Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

Most local public agencies, or LPAs, confidently 

follow State and local regulations when developing 

transportation solutions. On Federal-aid projects, 

they must also follow Federal regulations, which 

may generate questions. 

To identify what your agency must do when 

working on a Federal-aid project, your State

department of transportation, or State DOT, is 

required to prepare a subaward agreement. 

Typically, a subaward agreement defines a 

project's funding sources, time frame, roles, and 

responsibilities of the LPA and State DOT, and

approval procedures. 

The subaward agreement also references policy 

and procedures manuals. 

Let's see how two LPAs rely on the 

subaward agreement and various 

policy and procedure manuals to 

complete project milestones, 

including environmental 

requirements; plans, specifications 

and estimate, or PS&E; and project 

close out. 

In our first example, the town of Desert View will 

use Federal funds to upgrade an existing “T” 

intersection. Desert View and the State DOT enter 

into a subaward agreement that references the 

LPA manual and supporting environmental and 

design manuals.

At the project’s onset, the State DOT 

representative meets the city engineer and other 

team members at the project site. 

Federal-aid Program Overview

Project Delivery

Key Actions in the Cradle to Grave Process

Agencies rely on subaward agreements and various policy 

manuals to meet important Federal-aid requirements
Federal-aid Essentials for Local Public Agencies

During the introductions, the State DOT 

representative discovers that the city engineer is a 

consultant, not a city employee, and points out 

that the LPA manual requires a public employee 

be “in responsible charge” of the project. The 

group agrees that the city manager has the 

qualifications to be in responsible charge. 

As they walk the site, the group finds a dry creek 

bed in the planned path of construction. They 

discuss some general approaches outlined in the 

environmental manual for addressing any 

environmental concerns. 

The State DOT representative also reviews the 

design manual, including contract provisions 

required for Federal-aid projects, as well as the 

policy related to sidewalk ramps that comply with 

the Americans with Disabilities Act, known as 

ADA.

At the end of the meeting, the State DOT 

representative stresses that at each milestone, he 

will verify that the project is progressing in 

accordance with the subaward agreement and the 

referenced manuals.

As the project progresses and as required by the 

environmental manual, the Desert View team 

develops the intersection design and a culvert that 

minimizes impact to the creek bed. In accordance 

with the subaward agreement, various agencies 

review the plans, and the city manager submits a 

final recommendation to the State DOT. Federal 

Highway Administration, or FHWA, approval 

concludes the environmental phase.

The team follows the design manual to develop a 

PS&E package. The plans for the intersection detail 

a small concrete box culvert for the dry creek 

crossing and include ADA-compliant sidewalk 

ramps.

In addition to the material quality and traffic control 

specifications needed for this intersection 

improvement project, Desert View inserts the 

contract provisions required for Federal-aid 

projects, such as form FHWA-1273 and the Buy 

America specification.

The State DOT representative verifies that the 

PS&E package complies with the subaward 

agreement and concludes the milestone by 

authorizing the team to advertise for the 

construction contract. 

In our second example, Sea Side 

County will add shoulders to three 

miles of a county road and upgrade 

drainage utilities.

This project’s subaward agreement identifies 

Federal funds for 80 percent of the estimated 

construction costs, but none for the acquisition of 

additional right-of-way. The agreement also 

references the local public agency program manual 

and supporting right-of-way, design and 

construction manuals.

The Sea Side County team and the State DOT 

representative meet to discuss the project’s 

management and spend most of the time 

determining how the various manuals will guide the 

project.
Federal-aid Essentials for Local Public Agencies

For example, according to the right-of-way 

manual, Sea Side County must follow Federal 

right-of-way procedures even though the county 

will not use Federal funds to acquire property. 

According to the design manual, Sea Side County 

must insert additional Federal provisions into the 

specifications, such as Buy America and Form 

FHWA-1273.

And according to the construction manual, Sea 

Side County must comply with the Buy America 

policy by verifying that the cast iron manhole 

covers are manufactured in the United States. 

Additionally, the county must comply with the 

Davis-Bacon Act by verifying that project workers 

receive appropriate wages.

Before the meeting is over, the State DOT 

representative reviews the subaward agreement, 

including the approval processes at the PS&E and 

project closeout milestones.

The project advances according to plan, and the 

Sea Side County project manager submits the 

PS&E package to the State DOT representative 

for approval as agreed. 

The State DOT representative verifies that the 

PS&E package includes the required Federal 

provisions and that Sea Side County followed the 

right-of-way manual when acquiring the right-ofway. With the milestone complete, he authorizes 

Sea Side County to advertise the project for 

construction.

During construction, the Sea Side County inspector 

follows the procedures in the construction manual 

and verifies that the contractor’s work is acceptable 

and that Federal regulations have been followed. 

For example, the inspector:

• Examines the Buy America certifications 

prior to paying invoices for the manhole 

covers

• Reviews the posting of minimum wages on 

the project poster boards and interviews 

workers about wages received

Following the procedures in the subaward 

agreement, Sea Side County incorporates the 

reports, certifications, and logs into a final 

inspection report. 

The State DOT representative then prepares the 

final acceptance report that concludes the 

milestone and allows Sea Side County to submit a 

final invoice for reimbursement.

As we've just seen, agencies 

encounter a variety of regulations on 

Federal-aid projects and no two 

projects are alike. 

As you prepare for your project, carefully review the 

subaward agreement and use the manuals it 

references. If you have any questions, raise them 

during the kick-off and milestone meetings, or 

contact your State DOT as needed. The staff there 

can answer your questions and direct you to 

additional resources.
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-00025 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. 

Web Resources

• Link to FHWA's Program Policy and Guidance Center for laws, policies, and 

guidance about Federal-aid 

http://www.fhwa.dot.gov/pgc/

• FHWA guidance on contract provisions, administrative procedures, and 

policies related to Federal-aid design and construction contracts

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