraph applies to a limited number of airports subject to the normal limitations 

on terminal development funding categories and levels. 

a. Repaying the principal of bonds for terminal development or other evidences of indebtedness is 

an allowable cost when carried out – 

(1) On or after July 1, 1970, and before July 12, 1976, at commercial service airports; 

(2) Between January 1, 1992, and October 31, 1992, at nonhub, commercial service airports; or 

(3) Between January 2003 and August 2004 at nonhub primary airports in the Military Airport 

Program during FY 2003. 

b. The reimbursement under this paragraph is eligible if: 

(1) The sponsor submits the required terminal development grant certification in Paragraph 600; 

(2) The Secretary of Transportation decides that using the amount to repay the borrowed money 

will not defer an airport development project outside the terminal area at that airport; and 

(3) Amounts available for airport development under Section 47119 of the Act will not be used 

for additional terminal development projects at the airport for at least 3 years beginning on the date the 

grant is used to repay the borrowed money subject to funding limitations. 

c. In addition to subparagraph b above at airports described in subparagraph a(2), eligible work is 

not subject to the requirements for Veteran’s preference, Davis-Bacon, Disadvantaged Business 

Enterprise, and the Brooks Act (professional services). 

615. - 619. RESERVED

Section 2. TERMINAL ACCESS

620. ACCESS ROAD ELIGIBILITY. 

The construction, reconstruction, and alteration of airport roads and related facilities may be eligible. 

a. Access Roads. Access roads and related facilities are eligible provided they meet the following 

conditions: 

(1) The access road may only extend to the nearest public highway of sufficient capacity to 

accommodate airport traffic. 

(2) The access road must be located on the airport or within a right-of-way acquired by the 

airport sponsor. 

Page 117
June 28, 2005 Order 5100.38C

(3) The access road must serve exclusively airport traffic. Any section of the roadway, which 

does not serve airport traffic exclusively, is ineligible. (AGC opinions, 1949, and 1951.) As an example, 

an airport is fronted by a retail and hotel development. That portion of the road that goes through and 

also serves the commercial development would not be eligible; however, that portion of the road 

continuing into the airport to the terminal would be eligible. As another example, a road that serves an 

airport terminal complex, then goes on to provide access to other unrelated airport development would 

not be eligible. Also, the access road must serve airport traffic exclusively and the cost of that road 

cannot be prorated on the basis of airport traffic to nonairport traffic. 

(4) More than one access road is eligible if the airport surface traffic is of sufficient volume to 

require more than one road. The justification for the additional access road(s) shall be supported by 

traffic counts and a recent traffic study. This study may be an element of a master plan study or an 

individual study specifically to support the proposed project. 

(5) Related facilities such as acceleration and deceleration lanes, exit and entrance ramps, 

street lighting, and bus stops also are eligible when they are a necessary part of an eligible access road. 

b. Public Circulation Roads. Roads constructed to provide for the circulation of passengers and 

freight on the airport are eligible except: 

(1) Roads exclusively for the purpose of connecting parking facilities to an access or circulation 

road (for roads that directly connect terminal facilities to ineligible public facilities, see Paragraph c. 

below); 

(2) Roads serving solely industrial or non-aviation related areas or facilities; and 

(3) Roads necessary only to maintain FAA facilities installed under the F&E program. 

c. Service Roads. Service roads located on the airfield side of the airport are eligible in 

accordance with Paragraph 527 if necessary for: 

(1) ARFF access to the runway and runway safety areas; or 

(2) Operation and maintenance of the airport. 

(3) A service road that provides incidental access to FAA or other non-aviation related areas or 

facilities may be eligible. 

(4) Roads constructed to provide separation of airport surface vehicles and aircraft may be 

justified on the basis of safety. This would depend on the amount of surface vehicle and aircraft traffic 

and the specific layout of the airport. 

d. Special Circumstances. Roads directly from a terminal to an ineligible (revenue producing) 

parking lot are eligible as would be sidewalks or people movers between eligible terminal areas and the 

ineligible parking lot. The Act provides that access to and from a terminal is eligible if it is necessary for 

the movement of passengers and baggage. This also includes sidewalks and people movers. In 

addition, access between an eligible terminal and an eligible parking facility (nonrevenue parking lot on a 

nonhub primary or nonprimary commercial service airport) is eligible. 

621. WALKWAYS. 

At commercial service airports, walkway facilities including surface sidewalks, moving sidewalks, 

tunnel walkways, stairs, and overhead walkways are eligible. Covers or canopies over surface 

sidewalks may be eligible when necessary to protect concentrations of persons from the weather such 

as at passenger loading or unloading areas. If structurally part of the terminal facility, they will be 

Page 118 
June 28, 2005 Order 5100.38C

considered as part of terminal development. At airports other than commercial service airports, surface 

sidewalks and bike lanes will be eligible only as an incidental part of an eligible access roadway project. 

622. ON AIRPORT RAPID TRANSIT SYSTEMS. 

a. Light Rail, Monorail, and Automated People Mover Systems. Light rail, monorail, and 

automated people mover systems, including equipment needed to provide operational control of the 

system, used to transport passengers and baggage between eligible terminals and parking lots and 

other areas of an airport are eligible. Stations or stops for passenger access are only eligible to the 

extent that they only provide passenger access. Any commercial areas, maintenance areas, employee 

parking lots, ticketing, or fare collection areas are ineligible. If any ineligible areas are included in the 

station’s design, the cost for the station must be prorated. Any operations, maintenance, storage facility, 

spare parts, spare equipment, any equipment required to perform any maintenance, whether that 

maintenance be on rail cars, structural elements, operations systems, or other components, 

administrative offices, and any track to a maintenance facility is ineligible. Also, extensive justification 

for an on airport passenger transportation system is required. This justification must include a 

discussion of other alternatives. Any such project should be coordinated with APP-520 before it is 

programmed. 

b. Rail Service to Airports. Rail service to an airport must meet the same eligibility criteria as 

airport access roads as found in Paragraph 620. The rail line must be limited to only serve passengers 

and employees traveling to and from the airport. Stations or stops for passenger access are only eligible 

to the extent that they only provide passenger and employee access. Any commercial areas, 

maintenance areas, ticketing, or fare collection areas are ineligible. If any ineligible areas are included 

in the station’s design, the cost of the station must be prorated. At a minimum, the eligibility/ineligibility 

in Paragraph a above would apply to rail service to airports. Also, any equipment needed for fare 

collections is not eligible. 

623. - 629. RESERVED. 

Section 3. OTHER TERMINAL LANDSIDE CONSTRUCTION. 

630. GENERAL. 

There are other terminal area projects that may be eligible. These projects may be required as a 

result of environmental findings, such as, water and air quality projects. (See Paragraphs 544, 547(d), 

580,and 586). 

631. ESTABLISHMENT OF STRUCTURES ON FEDERALLY OBLIGATED PAVED AREAS. 

An airport sponsor may construct a locally funded structure for deicing or anti-icing purposes (only) 

on an AIP funded taxi lane or apron, even if that structure would be located on an existing Federally 

obligated pavement. (See Paragraph 526b.) A sponsor may build more than one shelter for additional 

capacity. Other types of structures are not permitted. The FAA will take appropriate action to ensure 

sponsor compliance with the following requirements when a deicing or anti-icing structure is constructed: 

a. Any proposed anti-icing shelters; adjacent hangars or related facilities must be depicted on the 

FAA-approved ALP prior to initiating work. The size of the structures must accommodate an appropriate 

range of user aircraft if limited anti-icing facilities are available. In reviewing the ALP, FAA Airports 

offices should give special attention to any adverse impacts that such construction may have on taxi or 

run up operations at the airport. 

b. The sponsor will establish a fee schedule for use of the structures consistent with the assurance 

that requires that the airport be as self-sustaining as possible. Use of the structures during fair weather 

and for other than deicing/anti-icing purposes will be considered in establishing the fees. 

Page 119
June 28, 2005 Order 5100.38C

c. The sponsor may not operate the structures on an exclusive or near exclusive basis, and the 

sponsor must establish procedures for management and operation of the structure to ensure prompt 

access to the facility for each potential user. This may include movement of aircraft parked within the 

shelters to accommodate other airport users. 

632. - 639. RESERVED. 

Section 4. AIP/PFC PROGRAM DISPARITIES

640. GENERAL. 

There are few disparities between the AIP and PFC programs and they are as follows: At large, 

medium, and small hub airports the terminal baggage makeup area is not eligible under the AIP program 

except as described in Paragraph 602(c). Under the PFC program, this area would be eligible. Also, 

non-exclusive use baggage makeup equipment (conveyors) owned by the sponsor would be eligible 

under the PFC program. This equipment would not be eligible under the AIP. These areas are 

considered “gates and related areas", which is an area of additional eligibility for the PFC program. The 

ineligible areas must be prorated for an AIP grant; however, the PFC program would not require a 

proration. In addition, the PFC program is not subject to the source of funding limitations to which the 

AIP is subject. At nonhub primary airports and nonprimary commercial service airports, revenueproducing areas are eligible under both programs. See Paragraph 600(g) and Table 11. Also, for a 

more detailed discussion on the PFC program, and more specifically gates and related areas eligibility, 

please refer to FAA Order 5500.1. 

641. - 699. RESERVED. 

Page 120 
June 28, 2005 Order 5100.38C

Chapter 7. L AND ACQUISITION P ROJECTS

Section 1. LAND ACQUISITION

700. GENERAL. 

a. The acquisition of any interest in land is eligible when it is necessary for airport purposes, 

provided the land was acquired after the date of enactment of the Federal Airport Act, May 13, 1946. 

For reimbursement of land costs, see paragraph 310a(4). 

(1) The cost of all real property acquired for AIP purposes shall be supported by a real estate 

appraisal and accepted settlement justification in accordance with Order 5100.37A, Land Acquisition and 

Relocation Assistance for Airport Projects, and in Advisory Circular 150/5100-17, Land Acquisition and 

Relocation Assistance for Airport Improvement Program Assisted Projects. These documents contain 

detailed coverage of the appraisal and acquisition of real property, and are expected to be used as 

complimentary guidance to Order 5100-38, Airport Improvement Program Handbook. 

(1) The term “airport purposes", as used herein, refers to all aviation activities normally found 

on an airport. Although many infrastructure and construction elements are not eligible for AIP, the land 

they occupy would be eligible for acquisition. 

(2) The term “necessary", as used above, is relative and need not be so narrowly applied as to 

limit land acquisition to the minimum presently required for the airport. The acquisition of any interest in 

land if it is necessary for future as well as current airport development purposes shall be encouraged 

based on reasonable projections contained in the latest airport master plan but, not to exceed 20 years 

of aeronautical need as determined by the FAA Airports Office. 

b. The approved ALP serves as a primary basis for determining the areas of land necessary for the 

airport. Generally, land necessary for airport purposes includes the building areas, landing area, runway 

protection zones, approach areas, areas for noise compatibility, and offsite areas required for airport 

utilities, such as sanitary sewers, storm drainage, electrical power, and obstruction lighting facilities. 

c. Eligible land acquisition will normally be fee simple; however, some lesser interest may be 

acquired if that interest is legally sufficient for the purpose of the grant. However, when the cost of a 

lesser interest approaches the cost of a fee simple interest, the acquisition in fee simple is encouraged. 

It may also include extinguishment of easements or other interests in land held by others, such as 

mineral rights, which interfere with or might adversely affect the development or operation of the airport. 

d. Existing property lines and boundaries created by nature such as rivers and manmade 

development (highways, railroads, etc.) should be recognized in delineating areas of land to be 

acquired. There will be instances where it is prudent for a sponsor to acquire an entire parcel of land 

rather than a specific portion that is the minimum needed for airport projects, (such as where the entire 

parcel can be purchased for approximately the same price as the portion required for airport purposes). 

This excess land should be treated in accordance with Paragraph 702 of this Order. 

e. Where a partial acquisition would leave the owner with an uneconomic remnant (defined at 

Title 49 CFR, Part 24.2 1

), as required under the Uniform Relocation Assistance and Real Property 

Acquisition Policies Act of 1970 (Uniform Act) the airport owner shall offer to purchase the remnant 

 

1 uneconomic remnant. The term "uneconomic remnant" means a parcel of real property in which the owner is left 

with an interest after the partial acquisition of the owner's property, and which the airport sponsor has determined has 

little or no value or utility to the owner. 

Page 121
June 28, 2005 Order 5100.38C

parcel in addition to the property needed. Uneconomic remnants may be incorporated into airport 

property as feasible, or disposed of in accordance with Paragraph 702 of this Order. 

701. LAND ACQUISITION FOR CURRENT AIRPORT DEVELOPMENT. 

The acquisition of land or any interest in land for current airport development is eligible when 

necessary for: 

a. Airside Development. Runways, taxiways, associated safety areas, ramps, aprons, and the 

land adjacent to these facilities required by current standards for separation and clearance. In addition, 

land for ultra light operations at an existing airport is eligible when necessary for safety or capacity 

purposes and if the airport itself is eligible to receive grant funding. 

b. Protection of The Airport Approach Area. The approach zones (including runway protection 

zone), horizontal, conical, and transitional zones at airports required to convey a right of flight. This also 

includes the right to remove existing obstructions and to restrict the establishment of future obstructions 

(See Chapter 5, Section 9). As used in this paragraph, zone means land lying under the appropriate 

Part 77 surface. 

(1) Runway Protection Zone (RPZ). The sponsor should be strongly encouraged to acquire 

fee title to all land within the RPZ, with first priority given to land within the Object Free Area. See 

Paragraph 581. If the fee title acquisition is impracticable, an avigation easement is required. This 

easement must convey the right of flight with inherent noise and vibration below the approach surface, 

the right to remove existing obstructions, and a restriction against the establishment of future 

obstructions. Alternatively, for existing runways the RPZ may be subject to written agreements (rather 

than an easement) with a public agency, e.g. a State highway division, to control the use of land. The 

grant agreement must contain the special condition in Appendix 7, Paragraph J which obligates the 

sponsor to protect the runway protection zone. 

(2) Approach and Transitional Zones. Land interest is eligible when acquisition is necessary 

to restrict the use of land in the approach and the transitional zones (the dimensions as cited in the 

applicable AC’s) to activities and purposes compatible with normal airport operations as well as to meet 

current and anticipated development at the airport. Unless there is a need for the land for future 

development or noise compatibility purposes, sponsors should be encouraged to acquire the minimum 

property interest necessary to ensure safe aeronautical use. For approach zones, except for noise 

compatibility, fee simple acquisition beyond 5000 feet from the end of the existing or proposed primary 

surface will not normally be eligible. 

(3) Protection of Horizontal and Conical Surfaces. Normally zoning will be adequate to 

provide the necessary rights and protection above the entire horizontal and conical surface. In any 

case, where an easement or fee title acquisition is needed to provide such rights, special justification 

should be included in the project file to document such need. 

c. Landside Development. Items include airport terminal and administrative buildings; hangars; 

equipment buildings; fixed base operator buildings; and other airport buildings needed in connection with 

the operation and maintenance of the airport. The building area also includes the tie-down area, 

transient parking apron, automobile parking, access roads, and walks. Land acquisition specifically for 

development of industrial or nonaeronautical commercial building areas is ineligible. 

d. Navigational Aid Facilities. Land may be acquired for the installation, operation, and 

maintenance of a Sponsor owned navigational aid or another aid (including a precision approach 

system) used by aircraft for landing at or taking off from the airport, whether located within or outside of 

the airport boundary. Also, a relocation site may be acquired for an air traffic control tower and any 

NAVAIDs (including radar) if the relocation is required by eligible airport development and if the sponsor 

is responsible for such relocation. (See Paragraph 305.) 

Page 122 
June 28, 2005 Order 5100.38C

e. Installation of Airport Utilities. Right-of-way for drainage, sanitary sewers, storm water runoff, 

utility lines, etc., that are located outside the airport boundary. 

f. Mitigation of Airspace Conflicts. The resolution of a conflict caused by the proximity of two or 

more airports, which cannot be resolved by an acceptable operational or design alternative. Allowable 

costs for resolving such conflicts are limited to the lesser of the following: 

(1) The appraised value of acquisition of any easement or of placing a restrictive covenant on 

the property necessary to permit full development and use of facilities eligible for AIP grants-in-aid. The 

value of the easement or restriction must be based on appraisals using the Before-and-After Method as 

described in Paragraph 2-21, Order 5100.37A. 

(2) An amount equal to the difference in cost between fee simple acquisition of the property and 

the resale of the property at full market value after imposition of appropriate restrictions to allow airport 

development. If this method is used, the sponsor should be cautioned that the Uniform Act may apply, 

depending upon the sponsor’s acquisition techniques. Also, the grant may not include any provision for 

directly paying sponsor costs of fee simple acquisition. 

702. TREATMENT OF UNNEEDED REAL PROPERTY.

Normally, AIP funds may be used to pay the Federal share of the cost of acquiring only such land as 

is needed for airport or noise compatibility purposes. However, where the sponsor must acquire a tract 

of land in excess of airport needs and where the land or improvements will be immediately disposed of, 

the grant may be based on the full value of the parcel, including that part which is excess. The net 

proceeds from the sale shall be deducted from the grant amount before project closeout. In those cases 

in which the sponsor does not intend to sell the excess property immediately after acquisition, the 

amount of the purchase price attributable to such property shall not be included in the grant. If, after 

having originally selected the option of immediate disposal, the sponsor elects after grant award to retain 

any property for nonaeronautical purposes, the amount attributable to that property retained shall be 

deducted from the grant. 

703. RETENTION OF EXCESS LAND FOR NOISE PURPOSES. 

Where the sponsor must acquire a tract of land for airport development and a portion of the tract is in 

excess of airport development needs and that portion is to be retained for noise purposes, the excess 

land must meet the requirements contained in Chapter 8, Section 2. 

704. RELOCATION AND REAL PROPERTY ACQUISITION ASSURANCES. 

For projects that involve the acquisition of real property or which result in the relocation of any 

person or business, the sponsor must satisfy certain requirements of the Uniform Act and the 

implementing DOT regulations contained in Title 49 CFR, Part 24. Information on these requirements is 

contained in Order 5100.37A, Land Acquisition and Relocation Assistance for Airport Projects, and in 

Advisory Circular 150/5100-17, Land Acquisition and Relocation Assistance for Airport Improvement 

Program Assisted Projects. These assurances are required both for all FAA assisted projects and 

programs where acquisition or relocation is required or contemplated, and for projects to reimburse the 

sponsor for prior acquisition or relocation. 

705. LAND ACQUISITION FOR FUTURE AIRPORT DEVELOPMENT. 

a. General. Acquisition of land for future airport development is eligible if it is based on reasonable 

projections of aeronautical need as determined by the FAA Airports Office. “Future development” is 

considered to be the development of a facility more than 5 years after acquisition. A sponsor may 

consider such land acquisition in planning a new airport or in the orderly development of an existing 

airport. Justification for use of current AIP funding for long term land needs must be documented, taking 

into consideration such factors as rising land costs, encroachment on available land by incompatible 

uses and development, and the probable unavailability of land for airport use in the future. The property 

Page 123
June 28, 2005 Order 5100.38C

acquisition must conform to Uniform Act requirements and persons displaced shall be provided 

relocation assistance and payments as prescribed. The acquisition of land for future airport 

development must meet the requirements of the National Environmental Policy Act (NEPA) of 1969, as 

implemented by the current versions of FAA Orders 1050.1 and 5050.4. 

b. Requirements. No project to acquire land for future development of a proposed airport shall be 

approved unless the following requirements have been satisfied: 

(1) There is a valid aeronautical need for the land; 

(2) The site selected has been approved by the FAA; 

(3) Airspace clearance for the site has been granted; 

(4) There is an approved airport layout plan; and 

(5) Environmental concerns have been identified and addressed in accordance with NEPA. 

c. Special Conditions. The grant document shall include the special conditions specifically 

drafted for projects that include land as contained in Appendix 7, Paragraph K. 

d. Land Banking and Purchase of Land Options. Studies of the concepts of "Land Banking" and 

"Purchase of Land Options" were conducted to determine if there were conditions and procedures that 

enabled acquisition of land needed for future airport development in the current time frame. The 1977 

study of land banking assesses the potential to ensure the future availability of land for airport 

development. A study of the purchase of land options was completed in 1997. That study summarized 

some of the findings and conclusions of the land banking study. It then evaluated the concept of 

purchase of land options as used in the private sector with a view toward adapting the concept to 

Federal projects. It provides a comprehensive overview of the use of land options, with an emphasis on 

terminology used in the commercial real estate arena. The study also summarizes Federal experience 

with advance purchase of land for future development. The study concludes that the concept of 

purchase of land options may have limited usefulness in the Federal sector. The study is available on 

the APP-500 web site at the following address: http://www.faa.gov/arp/500home.htm. The report, Land 

Options Used in Federally Funded Airport Projects, is listed near the bottom of the page and is available 

for viewing and downloading in both HTML and PDF. 

706. LAND ACQUISITION FOR NOISE COMPATIBILITY. 

a. General. The acquisition of, or interest in, land to ensure that such land is used only for 

purposes compatible with the noise level of the airport is eligible provided: 

(1) It is a noise compatibility program measure approved by the FAA pursuant to FAR Part 150; 

(2) It is reimbursement for noise land acquired through FY 1986 or it was a noise compatibility 

project included in a multi-year grant that was entered into prior to FY 1987. In either of these cases, the 

project must have been an element of a noise compatibility program determined by the FAA to be 

substantially consistent with the purposes of reducing existing noncompatible land uses and preventing 

the introduction of additional noncompatible land uses under Title 49 U.S.C., Section 47504(c)(2)(c). 

(3) It is required as a mitigation measure in an environmental document for airport development 

upon which approval of the project is conditioned. 

b. Areas below DNL 65 dB. Airport sponsors may determine that local circumstances warrant 

land acquisition for noise compatibility, including noise buffers, in areas of moderate noise exposure 

(i.e., either between DNL 65-60 dB or between DNL 65-55 dB). Such acquisition is eligible when 

supported by appropriate documentation from the sponsor and approved in a Part 150 program or FAA 

Page 124 
June 28, 2005 Order 5100.38C

environmental document. Contact APP-600 for assistance in advising sponsors on documentation. The 

funding priority for land outside DNL 65 dB is lower than for land subject to significant levels of noise 

exposure. 

c. AIP/PFC Program Disparity. PFC eligibility differs from AIP eligibility. To be eligible for PFC, a 

noise mitigation project must be located in an area adversely impacted by noise and the proposed 

mitigation must be eligible for approval as a noise compatibility measure under Part 150 if it were so 

submitted. However, PFC funded projects do not have to be submitted to FAA in a Part 150 program 

and do not have to receive Part 150 approval. Where a project is not in an approved Part 150 program, 

FAA requires a sponsor to provide documentation demonstrating that the project will accomplish a noise 

mitigation purpose that would be eligible for approval under Part 150. The eligibility of the proposed 

noise project must be supported by noise contours that could be prepared in conjunction with a Part 150 

study, environmental document, or other suitable planning analysis. Noise mitigation in areas of 

moderate noise exposure below DNL 65 dB is also eligible, as with AIP. 

707. ACQUISITION OF A PRIVATE AIRPORT BY A PUBLIC SPONSOR. 

a. General. The acquisition of a private airport by a public sponsor will normally include acquisition 

of lands already developed as a privately owned airport and of all structures, fixtures, and improvements 

constituting a part of the realty. A public sponsor, when purchasing an existing privately owned airport, 

normally acquires all land owned and used for the airport. To do otherwise would encourage “through 

the fence operations.” 

b. Highest and Best Use - As an Airport. The value of structures, lands, or other development, 

which would be ineligible for inclusion in a construction or land acquisition project under the AIP, may 

not be included in the grant amount when the appraisal is based on the highest and best use as an 

airport. 

c. Highest and Best Use - Other than an Airport. If the basis of an appraisal is the highest and 

best use other than as an airport, the grant may be based on the entire appraised estimate of value. 

d. Legal Review. A legal review shall be made of the agreement of sale to ensure that the 

sponsor can carry out all of the grant obligations. Particular attention should be paid to any on-going 

agreements with former owners. 

708. LAND ACQUISITION AT A PRIVATELY-OWNED PUBLIC USE AIRPORT 2. 

a. Eligibility of Land. The eligibility of land acquisition at privately owned public use airports is 

limited to that land necessary for landing areas (including helipads), taxiways, aprons, associated safety 

areas, and runway protection zones or land necessary to improve safety. A private sponsor can only 

acquire land needed for AIP eligible development. 

b. Ineligibility of Land. The acquisition of land for an entire airport for a private sponsor is 

ineligible. 

c. Full Disclosure. The sponsor must provide full disclosure of any prior interest it may have had 

in any land proposed for acquisition. Where such interest exists or existed, the FAA Airports Office 

should contact APP-520 for guidance. 

 

2 As defined in Paragraph 208. Private Airport Owners. This may be an individual, a partnership, corporation, etc., 

that owns or operates a reliever airport or a public use airport that receives scheduled passenger service of aircraft 

which enplane annually 2,500 or more passengers. 

Page 125
June 28, 2005 Order 5100.38C

709. LAND ACQUISITION FROM A STATE/LOCAL PUBLIC AGENCY. 

The FAA Airports Office shall determine that land acquired from another public agency is, in fact, a 

bona fide sale to the sponsor, and that such land was not transferred merely for the purpose of making 

the land eligible for Federal Funding. This pertains to purchase from another public agency and not 

donation. Donated land valuation is covered in Chapter 3. 

Section 2. TITLE AND PROPERTY INTEREST

710. TITLE REQUIREMENT. 

Title 49 U.S.C., Section 47106(b)(1) states that no project grant application for airport development 

may be approved by the Secretary until the Secretary is satisfied that the sponsor, a public agency, or 

the United States Government holds good title to the areas of the airport used or intended to be used for 

the landing, taking off, or surface maneuvering of aircraft, or gives assurance to the Secretary that good 

title will be acquired. 

711. TITLE FOR LANDING AND BUILDING AREAS. 

a. General. Title with respect to lands to be used for landing area or building area purposes can be 

either fee simple title (free and clear of any and all encumbrances), or title with certain rights excepted or 

reserved. Any encumbered title must not deprive the sponsor of possession or control necessary to 

carry out all obligations under the grant. A deed containing a reversionary clause, for “so long as the 

property is being used for airport purposes", does not negate good title provided the other conditions are 

satisfied. Where rights excepted or reserved would prevent the sponsor from carrying out its obligations 

under the grant, such rights must be extinguished or subordinated prior to approval of the project. 

b. Airport Property Subject to a Mortgage. The existence of a mortgage on the airport property, 

in and of itself, is not a sufficient reason to render such project ineligible. However, the sponsor’s ability 

to meet the principle and interest payments on the mortgage must be determined prior to the approval of 

the project. 

c. Lease of Aeronautical Land. Privately owned public use airport sponsors that qualify for 

Federal funding under AIP must own the landing and building areas and may not be a lessee of land for 

aeronautical purposes. In those instances where the public sponsor’s title consists of a long-term lease, 

such title is satisfactory provided the following conditions are met: 

(1) If the landing area is leased, the lessor must be a public agency; 

(2) The sponsor has a long-term lease (minimum of 20 years from the date of the grant) to all 

landing areas and building areas; 

(3) The lease contains no provision which prevents the sponsor from assuming any of the 

obligations of the grant agreement; and 

(4) That consideration for the entire lease is paid in advance. However, this condition may be 

waived if the sponsor has adequate financial resources to assure future lease payments. 

712. TITLE FOR OFF-AIRPORT AREAS. 

Property interests required in off-airport areas (See Paragraph 303) must be sufficient to assure that 

the sponsor will not be deprived of its right to occupy and use such lands for the purposes intended. 

Page 126 
June 28, 2005 Order 5100.38C

713. DETERMINATION OF ADEQUATE TITLE. 

A certification by a sponsor that it has acquired property interests required for a project may be 

accepted in lieu of any detailed title evidence (See FAA Order 5100.37A Paragraph 3-13) and need not 

be submitted to the Regional Counsel unless the regional Airports Division Manager considers legal 

review necessary. Without such certification, the sponsor’s submission of title evidence must be 

reviewed to determine adequacy of title. The adequacy of such title is an administrative determination 

made by FAA Airports Office personnel and need not be submitted to Regional Counsel for review 

unless there is reason to suspect title is not adequate. 

714. TITLE REQUIREMENT PRIOR TO NOTICE TO PROCEED. 

Authorization for the sponsor to issue a notice to proceed with construction work should not be given 

until it has been determined that all required property interests on which construction is to be performed 

have been or will be acquired in conformance to the Uniform Act and that comparable replacement 

dwellings have been made available to persons displaced from their homes. The Sponsor Uniform Act 

Certification and Certification of Title may be accepted in making these determinations and should be 

provided to the FAA prior to notice to proceed being issued (See Chapter 9 of AC 150/5100-17). See 

Paragraph 1203 for more information. 

715. - 719. RESERVED. 

Section 3. LAND COSTS

720. GENERAL. 

The purchase price or cost of land, including justified administrative settlement amounts (See FAA 

Order 5100.37 for acceptable criteria) and costs incidental to the acquisition of any property interest 

necessary for airport purposes including appraisal costs, is allowable provided such costs are necessary 

and reasonable in amount. Sponsor costs for obtaining title insurance for lands it purchased are not 

allowable. The sponsor shall maintain adequate documentation to support costs as eligible for Federal 

reimbursement. A documentation checklist and quality control guidelines are provided in 

AC 150/5100-17. 

721. RELOCATION COST. 

a. General. The cost incurred by the sponsor to meet the requirements of the Uniform Relocation 

Assistance and Real Property Acquisition Policies Act of 1970 is eligible for Federal assistance as 

project costs except that the Federal share of the cost incurred by the sponsor of providing payments 

and assistance under the Act from January 2, 1971 through June 30, 1972, is 100 percent of the first 

$25,000. (See Order 5100.37A.) Also, see Appendix 7 for special conditions for land in projects. 

b. Examples of Relocation Costs: 

(1) Moving expenses; 

(2) Reestablishment expenses; 

(3) Replacement housing payments; 

(4) Rent supplements; 

(5) Down payments; 

(6) Mortgage interest differentials or mortgage buy downs; 

(7) Incidental expenses in connection with the acquisition of replacement housing; 

Page 127
June 28, 2005 Order 5100.38C

(8) Advisory services; and 

(9) Preparation of feasibility studies and relocation plans. 

722. REIMBURSEMENT FOR LAND PREVIOUSLY ACQUIRED. 

b. For public sponsors the grant shall be based on the value of the land at the time it was acquired 

by the sponsor. Where it is necessary to substantiate the reasonableness of cost of land previously 

acquired, an examination of the facts surrounding the transaction should be made. If the sponsor, at the 

time of acquisition, did not obtain and use appraisal reports, a historical appraisal shall be prepared. For 

private reliever sponsors AIP funds may be used to reimburse at the current fair market value for land 

acquired prior to receipt of a preapplication. 

c. Title 49 U.S.C. provides a special rule regarding the valuation of land contributed by the sponsor 

of a privately owned reliever airport. Unlike public sponsors, owners of eligible privately owned reliever 

airports receive current fair market value for land contributed (not donated) to a project as the sponsor’s 

share. Title 49 U.S.C., Section 47109(c) provides that a privately owned reliever airport that contributes 

any lands, easements, or rights-of-way to carry out a project under AIP is permitted to credit the current 

fair market value of these property interests toward the non-Federal share of allowable project costs. 

Public sponsors, however, continue to receive credit based on the cost or value at the time of 

acquisition. The methodology for applying this provision is unchanged from that set forth in Paragraph 

353, except that, for a project at a private reliever airport in which land is contributed in lieu of cash for 

the local share, the basis for the value of the land must be based on the current fair market value. Such 

claims of valuation should be supported by recent credible appraisals. Land contributed to a project, 

whether by a public or private sponsor, is subject to Assurance 31 should the sponsor propose to 

dispose of the land. 

(1) The background on the evolution of the current policy for valuation of previously acquired 

land is provided below. 

(a) A letter was written to Congress on behalf of a privately owned reliever airport owner's 

concern for the way the Federal Aviation Administration was handling land reimbursement policy at 

private reliever airports, and in particular, his. His contention was that he was donating land for the 

airport development project and therefore should be able to claim current fair market value. He also 

contended that we were treating private and public relievers differently. 

(b) An evaluation of his assertion resulted in the conclusion that he was confusing two 

distinct and separate matters related to land. He consistently referred to donated land in his letters to 

his Congressman. In his case, he was not dealing with donated land, which would entail a gift from 

another party. Instead, he was dealing with the issue of using previously acquired land as the sponsor's 

matching share for a new Federal grant. 

(c) The policy, in effect at the time, on the use of previously acquired land was based on 

legislation contained in Title 49 U.S.C.. Specific language in Title 49 U.S.C., Section 47110(c) outlines 

eligibility of certain prior costs as allowable costs in a new grant. The costs of formulating a project, 

including costs incurred after May 13, 1946, to acquire interests in land, may be included in a grant 

associated with the project. It should be noted that this section provides no authority to base the grant 

amount on other than the actual costs incurred by the sponsor, or to reimburse any land acquisition 

costs incurred on or before May 13, 1946. 

(d) This provision, as it applies to public airports, has been in effect since 1946, the first 

year of Federal grant programs for airports. Under this provision, a sponsor may include the cost of all 

or a portion of previously acquired land in a project grant application. The grant is then issued, in effect, 

for a project in which land acquisition and construction costs are combined, and the grant amount is 

based on the Federal share of the combined allowable costs. When the cost basis of such land equals 

the sponsor's share of total project costs, the sponsor need contribute no cash toward the construction 

Page 128 
June 28, 2005 Order 5100.38C

costs of the project. For example, in a project with construction costs of $90,000, the inclusion of 

$10,000 in previous land acquisition costs would result in combined project costs of $100,000. With the 

Federal share set at 90 percent of allowable project costs, the AIP grant would be $90,000 and the 

sponsor would not need to make any additional cash contribution. 

(e) When legislation was enacted establishing the eligibility for AIP grants at private reliever 

airports, FAA did not apply the provision for reimbursement of prior land acquisition costs to privately 

owned airports. This, however, did not preclude the use of AIP grant funds to acquire additional 

development land where needed at a private reliever airport. 

(f) A 1994 conference report directed the FAA to determine if private relievers should be 

treated differently in regard to the valuation of land they used in a project. The inference was that the 

land had been relatively worthless before being developed as an airport, and to use that value would not 

provide the sponsor the ability to maximize his return on the increased value of the land as an airport. It 

was found that the improvements to the land and the valuable contribution of the airport to the Nation’s 

aviation system were not being recognized. However, there was no authority under Title 49 U.S.C., 

Section 47110 to revise the policy of land valuation for private relievers. 

(g) The FAA's response to Congress identified rationale for interpretation of legislative 

intent being applied to valuation of previously acquired land. 

3. Most of the 3,400 airports in the FAA's National Plan of Integrated Airport 

Systems are small publicly owned facilities, and, as at private airports, funds for the matching share on 

Federally assisted projects are extremely limited. Using the cost of previously acquired land allows a 

sponsor, public or private, to obtain a grant for an important project without a cash outlay for the 

sponsor's share. Public owners have always been reimbursed for previously acquired land based on 

their actual acquisition costs. The same provision, at that time, was being applied to private owners. 

4. The authority provided in Title 49 U.S.C., Section 47110(c) to reimburse an airport 

sponsor for project formulation costs incurred after May 13, 1946, including costs to acquire land or 

interests in land for airport development, refers to costs incurred. This section sets forth an exception to 

the more general provision in Section 47110(b) that likewise defines allowable costs in terms of costs 

incurred. The FAA found no statutory basis for reimbursing a sponsor for an amount other than its 

actual costs incurred. Thus, in the example noted above, no basis in law could be found for valuing the 

land at any amount other than $10,000 for determining total project costs or actual local share. 

(h) Based on the findings by FAA, Congress acted to clarify their intent in relation to private 

reliever airports. Section 1211 of the Federal Aviation Reauthorization Act of 1996 amends Section 

47109 to change the way land reimbursement is treated when a privately owned reliever airport uses a 

portion of existing airport land for use in a project to cover the non-Federal share. The current fair 

market value, instead of the fair market value at time of acquisition, is now to be used to determine the 

value of the land included in the project. 

(i) This change results from our findings during the past several years that the private 

relievers should be treated no differently than public relievers and legislation would not permit any other 

method. Although this change validates our previous eligibility determination for valuing land included in 

an airport project, we must now treat public and private reliever airports differently. 

d. There have been suggestions that in the past we may have allowed some private reliever 

sponsors to obtain current fair market value for land they included in projects. We believe this may have 

resulted from a misinterpretation of the terms “donation” and “reimbursement”. If it is found that an error 

was made through confusion of terms, the fact should be documented in the project folder. It is not likely 

that recovery of excess funds would be feasible or possible. That fact should also be noted in the folder. 

Page 129
June 28, 2005 Order 5100.38C

723. LAND ACQUIRED THROUGH CONDEMNATION. 

The cost of land or property interest established by the courts in a condemnation proceeding may be 

accepted as a reasonable cost, even though above current appraised value. However, if the FAA has 

reason to believe that the court award is excessive, the sponsor should be requested to appeal the 

award. While infrequent, there have been cases where the amount of the original award has been 

reduced on appeal because it was found to be excessive and unreasonable. There have been other 

cases where the condemner, after withdrawing from the proceeding because of excessive amount of the 

award, obtained the land involved by negotiation or subsequent condemnation at a lower price. Attorney 

fees, interest, and other incidental expenditures included in a court award to land owners in a 

condemnation action may be included as project costs. 

724. LAND EXCHANGE. 

The acquisition of land required for the airport, through the exchange of other land owned by the 

sponsor, constitutes an eligible project cost. In such cases, the value of the sponsor-owned land will be 

determined in the same manner in which the value of donated land is established. In the case of a 

donation (See Paragraph 351), the maximum value eligible for Federal participation is the fair market 

value at the time the property was conveyed to the sponsor, as determined by an independent historical 

appraisal in accordance with Paragraph 722. Therefore, if the sponsor acquires property from some 

third party through the exchange of other property it owns, it may seek reimbursement from the FAA for 

the appraised fair market value of its property with a date of value as of the time that property was 

originally conveyed to it. 

725. LAND LEASES. 

Lease payments in the form of periodic rental payments for use of land owned by another public 

agency are considered to be operating costs and are not eligible. However, prepaid rent, which is 

payment in full in advance for the full term of the lease, is eligible. The pre-paid rent should reflect the 

present value of the rent payments not to exceed the current fair market value of the real property 

leased. 

726. NONALLOWABLE LAND COSTS. 

See Paragraph 311.g. for limitation on interest charges related to land acquisition. Land costs 

should exclude payments that exceed entitlements prescribed in Title 49 CFR, Part 24 and for items 

generally held to be non-compensable in eminent domain (e.g. compensation for loss of business, 

goodwill, frustration of development plans, and applicable limitations as described in the Uniform 

Appraisal Standards for Federal Land Acquisitions available on the Department of Justice web site at the 

following address: http://www.usdoj.gov/enrd/land-ack). DOJ appraisal standards are used to describe 

the compensable limits. Some of the provisions of the DOJ appraisal standards do not apply where the 

state or local government is taking title, and only apply when taking title in the name of the USA and 

having condemnations in US Courts. The FAA appraisal standards conform to Title 49 CFR, 

Part 24.103 and are described in FAA Order 5100.37A, Land Acquisition and Relocation Assistance for 

Airport Projects, and in Advisory Circular 150/5100-17, Land Acquisition and Relocation Assistance for 

Airport Improvement Program Assisted Projects. Consult APP-600 for other suspected nonallowable 

land costs. 

727. - 729. RESERVED. 

Section 4. DISPOSAL OF UNNEEDED LAND

730. DISPOSAL OF LAND. 

Land that initially had an aeronautical purpose, but is no longer needed for such purpose, shall be 

disposed of in accordance with Order 5190.6A and such proceeds shall be handled in accordance with 

Assurance 31, Disposal of Land. That portion of the proceeds retained by the airport is considered 

airport revenue, subject to the requirements of Title 49 U.S.C., Sections 47107(b) and 47133. 

Page 130 
June 28, 2005 Order 5100.38C

731. USES OF AIRPORT REVENUE. 

a. Title 49 U.S.C., Section 47133 Requirement. Under Title 49 U.S.C., Section 47133 sponsors 

must provide assurance that all revenue generated by their airport, if it is a public-owned airport, will be 

expended for the capital or operating costs of the airport, the local airport system or other local facilities 

which are owned or operated by the sponsor and directly and substantially related to the actual air 

transportation of passengers or property. This requirement appears as Assurance 25 in the Assurances 

for Airport and Planning Agency Sponsors though it does not apply to planning projects. 

b. Exceptions to Title 49 U.S.C., Section 47133 Requirement. Title 49 U.S.C., Section 47133 

does not apply to planning agency, private, or nonairport sponsors. Additionally, the section itself 

contains language exempting certain sponsors from this limitation and “shall not apply if a provision 

enacted not later than September 2, 1982, in a law controlling financing by the airport owner or operator, 

or a covenant or assurance in a debt obligation issued not later than September 2, 1982, by the owner 

or operator, provides that the revenues, including local taxes on aviation fuel at public airports, from any 

of the facilities of the owner or operator, including the airport, be used to support not only the airport but 

also the general debt obligations or other facilities of the owner or operator.” AAS-400 should be 

consulted for assistance in making determinations on the applicability of the exemption in particular 

cases. 

c. Guidance on Airport Revenue. Additional guidance on acceptable uses of airport revenue can 

be found in Federal Register Notice, Policy and Procedures Concerning the Use of Airport Revenues, 

Volume 64, Number 30, Tuesday, February 16, 1999. 

732. - 799. RESERVED

Page 131
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 132 
June 28, 2005 Order 5100.38C

Chapter 8. NOISE COMPATIBILITY P ROJECTS

Section 1. GENERAL

800. GENERAL. 

The Aviation Safety and Noise Abatement (ASNA) Act of 1979, as amended, and recodified without 

substantive change at Title 49, U.S.C., Sections 47501 – 47510, permits the FAA to provide funds for 

projects at both commercial service and general aviation airports to carry out an FAA approved noise 

compatibility program (NCP). In addition, the FAA may provide AIP funds for noise insulation projects in 

buildings used primarily for educational or medical purposes that are not included in an FAA approved 

NCP. Grants for such projects may be made to airport sponsors as well as to eligible public agencies 

not owning airports (nonairport sponsors). However, noise mitigation associated with airport 

development projects will continue to be funded as airport development (See Paragraph 580 of this 

Order). 

