Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

Project Construction and Contract Administration

Project Management

Supervising Agency Requirements (Responsible Charge)

There is a saying, “You don’t get what you 

‘ex’-pect, but what you ‘in’-spect,’” which is 

why the Federal Highway Administration, or 

FHWA, places importance on construction 

project supervision. Why is this important? 

Because agencies must satisfy certain 

project supervision requirements in order to 

receive Federal-aid highway construction 

funds. 

These requirements follow good business 

practice by having the agencies close to the 

work safeguard the public’s interests as 

they supervise completion of a project. 

Simply stated, an agency must provide 

necessary supervision and inspection to 

ensure contract satisfaction and that the 

public gets what it is paying for. 

Federal regulations stipulate that the State 

department of transportation, or DOT, is the 

first-line supervising agency. The State DOT 

must provide an “engineer in responsible 

charge” to oversee construction project 

administration.

In some cases, the State DOT will arrange 

for a local public agency, or LPA, having 

jurisdiction over a highway, to complete the 

construction work. This means assigning 

the LPA some supervising agency 

responsibilities. The LPA may use a 

contractor or its own staff to complete the 

work. Most often, contractors are hired and,

depending on the situation in your State, an 

LPA may contract for the construction itself 

or through the State DOT. 

To enter into such an arrangement, an LPA 

must meet certain conditions and get State 

DOT and FHWA approval in advance. The 

State DOT maintains overall project 

responsibility, and oversees the LPA and 

any consultant staff based on some 

consideration of experience with Federal-aid 

projects. 

Each State 

DOT 

should 

clarify 

project 

supervision responsibilities through 

agreements with the LPA. 

So what are the conditions for an LPA to 

assist as a supervising agency? 

• You must include all Federal 

requirements in the contract and ensure 

compliance.

Necessary supervision and inspection must be provided to 

ensure contract satisfaction in order to receive Federal-aid funds
Federal-aid Essentials for Local Public Agencies

• You must be adequately staffed and 

equipped to complete the work to the 

satisfaction of the contract. In other 

words, you must perform project 

administration, including inspecting the 

construction. Consultant engineers and 

inspectors may be hired to assist with 

this, but cannot make critical project 

decisions that are best made by the 

agency on the public’s behalf. 

• You must provide an “employee in 

responsible charge” of each project, 

including projects that employ 

consultants. This must be a full-time 

employee of the LPA, although he or 

she does not have to be an engineer nor 

dedicated full time to a project.

Let’s look in more detail at the LPA 

employee-inresponsible-charge

requirement. This 

person supervises all 

project administration 

activities and 

coordinates with the 

State DOT based on 

the assignment of responsibilities. The 

employee in responsible charge typically 

performs the following activities: 

• Maintains familiarity with day-to-day 

project operations, including safety 

issues

• Approves contract changes based on 

the arrangement with the State DOT

• Performs field reviews with a frequency 

appropriate to the project size and 

complexity, including a final inspection 

to compare against the plans and 

specifications

• Reviews project financials to ensure that 

safeguards are in place to minimize 

fraud, waste, and abuse

• Directs staff to carry out project 

administration and ensures it is done 

satisfactorily

Next, let’s consider what it means to be 

adequately staffed to perform project 

administration according to the contract. 

The contract includes the plans and 

specifications for building the project, as 

well as provisions for controlling the 

project’s cost, schedule, and quality; as well 

as for complying with other laws. An LPA, 

as an assisting supervising agency, 

provides necessary personnel to make sure 

the project is built per the contract. The 

LPA’s employee in responsible charge will 

oversee project administration by these 

personnel, whether they are from the LPA 

or a consultant. 

For example, when we talk about managing 

project costs, these activities include 

approving contractor payments and contract 

modifications or change orders. Managing 

the schedule includes overseeing a project’s 

completion within the contract time and 

proper handling of any time extensions. 

