Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

Properly functioning and efficient highway 

infrastructure is critical to the American economy 

and way of life. Highway construction projects –

when administered and delivered well – add 

significant value to our infrastructure and 

ultimately to our communities. Because these 

projects often involve large amounts of money, 

there is greater concern about the possible risk of 

waste, fraud and abuse. Diligent project 

administration, however, is used as the primary 

process to reduce these risks and guarantee that 

the benefits will be realized. A local public agency, 

or LPA, that receives Federal-aid funding is 

usually responsible for project administration and, 

therefore, needs to ensure that Federal 

requirements are met and the public’s interests 

are protected.

With this in mind, let’s go over the big picture of 

the project administration requirements that help 

ensure we build successful projects according to 

applicable laws and good business practices.

LPAs perform essential project administration that 

can be categorized into three topic areas: project 

management, contract administration, and safety 

and operations. Let’s now briefly review some of the 

responsibilities in each of the three areas, using a 

sample scenario of an LPA, Hometown, USA, 

assigned to perform project administration on a 

Federal-aid project. Then, we will take a look at an 

area of project administration that often poses 

problems: lack of documentation. 

Let’s start with the first of the three areas, project 

management, which has to do with how an LPA 

oversees construction, including all the activities for 

completing a project within its approved scope, 

schedule, budget and quality requirements. 

Examples of Federal requirements related to project 

management include supervising the construction, 

construction quality assurance, and project 

closeout.

Project Construction and Contract Administration

Introduction to Project Construction and 

Contract Administration

Agencies must ensure that Federal requirements and the 

public’s interests are met through sound project administration
Federal-aid Essentials for Local Public Agencies

In our example, Hometown, USA, decides to hire a 

construction engineering consultant, Quality 

Projects, Inc., or QPI, for management of 

operations. Hometown’s city engineer, Joan, will 

act as the LPA’s “employee in responsible 

charge,” supervising QPI and coordinating with the 

State department of transportation, or State DOT, 

on important decisions, such as change orders 

involving extra work or time extensions. We will 

refer to this arrangement between Hometown and 

the State DOT as the project administration, or 

PA, team.

QPI manages daily project operations to help 

Hometown stay within the contracted scope and 

schedule. The PA team tracks project 

expenditures and change orders to keep costs 

within the Federal- and State-authorized total 

budget. The PA team inspects the work and tests 

materials against the contract quality assurance 

specifications to ensure the project will perform as 

required once in service. Finally, the PA team 

closes out the project and documents that all 

contract requirements are met.

Now let’s talk about the second topic area, 

contract administration, which has to do with an 

LPA ensuring satisfaction of all project contract 

obligations. In this section, we’ll highlight some of 

the more common obligations introduced with 

Federal-aid projects. First is Form FHWA-1273, 

which is a collection of several required contract 

provisions, including those related to 

nondiscrimination, payroll issues, jobsite posters, 

and worker safety. 

Some additional Federal contract obligations 

include those related to contract duration and 

schedule management, changed conditions and 

change orders, Buy America provisions, and 

Disadvantaged Business Enterprises, or DBEs. 

So, in our scenario, the PA team’s contract 

administration responsibilities include contract 

oversight and field reviews to confirm satisfaction of 

all contract obligations. For example, QPI follows 

Federal requirements in preparing 

recommendations to Joan for progress payments 

made to the contractor. The PA team makes sure 

to justify and document all costs, and confirm that 

items to be paid have been built according to the 

contract and have passed necessary inspections. 

QPI coordinates with Joan and the State DOT to 

approve contract change requests. The PA team 

checks statements and payrolls to verify the 

contractor is paying prevailing wages for all 

laborers and mechanics according to Federal 

Davis-Bacon Act provisions. The PA team confirms 

the contractor is using iron and steel products 

made in the United States as required by Buy 

America provisions. The team also checks that the 

contractor is meeting DBE goals in the contract.

The third topic area - safety and operations – has 

to do with how the LPA helps ensure a safe job site 

and optimal traffic flow during construction. Federal 

requirements related to safety and operations 

include work-zone traffic control reviews, worker 

safety and transportation management plans. 

In our Hometown scenario, Joan and QPI perform 

field reviews to verify that work-zone traffic control 

is placed correctly to optimize safety and traffic 

flow. Because this project has a significant impact 
Federal-aid Essentials for Local Public Agencies

on traffic in the community, the PA team 

implements additional strategies in the 

transportation management plan for better traffic 

flow around the project and for an enhanced public 

information campaign. The PA team monitors 

worker safety requirements, timely notifying the 

contractor of concerns, and meeting with the 

contractor to regularly discuss safety issues.

One challenge the Federal Highway 

Administration has found common to all three of 

these areas is a lack of appropriate documentation 

to verify actions taken. This could occur on 

numerous actions, including change orders and 

claims; utility agreements and reimbursements; 

construction pay quantities and progress 

payments; general project reporting and tracking; 

and quality assurance procedures. The LPA must 

work with the State DOT to ensure that its 

documentation policies and practices comply with 

applicable standards. 

Successful Federal-aid construction project 

administration starts with a solid LPA awareness of 

the requirements. This enables LPAs to provide 

appropriate supervision and field reviews to ensure 

that the requirements are accomplished. This has 

been only a brief introduction to some of the 

Federal project administration requirements.

Please refer to other resources, 

including your State DOT to be sure 

you have a complete understanding.
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-00023 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

• Contract Administration Core Curriculum provides overview of Federalaid administration requirements

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

• FHWA’s definition of "responsible charge" and examples of duties 

related to supervising agencies

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

• FHWA regulation covering temporary traffic control devices

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr;sid=ac50c6fdef0382eaaf0e2aeffd84f2fc;rgn=div6;view=text

;node=23%3A1.0.1.7.21.10;idno=23;cc=ecfr

• FHWA regulations for work zone safety and mobility

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr&sid=290fc6120445390597f08cbae47b02d8&rgn=div6&vie

w=text&node=23:1.0.1.7.21.9&idno=23

• Regulation for construction quality assurance 

http://www.gpo.gov/fdsys/pkg/CFR-2011-title23-vol1/pdf/CFR-2011-

title23-vol1-part637.pdf

• FHWA regulations addressing construction-related requirements

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

se/Title23/23cfr635_main_02.tpl

• Regulations, policies, best practices and updates related to work zone 

safety and mobility

http://www.ops.fhwa.dot.gov/wz/