801. PROJECT ELIGIBILITY. 

Prior to programming noise compatibility projects, airport sponsors and FAA Airports Offices should 

review the Noise Exposure Maps upon which noise compatibility projects are based to ensure they are a 

reasonable representation of current and/or forecast conditions at the airport. (This review may be 

accomplished using the Noise Exposure Map Checklist, Part II, Section III.B. The checklist is available 

at http://www.faa.gov/arp/environmental/14cfr150/index14.htm.) A proposed noise compatibility project 

is eligible for Federal participation if it meets one of the following four criteria (Note: Projects are eligible

if they are approved under Part 150. However, projects must also be justified using the criteria specified 

for the project type as further described in Section 2 of this chapter): 

a. It is a measure in an NCP, as described under Section 47504(a) of Title 49 U.S.C., prepared by 

the airport sponsor, and the measure is approved by the FAA in accordance with FAR Part 150; or 

b. It is a project to provide noise insulation for a building that is: 

(1) Used primarily for educational or medical purposes in the noise impact area surrounding a 

public airport(s), and 

(2) Determined to be adversely affected by airport noise; or 

c. It is reimbursement for costs that were incurred: 

(1) After February 1, 1980 (date of enactment of the ASNA Act), by the airport operator, 

(2) Before, on, or after the execution of the grant agreement, 

(3) To implement a part of the airport sponsor’s approved NCP (including project formulation 

costs), subject to the following criteria: 

(a) The NCP must show evidence that the project was specifically approved in the NCP, or 

(b) If the project involved acquisition, the acquisition must have been accomplished in 

accordance with provisions of the Uniform Relocation Assistance and Real Properties Acquisition 

Polices Act in effect at the time the land was acquired, and 

d. It is in accordance with other exceptions as listed in Section 47504(c)(2) of Title 49 U.S.C. 

Page 133
June 28, 2005 Order 5100.38C

802. SPONSOR ELIGIBILITY. 

a. Airport Sponsors. Noise compatibility projects may be carried out by eligible airport sponsors 

as described in Chapter 2 of this Order. 

b. Nonairport Sponsors (Unit of Local Government or Public Agencies not Owning Airports). 

Noise compatibility projects may also be carried out by a unit of local government or public agencies that 

are not airport sponsors. Section 47504(c)(1)(B) of Title 49 U.S.C. requires a unit of local government to 

have the capability to carry out the projects for which applications are made. Though any unit of local 

government meeting this criterion is eligible, the FAA should encourage sponsorship by those units of 

local government with the widest or most direct authority for land use control so as to obtain more 

effective compliance with the compatible land use assurance. 

803. COSPONSOR. 

Any two or more units of local government may cosponsor a noise compatibility project, provided 

that such units of local government jointly or severally are eligible sponsors. An airport sponsor may be 

a cosponsor on such a project. Cosponsorship should be encouraged, particularly where it would 

contribute to more effective compatible land use commitments on the part of unit of local government 

having jurisdiction over land use. 

804. APPLICABILITY OF THE AIRPORT AND AIRWAY IMPROVEMENT ACT (AAIA) PROVISIONS. 

Title 49 U.S.C., Section 47504(c)(5) states that all of the provisions applicable to AIP grants shall be 

applicable to any grants for noise compatibility projects. Therefore, requirements pertaining to DBE, 

Davis-Bacon, NEPA, E.O. 12372, etc., apply to noise compatibility projects. (AGC Opinion, 

August 24, 1983.) 

805. ENVIRONMENTAL CONSIDERATIONS. 

Noise compatibility projects must receive appropriate FAA environmental determinations prior to 

consideration for AIP funding. The current version of Order 5050.4, Airport Environmental Handbook, 

indicates which noise compatibility projects require an environmental assessment or environmental 

impact statement, and which are categorically excluded. Environmental requirements for non-airport 

development projects, for air traffic procedures for example, are covered by the most current version of 

FAA Order 1050.1, Policies and Procedures for Considering Environmental Impacts. Contact the 

Community and Environmental Needs Division (APP-600) for assistance in this area. 

806. AGREEMENTS FOR NOISE COMPATIBILITY PROJECTS ON PUBLIC PROPERTY NOT OWNED BY THE 

SPONSOR. 

a. General. Where a noise compatibility project is located on public property not owned by the 

sponsor, Assurance 5 requires the sponsor to enter into an agreement with that unit of local government, 

having control over the public property, to ensure that such a beneficiary complies with the same general 

requirements to protect the Federal investment, regardless of whether or not it “sponsors” the project. 

The agreement should be modeled on the Nonairport Sponsors assurances (available on the FAA web 

site at the following address: http://www.faa.gov/arp/financial/aip/assurances.cfm?ARPnav=aip). The 

agreement may take one of two forms, depending on whether the noise compatibility project is 

sponsored by an airport sponsor or a nonairport sponsor. The specific assurances that should be 

incorporated into each agreement are listed below, although circumstances unique to the project, 

sponsor, or unit of local government may require ad hoc variations. For example, when the sponsor is 

administering the procurement and construction, and the other unit of local government is not directly 

involved in project accomplishment, Assurances 8, 9, 10, 11, and 12 need not be incorporated into the 

agreement. For the purposes of this Paragraph 806, a Nonsponsoring unit of local government is not a 

party to the actual grant with the Federal Government but is the actual owner of the public property. A 

sponsoring unit of local government is the unit of government that is a party to the grant agreement with 

the FAA. 

Page 134 
June 28, 2005 Order 5100.38C

b. Agreements between Airport Sponsors and Nonsponsoring Units of Local Government. 

Except as discussed in Subparagraph a., the agreement between the airport sponsor and the nonsponsoring unit of local government should incorporate the substance of the following nonairport 

sponsor assurances, as applicable: 

(1) Assurance 1, General Federal Requirements. It is only necessary to include the first 

paragraph. Reference to and listing of laws and regulations may be deleted; 

(2) Assurance 2, Responsibility and Authority of the Sponsor; 

(3) Assurance 3b, Sponsor Fund Availability; 

(4) Assurance 8, Accounting System, Audit, and Record keeping Requirements; 

(5) Assurance 9, Minimum Wage Rates; 

(6) Assurance 10, Veterans Preference; 

(7) Assurance 11, Conformity to Plans and Specifications; 

(8) Assurance 12, Construction Inspection and Approval; 

(9) Assurance 13, Operation and Maintenance; 

(10) Assurance 15, Compatible Land Use; 

(11) Assurance 16, Reports and Inspections; and 

(12) Assurance 17, Civil Rights. 

The airport sponsor may also add any other terms and conditions, consistent with the Assurances, 

which it believes are necessary. 

c. Agreements between Sponsoring and Nonsponsoring Units of Local Government. Except 

as discussed in Subparagraph a., an agreement between the nonairport sponsor and another unit of 

local government should include the following nonairport sponsor assurances, as applicable: 

(1) Assurance 1, General Federal Requirements. It is only necessary to include the first 

paragraph. Reference to and listing of laws and regulations may be deleted; 

(2) Assurance 2, Responsibility and Authority of the Sponsor; 

(3) Assurance 3b, Sponsor Fund Availability; 

(4) Assurance 8, Accounting System, Audit, and Record keeping Requirements; 

(5) Assurance 11, Conformity to Plans and Specifications; 

(6) Assurance 12, Construction Inspection and Approval; 

(7) Assurance 13, Operation and Maintenance; 

(8) Assurance 14, Hazard Prevention; 

(9) Assurance 15, Compatible Land Use; and 

Page 135
June 28, 2005 Order 5100.38C

(10) Assurance 17, Civil Rights. 

The nonairport sponsor may also add any other terms and conditions, consistent with the 

assurances, which it believes are necessary. 

807. PROJECTS ON PRIVATELY OWNED PROPERTY - CONDITION IN GRANT AGREEMENT. 

a. Requirement for Agreement. Assurance 5 requires the sponsor and the private property owner 

to enter into an agreement that contains provisions specified by the Secretary. To aid in satisfying this 

requirement, the special condition Noise Projects on Privately Owned Property contained in Appendix 7, 

shall be included in the grant agreement. 

b. Responsibility for Operation and Maintenance. The purpose of requiring the special 

condition Noise Projects on Privately Owned Property in Appendix 7 is to establish that the owner is 

responsible for maintenance and operation of the noise compatibility improvements, not that the owner 

is required to conduct any specific operation and maintenance activities. In the case where the private 

property is a parochial school, for example, this condition should not be construed to mean that the 

owner is obligated to operate the facility as a school for the useful life of the noise compatibility 

measures. It should generally be understood, however, that noise compatibility projects should be 

implemented only in those buildings that can reasonably be expected to be used for a period of time 

equal to or exceeding the useful life of the project. 

808. EASEMENT IN CONJUNCTION WITH SOUNDPROOFING. 

A grant under the AIP may not include a requirement that a property owner donate an easement (or 

other property interest) to the airport sponsor in exchange for noise insulation. FAA policy, however, 

encourages sponsors to work out such voluntary arrangements locally, exclusive of FAA grant 

stipulations. Alternatively, the airport sponsor may agree to acquire an easement at the time the 

structure receives noise insulation. See Paragraph 811 for additional discussion of easement 

acquisition. 

809. REVENUE FROM NOISE COMPATIBILITY PROJECTS. 

In some noise compatibility projects, sponsors may acquire property that produces net revenue, 

such as rents and royalties. Such revenue earned prior to final project closeout shall be deducted from 

the total cost of that project for determining the net costs on which the grant will be based. Revenue 

earned after final project closeout shall be considered airport revenue. (See Section 3 for the use of 

proceeds from the disposal of land acquired for noise compatibility). 

Section 2. NOISE COMPATIBILITY PROJECTS

810. GENERAL. 

a. Eligible noise compatibility projects generally fall into the following categories: land acquisition 

(including relocation assistance), noise insulation, runway and taxiway construction (including 

associated land acquisition, lighting and NAVAIDs), noise monitoring equipment, noise barriers and 

other Part 150 approved noise abatement/compatibility measures. Sponsors may from time to time 

propose noise compatibility measures not described in this section. In such a case, contact APP-600 for 

assistance in determining the scope of FAA approval in the sponsor’s NCP; contact APP-520 for 

assistance in determining the scope of eligible work in such proposals. 

b. Noise compatibility projects usually are located in areas where aircraft noise exposure is 

significant, as measured in day-night average sound level (DNL) of 65 decibels (dB) or greater. 

However, projects may also be approved and made eligible in areas of less noise exposure. The 

following criteria apply: the airport operator must adopt a designation of non-compatibility different from 

the Federal guidelines; the NEM and NCP must identify the areas as noncompatible; and the measures 

proposed for mitigation in that area must meet Part 150 approval criteria. If a noise buffer is 

Page 136 
June 28, 2005 Order 5100.38C

recommended in areas of moderate noise exposure (i.e., DNL 64-55 dB), only non-noise sensitive land 

uses may be developed within the area to be considered a noise buffer. Projects in areas below 

DNL 65 dB that are approved in noise compatibility programs must be supported by appropriate 

documentation from the sponsor to determine whether they are justified for Federal financial assistance 

for the year of the grant application. These measures, when proposed for approval in a Part 150 

document, are subject to the same FAA review and approval processes as noise compatibility projects 

within the DNL 65 dB noise contour. Contact APP-600 for assistance in advising sponsors of 

documentation requirements. The AIP priority ranking assigned to projects below DNL 65 dB would be 

lower. In addition, projects within DNL 65 dB may be expanded beyond the DNL 65 dB contour to 

include a reasonable additional number of otherwise ineligible parcels contiguous to the project area, if 

necessary to achieve equity in the neighborhood. Neighborhood or street boundary lines may help 

determine what is reasonable, in addition to numbers of properties. Other projects that produce 

community-wide benefits (development of a noise attenuation standard in a local building code, for 

example) are also eligible. 

c. Individual recipients (e.g., homeowner or school) of noise compatibility projects may be entitled 

to more than one mitigation measure if the additional measures are approved in the sponsor’s NCP, 

enhance land use compatibility, provide additional protection for the airport, and the total cost of the 

measures is reasonable in relation to the property value. For example, noise insulation may be 

combined with acquisition of an easement, or a sponsor may acquire residential property and install 

noise insulation with an easement, before offering it for resale. 

d. Noise compatibility proposals in an NCP that are not approved by the FAA are not eligible under 

the AIP when eligibility depends on Part 150 approval. Remedial noise mitigation measures that are 

disapproved under Part 150 for new noncompatible development constructed after October 1, 1998 also 

are not eligible. Other noise compatibility proposals may be approved in the NCP as noise beneficial, 

but are not eligible for AIP. These projects may include: development of new or modified flight 

procedures or environmental assessments prepared by the FAA for flight procedures approved in an 

NCP; projects which cannot be implemented by an eligible sponsor; operational or administrative costs 

of a sponsor’s ongoing noise mitigation program; and demonstration programs intended to test the 

effectiveness of new noise mitigation technology. Projects that are not described in sufficient detail to 

determine their noise mitigation benefits are also ineligible. 

811. ACQUISITION OF LAND OR INTERESTS IN LAND FOR NOISE COMPATIBILITY. 

Both airport and nonairport sponsors are eligible to acquire land for noise compatibility purposes. 

Earlier guidance stated that costs of removing structures from land acquired under a grant for noise 

compatibility purposes were not allowable. However, sponsors frequently have strong justification for 

demolishing or otherwise removing structures promptly after they acquire property. Therefore, land 

acquisition with justification for demolishing or otherwise removing structures is allowable. However, 

sponsors should be encouraged to consider other alternatives (e.g., sale and relocation or reuse for 

compatible purposes), if appropriate, if those alternatives could lower the project costs. Acquisition may 

occur under the following criteria and limitations: 

a. Land Acquisition to Change Land Use. These programs acquire non-compatible property 

within the designated eligible areas and relocate the occupants from the noise impact. Acquired land is 

assembled for reuse as an airport compatible land use. This airport compatible use normally should be 

maintained as a buffer area, even if airport noise is projected to decrease and place the property within 

areas of moderate (DNL 64-55 dB) noise exposure. Procedures and requirements for acquiring 

noncompatible property are identical to those outlined in Chapter 7 of this Order and must conform to 

the Uniform Act as described in the most current versions of the Land Acquisition and Relocation 

Assistance for Airport Projects, Order 5100.37 and Land Acquisition and Relocation Assistance for 

Airport Improvement Program Assisted Projects, AC 150/5100-17. Under these “Buy-out” programs, 

displaced homeowners and tenants are entitled to relocation assistance and payments prescribed in the 

Uniform Act. The following factors should also be considered when acquiring land for noise compatibility 

purposes when the objective is to convert to compatible uses. 

Page 137
June 28, 2005 Order 5100.38C

(1) The FAA should work closely with the sponsor in such land acquisition projects to develop a 

long-term plan for land reuse. (See Paragraph e. below regarding the land disposal assurance.) Land 

acquisition projects should include development of land use conversion, economic feasibility, and 

marketing plans to ensure that subsequent land uses are consistent with local land use plans and 

policies, including compatibility with noise exposure levels in the area, and that the sponsor recoups a 

reasonable amount upon resale. Such planning is eligible in conjunction with a land acquisition project 

or as a separate project. However, costs to implement the marketing plan are considered operational 

costs and as such are not allowable. (See Section 3 of this Chapter and Order 5190.6A on the use of 

resale proceeds.) 

(2) Costs attributable to removal of structures from land acquired for noise compatibility, when 

properly justified, are allowable costs under a grant for land acquisition or for reimbursement. Such 

removal costs may include, but are not limited to, demolition of structures, sale of structures for removal 

by purchaser, and relocation of structures to another site. Removal costs and proceeds from sale of 

structures may be used to adjust the net proceeds from resale of the property. 

(3) Costs attributable to preparing land for resale may be deducted from the proceeds of 

disposal, but are not allowable costs under a grant. Such costs may include, but are not limited to, 

rezoning, replatting and upgrading of utilities and services. 

(4) Costs associated with holding land are not allowable under a grant, nor may they be 

deducted from the proceeds of resale. Such holding costs may include, but are not limited to, property 

taxes assessed against the sponsor during the period of ownership, charges for utilities and public 

services, insurance, financing charges, and assessments. 

Example: A sponsor acquires 10 parcels of land for a total cost of $1.0 million; the sponsor 

removes all structures, assembles the parcels into one marketable unit, prepares requests for 

zoning changes, resurveys, determines consistency with local land use plans and files necessary 

documents with local officials; utilities and public services improvements are made at sponsor 

expense; a marketing plan is prepared and the property is sold for $750,000. The proceeds of 

the sale are calculated as follows: 

Acquisition Cost = $1,000,000 ($800,000 Federal/$200,000 Local) 

Development and Sale Costs: 

Remove Structures $250,000 

Revise Zoning, Local Plans, Maps, etc. $100,000 

Improve Utilities and Public Services $100,000 

Marketing and Sales $ 50,000 

Total Costs $500,000 

Sales Price $750,000 

Less Total Costs $500,000 

Net Proceeds 

$250,000 

($200,000 Federal/ 

$50,000 local) 

Note: Costs associated with holding the land (taxes, fees, assessments, insurance, etc.) may not be 

used in calculating the net proceeds. 

b. Land Acquisition without Change to Land Use. An airport sponsor’s approved NCP may 

include “Purchase Assurance”, “Sales Assurance”, or “Transaction Assistance” measures (described 

below) to acquire for resale or assist a market sale of eligible noncompatible property without changing 

the existing land use. These measures assist homeowners to move from the noise impact by facilitating 

a timely market sale of their noise-impacted property. Noise insulation of residences is eligible prior to 

Page 138 
June 28, 2005 Order 5100.38C

sale or resale. Also, pre-existing noise insulation will not disqualify a property from these programs (see 

paragraph 812 for noise insulation criteria). Under these programs, the sponsor shall ensure that 

potential buyers are provided with an appropriate disclosure statement that describes the airport noise 

exposure on the property and the intention of the sponsor to retain an easement or similar interest. 

(1) Purchase Assurance. Under Purchase Assurance, a property that fails to sell within a 

specified time period is purchased by the airport and then resold for continued residential use. The 

airport purchases the property at the appraised fair market value “as is” subject to airport noise. 

Typically, noise insulation is provided and the property is then listed and sold subject to the airport’s 

easement. 

(2) Sales Assurance. Under Sales Assurance the appraised fair market value of the 

homeowner’s residence is guaranteed on a timely market sale, however the airport does not acquire the 

property. Should the property sell for less than the appraised value, the selling owner is compensated 

for the short fall by the airport. Property is appraised at its current fair market value “as is” subject to 

airport noise. The property is listed and sold subject to the airport’s easement that is conveyed to the 

airport at sale of the property. 

(3) Transaction Assistance. Transaction assistance generally involves an agreement by the 

airport sponsor to pay certain costs associated with the sale of residential property. Allowable costs 

should generally be limited to the real estate sales commission (consult with APP-600 for other 

allowable transaction costs). The property is listed and sold subject to the airport’s easement that is 

conveyed to the airport at the assisted sale of the property. 

c. Easements and Other Property Interests. 

(2) Purchase of easements or similar property interests for noise compatibility is eligible if it is 

an approved measure of a sponsor’s NCP. Depending on local real estate laws and other site factors, 

sponsors may propose to acquire restrictive covenants, development rights, or other specified interests. 

The requirements and procedures applicable to acquisition of such property interests with Federal 

assistance are described in Chapter 7 of this Order. 

(3) Easement compensation is difficult to appraise because of limited market information. 

Acceptable appraisal procedures are described in the most current version of FAA Order 5100.37, and 

specific considerations and methods to appraise easements acquired for noise compatibility are 

provided in FAA AC 150/5100-17. As provided in this guidance appraised just compensation owed for 

an easement acquisition shall be based on application of the “Before and After Appraisal” method. The 

estimated or actual costs of acquiring easements should be carefully reviewed prior to approving the 

project or approving payment to the sponsor to confirm adherence to this valuation guidance. Where the 

cost for acquiring easements seems disproportionately high, the FAA office administering the project 

should consider whether it meets the reasonable cost criterion as discussed in Paragraphs 310 and 

1022. Where costs appear to be unreasonable when compared to costs associated with other, more 

tangible mitigation measures, airport sponsors should be encouraged to consider revising the NCP and 

developing these means to achieve compatibility. 

(4) Nonairport sponsors are also eligible for grants to acquire easements only; however, the 

easement should be written specifically to protect the airport. 

d. Currently Compatible Land-Use. If the airport sponsor proposes to acquire land presently in 

compatible use (e.g., parking lot, agricultural, vacant) on the grounds that noncompatible development is 

highly likely and that local controls are inadequate to prevent that development, and if the FAA has 

approved the sponsor’s recommendation in an approved NCP, the acquisition is eligible. In such cases, 

it is advisable to urge the sponsor to first consider acquisition of an interest less than fee simple (e.g., 

development rights, easement). If fee simple acquisition is approved, the sponsor should be advised of 

the requirement for timely disposal. 

Page 139
June 28, 2005 Order 5100.38C

e. Sponsor Assurance Regarding Disposal of Land Acquired for Noise Compatibility. 

Title 49 U.S.C., Section 47107(c)(2)(A) provides that for land purchased under a grant for airport noise 

compatibility purposes, the airport owner will dispose of the land, when the land is no longer needed for 

such purposes, at fair-market value, at the earliest practicable time. Any disposal must assure that the 

land is re-used compatibly with aircraft noise exposure levels, including land that was purchased within 

the DNL 65 dB contour and is now subject to "moderate" noise exposure (DNL 64-55 dB) with Stage 3 

transition or other airport specific factors. In cases where such land was incompatible with airport noise 

at the time of acquisition (based on the sponsor’s selected noise compatibility criteria in the NCP of 

either the Federal guidelines or the local compatibility standard adopted by the airport sponsor in 

accordance with Part 150), and the noise levels both now and in the foreseeable future are no longer 

“significant” using the standard adopted by the airport sponsor, at a minimum disposal of the land must 

include a noise avigation easement to protect the airport against noise damages. Where possible, the 

FAA prefers the property to be reused for non-noise sensitive development to provide a noise buffer 

around the airport to guard against potential new noncompatible land uses that could not be foreseen at 

the time the property was disposed. Further, the portion of the proceeds of such disposition that is 

proportionate to the United States’ share of acquisition of such land will, at the discretion of the FAA 

acting on behalf of the Secretary of Transportation, 1) be repaid to the Airport and Airway Trust Fund, 

or 2) be reinvested in an approved noise compatibility project. Reinvestment of proceeds from the sale 

of noise land at the original airport is the option preferred by the FAA. See Section 3 of this Chapter for 

more information on the use of proceeds from the sale of such land. 

812. NOISE INSULATION PROJECTS. 

a. General. Noise insulation, if approved in an airport sponsor’s NCP, or if qualified as a school or 

hospital under Title 49 U.S.C., Section 47504 is eligible under the AIP. To be justified for discretionary 

funding assistance, the project must meet the noise insulation criteria in this chapter. Eligible sponsors 

include units of local government having jurisdiction over the project location, airport sponsors, and 

special purpose units of local government (e.g., school and hospital districts). Eligible structures include 

residences (single family and multifamily), schools, hospitals, churches, and other noncompatible 

structures identified in the sponsor’s NCP and approved by the FAA as a project in the NCP. In addition, 

noise insulation may be installed in buildings near an airport without an approved NCP if the buildings 

are used for educational or medical purposes and they are demonstrated to be adversely affected by 

airport noise. 

(1) Noise insulation projects are subject to the general guidance governing noise compatibility 

projects within and below DNL 65 dB in Paragraph 810.b. In addition, unless extenuating circumstances 

dictate, noise insulation should normally not be considered for a number of types of noise sensitive 

structures (e.g., residences, schools, hospitals, churches, auditoriums, concert halls) within a DNL 75 dB 

or greater noise contour since it is preferable to change the land use. Noise insulation is not a viable 

noise compatibility project for mobile homes, since their design and construction may not lend 

themselves to effective noise reduction measures. However, modular structures may be classified as 

permanent if they meet construction guidelines applied to permanent structures. A determination to 

noise insulate these structures will be made on a case-by-case basis. 

(2) The purpose of noise insulation projects is to reduce the adverse impact of airport-related 

noise on building occupants or residents. These projects are not intended to compensate for inadequate 

maintenance, to bring nonconforming structures up to building code standards, or to improve the comfort 

or attractiveness of a building, although these benefits may result indirectly from the project. Therefore, 

if a noise insulation project requires that new windows be installed, or that upgraded electrical service be 

provided for ventilation equipment to achieve noise reduction objectives, the costs associated with those 

work elements are allowable costs. If, however, it is determined in the course of designing a project that 

a building needs several improvements to conform to local building codes, the costs of such 

improvements are not allowable under the grant program. 

(3) Where noise insulation is being proposed as a single project for a large number of 

structures, and where a standard package of noise insulation improvements will be included, the 

Page 140 
June 28, 2005 Order 5100.38C

qualifying criteria need not be so restrictively applied that it would prevent an incidental number of 

homes within the project area from receiving the standard package of improvements. For example, if 

acoustical windows are to be installed in a preponderant number of homes within the project area, 

eligibility may be extended to an incidental number of homes within the project area, even though they 

would not qualify for window installation if considered individually. 

(4) Sponsors must certify to the FAA that the engineering plans and specifications for the noise 

insulation measures conform to the local building code. 

(5) A noise level reduction (NLR) of 25-35 dB from outdoor noise levels to indoor levels usually 

can be achieved with some combination of window and door replacement, ceiling insulation, caulking, 

weather-stripping, and central air ventilation (or air conditioning as limited below) systems. Therefore, 

project eligibility will normally be limited to these measures plus “before and after” noise testing. The 

target noise level for the interior habitable area is a DNL of 45 dB (refer to Table 1 of 14, CFR part 150). 

If, for example, existing construction or the location of the structure within the noise contour causes the 

structure to already meet or exceed the interior target of DNL 45 dB, additional noise insulation normally 

is not justified. Some limited exceptions may apply, as described below. APP-520 should be consulted 

if additional measures are recommended. 

(6) Sponsors may offer a continuous positive ventilation system or air conditioning to owners of 

eligible structures in conjunction with noise insulation projects. The goal of a continuous positive 

ventilation system is to provide two volume changes of air per hour. This roughly equates to a condition 

where windows in the structure are open. Likewise, an air conditioning system will provide air 

exchanges along with temperature and humidity reduction. The added benefits are preferred by most 

residents. Either option preserves the noise attenuation benefits achieved with the insulation project by 

eliminating the need to open windows to maintain an acceptable level of indoor comfort. However, the 

FAA believes that an air conditioning system would be comparable in cost, and perhaps less expensive 

than customized air handling systems. Consequently, air conditioning could be offered as an eligible 

noise attenuation measure in lieu of the positive air handling equipment. There is no need to compile a 

price comparison and to prorate cost differentials between options offered for selection. Two caveats 

should be discussed with sponsors and recipients who receive air conditioning or a continuous positive 

ventilation system: 

(a) The recipient will be expected to operate the system installed under the AIP grant to 

preserve the noise attenuation benefits achieved with the insulation project. Failure to use the installed 

system will negate the benefits and will not be grounds for making complaints about noise levels. 

(b) Property owners and residents should be presented with information about utility and 

maintenance costs for the installed equipment. Increased utility costs are to be expected. Also, routine 

maintenance costs should be planned to keep the system operating at peak efficiency. Maintenance 

service contracts tend to minimize disruptions by providing regular checks of the installed system. The 

costs of these contracts are a responsibility of the property owner. 

(7) Sponsors are encouraged to obtain a noise easement in return for the noise insulation 

provided by the project, but it is not a mandatory AIP requirement. (See Paragraph 808.). 

b. Residential Noise Insulation. 

(1) The design objective in a residential noise insulation project generally should be to achieve 

the requisite NLR when the project is completed. (This is mathematically equivalent to achieving a DNL 

of 45 dB in all habitable rooms.) For residences located in areas where exterior noise exposure is DNL 

65 dB, the requisite NLR provided by the structure should be at least 20 dB in major habitable rooms. 

The requisite NLR should be increased commensurate with any increase in exterior DNL above 65 dB. 

The project design should be based on exterior DNL and the existing NLR in the structure. The existing 

construction must provide less than the needed noise level reduction for the noise exposure level at the 

Page 141
June 28, 2005 Order 5100.38C

location of the residence. For purposes of equity in a neighborhood where noise insulation has taken 

place, the following example may be considered as a guide. A house having 30 dB noise level reduction 

is located at the DNL 68 dB. It is already compatible because the interior noise level would be 

approximately equivalent to 38 dB, well below the target 45 dB. Although such a dwelling is compatible 

under the Federal guidelines of part 150, some lesser level of noise insulation (replacement of 

depreciated windows, storm doors, caulking and weather stripping, etc.) may be provided to assure 

conformity of improvements and perceived equity of application in the project neighborhood. 

(2) Since it takes an improvement of at least 5 dB in NLR to be perceptible to the average 

person, any residential noise insulation project should be designed to provide at least that increase in 

NLR as a marginal minimum. 

(3) Examples. 

(a) A residence located in an area where the DNL is 73 dB has existing NLR of 26 dB. The 

requisite NLR in that area is 28 dB (73 - 45). However, to meet the requirement for increasing the NLR 

by not less than 5 dB, a noise attenuation project for that residence should result in NLR of 31 dB 

(26 + 5). 

(b) A residence located in an area where the DNL is 67 dB has existing NLR of 16 dB. The 

requisite NLR in that area is 22 dB (67 - 45). Therefore, the noise insulation project should be designed 

to increase the NLR by at least 6 dB (22 - 16). 

c. Noise Insulation in Schools. 

(1) For schools, the usual design objective for classroom environment is a time-average Aweighted sound level of 45 dB resulting from aircraft operations during normal school hours. As with 

residential noise insulation, a school project should reduce existing noise levels by at least 5 dB for the 

same time-average school hours time frame. 

(2) Eligible schoolrooms include classrooms, libraries, offices, and other rooms for which noise 

insulation is specifically justified because of the substantial and disruptive effect of aircraft noise. 

Facilities, such as gymnasiums, cafeterias, and hallways are usually not eligible, unless the facility is 

also used substantially for purposes that qualify for noise insulation. Consequently, eligibility for these 

areas should take into consideration the extent they are used for instructional activities and assemblies. 

d. Other Buildings. Churches, concert halls, offices, and other structures identified as 

noncompatible, and for which noise insulation has been recommended by the airport sponsor in its NCP 

and approved by the FAA, are also eligible. Such proposals should be evaluated carefully on a 

case-by-case basis and should involve consultation with APP-520 and APP-600. 

813. NOISE MONITORING EQUIPMENT/SYSTEMS. 

A project for noise monitoring may be as modest as a few portable noise monitors or as extensive as 

a system of a dozen or more fixed monitors linked to a central processing unit, perhaps incorporating air 

traffic, weather and land use data. Such projects are eligible, subject to the following criteria: 

a. Noise monitoring must be an approved item in the sponsor’s NCP. Procurement of noise 

monitoring equipment in conjunction with master planning or noise compatibility planning is not eligible. 

In the case of a planning product, such as a master plan or NCP, the noise monitoring equipment is only 

a tool used by the consultant to prepare the study. However, the NCP may include a measure for an 

ongoing requirement for the sponsor to monitor noise conditions. In that case, acquisition of equipment 

to be used by the airport sponsor for that purpose is eligible. (Consult with APP-600 for clarification.) 

b. Nonairport sponsors (e.g., school districts, municipalities) are eligible only for portable noise 

monitoring equipment when used in connection with noise insulation projects managed by that sponsor. 

Page 142 
June 28, 2005 Order 5100.38C

In cases where more than one sponsor is expected to engage in noise insulation programs, however, 

the airport sponsor should be encouraged to acquire the equipment and make it available to other local 

agencies as needed. 

c. Eligibility for a fixed (permanent) monitoring system will be limited to circumstances where 

sponsors can clearly show that portable monitors would be inadequate. Fixed noise monitoring 

equipment is ineligible where the Part 150 noise exposure maps (existing and forecast) show no 

noncompatible land uses. In all cases, sponsors should be encouraged to acquire the least costly 

system that will satisfy the purposes used to justify the project. 

d. A noise-monitoring proposal should not be an end in itself, nor an instrument for enforcement of 

a noise rule or procedure. Rather, noise monitors should provide an ongoing stream of useful products 

and data in support of the overall noise compatibility program. A primary justification should be to 

provide information necessary to carry out other noise compatibility projects in the approved NCP, or to 

monitor progress in achieving noise compatibility objectives. Some sample uses of noise monitoring 

data include: 

(1) Selection of dwelling units or other structures for noise insulation; 

(2) Pre- and post-insulation interior/exterior noise measurement; 

(3) Compliance with a monitoring requirement of State noise law; 

(4) Aiding implementation of other noise compatibility projects; or 

(5) Providing noise data for future revision of the NCP. 

e. Allowable costs include system design, noise monitoring equipment, dedicated data processing 

equipment and software, equipment installation, site preparation and one-time costs for installation of 

electrical power and data transmission lines. All costs for permanent monitoring systems should be 

minimized. Sponsors should be encouraged to obtain low cost monitoring locations by using existing 

utility poles and easements, accessible public land, or donated access to private property. 

f. Costs for vehicles to be used in a noise-monitoring program, general-purpose computer software, 

operating costs, and equipment to be used only for public information purposes (equipment for visual 

presentations at public meetings or hearings, for example) are not allowable. 

814. NOISE BARRIERS. 

Noise barriers may be effective in certain locations to reduce adverse noise impacts from aircraft on 

the ground, particularly from maintenance areas and loading gates. Generally, such activities do not 

make a substantial contribution to total noise exposure, but single event occurrences may disrupt nearby 

classrooms or residences. Noise barriers, earth berms, wall structures, “hush houses” and other 

devices designed to shield areas from noise generated on the airport are eligible with the following 

provisions: 

a. Noise barriers must be located and constructed in areas that benefit noncompatible uses 

affected by a single event ground operation noise that interferes with sleep and conversation. A single 

event noise reduction of at least 5 decibels should be realized at the nearest noncompatible land uses. 

b. The construction or installation must mitigate noise from a variety of airport users. For example, 

a hush house in the leased area of an airline maintenance facility is not eligible. If the airport sponsor 

proposes to designate an area on the airport for all engine runups, however, a noise barrier or hush 

house may be eligible to shield nearby areas from such activities. 

Page 143
June 28, 2005 Order 5100.38C

c. Noise barriers must be designed to ensure that they do not violate airport design standards or 

Part 77 surfaces. 

d. Landscaping costs in conjunction with noise barrier or berm construction are allowable only for 

materials necessary to stabilize soil against wind or water erosion. 

e. If not done in conjunction with evaluation of alternatives in the Part 150 study, a cost-benefit 

analysis should be conducted which compares the effectiveness of the proposed noise barrier with other 

feasible alternatives, such as land acquisition and noise insulation. If other feasible alternatives were 

not approved in the NCP, a Part 150 update comparing the effectiveness and costs of other alternatives 

may be required to permit the use of noise set-aside funds. (Consult with APP-600 if additional 

guidance is needed.) Noise barriers constructed outside of the Part 150 process may not be paid for 

using the noise set aside. 

815. MISCELLANEOUS NOISE COMPATIBILITY PROJECTS. 

The following types of projects, when they are approved measures in a sponsor’s NCP, are eligible if 

they are justified as described below. The Federal share shall be calculated as other noise compatibility 

projects: 

a. Runway and Taxiway Construction. Runways and taxiways, including land acquisition, 

lighting and marking, if it can be shown that the primary purpose and benefit is noise relief. For 

example, if a proposed project is part of development shown in a master plan for capacity or safety 

purposes and has incidental noise benefits, it is not an eligible noise compatibility project. It may, 

however, be eligible as airport development. However, if it can be shown that the project would have a 

significant immediate noise benefit it may be eligible. 

b. Lighting and/or Visual Markers. Lights or other visual devices to help pilots fly specific noise 

abatement VFR flight tracks or traffic patterns. 

c. Special Studies. Special studies are eligible if they are approved in an NCP, and may be 

justified for Federal participation if they meet applicable criteria. Studies to redevelop a noncompatible 

area, to determine the most effective location for a hush house or sound barrier, to determine the most 

effective noise abatement departure procedures to be used by aircraft operators (not the actual flight 

procedure itself, which would be implemented by the FAA) at various runways, to evaluate airport noise 

and access restrictions, to address noise compatibility problems that were beyond the scope of the basic 

Part 150 study, or to prepare noise elements of local building codes, are typically appropriate to be 

included in a Part 150. In the case of noise and access restriction studies, the measure to study 

restrictions must be included in an NCP, approved by the FAA for study, and included in a Part 150 

update. Studies are eligible provided that they result in definitive, implementable products. Usually, 

these studies are accomplished by the airport operator’s consultant. Studies whose implementation 

would be within the purview of a local land use planning jurisdiction (for noise elements of local building 

codes, for example) may be accomplished by a local agency sponsor by force account. In the latter 

case, however, sponsors should clearly understand that routine administrative costs are not allowable 

under the AIP. (Refer to the discussion of force account work in Chapter 4.) 

d. Other. Consult with APP-520 for other noise compatibility proposals. 

Page 144 
June 28, 2005 Order 5100.38C

816. ALLOWABLE PROJECT COSTS. 

Costs for work that is necessary to accomplish a noise compatibility project are allowable in the 

same way that such costs are allowable for airport development projects as discussed in Chapter 5. For 

example, if construction of a noise barrier would require the demolition of a structure on the airport, 

those costs are allowable. If the structure were occupied by a tenant under a lease, the cost of 

relocating the tenant and the cost associated with terminating the lease, as provided for under the 

Uniform Act, are also allowable. The Federal share of such costs associated with a noise compatibility 

project is the same as the Federal share of the cost for noise compatibility projects at that airport, rather 

than the share applicable to airport development projects. 

817. - 819. RESERVED. 

Section 3. USE OF PROCEEDS FROM SALE OF 

NOISE COMPATIBILITY LAND

820. DISPOSAL REQUIREMENT. 

When land acquired for noise compatibility purposes is no longer needed for that purpose, the 

sponsor is required to dispose of the property. The proceeds, at the discretion of the FAA, may be 

returned to the Airport and Airway Trust Fund or reinvested in approved noise compatibility projects. 

Reinvestment of proceeds from the sale of noise land at the original airport is the option preferred by the 

FAA. 

821. USE OF FUNDS. 

In accordance with Section 47107(f), proceeds from the sale of noise compatibility land that are 

returned to the Trust Fund may be reissued in grants for airport development and airport planning and 

are not subject to obligation limitations. Contact APP-520 for information on procedures for depositing 

such proceeds and their subsequent reuse. To avoid unnecessary actions, in lieu of returning the 

funding to the Trust Fund to be reissued, regions may request approval from APP-500 to allow use of 

the proceeds directly in an airport development or planning project. Project files should contain enough 

of an audit trail so that these actions are clearly understood. 

822. EVALUATING REINVESTMENT PROPOSALS. 

In many cases, it will be desirable to reinvest proceeds from the sale of noise land in another noise 

compatibility project at the original airport or vicinity. The following factors should be considered, 

however, prior to approving local reinvestment of such funds: 

a. The sponsor’s financial management procedures should be able to account for the proceeds and 

track their subsequent use in new projects. 

b. Projects at that airport should be of sufficient priority to justify their reuse locally, and the FAA 

should concur in the sponsor’s project selection for use of the proceeds. 

823. REQUIREMENTS FOR REINVESTMENT. 

Where the proceeds are to be reinvested in another noise compatibility project, the following 

provisions apply: 

a. The project must be an eligible noise compatibility project as described in Paragraph 801. In 

addition to those eligible projects in an NCP, the FAA may allow the reinvestment of revenues for 

projects not in an NCP such as noise insulation projects in buildings used primarily for educational or 

medical purposes. 

Page 145
June 28, 2005 Order 5100.38C

b. The project must be at the same airport or in the vicinity as that where the land sale proceeds 

were realized. 

c. The same sponsor who disposed of the land and realized the proceeds of the sale must sponsor 

the new project. 

d. When Federal assistance is used to acquire land, and the land is subsequently sold and the 

proceeds are used to acquire additional land, that acquisition is also subject to the provisions of the 

Uniform Act, even if no “new” Federal funds are provided for the later acquisition. (Regional/General 

Counsel Opinion 3/1/88) By extension, it follows that other conditions and assurances are renewed 

when such proceeds are used in follow-on projects. The sponsor should be advised of this continuing 

obligation early in the original grant application process, if possible, but no later than prior to use of the 

proceeds in a new project. The following actions are normally applied to facilitate tracking these sponsor 

obligations: 

(1) Award a grant with “new” (current year) Federal grant funds when a project is to be 

undertaken with proceeds from the sale of noise land to ensure sponsor/FAA cognizance of the renewed 

grant obligations; and/or 

(2) Use the proceeds for noise insulation or another noise related improvement project which 

uses up the funds and eliminates the need to track the proceeds and sponsor obligations through 

subsequent iterations; and/or 

(3) Amend the original grant to make use of the proceeds if the grant amendment requirements 

and limitations can be met. 

824. CONVERSION TO AIRPORT DEVELOPMENT LAND. 

Land acquired for noise compatibility purposes may subsequently be redesignated as airport 

development land without any further certifications or adjustment in the Federal share of the cost of 

acquisition, provided that the land being redesignated as airport development land is justified by a new 

or revised airport master plan. In addition to the justification, the land must be depicted on a new or 

revised airport layout plan, depicted as future development land, and unconditionally approved by the 

FAA. 

825. - 899. RESERVED. 

Page 146 
June 28, 2005 Order 5100.38C

Chapter 9. P ROCUREMENT AND CONTRACT 

REQUIREMENTS

Section 1. PROCUREMENT

900. GENERAL. 

a. Procurement Regulations. Title 49 CFR, Part 18.36 (referred hereinafter as Part 18.36) 

provides the policy, procedures, and regulations to be used for procurements made under Federal grant 

programs. Typical procurements under the airport aid program involve construction projects, equipment 

purchases, and professional services such as engineering/architectural, planning, legal, land appraisal, 

and audit services. 

b. State and Local Procurement Standards. Federal law provides that the granting agency 

(FAA) has a minimal role in the procurement used by airport sponsors. For example, if the sponsor is a 

state, states are authorized under Part 18.36 to use the same procurement policies and laws that they 

use for procurements not funded in whole or in part by Federal sources. Other non-state Sponsors will 

use their own procurement procedures that reflect applicable state and local laws and regulations, 

provided that the procurements conform to applicable Federal law and the standards identified in 

Part18.36. 

c. Contractual Responsibility. The standards in this section do not relieve the sponsor of the 

contractual responsibilities arising under its contracts. The sponsor is the responsible authority, without 

recourse to the FAA regarding the settlement and satisfaction of all contractual and administrative issues 

arising from procurements entered into, in support of an AIP grant. This includes, but is not limited to, 

disputes, claims, protests of award, source evaluation, or other matters of a contractual nature. 

d. Code of Conduct. The sponsor is required to maintain a code of standards of conduct, which 

governs the performance of its officers, employees, or agents in contracting with and expending airport 

aid funds. The sponsor’s officers, employees, or agents are not allowed to solicit or accept gratuities, 

favors, or anything of monetary value from contractors or potential contractors. To the extent 

permissible by the state or local law, rules, or regulations, such standards shall provide for penalties, 

sanctions, or other disciplinary actions to be applied for violations of such standards by either the 

sponsor’s officers, employees, or agents, or by the contractors or their agents. 