Managing the project’s quality includes 

supervising inspection and other quality 

assurance activities, including materials 

testing. Demonstrating contract compliance 

means maintaining good documentation. 

This includes keeping records, such as 

measured field quantities for payment; 

certifications of material quality; field diaries 

as a general project record; environmental 

permits and commitments; and other 
Federal-aid Essentials for Local Public Agencies

documentation to show observance with 

other Federal, State, and local requirements 

in the contract. 

Let’s use an example to help clarify. Say we 

have an LPA project, called Deficient Bridge 

Replacement in Hometown, USA, with a 

small bridge crossing Founders Creek and 

about a mile of asphalt pavement 

resurfacing on either side. Based on an 

agreement with FHWA, the DOT evaluated 

Hometown and approved it to act as an 

assisting supervising agency. The DOT 

assigned an engineer in responsible charge, 

Sue, to work with Hometown’s employee in 

responsible charge, Bill, who is not an 

engineer, to arrange supervision and 

inspection for the project. Bill is the county 

manager, so his involvement with the 

project is part time, enough to maintain 

responsibility for important decisions and 

the outcome. Using the DOT’s approved 

consultant selection process, Hometown 

hired a qualified consultant, Construction 

Management Inc. (CMI), to do the 

construction engineering and inspection 

under Bill’s supervision. Sue and Bill 

specified necessary staffing for CMI to 

adequately supervise and inspect the

project, which includes: 

• A project engineer to act as the owner’s 

field representative, supervising other 

field inspection staff and ensuring the 

contract obligations are met and all 

documentation is completed in a timely 

manner. The project engineer will confer 

with Sue and Bill before making 

decisions reserved for the agency, such 

as progress payments, change orders,

and time extensions. 

• Qualified inspectors to check the 

contractors work against the plans and 

specifications, including earthwork, 

drainage, paving, bridge and work zone 

traffic control. They will keep field diaries 

and measure the work completed for 

progress payments. CMI also 

coordinates with certified State DOT lab 

technicians testing the project materials 

before paying the contractor. In this 

case, the State DOT is providing the 

testers and lab for the project, but this 

can also be contracted. 

Bill is in regular contact with CMI and visits 

the project weekly or when critical activities 

occur. He coordinates important decisions 

with Sue. Sue also comes out about once a 

month, especially when there are more 

significant change orders to review. 

Of course, this is only a simple example and 

your project may differ based on its 

particular needs for supervision. 

Let’s review the core requirements for an 

LPA to assist as a supervising agency: 

• You must include all Federal 

requirements in the contract and ensure 

compliance. 

• You must provide an employee in 

responsible charge to oversee project 

administration and coordinate with the 

State DOT on important decisions. Hired 

consultants cannot act in this role. You 

must provide adequate staff to ensure 

the project is built according to the 

contract. 

• You can use consultant personnel to 

assist with this, such as field inspectors, 

office staff, 

testers, and 

engineering 

analysis.

You should always 

check with your State DOT or FHWA 

division office for specific policies and 

procedures in your State.
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number

DTFH61-11-D-00024 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This companion resource 

is the script content for 

the video production of 

the same name. 

Additional Resources

• Federal regulations addressing construction, including Section 105 on 

supervising agency requirements

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr&sid=9278b79aa6b692bc0e795fdc362b9eaf&tpl=/ecfrbrowse/Title23/

23cfr635_main_02.tpl

• FHWA guidance covering contract-related issues common to supervising a 

construction project

http://www.fhwa.dot.gov/programadmin/contracts/coretoc.cfm

• 2011 FHWA memo defining "responsible charge" and examples of duties related 

to supervising agencies 

http://www.fhwa.dot.gov/federalaid/110804.cfm

• Law requiring agency to be "adequately staffed and suitably organized" to 

deliver Federal-aid projects

http://www.gpo.gov/fdsys/pkg/USCODE-2011-title23/pdf/USCODE-2011-title23-

chap3-sec302.pdf