901. REVIEW OF PROPOSED PROCUREMENTS. 

FAA Airports Office personnel are required to assure that a proposed procurement meets the 

standards of Part 18.36. Except as provided below, this can be accomplished by two methods. The first 

and preferred method is for the review and determination that a sponsor’s procurement system complies 

with the standards of Part 18.36. Absent this summary determination, each proposed procurement must 

be reviewed for compliance with regulatory requirements. 

Under Part 18.36, a sponsor is exempt from the pre-award review if the FAA determines that its 

procurement systems comply with the standards of Part 18.36. Therefore, FAA Airports Office 

personnel are not required to review or concur in award of sponsors’ contract if a determination is made 

that the sponsor’s procurement system complies with Part 18.36 requirements. In order to manage 

workload, FAA Airports Office personnel are encouraged to review the standards of Part 18.36 with 

airport sponsors and to perform a procurement system compliance review. Regional Airports Divisions 

are delegated the authority to determine that a proposed procurement meets the requirements of 

Part 18.36. Such authority may be redelegated. 

FAA Airports Offices are authorized to accept certifications that the technical specifications meets 

the standards of the FAA but may require sponsors to submit such technical specifications on proposed 

Page 147
June 28, 2005 Order 5100.38C

procurements where the FAA believes such review is needed to ensure that the item or work specified 

meets FAA standards. 

a. Pre-Award Review Required. Pre-award review of proposed contracts is required in the 

following cases: 

(1) The sponsor does not comply with the standards promulgated in Title 49 CFR, Part 18.36, 

Procurement; 

(2) The proposed contract is to be awarded on a sole source basis or when only one bid or 

proposal is received in which the aggregate expenditures exceed $100,000 (all proposed contracts 

specifying “brand name” products shall be considered sole source procurements); 

(3) The apparent low bidder under a formally advertised procurement is determined by the 

sponsor to be a non-responsive and/or not responsible bidder (the FAA must review and concur in this 

determination and document it in the project file); or 

(4) A review of the bid abstract reveals the possibility of bid improprieties (See Paragraph 1053). 

b. Pre-Award Review Optional. The FAA Airports Office has the option to impose pre-award 

review when: 

(1) Sponsors are working on their first assistance project supported by DOT and have not yet 

been reviewed for compliance with the standards contained in Title 49 CFR, Part 18.36, Procurement; 

(2) Sponsors request pre-award assistance for proposed contracts; 

(3) Contracts are awarded for automatic data processing in accordance with Paragraph C1 of 

Attachment B to OMB Circular A-87; 

(4) Contracts are repeatedly awarded to the same firm; 

(5) Purchasing is performed outside the sponsor’s established procurement system or office; 

(6) Proposed construction contracts are to be awarded through the competitive proposal 

procurement method; and/or 

(7) FAA determines that the circumstances warrant and requests such documents. 

902. FAA REVIEW OF CONTRACT DOCUMENTS. 

When requested by the FAA Airports Office, the sponsor shall submit one copy of the executed 

contract and other procurement documents for review to determine whether all of the required contract 

provisions have been included. The sponsor is required to make procurement documents available for 

pre-award review when: 

a. FAA has determined that the sponsor’s procurement procedures or operation fail to comply with 

the standards of Part 18.36 as provided above; 

b. the procurement is expected to exceed $100,000 and is to be awarded without competition or 

only one bid or offer is received; 

c. the procurement, which is expected to exceed $100,000, specifies a “brand name”; 

d. the proposed award over $100,000 is to be awarded to other than the apparent low bidder; or 

Page 148 
June 28, 2005 Order 5100.38C

e. a proposed contract modification changes the scope of a contract or increases the contract 

amount by more than $100,000. 

903. COMPETITION IN PROCUREMENTS. 

Title 49 CFR, Part 18.36(c) states “all procurement transactions will be conducted in a manner 

providing full and open competition consistent with the standards of Part 18.36". 

a. Practices considered to be restrictive of competition include but are not limited to: 

(1) Unreasonable requirements on firms in order for them to qualify to do business; 

(2) Noncompetitive pricing practices between firms; 

(3) Organizational conflicts of interest; 

(4) Unnecessary experience and bonding requirements; 

(5) Unnecessary product or “brand name” specifications; and 

(6) Preference to in-state or local bidders. 

b. In addition to the proceeding Paragraph a, the specification of features that require bidders to 

significantly alter a product’s design can have an effect of limiting competition. Therefore, FAA Airports 

Office employees should encourage sponsors to be diligent in specifying only essential requirements in 

purchase specifications. 

c. The sponsor’s requests for bids or proposals shall clearly and accurately describe the technical 

requirements for the material, product, or service to be procured. The request must clearly state all 

requirements that must be fulfilled and the factors that will be used to evaluate the bids or offers. 

d. Unreasonable limitations placed in a solicitation are not permitted. There are conditions under 

which specifications may be limited to meet valid operational demands or other pertinent circumstances. 

If a sponsor knowingly writes a proprietary specification (and, therefore, knows the specification is 

actually limited or sole source), it must advise the FAA in advance of issuance that the specification 

contains limitations, is proprietary, and must justify this procurement method. 

904. PROCUREMENT METHODS. 

Four basic methods of procurement are permitted: 

a. Competitive Sealed Bids. Competitive sealed bids are usually used in the airport grant 

program for procurements involving construction projects or equipment purchases. In this procurement 

method, sealed bids are publicly solicited and a firm fixed price contract (either lump sum or unit price) is 

awarded to the responsible bidder whose bid, conforming to all the material terms and conditions of the 

invitation for bids, is lowest in price. 

(1) The invitation for sealed bids must be publicly advertised although it may also be sent 

directly to known suppliers; 

(2) Where specified in the bidding document, factors such as discounts, transportation costs, 

and life cycle costs may be considered in determining which bid is lowest (See Paragraph 910 for 

additional guidance on use of life cycle costs); 

(3) If the sponsor determines that the bidder submitting the lowest bid is not responsive and/or 

responsible, the FAA must review and concur in this determination. The FAA’s action on the sponsor’s 

Page 149
June 28, 2005 Order 5100.38C

determination should be documented in the project file (See Paragraph 912 for Award to Other than the 

Apparent Low Bidder). 

b. Competitive Proposal. Competitive proposals are used when it is not appropriate to use the 

sealed bid method. This method would be used, for example, when complete and adequate 

specifications or purchase description are not available, or when more than one responsible bidder is not 

reasonably expected to bid, or when the selection of contractor cannot be made principally on the basis 

of price. Generally, competitive proposals include price but elements of price are prohibited when being 

used for selection and award for professional services as described below. 

(1) Competitive proposals are solicited from an adequate number of qualified sources. 

Additionally, the request for proposals (RFP) is also publicized. The request for proposals must identify 

all the factors that will be used to evaluate the proposals and their relative importance. Under this 

method (except for professional services in Paragraph (2) below), Sponsors may be permitted to pay a 

reasonably higher price for a better quality product if justified. Since this de-emphasizes the price 

concept, the approval to use competitive negotiations is given sparingly except for the required use for 

procurement of professional services. 

(2) The procurement of certain professional services is accomplished through a special form of 

competitive proposal. The nature of the services dictates the use of this method rather than the 

professional credentials of the employees to be used. These services include program management, 

construction management, planning and feasibility studies, architectural services, preliminary 

engineering, design, engineering, surveying, mapping, and related services. The competitive 

negotiation method recognizes that the expertise of firms (or individuals) providing professional services 

varies. Although several firms may be qualified to provide the professional service required, some of 

them may have more expertise in the particular area than others. For this reason, procurement 

(selection) under this special competitive negotiation method considers the technical qualifications of the 

competitor, subject to negotiation of fair and reasonable compensation (price). Sponsors may not 

request price or cost data prior to determination of the best qualified firm even if the data is submitted in 

a separate sealed envelope and further, price may not be used as a selection factor in the procurement 

of these services. Sponsors may use competitive proposals for procuring engineering and architectural 

services whereby only the offeror’s technical qualifications are evaluated for selection. In these cases, 

the request for proposals requires that firms only submit their technical qualifications for performing the 

project. The best-qualified firm is then selected subject to the negotiation of a fair and reasonable price. 

If the sponsor and the best-qualified firm cannot agree upon a price, negotiations with that firm are 

terminated. Price negotiations are then entered into with the second best qualified firm. The same 

procedure should be followed with the third firm, fourth firm and so on until a fair and reasonable price 

can be negotiated with a qualified firm. Once negotiations have been terminated with a firm and begun 

with another, they cannot be reopened with the former firm. Advisory Circular 150/5100-14 provides 

further details on the procurement of engineering and architectural services through competitive 

negotiation. 

c. Small Purchase Procedures. The procurement process under small purchase procedure is 

less formal than either of the previously discussed methods and may only be used for procurements of 

less than $100,000. The number of sources solicited would be determined by the number of qualified 

sources available, the time frame involved, and the dollar value. Oral solicitation is acceptable for very 

small purchases, but should be adequately documented. Except for very small purchases, a letter 

request should be issued as a minimum, and a written proposal should be solicited. 

d. Noncompetitive Proposal. 

(1) Although it is preferred that all procurements be made on a competitive basis, a 

noncompetitive proposal is permitted under the following circumstances: 

(a) The item is available only from a single source; 

Page 150 
June 28, 2005 Order 5100.38C

(b) Public exigency or emergency when the urgency for the requirement will not permit a 

delay incident to competitive solicitation; 

(c) After solicitation of a number of sources, competition is determined inadequate; or 

(d) The FAA authorizes noncompetitive negotiation. 

(2) Under (1)(d) above, regions may authorize noncompetitive negotiation for professional 

services if the cost of the contract is not expected to exceed $10,000 and the professional services are 

incidental to the grant project. Typical contracts of this nature include: 

(a) Services to review legal sufficiency of the grant; 

(b) Appraisal; 

(c) Grant audit services performed as part of a project; and 

(d) Independent project cost estimates. 

(3) Care must be exercised in allowing noncompetitive contracts for legal services involving land 

acquisition (especially those which may include condemnation proceedings) since these types of 

contracts may exceed the $10,000 limitation and, in some cases, could be considered a prime rather 

than an incidental part of the project. Similarly, engineering/architectural services are normally a prime 

part of the project (rather than incidental); and, therefore, noncompetitive proposal would not be 

appropriate. 

(4) If a sponsor knowingly writes a specification that is noncompetitive (and, therefore, knows 

the specification is actually sole source), it must notify the FAA in advance that the specification is, in 

fact, sole source and then justify this procurement method. 

(5) Utility companies owning service lines or other facilities generally do not permit work on their 

property or equipment by anyone other than their own employees. Accordingly, contracts for installation, 

extension, removal, and relocation of public utility facilities may be entered into through a noncompetitive 

proposal. However, the contracts, cost estimates, and plans for such work must be reviewed and 

approved by the FAA. (See Paragraph 594.) 

e. Other Methods of Contracting. Other methods of contracting may be appropriate when used 

for an AIP project. One such method is considered a two-step procurement in which a general scope of 

the project is provided to prospective bidders. A technical proposal is submitted and the sponsor 

determines which bidders provide a technical proposal that meets the requirements of the general 

scope. An invitation for bids that encompasses the general scope and incorporates a bidder’s technical 

proposal by reference is issued to each bidder whose technical proposal is deemed acceptable. The 

bidder then bids on the general scope as well as its technical approach and the responsible and 

responsive bidder submitting the lowest bid is awarded the contract. Other methods that may have 

some use under AIP are various forms of Design-Build. Except in those circumstances under which a 

project has been approved under a Design-Build pilot program, sponsors should be cautioned that the 

design-build contracting must still meet the requirements of both Paragraph 904(b)(2) above for 

professional services as well as the price competition for construction. In addition, sponsors should be 

cautioned that except under limited circumstances (See Chapter 3, Section 2) costs incurred prior to a 

grant are not necessarily reimbursable so the contract phasing should reflect the need to perform 

construction services after a grant is issued. 

905. PROCUREMENT OF EQUIPMENT. 

a. FAA is authorized to establish or approve standards for airport development, which is to be 

accomplished with AIP funds. FAA has done this for many types of equipment, such as snow removal 

Page 151
June 28, 2005 Order 5100.38C

equipment, airport lighting, aircraft rescue and firefighting equipment, etc. In some cases, it has also 

published approved lists of items meeting FAA plans and specifications. However, the fact that a piece 

of equipment is not on an approved list, in and of itself, does not make the equipment ineligible or not 

acceptable. For such equipment, the sponsor will have to establish, to FAA’s satisfaction, that the 

equipment does, in fact, meet the standards and specifications. If the equipment does not meet the 

standards and specifications, it is not eligible for Federal aid. If the sponsor elects to install equipment, 

which has not been approved by FAA and cannot meet standards at the time of commissioning, then the 

sponsor must take whatever steps necessary to replace the equipment or the appropriate costs will be 

disallowed. 

b. Where FAA has published specifications for specific items, the specifications should be used 

with no modification, unless the sponsor can justify to FAA such modification. Some sponsors in the 

past have altered or required features not contained in the advisory circulars for items such as airfield 

lighting and aircraft rescue and firefighting equipment. Sponsors should be advised that, if not approved 

by FAA in advance, these alterations could jeopardize FAA’s ability to fund the purchases through AIP. 

A sponsor’s solicitation should contain only FAA specification and related designation (e.g. AC 

150/5345-46, L-850A, runway centerline fixture). Solicitations should not include limiting factors, which 

have the effect of restricting competition, which requires manufacturers to radically change design or 

make other changes to their equipment unreasonably. Inclusion of limiting factors could cause a defacto 

limitation of competition. 

c. While FAA can appreciate the sponsor’s desire to have uniformity of equipment, both for 

maintenance as well as for aesthetic purposes, Federal regulations regarding the bidding process 

require open and free competition. This is not to imply that there may not be reasons for specifying a 

certain type of equipment. If such is the case, the sponsor must submit a justification for such restriction 

to FAA for consideration. An example of such justification might be that the equipment quantities to be 

acquired represent an insignificant number (for example, less than 5%) of the overall equipment in use 

and, therefore, do not justify the creation of duplicate inventory. In some cases a sponsor may request 

equipment to “match existing” equipment. If the effect of such request is, de facto, the establishment of 

sole source procurement because of the lack of interchangeability of parts or equipment, then this type 

of wording should not be allowed in the solicitation. Open and free competition is to be the norm and not 

the exception. 

d. To allow sponsors flexibility in purchasing equipment, they should be permitted to select and 

specify in their bidding documents, equipment features, and characteristics when FAA standard 

specifications for such equipment allow a choice. However, in selecting those features and 

characteristics, the sponsor must assure FAA that at least two manufacturers will be able to meet the 

selected specification with their standard production model. In cases where sponsor selections are likely 

to result in only one qualified manufacturer, field personnel must secure from the sponsor sufficient 

justification for those selected features that create the exclusivity since the resulting procurement would 

be noncompetitive. 

e. FAA Airports Offices may approve procurement of equipment containing additional features not 

contained in FAA specification. Unless the additional features represent state-of-the-art development, 

Federal financial participation shall be limited to those features incorporated in the specification and 

some basis must be established for determining the cost of nonessential items. State-of-the-art features 

may be eligible for participation if approved by the Office of Airport Safety and Standards (AAS) and 

justified by the airport sponsor. In no case can these added features (other than state-of-the-art ones) 

result in the elimination of competitive bidding by specifying a design limited exclusively to one 

manufacturer. 

f. Field offices should strongly encourage sponsors to send nonstandard specifications for 

equipment to industry for review and comment prior to issuance of the Invitation for Bids (IFB). This will 

allow defects in the specifications to be identified in advance, especially if the specification is proprietary. 

Page 152 
June 28, 2005 Order 5100.38C

Using the information and input from industry, correcting or modifying the specification, the sponsor can 

certify to FAA that at least two manufacturers will be able to meet the proposed specification in the IFB. 

g. If a sponsor knowingly writes a proprietary specification (therefore, knows the specification is 

actually sole source), it must notify in advance FAA that the specification is, in fact, proprietary and then 

justify this procurement method. 

906. PRICE OR COST ANALYSIS. 

a. Required Analysis. Sponsors are required to perform some form of a cost or price analysis for 

every procurement, including change orders. This analysis is needed for FAA review to determine the 

reasonableness of cost (See Paragraph 1052) and to identify possible bid improprieties (See 

Paragraph 1053). 

(1) Cost Analysis. Cost analysis is the review and evaluation of a contractor’s proposal and 

the judgmental factors, which the contractor applied. The analysis is used by the sponsor to form an 

opinion as to whether proposed costs are consistent with what contract performance should cost, 

assuming reasonable economy and efficiency. For the procurement of professional services, the 

sponsor should make a technical evaluation of the effort needed to perform the tasks and should include 

this in the analysis. Cost analysis results in a determination of the necessity for costs and the 

reasonableness of the amounts. 

(2) Price Analysis. Price analysis is accomplished by comparing the submitted proposals or 

quotations with prior quotations and prices and using parameters such as average unit cost, published 

price lists, etc. A price analysis should be used in most cases, other than for professional services, 

since a detailed cost analysis is already required. Apparent gross inconsistencies should be subjected 

to more intensive inquiry. 

(3) Significant Differences. Significant differences in the proposed contract prices and the 

sponsor’s cost estimate should be explained as part of the analysis. 

b. FAA Review. The sponsor’s analysis shall be submitted to FAA for review only if the 

procurement is submitted for review under Paragraph 901. Otherwise, the analysis will be retained with 

the sponsor’s procurement file and made available upon FAA request. Particular attention should be 

paid to the sponsor’s analysis where the procurement involves a negotiated price. 

907. PROFESSIONAL SERVICE RETAINERS. 

a. Many sponsors hire firms (or individuals) to provide professional services necessary for their 

normal operations (not necessarily related to a grant) on a retainer basis. The sponsor may use these 

same firms to provide professional services necessary for a grant project without further procurement 

action provided that: 

(1) The retainer contract was awarded as a result of a procurement method which would have 

met the requirements of competitive procurement, as specified in Paragraph 904; 

(2) The parties competing for the work were advised that anticipated grant funded projects 

would be performed under the retainer contract. This would include advising them of a specific scope of 

services for those specific projects; and 

(3) The price for the work to be performed under the grant contract will be fair, reasonable, and 

supported by a cost or price analysis. Comparisons should be made to similar type projects. 

b. The sponsor shall be required to initiate a competitive procurement action in accordance with 

Paragraph 904 if the firm on retainer does not meet all of the above conditions. 

Page 153
June 28, 2005 Order 5100.38C

908. PROCUREMENT OF ENGINEERING, ARCHITECTURAL, AND OTHER PROFESSIONAL SERVICES FOR 

SEVERAL PROJECTS. 

Advisory Circular 150/5100-14provides guidance for airport sponsors in the selection and 

employment of architectural, engineering, and planning consultants under FAA airport grant programs. 

Firms competing for engineering, architectural, and other professional services must be selected on their 

qualifications subject to the negotiation of a fair and reasonable price. Consequently, it would be 

permissible for the sponsor to procure engineering and architectural services for several grant projects 

through one procurement action if the following criteria are met: 

a. The parties competing for the work must be advised that the work is expected to be 

accomplished during the course of several grant projects; 

b. The parties shall also be advised that possibly all or some of the services may not be required 

and that the sponsor reserves the right to initiate additional procurement actions for any of the services 

included in the procurement; 

c. The scope of the proposed development work and required services must be defined along with 

the expected schedule of project initiation. The scope of the development must be specific rather than 

general; 

d. Unless otherwise approved in writing by the appropriate FAA Airports Office, the services 

included in the procurement shall be limited to those projects that can reasonably be expected to be 

initiated within five years of the final procurement selection. This time limitation has been established so 

that competition is not unduly restricted. In some circumstances (e.g. a project that will take many years 

to complete a safe, usable unit), it may be permissible to approve an engineering contract that involves 

services beyond the five-year limitation. However, APP-500 shall be consulted prior to approval for 

periods exceeding five years: 

e. The negotiation of the fee will usually be limited to the services expected to be performed under 

the initial grant; 

f. The contract should be limited to the services covered by the negotiated fee. Subsequent 

services should be covered by amendment to the initial contract or subsequent contracts. However, at 

the time the initial contract and cost analysis are submitted for review, the sponsor should notify FAA of 

the subsequent services that were included in the procurement; 

g. The negotiation of the fee for subsequent services (i.e. services included in the procurement 

action but not included in the initial contract) shall occur at the time those services are needed. The 

sponsor must perform a cost analysis for each of these negotiations. If a price cannot be agreed upon 

between the sponsor and the selected firm, then negotiations are terminated with that firm. However, 

rather than entering negotiations with the firm ranked in the next place at the time the initial contract was 

negotiated, a new procurement action must be initiated. 

909. SOLICITATIONS CONTAINING BOTH ELIGIBLE AND INELIGIBLE WORK. 

Unless there is a convincing reason to combine eligible and ineligible work in a single solicitation, 

sponsors should be discouraged from doing so. Sponsors who issue such combined IFBs should be 

made aware of the policy in this paragraph before the IFB is issued. In solicitations or IFBs where both 

eligible and ineligible work are combined (e.g. paving an apron and building a hangar), the extent of 

Federal participation with grant funds will be determined as follows: 

a. Where a combined solicitation is logical, eligible work should be clearly identifiable as separate 

line items, or, as in the case of pavement overlay for instance, easily prorated; 

Page 154 
June 28, 2005 Order 5100.38C

b. On any solicitation to be funded in part with Federal grant money, the sponsor must award to the 

lowest responsive and responsible bidder on the entire contract, except as in “c” below; 

c. If the low overall bid contains a cost for the eligible work higher than that of other bids, Federal 

participation shall be based on the lowest amount bid for the eligible work by a responsive and 

responsible bidder, unless it is obvious from a comparison with other bids or the engineering estimate 

that the bid containing the lowest price for the eligible work is unbalanced and the price of the eligible 

item is unreasonably low. In this case, FAA Airports Office should limit Federal participation to the next 

lowest reasonable bid on the eligible work. 

910. LIFE CYCLE COSTS IN COMPETITIVE SEALED BIDS. 

a. The concept of life cycle costs recognizes that although an item may have the lowest initial cost, 

it may actually be more expensive than some other item when other costs such as those associated with 

operation and maintenance are considered. Under the life cycle cost concept, any costs expected to be 

incurred for the item over its useful life (i.e. acquisition, installation, operation, and maintenance) are 

considered. Cost data must be verifiable independently of a claim by the manufacturer or contractor. 

Since life cycle costing can result in overall economy to the sponsor when properly carried out, FAA 

Airports Offices should encourage life cycle costing when the conditions below can be met: 

(1) The invitation for bid states that life cycle costs will be used in determining the low bidder; 

(2) The factors to be considered are specified and the costs associated with the factors must be 

quantifiable: 

(a) “Specified” means that the invitation for bid specifically states the factors that will be 

included in the life cycle cost computation. Examples of factors that could be specified include annual 

fuel consumption for a motor vehicle, electrical consumption, and lamp replacement for lighting 

equipment, recurring inspection, and maintenance. All factors that have quantifiable costs should be 

specified in the bidding document. 

(b) “Quantifiable” means that there is sufficient information available so that costs 

associated with these factors can be readily calculated. Calculation of energy consumption costs is 

fairly straightforward and should be based upon some objective standard or independent testing. For 

lighting equipment, electricity consumption and lamp replacement should be based upon the rating 

assigned by the manufacturers of the components rather than the equipment manufacturer. Calculation 

of costs associated with recurring inspections and maintenance is much more difficult. Generally, costs 

associated with maintenance should only be included in the life cycle costs computation if a fair and 

accurate calculation of such costs can be made. Maintenance costs, if used, should be independently 

validated. 

(3) The IFBs must explain how the costs for each of the specified factors will be calculated: 

(a) The costs associated with a factor can vary substantially depending upon how they are 

calculated. For this reason, any assumptions that will be used in making the calculations should be 

included in the bidding document. For example, if the fuel consumption of a vehicle will be considered, 

the IFB should state the expected number of annual miles and the price of fuel that will be included in 

the calculation. 

(b) The period of time over which the life cycle costs will be calculated should also be 

stated. 

b. The item that meets the bidding specification and has the lowest life cycle cost is the successful 

bid. Sponsors desiring to use the life cycle cost concept should be advised to consult with their FAA 

Airports Office before issuing an IFB to assure that their procurement procedure will meet grant 

requirements. 

Page 155
June 28, 2005 Order 5100.38C

911. BONDING. 

Bonding requirements for construction are found in Title 49 CFR, Part 18.36(h) and allows sponsors 

to follow their own requirements relating to bid guarantees, performance bonds, and payment bonds for 

construction unless the contract or subcontract exceeds $100,000. For those contracts and 

subcontracts exceeding $100,000, FAA may accept the bonding policy and requirements of the sponsor 

provided the appropriate FAA Regional Office has made a determination that the Federal Government’s 

interest is adequately protected. The determination should be adequately documented in the project file. 

If such a determination has not been made, the minimum requirements shall be as follows: 

a. Bid Guarantee of Five Percent. Each bidder shall submit a bid guarantee equivalent to five 

percent of the bid price with its bid. The “bid guarantee” shall consist of a firm commitment such as a bid 

bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder 

will, upon acceptance of its bid, execute such contractual documents as may be required within the time 

specified. 

b. Performance Bond of 100 Percent. Each contractor shall submit a performance bond for 

100 percent of the contract price. A “performance bond” is one executed in connection with a contract to 

secure fulfillment of all the contractor’s obligations under such a contract. 

c. Payment Bond of 100 Percent. Each contractor shall submit a payment bond for 100 percent 

of the contract price. A “payment bond” is one executed in connection with a contract to assure 

payment, as required by law, of all persons supplying labor and material in the execution of the work 

provided for in the contract. 

912. AWARD TO OTHER THAN APPARENT LOW BIDDER. 

When the competitive sealed bid procurement method is used, the contract must be awarded to the 

lowest responsible and responsive bidder. If the sponsor determines that the apparent low bidder (i.e., 

the bidder submitting the lowest dollar amount) is not responsible and/or nonresponsive, FAA must 

review and concur in this determination. Although the sponsor can award to other than the apparent low 

bidder, Federal funds cannot be used in the contract unless FAA concurs in the determination prior to 

award of the contract. 

a. Not Responsible. The bidder must be a responsible party, i.e. it must have the required 

financial, managerial, technical, and ethical capacity to perform the contract. Part 18.36 (b)(8) reads that 

“grantees...will make awards only to responsible contractors possessing the ability to perform 

successfully under the terms and conditions of a proposed procurement. Consideration will be given to 

such matters as contractor integrity, compliance with public policy, record of past performance, and 

financial and technical resources.” However, sponsors possess a wide amount of discretion in 

determining who is responsible. To concur in a sponsor’s determination of not responsible, FAA 

personnel should review the determination to assure that there is a factual basis for the determination. 

b. Nonresponsive. When a bid does not conform to all the material terms and conditions of the 

IFB that are deemed substantial, it is nonresponsive. It is the sponsor’s responsibility to determine if the 

exceptions taken by a bidder to the solicitation are substantial or not and the extent of deviation it is 

willing to accept. Sponsors should be encouraged to disallow all deviations except for those that they 

would waive as being immaterial. Items affecting material terms and conditions of the invitation for bids 

such as delivery time, quantity, technical specifications, price, etc., should be considered material. FAA 

project manager should normally not use his/her judgment in place of the sponsor’s unless there are 

compelling reasons to do so or unless the sponsor is not in compliance with local procurement 

regulations. Determinations of nonresponsiveness should not be based upon deviations that are not 

substantial. 

Page 156 
June 28, 2005 Order 5100.38C

913. ALTERNATE BIDS. 

To allow more flexibility in the procurement process, the sponsor may request alternate bids in a 

procurement action. For example, a sponsor may be taking bids on a bituminous aircraft-parking apron. 

An alternate might be the construction of the same apron with concrete. The amount of Federal 

participation will depend on the manner in which the alternate bids are addressed in the IFB. 

a. If the sponsor specifies in the IFB that it reserves the right to award to the low bidder in either 

alternate category and establishes a reasonable objective standard that will be applied in making the 

award, then the contract may be awarded to the low bidder in either alternate with full Federal 

participation. (As an example, the IFB might state that: “The sponsor reserves the right to award to the 

low bidder in either Alternate “A” or Alternate “B,” provided that the amount of the low bid in the alternate 

selected does not exceed the amount of the low bid in the other alternate by more than 10%.”) 

b. If, in the IFB, the sponsor has not reserved the right to accept the low bid in either alternate or 

has not established an objective standard to be applied in making the award, the sponsor may award to 

the low bidder in the higher alternate bid if local policy allows; but the Federal participation will be based 

on the lowest responsive alternate bid. 

c. If a sponsor plans to use alternate bids, the FAA Airports Office should call to the sponsor’s 

attention the differences in “a” and “b”, above, so that the sponsor is aware prior to the issuance of the 

IFB of the Federal participation. 

914. BID PROTESTS. 

a. Role of the Sponsor. Under Title 49 CFR, Part 18.36, the sponsor will develop protest 

procedures to handle and resolve disputes relating to their procurements and shall, in all instances, 

disclose information regarding the protest to FAA. The sponsor is responsible for all procurement 

actions to be accomplished in accordance with its established procedures including the handling of 

complaints and protests. 

b. Role of FAA. FAA’s role is limited to a review of the protest for violations of Federal law or 

regulations and violations of the sponsor’s protest procedures if the bidder subsequently appeals to 

FAA. A protestor must exhaust all administrative remedies with the sponsor before pursuing an appeal 

with FAA. FAA field offices should ensure that the sponsor sends a copy of all protests to them and 

should redirect to the sponsor any protests received from bidders. To avoid delaying the procurement 

process, field offices should immediately review any protest they receive and send a copy to APP-520 to 

assure consistency in the resolution of bid protests. APP-520 will provide advice on matters of 

regulation and policy upon request. Regions should determine the disposition of appeals to FAA in 

consultation with Regional Counsel, if such consultation is deemed appropriate. 

c. Defects in Bid Solicitation. 

(1) Since defects in the bid solicitation can be identified prior to bid opening, the protest should 

be filed with the sponsor before bid opening since the deficiency can often be corrected by amending the 

solicitation. Unless a sponsor has a valid and justifiable reason to shorten the time, bid-opening dates 

should be at least 30 and preferably 45 days after the public issuance of the bid solicitation (including 

the issuance of plan sets). This would normally allow a prospective bidder time to review the plans and 

specifications and to confer with the sponsor in order to clarify any area that may be vague or 

misunderstood. Such informal discussion may be in order because of unintentional inclusions of 

proprietary items by the sponsor or its engineer in the plans and specifications. This would allow the 

sponsor time to issue addenda, as necessary. Such action may well avoid the filing of a formal protest. 

(2) If a prospective bidder formally protests the procurement on the grounds that the bid 

solicitation is defective, it is the responsibility of the bidder to notify the sponsor in writing and before the 

bids are open, about what aspects of the solicitation the bidder is protesting. The sponsor shall send a 

Page 157
June 28, 2005 Order 5100.38C

copy of the protest (or have the bidder do so) to the ADO or regional Airports office. The bid opening is 

to be delayed, if necessary, until the protest is satisfied (including rejection) or to allow time for the 

sponsor to issue an addendum, as appropriate. Since the most common occurrence in the grant 

program under this category is the use of proprietary specifications, the project manager should review 

the solicitation, especially if the sponsor has certified that the plans and specifications meet FAA 

standards, are nonproprietary, and are in accord with Section18.36. The fact that FAA may have 

approved the specification or accepted the sponsor’s certification is obviated by the receipt of the bid 

protest. Because of the complexity of some of the equipment being used by sponsors today, it may be 

necessary to seek the advice of headquarters personnel, such as found in AAS-100 and 200, on 

technical or design issues. If the sponsor insists on opening the bids when there is a protest 

outstanding, they should be advised that FAA will not approve awarding of a contract and that Federal 

funds may not be used. 

(3) If a protest of this nature is made after bid opening (and assuming that the bid package has 

been available for more than 10 working days) and if local procurement regulations allow, the sponsor 

may have the option of rejecting the protest without action, even if, in fact, the protest is valid. This is 

based on a General Accounting Office principle that a bidder normally has sufficient time to protest a 

defective solicitation prior to bid opening and not after bid opening. 

(4) There are times when it is not practical to have a 30 or 45-day solicitation period for all bids. 

Sometimes a sponsor may be able to justify a shorter period of time. If the sponsor allows 10 days or 

less for bid proposals, then the prospective bidders should be allowed to protest a defective specification 

up to contract award. 

d. Improper Evaluation of Bids. While protests pertaining to defective solicitations are made prior 

to bid opening, there is another type of protest that occurs after bid opening (the time period for filing is 

dependent upon the provisions of local law). This involves an improper bid evaluation. A bidder may be 

improperly disqualified or the sponsor may fail to disqualify the apparent low bidder for a defective bid. 

Here, the most common question deals with bid responsiveness and the responsibility of the bidder. If 

the apparent low bidder is determined by the sponsor to be non-responsive or not responsible, FAA 

must concur in the determination (See Paragraph 912). If an unsuccessful bidder protests that the low 

bidder was either non-responsive or not responsible, FAA must ask the sponsor to provide information 

on how it made its determination. In view of the protester’s complaint, FAA must also concur in this 

determination. 

915. SPECIFIC SITUATIONS. 

Because procurement regulations vary from locale to locale, it can be extremely difficult for FAA 

project manager to keep track of all the procurements in progress. Below are outlined several scenarios 

which are not uncommon and which provide appropriate guidance: 

a. A Contractor uses Quote from Supplier “A” and is Apparent Low Bidder. After Awarded 

the Contract, the Contractor Obtains the Equipment from Supplier “B.” 

There is no Federal requirement preventing a contractor from switching suppliers as long as there is 

no change in the bid. This is also true in the case of using subcontractors. While this is probably not a 

good business practice, FAA has no control over this situation. The assumption here is that there has 

been no influence, either overtly or covertly, from the sponsor. However, when a protest is filed and to 

ensure the sponsor has not been exerting pressure, FAA project manager may request that the sponsor 

supply the names of the suppliers/manufacturers from the prospective bidders. FAA Airports Office 

should review such submittals to confirm that all the contractors are not using the same suppliers and 

distributors. 

b. A Contractor uses a Quote from Supplier “A” and is Apparent Low Bidder. After Awarded 

the Contract, the Sponsor’s Engineer Refuses to Accept the Material from Supplier “A” and Makes 

Arrangements for the Contractor to Obtain the Material from Supplier “B” at the Same Price.

Page 158 
June 28, 2005 Order 5100.38C

This type of action is not acceptable and would be in violation of, Title 49 CFR, Part 18. The 

sponsor is interfering with the open and competitive market. As long as the material from supplier 

“A” meets the standards and specifications, the sponsor may not specify with whom the contractor 

shall do business. 

c. A Contractor uses Quote from Supplier “A” and is Apparent Low Bidder. After Awarded 

the Contract, the Contractor is Told by the Sponsor to Furnish Material from Another Supplier at a 

Higher Cost. The Sponsor will Pay the Additional from its Own Funds. There has been a long-standing 

policy by OMB that this is not acceptable. This is an obvious attempt to circumvent the procurement 

regulations and is not to be allowed. 

Sponsor Category Plans to Procure Equipment under the Grant Program. Can He or Should He 

Break Up the Order to Accommodate Several Suppliers/Manufacturers or Should He Purchase as a 

Complete Usable Unit, E.G. Lighting Fixtures and Cans.This practice is left up to the discretion of the 

sponsor. By breaking up the order, the sponsor may be able to meet its overall Disadvantaged Business 

Enterprise goals more easily. However, there may be inherent problems using this technique, such as 

delivery dates, compatibility of equipment, having to deal with more than one vendor or contractor, etc. 

Normally, FAA project manager should not get involved in this type of decision unless there are 

extenuating circumstances. 

916. - 919. RESERVED. 

Section 2. TRADITIONAL CONTRACTS

920. GENERAL. 

a. The type of contract (e.g. fixed-price contract and cost-reimbursement contract) shall be 

appropriate for the particular procurement and for promoting the best interest of the project involved. 

Discussion about other less traditional contracting methods, commonly referred to as alternative delivery 

methods contrtacting (or “Design-Build”) is contained in section 3 of this chapter. Contracts should be 

sound and complete agreements and include, to the extent appropriate, provisions defining: 

(1) The scope and extent of the contract work; 

(2) The time for completion of the contract work, including, where appropriate, dates for 

completion of significant tasks; 

(3) The contract price and method of payment; 

(4) Identification of key personnel and facilities necessary to accomplish the work within the 

required time; 

(5) The extent of consulting contracts and subcontracting to be performed; 

(6) Changes by the sponsor within the general scope of the contract in the services or work to 

be performed; and 

(7) Contractor conformance with the terms, provisions, conditions, and specifications. 

b. FAA should carry out pre-award contract review in accordance with Paragraph 901. 

921. NONALLOWABLE PRACTICES. 

a. Cost-Plus-a-Percentage-of-Cost. The “cost-plus-a-percentage-of-cost” method of contracting 

shall not be used. 

Page 159
June 28, 2005 Order 5100.38C

b. Contract bonus for expedited construction completion. Contracts sometimes provide for 

payment of a bonus to the contractor for completing construction ahead of schedule. Under airport aid 

grants, this is not an item to be considered in determining reasonableness of construction costs. 

Therefore, such bonus payments are ineligible. 

c. Escalator Clauses. Unless otherwise authorized by APP-1, FAA will not participate in any costs 

in a contract that are subject to an escalator clause. For example, during periods of rising crude oil 

prices occasionally a contractor will request a clause providing for an increase in the cost of bitumen be 

inserted into a paving project contract. Such authorization will only be provided in instances where 

short-term price fluctuations in the market indicate that expected costs cannot be accurately estimated. 

922. REQUIRED FEDERAL PROVISIONS. 

a. In addition to the general requirements above, Federal laws and regulations prescribe that 

certain provisions be included in federally funded contracts, as specified below. For purposes of this 

paragraph, the term, “contract", includes subcontracts. For specific wording of contract clauses and 

solicitation provisions, please see the FAA Airports website at 

http://www.faa.gov/arp/financial/procurement/ .All Contracts. 

(1) Civil Rights - Title VI. Appropriate clauses from the Standard DOT Title VI Assurances 

must be included in all contracts. The clauses can be found in Appendix 2 in Advisory Circular 

150/5100-15, Civil Rights Requirements in the Airport Improvement Program. 

(2) Disadvantaged Business Enterprises. Appropriate clauses from Title 49 CFR, Part 26 

must be included in all contracts. 

(3) State Energy Conservation Plans. The contracts shall recognize mandatory standards 

and policies relating to energy efficiency that are contained in the State energy conservation plan issued 

in compliance with the Energy Policy and Conservation Act (42 U.S.C. 6201). Sponsors should be 

advised to include their State’s plans in contracts issued as a result of AIP grants. 

(4) Record Availability. Contracts must include a provision to the effect that the sponsor, FAA, 

the Comptroller General of the United States, or any of their duly authorized representatives, shall have 

access to any books, documents, papers, and records of the contractor which are directly pertinent to 

the specific contact for the purpose of making audit, examination, excerpts, and transcriptions. 

Sponsors shall require contractors to maintain all required records for three years after the sponsor 

makes the final payment and all other pending matters are closed. 

(5) Remedies. Contracts must allow for administrative, contractual, and legal remedies to 

instances in which contractors violate or breach contract terms and providing such appropriate sanctions 

and penalties. 

(6) Foreign Trade Restriction. All solicitations, contracts, and subcontracts resulting from 

projects funded under the AIP must contain the foreign trade restriction required by Title 49 CFR, 

Part 30, Denial of Public Works Contracts to Suppliers of Goods and Services of Countries That Deny 

Procurement Market Access to U.S. Contractors. See the Standard Solicitation and Contract Language 

provided on the FAA Airports web site. 

b. All Contracts over $10,000. These contracts must contain provisions or conditions for 

termination for cause or convenience by the sponsor including the procedure and the basis for 

settlement. In addition, such contracts shall describe conditions under which the contract may be 

terminated because of circumstances beyond the control of the contractor. 

c. All Contracts over $25,000. All solicitations, contracts, and subcontracts that exceed $25,000, 

shall contain the required provision from Title 49 CFR, Part 29, Government Debarment and Suspension 

(Non-procurement). Further, this provision will be inserted in all solicitations and contracts when the 

Page 160 
June 28, 2005 Order 5100.38C

solicitation or contract is for auditing services regardless of amount. See the Standard Solicitation and 

Contract Language provided on the FAA Airports web site. 

d. All Contracts over $100,000. Contracts in amounts in excess of $100,000 shall contain a 

provision which requires compliance with all applicable standards, orders, or requirements issued under 

Section 306 of the Clean Air Act (42 USC 7602, et seq.)), Section 508 of the Clean Water Act (33 USC 

1368), Executive Order 11738, Environmental Protection Agency regulations (40 CFR Part 15), and 

Title 49 CFR, Part 20. 

e. All Construction Contracts. All contracts involving labor must contain provisions necessary to 

ensure that in the employment of labor (except in executive, administrative, and supervisory positions), 

preference shall be given to qualified individuals who are Vietnam era veterans or disabled veterans, 

who have been honorably discharged from such service. However, this preference shall apply only 

where the individuals are available and qualified to perform the work to which the employment relates. 

The clause can be found in Advisory Circular, AC 150/5100-6, Labor Requirements for the Airport 

Improvement Program. 

f. All Construction Contracts over $2,000. 

(1) Davis-Bacon Requirements. All construction contracts over $2,000 need to include a 

provision for compliance with prevailing wage rate requirements of the Davis-Bacon Act (40 USC 3701 

et seq. to a-7) and the Department of Labor (DOL) implementing regulations (29 CFR Part 5). Under 

this Act, contractors are required to include the contract provisions in Section 5.5(a) of 29 CFR Part 5, 

and to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in the 

wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay 

wages not less often than once a week. The sponsor shall place a copy of the current prevailing wage 

determination in each solicitation, and the award of a contract shall be conditioned upon the acceptance 

of the wage determination. The sponsor shall report all suspected or reported violations to FAA. (AC 

150/5100-6 contains detailed guidance in this area along with the appropriate clauses.) 

(2) Contract Work Hours and Safety Standards Act Requirements. The contracts must 

include a provision for compliance with Sections 103 and 107 of the Contract Work Hours and Safety 

Standards Act ( formerly 40 USC 327-330) as supplemented by the Department of Labor regulations (29 

CFR Part 5). Under Section 103 of the Act, each contractor shall be required to compute the wages of 

every mechanic and laborer on the basis of a standard workweek of 40 hours. Work in excess of the 

standard workweek is permissible provided that the worker is compensated at a rate not less than 1.5 

times the basic rate of pay for all hours worked in excess of 40 hours in the workweek. Section 107 of 

the Act is applicable to construction work and provides that no laborer or mechanic shall be required to 

work in surroundings or under working conditions that are unsanitary, hazardous, or dangerous to health 

and safety as determined under construction, safety, and health standards promulgated by the Secretary 

of Labor. These requirements do not apply to the purchases of supplies, materials, or articles ordinarily 

available on the open market, or contracts for transportation or transmission of intelligence. Appropriate 

clauses can be found in AC 150/5100-6, Appendix 2. 

(3) Copeland “Anti-Kickback” Act Requirements. All construction contracts over $2,000 

must include a provision for compliance with the Copeland “Anti-Kick Back” Act (18 USC 874) as 

supplemented in Department of Labor regulations (29 CFR Part 3). This act provides that each 

contractor shall be prohibited from inducing, by any means, persons employed in the construction, 

completion, or repair of public work to give up any part of their compensation. The sponsor must report 

all suspected or reported violations to FAA. . 

g. All Construction Contracts over $10,000. Executive Order 11246, Equal Employment 

Opportunity, applies to all construction contracts over $10,000. Appropriate clauses from 41 CFR 

Part 60 must be included in all applicable contracts. 

Page 161
June 28, 2005 Order 5100.38C

h. Contracts for Steel or Manufactured Products. Buy-American preferences established within 

Title 49 U.S.C., Section 50101 require that the steel and manufactured products used for AIP-assisted 

projects must be produced in the United States. This provision may be subject to the following four 

exceptions: 

(1) applying the provision is not in the public interest. This is reserved for significant public 

interest determinations; 

(2) the steel or manufactured product is not available in sufficient quantity or quality in the 

United States; this refers to the manufacturing capability of the United States and whether it can meet 

demand; 

(3) the cost of components and subcomponents produced in the United States is more than 

60 percent of the total components of a facility or equipment, and final assembly has taken place in the 

United States. (The term “final assembly” for purposes of this provision should be substantial rather 

than a light bulb put in a vehicle.) The application of this subsection is determined after bid opening. 

FAA Airports Offices should use the cost of the facility being constructed in determining the cost of the 

components. For example, if a project is to construct a runway, the components would cover things 

such as rebar, lights, etc. If a project is for runway lights only, the components would be the lenses, etc. 

Depending on the project scope, therefore, a piece of equipment may be found to not comply with this 

section in one instance and be acceptable in another; or 

(4) applying this provision would increase the cost of the overall project by more than 

25 percent. 

The FAA project manager is responsible for assuring that the sponsor inserts the appropriate 

Federal clauses into its contracts and solicitations. A special condition to be used in grants is found in 

Appendix 7. 

923. - 929. RESERVED. 

Section 3. ALTERNATIVE DELIVERY METHODS

930. GENERAL. 

In 2000, a pilot program was established to test design-build contracting and other forms of 

alternative delivery methods. Such methods are gaining popularity in local and state governments. The 

philosophy behind these new types of delivery methods is generally that delivery time can be reduced 

and change orders are minimized resulting in overall lower costs and higher quality. Although this is the 

philosophy, conditions for the project must be evaluated to determine if traditional design-bid-build 

methods in section 2 is more appropriate before undertaking an alternative delivery method. Contract 

clauses shown in section 2 would still apply to procurement action that seek alternative delivery methods 

under this section. 

Title 49, United States Code was amended to add Section 47142, which established design-build 

contracting as an approvable form of contracting under AIP. Under the statute, design-build contracting 

is defined as an agreement that provides for both design and construction of a project by a contractor. 

Since different laws affect the contracting for the design portion of a project and the construction portion, 

there were infrequent opportunities to use design-build contracting under AIP until the pilot program and 

subsequent permanent inclusion. 

Other alternative delivery methods, however, have not been as hampered. Although not intended to 

be restrictive and all-inclusive, two other methods are described below. 

a. Construction Manager-At-Risk (CM-A-R). Under forms of CM-A-R, the sponsor would engage 

a design firm for the design of the project. At an early stage of design, a contract is let for CM-A-R in 

Page 162 
June 28, 2005 Order 5100.38C

which the contractor reviews designs as they evolve to provide expertise for the construction phase. 

The CM-A-R and the sponsor also negotiate a ceiling amount for the construction beyond which the CM 

is “at-risk.” 

b. Task Order Contracting. In many procurement systems, these are sometimes referred to as 

indefinite quantity/indefinite delivery contracts and other similar contracting instruments. Under the most 

common approach to this type of contracting, the sponsor would procure an annual need such as paving 

or floor finishing (there could be many areas adaptable to this form of contracting.) The sponsor would 

estimate a ceiling amount and most frequently a maximum per order amount. The contract is also 

procured on the basis of criteria such as standard fees or unit rates and provides the standard contract 

clauses. When a contractor is needed for a relatively small job within the category, the contractor and 

sponsor will negotiate by applying the basic agreed upon fee against the scope of the specific project. 

No further competition is necessary if the task order contract was competed within the same year. If a 

sponsor wishes to use this tool beyond a 12-month period, regions and ADO’s should advise sponsors 

that such action would require agreement with FAA in order for the cost to be found allowable. The most 

important factor is a determination that there is no necessity to recompete the agreement due to similar 

economic conditions, stability of wages and fringe benefits under Davis-Bacon determination and similar 

cost areas. 

931. DESIGN BUILD. 

a. Design-build is a method of contracting in which two distinct phases of project accomplishment, 

design phase and construction phase, are combined into a seamless process performed by one 

contractor who retains single-source responsibility for that entire process. Due to timesavings in the 

contracting process as well as earlier commencement of construction, design-build may provide cost 

savings. There are many recognized forms of design-build and the following is a brief description. There 

may be hybrid types of design-build that use variations of the basic philosophies. 

b. Design-build project delivery can be performed by a single company with both design and 

construction capability in-house, or by a team of design firms and contracting firms, working under a 

single design-build contract. The design-build firm/team contracts to design and build the facility, and 

retains the risk for overall project completion, budget, and schedule. There is no division of responsibility 

to the Sponsor between the design organization and the construction organization. 

c. Design-build services can be performed under all of the contractual methods used for 

construction including lump sum, cost plus (excluding cost-plus- percentage-of-costs which is 

unauthorized), cost with a guaranteed maximum, etc. Design fees can be included in the overall contract 

price or separated as a subset of the price. 

d. Contracting for design-build services can be done by either of two basic methods: 

(1) Qualifications Based Selection (QBS) - In this method, contracting for design-build services 

is nearly identical to selection procedures commonly used for professional design services. The Sponsor 

solicits proposals for the project, and design-build firms and teams respond with qualification information 

as prescribed in the solicitation. The sponsor chooses a short list of the most qualified firms/teams, and 

presentations/interviews are made by those firms/teams. The sponsor then selects the most qualified 

firm/team and negotiates a contract for professional services that also provides for subsequent 

establishment of a guaranteed maximum price (or lump sum, or cost plus fee, or another form of pricing) 

and guaranteed completion date for the entire project at an agreed level of completion of the preliminary 

design work. 

(2) Competitive Proposal Selection (CPS) - The contracting process for design-build services is 

accomplished in two steps. The Sponsor first prepares a design criteria package for the project using inhouse staff or a retained design firm (often a firm with an existing retainer contract.) Design-build 

firms/teams respond to a solicitation, and are short-listed in the same process used for QBS. In the 

second step, a design criteria package is issued to the short listed firms/teams, who respond with 

Page 163
June 28, 2005 Order 5100.38C

separate technical and price proposals. Technical proposals are evaluated first, using a numerical 

"points earned" system. Then, price proposals are opened and prices are factored into the "points 

earned" system to determine the final selection. A common method of "scoring" price information is to 

divide the price by the technical points score, and the resulting low score wins. 

(3) Note that the CPS process may have more costs than the QBS method. Under the CPS, the 

Sponsor must bear the cost of design criteria package preparation. Further each short listed design-build 

firm/team must bear the considerable cost of preparing a technical proposal with preliminary drawings 

and outline specifications, along with a conceptual cost estimate to establish a price. To control this 

substantial submittal cost, Sponsors should avoid short lists longer than 3-4 firms/teams. Sponsors 

should also consider granting a stipend to each unsuccessful firm/team in return for the right to use any 

concepts from the unsuccessful teams/firms' technical proposals for the project. 

e. Limitations. The following are some limitations on the approval of projects for design-build 

contracting: 

(1) The selection process must be permitted under State or local law; 

(2) FAA must approve the use of design-build in advance; 

(3) FAA must approve the method of design-build used; 

(4) Sponsors must provide a schematic design adequate for FAA to approve the grant and 

assure that the contract will be executed after competitive procedures; 

(5) Sponsors must demonstrate that the use of the contracting method will be cost-effective and 

will expedite the project; 

(6) Sponsors must show that the contracting method will safeguard against conflict of interest; 

(7) The selection must be as open, fair and objective as the competitive bid system and at least 

3 or more bids will be submitted. 

f. Airport District Offices or regional offices, as appropriate, should advise airport sponsors that to 

be considered, the sponsor should, as a minimum, submit the following: 

(1) A full description of the project together with general sketches of proposed work; 

(2) A description of the contracting process to be utilized as well as steps to be taken to assure 

that 3 or more companies will bid on the proposed project, including a statement that the type of project 

has an adequate number of firms involved regularly in the execution of design-build contracts; 

(3) An analysis of the cost-savings and/or time savings that will be gained by the use of the 

design-build construction method; 

(4) A statement describing what safeguards are in place to prevent conflicts of interest and that 

the process will be as open, fair and objective as the normal contracting process; 

(5) A statement citing specific references to the state or local law that permits the use of designbuild contracting methods. 

Page 164 
June 28, 2005 Order 5100.38C

932. - 939. RESERVED. 

Section 4. CHANGE ORDERS AND SUPPLEMENTAL AGREEMENTS

940. CHANGE ORDERS AND SUPPLEMENTAL AGREEMENTS. 

Most contracts will incorporate AC 150/5370-10, Standards for Specifying Construction of Airports, 

as part of the standards and specifications. This AC addresses both change orders and supplemental 

agreements. In contracts not incorporating the AC, procedures for change orders and supplemental 

agreements that are as close as feasible to those in the AC should be followed. 

a. Change Orders. A change order is a written order by the sponsor to the contractor, given 

pursuant to a recognized right or rights reserved in the contract, which makes a change in the design, 

drawings, or specifications of the contract within the general scope. No new wage rate decision will be 

required to cover the work involved in the change order. Any change that exceeds an increase or 

decrease of 25% of the estimated cost of the contract or of a major item (as defined in the AC) must 

normally be accomplished through a supplemental agreement. 

b. Supplemental Agreements. A supplemental agreement covers work that is not within the 

general scope of the existing contract and which the contractor is not obligated to perform under the 

terms of the contract, or is work which exceeds the 25% limitation, covered in “a.” above. Thus, a 

supplemental agreement is a separate contract and requires execution by both parties with the same 

formality as any other contract. A new wage rate decision will be required for each supplemental 

agreement involving more than $2,000 unless it involves work under a project for which a wage 

determination decision was issued and such decision has not expired at the time of award of the 

supplemental agreement. 

c. FAA Approval. The sponsor must get prior FAA approval for any change orders and 

supplemental agreements, which will result in a grant amendment. In other cases and in emergency 

situations, the region may choose to establish procedures and levels of changes in cost and scope 

below which the sponsor need not obtain prior approval. The region must ensure that the sponsor 

understands what these procedures and levels are. The sponsor should also be made aware of the 

statutory limitation on the increase in grant amount. 

d. Eliminating Items of Work. A change order is used to eliminate items of work from the plans 

and specifications of a construction contract. If the item to be eliminated is of such magnitude as to 

change the scope of the project as described in the grant agreement, there must be a formal 

amendment of the grant agreement prior to issuance of the change order. 

941. - 949. RESERVED. 

Section 5. SUSPENSION AND DEBARMENT

950. GENERAL. 

Title 49 CFR, Part 29, Governmentwide Debarment and Suspension (Nonprocurement), was revised 

and became effective October 1, 1988. The suspension or debarment of an individual or a company by 

one Federal agency now has Governmentwide effect. All departments within the Executive Branch of 

the Federal Government have adopted GSA and OMB’s common rule on debarment and suspension. 

951. APPLICABILITY OF TITLE 49 CFR, PART 29. 

The procedures are applicable to contractors and subcontractors at any level, including suppliers, 

fee appraisers, inspectors, real estate agents and brokers, consultants, architects, engineers, attorneys, 

and to affiliates of these contractors when the procurement contract for goods or services equals or 

exceeds the Federal procurement small purchase threshold, currently set at $100,000 (this limit does not 

apply to auditors under OMB Circular A-133). 

Page 165
June 28, 2005 Order 5100.38C

952. NONPROCUREMENT LIST. 

The “Nonprocurement List” is that portion of the “List of Parties Excluded from Federal Procurement 

and Nonprocurement Programs” compiled, maintained, and distributed by GSA which contains the 

names and other information about persons or companies who have been debarred, suspended, or 

voluntarily excluded from participation in Federal programs. An individual or company named in the 

“Nonprocurement List” may not be awarded a grant, a contract, or a subcontract except as provided in 

Title 49 CFR, Part 29. Sponsors may gain access to this list on the web by using http://epls.arnet.gov/. 

953. DESIGNATIONS. 

a. Debarring/Suspending Official. The Administrator has designated the Airports Division 

Managers as debarring and suspending officials. This designation may not be delegated. 

b. Coordinator. APP-520 will serve as the national coordination point and should be notified when 

a party has been suspended, debarred, or voluntarily excluded from contracts under AIP. They, in turn, 

will notify all regions and the Assistant Secretary for Administration (OST) for the purposes of inclusion 

on the Non-procurement List. 

954. PROCEDURES FOR SUSPENSION AND DEBARMENT. 

Regions should consult and carefully follow the procedures for suspension and debarment contained 

in Title 49 CFR, Part 29. 

955. - 999. RESERVED. 

Page 166 
June 28, 2005 Order 5100.38C

Chapter 10. P ROJECT FORMULATION , REQUESTS FOR 

AI D , AND LETTERS OF I NTENT

Section 1. PROJECT FORMULATION

1000. GENERAL. 

The project formulation stage begins with the sponsor’s identification of planning and development 

needs for an airport. Needs may be identified as a result of a master planning study, systems planning 

study, Part 150 study, Part 139 inspection, master record inspection, runway safety action team 

recommendations, security recommendation, planning conference, an FAA Facilities and Equipment 

project, or the implementation of a new approach procedure. Project formulation continues through the 

development of a concept; preparation of technical and cost information, including benefit/cost analyses 

(BCA) if appropriate; development of a financial plan; accomplishment of engineering and design; and 

the review by the FAA of the project description, justification, and other supporting documentation. It 

may also include the required environmental actions, coordination processes, airspace analysis, and an 

overall project development schedule. Consideration may be given to multi-year funding at this stage 

(See Paragraph 1102). Project formulation is normally conducted through the preparation of a Capital 

Improvement Program (CIP). The CIP, which represents the five-year plan of development of an airport, 

is prepared in close cooperation with the applicable FAA field office. The formulation stage is completed 

when the project application is prepared and submitted to the FAA. Timing of CIP development and 

transmission to the FAA is noted in FAA Order 5100.39. 

1001. PROJECT FILE. 

A project file is a collection of files and records on a particular project that is kept by the Regional 

office or by the various field offices, as decided by the Airports Division. The Division is left to its own 

discretion as to what type of information, the format the information is to be provided in, and what is to 

be included in the project file except for that information required by this Chapter or other Orders. 

However, there should be enough information to be able to track a project from project formulation to 

closeout and audit or, for disapproved projects, a narrative statement supporting the disapproval. 

1002. PROJECT ENGINEERING. 

a. The sponsor is responsible for providing all project engineering including the preparation of plans 

and specifications, construction supervision, and the conducting of inspections and testing needed for 

project control. Proposals for engineering services will normally be submitted to the FAA for approval 

unless a certification has been submitted in accordance with Chapter 10, Section 3. Engineering 

services may be provided through contract with a qualified engineer or engineering firm or by the 

sponsor’s own personnel (force account). 

b. Separate funding for the preparation of plans and specifications may be provided in accordance 

with Paragraphs 300 and 310d. 

1003. CONTRACT ENGINEERING SERVICES. 

If the sponsor engages the services of a qualified engineer or an engineering firm, the engineering 

agreement becomes the basis for FAA determination of adequate engineering services and reasonable 

costs. Chapter 9 of this Order and AC 150/5100-14, Architectural, Engineering, and Planning 

Consultant Services for Airport Grant Projects, provides guidance for selection, review, and approval for 

engineering services. If deemed necessary by the FAA, a draft of the agreement will be submitted to 

ensure that: 

a. The scope of the engineering is described completely; 

Page 167
June 28, 2005 Order 5100.38C

b. The fees or reimbursements are reasonable and eligible as shown by a cost/price analysis; 

c. The type of contract is appropriate; and 

d. The engineering/consultant firm and the proposed contract terms are acceptable. 

Section 47105(d) of the Act authorizes the Secretary to require certifications from sponsors that they 

will comply with statutory and administrative requirements. Use of sponsor certifications for selection of 

engineering, architectural, professional services, and planning consultants is encouraged. A copy of the 

certification form is contained in Appendix 25. Acceptance by the FAA of the sponsor’s certification does 

not limit the FAA’s ability to request and review documentation to ensure the accuracy of the 

certification. 

1004. FORCE ACCOUNT ENGINEERING SERVICES. 

Proposals to accomplish airport engineering with the sponsor’s own personnel or by its agent must 

be approved by the FAA. Proposals shall be submitted in writing and subjected to a review similar to 

that for engineering contracts. The guidelines and procedures for force account engineering services 

are the same as for force account construction work discussed in Chapter 12. It should be noted that 

most of the factors considered in the selection of a consultant would be applicable to approval of 

services to be done by force account. Field offices should exercise diligence in reviewing force account 

engineering costs. The sponsor’s proposal to use force account rather than contract-engineering 

services must be fully documented and should contain as a minimum: 

a. Justification for doing the work by force account rather than by contract; 

b. Estimate of costs, including detailed data on estimated work hours, hourly rates, non salary 

expenses, and indirect costs; 

c. Names and engineering qualifications of personnel that will be accomplishing specific tasks; 

d. Statements concerning the capability of the Sponsor to perform the various tasks of design, 

supervision, inspections, testing, etc., as applicable to the project with arguments to support the decision 

to use force account; 

e. Summary of Sponsor’s experience with airport engineering pertaining to projects with similar 

design scopes; and 

f. Statement by the Sponsor on the ability of its personnel to integrate the project into their 

workload, with a schedule of accomplishment of tasks, date by which the work will be complete, or dates 

within which it will take place. 

1005. COORDINATION AND APPROVAL OF PLANS AND SPECIFICATIONS. 

All AIP construction projects shall be coordinated with other FAA operating offices and Government 

agencies, as appropriate. Examples of such coordination include obtaining recommendations from the 

appropriate operating divisions with respect to designation of instrument runways, adequacy of approach 

lights, airport marking, air traffic notification procedures, security requirements, and the location of 

underground facilities in the work area. In addition, projects must comply with local ordinances and 

other applicable requirements. Generally, FAA Airports personnel shall be responsible for coordination 

within FAA while the sponsor maintains the responsibility for all other coordination. 

a. Approval of Plans and Specifications. Sponsors may submit certification of plans and 

specifications consistent with the requirements in Chapter 10. If certifications are not received, the FAA 

must review the plans and specifications to assure that they are in accordance with applicable standards 

and, if acceptable, approve them for use. If a sponsor submits plans and specifications, which contain 

Page 168 
June 28, 2005 Order 5100.38C

proprietary items, the FAA Airports Office must review the sponsor’s justification for sole source 

procurement to determine if the project warrants such authority. 

b. Sponsor’s Engineer’s Report. A sponsor’s engineer’s report, setting forth the general analysis 

and explanation of reasons for design choices by the engineer, must be submitted with the plans and 

specifications unless deemed inappropriate by the field office. The report should, at a minimum, provide 

the following information: 

(1) Design Computations. The report should include a summary of the design computations 

used in the design of major development items. Use of FAA Form 5100-1 for the design pavement 

thickness is required. A summary of computations and a description of the method used to conduct the 

drainage design must be presented. The engineer is not required to submit earthwork cross-sections or 

mathematical calculations for designs but should have them available for review by FAA representatives 

if requested. 

(2) Reasons for Selections of Design Materials and Equipment and Modifications to 

Standards. The engineer’s choices and recommended modifications will, in most cases, be influenced 

by service records for comparable construction and by cost comparisons. The report should include 

concise statements and cost comparisons that justify selections made and modifications to standards 

proposed in the project. See Order 5300.1, Approval Level for Modification of Agency Airport Design 

and Construction Standards for additional information on modifications to design and construction 

standards. 

(3) Other Elements. The engineer must outline related project work elements to be done 

without AIP assistance, including details on how the work is to be accomplished, and how it relates to 

the AIP work. Work to be done by utility companies must be described in sufficient detail to verify 

adequate funding for the work. 

(4) Support Data. The report should also include supporting data and itemized project cost 

estimates with source information. Any unique circumstances that may influence adjustments of existing 

project cost estimates should be explained. 

c. Conditional Approval. If the certification of plans and specifications is not received from the 

sponsor, the FAA may conditionally approve plans and specifications to permit initial advertising of bids, 

even though the plans and specifications may require minor revisions. The FAA Airports Office should 

use the conditional approval procedure only when the revisions are non-controversial and do not 

significantly affect the design and engineer’s estimate. The FAA Airports Office should, with the 

signature giving conditional approval, make a note of reference to the letter that discusses the 

conditions. Removal of the conditions after acceptable revisions will require a subsequent notation 

canceling the condition. Receipt of revisions and cancellation of the conditions should occur prior to 

issuance of the grant offer. (See Appendix 9, Paragraph 14 for special condition on preliminary plans 

and specifications.) 

1006. INTERGOVERNMENTAL PROJECT REVIEW. 

a. State and Local Review of Grants. Executive Order (E.O.) 12372, Intergovernmental Review 

of Federal Programs, as supplemented, establishes procedures that replace the procedure in OMB 

Circular A-95. E.O. 12372 allows States, in consultation with local elected officials, to establish their 

own process for reviewing and commenting on Federal programs and activities. It requires Federal 

agencies to accept State and local views or explain why the views are not accepted. 

(1) Regulations implementing E.O. 12372 are contained in Title 49 CFR, Part 17, 

Intergovernmental Review of Department of Transportation (DOT) Programs and Activities. Additional 

guidance is contained in FAA Order 1200.21, Intergovernmental Review of FAA Programs and Activities. 

APP-520 can provide information on documenting a State’s intergovernmental project review process or 

single points of contact. 

Page 169
June 28, 2005 Order 5100.38C

(2) The intergovernmental review process is supplemented by provisions of 49 USC 

47106(c)(1)(A). It requires that, upon request, a large or medium hub must provide airport layout plan 

amendments (and an associated master plan) to the relevant Metropolitan Planning Organization (MPO) 

for airport development projects if the work involves location of an airport, runway or major runway 

extension. Certification by the airport that the requirement was met may be satisfied in grant agreement 

or other appropriate documents. 

b. FAA Responsibilities. 

(1) Sponsor Notification. The FAA is responsible for informing potential sponsors of AIP 

grants of the required intergovernmental project review process. This process normally allows 60 days 

for State and local agencies to complete the review. Sponsors should be notified of the name and 

address for single points of contact or other entities to be contacted prior to grant application submittal. 

The planning projects or other channels of information may be used to inform potential sponsors. 

(2) Treatment of Comments. When the intergovernmental project review process results in 

comments, the FAA should pursue one of the following options: 

(a) Accept the Comments. That is, do as the State or local agency recommends; 

(b) Reach a Mutually Agreeable Solution with the State or Local Agency. This solution 

may differ from the original State or local agency position on the matter; or 

(c) Reject the Comments. While the FAA is not required to accept comments or discuss 

another solution, a written explanation of the final decision should be provided as a courtesy to the 

single point of contact. The explanation should be provided at a minimum of 15 days before beginning 

work on a project. If no single point of contact exists, the explanation should be sent to other parties that 

initially provided comments. Where 49 USC 47106(c)(1)(A) is involved, the MPO should receive the 

explanation. An informational copy of the explanations should be sent to the DOT Assistant Secretary 

for Administration. 

(3) Early Project Review. Sponsors regularly engage environmental consultants to prepare 

environmental assessments as part of the FAA’s National Environmental Policy Act (NEPA) process. 

State agencies reviewing the assessments, capital improvement programs, or other planning studies 

use the State’s review and comment process. 

(a) The intergovernmental project review should be accomplished as early as feasible. The 

early project review in Order 1200.21 is incorporated into Order 5050.4 and other NEPA guidance. 

(b) When the reviews are accomplished as described in subparagraph b(3)(a), 

intergovernmental project review does not need to be repeated during the implementation stage unless 

the scope of work changed, substantial new information has become available, or significant time 

lapsed. 

(4) Exempt Projects. Projects that do not significantly affect State or local governments 

beyond airport boundaries are exempt from intergovernmental review, unless coordination is requested 

under a State’s review and comment process or 49 USC 47106(c)(1)(A). 

(5) Process Changes. Formal changes in a State’s intergovernmental project review process 

shall be forwarded to the DOT Assistant Secretary for Administration and implemented within 90 days of 

receipt from the State. 

1007. PUBLIC HEARING. 

a. General. Any airport development project involving airport location, a new runway, or a major 

extension of an existing runway cannot be approved unless the opportunity for a public hearing has 

Page 170 
June 28, 2005 Order 5100.38C

been offered, in accordance with Section 47106(c) of the Act. In addition, there may be other occasions 

when either the opportunity for a public hearing or a public hearing itself may be appropriate. 

Section 1506.6 of the CEQ Regulations established procedures for public involvement in projects 

affecting the environment. Appendix 6 of FAA Order 1050.1 and FAA Order 5050.4 prescribe 

environmental requirements in detail. These orders are controlling and should be consulted regarding 

public hearing requirements. In cases where the opportunity for a public hearing was accomplished 

during advanced planning, it does not need to be repeated at the implementation stage unless the scope 

of work has changed, substantial new information became available, or significant time elapsed. 

b. Form of Notice. The notice of opportunity for public hearing must include a concise statement 

of the proposed development and be published in a newspaper of general circulation in the communities 

in or near the proposed development. The notice must specify that the hearing is for the purpose of 

considering the economic, environmental, and social effects of the airport location or development and 

its consistency with the goals and objectives of such urban planning as has been carried out by the 

community. The notice must provide a minimum of 30 days from the date of the first required publication 

in accordance with local law, for submission of requests for a hearing by persons having an interest in 

the project, and state the manner in which a hearing may be requested. The notice must further state 

that a copy of the sponsor’s environmental documentation will be available at the sponsor’s place of 

business for examination by the public for a minimum of 30 days, from the date of the notice. This 30-

day minimum should commence from the date the notice is first required to be published, if published 

more than once. 

c. Request for Hearing. A public hearing must be provided if requested. When a public hearing is 

to be held pursuant to receipt of a request, the sponsor must publish a notice of that fact in the same 

newspaper in which the notice of opportunity for a hearing was published. The last notice required by 

local law must be published at least 15 days before the date set for the hearing. The notice must specify 

the date, time, place of the hearing, a concise description of the proposed project, and indicate where 

and at what times more detailed information may be obtained. 

d. Report of Hearing. If a public hearing is held, the sponsor must provide the FAA with a 

summary of the issues raised, the alternatives considered, the conclusion reached, and the reasons for 

that conclusion. The sponsor must also keep a recording or other records covering the hearing and, 

upon FAA request, prepare a verbatim transcript of such hearing. 

e. Lack of Interest. A hearing need not be held if, after adequate public notice of opportunity for a 

public hearing, no person or group having an interest in the project’s economic, social, and 

environmental effects requests a hearing. In such a case, the sponsor must submit written statement 

that adequate notice of opportunity for a hearing had been provided, and that no request for a public 

hearing was received. Upon request, proof of publication of the notice must be submitted. 

1008. ALP REVIEW. 

During the project formulation, the sponsor and the FAA should review the approved ALP to ensure 

that it is current and contains the proposed project as required in Section 47107(a)(16) of the Act. 

1009. VALUE ENGINEERING (VE). 

VE is the systematic application of recognized techniques that identify the function of a project or 

service and provide the best function reliably at the lowest overall cost. Cost-benefit studies, present 

worth analysis, the study of alternatives, tactical planning, or other forms of technical evaluation may 

substitute for VE in most airport grant projects. 

a. Required VE: VE will be required at some point in project formulation for new primary airports. 

Use of a formal VE task team during planning, project formulation, or construction design may also be 

required by the region for the following work: 

Page 171
June 28, 2005 Order 5100.38C

(1) Substantially changed airfield configurations at a hub airport that annually enplanes 0.25 

percent or more of U.S. passengers (medium and large hubs); 

(2) Modifications of design standards proposed by an airport that would result in significantly 

increased cost; 

(3) The preparation of State-wide system standards proposed to be approved by the FAA and 

used for development at nonprimary airports; 

(4) Multi-year projects; and 

(5) Similar projects exceeding $10 million Federal share, unless this work is part of a larger unit 

such as a new airport where the VE was already considered or completed. 

b. VE Procedures: Specific concurrence on the scope of work by the region is required prior to 

the use of VE by local or State agencies in AIP projects. The cost of work performed on VE will not be 

allowed unless incurred after the date of the FAA concurrence on the scope. VE guidance is contained 

in Advisory Circular 150/5300-15. 

Section 2. REQUESTS FOR AID

1010. GENERAL. 

a. Capital Improvement Program (CIP): A sponsor’s five-year program of development is 

included in its CIP. The CIP is prepared on an annual basis and it identifies the airport, it's proposed 

development, funding requirements, source of funding, fiscal year, project description, and justification. 

The CIP submission may also include information on environmental, Exhibit “A” land and ALP status, 

and sketches. The CIP is developed in close coordination between the sponsor and the FAA Airports 

Office, with participation by state aviation officials and metropolitan planning organizations, as 

appropriate. For further information on CIP development and the ACIP process, including a discussion 

of the National Priority System (NPS), submission and approval dates, and notification of sponsors, refer 

to FAA Order 5100.39. 

b. Preliminary Notice of Interest. The CIP also serves as a preliminary notice of the sponsor’s 

interest and intent without actually obligating the sponsor to perform any work or expend any funds. 

Acceptance of the CIP by the FAA does not imply that the proposed project will be programmed under 

the AIP. When a project need is identified subsequent to the annual ACIP process, the sponsor may 

submit an updated CIP. 

c. Form Preparation. An application for Federal assistance, Standard Form (SF) 424, together 

with FAA Form 5100-100 (Appendices 3 and 4), must be submitted for any of the projects programmed 

under AIP to the appropriate FAA Airports Office before issuance of a grant. The original and two copies 

of the SF 424 must be completed in accordance with the instructions on the reverse side of the form and 

submitted to the FAA with all supporting documentation, sponsor assurances, and certifications. The 

appropriate FAA Airports Office is responsible for furnishing guidance about the proper completion of the 

form and the required supplemental supporting documentation, sponsor assurances, and certification. 

1011. SUPPORTING DOCUMENTS. 

The completed SF 424 must be accompanied by the supporting documents listed below, as 

appropriate. The FAA may request on a case-by-case basis additional supplemental information to 

support other Federal and local requirements. 

a. Program Narrative and Cost Estimates. A narrative summary statement of each project must 

be provided. The summary shall include a description and justification for each of the projects to be 

Page 172 
June 28, 2005 Order 5100.38C

accomplished. Additionally, estimates showing the basis for the project budget must be furnished in 

sufficient detail to determine whether the project costs appear to be reasonable. 

b. Sketch. A sketch, at least 8 1⁄2” x 11”, must be provided, that depicts and identifies the limits of 

the proposed project, and distinguishes other airport development from the development proposed in the 

grant. For land acquisition projects, the sketch should show the boundaries of currently owned land and 

the boundaries and proposed property rights of each parcel of land or easement to be acquired. 

c. Identification of Environmental Requirements. All AIP projects must be either categorically 

excluded or accompanied by an environmental assessment that resulted in a finding of no significant 

impact (FONSI) or an environmental impact statement prepared in accordance with the current version 

of FAA Order 5050.4. 

d. Public Hearing. For projects that are subject to public hearing requirements, if a public hearing 

has been held, a summary of the issues raised, alternatives considered, and conclusions reached must 

be provided. In cases where a hearing has not been held, a certification that no request for public 

hearing had been received must be provided. (See Paragraph 1007d. and e.) 

1012. TIMING OF SUBMISSION. 

The FAA may accept sponsors’ applications at any time. Special directions are published annually 

in the Federal Register that provide a deadline for submission of applications under the AIP. This 

announcement is for the upcoming fiscal year and covers only sponsor entitlement and cargo funds. 

Sponsors should be advised, as appropriate, to comply with the schedule in the Federal Register. 

However, regions may request sponsors’ submissions at an earlier date to meet regional needs. 

1013. - 1019. RESERVED. 

Section 3. SPONSOR CERTIFICATION

1020. GENERAL CERTIFICATION REQUIREMENTS. 

Title 49 U.S.C., Section 47105(d) authorizes the Secretary to require certification from sponsors that 

they will comply with statutory and administrative requirements in carrying out a project. The standard 

airport sponsor assurances described within Paragraph 1010c contain “Sponsor Certification” in item C 

as a significant aspect of this. 

1021. RELATION OF ASSURANCES AND CERTIFICATION. 

A primary means of legally binding the sponsor to statutes, regulations, and policies is the standard 

assurances. The part of the assurances titled “Sponsor Certification” is also the subject of a focused 

process outlined in this section to ensure sponsors make adequate certifications. 

a. Standard Assurances. The sponsor certification process within this section in no way replaces, 

abrogates, or diminishes the sponsor’s legal obligations to carry out all of the requirements contained in 

the grant agreement, including the standard assurances. The grant agreement and standard 

assurances adequately represent legal requirements without the need for supplementary obligations 

from the sponsor certification process. 

b. Sponsor’s Certification Process. The sponsor’s certification process is a means of focusing 

sponsor attention on requirements to make them more knowledgeable and diligent in assuring their 

grant obligations will be satisfied. Paragraph 1025 identifies forms that are used as education tools to 

clarify “Sponsor Certification” within the assurances in the context of AIP procedures. 

c. Sponsor Certification Policy. Regions will obtain and rely on sponsor certification forms 

consistent with program goals or the need to protect the Federal investment in airports. 

Page 173
June 28, 2005 Order 5100.38C

1022. REQUIRED SPONSOR CERTIFICATION FORMS. 

The completion of sponsor certification forms using procedures below will be required unless in the 

judgment of the region the sponsor has become knowledgeable and diligent in assuring their grant 

obligations. 

a. Sponsor Responsibility. Airport planning and development projects are administered based on 

the philosophy that responsibility for assuring compliance with program requirements rests primarily with 

the sponsor. 

(1) The signing by a sponsor of an AIP project application and the grant agreement by a 

sponsor establishes the sponsor’s obligation to comply with all grant terms and conditions. 

(2) The sponsor is responsible for the preparation, adequacy, and correctness of required 

project documents. 

(3) The sponsor is responsible for carrying out the project. 

b. Mandatory Sponsor Certification Procedures. To use resources effectively in administration 

of the AIP, reliance for satisfying grant assurances will be placed on sponsors through mandatory 

sponsor certification procedures. 

(1) All new sponsors, changes in the sponsor’s administrator, or infrequent grantees will 

normally be required to submit the necessary certification forms. At the discretion of the FAA Airports 

Office, based of the FAA’s opinion as to the sponsor’s understanding and ability to carry out the actions 

required by the certifications, any sponsor may be required to complete any and all actions satisfied by 

certifications. Block grant states are not required to use the sponsor certification procedures for their 

individual airport projects. 

(2) Acceptance of the certification forms by the FAA is not appropriate in cases where an 

inadequate or incomplete form has been submitted. See Paragraph 1027. 

c. FAA Responsibility. The FAA is responsible for providing guidance and leadership in matters 

concerning airport planning or development projects and for instructing the sponsor on project 

requirements. Use of sponsor certification procedures does not relieve FAA personnel from their 

responsibility to maintain a broad overview of AIP projects and be reasonably assured that the sponsor 

is meeting all of its obligations. 

d. Appropriate FAA Oversight. Acceptance of sponsor certifications does not inhibit or limit 

FAA’s ability to request and review appropriate documentation to ensure the accuracy of a certification 

form. These certifications should be questioned when information becomes available indicating the 

sponsor may be in noncompliance with requirements or lacks the knowledge and capability to complete 

an accurate certification. Under these circumstances, a more detailed oversight review by FAA together 

with an increased emphasis on educational activities is appropriate and should be performed. 

e. Required FAA Actions. Regions retain responsibility for aviation safety issues and the 

coordination of project plans, safety phasing plans, and other required coordination with organizational 

elements within FAA. A construction safety/phasing plan covering all aspects of safety during 

construction must be provided by the sponsor to the FAA. The FAA cannot accept the certification of 

project safety/phasing plans. All safety phasing plans must be received, reviewed, coordinated with 

other FAA operating administrations, airspaced (if necessary), and approved for use prior to the start of 

all construction projects. Early submission of safety/phasing plans will permit the timely start of 

construction projects. See Paragraph1026. 

f. Supplemental Certification Forms. Regions may use judgment to rely on the original 

certification or require re-certification as described in Paragraph 1024. Regions may supplement these 

Page 174 
June 28, 2005 Order 5100.38C

standard certification procedures to reflect special conditions or assurances in the grant. In addition, 

regions may use their checklists, forms, or certification procedures for areas other than those described 

in this section. 

1023. TIMING OF SPONSOR CERTIFICATION PROCESS. 

The sponsor certification process should begin in the early steps of project formulation by making 

the standard forms available to sponsors and consultants so that they are aware of specific Federal 

requirements that must be met. However, execution of the certification forms can be required by the 

region at selected points in the grant process to best suit regional procedures. When practicable, 

certification forms should be timed to require that sponsors certify actions and conditions the sponsor 

has already completed or met. 

1024. SPONSOR CERTIFICATION FORMS AND PROCEDURES. 

Paragraph 1025 describes standard sponsor certification forms for which the procedures below 

apply. 

a. Sponsor Completion of Forms. Each standard certification form contains a basic certifying 

statement, a checklist to be attested in meeting the requirements, and a signature line to be completed 

by the sponsor. It also contains reference to the statute, regulation, or advisory circular that describes 

the requirements. 

(1) The sponsor should read the requirements and determine actions needed to comply with the 

grant agreement. 

(2) Each checklist item must be reviewed by the sponsor and completed. 

(3) An explanation or additional information shall accompany any question with “no” checked. 

This added information becomes part of the certification. 

(4) The sponsor should provide the forms and attachments to the FAA together or separately in 

accordance with the timing required by the region. See Paragraph 1023. 

(5) If the sponsor has been requested by the FAA to provide full project documentation, it should 

be submitted with the forms. 

b. FAA Review of Forms. The appropriate FAA Airports Office should review the sponsor, airport, 

project number, work description, checklist items, authorized representative, typed name, as well as 

attachments to ensure they are correct and complete. 

(1) Incomplete forms shall be returned for further action. 

(2) The FAA Airports Office should review any checklist item marked “not applicable” to confirm 

non-applicability for the project. 

c. Re-Certification. If the sponsor has been found to be inaccurate in making certifications, 

regions should require the sponsor to routinely submit full documentation in support of the forms. FAA 

review of this documentation and monitoring of the project implementation will need to be more 

comprehensive than relying on certification forms for any such sponsor. See Paragraph 1027. 

d. Project Files. The executed certification forms and attachments shall be included in the project 

files. Any checklist items not meeting full compliance should be clarified with the sponsor and 

documented in the file. 

Page 175
June 28, 2005 Order 5100.38C

e. Acceptance of Forms. When the sponsor has properly executed a certification form, no further 

routine or detailed conformance reviews of that area on the project will be necessary by regions unless 

exceptional circumstances arise. Acceptance by the FAA is considered complete when the forms are 

filed. 

1025. AREAS WITH STANDARD FORMS. 

Appendix 25 contains standard sponsor certification forms for the following areas: 

a. Selection of consultants; 

b. Project plans and specifications; 

c. Construction or equipment project contracts; 

d. Real property acquisition; 

e. Construction project final acceptance; and 

f. Drug-free work place. 

1026. AREAS EXCLUDED FROM ROUTINE CERTIFICATION FORMS. 

The following are examples of areas involving Federal responsibilities under the law that would 

normally be inappropriate for the routine sponsor certification procedures described in Paragraph 1024 

since they require more complete FAA review: 

a. Content of the National Airspace System Architecture and National Plan of Integrated Airport 

Systems; 

b. Matters directly involving Part 139, commissioning or decommissioning of airfield facilities, and 

other safety considerations; 

c. Determinations of project eligibility or justification under the AIP; 

d. Coordination with the Facilities and Equipment program; 

e. Modification of design standards for airport location, layout, site preparation, paving, lighting, and 

safety of approaches; 

f. Procedures for handling airspace determinations and the designation of instrument runways; 

g. Matters involving Part 150 and environmental impact determinations; 

h. Determinations on the reasonableness and necessity of project cost in the expenditure of AIP 

funds as well as costs incurred subsequent to the execution of the grant agreement, where required; and 

i. Disadvantaged Business Enterprise compliance. 

1027. FALSE AND INACCURATE CERTIFICATIONS. 

The region may rescind the acceptance of sponsor certification forms at any time. Where fraud or 

criminal action and intent is suspected, the U.S. Justice Department shall be immediately notified 

through regional counsel. 

a. Sponsor Notice. Sponsors shall be immediately notified in writing when certifications submitted 

are discovered to be false, inaccurate, or incomplete. The notification should state the nature of the 

Page 176 
June 28, 2005 Order 5100.38C

problem, remind the sponsor of its responsibilities in submitting accurate certifications, and specify 

actions necessary to remedy the situation. 

b. Sponsor Education. Most inaccuracies discovered in certifications will probably occur as a 

result of the sponsor or its consultant’s lack of knowledge with respect to requirements rather than being 

deliberately incomplete or making false statements. In such cases, the emphasis should be placed on 

correcting the deficiencies and educating the sponsor as to the responsibilities incurred with the signing 

of the assurances and certifications rather than invoking penalties. The most current assurances and 

certifications should be provided to a sponsor with a recommendation that the sponsor’s revised 

submission address the deficiencies. 

c. Other Corrective Actions. Negotiations with the sponsor may be necessary where inaccurate 

certifications are discovered in on-going or finished projects. Such negotiations shall address corrective 

actions and may involve action to suspend the grant as described in Chapter 11, Section 6, or 

withhold/readjust Federal funds in accordance with Chapter 13. 

1028. - 1029. RESERVED. 

Section 4. CIP AND APPLICATION REVIEW AND EVALUATION

1030. GENERAL. 

The initial review is an important phase in the development of an AIP project. This is the time to 

verify the justification, eligibility, and reasonableness of the project, to determine the reasonableness of 

project timing, to assign priorities, to identify information deficiencies, to select candidate projects for 

discretionary funding, and to approve, disapprove, or defer projects. Proposals that would require 

special adaptation of standards and problem areas that may later require the use of special conditions in 

the grant agreement should be carefully evaluated. To avoid project delays, every effort should be 

made to resolve programming and technical problems prior to recommending a project for approval. 

1031. PROJECT EVALUATION REPORT AND DEVELOPMENT ANALYSIS. 

A Project Evaluation Report and Development Analysis (PERADA) Checklist, FAA Form 5100-109 

(7-01), (Appendix 8) must be prepared, by the FAA Airports Office, for each project intended to be 

programmed. FAA Form 5100-109 (7-01) should not be confused with similar forms previously 

distributed, including FAA Form 5100-109 (10-89), which may omit or incorrectly identify the minimum 

statutory, regulatory, and policy requirements for a project contained in this paragraph. The PERADA 

report should be completed during sponsor and FAA Airports Office development of each annual CIP 

element. This report must support the recommendations made with respect to the programming action. 

The report shall be prepared on FAA Form 5100-109 and shall concentrate on a concise discussion of 

problem areas. The data to be included in each section is described below: 

a. HEADING. Self-explanatory. 

b. Part I - Checklist. The checklist must be completed for each item. Items on the checklist, 

which do not obviously pertain to the project, should be marked “N/A.” All other items should be 

checked in either the “Meets Requirements” column or the “See Part III” column. A “Meets 

Requirements” reply is the FAA Airports Office’s affirmation that the item has been scrutinized and 

determined to require no further action. Each item checked under the “See Part III” column will require a 

short narrative, which will be included in that part and documented in the project file, as appropriate. 

The following is a brief discussion of each item: 

(1) ACIP Project Evaluation Checklist. Problems foreseen for project approval upon 

completing Airports Capital Improvement Plan Project Evaluation Checklist must be explained. (See 

FAA Order 5100.39.) 

Page 177
June 28, 2005 Order 5100.38C

(2) Sponsor Eligibility. Give status of the sponsor’s legal ability to carry out its obligations. 

State whether a tentative determination has been made on sponsor eligibility when a written opinion of 

regional counsel is pending. (See Chapter 2.) 

(3) Consistent with Local Plans. The airport project must be consistent with the plans 

(existing at the time the project is approved) of public agencies authorized by the State in which the 

airport is located to plan for the development of the area surrounding the airport. (See Title 49 U.S.C., 

Section 47106(a)(1).) 

(4) Designation of Instrument Runway for the Airport. An explanation is necessary only if 

the project is not on the approved ALP or an instrument runway improved by the project requires further 

coordination for work required to establish an approach procedure. (See Paragraphs 300c, 428d, 500b, 

554, and FAA Order 7400.2.) 

(5) Status of Prior Grant(s). If there are any projects over three years old or that have had no 

draw down for the proceeding 18 months and have not been closed out, give reasons for delays and 

schedules established for closing the projects. The maximum time for an AIP project, from date of grant 

acceptance to financial completion, is four years. In the case of a multi-year project, the maximum time 

for completion is four years from the date of the final multi-year amendment. 

(6) Runway Marking. If airfield marking is not contained within the project and existing 

markings will be obliterated, an explanation should be made. (See Paragraph 500e.) 

(7) Runway Safety Areas, Protection Zones, and Approaches. Explanation should be added 

where the work is related to a runway safety area, runway protection zone, or airport approach that is 

non-standard and not improved by the project. See Paragraphs 513 and 581 as well as Advisory 

Circular 5300-13. 

(8) Runway Lighting. If the airport has inadequate lighting, an explanation should be added. 

See Paragraph 500c. 

(9) Navigation Aid Requirements. If the requirements for landing aids are not included in the 

project, an explanation should be made. Any problems caused by the sponsor’s lack of action in 

providing these facilities at the airport will be described with possible solutions. See Chapter 5, 

Section 6. 

(10) Good Title and Property Inventory Map (Exhibit A). If the airport does not hold good 

title, an explanation should be added. See Paragraph 500a and Title 49 U.S.C., Section 47106(b)(1). A 

property inventory map (Exhibit A) in accordance with Order 5190.6 on the airport compliance 

requirements should be approved if it is not part of the airport layout plan. 

(11) Donations. All donations will be identified with information on the manner in which the 

value has been established for programming purposes. (See Chapter 3, Section 4.) 

(12) Force Account. Identify work proposed for force account. Comments will also include the 

method used in establishing costs for program purposes. (See Chapter 12, Section 3.) 

(13) Unreasonable Cost. Identify any unusual or unreasonable cost shown in the grant 

application. (See Paragraphs 310 and 311.) 

(14) Runway Surface Treatment. For all airports having turbojet operations, provide a detailed 

statement on the circumstances involved if surface treatment requirements have not been met. (See 

Paragraph 520d.) 

Page 178 
June 28, 2005 Order 5100.38C

(15) Intergovernmental Review. Explain any problem areas associated with coordination 

through the appropriate state single point of contact. (See Paragraph 1006.) 

(16) Compatible Land Use. Identify any known non-compatible land use problems relating to 

the use of property adjoining the airport and the sponsor’s actions to assure compatible land use. 

Include enactment date(s) of local ordinances and/or zoning restrictions. (See Paragraph 1005 and 

Title 49 U.S.C., Section 47107(a)(10).) 

(17) Public Hearing. State whether the public hearing requirements have been satisfied. 

Provide the date(s) of public hearings. (See Paragraph 1007 and Title 49 U.S.C., Section 47106(c).) 

(18) Useable Unit of Work. Identify problems if a useable unit of work will not result from the 

project. (See Paragraph 500d.) 

(19) Information on Specific Opposition. Identify any opposition or controversy received 

regarding the project and the disposition of such opposition. Controversial aspects other than specific 

opposition should be discussed in sufficient detail to insure that programming actions are appropriate. 

(20) Flood Insurance. Identify whether the sponsor has adequately satisfied this condition. 

(See AC 150/5100-16, AIP Grant Assurance 1 - General Federal Requirements.) 

(21) Consultation with Airport Users. Identify when and what type of consultation took place 

with the airport users and identify any unresolved issues raised by airport users. (See Title 49 U.S.C., 

Section 47105(a)(2).) 

(22) Uniform Acquisition and Relocation Requirements (Uniform Act). Identify any 

controversial aspects or failure to meet the requirements of the Uniform Act or Order 5100.37. 

(23) Terminal Development/Bond Retirement. Identify any requirements for this type of 

project and whether the sponsor has satisfied them. (See Paragraph 614.) 

(24) Noise Compatibility Projects. Provide the date of approval of a Part 150 program for any 

project in an approved Part 150. If any project is not contained in an approved Part 150 program, an 

explanation/justification for the project is required. 

(25) Pavement Reconstruction. For any projects to replace or reconstruct pavement, describe 

the sponsor’s pavement maintenance management program. See Paragraph 520a. 

(26) Sponsor Certifications. If the sponsor certification process has not been followed, 

explanation is needed. See Section 3 of this chapter. 

(27) Washington Approval Required. See Paragraph 31 for a list of projects requiring 

Washington approval. In addition, any coordination with Washington headquarters to determine 

eligibility as required within this directive should be described. 

c. Part II, Description and Justification of Work Items. Include a clear description of each work 

item and a brief statement of justification for each item recommended for programming. The statement 

of justification shall include a concise discussion of the aeronautical justification with respect to necessity 

and timing and shall not include detailed design information unless pertinent to the programming 

decision. See Paragraphs 402b and 505. The priority assigned to each development item shall be 

included. For development not recommended for programming, the report should contain a brief 

description of the analysis leading to that conclusion. 

d. Part III, Explanation. Explain any item from the Part I, Checklist, marked “See Part III.” 

Page 179
June 28, 2005 Order 5100.38C

1032. - 1039. RESERVED. 

Section 5. PROJECT APPROVAL/DISAPPROVAL AND ALLOCATION

1040. PROJECT APPROVAL. 

This paragraph outlines procedures for processing AIP projects. 

a. Projects submitted to the FAA will be evaluated as they are received. Each project file will 

contain the following documents: 

(1) Project Evaluation Report and Development Analysis (PERADA), FAA Form 5100-109 

(Appendix 8); 

(2) Application for Federal Assistance, SF 424 (Appendix 3); 

(3) Current FAA-Airport Master Record, FAA Form 5010-1; 

(4) Program narrative consisting of a list of the projects, justification for the projects, and a 

detailed cost estimate of the projects. 

(5) A sketch, preferably 8 1⁄2” x 11”, drawn to scale and identifying projects requested and 

recommended. Number items requested by the sponsor to match items in the grant application. Larger 

sketches should be fastened to the folder in a manner that will readily permit unfolding; 

(6) For projects requiring an environmental impact statement, the public record of decision 

required by CEQ Regulations, Section 1505.2 (43 F.R. 55978) shall also be included; 

(7) Airport Improvement Program Action, FAA Form 5100-107 (See Appendix 28). 

b. A decision on a project must be made at the field level in a timely manner. Should a sponsor fail 

to respond to FAA Airports Office requests for information necessary for project consideration, the 

application should be returned to the sponsor with no action taken. 

1041. NOTICE OF DISAPPROVAL OR DEFERRAL. 

When a project contained in a CIP is not approved or is deferred for inclusion in the program, the 

sponsor shall be advised of such action and the reasons therefore. A copy of such notice shall be sent 

to the appropriate state agency. (See Paragraph 1150.) If disapproval is based on the violation by the 

sponsor of an assurance or other requirement of the grant program and the project is to be funded from 

passenger or cargo entitlement (or special Alaska entitlement) funds, the procedures in 

14 CFR Part 16 should be followed. 

1042. WASHINGTON COORDINATION. 

a. APP-520 will review regional recommendations and approvals to assure consistency in 

application of policies, programming criteria, guidelines, and national uniformity in the application of 

priorities. The regional programs will be monitored to determine at what priority level discretionary funds 

are being used. The Regional Airports Division, Planning/Programming Branch will be alerted of any 

obvious problems or deficiencies disclosed in this review and may be requested to provide additional 

information. (See Paragraph 31.) 

b. Upon receipt of notification of the approval of an AIP allocation, including increases in excess of 

$1,000,000 to an existing allocation by the Regional Airports Division Manager or the Administrator, as 

appropriate, APP-520 will provide the Office of Government and Industry Affairs (AGI) with the 

Notification of Allocation for Airport Development for delivery to the Office of the Secretary of 

Transportation (OST) Office of Congressional Affairs. 

Page 180 
June 28, 2005 Order 5100.38C

c. OST will notify the congressional delegation and advise APP-520 when the project is cleared for 

release to the sponsor. 

d. APP-520 enters the project release information into the AIP system daily. The following day the 

system updates the web based reports. 

e. The regions can obtain computerized OST Congressional release information from the AIP 

system the day the release is entered into the system or the next day from the FAA web site at: 

http://www.faa.gov/arp/arphome.htm. 

f. The FAA Airports Office will notify sponsors in accordance with the provisions of Paragraphs 

1043 and 1044 of the action taken on their proposal. 

1043. NOTICE OF ALLOCATION. 

When a project has been approved, the appropriate FAA Airports Office shall notify the sponsor 

following receipt of notice of congressional release. Copies of such notice will be sent to the appropriate 

state aviation agency or as agreed upon between the sponsor and its state aviation agency. Each 

notice should include the following: 

a. The amount of the allocation; 

b. A list of programmed projects. Any deletions or reductions from the sponsor’s proposal must be 

explained; 

c. A statement that the allocation may be used only for the programmed items; and 

d. A statement explaining that the allocation is the first step leading to the issuance of a grant offer, 

and is made within the amounts authorized under the terms of the Act and that the issuance of a grant 

offer is contingent upon all applicable Federal requirements being met, including: 

(1) Approval of the project as finally formulated; and 

(2) The limits of obligating authority for the current fiscal year; 

e. A statement that the allocation is in consideration of the sponsor’s representations shown on the 

application and that the FAA Airports Office will discuss these matters with the sponsor. 

f. A statement that failure to establish an acceptable schedule or delay in conforming to the 

schedule will result in prompt withdrawal of the allocation. 

g. A statement that copies of the AC’s on labor, civil rights, and relocation assistance, as applicable 

are available from the U.S. Government Printing Office or, if there is no charge, the U.S. Department of 

Transportation, General Services Section, M-443.2, Washington, D.C. 20590. 

1044. SCHEDULE FOR SPONSOR DEVELOPMENT OF THE PROJECT. 

a. Establishment of Schedule. 

(1) Immediately after an allocation is made, a meeting should, if deemed necessary, be 

arranged with the sponsor to establish a schedule for the development of the project. This meeting 

should include all representatives of the sponsor who will participate in the project, including, 

where/when appropriate, any state officials, sponsor’s engineers, and the sponsor’s attorney. The FAA 

Airports Office representative will provide the sponsor with an estimated date for tendering the grant 

offer. This date will take into consideration any limitation on obligational authority for the current fiscal 

year. The schedule will prescribe a definite date for each step of the project and will identify the 

Page 181
June 28, 2005 Order 5100.38C

individual responsible for each step. Emphasis will be placed on the fact that the allocation will be 

withdrawn unless the sponsor develops the project in accordance with the schedule. 

(2) Where appropriate, realistic deadline dates for each of the following steps, if applicable, of 

the project development should be set: 

(a) Submission of Certification of Plans and Specifications; 

(b) Designation of sponsor’s engineer; 

(c) Submission of preliminary plans; 

(d) Request for state air and water quality standards compliance assurances; 

(e) Submission of final plans and specifications and engineer’s report; 

(f) Completion of necessary land acquisition and Relocation of displaced persons; 

(g) Adoption of a zoning ordinance or other compatible land use measures; 

(h) Submission of title evidence; 

(i) Coordination with planning agencies; 

(j) Receipt of current wage rates; 

(k) Advertising for bids; 

(l) Award of contract; 

(m) Pre-construction conference; 

(n) Submission of Application for Federal Assistance (SF-424 and FAA 

Form 5100-100); 

(o) Issuance of grant offer; and 

(p) Acceptance of grant offer; 

(3) The schedule will be realistic from the standpoint of both the sponsor and the FAA in 

anticipating problems and causes for delays. Scheduling of actions required to develop the application, 

including engineering work and acquisition of property interests, should permit the issuance of a grant 

offer with a minimum of special conditions. 

(4) Regardless of project priority, every effort should be made to schedule projects for grant 

agreement during the same fiscal year for which an allocation is made unless advance-programming 

action is involved. The agreed scheduled dates shall be considered deadline dates, and the sponsor will 

be advised that failure to meet them may result in action to withdraw the allocation. This procedure is 

considered necessary to insure that sponsors will complete all preparatory work for entering into a grant 

agreement and will be prepared to proceed immediately with project development, as funds are made 

available. 

b. Monitoring Conformance to the Schedule. The Federal Airports Office should monitor 

programs in accordance with the agreed upon schedule and take appropriate action when delays occur. 

Sponsors should be queried on projects that have not begun within 6 months of grant award to 

Page 182 
June 28, 2005 Order 5100.38C

determine reasons for the delay and appropriate follow-up action. Appropriate documentation will be 

placed in the project file to support later decisions to extend or withdraw the allocation. 

1045. - 1049. RESERVED. 

Section 6. APPLICATION REVIEW AND APPROVAL

1050. GENERAL. 

The application and supporting documents should be reviewed for accuracy and completeness and 

the sponsor requested to furnish any supplemental information. Upon completion of the review, the 

appropriate field office should forward the application along with necessary documentation to the 

approving official for action. The issuance of a grant offer by the FAA constitutes approval of the 

application. The field office may adjust the depth and intensity of the review of various supporting 

material in Section 1 above in accordance with the complexity of the project, the amount of the grant, the 

size of the sponsor, and past experience with that sponsor. 

1051. PROJECT SUMMARY. 

Preparing a detailed report of the project and a recommended action for use by the approving official 

is no longer mandatory, but the regional Airports Divisions may continue to do so. 

1052. DETERMINATION OF REASONABLENESS OF COSTS. 

To be allowable, a cost must be reasonable. Where a project cost appears excessive, close 

attention should be paid to the plans and specifications to determine whether the excessive cost is due 

to over design. Projects for which there are no FAA specifications may require redesign so that the 

project benefits will justify the costs. FAA field personnel should determine during the review of the 

application that the amount of funds requested by the sponsor is reasonable. Issuance of a grant offer 

effectively constitutes a determination that the costs on which the grant offer is based are reasonable. 

The determination should be made in accordance with one of the following guidelines: 

a. Application amounts based upon estimated costs: 

(1) Requested amounts should be compared to the costs of similar type work included in other 

recently awarded grants, taking into account such factors as inflation and geographical differences; 

(2) Estimated cost of land acquisition should be based on appraisals of the parcels to be 

acquired as well as appropriate relocation assistance and administrative costs. 

b. Application amounts based upon competitive bids: 

(1) The sponsor is required to submit an itemized abstract of bids and a copy of the engineer’s 

estimate, both to be included in the project file. The low bid should be compared to the engineer’s 

estimate, as well as costs for similar type work in other projects. If there are several bids, it may not be 

necessary to compare the low bids to costs in other projects since experience has shown that the 

greater the number of bidders, the lower the price; 

(2) If only one bid is received, the FAA should encourage the sponsor to negotiate with the sole 

bidder to obtain lower prices if such negotiation is permitted by state or local law; 

(3) If there are less than five bidders and the low bid exceeds the engineer’s estimate by 10%, 

the grant should not be issued unless the FAA satisfies itself that the costs are reasonable. 

Page 183
June 28, 2005 Order 5100.38C

1053. REVIEW FOR BID IMPROPRIETIES. 

a. In reviewing the abstract of bids to determine the reasonableness of costs, field offices should be 

alert to possibilities of improprieties in the procurement process such as bid rigging and collusion. Field 

offices should notify the Office of Inspector General (OIG) Regional Special Agent-in-Charge of 

Investigations when: 

(1) There are five or fewer bidders on a construction project and the low bid is 95% or more of 

the engineer’s estimate and the bid is $500,000 or more; 

(4) There is only a single bidder on a construction contract and the bid is $250,000 or more; 

(5) Any bid package that FAA field personnel feel contains any unusual or suspicious bid 

patterns or activities. 

b. The bid package shall not be submitted to the OIG unless requested, and the grant award 

should not be delayed unless the Special Agent-in-Charge indicates otherwise. 

1054. - 1059. RESERVED. 

Section 7. MODIFICATION OF APPROVED PROGRAMS

1060. PROGRAM CHANGES. 

Program changes are major changes to the scope of a project by deletion, revision or additions of 

work items or adjusting allocations for which notices of allocation have been issued. Program changes 

may be made by the FAA anytime after the tentative allocation and prior to grant acceptance by the 

sponsor. Field offices may make program changes involving work items so long as the new project is at 

least the same priority as the one being replaced. All proposed projects receiving a lower priority rating 

must be submitted to APP-520 for review and approval. After approval, any grant offers must reflect the 

corrected description. Such program changes should not be used indiscriminately or as a substitute for 

careful planning and estimating for initial programming. 

1061. PROCEDURES. 

a. Timing. A sponsor should request a program change as soon as the need becomes evident. 

b. Sponsor Submission. 

(1) Deletions or Reductions in Projects. Deletion or reduction of development items from 

approved projects may affect the operational capability of the airport involved or prevent the construction 

of a safe, useful, and usable project. Consequently, such action should be undertaken with caution to 

assure that the operating capability of the airport or unit of development is not adversely affected. 

(2) Increase in Funds or Additions to Programmed Development Items. The sponsor must 

submit a request with the same type of information and documentation required within this chapter. This 

must, in all cases, include a revised project estimate and assurance of availability of sponsor funds if a 

request for the modification of funds has been submitted after application. Changes in development 

items will normally require a revised project sketch. 

(3) Decrease in Allocation. Where the change involves only a reduction in the amount of the 

allocation, a revised project estimate is sufficient basis for decreasing the allocation. 

c. Regional Determination. Regions will approve or deny requests for program changes except 

for those projects approved at the headquarters level. 

Page 184 
June 28, 2005 Order 5100.38C

d. Headquarters Determination. For any changes that cannot be approved in the region, the 

region will submit the request to APP-520. Documentation may be requested by APP-520 for an 

evaluation of the request. (See Paragraph 31.) 

1062. ANNOUNCEMENT OF CHANGES TO APPROVED PROGRAM. 

Changes made under Regional authority should be announced to congressional offices in 

accordance with procedures in Order 5100.20, Program Control and Reporting Procedures. 

1063. - 1069. RESERVED. 

Section 8. LETTERS OF INTENT

1070. GENERAL. 

The FAA is authorized to issue a letter of intent (LOI) for certain airport development projects when 

current obligating authority is not timely or adequate to meet a sponsor’s desired timing for a project. 

Under this provision, a sponsor may notify the FAA of an intention to carry out a project without Federal 

funds and request that the FAA issue an LOI. The FAA evaluates the proposal and, if approved, issues 

a letter stating that reimbursement will be made according to a given schedule, as funds become 

available. A sponsor who has received an LOI may proceed with a project without waiting for an AIP 

grant. The Sponsor is assured that all allowable costs related to the approved project remain eligible for 

reimbursement. 

1071. ELIGIBILITY. 

a. Airport. LOIs may be issued to cover work only at primary and reliever airports. 

b. Airfield Project. The project must enhance airfield capacity or be supporting development 

directly related to the primary project to be eligible for a letter of intent. Any development directly related 

to the primary project, to be included in the LOI, is also subject to the review factors and conditions of 

the primary project of the LOI. An example of a directly related project includes an extension of a 

taxiway to match a runway extension. An example of a project that is not directly related would be the 

construction of a public roadway serving a terminal building in an LOI for a new runway or extension. 

c. Payment of Interest. The payment of interest from bonds or other forms of indebtedness under 

an LOI is not allowable. Accordingly, in submitting an LOI application, interest costs may not be 

included in project costs and will not be covered as part of an approved LOI. Additionally, the FAA will 

not recognize the cost of interest as an allowable expense in processing a request for payment of grant 

funds under a grant agreement executed pursuant to an LOI. 

However, once allowable expenses have been incurred by the sponsor for approved LOI project 

capital costs, amounts paid to the sponsor by the FAA under the LOI constitute reimbursements. The 

FAA does not generally track or monitor airport sponsors’ uses of payments under grant agreements 

after receipt of those payments by the sponsor. Therefore, the FAA has no objection to the use of 

reimbursement payments, upon receipt by the sponsor, for any lawful airport purpose, including the 

payment of interest on airport obligations. 

1072. FACTORS IN CONSIDERING LOIS: 

The FAA will consider these factors in reviewing requests for LOIs: 

a. For projects at large and medium hub airports, the project’s effect on the overall national air 

transportation system capacity. The FAA will determine the current annual hours of flight delay for and 

reduced annual aircraft and passenger delays at current and future airport activity levels. Data required 

for FAA analysis includes: the approved Airport Layout Plan, fleet mix, type of operation, peak hour 

airfield mix by class, runway occupancy times, taxiway exit percentages, noise, obstructions, terrain, 

Page 185
June 28, 2005 Order 5100.38C

aircraft departure and arrival constraints, minimum vectoring altitudes, aircraft separations, length of and 

approach speeds on typical approach by aircraft type, weather conditions, runway dependencies, and 

the different runway use configurations in the various wind and weather conditions. Also, required for 

analysis is the enplanement forecast for the period of construction and the growth rate of enplanements 

for out years beyond construction. 

b. A Positive Benefit/Cost Ratio: A project Benefit/Cost Analysis (BCA) will involve a detailed 

review of future benefits and costs for each year of the project’s expected life, discounted to present 

value at an appropriate discount rate. The FAA will consider benefits in terms of annual cost savings 

attributable to reduced delays, and the monetary value of saved passenger time. In addition, the net 

value to the airlines, the airport, and the public from additional airline service made possible by the 

project will be considered. Total costs attributed to the project include, but are not limited to, land 

acquisition, site preparation, environmental and noise mitigation, engineering, and construction. The 

FAA recommends all benefit/cost analysis be conducted in accordance with the guidance issued on 

December 15, 1999. The guidance may be downloaded from the FAA Airports web site at 

http://www.faa.gov/arp/bca.htm. 

c. Sponsor Financial Commitment, (LOI Finance Template). The FAA will determine the 

sponsor’s financial commitment in the analysis of an airport’s financial plan. The FAA has established a 

Finance Template (See Appendix 29) for the purpose of standardizing the submittal of an airport’s 

financial plans. Historically, FAA has requested supplemental or modified financial data from airports 

during the LOI review process. By standardizing the financial plan submittals, the LOI review process 

will permit FAA personnel to efficiently and effectively perform the financial analysis. 

In addition to the LOI finance template, the sponsor should provide the entire capital improvement 

plan that covers the life of the LOI request. This list of projects, both within the LOI and outside the LOI, 

should contain the total project costs, and a cost breakdown by source of funds. The FAA will utilize this 

supplemental information to consider other sponsor commitments that may impact the sponsor’s ability 

to pledge specific sources of funds. Also, this information may highlight a sponsor’s use of entitlement 

funds to other higher priority projects. Finally, FAA will consider the sponsor’s contribution from nonfederal funding sources, airport revenue diversion, grand-fathered payments to other governmental 

offices, and whether or not the sponsor plans to proceed with the project in accordance with all 

applicable statutory and administrative requirements, with the LOI payments to be used as 

reimbursement for advance expenditures. The FAA will not consider an LOI payment schedule that 

directly matches an airport’s capital drawdown schedule. 

1073. ISSUANCE OF LOI. 

FAA will issue the LOI to the sponsor when the congressional notification is complete. The same 

official who normally signs a grant offer for the FAA will be the official who signs the LOI. The LOI 

should include the following: 

a. LOI number and airport name (the number should be based on the region’s three letter code, the 

fiscal year of issuance, and a sequential number, e.g., AGL-88-02, the second LOI issued by AGL in 

FY 1988); 

b. A brief, but complete, project description; 

c. The maximum amount of Federal funds which will be made available for the project; 

d. A schedule of reimbursements by fiscal year and type of funds, (apportionment and/or 

discretionary); 

e. A statement that the sponsor must comply with all statutory and administrative requirements; 

Page 186 
June 28, 2005 Order 5100.38C

f. A statement that the LOI is not considered to be an obligation of the United States, shall not be 

deemed an administrative commitment for funding, but shall be regarded as an intention to obligate from 

future budget authority as such funds become available; and 

g. A statement that the LOI, with sufficient justification, may be amended to adjust the maximum 

Federal obligation, the payment schedule, or both. When entitlement funds (includes cargo and primary) 

are more than the amount scheduled in a year, the discretionary funds in the same year may be reduced 

by an amount equal to the increase in entitlement funds over the amount scheduled in the LOI. In this 

case, no adjustments have to be made to the future funding years in the original LOI allocation project. 

Conversely, however, if entitlement funds are less than that projected, discretionary funds will not be 

increased to compensate for the lower entitlement funds. The accurate projection of entitlement funds is 

very important to both parties. 

1074. PROCEDURES. 

A principal goal in establishing the LOI procedures is that projects to be funded in this way be 

treated as much like conventionally funded grant projects as possible. In order to ensure that all 

statutory and administrative requirements attendant to the normal grant process are satisfied, the FAA 

will evaluate sponsor CIP’s, grant applications, and review proposed projects as is done for a normally 

funded AIP project. At the point where an Federal Airports Office would issue a notice of allocation to 

the sponsor, subject to APP-500 review, that office will instead issue a LOI. Grant applications and 

offers will follow as set forth in the LOI payment schedule, subject to the availability of funds. Actions 

should occur as outlined below: 

a. Early FAA/Sponsor Coordination. An airport sponsor may initiate consideration of an LOI for a 

large capacity-enhancing project. The sponsor should be briefed early on the general features of LOI 

provisions and on actions that the sponsor should take to obtain an LOI. The FAA Airports Office will be 

the primary contact for the sponsor regarding an LOI. It may be desirable, from the sponsor’s point of 

view, as well as the FAA’s, to hold a joint meeting so that all parties understand the purpose and scope 

of the project, FAA authority and policy, and sponsor financial needs, schedules, and responsibilities. 

Since all LOIs require a BCA, and given the length of time required to review the BCA, the review of the 

BCA should be started upon receipt of the BCA not after LOI submittal. As a minimum, the FAA and the 

sponsor should meet to discuss the following points: 

(1) A sponsor must notify the FAA of their intention to proceed with a project without federal 

funds through a request for a letter of intent. LOI applications must be submitted to the FAA no later 

than March 1 of the fiscal year in which the LOI approval is being requested. Applications received after 

March 1 will be considered for the following fiscal year. The application should include all relevant 

support material such as the status of the federal environmental finding, ALP approval, BCA, and 

requested LOI payment schedule. The applicant should also note the source(s) and amount(s) of other 

financing for the project. If the sponsor receives an LOI and then proceeds without the aid of Federal 

funds, the sponsor may later be reimbursed under the terms of the LOI. The sponsor notice to proceed 

with a project without federal funds and request a letter of intent should be submitted during project 

formulation or with the CIP and should specify the forecast dates for implementing the project or stages 

of the project and the estimated costs associated with each stage of the project. 

(2) A project under an LOI must satisfy all statutory and administrative programming 

requirements for an AIP project. Sponsors should be advised to proceed as though they had received 

Federal funds and should fulfill all environmental, civil rights, bidding, procurement, and contracting 

requirements associated with an AIP grant, even though no Federal funds have been received at the 

time the project was initiated. 

(3) All documents normally submitted with a grant application should be submitted in support of 

a request for an LOI. 

Page 187
June 28, 2005 Order 5100.38C

(4) The sponsor should agree to commit all, except to the extent that the FAA agrees funds may 

go to other projects of equal or greater priority, entitlements over the life of the LOI to the project. An 

exception may be made if entitlement funds are already committed for other urgent needs. In such a 

case, the payment schedule in the LOI may have no funds or reduced entitlements under the 

apportionment heading. 

(5) An LOI may be issued with payments scheduled beyond the statutory expiration of the AIP, 

as authorized by the FY 1989 Department of Transportation and Related Agencies Appropriations Act 

(Public Law 100-457). 

(6) The total of discretionary funds in all LOIs subject to future obligation is limited to 

approximately 50 percent of the forecast discretionary funds available for that purpose. 

(7) Issuance of an LOI is considered a Federal action subject to the requirements of the National 

Environmental Policy Act. Consequently, all environmental actions must be complete before issuance of 

a letter of intent. 

(8) An LOI may be amended in future years to adjust the total maximum Federal obligation, the 

schedule of payments, or both. Considerations that may lead to an amendment include, but are not 

limited to, a change in project cost, change in project timing or scope, or changes in future obligating 

authority. 

(9) Alternative funding levels and schedules should be discussed. The FAA position is to use 

the LOI provision to encourage the maximum number of capacity-enhancing projects. Consequently, 

the FAA should ensure that sponsor resources are used to the maximum extent reasonable, and that 

Federal financial support should be the minimum amount needed to allow the project to proceed. 

(10) Costs incurred prior to the issuance of an LOI, except project formulation costs, will not be 

reimbursed. 

(11) Sponsors shall complete a BCA for LOI projects. The cost of preparing BCAs can be 

reimbursed as a project formulation cost when and if the project is approved for an AIP grant. The 

preparation of the BCA may also be part of a master plan project if such master plan effort is timely to 

the planned LOI project. 

(12) LOIs are an important innovative financing tool. As such, an airport seeking an LOI must 

submit a financial plan that demonstrates how the LOI will leverage increased financial commitment from 

non-Federal sources and/or will cause the project to be accelerated. Financially superior LOI requests 

will be those that seek a greater percentage of the AIP funds later in the financial plan, divide the 

Federal participation over a longer time frame, and seek realistic overall Federal participation. Airports 

seeking earlier and larger AIP allocations should be encouraged to consider competing for funds through 

annual discretionary grants rather than LOIs. 

b. FAA Actions to Approve the Project. Regions should notify APP-500 promptly when a 

sponsor expresses interest in obtaining a letter of intent. Preliminary information provided to APP-500 

should include a general description of the project, the estimated cost, the proposed schedules for 

construction and reimbursement, and an indication of whether the project is a good candidate for an LOI. 

All normal pre-application review and evaluation actions should be completed as if the project were 

being programmed for a grant. Similarly, the sponsor should be briefed on the importance of complying 

with all Federal procedures on bidding, civil rights, and contract award. 

FAA has established a committee to review LOI proposals to insure all statutory requirements have 

been met and advise the Associate Administrator for Airports (ARP-1) on the selection of LOI proposals. 

The committee is composed of representatives from the Office of System Capacity (ASC), Office of 

Page 188 
June 28, 2005 Order 5100.38C

Aviation Policy and Plans (APO), and from the Associate Administrator for Airports (ARP). The 

committee is chaired by APP-500 and includes ARP representatives from APP-510, APP-520, and an 

airports regional division manager with no LOI candidate. This committee will review substantially 

complete LOI requests submitted by the March 1 deadline. The committee reviews the LOI proposal, 

system benefits, BCAs, and the financing package. 

After ARP-1 selects the sponsors that will receive LOIs, APP-500 will complete the headquarters 

actions necessary to complete the approval process and initiate the OST/Congressional notification 

process. The Congressional notification will state the FAA’s intention to grant funds, not to exceed the 

estimated total Federal share of allowable project costs, and any amounts that are approved for 

allocation in the current year. 

1075. LOI FUNDS ALLOCATION. 

At the beginning of each fiscal year, the FAA, in its administration of the AIP, sets aside the amount 

of discretionary funds to cover the LOI payment schedules. The sources of discretionary funds for 

existing and new LOIs are as follows: 

a. Large and Medium Hub Primary Airports-up to 50 percent of the Capacity/Safety/Security/Noise 

set aside. 

b. Small Hub Primary Airports-up to 50 percent of the “small hub” set-asides. 

c. Nonhub Primary Airports-up to 50 percent of the nonhub portion of the small airport fund. 

d. Air 21, Section 104(f), amended Title 49 U.S.C., Section 47117(e)(1), to establish a new reliever 

airport set-aside when the total annual amount made available for the AIP is $3.2 billion or more. The 

amount of the new reliever set-aside is 0.66 percent of discretionary funds. 

e. Up to 50 percent of the undesignated discretionary (remaining discretionary) will be available for 

LOIs. Primary airports of all sizes and relievers may compete for these limited funds. 

APP will ensure that, in any given fiscal year, FAA does not approve LOI payment schedules which 

would in future fiscal years exceed the 50 percent level in any category. It is important to stress to 

airport sponsors applying for LOIs that their requested payment schedules will have a significant impact 

on the review process and any unreasonable payment schedules may be cause for rejection of the 

application without further consideration of other factors. 

Each fiscal year APP-500 will issue an analysis of existing LOIs and the impact of these LOIs on 

projected funding, including an estimate of projected availability of funding of new LOIs. 

1076. POST-LOI ACTIONS. 

All actions that would normally follow the notification of allocation, except those related to grant offer, 

acceptance and payments, must be completed as if a grant had been issued. If a sponsor proceeds 

without satisfying all of the “statutory and administrative requirements” associated with an actual grant, 

the commitment to reimburse the sponsor under the LOI may be voided. Sponsors should fully 

understand that failure to comply with all Federal requirements could jeopardize later reimbursements. 

1077. LOI GRANT APPLICATION AND OFFER. 

When the authority to obligate funds for a project under an LOI is received, the sponsor should be 

notified to submit a grant application and all additional documentation needed at that time. The SF-424 

must provide the LOI project description. Additional documentation may include periodic construction 

progress reports, inspection reports, or other evidence of satisfactory progress. The grant application 

may be for costs already incurred or for prospective costs. If the application includes costs not yet 

Page 189
June 28, 2005 Order 5100.38C

incurred however, the FAA should ensure that the costs are imminent, rather than anticipated at some 

unspecified date in the future. 

Any grant issued for the same work as identified in an LOI will be considered in the LOI rather than 

as a separate action. This does not preclude the issuance of a separate grant for distinct work outside 

the scope of the LOI. No separate grants for projects covered within an LOI will be considered. 

1078. ADMINISTRATION OF LETTERS OF INTENT. 

There will be an ongoing need to maintain up-to-date records of outstanding commitments under the 

LOI provisions. In addition, projects constructed under LOIs are more likely to be complex and to 

require longer completion times than those initiated with current year allocations and grants. 

Consequently, there may be a need to periodically review the amount of funds originally agreed to in a 

letter of intent and adjust the estimate for funding needed in the out years. In any case, APP-500 must 

approve any changes in the amounts or status of such future funding agreements. 

1079. AMENDMENTS TO LETTERS OF INTENT. 

Because these projects will be administered in the same way as conventionally funded projects, 

there will be ongoing FAA field involvement as each project phase is completed, as subsequent phases 

come to bid, and as successive grants are issued under the LOI. In cases where significant changes in 

project scope or costs are apparent, the Federal Airports Office administering the project is authorized to 

issue an amended LOI, after APP-500 approval, revising the project description, increasing or 

decreasing the Government’s maximum obligation, or revising the payment schedule. See Appendix 24 

for a sample LOI amendment. 

Substantial revision or abandonment of a project initiated under an LOI is not anticipated. In such an 

event, however, consult APP-500 to determine the appropriate course of action. Although the limitation 

on grant amendments (currently 15 percent) does not apply to LOIs, caution should be exercised in 

considering project changes that would substantially increase the cost. 

1080. ADDITIONAL LETTER OF INTENT. 

Should a sponsor seek to obtain another LOI for projects not covered by the first LOI, the sponsor’s 

new proposal should be evaluated in the same way as the original. 

1081. - 1089. RESERVED

Section 9. BLOCK GRANT PROCEDURES

1090. GENERAL. 

This program consolidates funding to states for individual airport projects at selected locations and 

enhances State airport improvement responsibilities. 

a. Authorization. Statutory authority exists for ten states to administer block grants on other than 

the primary airport projects. 

b. Traditionally Federal Functions That States Will Perform. Block grant States perform some 

AIP administrative functions traditionally accomplished by the FAA, such as preparation of airport grant 

information for sponsors, reviewing of the sponsor’s requests, and accounting for program expenditures. 

While various States have widely varying involvement in airport development, a State participating with 

block grants must accept the specific responsibilities of the program when it accepts the grant offer in 

writing. For purposes of the block grant program, states only assume functions related to the grant 

agreement. 

Page 190 
June 28, 2005 Order 5100.38C

c. State Channeling and Sponsorship of Airport Projects. State channeling of Federal airport 

grants occurs in various forms within numerous states. This is based on State enabling legislation rather 

than Federal law. Regions should administer the AIP to accommodate the State requirements. In 

addition, State sponsorship of airport projects also occurs with regularity based on provisions in 

Paragraph 209. The main difference between State sponsorship of airport projects and the block grant 

program (which is limited to nonprimary airports) is that in the latter states select each project rather than 

the FAA. State channeling and sponsorship of airport projects may be viewed as transitions to a block 

grant should the program allow new States, although they are not mutually exclusive provisions. 

d. State Aviation Agency Application. If a State aviation agency is interested in the block grant 

program, only the State’s initial application needs to be considered for participation. However, regions 

should request new applications from all current participants whenever the State, airport, or noise project 

sponsor assurances are changed. See Paragraph 1010. The selected State organizations must be 

capable of effectively administering a block grant. For the application forms, see Appendices 3 and 26 

and block grant assurances. 

e. Application Schedules. An application may be provided to regions from a State when notice 

has been given by APP-500 that the FAA will consider new applications. There is no set schedule for 

considering applications by states not currently participating in the program. Any schedule for new 

applications currently depends upon authorization for an expanded number of States or discontinuation 

by a current participant. 

f. Airport/State Relationship. The relationship between airports and the State would be a factor 

in FAA oversight of the block grant program as well as selection of any additional states for it. 

1091. CALCULATING AMOUNTS FOR GRANT AGREEMENTS. 

A worksheet on the calculation of amounts in the block grants should be made available to states 

when the grant is offered. The funding categories should be specified in this worksheet, e.g. State 

apportionment or discretionary funds. Where nonprimary airport projects are to be administered by the 

FAA due to unusual circumstances in a block grant State for any fiscal year, the description of such a 

project and amount of funds should also be identified on the worksheet or separately. FAA is not 

involved in project selection under block grants. However, the FAA may reduce a participating State’s 

funding and administer certain nonprimary airport projects the region selects outside of the State block 

grant. Title 49 U.S.C., Section 47116(c), specifically allows an airport in block grant states to receive 

grants with small airport funds as if the State were not within the program. (See Paragraph 1095.) 

a. Annual Grant Agreement using State Apportionment. Normally, a single block grant for each 

fiscal year is issued to the State. However, it may be desirable to issue portions of the total, such as the 

State apportionment funds, for any fiscal year before the discretionary amount is known. In these cases, 

separate grants may be offered if the later increase would be greater than 15 percent of the initial block 

grant. An amendment may be made where the increase is 15 percent or less. All of the State 

apportionment should normally be included in block grants, and Condition 1 of the grant agreement in 

Appendix 27 limits use of these funds. If it is necessary for the FAA to administer all or part of the airport 

projects to benefit from such apportionment outside of a block grant, early consultation with the State is 

desirable. 

b. Passenger and Cargo Entitlements. Where an amount of cargo funds is included in the block 

grant, the State distribution may be made without regard to this proportion. Use of any transferred 

passenger entitlements would be subject to the specific terms of the agreement of transfer in 

Appendix 16, which should be incorporated as a special condition of the block grant. 

c. Discretionary and Returned Entitlement Funds. When amounts of discretionary or small 

airport funds are included in the block grant, the State distribution may be made without regard to these 

proportions. FAA may review the State’s use of entitlement funds for any fiscal year in making 

determinations about additional discretionary funding for that fiscal year based on the Airport Capital 

Page 191
June 28, 2005 Order 5100.38C

Improvement Plan. Where the FAA intends that the discretionary funds be used at a particular airport 

the block grant agreement should expressly provide for this use. States have flexibility to change the 

original projects. Documentation should be requested of states on how the specified discretionary 

amounts were used when such changes occur. See Paragraph 1094h. 

d. Nonprimary Entitlements. When entitlements are permitted, current and future block grant 

states will be responsible for administering the individual nonprimary airport entitlement. These airports 

must be itemized within the block grant offer ensuring the State uses the specified funds at entitled 

locations. Lists of the associated city, airport, and amount of Federal share should be added in a new 

condition 9 with the preface: “Entitlements for nonprimary airports must be utilized as follows: ...". 

Regions shall request states to report on how the specified entitlement amounts were used at the end of 

three years after such a block grant has been issued. See Paragraph 1094h.

1092. MAXIMUM STATE FLEXIBILITY. 

Regions should administer the block grants to encourage State innovation as well as allow maximum 

flexibility for them to carry out the program effectively and efficiently. States may use either FAA forms 

and procedures or their own as they choose, except for those procedures that are mandatory as noted in 

Paragraph 1095. 

a. Pre-Project State Planning Process. State participants have considerable flexibility in using 

their pre-project planning process to determine airport development requirements. States are 

responsible for approval of airport layout plans (ALPs). Complete ALPs should be submitted to the 

region. Block grant funds may be used for airport master planning. In addition, States must undertake 

airport system planning determined as satisfactory to the FAA. That planning process must provide for 

meeting the critical safety and security needs of the national airport system. AIP grants administered by 

the FAA may be used for system planning. 

b. Programming Process. States have substantial flexibility and may use their own airport project 

programming process, although the State must use a programming process that has been determined to 

be acceptable to the FAA. The State programming process must provide for critical safety and security 

requirements and ensure the needs of the national airport system will be addressed in deciding which 

projects will receive AIP funds. AIP grants administered by the FAA may be used for preparing State 

capital improvement programs through a system-planning project. 

c. State Priority System for Entitlements. States have complete flexibility to use their priority 

system in selecting projects for any fiscal year using State apportionment funds as well as entitlements. 

See Paragraphs 1091c and 1092d for priority system requirements applicable to the use of discretionary 

and small airport funds. 

d. State Priority System for Discretionary Funds. The priority system of the State may be used 

to select projects for any fiscal year using discretionary funds or returned entitlements provided the FAA 

has previously determined that the State’s system is not inconsistent with the national priority system. 

While none of the States has been approved at the present time to use their priority system for 

discretionary or small airport funds, the FAA considers State priorities when applying the national priority 

system. State coordination and adoption of the priority system would be necessary before achieving the 

FAA determination allowing use of its priorities for discretionary and small airport funds. In an effort to 

treat each State the same (whether in the block grant program or not), states that wish to be considered 

for this option must forward a description of their priority system and any coordination of such with the 

FAA Airports Office through the region to APP-520. Regions should allow three months before any 

fiscal year in which the priority system is to be used for the necessary review and coordination. No 

guidelines have been established on amounts of funds that would be made available for this purpose. 

e. State/Local Matching Share. States have the flexibility to fund individual airport projects using 

any United States Government share of allowable project costs that is not greater than 90 percent in 

accordance with Title 49 U.S.C., Section 47109 (a)(2). The United States share for the total block grant 

Page 192 
June 28, 2005 Order 5100.38C

work accomplished during each fiscal year shall be that amount or the higher amounts provided within 

states for public lands under Title 49 U.S.C., Section 47109(b). The potential for a reduced Federal 

share, from that allowed within states without block grants, requires the State or airports contribute a 

higher percentage of project costs. This leverages Federal funds to allow more work and may contribute 

to better project monitoring on the part of the airports. State block grant matching shares may vary from 

year to year depending upon their identification of individual airport project contributions. 

f. Environmental Requirements. Environmental impact assessment responsibilities, except as 

described in Paragraph 1096, have been passed to States receiving block grant funds. Block grant 

funds may be used for airport studies including environmental assessments and environmental impact 

statements. Since the block grant States are responsible for selecting the individual airport projects 

within block grants, environmental analysis and the definition of the alternatives are the responsibility of 

the State. Block grant States are allowed to follow their own environmental requirements if comparable 

to the National Environmental Policy Act as defined in the U.S. Council on Environmental Quality (CEQ) 

regulation. States that have no such requirements shall follow the CEQ regulation. CEQ may ask to 

review the State agreement or procedures on these requirements. Contact APP-600 if there are 

questions on these or related airport environmental issues identified in Order 5050.4. 

g. Form of Agreements. Block grant States have wide latitude in the form of agreements used for 

the program. States will have standard AIP block grant agreements with the FAA. In addition, the State 

may decide to enter into FAA regional agreements due to variations in State law or procedures. The 

form of the regional agreement should be determined between the region and State. States must also 

have individual airport agreements for projects, and the form of these is left to the State, provided it is 

acceptable to the FAA. See Paragraph 1095. 

h. Examples of State Flexibility. To illustrate other allowable variations, several examples have 

been documented of the flexibility States may use that FAA cannot in administering AIP grants: 

(1) One State has allowed a contingency amount of 2 percent of the construction cost for 

calculating airport grants that may cover unforeseen work without issuing amendments. 

(2) Several of the States have used AIP funds for program administration costs under an 

exemption from the provisions of FAR Part 156 that prohibit use of AIP funds to supplement State 

aviation agency resources for management of the program. 

i. State Activities Unrelated to Block Grants. States have flexibility to incorporate various 

activities unrelated to block grants into their State aviation program. These activities need to be 

considered separately from grant requirements, especially where the authority is other than for the AIP 

within Title 49 U.S.C., Sections 47101 to 47137. Block grant programs should exclude any elements 

other than those directly related to the AIP if questions arise about the adequacy of such activities. For 

instance, certain portions of coordination on obstruction evaluation and airport airspace analysis may be 

delegated to the states by mutual agreement between the FAA and the State. Any such evaluation or 

analysis is unrelated to block grants, and Order 7400.2 does not provide for the State to make the final 

determination. States that have been delegated airspace duties except final determinations by the 

regional Airports division manager should contact AAS-100 for assistance with access to databases. 

j. Conflicting Policies. State aviation agencies may have views or policies that conflict with those 

of the FAA on various subjects. However, every effort should be made by regions to ensure that airport 

sponsors receive consistent AIP information and guidance from FAA/State sources. If significantly 

different positions have been taken that may cause an airport problem, contact APP-520 for assistance 

in resolving or accommodating the conflicts. 

1093. AIRPORT ELIGIBILITY AND ALLOWABLE COST. 

AIP requirements for airport project eligibility and allowable cost are the same for States receiving a 

block grant as they would be if the FAA were administering the project. 

Page 193
June 28, 2005 Order 5100.38C

a. National Plan of Integrated Airport Systems. Regions must ensure that airports benefiting 

from block grant projects are included in the NPIAS. States have system plans and may provide NPIAS 

information. However, the States do not have authority to change airports in the NPIAS. 

b. Eligible Airport Projects. Regions must ensure the participating block grant States use AIP 

funds for eligible airport planning and development projects or to carry out an FAA-approved noise 

compatibility program. States must use the block grant funds to accomplish projects that are eligible 

under the statute as interpreted by the FAA. 

c. Ineligible Airport Projects. Regions should identify ineligible projects contained in the Block 

Grant State’s program using the AIP eligibility criteria. Where the region may be uncertain about 

eligibility, contact APP-520. 

d. AIP Project Costs. Regions must ensure that States not use AIP block grant funds for project 

costs that would be ineligible under a grant administered by the FAA. Project costs must be necessary 

and reasonable to be allowable. Except for the land acquisition, project formulation, and certain costs 

with prior FAA approval, all other items must be incurred after the date of the airport agreement. 

e. Project Administration Costs. Project administration costs that would otherwise be eligible for 

a grant should be allowed under the same terms as other AIP projects. 

f. Program Administration Costs. State program administration costs are ineligible under FAR 

Part 156, although some states have been given a limited exemption from this requirement. These are 

costs that would be incurred by the region if the FAA were administering the airport project. 

1094. ACCOMPLISHMENT OF AIRPORT PROJECTS. 

States are allowed to use many of their own programs and procedures for accomplishing airport 

projects. However, the minimum of uniformity described below within each Block Grant State is required 

to achieve AIP program objectives. 

a. General. In any case, where the region is unsure about allowing any aspect of the State’s 

administration of the airport planning or development process, contact APP-520. 

b. National Airspace System Requirements. Block grant construction and equipment projects 

must be consistent with the NAS Architecture as described in Paragraph 502. 

c. Project Changes Due to Satellite Navigation. Changes in airports and airport activity levels 

may result from the transition to satellite navigation. Regions and states need to question the 

applicability of obsolete project items, airport design, standards, or equipment, as well as the suitability 

of new technology. See Paragraphs 503 and 504. 

d. Project Standards. With the exception to the use of State highway specifications for airfield 

pavement at nonprimary airports with runways of 5,000 feet or shorter serving aircraft that do not exceed 

60,000 pounds gross weight, the application of State standards to block grant projects requires approval 

of the FAA. The use of State highway specifications will prohibit the sponsor from seeking AIP grant 

funds for the rehabilitation or reconstruction of any such airfield pavement for a period of 10 years after 

construction is completed unless the Secretary determines that the rehabilitation or reconstruction is 

required for safety reasons. The requirements of Paragraph 506 apply to block grants. 

e. Disadvantaged Business Enterprises (DBE). The block grant program recipients are covered 

by DBE requirements in Paragraph 1422 regardless of the amounts made available to individual airport 

projects. States may submit a single overall goal for contracts funded by the block grant during a fiscal 

year or it may propose separate goals covering one or more projects. States should submit their goal or 

goals to the regional Civil Rights offices. 

Page 194 
June 28, 2005 Order 5100.38C

f. Grant Payments and Closeout. Normally payments to block grant states will be by letter of 

credit. After a period of three years within this program, block grant closeouts should be accomplished 

at approximately the same rate as the FAA closes individual airport projects. Starting with block grants 

issued during FY 2002, regions should forward the State’s airport project information to APP-500 as 

described within Paragraph 1097a. 

g. Commissioning and Decommissioning Airport Facilities. Regions should ensure that 

commissioning and decommissioning of the block grant airfield facilities will be accomplished to achieve 

a comparable level of safety as provided in Paragraph 507. 

h. Recoveries. For the funds states do not obligate in airport projects before block grant close out, 

the FAA must recover that amount. For the funds that were obligated and later recovered by the State 

from an airport project, the block grant policy allows either the FAA to recover the amount (and include it 

in succeeding block grants) or the State’s re-obligation of it for new airport projects on a continuing 

basis. (The FAA has not usually limited State recovery of airport project funds beginning in FY 1993.) 

This practice includes discretionary funds. The adjustments are based on actual airport project 

payments except as described in Paragraph 1095i. Regions should oversee State recoveries from 

airport projects to ensure the funds are used for nonprimary airports eligible under the AIP, although it is 

unnecessary to track such after completion of an initial airport project benefiting from recovered funds. 

When nonprimary entitlements are granted, if use of AIP funds for the location after four years does not 

meet the entitlement, regions should ensure states provide entitled airports with amounts identified 

within block grants or return the funds to FAA. (See Paragraph 1091d.) 

i. Expired Carryovers. At the end of each fiscal year, regions should coordinate with the states 

and report to APP-520 the amount of unused entitlement funds not obligated by a State for an airport 

project to be recovered by the FAA and converted into discretionary projects at airports, if any. APP-520 

will then provide instructions on transferring these expired carryovers. See Paragraph 1097 and Order 

5100.20. 

j. Accounting and Audits. Regions should ensure states have an accounting system that 

accurately reflects expenditures of block grants. Block grants and airport projects under them are 

subject to the same audit requirements as any other AIP grant. 

1095. STANDARD ASSURANCES AND REGIONAL AGREEMENTS. 

The standard block grant agreement in Appendix 27 will be used for FAA grant offers. 

a. Mandatory Program Features. The mandatory block grant program features are identified in 

the standard block grant assurances. These Federal requirements are not waived by Title 49 U.S.C., 

Section 47128. The FAA does not have authority to exempt the States from compliance with these 

requirements. However, there may be a means for States to comply in a manner different from FAA’s 

procedures. States are not required to follow FAA directives. Refer to standard airport sponsor and 

noise project sponsor assurances (Section C.1, General Federal Requirements) for the list of laws and 

regulations States must follow, which are incorporated by reference in block grant agreements. 

b. Regional Agreements. Regions are encouraged to enter into written agreements with 

participating states to supplement the block grant agreement on the issues below that may need to be 

tailored for a State or region. If any nonprimary airport within the State will receive a grant administered 

by the FAA, the regional agreement (or a separate letter to the State) should identify those airports and 

the terms of this funding arrangement for such locations. (See Paragraph 1091.) 

Environmental impact assessment may differ in each State due to the application of local laws or 

requirements. Some of the issues that need to be addressed in the regional agreement may not be 

related to the National Environmental Policy Act, but are covered in Order 5050.4, such as historic 

preservation. 

Page 195
June 28, 2005 Order 5100.38C

Monitoring airport compliance requirements from grant assurances is described in Order 5190.6. 

The U.S. Departments of Labor, Transportation, or FAA regions may participate in investigations. 

Airport layout plans under block grants are to be coordinated with all interested parties in 

accordance with existing procedures established within the region. Since the states have different 

system plans, coordination of master planning may also vary with each State. 

The form for project monitoring and reporting information may be somewhat different within each 

State. Requirements are described in Paragraph 1097. Reports may also include project justification, 

eligibility, priority, allowable costs, programming, airport agreements, layout plans, modification of 

standards, coordination, environmental status, procurement, land or relocation topics, labor 

requirements, civil rights, safety during construction, compliance problems, administrative costs, and 

other issues. 

Other topics directly related to the AIP may be in regional agreements. However, care should be 

exercised to ensure the agreements are limited to AIP considerations and do not address unrelated 

issues of a State. Any existing regional agreement that contains issues unrelated to AIP grant 

agreements should be revised to delete inappropriate considerations, such as surplus Federal property 

responsibilities. See Paragraph 1092i. 

c. Obligation to Standard Assurances. Regions must ensure that participating states obligate, if 

appropriate, each person or entity to which it distributes funds to any terms that the State block grant 

agreement requires be imposed on a recipient for airport projects funded under the program. Standard 

sponsor assurances in Appendix 1 may pass-through the State to the airport. The sponsor assurances 

must be the responsibility of the State, the airport, and/or both. An agreement between the State and 

the airport shall address any transfer and delegation of these obligations. The agreements between the 

State and airports are not necessarily required to be in the form of a sub-grant. 

d. Standard Federal Requirements. States must agree to comply with United States Government 

standard requirements for administering the block grant. Where questions arise about the interpretation 

of standard Federal requirements applicable to block grants, contact APP-520. 

e. Post-Project Compliance with Legislated Requirements. While regions ultimately have 

authority and responsibility to enforce airport sponsor assurances, the participating states are a first line 

of defense against non-compliance. Regions must ensure that the State does not delegate or relinquish 

its authority, rights, or power in a way that would interfere with the State’s ability to comply with the terms 

of a block grant agreement. 

1096. AUTHORITIES RETAINED BY FAA. 

The flexibility afforded states in Paragraph 1092 are limited by various authorities or responsibilities 

retained by the FAA. 

a. General. FAA approval will continue to be required for certain functions. For instance, airport 

sponsor compliance with Part 139 requirements is the responsibility of FAA where applicable. 

b. System Planning and Airport Layout Plans. Regions retain responsibility for preparation of 

the NPIAS and administration of airport system planning grants for the block grant States or other 

eligible planning agencies. The FAA will provide an advisory opinion about the approved ALP submitted 

by block grant states. This advisory opinion will address the safety, utility, and efficiency of the ALP. 

Likewise, the runway safety area program is described in Order 5200.8, which identifies determinations 

to be made by the FAA. Block grant states should be given an advisory opinion about how to meet 

standards based on this directive. Advisory Circular 150/5100-13 identifies limitations on development 

of State standards for nonprimary airports. 

Page 196 
June 28, 2005 Order 5100.38C

c. FAR Part 150. Responsibility for approval of Part 150 studies, noise exposure maps, and noise 

compatibility plans have not been passed to states in the same way as other environmental 

responsibilities. 

d. Examples of State Constraints. To illustrate other non-allowable variations, several examples 

of the constraints on State block grants have been documented. 

Several block grant states have become involved with procedures for handling airspace matters that 

are not associated with a specific AIP airport planning or development project. Order 7400.2 does not 

provide for these states making the final FAA airspace determination, and nothing in the block grant 

agreement supercedes that directive. Likewise, the designation of instrument runways under that order 

should be accomplished primarily by the FAA. 

Several of the States have delayed making payments to airports with block grant funds made 

available to the State. Timely project accomplishment and closeout should be comparable to that of the 

FAA. 

One State has programmed the instrument landing system more liberally than the FAA. Due to the 

airport’s statutory option allowing the Federal Government to take over ILS projects under the AIP and 

the magnitude of potential costs, states shall use the same criteria as FAA in approving such projects. 

e. Enforcement. The FAA may take action in accordance with Order 5190.6 and 14 CFR Part 16 

to enforce the terms of a State block grant agreement including any terms imposed upon subsequent 

recipients of block grant funds. The states may be successful in enforcing airport compliance 

obligations. However, in instances where a State is unsuccessful, the FAA cannot entirely delegate 

airport sponsor compliance enforcement actions to states. 

1097. REPORTING AND FAA REGULATORY OVERSIGHT. 

Except as noted below, reporting of the State should be determined by each region based on its 

requirements and need for oversight of the block grant program. 

a. State Program Reports. States must agree to provide the airports and region with program 

information the region requires. Regions may require a quarterly report on each airport project. If the 

FAA needs information on a location for any reason, states shall provide the project approval status, 

work description, funding levels, standards, and procedures to obtain further State funding commitments 

for phased projects. Starting with block grants issued during FY 2002, regions should forward the 

reports on the State’s airport projects, including projects with State-only funds if desired, in formats 

provided by APP-500. The data may be included as an appendix for the State in the annual AIP report 

of accomplishments. 

b. Program Review by FAA. The FAA is responsible for continuous oversight of the block grant 

program, especially for issues involving airport safety and security as well as potential waste, fraud, or 

abuse of AIP funds. 

c. Evaluation of Funds Utilized. Regions should track the utilization rate of AIP funds where it is 

suspected that State actions are not occurring in a timely manner. Sub-grants issued, or agreements 

with sponsors for airport projects, are adequate measures of performance for any State that is new to 

the program. After a period of three years, States should also be making payments to airports at 

approximately the same rate as the FAA. 

d. FAR Part 156 and FAA’s Advisory Role. FAR Part 156 identifies specific regulations 

applicable to the block grant states. Regions should be prepared to provide advice or furnish any 

additional documents requested by the State. FAA orders may be provided to a State to indicate how 

regions administer the grant program, although these internal directives, including Program Guidance 

Letters, are not binding on states. 

Page 197
June 28, 2005 Order 5100.38C

e. Program Administrative Cost Petitions. The FAA has previously reviewed certain limited 

petitions for exemption from the requirements of FAR Part 156 prohibiting AIP funds from being used for 

program administrative costs. Contact APP-520 prior to the State sending any such petition. 

f. Consultation with Headquarters. If the region has questions about the reporting or oversight 

relationship between the State and FAA, contact APP-500. 

1098. SUSPENSION OF BLOCK GRANT. 

Block grant suspension may be necessary where the State fails to comply with mandatory 

requirements. The criteria for the findings and determinations about suspension are the same as those 

used in selection of states to participate in the block grant program under 49 USC 47128(b)-(c). 

Regions should consider block grant conditions, regional agreements, and any comments from airports 

or other interested parties prior to issuing a notice suspending a block grant. 

Regions should enforce airport compliance requirements involving AIP funds that were administered 

by the State under a block grant. Prior to suspension, regions should obtain copies of the State/airport 

agreements under block grants for funded airport projects whether closed out or incomplete. Corrective 

actions by the State/airport must be taken at the earliest practical time or on a schedule as otherwise 

may be agreed by the region and State. (See Paragraphs 1150-1151.) 

1099. TERMINATION OF STATE BLOCK GRANT OR PROGRAM.

States may voluntarily terminate a block grant or the program. In addition, failure of states to comply 

with block grant conditions or regional agreements may ultimately result in FAA termination of the 

State’s grant(s) or program. The suspension criteria and procedures within Paragraph 1098 should be 

used when terminating a block grant or program. (See Paragraphs 1152-56.) 

a. Contacts on Block Grant or Program Termination. The concurrence of APP-500 is needed 

prior to discussing with the State final arrangements terminating the grant(s) or transferring block grant 

program responsibilities. 

b. Negotiations on Extent and Duration of State Participation. If a State block grant or program 

is to be terminated, the extent and duration of the State’s participation may be the subject of 

negotiations. When it is known that the State will no longer participate with grants or its program, 

regions should notify APP-520. The regions and states might agree to phase out participation in a 

program starting with selected categories of airports or projects. Region should encourage such states 

to continue administering its open airport projects. However, the State will be subject to the limitations 

on airport project closeout after four years, which would discontinue its block grant program participation 

at the end of that period.

c. Regional Agreements and Termination. The regional agreements with a State for block 

grants described in Paragraph 1095b should be amended or voided to transfer program responsibilities. 

Regions should clarify immediate and long-term obligations of the State to the United States in writing 

establishing mutual agreement on grant or program termination as described in subparagraphs 1099d-g. 

The clarification may become part of the existing regional agreements. 

d. Obligations for Closed Out Airport Projects. Regions should identify requirements for each 

airport project that has been closed out in the grant or the program. At minimum, project lists should 

itemize documents that specify State and airport obligations as described in Appendix 30, Obligations in 

Block Grant Suspension or Termination. The lists may be summarized by categories of the airports or 

projects if appropriate. This is a summary to facilitate communicating the compliance information. It 

does not add legal requirements. The concurrence of AAS-400 is needed prior to providing the State 

with an approved summary of obligations in the block grant agreements and airport project agreements. 

Page 198 
June 28, 2005 Order 5100.38C

e. Obligations for Incomplete Airport Projects. Regions should identify requirements for each 

incomplete airport project within a grant or the program in accordance with this subparagraph. At 

minimum, project lists should reflect State and region views of block grant work as described in 

Appendix 30. This is a summary to facilitate recognition of airport project obligations. It does not add 

legal requirements. APP-500 concurrence is necessary prior to providing the State with an approved 

summation of the required actions or obligations in the block grant agreements and airport project 

agreements ensuring adequate transition of projects not closed out. 

States should provide a status report on construction or equipment projects underway, processes 

requiring FAA action, and airport project safety. The region may annotate the report to identify 

nonstandard conditions. 

States should provide a status report on land acquisition or relocation projects underway and 

processes requiring FAA action. FAA may annotate the report. 

States should provide a status report on planning or environmental projects, processes that may 

require FAA action, and public opposition affected by proposed termination. The region may annotate 

the report to identify FAA positions on known problems. 

States and regions should jointly decide outstanding eligibility questions and agree upon the 

documents that specify State or airport obligations for each project. If joint decisions cannot be reached, 

FAA should provide documentation and/or enforce terms of agreements. 

States and regions should jointly agree upon procurement, audit, and the allowable Federal share of 

project cost requirements for each project. If joint agreement cannot be reached, FAA should identify 

requirements and/or enforce terms of agreements. 

Regions should determine the impact of terminating a grant or program on the airports, airport 

agreements, the State, and overall AIP accomplishments. 

f. Continuing Responsibilities of State. States have continuing obligations for closed out and 

incomplete projects. The obligations may be altered in accordance with this section. State 

responsibilities for providing airports with AIP information may continue at the discretion of the region. 

The states having a terminated block grant or program will not have control over selection of the affected 

airport projects. States must provide at the request of FAA such block grant program information and 

status reports as requested. 

g. Responsibilities Assumed by FAA. Regions should exercise care to oversee matters related 

to closed out airport projects in terminated block grant agreements that may require action. Regions 

should assume responsibilities for incomplete airport projects in terminated block grant agreements that 

were a State’s responsibility where the State is no longer involved with the work. If the State funded 

unusable units of work in closed out or incomplete projects, the region should evaluate the situation and 

determine the best use of the project on a case-by-case basis. 

h. Unilateral Termination. When the FAA might unilaterally terminate the block grant(s) or the 

program, the region should notify APP-1/500 at the earliest possible time. A copy of obligations on 

airport projects as listed in Appendix 30 should be forwarded to APP-520. 

i. Conditions for State to Reapply. At such time as a terminated State program is no longer 

administering incomplete AIP funded airport projects and it is discontinued, that State’s option to reapply 

is based on the same conditions as other states. 

Page 199
June 28, 2005 Order 5100.38C

Chapter 11. GRANT OFFER , AGREEMENT, AND 

A MENDMENT

Section 1. GRANT OFFER

1100. GENERAL. 

A grant offer is a legal document prepared and signed by the FAA and delivered to the sponsor for 

acceptance in which the FAA formally makes an offer to pay a portion of the allowable costs of an AIP 

project for which a project application has been determined eligible. The signature of the sponsor 

accepting the grant offer constitutes a grant agreement which is a binding agreement obligating the 

sponsor and the United States in accordance with the terms and conditions of the grant document. 

Part I of the Grant Agreement, FAA Form 5100-37 (Appendix 8) is the standard form to be used in 

preparing the grant offer. 

a. Project Grant. No changes or modifications shall be made to the standard terms and provisions 

of the grant agreement unless approved by FAA headquarters. Part 1-Offer of the grant agreement 

must be consistent with the approved project application. The grant agreement should be dated and 

signed by the FAA official authorized to approve the project and sent to the sponsor. At the option of the 

FAA Airports Office this may be the standard grant offer or the modified one page grant offer, see 

Section 2 and Appendices 6, 14 and 27. 

b. Block Grant. In addition to the requirements of Paragraph 1100(a), for State block grant 

agreements, see Paragraph 961 and Appendix 27. 

1101. PROJECT DESCRIPTION. 

The project must be carefully described in Part 1-Offer of the grant agreement in sufficient detail to 

identify each item of the project. Runways being developed or improved under the project should be 

identified by direction or number and by the length and width. Taxiways or aprons being constructed or 

improved should be specifically identified. A general term such as “construction of taxiway” should not 

be used. Runway protection zone acquisition and improvements such as approach clearing should be 

described in connection with the particular runway end being protected and/or the objects to be removed 

or lowered. All construction work must be shown in detail in the approved project plans. It is also 

essential that a grant offer for the acquisition of land be specific as to areas, tracts, or parcels of land. 

All work eligible under Title 49 U.S.C., Section 47501, formerly known as the Aviation Safety and Noise 

Abatement (ASNA) Act, should be clearly identified. The project description should be in sufficient detail 

to allow calculation of the possible differing Federal shares of individual work item(s), as applicable. 

1102. MULTI-YEAR GRANTS. 

Under this type of grant, the FAA agrees with the sponsor to commit the sponsor’s future years 

entitlement funds to a project. However, the FAA cannot commit to a multi-year project that extends 

beyond the current program authorization. The initial grant offer contains a current year obligation as 

well as the total U.S. share of the estimated cost of completion of the project. The initial year of a multiyear grant must include entitlement funds and may include discretionary funds. Each year of the project, 

the grant must be amended to include additional obligations. This can be achieved through a formal 

grant amendment or through a letter of amendment sent to the sponsor to obligate the new entitlement 

funds. Each procedure has its own special condition format in the initial grant agreement. 

a. Applicability. This type of grant may be issued for a project that meets the following conditions: 

(1) The project is funded with the entitlement funds under Sections 47114(c) and 47114(d)(3)(A) 

of the Act (except as noted above); 

Page 200 
June 28, 2005 Order 5100.38C

(1) The project will not be completed in one fiscal year. See Section 47108(a) of the Act; and 

(2) The commitment does not exceed the current program authorization. 

b. Grant Agreement Format. 

(1) The following clause should be inserted after the words “Project Application” at the bottom of 

page 1 of FAA Form 5100-37: “Whereas this project will not be completed during fiscal year 20XX, and 

the total U.S. share of the estimated cost of completion will be $XXX,XXX.” 

(2) See Appendix 7 for the Special Condition that should be added on page 4 of FAA 

Form 5100-37. 

c. Establishment of U.S. Share. 

(1) The cost of the eligible work in the total project may be estimated. However, it is generally 

preferred that the U.S. share for construction projects be based on actual bids. If possible, sponsors 

should be encouraged to obtain signed purchase agreements for land to be acquired in the project. The 

U.S. share is calculated using the applicable participation rates for the type of work. 

(2) The amount calculated in c(1) may not exceed the sum of the sponsor’s current entitlement 

funds, the entitlement funds expected to be received through the duration of the project, and the amount 

of discretionary funds that can be committed to the project in the initial year. 

(3) If the amount calculated within c(1) exceeds the amount estimated to be available in c(2), 

then the scope of the project should be reduced until the two amounts are equal. 

d. Initial Year. The U.S. share established in subparagraph c above is stated in the grant 

agreement (see b(1) above) and represents the total U.S. share of the cost of the project. The initial 

grant also specifies a current year obligation consisting of the sponsor’s current entitlement funds and 

available discretionary funds, if any. 

e. Follow-On Years. The grant may be formally amended each fiscal year (see Section 4 of this 

chapter) or continued through a letter of amendment (Appendix 17) through the duration of the project to 

include additional obligations for the new fiscal year with the sponsor’s entitlement funds. However, the 

sum of the yearly obligations under the multi-year grant may not exceed the total U.S. share of the 

estimated cost of completion established in subparagraph c above. 

f. Increasing the Total U.S. Share of the Estimated Cost of Completion. Once established in 

the initial grant agreement, the total U.S. share of the estimated cost of completion may be increased in 

accordance with Section 5 of this chapter. 

g. Change in Participation Rate. If in subsequent years following the award of a multi-year grant 

the sponsor’s participation rate changes, the Federal share is at their current year rate and not the rate 

of the initial multi-year grant. For instance, airports may change from a medium hub to a small hub and 

the rate changes from 75 percent to 95 percent. A grant amendment increase limit of 15 percent (for 

grants executed after September 30, 1987) will still apply. 

1103. STANDARD CONDITIONS. 

The standard conditions are listed on the grant agreement (FAA Form 5100-37 (Appendix 8)) and 

apply to all grants. They are self-explanatory, except for the following: 

a. Condition #1. Since the Act provides that the maximum obligation of the United States may be 

increased by 15 percent except for planning, it is necessary to identify, as part of the grant agreement, 

the amount included in the agreement for planning. 

Page 201
June 28, 2005 Order 5100.38C

b. Condition #6. This condition provides for the insertion of a stipulated number of days within 

which the sponsor must accept the offer. Ordinarily, a 60-day period is sufficient for acceptance of the 

offer and in any case, when the stipulated time will exceed 90 days, then APP-500 shall be consulted. 

In some instances, a period less than 60 days for acceptance may be necessary. Since all grant offers 

must be accepted in the fiscal year in which they are made, the period of acceptance should be adjusted 

for all offers made after August 1. 

1104. FINAL CLEARANCE OF GRANT OFFER. 

The grant offer may not be issued unless the approving FAA official is satisfied to the best of his/her 

knowledge the project application and supporting documents meet all the requirements of the Act and 

the FAA regulations and are in accordance with current national policies. 

1105. LETTER OF INTENT. 

See Section 8 of chapter 10. 

1106. - 1109. RESERVED. 

Section 2. VARIATIONS AND TRANSITION TO ELECTRONIC GRANTS 

1110. GENERAL. 

a. The FAA Airports Office may elect to use variations in lieu of procedures described in Section 1 

of this Chapter. The region will submit alternative grant agreement formats, standard conditions, and 

related procedures to APP-500 for approval. See Paragraph 31. 

b. The standard assurances, certifications, conditions, and grant offer forms are currently 

undergoing revision in anticipation of electronic grant making. Therefore, we do not expect the 

Washington review of alternative grant offers would require more than 30 days for any region. 

1111. - 1119. RESERVED. 

Section 3. SPECIAL CONDITIONS

1120. GENERAL. 

a. Special conditions are used to accommodate particular circumstances needed in a grant 

agreement, which are not satisfied by the standard conditions. Special conditions may be unique to a 

sponsor or required for a certain type of project (e.g., a project with a proration of Federal share of 

building and utility costs). 

b. Failure to meet any special condition, which incorporates a deadline date, can be grounds for 

withholding grant payment. Therefore, any special condition requiring a deadline date should contain 

that specific deadline. 

1121. SPECIAL CONDITIONS TO BE INCLUDED IN GRANT AGREEMENTS. 

Special conditions to be used, as required, in grant agreements can be found in Appendix 7. Special 

conditions for Instrument Landing System (ILS) grants awarded under the current precision instrument 

system policy can also be found in Appendix 7. Special conditions for projects on privately owned public 

use airports can be found in Appendix 7 and are referenced in the appropriate paragraphs in this Order. 

1122. OTHER SUBJECTS WHICH MAY REQUIRE SPECIAL CONDITIONS. 

In addition to special conditions in Appendix 9, other special conditions may be required to meet 

statutory requirements or to comply with circumstances unique to the project. Examples of subjects 

covered are: 

Page 202 
June 28, 2005 Order 5100.38C

a. State channeling and/or agency agreement; 

b. Correction of deficiencies in property identification or title representations; 

c. Identification of specific land acquisition; 

d. Airport zoning; 

e. Identification of development excluded from Federal participation; 

f. Environmental impact mitigation commitments; and 

g. Other Federal Funds. Where other Federal funds are used to supplement AIP funds, the grant 

offer should include a special condition, which shows clearly. 

(1) The amount available from each Federal grant program; 

(2) Conditions pertaining to the use of such funds, including the applicable methodology of 

determining the share of each grantor agency in case of changing project costs; and 

(3) For those Federal grant programs permitted by law to be used as matching funds, an 

acknowledgement of the program and funds should be inserted as a special condition. 

1123. - 1129. RESERVED. 

Section 4. ACCEPTANCE OF GRANT OFFER

1130. GENERAL. 

After signature by the FAA approving official, sufficient copies of the grant offer to satisfy regional 

requirements shall be sent to the sponsor for execution. If in agreement with the grant offer, the sponsor 

will sign Part II of the grant agreement. The sponsor’s attorney must certify that the sponsor’s 

acceptance complies with local and state law and constitutes a legal and binding obligation of the 

sponsor. The sponsor will return the executed documents to the appropriate FAA Airports Office. 

1131. TIME LIMIT FOR ACCEPTANCE OF OFFER. 

Normally, as stated in Paragraph 1103(b), a 60-day period is sufficient time for the sponsor to accept 

or reject the grant offer. 

1132. DISTRIBUTION AND NOTIFICATION OF GRANT AGREEMENT. 

a. The FAA Airports Office immediately upon receipt of the grant agreement from the sponsor will 

enter a Phase 5 (Grant Agreement Acceptance) into the AIP automation system. 

b. Distribution of copies of the executed grant agreement shall be in accordance with regional 

practice. 

1133. REVISION OF GRANT OFFER. 

Occasionally, the sponsor or the FAA may wish to modify the offer before it is accepted. Generally, 

such revisions are limited to a change in the scope, description, maximum obligation for the project, or 

an extension of the time for acceptance by the sponsor. All grant offers must be returned unsigned to 

the FAA for any changes. The Sponsor may not alter or change the grant offer documents. Also, the 

FAA, at its discretion, may withdraw the grant offer at any time before the sponsor accepts it. 

Page 203
June 28, 2005 Order 5100.38C

a. Change in Scope of Project. Where such action is in the interest of the United States, the 

scope of the project may be changed. 

b. Reducing Maximum Obligation. It is current FAA policy to issue all grants based on bids to the 

greatest extent possible. However, if it appears from the receipt of bids or other causes, that the amount 

of the offer is in excess of the amount required to pay the United States share of the latest estimated 

cost of the project, the maximum amount stated in the offer should be reduced accordingly. If the 

sponsor has already accepted the grant, the grant must be amended utilizing the amendment process in 

Section 5 of this chapter. 

c. Increasing Maximum Obligation. 

(1) Request for Increase. If the sponsor determines that the maximum obligation of the United 

States under the offer is insufficient, it may request an increase. This determination may come from 

various sources including a recheck of the project estimate or, more conclusively, the receipt of bids 

indicating the need for a higher maximum amount. 

(2) Justification for Increase. The sponsor must give complete justification for the request, 

setting forth the amount of the increase requested, together with a statement of the facts surrounding the 

unforeseen contingency or circumstances necessitating the increase. The FAA shall review the 

justification and may issue a revised grant offer if the justification is deemed adequate. 

d. Withdrawal of Offer. If it appears that Federal funds are insufficient to permit participation in 

the increased amounts requested, the project cannot be completed at a reasonable cost, or other 

circumstances warrant, the FAA may withdraw the offer at any time before the offer is accepted. 

1134. - 1139. RESERVED. 

Section 5. GRANT AMENDMENTS

1140. GENERAL. 

Subject to the conditions in the following paragraphs, a grant agreement may be amended after its 

execution. 

1141. AMENDMENTS INVOLVING A CHANGE IN THE WORK DESCRIPTION. 

FAA Airports Offices are authorized to amend AIP grant agreements to change the work description. 

This may involve adding work items, deleting work items, or a combination of both. However, new work 

should not be added to an existing grant for the sole purpose of using excess grant funds. New 

development items that are added to an existing grant should be closely related to the existing project. 

Issuance of a new grant for a new project or unrelated work items will permit the closeout of the original 

grant at the earliest possible date. 

a. Adding Work Items. Before amending a grant to add an item of work, regional offices must 

ensure that: 

(1) It is advantageous to the Government to accomplish the new development items under an 

amendment to an existing grant agreement rather than by issuance of a new grant agreement. 

(2) Funds are available within the existing grant to cover the cost of the new work item. 

(a) If funds in the existing grant are insufficient to cover the cost of the new work, funds may 

be added in accordance with Paragraph 1142(b) and Paragraph 1142(c). 

Page 204 
June 28, 2005 Order 5100.38C

(b) Items of work shall not be added to a grant solely because funds are available. The 

need for additional work items must be closely related to work contained in the grant description to be 

amended, fully justified, and documented. 

(3) Costs incurred for work undertaken on a new development item prior to execution of the 

amendment are ineligible for reimbursement (except for costs allowed under Paragraph 310(a)(4)). 

(4) All other statutory and regulatory requirements (airspace, ALP, and etc.) that may apply to 

the project or work item to be added to the grant agreement that were not satisfied by the original grant 

agreement have been or will be complied with at the appropriate time (e.g., environmental or labor). 

b. Deleting Work Items. Grant agreements may be amended to delete items of work. The 

amendment shall be supported by documents indicating the purpose, nature, and effect of the 

amendment, the resulting advantages to the United States, and a finding that the amendment does not 

prejudice the interests of the United States. In deleting items from the grant, the conditions below must 

be observed: 

(1) Normally, the maximum obligation of the United States should be reduced by the U.S. share 

of the deleted item as calculated from the application amount. If the funds are not reduced, the project 

file shall be fully documented to explain why the action is not prejudicial to the interests of the United 

States. The project file must identify which work items increased and the justification for the increase in 

project costs. If a change in the scope of the grant agreement is approved (project deleted), and the 

funds are not reduced (it is in the best interest of the U.S. not to reduce the U.S. share), the Regional 

Airports Division Manager must be contacted for approval of the amendment. See Paragraph 31 for 

limitations on regional authority. 

(2) In grants that contain land acquisition, land parcels for which costs have been incurred 

during the grant period may be deleted but cannot be reprogrammed in another grant. If costs have not 

been incurred for the land during the grant period, it may be deleted and then later reprogrammed. 

c. Substitution of Work Items. In some cases, it is in the best interest of the United States and 

the sponsor to delete items of work and replace them with new items. If the substituted items are not of 

equal value to the deleted items, then the obligation of the United States should be adjusted accordingly. 

As a minimum, the project file shall be documented to include: 

(1) An explanation as to why the originally programmed items are no longer justified at this time. 

The deletion must be shown to be in the best interest of the Government. The amount for the deleted 

items included in the grant must also be indicated; 

(2) An explanation as to why substituted work elements or projects are justified at this time and 

their estimated costs. It must be shown that programming the new items is in the best interest of the 

Government. Items may not be added solely because there will be excess funds in the grant as a result 

of deleting items. 

1142. AMENDMENTS INVOLVING A CHANGE IN THE U.S. OBLIGATION. 

FAA Airports Offices may amend a grant agreement to change the maximum obligation of the United 

States as follows: 

a. Decreases in the Maximum U.S. Obligation. The maximum obligation should be decreased 

when there are excess funds in the grant unless additional work items are to be included in accordance 

with Paragraph 1141. Excess funds may result from the deletion of work items (decrease in the 

obligation should be made simultaneously with the amendment to delete) or actual bids being less than 

estimates when the grant amount is based upon estimates. Either the sponsor or the FAA Airports 

Office may initiate a decrease in the U.S. obligation. The FAA Airports Office may initiate a grant 

Page 205
June 28, 2005 Order 5100.38C

amendment any time after the excess is identified, otherwise the adjustment may be made at grant 

closeout. 

b. Increases in the Maximum U.S. Obligation for Grants Executed prior to October 1, 1987. If 

total actual allowable project costs exceed the total maximum obligation specified in the grant 

agreement, the maximum obligation of the U.S. specified in the grant agreement may be increased 

using only amounts the Government recovers from other grants as follows: 

(1) Airport Development or Noise Implementation Programs. If the increase in total project costs 

is attributable solely to an increase in airport development or noise implementation program costs other 

than land acquisition, then the maximum obligation may be increased by the applicable U.S. share of the 

total allowable excess project costs, not to exceed 10 percent of the maximum obligation. 

(2) Land Acquisition. If the increase in total project costs is attributable solely to the increase in 

land acquisition costs, the maximum U.S. obligation may be increased by 50 percent of the total 

allowable excess project costs. 

(3) Combination of Airport Development, Noise Implementation programs and Land Acquisition. 

If the increase in total project costs is attributable to both (1) and (2) above, then the maximum obligation 

of the United States may be increased by the total of: 

(a) The U.S. share of the increased airport development and/or noise implementation costs 

(other than land acquisition costs) not to exceed 10 percent of the maximum obligation of the grant 

(minus the land costs); and 

(b) 50 percent of the difference between the total actual allowable land acquisition costs and 

the sum of the land cost base and the sponsor’s share applicable to such base. The land cost base is 

the figure shown in the original grant agreement under Condition 1 for Land Acquisition (See Paragraph 

1103 and Appendix 13). 

(4) For grants executed prior to October 1, 1987, the amendment will not exceed the 

60 percent/$200,000 limitation when the increase involves terminal work (See Paragraph 551); 

(5) A determination is made that the amendment is advantageous to the Government. The 

basis for the amendment shall be documented in the project folder. A general statement that the 

increase is for cost overruns is not acceptable. Instead, the documentation should contain specific 

justification such as: 

(a) Increases necessitated by work under Change Orders (specific change); 

(b) Increase due to actual excavation quantities being greater than original estimate; 

(c) Increase due to increased land acquisition costs for parcels (identify specific parcel or 

parcels) over original estimate; and/or 

(d) Grant issue based on estimates; increase to cover actual construction bid that was 

higher than estimate. 

c. Increases in the Maximum U.S. Obligation for Grants Approved after September 30, 1987. 

If total actual allowable project costs for airport development or noise implementation projects or land 

acquisition exceed the total estimated project costs upon which the maximum obligation is based, the 

maximum obligation of the U.S. specified in the grant agreement may be increased by 15 percent. 

d. Increases in the Maximum U.S. Obligation for Grants Approved after September 30, 1992. 

Grants to acquire an interest in land for an airport (except a primary airport), may be increased by not 

Page 206 
June 28, 2005 Order 5100.38C

more than the greater of the following, based on current creditable appraisals or a court award in a 

condemnation proceeding: 

(1) 15 percent; or 

(1) 25 percent of the total increase in allowable project costs attributable to acquiring an interest 

in land. 

e. Planning Items. If the increase in project costs is attributable to planning items, the maximum 

U.S. obligation may not be increased. Supplemental planning grants may be issued after determining 

that requirements for a new project have been met. 

f. Multi-Year Project. A multi-year grant may be amended each fiscal year through the duration of 

the project to increase the actual U.S. obligation provided that the total project cost does not exceed the 

U.S. obligational commitment stated in the grant plus any increase allowed in this paragraph. (See 

Paragraph 1102.) 

g. Request for Amendment. 

(1) Any amendment involving an increase in the maximum U.S. obligation must be requested by 

the sponsor in writing. 

(2) The request must state the purpose, justification, and amount of the amendment and be 

supported by whatever documentation (e.g. plans and specifications, cost information, etc.) that the FAA 

project manager considers necessary. 

(3) The foregoing request and documentation is not necessary if the project is a multi-year grant 

and the amount of the amendment will not make the U.S. obligation exceed the maximum obligational 

commitment. 

h. Approval of Increases to the Maximum U.S. Obligation. For approval of increases, the FAA 

Airports Offices shall review the sponsor’s request and supporting documentation and may approve 

increases to the maximum U.S. obligation if: 

(1) The funds are available; 

(2) The increased costs appear to be allowable; and 

(3) The amendment will result in a change to the maximum U.S. Obligation that is otherwise 

consistent with this paragraph. 

1143. ACCEPTANCE OF AMENDMENT. 

In accepting an amendment to the grant agreement, the sponsor will follow the same procedure for 

grant acceptance. Distribution of the amendment shall be the same as for the original agreement. It is 

imperative that a copy be furnished the Accounting Office to comply with fund control procedures. (See 

Appendix 18.) 

1144. NUMBERING AMENDMENTS. 

Each amendment to a grant agreement shall be numbered in consecutive order. The number will be 

placed in the heading of the document as follows: “Amendment No. 1 to Grant Agreement for 

Project No. 3-36-0009-01.” 

Page 207
June 28, 2005 Order 5100.38C

1145. INFORMAL LETTER AMENDMENTS. 

At grant closeout, regions are encouraged to determine whether a letter request from the sponsor 

will suffice for changing the grant final closeout amount. Any project scope change is not a candidate for 

an informal letter amendment and will require a formal amendment. In cases where only the final grant 

amount is to be amended, a letter signed by the sponsor’s representative identifying the final project 

closeout amount is required. Approval of any requested change(s) may be accomplished by the FAA 

project managers concurrence in pen and ink on the face of the letter, which shall be retained in the 

project files. The sponsor shall be notified of FAA acceptance of the requested amendment. Before an 

informal letter amendment request can be considered the following conditions must be met: 

a. The special condition permitting the use of the informal letter amendment must be in the original 

grant agreement (See Appendix 7); 

b. The sponsor’s officially designated representative must sign all letters requesting the informal 

amendment; 

c. All amendments to cover cost overruns in the grant must be within the statutory allowable limit 

(currently 15%); and 

d. Planning project increased costs cannot be included in the amendment. 

1146. - 1149. RESERVED. 

Section 6. SUSPENSION AND TERMINATION OF THE GRANT

1150. GENERAL. 

Failure to comply with grant conditions, other than civil rights, may result in suspension or 

termination of the grant. FAR Part 16, FAA Rules of Practice for Federally-Assisted Airport 

Proceedings 3

, 14 CFR Part 16 (Part 16 or Rules of Practice) provides detailed procedures for 

investigating and adjudicating exclusively airport-related complaints under the applicable Federal 

statutes and the obligations imposed on the FAA-Airport Sponsor relationship by those statutes. There 

are three civil rights statutory provisions that contain their own enforcement procedures and do not use 

14 CFR Part 16. They are Title VI of the Civil Rights Act of 1964, as amended; Section 504 of the 

Rehabilitation Act of 1973, as amended; and Title 49 U.S.C., Section 47123. Part 16 provides the only 

available vehicle for obtaining a final FAA decision in airport-related compliance matters except for the 

three civil rights statutory provisions noted above. (See Paragraph 1305 for withholding of payment.) 

1151. SUSPENSION OF THE GRANT. 

If the sponsor fails to comply with conditions of the grant, the FAA Airports Office may, by written 

notice to the sponsor, suspend the grant in whole or in part. Additional obligations incurred during the 

period of suspension after receipt of the notice will not be eligible, unless specifically authorized in 

writing by the FAA. However, the FAA may allow costs, which are otherwise allowable and could not be 

avoided during the period of suspension. The notice of suspension shall contain the following: 

a. The reasons for the suspension and the corrective action necessary to lift the suspension; 

b. A date by which the corrective action must be taken; and 

c. Notification that consideration will be given to terminating the grant after that date. 

 

3

 FAA Rules of Practice for Federally-Assisted Airport Proceedings, 

61 FR 53998-54012, effective December 16, 1996. 

Page 208 
June 28, 2005 Order 5100.38C

1152. TERMINATION FOR CAUSE. 

If the sponsor fails to comply with the conditions of the grant, the FAA Airports Office may, by written 

notice to the sponsor, unilaterally terminate the grant for cause. In all correspondence, which may lead 

to termination for cause, care should be taken to use only factual and objective language. FAA Airports 

Offices shall use the following procedures: 

a. The grant shall first be suspended in accordance with Paragraph 1151; 

b. APP-1 shall be notified, at the earliest possible opportunity and also in writing, of the proposed 

termination. A copy of the notice of suspension and the FAA Airports Office assessment of the action 

taken by the sponsor to remedy the situation shall also be forwarded to APP-500; 

c. Upon receipt, APP-500 will acknowledge the proposed termination via telephone or e-mail. 

Within 30 days of APP-500’s acknowledgement, the FAA Airports Office will be notified, in writing, of the 

procedures to be followed; 

d. The sponsor shall be notified, in writing, of the termination. The notice shall include the reasons 

for the termination. Payments to be made to the sponsor or recoveries of payment by the FAA under the 

grant shall be in accordance with the legal rights and liabilities of the parties; and 

e. Termination for cause may require further action in accordance with Order 5190.6 and 14 CFR 

Part 16 on airport compliance requirements. 

1153. TERMINATION FOR CONVENIENCE. 

When the continuation of the project would not produce beneficial results commensurate with the 

further expenditure of funds, the grant may be terminated, in whole or in part, upon mutual agreement of 

the regional Airports Division Manager and the sponsor. Agreement will be made upon the termination 

conditions, including the effective date and, in the case of partial terminations, the portion to be 

terminated. In such cases, the sponsor may not incur new obligations for the terminated portion after 

the effective date and shall cancel as many obligations relating to the terminated portion as possible. 

The sponsor will, however, be allowed full credit for the Federal share of those obligations that cannot be 

canceled which were properly incurred by the sponsor prior to the effective termination date. 

1154. REQUEST FOR RECONSIDERATION. 

Subject to the provisions of 14 CFR Part 16, if applicable, in any case of suspension or termination, 

the sponsor may request the Associate Administrator (ARP-1) to reconsider the suspension or 

termination. Such request for reconsideration shall be made within 45 days after receipt of the notice of 

suspension or termination. All notices of suspension or termination must inform the sponsor of this 

appeal process. 

1155. FUNDS RECOVERY. 

Immediately following the 45-day appeal period a Phase 9 shall be put into the AIP system and a 

Form 1413 forwarded to the region to deobligate and recover the funds. 

1156. DISTRIBUTION. 

Copies of suspension and termination documents shall be distributed in the same manner as the 

distribution of the original agreement and any amendments. 

Suggested (minimum) Distribution: 

APP-520 

APP-500 

Page 209
June 28, 2005 Order 5100.38C

APP-1 

ARP-1 

1157. - 1199. RESERVED. 

Page 210 
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 211
June 28, 2005 Order 5100.38C

Chapter 12. P ROJECT ACCOMPLISHMENT

Section 1. PRE-CONSTRUCTION ACTIVITIES

1200. GENERAL. 

It is the FAA Airports Financial Assistance Division policy to accept certification of plans and 

specifications for AIP projects. However, if a first-time sponsor or if unusual circumstances exist and 

certifications of compliance are not requested, and the proposed contract to be awarded under the 

procurement procedures outlined in Chapter 9 has not been reviewed with the bid tabulation before the 

grant offer, it should be reviewed to insure compliance with all requirements after the grant agreement. 

Since certifications are normally received from sponsors, they are briefly addressed in this chapter, as 

there has already been a more comprehensive discussion in Chapter 10. For block grants, 

requirements on accomplishment of airport projects are described in Chapter 10, Section 8. 

1201. SPONSOR CERTIFICATION. 

Title 49 U.S.C., Section 47105(d), authorizes the Secretary to require certifications from sponsors 

that they will comply with statutory and administrative requirements. Use of sponsor certifications is 

permitted in the following areas; “Project Plans and Specifications”, “Equipment and Construction 

Contracts”, “Real Property Acquisition”, “Construction Project Final Acceptance” and “Drug-Free 

Workplace Act of 1988”. Copies of the certification forms are contained in Appendix 25. Acceptance by 

the FAA of a sponsor certification does not limit the FAA’s ability to request and review documentation to 

ensure the accuracy of a certification. (See Chapter 10, Section 3.) 

1202. ASSURANCES AND CERTIFICATIONS. 

Sponsor certification, as authorized by Title 49 U.S.C., Section 47105(d), allows the FAA Airports 

Office to obtain adequate assurance that an airport sponsor has complied with the statutory and 

administrative requirements imposed through grant agreements. Equipment and construction contracts 

are considered appropriate for obtaining sponsor certifications and a standard format for the certification 

has been developed (See Appendix 25). However, the use of sponsor certifications does not relieve the 

FAA Airports personnel from their responsibility to maintain a broad overview of AIP projects and be 

reasonably assured that the sponsor is meeting all of its obligations. (See Chapter 10, Section 3) In 

addition, FAA Airports personnel retain responsibility for coordination of the proposed development with 

the appropriate organizational elements within the FAA. 

1203. LAND TITLE REQUIREMENT. 

Authorization for the sponsor to issue a notice to proceed with construction work generally must not 

be given until it has been determined that the required property interests have been acquired in the land 

on which construction is to be performed. In some cases, the deferral of a notice to proceed until this 

determination is made may unduly delay project construction and result in increased project costs. In 

cases where the FAA Airports Office is satisfied that good title will be forthcoming and where the 

sponsor has obtained a right to enter upon the land to commence construction and certifies that it will 

acquire adequate title, a notice to proceed may be authorized. 

1204. AUTHORIZATION OF NOTICE TO PROCEED. 

Where plans and specifications conform to the general scope and design concepts agreed upon, 

project costs are considered reasonable, and the appropriate engineering and construction standards 

will be complied with, the FAA Airports Office, when satisfied all of the pre-construction requirements 

have been met, may authorize the sponsor to issue a notice to proceed to the contractor. 

Page 212 
June 28, 2005 Order 5100.38C

1205. DELAY IN CONSTRUCTION START. 

If construction is delayed beyond the approved schedule, appropriate action must be taken. (See 

Chapter 11, Section 6.) 

1206. PRE-CONSTRUCTION CONFERENCE. 

a. Purpose for pre-construction conference. Where appropriate, the FAA Airports Office should 

request that the sponsor hold a pre-construction conference to familiarize all interested parties with the 

various requirements of the project. One major advantage of the conference is that, through a 

discussion of each requirement, the responsibility of parties may be determined. For airport grant 

projects AC 150/5300-9, “Pre-design, Pre-bid, and Pre-construction Conferences,” provides additional 

guidance on conducting pre-construction conferences. 

b. Participation. 

The participants will vary with the nature of airport activities and work to be performed and may 

include: 

(1) The sponsor’s engineer and testing personnel; 

(2) The airport manager; 

(3) Other sponsor representatives as selected by the sponsor; 

(4) The state agency representative, if applicable; 

(5) The contractor and subcontractors; 

(6) Fixed-base operators; 

(7) A representative of the FAA Airports Office; 

(8) Other FAA representatives, as appropriate; 

(a) The Air Traffic Manager at towered airports; and 

(b) The local Airway Facilities Representative; 

c. Local managers for airlines; 

d. Representatives of military organizations; 

e. Air Transport Association and/or Regional Airline Association representatives; and 

f. Others, as appropriate. 

The FAA Airports Office should assure that all appropriate Federal Airports Offices, military 

installations, and Federal agencies that may have an interest in the project are notified so that they may 

have the opportunity to be represented at the conference. 

1207. SCOPE AND AGENDA. 

The scope and agenda of a pre-construction conference should be designed to address the 

requirements and special concerns of a particular project and participants. Safety during construction, 

grant assurances, and special conditions should be included at appropriate points throughout the 

Page 213
June 28, 2005 Order 5100.38C

meeting. Advisory Circular, AC 150/5300-9, provides guidance on items to be considered in developing 

an agenda. 

1208. LABOR AND CIVIL RIGHTS REQUIREMENTS. 

If in attendance, the FAA representative should be prepared to discuss labor and civil rights 

requirements, as outlined in AC 150/5100-6, Labor Requirements for the Airport Improvement Program, 

and AC 150/5100-15, Civil Rights Requirements Under the Airport Improvement Program. 

1209. - 1219. RESERVED. 

Section 2. CONSTRUCTION PROCEDURES

1220. FAA RESPONSIBILITIES. 

The FAA Airports Office has the responsibility to coordinate all grant construction activities with the 

other FAA operating offices. In addition, the FAA has a responsibility to ensure that the terms and 

conditions of the grant agreement are met and to maintain a broad overview of AIP construction 

projects. This can be achieved by: 

a. Periodic Inspections. Periodic inspections may be scheduled by the FAA at a frequency that is 

dependent on the proposed construction schedule, the complexity of the project, the relative capability of 

the sponsor’s engineer and inspection personnel, the availability of FAA personnel, and other 

considerations as appropriate. For paving projects with a cost greater than $250,000, one such 

inspection should be made during the early stages of construction. If an inspection cannot be made, the 

sponsor will be required to submit a summary of interim test results. During periodic inspections and at 

other times as appropriate, the FAA will inspect daily construction records to review past project 

activities and to evaluate the adequacy of sponsor’s inspection activities. The FAA will also review the 

sponsor’s construction management program, required by the special condition on Pavement Quality 

Control, to ensure elements such as contract administration, testing laboratories with quality control 

responsibilities, qualifications of inspection personnel, and testing procedures and results are properly 

addressed. In no case shall FAA personnel place themselves in the role of providing resident inspection 

services or issuing construction directions to the sponsor’s contractors. 

b. Requiring Construction Progress Reports. The FAA Airports Office may require a sponsor to 

submit FAA Form 5370-1, Construction Progress and Inspection Report, on a periodic basis. 

Requirement and frequency shall be determined based on the region’s need for monitoring and control 

of the individual project. 

c. Labor Provision Reviews and Investigations. Compliance with and enforcement of Federal 

labor provisions shall be in accordance with the procedures outlined in the Department of Labor 

regulations (29 CFR Part 5). (See Chapter 14.) 

d. Civil Rights Review. FAA Airports Office personnel shall coordinate with regional civil rights 

personnel to carry out compliance with and enforcement of civil rights requirements in accordance with 

regional policy and Chapter 14. 

e. Contact with the Sponsor and other Federal Airports Offices. FAA Airports Offices should 

ensure through periodic contact with the sponsor they are properly supervising the project. Coordination 

should be undertaken with other Federal Airports Offices or inter-division working groups whenever 

there is a concern that Federal requirements may be overlooked. 

f. Final Inspections. Final inspections should be conducted in the presence of the sponsor and 

contractor representatives, and the results recorded on FAA Form 5100-17, AIP Final Inspection Report, 

(Appendix 10). The region may waive final inspection if there is full assurance that the work has been 

completed totally and satisfactorily. The rationale supporting such a waiver shall be fully documented. 

Page 214 
June 28, 2005 Order 5100.38C

g. Enforcement. Where an inspection, report, or other source reveals the sponsor is not providing 

satisfactory supervision and inspection of the construction, the sponsor will be immediately advised that 

adequate supervision is required under the terms of the grant agreement. Further, when any other 

discrepancy in civil rights, labor requirements, technical or engineering specification becomes evident, 

the region shall notify the sponsor and take follow-up action as necessary. If these actions fail to obtain 

satisfactory results, the sponsor will be advised that project payments will be suspended or other 

appropriate action taken until adequate supervision and inspection is provided to assure construction in 

accordance with approved plans and specifications. (See Paragraph 1305.) 

1221. SPONSOR’S RESPONSIBILITIES. 

FAA Airports Offices should advise the sponsor of the sponsor’s direct responsibility for monitoring 

project accomplishment. The sponsor must ensure that the work is carried out in accordance with the 

plans and specifications; that time schedules are observed; that Federal labor and civil rights provisions 

are followed; and that all other terms and conditions in the contract documents and grant agreement are 

implemented. The following are also specific responsibilities during construction of which the sponsor 

must be advised: 

a. Supervision and Inspection. The sponsor is required to provide adequate, competent, and 

qualified engineering supervision and construction inspection during all stages of the work. If so desired 

or deemed necessary, the FAA may require a sponsor to furnish a signed statement that it has reviewed 

the qualifications of personnel who will be performing engineering supervision and conducting 

inspections and is satisfied that they are qualified and competent to do so. 

b. Construction Records. The FAA should advise the sponsor that the resident engineer must 

keep daily construction records. Some of the data that should be a part of these records include: 

(1) Daily weather conditions and temperatures; 

(2) Work in process and general location; 

(3) Equipment in use; 

(4) Adequacy and size of work force including supervision; 

(5) Hours worked per day for contractor, subcontractor, testing laboratory and resident 

engineers; 

(6) Quality and quantity of materials delivered; 

(7) Tests performed and locations; 

(8) Test results; 

(9) Instructions to the contractor, such as minor changes to grade, work schedule, gradation of 

material or mix design, and alignment; 

(10) Unsafe or unexpected hazardous conditions encountered; 

(11) As-built drawings; and 

(12) Documentation of each pay item quantity measurement. 

Page 215
June 28, 2005 Order 5100.38C

c. Sponsor Quarterly Performance Report. 

(1) The sponsor must be advised of the need to submit to the FAA Airports Office a performance 

report, on a quarterly basis, which includes: 

(a) A comparison of actual accomplishments to the goals established for the period. When 

applicable, a comparison will be made on a quantitative basis related to cost data for computation of unit 

costs; 

(b) Reasons for slippage in those cases where established goals are not met; 

(c) Relationship, if any, to AIP projects not covered within this grant; 

(d) Impact on PFC, F&E or other projects; and 

(e) Other pertinent information including, when appropriate, analysis and explanation of cost 

overruns or high unit costs. 

(2) If any performance review conducted by the sponsor discloses a need for a grant 

amendment, the sponsor should be required to submit a request for an amendment on FAA 

Form 5100-100, Section B. The sponsor makes such a request whenever: 

(a) The revision results from changes in the scope or objective of the project; or 

(b) The revision increases or decreases the amount of Federal funds needed to complete 

the project. 

d. Construction Progress and Inspection Report. The sponsor may be required by the FAA 

Airports Office to submit FAA Form 5370-1, Construction Progress and Inspection Report, (Appendix 13) 

periodically, but no less than quarterly, on a case-by-case basis. 

e. Special Reports. Regardless of the performance-reporting schedule, sponsors are to be 

advised to notify FAA immediately whenever problems, events, or deficiencies occur that will require a 

major change in the scope of the project, or significantly affect the construction schedule or increase the 

total funds needed to complete the project by an amount that the FAA Airports Office considers 

significant. The sponsor will be notified by the FAA Airports Office of the amount that will trigger the 

special report. 

1222. CHANGE ORDERS AND SUPPLEMENTAL AGREEMENTS. 

See Chapter 9, Section 4. 

1223. - 1229. RESERVED. 

Section 3. SPONSOR’S FORCE ACCOUNT

1230. GENERAL. 

a. Force Account. Force account construction work is construction that is accomplished through 

the use of material, equipment, labor, and supervision provided by the sponsor or by another public 

agency pursuant to an agreement with the sponsor. 

b. Force Account Standards. A project, or any part of a project, accomplished by force account 

must meet the same engineering and construction standards that are required for contract construction 

(See Paragraph 904). The FAA will apply the same requirements in review of plans and specifications 

as in conducting construction inspections. Construction reporting standards in Paragraph 1221 shall 

Page 216 
June 28, 2005 Order 5100.38C

also apply, as appropriate. The sponsor of force account construction must keep records on costs of 

materials, hourly operation of equipment, payrolls, and all other costs to avoid disallowance of costs that 

cannot be verified in an audit. 

1231. JUSTIFICATION AND APPROVAL. 

Generally, construction should be accomplished through the competitive bidding process. 

Therefore, a sponsor anticipating construction using force account must submit a written justification for 

approval by the FAA Airports Office early in the grant process, preferably before grant application. The 

FAA Airports Office may wish to withhold approval of force account construction until after review of the 

final plans and specifications. The sponsor’s proposal to use force account rather than contract 

construction must be fully documented and should contain as a minimum: 

a. Justification for doing the work by force account rather than by contract; 

b. Estimate of costs with details as to wage rates, non-salary expenses, indirect costs, and 

comparison of costs between the sponsor’s force account construction and contract construction; 

c. Information on sponsor’s resources (labor, material, equipment, and financing) and workload as 

they affect capacity to do the work, date by which the work will be complete, or dates within which the 

work will take place; 

d. Adequate plans and specifications showing the nature and extent of the work to be performed 

using force account; and 

e. The sponsor must clearly show that the benefits, including benefits to the Federal Government, 

of using force account override the Federal policy of competitive bidding. 

1232. SPONSOR FUNDS. 

Enough funds must be available to the sponsor to carry payrolls and any necessary purchases of 

materials and rental equipment for the first portion of construction or until the first partial grant payment 

is received. The total amount of the sponsor’s share may also consist of rental value of equipment, cost 

of materials in stock, and the value of labor that will be used on the project, as well as cash. 

1233. COST ALLOWABILITY. 

a. Records. To ensure the allowability of cost, the sponsor must keep accurate records of the 

hours sponsor equipment and personnel are employed on the project. Such records should include time 

sheets reflecting a job or account number chargeable to the project and payroll records certified by a 

supervisor. 

b. Equipment. Equipment rental rates applicable to the construction on force account 

development vary widely. Therefore, to facilitate a uniform method for evaluating these rates, the 

regions may use the District Offices of the United States Army Corps of Engineers “Construction 

Equipment Ownership and Operating Expense Schedule” (EP-1110-1-8) or the Associated General 

Contractors of America (AGCA) “Contractors Equipment Cost Guide,” to evaluate the sponsor’s rate. 

The Army Corps of Engineers “Construction Equipment Ownership and Operating Expense Schedule” 

can be found on the world wide web at: http://www.usace.army.mil/inet/usace-docs/engpamphlets/cecw.htm. The purchase price of equipment bought by the sponsor for use on a force 

account project is not allowable except to the extent that its amortization is included in the calculation of 

rental and operating rates. 

c. Supplies and Materials. Any procurement of supplies and materials carried out for the 

purposes of the force account project must be in accordance with the procurement standards in chapter 

8 to the extent possible. 

Page 217
June 28, 2005 Order 5100.38C

d. Personnel. Cost of labor and supervision shall be in accordance with state and local standards. 

1234. PERFORMANCE OF CONSTRUCTION. 

a. Insurance. Sponsors are not required to carry any type of insurance unless mandated by local 

or state law. Sponsors should be advised that it is their responsibility to comply with state and local 

insurance requirements. (See Paragraph 311(I)). Where sponsors routinely include requirements for 

minimum liability insurance coverage in all public works projects of comparable scope, they may be 

considered as reasonable and necessary overhead costs and will be allowable under the AIP. 

b. Project Changes. The sponsor must get prior FAA approval for any changes, which will result 

in a grant amendment. Where a change in construction is contemplated which is substantial in scope or 

design, or is a change in either the plans or specifications, the equivalent of a “change order” shall be 

issued. This will be in the form of written instructions from the sponsor or its authorized representative to 

the engineer in charge of supervision and inspection of construction. 

c. FAA Inspections. The procedures for FAA periodic and final inspections of the construction 

work done by sponsor’s force account are similar to those procedures in Paragraph 1220 for 

construction by contract. 

1235. - 1299. RESERVED. 

Page 218 
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 219
June 28, 2005 Order 5100.38C

Chapter 13. P ROJECT PAYMENT, CLOSEOUT, AND 

AUDIT

Section 1. PROJECT PAYMENT

1300. GENERAL. 

The AIP program has drawn criticism that AIP funds under grant are idle while critical projects are 

not funded because of a shortage of funds. One measurement that a project is progressing acceptably 

is the regularity that grant payments are being made or drawn down to reimburse for project 

accomplishments. When grant funds are drawn down regularly, this would prove that the funds are not 

idle. To facilitate reaching this stage, the FAA Airports Office requests that each AIP grantee request or 

initiate a draw down grant payment for project accomplishments every 30 days during the course of the 

project life. This 30-day requirement can be waived when the accomplishments are not significant 

enough to warrant a grant payment, i.e., less than $10,000. However, a request for or a draw down of a 

grant payment will be required within 30 days after the end of each federal fiscal year to cover all 

accrued grant costs from the prior fiscal year that have not been reimbursed. This would give an 

accounting of the year-end status of each project. 

Grant payment may be made to sponsors by letter of credit, electronic funds transfer, or Treasury 

check. The letter of credit as used in this program does not conform to the standard definition as used in 

the financial or banking communities. The letter of credit as used here is a draw down of funds against 

the grant obligation and is used to conform to the terminology on the approved Standard Form 272 and 

Order 2700.33. The letter of credit will be used unless the sponsor is ineligible or specifically requests 

payment by Treasury check or electronic funds transfer. Payments totaling not more than 90 percent of 

the United States Government’s share of the project’s estimated allowable costs may be made before 

the project is completed if the sponsor certifies to the FAA Airports Office that the total amount expended 

from the payments at any time will not be more than the cost of the airport development work completed 

on the project at that time (See 49 USC Section 47111). Payments cannot be made in advance of grant 

work being completed. The FAA Airports Office may require documentation from the sponsor to support 

any costs claimed. FAA Airports Offices should encourage sponsors to use the letter of credit to reduce 

paperwork. 

1301. LETTER OF CREDIT. 

Payment by letter of credit is currently the subject of a working draft replacement for this paragraph 

within Program Guidance Letter 05-2 dated April 29, 2005, pending revision of related directives and 

reorganization of the Regional Accounting Offices. 

1302. PAYMENT BY TREASURY CHECK OR ELECTRONIC FUNDS TRANSFER - GENERAL. 

Payment by Treasury check or electronic funds transfer is the method to be used when the sponsor 

does not meet the letter of credit requirements. Payment of costs claimed by electronic funds transfer is 

processed the same as a payment by Treasury check, except that the sponsor receives the funds by a 

fund transfer to its bank rather than by receiving a paper check. Payments should be made on a 

reimbursable basis for actual work completed, material delivered to site, or land acquired. These 

requests for reimbursement should not be more frequently than monthly. A sponsor shall not be 

reimbursed for amounts that are to be withheld from contractors to ensure satisfactory completion of the 

work. These amounts will be paid when the sponsor releases these funds to the contractor. 

1303. PAYMENT BY TREASURY CHECK OR ELECTRONIC FUNDS TRANSFER - FORMS. 

a. Request for Advance or Reimbursement, SF-270. Form SF-270 is prepared by the sponsor 

and submitted to the FAA Airports Office to request progress or final payment for non-construction 

Page 220 
June 28, 2005 Order 5100.38C

projects. It may be used for construction programs if the region believes that the form provides sufficient 

information. 

b. The Outlay Report and Request for Reimbursement, SF-271. Form SF-271 is prepared by 

the sponsor to request progress or final payment for construction projects or any other project for which 

the region feels a need for more detailed information than provided on SF-270. 

c. Distribution of Forms. The sponsor shall submit the original plus two copies of the necessary 

forms. After approval by the FAA Airports Office, the original and a copy shall be forwarded to the 

Regional Accounting Office. 

1304. PAYMENT BY TREASURY CHECK OR ELECTRONIC FUNDS TRANSFER - APPROVAL. 

a. Before approving a payment request, the FAA Airports Office should establish that: 

(1) The cost is reasonable and allowable; 

(2) The payment request does not exceed the outstanding balance in the grant; 

(3) The work covered by the payment is in line with the project schedule; and 

(4) In cases involving land, the sponsor has submitted evidence satisfactory to the FAA the 

sponsor has received good title to land acquired or to be acquired. 

b. Where the FAA Airports Office determines that the amount requested is not justified, a lesser 

amount should be approved and the sponsor notified of the adjustment and the reason for the 

adjustment. The FAA Airports Office may not withhold payment for proper charges for more than 

180 days unless the sponsor has failed to comply with grant conditions and has been notified and given 

an opportunity for a hearing. Also, payment may be withheld if a sponsor is indebted to the U.S. 

Government and collection of the indebtedness will not significantly impair accomplishment of the 

objectives of the grant program. All such action will be coordinated with the Regional Accounting Office. 

c. FAA Airports Office will indicate approval of the payment request by affixing and signing the 

following on the payment request form: 

“I find $ __________________ of the amount requested for reimbursement to be an allowable 

project cost based on the representations and certifications of the sponsor as contained in the payment 

request. I further find this cost has not previously been reimbursed, and hereby approve payment of 

such amount.” 

Name___________________________________ Date: _____________ 

d. Before forwarding the request for payment to the regional accounting office, the FAA Airports 

Office should ensure the sponsor’s name, project number, partial payment request number, and the 

DOT contract number are included on the form. 

e. If the request is for final payment associated with project closeout, see Section 2 of this chapter. 

1305. WITHHOLDING PAYMENT. 

Payment may be withheld by the FAA Airports Office pending the determination of reasonableness, 

allowability, and necessity of the claimed costs or for noncompliance with a grant condition. Title 

49 U.S.C., Section 47111(d) contains certain requirements that must be followed when withholding 

payments for noncompliance with grant conditions. Thus, if any determination of noncompliance is to be 

made that requires withholding of payment, contact the FAA Airports Office of Compliance, AAS-400, for 

specific procedures. If it is also necessary to suspend the letter of credit, see Order 2700.33, Letter of 

Credit - Treasury Financial Communications system (TFSC), Paragraph 19. If the grant is suspended or 

Page 221
June 28, 2005 Order 5100.38C

terminated, see Paragraph 1150. Where there is a dispute between the sponsor and the contractor, see 

Paragraph 1314. 

1306. - 1309. RESERVED. 

Section 2. GRANT CLOSEOUT PROCEDURES

1310. GENERAL. 

The closeout of a grant is the process by which the FAA Airports Office and the sponsor perform the 

necessary final administrative actions to complete all requirements of the grant agreement. It is 

important that all parties involved fulfill these requirements promptly so that unnecessary delays in 

closing a grant can be avoided. The closeout process will usually require an examination of three areas 

- project work completion, administrative requirements, and financial requirements - to ensure that the 

required steps have been taken or conditions met. 

1311. AUDIT RELATIONSHIP TO CLOSEOUT. 

The single audit required by OMB Circular A-133-Revised June 24, 1997, will not usually coincide 

with the project accomplishment period; nor is a single audit likely to contain sufficient information on the 

project to show all grant requirements have been met. If the project manager believes it necessary to 

audit the project more closely, see Paragraph 1320. Otherwise, FAA Airports Offices may close out 

projects before the audit cycle is completed. The project may be reopened later to resolve subsequent 

audit findings. 

1312. WORK COMPLETION REQUIREMENTS FOR CLOSEOUT. 

Conditions to be met before work completion can be determined will vary according to the type of 

work in the grant, i.e. planning, land acquisition, equipment acquisition, or construction. 

a. Planning. The conditions are met when the sponsor has completed the work elements identified 

in the program narrative and the FAA has reviewed and accepted the final report. Acceptance does not 

require that the FAA agree with the conclusions or recommendations in the plan. It should be kept in 

mind that the plan has been developed in part for the purpose of providing local and state governments 

with a planning tool to assist them in making airport development decisions. When significant 

differences of opinion exist, a letter should be sent to the sponsor, which outlines the FAA position. See 

Paragraph 428. 

b. Land Acquisition. Conditions are met when the sponsor obtains satisfactory property interest 

in all parcels included in the grant description, has submitted adequate title evidence or appropriate 

certification for all the parcels, and the FAA Airports Office has accepted such evidence. In addition, the 

FAA Airports Office is satisfied that the Uniform Relocation Assistance and Real Property Acquisition 

Policies Act of 1970, as amended, requirements have been met. See Paragraph 713. 

c. Equipment Acquisition. Conditions are met when the equipment is delivered, installed, and 

tested in accordance with approved plans and specifications. At the option of the FAA Airports Office, 

the FAA or the sponsor may make final inspection. 

d. Construction. Conditions are met when all work items in the grant description have been 

completed in accordance with the approved or certified plans and specifications and the final inspection 

completed as stated in Paragraph 1220(f). Correction of noted discrepancies (punch list items) should 

be completed, or the FAA Airports Office should have assurance that arrangements are made for their 

completion. Sponsor certification may be accepted or required for both work items and punch list 

completion. 

Page 222 
June 28, 2005 Order 5100.38C

e. Combination of the above. Regions may close out portions of projects that involve 

combinations of the preceding four categories when each specific portion meets its requirements for 

closeout. 

1313. ADMINISTRATIVE REQUIREMENTS FOR CLOSEOUT. 

Sponsors shall be required to submit the following items as part of the administrative closeout of the 

project: 

a. As-Built Plans. “As-built” plans for airport development projects involving construction must be 

submitted. At the FAA Airports Office’s discretion, certification from the sponsor that as-built plans have 

been received and will be retained for future use may be accepted. Another option, at the discretion of 

the FAA Airports Office, is to accept an electronic version of the as-built plans; 

b. Exhibit A, Property Map. Revised “Exhibit A” if any changes were made from the one 

submitted with the project application; 

c. Property Accountability. A sponsor rarely acquires equipment expressly to carry out a grant. 

However, if a sponsor does, an inventory of all equipment with a current per unit fair market value in 

excess of $5,000, acquired with Federal funds and used to carry out the grant, must be submitted as 

part of the closeout package. Equipment no longer needed for airport purposes may be sold or retained 

by the sponsor. The Federal share of the current fair market value shall be deducted from the grant 

amount or reimbursed to FAA. 

d. Block Grants. Forward information to the region on airport projects as described in 

Paragraph 1097a. 

1314. FINANCIAL REQUIREMENTS FOR CLOSEOUT. 

a. Final Financial Report. The sponsor shall be required to submit a final financial report to the 

FAA in accordance with Title 49 CFR, Parts 18.41 and 18.50. This report is required even if the sponsor 

has already received payments equal to the maximum obligation of the United States stated in the grant 

agreement. For construction and non-construction projects, the final report shall be made on the form 

the sponsor normally uses to request payment (SF-270 or SF-271) in cases of reimbursement by 

Treasury check, or on SF-272 if the letter of credit has been used. The final financial report may also 

serve as the request for final payment when 100% progress payment has not been made or when an 

adjustment to the 100% progress payment is required. 

b. Form Preparation. On the appropriate line of these forms or in the “Remarks” section, if the line 

does not exist, the following information must be included, if applicable: 

(1) Identification of any Interest Earned on Federal Funds. Except for sponsors that are 

state agencies, all such interest must be returned to the Federal Government; 

(2) Identification of Credit for Non-expendable Personal Property (See Paragraph 1313(c)); 

and

(3) Identification of Any Disputed Costs. Where there is a dispute between the contractor 

and the sponsor as to the amount of compensation due the contractor, which may have to be settled by 

litigation, the contractor should furnish the sponsor an estimate of the total amount allegedly due from 

the sponsor. The sponsor should only recognize the undisputed portion of the contractor’s claim and 

include that amount in the final financial report. However, in the “Remarks” section, the sponsor should 

point out that there is a certain disputed amount that the contractor claims and which may be the subject 

of litigation. Following review of the Sponsor’s closeout documentation the region may choose to 

continue with the project closeout or leave the grant open until all litigation is completed. 

Page 223
June 28, 2005 Order 5100.38C

c. Excess Payments. If the final financial report indicates that payments have been made which 

exceed the Federal share of the estimated allowable costs or the sponsor has received interest on 

Federal funds to which it is not entitled, this amount constitutes a debt to the Federal Government. The 

accounting office should be informed of the amount and asked to send a notice to the sponsor that the 

debt should be paid within 30 days or a charge for interest and penalties in accordance with the Federal 

Claims Collection Standards will be assessed. See Paragraph 1304(b) for guidance regarding offset 

against another grant. 

d. Fiscal Adjustments. It may be necessary to make upward or downward adjustments as a 

result of an audit, grant amendments, or resolution of disputed costs. 

1315. FINAL PROJECT REPORT. 

a. Preparation. After the requirements of Paragraphs 1312, 1313, and 1314 have been met, a 

final project review shall be made resulting in a final project report. The report shall contain information 

deemed necessary for any subsequent examination or evaluation of the project. 

b. Approval of Final Project Report. The report will normally be prepared by the FAA project 

manager and be reviewed and approved by the Airports Division Manager. This authority may be 

delegated but must remain at one level higher than the project manager in the chain of command. This 

constitutes a routine element of program checks and balances as required by OMB Circular A-123. 

1316. FINANCIAL SETTLEMENT. 

Upon approval of the final project report, payment for the allowable costs up to the maximum 

obligation of the United States may be made. Financial settlement may also involve recovering any 

overpayments or interest (See Paragraph 1314(c)). The sponsor shall be notified in writing with a copy 

to the project file when the final financial settlement is being made that the grant is considered closed 

out. Any differences in the amount of funds requested by the sponsor and the amounts paid out should 

be explained. If the amount requested in the sponsor’s final financial report exceeds the balance of the 

maximum U.S. obligation remaining in the grant, either the excess must be denied or a grant 

amendment made in accordance with Chapter 11, Section 5. 

1317. REPORTS TO FAA HEADQUARTERS. 

One copy of the Airports Division final project report is required by APP-520 when Economic 

Development Act or Appalachian Regional Commission funds are included in the project, or on an “as 

requested basis” for other projects. 

1318. RECLAIM FOR SUSPENDED COSTS AFTER FINAL SETTLEMENT. 

There will be instances where final payment will be made to the sponsor with certain project costs 

being suspended for lack of substantiating evidence or for other reasons. The sponsor may reclaim 

such costs after final payment provided the sponsor has submitted evidence that is satisfactory to justify 

a determination that the costs are reasonable and necessary to the project. However, if the sponsor 

does not file for such reclaim within 90 days after final payment, the project may be closed out. 

1319. RESERVED. 

Section 3. AUDITS

1320. GENERAL. 

OMB Circular A-133-Revised June 24, 1997, Audits of States, Local Governments, and Non-Profit 

Organizations implements the Single Audit Act of 1984, P.L. 98-502 and Single Audit Act Amendments 

of 1996, P.L. 104-156, and establishes audit requirements for States, local governments, and non-profit 

organizations expending Federal awards. It requires that any States, local governments, and non-profit 

organizations that expend $300,000 or more a year in Federal funds shall have an audit made in 

Page 224 
June 28, 2005 Order 5100.38C

accordance with OMB Circular A-133-Revised June 24, 1997. Operating Administrations (OAs) and 

Secretarial Offices (SOs) are also responsible for ensuring appropriate audit coverage for other types of 

assistance recipients not covered by the A-133 circular. Where DOT has been designated to serve as 

the cognizant agency, the responsibilities shall be divided between the OA’s and SOs, and the Office of 

the Inspector General (OIG). The audit shall be made by an independent auditor and cover the entire 

financial and compliance operations of that government body. Audits will be conducted annually unless 

State or local law requires biennial audits. When the OA’s, SOs, or the OIG determine that additional 

audits are necessary, such audits shall build on the results of independent auditors if the audits meet the 

criteria contained in OMB Circular A-133. Recipients that expend less than $300,000 a year in Federal 

assistance funds are exempt from single audit requirements; however, they must retain appropriate 

records to document their compliance with the requirements of their Federal assistance awards. The 

single audit concept was established to: 

a. Ensure that all Federal agencies rely on a single audit; 

b. Provide consistency and uniformity among Federal agencies for the audit of non-Federal entities 

expending Federal awards; and 

c. Improve the financial management of Federal assistance programs. 

Since most sponsors receive grants from more than one Federal agency, cognizant agencies are 

assigned based on the Federal agency that provides the predominate amount of direct funding in 

accordance with Section 400 of OMB Circular A-133. 

1321. AUDIT RESPONSIBILITIES - GENERAL. 

There are four parties involved with the A-133 process - the FAA Airports Office, the public sponsor, 

the sponsor’s auditor, and the DOT OIG (if a modal administration in DOT is the cognizant agency). 

Paragraph 1325 contains guidelines for private sponsor audits. 

1322. AUDIT RESPONSIBILITY - FAA AIRPORTS OFFICE. 

a. If DOT is the cognizant agency for a sponsor, and the FAA provides the most DOT funding, FAA 

would have administrative cognizance responsibility. 

b. If FAA is assigned as cognizant agency, the FAA Airports Office shall: 

(1) Ensure that audits are made and reports are issued and distributed in a timely manner in 

accordance with this section and that sponsors take corrective actions when audit reports are found by 

the OIG not to be in compliance with the requirements of Circular A-133-Revised 

June 24, 1997; 

(2) Sponsors shall be instructed to submit an appropriate number of copies of audit reports 

directly to the Bureau of Census Federal Audit Clearinghouse; 

(3) Establish and enforce appropriate audit coverage for recipients not covered under OMB 

Circular A-133. Audit requirements for these recipients shall be established and performed for the 

program in a manner that ensures the Federal interest is adequately protected; 

(4) Refer deficient findings that relate to a single Federal agency to that agency for resolution. 

Negotiate with recipients to correct system deficiencies and resolve questioned costs for findings that 

affect two or more Operating Administrations (OA’s)/Secretarial Offices (SOs). If agreed to by the 

cognizant agency and OA’s/SOs, specific DOT-related deficiencies or questioned costs may be resolved 

by the affected OA/SO; 

Page 225
June 28, 2005 Order 5100.38C

(5) Be responsible for approving sponsor cost allocation plans and negotiating and executing 

indirect cost rate agreements, if required, with respect to all assistance programs; 

(6) Issue management decisions on audit findings within 6 months, and ensure that recipients 

take prompt corrective action. Copies shall be submitted to the OIG and other appropriate officials; and 

(7) Consider auditor requests for extensions of report submission due date, with the advice and 

assistance of the OIG. 

c. If FAA is not the cognizant agency, the FAA Airports Office responsibility is limited to responding 

to the audit findings and recommendations and to cooperating with the cognizant agency. 

1323. AUDIT RESPONSIBILITY - PUBLIC SPONSOR. 

The public sponsor (Auditee) is responsible for: 

a. Ensuring it has a cognizant agency; 

b. Selection of an auditor. This can be a private firm selected in accordance with the provisions of 

Title 49 CFR, Part 18.36 or an in-house auditor approved by the OIG; 

c. Ensuring the audit is carried out in accordance with A-133; 

d. Responding to audit findings and cooperation with the FAA in resolving any problems; 

e. Keeping audit reports on file for three years from the date of their issuance; 

f. Submitting copies of the audit report within 30 days after issuance to a central clearinghouse 

located at the Census Bureau, Department of Commerce. The clearinghouse will keep completed audits 

on file and follow up with State and local governments that have not submitted required audit reports. 

Audit reports should be sent to Bureau of the Census, Data Preparation Division, 1201 E. 10th Street, 

Jeffersonville, IN 47132, Attn: Single Audit Clearinghouse; and 

g. Submitting a cost allocation plan and an indirect cost rate proposal, if required. 

1324. AUDIT RESPONSIBILITY - OIG. 

The OIG’s responsibility is to: 

a. Ensure that audits are in accordance with the requirements of OMB Circular A-133, and advise 

the recipient of audits that are deficient in meeting requirements. The OIG shall also notify the cognizant 

OA or SO of audits not meeting these requirements for follow-up action; 

b. Provide technical advice and liaison to State and local governments and independent auditors; 

c. Obtain or make quality control reviews of selected audits made by non-Federal auditors to 

ensure that audits are performed in compliance with OMB Circular A-133, generally accepted auditing 

standards and “Government Auditing Standards.” Results will be provided to the OA or SO whose 

program or activities are subject to audit by the entities. When appropriate, results should be provided 

to other interested organizations; 

d. Inform other affected Federal organizations and appropriate Federal law enforcement officials of 

any reported illegal acts or irregularities; 

Page 226 
June 28, 2005 Order 5100.38C

e. Advise the sponsor of audits that have been found not to meet the requirements of OMB Circular 

A-133. The OIG shall also notify the cognizant operating administration of sponsor audit reports that do 

not meet the requirements of OMB Circular A-133; 

f. Coordinate, to the extent practicable, audits made by or for Federal agencies that are in addition 

to the audits required by OMB Circular A-133, so that the additional audits build upon such audits; 

g. Provide audits to support approval of cost allocation plans and indirect cost rates. These audits 

should be completed by the OIG within 30 days of the receipt of the audit request; 

h. Perform or arrange for special or supplemental audits at the request of the Federal Airports 

Office; 

i. Coordinate audit work performed by or for Federal/non-Federal organizations that are in addition 

to the audits required by OMB Circular A-133 so that additional audits build upon such audits to achieve 

the most efficient and cost effective results; 

j. Consider auditee requests to qualify as a low-risk audit; and 

k. Coordinate the management decisions for audit findings that affect the programs of more than 

one agency. 

1325. PRIVATE SPONSOR AUDIT. 

Since A-133 applies only to public sponsors and non-profit organizations, the FAA will require, if 

appropriate, that in a grant agreement with a private sponsor a project audit will be conducted and 

submitted to the FAA Airports Office. See Appendix 7 for the special condition on private sponsor 

audits, which is to be included in appropriate grants. These audits should be sent to the OIG. Where 

the FAA Airports Office determines that project transactions are so basic that a full audit is unnecessary 

(e.g. purchase of equipment, a small lump sum contract on a third party planning contract, etc.) a cost 

review without audit may be made in lieu of the audit. 

1326. GRANTS LESS THAN $300,000. 

Where the total funds for all Federal grants to a single public sponsor are less than $300,000 a year, 

the audit requirements shall be those prescribed by the State or local law or regulation. 

1327. SUPPLEMENTAL AUDITS. 

The FAA Airports Office may require audits in addition to the single audit where they feel a need 

exists, e.g. where there is evidence of discrepancy, where there is an unusual financial situation, or any 

other reason the project manager believes is needed. The OIG should be requested to arrange for 

these audits. 

1328. AUDIT COSTS. 

The cost of audits is allowable as either a direct cost or an allocated indirect cost, in accordance with 

Paragraph 35 of this Order. Generally, the percentage of costs charged to Federal assistance programs 

for a single audit shall not exceed the percentage that Federal funds represent of total funds expended 

during the fiscal year. Higher actual costs must be documented. 

1329. RELEASE OF AUDIT REPORTS. 

The release to the public of any audit report prepared by the OIG shall be coordinated with the 

Regional Counsel to insure that it will be in accordance with the Trade Secrets Act (18 USC 1905) and 

the Freedom of Information Act (5 USC 552). 

Page 227
June 28, 2005 Order 5100.38C

1330. - 1399. RESERVED. 

Page 228 
June 28, 2005 Order 5100.38C

This page left intentionally blank.

Page 229
June 28, 2005 Order 5100.38C

Chapter 14. E NFORCEMENT OF L ABOR AND CIVIL 

RIGHTS REQUIREMENTS

Section 1. ENFORCEMENT OF LABOR REQUIREMENTS

1400. GENERAL. 

A more detailed treatment of the labor requirements with which sponsors, contractors, and 

subcontractors must comply are contained in AC 150/5100-6 and are summarized below. The clauses 

required by these acts to be included in contracts and subcontracts are found in the appropriate 

appendices of the AC. Therefore, the AC should be used as a companion document in this area. 

a. Davis-Bacon Act (DBA). All construction contracts and subcontracts awarded by the sponsor 

and contractor in excess of $2,000 shall include a provision for compliance with the applicable provisions 

of the Davis-Bacon Act (40 U.S.C. 3141 et seq.) and applicable provisions of the Department of Labor 

implementing regulations (29 CFR Part 5), as well as a provision to pay to mechanics and laborers 

wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall 

be required to pay wages not less often than once a week. The sponsor shall place a copy of the 

current prevailing wage determination issued by the Department of Labor in each solicitation, and the 

award of a contract shall be conditioned upon the acceptance of the wage determination. The sponsor 

shall report all suspected or reported violations to the FAA. 

b. Contract Work Hours and Safety Standards Act (CWHSSA). Where applicable, all contracts 

awarded by sponsors and contractors in excess of $2,000 for construction contracts and in excess of 

$2,500 for other contracts which involve the employment of mechanics or laborers shall include a 

provision for compliance with the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 et 

seq.) as supplemented by the Department of Labor Regulations (29 CFR Part 5). Under the Act, each 

contractor shall be required to compute the wages of every mechanic and laborer on the basis of a 

standard workweek of 40 hours. Work in excess of the standard workweek is permissible provided that 

the worker is compensated at a rate not less than one and one-half times their basic rate of pay for all 

hours worked in excess of 40 hours in the workweek. The Act is applicable to construction work and 

provides that no laborer or mechanic shall be required to work in surroundings or under working 

conditions which are unsanitary, hazardous or dangerous to his health and safety as determined under 

construction, safety and health standards promulgated by the Secretary of Labor. These requirements 

do not apply to the purchases of supplies or materials or articles ordinarily available on the open market 

or contracts for transportation. 

c. Copeland “Anti-Kickback” Act. This Act applies to construction contracts over $2,000 and 

declares it a criminal offense for any person to make unauthorized deductions, to exact rebates from 

wages paid to any person employed by any contractor or subcontractor engaged in the construction, 

prosecution, completion or repair financed in full or in part by loans or grants from a Federal agency. 

Contractors and subcontractors are required to submit weekly certifications of compliance. Some 

exceptions are made to the Act’s requirements as detailed by the Secretary of Labor’s regulations. 

Appropriate clauses are to be included in all contracts subject to the requirements of 29 CFR 

Parts 3 and 5. 

d. Fair Labor Standards Act. Basically, the Fair Labor Standards Act (FLSA) requires payment of 

the Federal minimum wage to all employees engaged in interstate commerce or the production of goods 

for interstate commerce and includes most employees in the construction industry. While the DBA 

applies to prevailing wages paid to laborers and mechanics, and the CWHSSA to laborers, mechanics, 

watchmen, and guards, the FLSA covers almost all other employees in AIP construction, other than 

those exempted under Section 213 of the FLSA and certain State and local public employees. 

Page 230 
June 28, 2005 Order 5100.38C

e. Occupational Safety and Health Act of 1970. This Act is often referred to as the WilliamsSteiger Act. It applies to all contracts funded in part by Federal grants and requires contractors to 

observe health and safety standards developed by the Department of Labor (See 29 CFR 1910). 

1401. ENFORCEMENT RESPONSIBILITY. 

a. General. The FAA is responsible for the administration and enforcement of the labor 

requirements of the Davis-Bacon Act, the Contract Work Hours and Safety Standards Act, and the 

Copeland Anti-Kickback Act. The DOL is also responsible for the enforcement of the CWHSSA, the 

FLSA, and the Occupational Safety and Health Act. Apparent violations of any of these acts should be 

brought to the attention of the FAA and the DOL, as appropriate. 

b. Continuing FAA Responsibilities. The DOL Memorandum #76 dated May 31, 1968, sets forth 

procedures for coordinating investigation activities of Federal agencies relating to the enforcement of 

labor provisions. Construction contracts subject to these provisions are also subject to other laws for 

which the DOL has basic enforcement responsibility. The FAA is still responsible for the administration 

and enforcement of labor standards required under AIP. An investigation by DOL does not relieve FAA 

of this responsibility. 

c. Contract Termination Report. When a contract is terminated by reason of violations of the 

labor standards provisions for which FAA is responsible, regions shall submit a report to the Secretary of 

Labor and the Comptroller General, giving the name and address of the contractor or subcontractor 

whose right to proceed has been terminated, the name of the contractor or subcontractor, if any, who is 

to complete the work, the amount and number of its contract and the description of the work it is to 

perform. 

1402. FAA EXAMINATIONS AND INVESTIGATIONS. 

Where there is evidence there may be compliance problems with labor requirements, FAA Airports 

Offices should examine payrolls and statements and conduct interviews as may be necessary to ensure 

compliance with the labor standards clauses. The DOL and the sponsor should be invited to participate. 

The results of the preliminary FAA interviews must be provided to the DOL for further action. The FAA 

Airports Office should then follow any recommendations made by the DOL concerning the alleged 

violation(s). 

1403. INVESTIGATION REPORT. 

Upon completion of the investigation, DOL will provide a copy of its report to the FAA Airports Office 

and the sponsor. 

1404. REVIEW AND SPONSOR NOTIFICATION. 

The FAA Airports Office shall review the DOL investigation report and its findings shall be affirmed or 

modified as appropriate. 

1405. SPONSOR CORRECTIVE ACTION. 

The sponsor shall be requested to have the contractor make restitution or furnish evidence to rebut 

the investigation findings. In addition, the contractor shall be required to furnish a signed statement or 

letter giving the reasons for the violations and evidence of restitution made such as hard copies, front 

and back, of canceled checks or employee receipts. 

1406. WITHHOLDING GRANT PAYMENTS. 

In the event the sponsor, the contractor, or the subcontractor do not take prompt action to correct 

any labor violations, the sponsor shall be informed that the amount of the underpayments will be 

withheld from the next partial payment, and all further payments may be suspended pending satisfactory 

correction of the violations. There may be instances where the violation is not discovered or the amount 

Page 231
June 28, 2005 Order 5100.38C

of underpayment determined until after the construction work on the project has been completed. The 

project may be reopened and payment made in the amount of the restitution from whatever funds are 

then available. If any payment is to be withheld for more than 180 days, see chapter 13. 

1407. ACTION ON INVESTIGATION REPORTS. 

Final reports shall include a definite determination as to whether the violations were willful or 

nonwillful. If the violation was willful, a recommendation should be made whether the contractor or 

subcontractor should be placed on the list of ineligible contractors as contemplated by 29 CFR Part 5. 

a. Where underpayments total less than $1000 and are nonwillful and satisfactory correction has 

been effected, no report need be made either to the U.S. Department of Labor or the FAA headquarters, 

except where the investigation was made at the request of the U.S. Department of Labor. In the latter 

case, the appropriate FAA Airports Office should write a letter to the U.S. Department of Labor 

summarizing the violations found, the number of employees involved, the amount of any restitution paid, 

the liquidated damages assessed, the reason why the violations are deemed to be nonwillful and 

recommending that the file be closed. 

b. Where underpayments total less than $1000 and are nonwillful and where satisfactory restitution 

has not been made because of inability of the contractor to locate the employees involved after a 

reasonable effort, a letter shall be written to the U.S. Department of Labor with a recommendation that 

the file be closed. In addition, the letter should state the efforts made by the contractor, the sponsor, 

and the FAA to locate the employees involved. 

c. Where underpayments total $1000 or more, or are willful, a copy of the investigation report, 

together with other information and data on which the determination that the violations are willful is 

based shall be furnished the U.S. Department of Labor except in those cases where a recommendation 

is made to place the contractor or subcontractor on the debarred bidders list. In the latter case, the 

recommendation to place the contractor or subcontractor on the list of ineligible contractors shall be sent 

to APP-500 for concurrence. 

1408. DEPARTMENT OF LABOR INVESTIGATIONS. 

The United States Department of Labor has the authority to make investigations as deemed 

desirable to obtain compliance with the Labor provisions. FAA personnel, contractors, and sponsors 

should cooperate in such investigations. 

a. Department of Labor Request for Investigations. Because of an understanding between the 

FAA and DOL, complaints may be forwarded directly from DOL to the FAA regional office for 

investigation and corrective action. 

b. Joint Investigations. When desirable, due to unusual or complex circumstances, the FAA 

regional office may participate in a joint investigation with the DOL. 

1409. LIQUIDATED DAMAGES UNDER THE CONTRACT WORK HOURS AND SAFETY STANDARDS ACT. 

a. Liquidated Damages. The CWHSSA provides that the governmental agency to which the 

financial assistance for the work is provided may withhold or cause to be withheld from any monies 

payable on account of work performed by a (sub) contractor. Such sums may be determined 

administratively to be necessary to satisfy any liabilities of such (sub) contractor for unpaid wages and 

liquidated damages. Since the act uses the word “may", the FAA has the option of determining whether 

or not Federal funds will be withheld from the sponsor for unpaid wages and liquidated damages. For 

example, if there is an unintentional violation and the contractor, upon notice, corrects the action, it will 

not be necessary for the FAA to withhold such funds and report the violation. If, on the other hand, the 

contractor intentionally fails to correct the violation or disputes the same, then the FAA should withhold 

an amount representing unpaid wages and liquidated damages in order that the Comptroller General will 

Page 232 
June 28, 2005 Order 5100.38C

have a fund to pay wages due the contractor’s laborers and mechanics in the event it is determined they 

are due these funds. If funds are to be withheld for more than 180 days, see Chapter 13. 

b. Enforcement Procedures. The CWHSSA provides that Reorganization Plan Number 14 

of 1950, as amended, shall be applicable with respect to the provisions of this Act. This Plan authorizes 

the Secretary of Labor to prescribe appropriate standards, regulations and procedures to be observed 

by the Federal agencies administering the labor standards provisions of various designated Acts, 

including the CWHSSA, as amended. The plan also authorizes the Secretary of Labor to cause such 

investigations to be made by DOL with respect to compliance with and enforcement of such standards, 

as he deems desirable. 29 CFR Part 5 covers the enforcement procedures applicable to the provisions 

of the Act. These enforcement procedures are summarized as follows: 

(1) Findings and Recommendations of the FAA. Whenever the FAA finds that the sum of the 

liquidated damages administratively determined to be due under the CWHSSA is incorrect or that the 

contractor or subcontractor inadvertently violated the provisions of the CWHSSA, notwithstanding the 

exercise of due care: 

(a) In Excess of $500. If the amount of the liquidated damages is in excess of $500, a 

recommendation may be made to the Secretary of Labor that an appropriate adjustment in liquidated 

damages will be made or that the contractors or subcontractors will be relieved of liability for such 

liquidated damages. Such findings with respect to liquidated damages necessarily include findings with 

respect to any wage underpayments for which liquidated damages are determined. 

(b) $500 or Less. If the amount of liquidated damages is $500 or less, an appropriate 

adjustment may be made or the (sub) contractor may be relieved of the liability of such damages without 

submitting recommendations or a report to the Department of Labor. 

(2) Findings by the Department of Labor. The recommendations of the FAA, submitted to the 

Department of Labor under Subparagraph (1) above, are reviewed initially by the appropriate office of 

DOL. Whenever DOL concurs in the findings and recommendations of the FAA, an order will be issued 

to that effect. If, however, DOL does not concur with the findings and recommendations of the FAA, the 

matter is transmitted to the second review level in DOL. The decision and order of the second level 

review with respect to the issues involved is their final action. 

c. Limitations, Variances, and Tolerances. Upon the request of any Federal agency or upon 

his/her own initiative, the Secretary of Labor may provide, under the CWHSSA, reasonable limitations 

and allow variations, tolerances and exemptions to and from any or all provisions of that Act whenever 

the Secretary finds such action to be necessary and proper in the public interest to prevent injustice or 

undue hardship or to avoid serious impairment of the conduct of Government business. Any request for 

such action by the Secretary shall be submitted in writing and shall set forth the reasons for which the 

request is made. 

1410. - 1419. RESERVED. 

Section 2. ENFORCEMENT OF CIVIL RIGHTS REQUIREMENTS

1420. GENERAL. 

1421. THE CIVIL RIGHTS REQUIREMENTS WITH WHICH SPONSORS, CONTRACTORS, AND 

SUBCONTRACTORS MUST COMPLY.

The requirements are described in various documents issued by the FAA, the Office of the 

Secretary, or the President as set out in the following paragraphs of this section. The clauses required 

by various laws and regulations to be included in contracts, subcontracts, leases, etc., are found in the 

documents listed in the following paragraphs of this section and appropriate appendices of the AC. 

Therefore, the documents cited in the following paragraphs of this section should be used as a 

Page 233
June 28, 2005 Order 5100.38C

companion documents in this area. It is the responsibility of the FAA Airports Offices to ensure the 

appropriate clauses are inserted into the grants and with respect to Executive Order 11246 (Equal 

Employment Opportunity), into contracts. The FAA Airports Offices are responsible for reporting to the 

Assistant Administrator for Civil Rights Staff any information indicating a possible failure to comply with 

Title II of the ADA or Section 504 of the rehabilitation Act of 1973. The Regional Civil Rights Staffs are 

responsible for ensuring that appropriate clauses are inserted into contracts for all other authorities listed 

below. The headquarters Office of Civil Rights (ACR) and the Regional Civil Rights Staffs are 

responsible for conducting investigations of discrimination complaints and for conducting periodic 

compliance reviews. The Department of Labor is responsible for enforcing the requirements under 

Executive Order 11246, as amended, discussed in Paragraph 1424. In all enforcement procedures, 

FAA’s action is with respect to the sponsor, who may be required to take action against an activity in 

order to enforce a DOT finding. Title VI of the Civil Rights Act of 1964. 

Title VI states that “no person in the United States shall, on the grounds of race, color, or national 

origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination 

under any program or activity receiving Federal financial assistance.” These requirements are primarily 

concerned with discrimination in service to the public. To implement the requirements of Title VI, the 

Department of Transportation (DOT) issued Title 49 CFR, Part 21, Nondiscrimination in Federally 

assisted Programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act 

of 1964. 

a. Standard DOT Title VI Assurance. Beginning in October 1984, the first grant issued to a 

sponsor to construct a facility (including runways, taxiways, aprons, etc.) or to purchase land must 

include the DOT Title VI Assurance, which includes clauses for contracts and subcontracts and 

requirements for deeds, licenses, leases, permits, or similar instruments. All grants must have the 

Standard DOT Title VI Assurances attached to the grant agreement. Acceptance of the grant 

agreement constitutes acceptance of the Title VI Assurances and a signature on the assurances 

themselves is not required. 

(1) Duration. This assurance obligates the sponsor for the period during which the financial 

assistance is extended to the program, except where personal or real property is involved. In that case, 

a sponsor is obligated for the longer of: 

(a) The period the property is used for the purpose for which the financial assistance was 

extended, or for another similar purpose; or 

(b) For as long as the sponsor retains ownership or possession of the property. 

(2) Property Acquisition or Improvement. When real property is acquired or improved with 

Federal funds, the sponsor must agree to include Title VI covenants in any subsequent deed, license, 

lease, permit, or other agreement pertaining to the property. 

(3) Reverter Clauses. The appropriate clauses of Attachment 2 in Appendix 11 need to be 

inserted as a covenant running with the land, in any future deeds, leases, permits, and similar 

agreements entered into by the recipient with other parties for the subsequent transfer of real property 

acquired or improved under a Federal financial assistance program of the FAA and for the construction 

or use of or access to space on, over or under real property acquired or improved under the Federal 

financial assistance program of the FAA. A reverter clause gives the sponsor the right to reclaim 

property titled to a third party if the party fails to comply with conditions, assurances, and covenants in 

the agreement established under Title VI. When real property is acquired or improved with Federal 

funds, the FAA must make a determination whether the sponsor will be required to use reverter clauses 

in subsequent transfers or other agreements pertaining to the property. In the case where land is 

acquired in a noise mitigation program that contains Federal funds and subsequently sold for a 

compatible land use, a reverter clause would not normally be required. If however, the sponsor chooses 

to lease the land for a compatible land use, and the lessee provides a service to the general public, a 

Page 234 
June 28, 2005 Order 5100.38C

clause terminating the lease for non-compliance with the Title VI assurances, covenants and conditions 

should be inserted into the lease. This would allow the sponsor to recover the property where violations 

of the Title VI assurances by the leaseholder are committed. The FAA will require use of these clauses 

on a case-by-case basis considering the past civil rights record of the sponsor. Insertion of the reverter 

clauses in a grant agreement binds the sponsor to use the clauses in all-future deeds, leases, licenses, 

permits, and similar agreements in which the land was originally acquired with or improved under a 

financial assistance program of the FAA. (See Appendix 15.) 

b. Enforcement of Title VI. Regional Civil Rights Offices are responsible for conducting 

compliance reviews and investigating complaints of violations. Any complaint received alleging 

discrimination under Title VI should be referred to the Regional Civil Rights Office for processing. (See 

Draft Order 1400.11 for further guidance). FAA Airports Offices should cooperate fully in the agency’s 

attempt at informal resolution. If informal resolution is not successful, the FAA Airports Office may be 

told to suspend, terminate, or refuse to grant in accordance with Title 49 CFR, Part 21. 

1422. DISADVANTAGED BUSINESS ENTERPRISES (DBE) PROGRAM. 

All sponsors are required, as a condition of project approval, to assume certain DBE obligations as 

set forth in Title 49 CFR, Parts 23 and 26. Complaints alleging discrimination under the DBE program 

should be referred to the Regional Civil Rights offices. Further technical assistance with respect to the 

DBE contracting program is available on DOT’s website at: 

http://osdbuweb.dot.gov/business/dbe/index.html

a. Department of Transportation (DOT) regulation Title 49 CFR, Part 26 requires sponsors 

anticipating awarding more than $250,000 in prime contracts in Federal funds during a Federal fiscal 

year to implement a DBE program (Section 26.21(a)(3)). Prime contracts are those for construction, 

professional services, and equipment. Contracts solely for the purchase of land, however, are not 

“DOT-assisted contracts” under the definition of Section 26.5 and thus, are excluded. Although a land 

purchase is not a “DOT-assisted contract", all other contracts let under land acquisition projects, 

including those for real estate survey or appraisal, are covered by the definition. 

b. Multiple Contracts in a Single Fiscal Year. Include all covered contracts in the Federal fiscal 

year, regardless of the date of the grant agreement funding them. Under the AIP, a sponsor may award 

prime contracts during a fiscal year from grants executed in a previous year, the current year, and a 

future year. Also, certain project formulation costs incurred prior to grant agreement that may qualify for 

reimbursement must be included in the Federal fiscal year contracts. 

c. Sponsors that Own or Operate more than One Airport. For these sponsors obligations are 

determined on the basis of the total funds placed under contract at all locations in a Federal fiscal year. 

d. Multi-Year Grants. In a multi-year grant, the FAA agrees to commit the sponsor’s future year 

entitlement funds to the project. The initial grant offer contains a current year obligation as well as the 

total Federal share of the estimated project cost. The total estimated project cost rather than the current 

year obligation is used in determining obligations under Title 49 CFR, Part 26. 

e. State Block Grant Program. States participating in this program receive block grants for airport 

master planning and development projects at eligible nonprimary airports in the state. 

(1) The states are considered “primary recipients” (sponsors) as defined in Title 49 CFR, 

Part 26. If the State anticipates that the total value of all prime contract awards made during a Federal 

fiscal year by all nonprimary airports will exceed $250,000 in Federal funds, all such awards are covered 

by the DBE program requirement, regardless of the awards made available to individual sub recipients 

(sub sponsors). 

Page 235
June 28, 2005 Order 5100.38C

(2) Under the “lead agency concept,” a sponsor receiving funds from more than one DOT 

operating administration (OA) submits its revised program to only one OA. This OA, known as the “lead 

agency", coordinates its review with the other OA’s involved. The lead agency for state departments of 

transportation is generally the Federal Highway Administration (FHWA) since it generally provides more 

funds to these recipients (sponsors) than does FAA or the Federal Transit Administration (FTA). Thus, a 

state block sponsor will generally submit its DBE program to the responsible FHWA official. 

(3) However, the state should submit its goal(s) for projects funded by the block grant to the 

responsible FAA Regional Civil Rights Officer. In accordance with Section 26.45(e)(2), the state may 

submit a single overall goal for contracts funded by the grant (and any other FAA grants) during the 

forthcoming fiscal year or, subject to FAA approval; it may submit separate overall goals covering one or 

more projects. If a single goal is used, the supporting methodology must reflect any variations in the 

availability of DBE’s by project location. 

(4) If a nonprimary airport recipient under the state block grant program also receives funding 

directly from the FAA, the sponsor must submit a DBE program (or updated goal, if a program has 

previously been implemented) to FAA for review when it anticipates awarding more than $250,000 in 

prime contracts in Federal funds during a Federal fiscal year. The DBE program, including the overall 

goal, should address only the funds received directly from FAA, not the funds received from the state 

under the block grant program. 

f. State Departments of Transportation as Contracting Agents. In some cases, the state 

department of transportation serves as the contracting agent for individual airports. The airport, as 

sponsor, is responsible for satisfying all requirements levied pursuant to Title 49 CFR, Part 26. If the 

state is not the sponsor, the airport is responsible for ensuring that the state provides FAA with required 

programs and goals and implements other required steps. 

g. Scope of Requirements. Contracts awarded by a sponsor which are not funded by an AIP 

grant are not subject to the provisions of Title 49 CFR, Part 26.3(d). 

h. Contracts not Covered by DBE Program Requirements. A contract that is not subject to the 

DBE program requirements must comply with other provisions. These include title 49 CFR, Part 26.7(a) 

and certain provisions of Title 49 CFR, Part 26.13. 

i. Force Account. A DBE program is required only when the sponsor will award contracts from the 

covered grant. 

(1) A sponsor that will accomplish all work under a project with its own personnel or the 

personnel of another public agency, rather than by contracting, is not required to implement a DBE 

program. Procedures and requirements for accomplishing work by this means (known as “force 

account”) are outlined in Chapter 10. 

(2) A related situation occurs when DOT-assisted contracts will be let from a grant requiring a 

DBE program, but a portion of the project will be accomplished by force account. In this case, the 

overall goal is based only on the contracts to be awarded, while the funds expended in force account are 

excluded from the goal-setting process. 

1423. SECTION 47123 OF THE ACT. 

a. Section 47123. Section 47123 of the Act concerns nondiscrimination and affirmative action. 

The DBE requirements for AIP were implemented through the departmental regulation, Title 49 CFR, 

Part 26. The concession requirements are contained in Title 49 CFR, Part 23. Benefits and public 

service requirements are handled through the Title VI and 14 CFR Part 21 regulations. Additional 

guidance may be found in Draft Order 1400.11, issued by the FAA Civil Rights office. 

Page 236 
June 28, 2005 Order 5100.38C

b. Enforcement of Section 47123. Any complaint alleging discrimination in employment practices 

under Section 47123 is to be directed to the regional Civil Rights office. From there, the complaint will 

be transferred to the Departmental Office of Civil Rights and on to the Equal Employment Opportunity 

Commission (EEOC). If it involves a class complaint, the complaint will be investigated by DOT/FAA 

Civil Rights office, as appropriate. 

1424. EXECUTIVE ORDER (E.O.) 11246. 

a. Purpose of E.O. 11246. The purpose of E.O. 11246 is to promote and ensure equal opportunity 

for all persons, without regard to race, color, religion, sex or national origin, employed or seeking 

employment with contractors performing under Federally assisted construction contracts in excess of 

$10,000. This Order, which authorizes the Secretary of Labor to adopt such rules and regulations as 

necessary to achieve the purpose of the Executive Order, was amended by Executive Orders 11375 and 

12086. E.O. 11375 provides for equal opportunity on the basis of merit without discrimination because 

of sex. E.O. 12086 transfers the compliance functions to the Secretary of Labor. The rules and 

regulations adopted by DOL to implement this E.O. can be found in 41 CFR Part 60, Office of Federal 

Contract Compliance Programs, Equal Employment Opportunity, Department of Labor. 

b. Responsibility of FAA. The FAA is responsible for ensuring the necessary clauses required by 

41 CFR Part 60 are included in appropriate grants, appropriate bid specifications, and construction 

contracts in excess of $10,000. (See AC 150/5100-15, Section 3.) 

c. Enforcement of E.O. 11246. Enforcement of the requirements of E.O. 11246 is the 

responsibility of the Department of Labor (See 41 CFR Part 60-1, Subpart B, for General Enforcement, 

and 41 CFR Part 60-30 for Administrative Procedures Requirements). 

(1) Complaints. Complaints may be filed with the Office of Federal Contract Compliance 

Programs (OFCCP), 200 Constitution Ave., NW, Washington, D.C. 20210, or with any regional OFCCP 

office. (See 41 CFR 60-1.23 for contents of complaints.) 

(2) Sanctions/Penalties. A sponsor must carry out such sanctions and penalties for violation of 

the Equal Employment Opportunity clause as may be imposed on contractors and subcontractors by the 

Department of Labor based on Part II, Subpart D of the Executive Order. If the sponsor fails or refuses 

to comply, the FAA may terminate, or suspend in whole or in part, any contractual arrangement it may 

have with the sponsor. The FAA may also, refrain from extending any further assistance under any of its 

programs subject to the executive order until satisfactory assurance of future compliance has been 

received from the sponsor, or may refer the case to the Department of Justice for legal proceedings. 

d. Other Areas of Discrimination. 

e. Employee Selection. Guidelines on employee selection are contained in 41 CFR Part 60-3. 

f. Sex Discrimination. Complete details on nondiscrimination requirements are contained in 

41 CFR Part 60-20. 

g. Discrimination Because of Religion or National Origin. Guidelines are found in 41 CFR 

Part 60-50. 

1425. REHABILITATION ACT OF 1973 (P.L. 93.112). 

Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against any qualified individual 

with a disability solely by reason of his/her disability in any program or activity receiving Federal financial 

assistance or under any federally conducted program or activity. Sponsors subject to 49 CFR part 27 

must also comply with the applicable provisions of the ADA. Compliance with 49 CFR part 27 does not 

relieve them of that responsibility. 

Page 237
June 28, 2005 Order 5100.38C

a. DOT Regulation Title 49 CFR, Part 27. This regulation implements Section 504 and sets out 

detailed requirements for grantees under Federal financial assistance programs. The rule prohibits 

employment discrimination and requires sponsors to make reasonable accommodations to the 

disabilities of otherwise qualified employees. In addition, sponsors are required to make their existing 

and future facilities and programs accessible to disabled persons by providing specific equipment to 

accommodate them. Sponsors are not required to make structural changes to their facilities constructed 

prior to July 26, 1992, unless other methods are not effective. Other methods may include redesign of 

equipment, reassignment of services to accessible buildings, delivery of services at accessible facilities, 

or any other methods that result in accessibility. Sponsors must give priority to the method that provides 

the most integrated setting appropriate for persons with disabilities (title 28 CFR, Part 35.130(d)). In 

addition, public airports must make reasonable modifications to its policies, practices, or procedures 

when the modifications are necessary to avoid discrimination on the basis of disability, unless the airport 

can demonstrate that the modifications would fundamentally alter the nature of the service, program, or 

activity (title 28 CFR, Part 35.130(b)(7)). A sponsor is not required to take any action that will result in a 

fundamental alteration in the nature of a service, program, or activity or would result in undue financial 

and administrative burdens. Specific equipment that is not part of the real property (telephones, 

teletypewriters, etc.) is not eligible under present legislation. The design and construction of new 

buildings and the alterations and the necessary structural modifications to existing buildings must 

comply with accessibility standards under Title II and Section 504. 

b. Responsibility of FAA. Transition plans are the airport’s specific plans to make structural 

modifications to existing buildings where necessary to meet accessibility standards. All airports under 

Section 504 were required to submit a transition to the FAA for approval “where extensive structural 

changes” were necessary. All the remaining airport sponsors who had not previously submitted a plan 

to the FAA were to have done so by March 3, 1997, (Title 49 CFR, Part 27.71(g)). The regional civil 

rights staff is responsible for reviewing plans and specifications for compliance with Section 504 

accessibility. The regional Civil Rights staff is also responsible for conducting investigation of complaints 

filed under Section 504 and conducting compliance reviews. 

c. Enforcement of Title 49 CFR, Part 27. If informal resolution is not successful, the FAA Airports 

Office may be told to suspend, terminate, or refuse to grant in accordance with Title 49 CFR, Part 27. 

See 49 CFR 27.125 and Chapter 11, Section 6. 

1426. AIRCRAFT AND AIR CARRIER FACILITY ACCESSIBILITY. 

Although OST, rather than FAA, enforces the Air Carrier Access Act (ACAA), Section 504 does 

place some responsibility for access to small aircraft on the airport sponsor. If that airport sponsor’s 

personnel are involved in providing boarding assistance, the sponsor must ensure that they are trained 

to proficiency in the use of the boarding assistance equipment used at the airport and appropriate 

boarding assistance procedures that safeguard the safety and dignity of passengers (Title 49 CFR, 

Part 27.72(e)). 

At an airport having 10,000 or more annual enplanements, a sponsor, in cooperation with carriers 

serving the airport, must provide to individuals with disabilities boarding assistance using mechanical 

lifts, ramps, or other devices that do not require employees to lift or carry passengers up stairs (Title 49 

CFR, Part 27.72(b)). These sponsors must also negotiate in good faith with each carrier serving the 

airport concerning the acquisition and use of such boarding assistance devices. The Sponsor must sign 

a written agreement with each carrier serving the airport for certain aircraft that have a capacity from 19 

to 30 seats. The agreement must address respective responsibilities for providing boarding assistance 

to individuals with disabilities using mechanical lifts, ramps, or other devices that do not require 

employees to lift or carry passengers up stairs. The agreement must have been signed by September 2, 

1997 (Title 49 CFR, Part 27.72(c)). 

Page 238 
June 28, 2005 Order 5100.38C

1427. AMERICANS WITH DISABILITIES ACT (ADA) OF 1990. 

The ADA protects individuals from discrimination based on disability regardless of whether they are 

seeking employment or access to services from a public or private entity or from an agency that receives 

federal financial assistance. The ADA has five separate titles. This discussion briefly covers the FAA’s 

responsibilities to enforce Title II. A more detailed treatment of the ADA requirements with which 

sponsors must comply are contained in AC 150/5360-14, Access to Airports by Individuals with 

Disabilities. Also, AC 150/5220-21, Guide Specification for Devices used to Board Airline Passengers 

with Mobility Impairments, and Order 1400.9, Americans with Disabilities Act and Rehabilitation Act 

Operating Procedures, may provide additional guidance. 

Title II prohibits discrimination on the basis of disability by public entities and applies to all services, 

programs, or activities made available by a public entity, regardless of whether it receives federal 

financial assistance. The DOT and FAA have jurisdiction over public airports, including those, which do 

not receive federal grant funds. The DOT has delegated authority to the modal administrations to 

conduct compliance reviews and other enforcement activities. 

1428. - 1499. RESERVED. 

Page 239

June 28, 2005 Order 5100.38C

Appendices 

Page 241
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 242 
June 28, 2005 Order 5100.38C

Appendix 1. NO N -ALLOWABLE ITEMS (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 243
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 244 
June 28, 2005 Order 5100.38C

Appendix 2. RESERVED (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 245
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 246 
June 28, 2005 Order 5100.38C

Appendix 3. STANDARD FORM 424 (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 247
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 248 
June 28, 2005 Order 5100.38C

Appendix 4. PART II – P ROJECT APPROVAL 

I NFORMATION (FAA FORM 5100-100)

( D EVELOPMENT P ROJECTS ) (10 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 249
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 250 
June 28, 2005 Order 5100.38C

Appendix 5. P ROJECT APPROVAL I NFORMATION 

(FAA FORM 5100-101) (PLANNING P ROJECTS) (8 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 251
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 252 
June 28, 2005 Order 5100.38C

Appendix 6. GRANT AGREEMENT

(FAA FORM 5100-37) (3 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 253
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 254 
June 28, 2005 Order 5100.38C

Appendix 7. GRANT SPECIAL CONDITIONS (6 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 255
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 256 
June 28, 2005 Order 5100.38C

Appendix 8. P ROJECT EVALUATION REVIEW AND 

DEVELOPMENT ANALYSIS CHECKLIST

(FAA FORM 5100-109) (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 257
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 258 
June 28, 2005 Order 5100.38C

Appendix 9. CONSTRUCTION P ROGRESS AND 

I NSPECTION REPORT (FAA FORM 5370-1) (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 259
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 260 
June 28, 2005 Order 5100.38C

Appendix 10. AIP FINAL I NSPECTION REPORT

(FAA FORM 5100-17) (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 261
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 262 
June 28, 2005 Order 5100.38C

Appendix 11. TITLE VI REVERTER CLAUSES (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 263
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 264 
June 28, 2005 Order 5100.38C

Appendix 12. L ABOR STANDARDS I NTERVIEW AND 

S UMMARY OF L ABOR STANDARDS I NVESTIGATION 

REPORTS

(FORMS DOT F 4220.5 AND 4220.6) (2 P AGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 265
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 266 
June 28, 2005 Order 5100.38C

Appendix 13. EXAMPLES OF I NCREASING MAXIMUM 

OBLIGATION (4 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 267
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 268 
June 28, 2005 Order 5100.38C

Appendix 14. GRANT A MENDMENT

(FAA FORM 5100-38) (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 269
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 270 
June 28, 2005 Order 5100.38C

Appendix 15. I NFORMAL LETTER A MENDMENT (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 271
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 272 
June 28, 2005 Order 5100.38C

Appendix 16. E NTITLEMENT T RANSFER AGREEMENT 

(FAA FORM 5100-110) ( 1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 273
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 274 
June 28, 2005 Order 5100.38C

Appendix 17. MULTI-YEAR LETTER A MENDMENT 

(S UGGESTED TEXT ) (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 275
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 276 
June 28, 2005 Order 5100.38C

Appendix 18. FEDERAL CASH T RANSACTIONS REPORT 

(SF 272) (3 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 277
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 278 
June 28, 2005 Order 5100.38C

Appendix 19. REQUEST FOR ADVANCE OR 

REIMBURSEMENT (SF 270) (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 279
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 280 
June 28, 2005 Order 5100.38C

Appendix 20. OUTLAY REPORT AND REQUEST FOR 

REIMBURSEMENT FOR CONSTRUCTION P ROGRAMS

(SF 271) (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 281
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 282 
June 28, 2005 Order 5100.38C

Appendix 21. LETTER OF I NTENT AND A MENDMENT 

(3 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 283
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 284 
June 28, 2005 Order 5100.38C

Appendix 22. AGREEMENT ON STATE SPONSORSHIP 

AND AIRPORT SPONSOR OBLIGATIONS (2 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 285
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 286 
June 28, 2005 Order 5100.38C

Appendix 23. ADJUSTMENTS OF FEDERAL S HARES AT 

CERTAIN AIRPORTS (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 287
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 288 
June 28, 2005 Order 5100.38C

Appendix 24. RESERVED (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 289
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 290 
June 28, 2005 Order 5100.38C

Appendix 25. STANDARD SPONSOR CERTIFICATION 

FORMS (12 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 291
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 292 
June 28, 2005 Order 5100.38C

Appendix 26. BLOCK GRANT APPLICATION (1 PAGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 293
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 294 
June 28, 2005 Order 5100.38C

Appendix 27. BLOCK GRANT AGREEMENT (4 PAGES )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 295
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 296 
June 28, 2005 Order 5100.38C

Appendix 28. AIP GRANT STATUS REPORT

(FAA F ORM 5100-107 - E LECTRONIC V ERSION ) (1 P AGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 297
June 28, 2005 Order 5100.38C

This page left intentionally blank.

Page 298 
June 28, 2005 Order 5100.38C

Appendix 29. FINANCE TEMPLATE FOR LOI 

APPLICANTS (1 P AGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files. 

Page 299
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 300 
June 28, 2005 Order 5100.38C

Appendix 30. OBLIGATIONS IN BLOCK GRANT 

S USPENSION OR TERMINATION (1 P AGE )

See 5100-38C Appendices Document. 

Appendices were separated from this document to limit the size of the files.

Page 301
June 28, 2005 Order 5100.38C

This page left intentionally blank. 

Page 302