FTA Technical Assistance and Project Management Oversight for Small Transit Construction Projects


Printer Friendly Number 2006-17
08-14-06

REGION 10 BULLETIN NO:  06-17

SUBJECT:   FTA Technical Assistance and Project Management Oversight for Small Transit Construction Projects

PROGRAM AREA: Program Management

DATE: August 14, 2006

The purpose of this bulletin is to provide general information on Federal Transit Administration (FTA) grant management, technical assistance, and project management oversight for grantees with small to mid-size construction projects. Projects are placed in this category based on a project budget of less than $100 million. The scope of this bulletin does not include FTA Small Starts projects.  In addition, this bulletin provides electronic links to guidance found on our web site for the topics discussed. The referenced guidance will amplify details of topics shown in this bulletin. The four major topics under which grant management, technical assistance and project management oversight will be described are as follows:

1. FTA Grant Requirements
2. FTA Project Management and Technical Guidance
3. The FTA TEAM Grant Process
4. FTA Monitoring/Oversight

For written technical guidance we would like to direct you to the FTA website.  Once the website has opened you will see a number of useful links, but for the purpose of this bulletin, please click on the tab for “Publications, Circulars/Guidance” shown on the left side of the window.  In the Publications, Circulars/Guidance window please click on the link “Circulars/Guidance”.  This bulletin will discuss the relevance of each referenced circular under the categories shown above. 

1. FTA Grant Requirements

The basic grant management requirements for state and local governments are contained in the Department of Transportation (U.S. DOT) regulations, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18, which is referred to as the "common rule."  The provisions of these rules apply except where inconsistent with Federal statutes or authorizing legislation.  The following circular/link provides the FTA specific guidance for general management compliance with common grant rules:

• C 5010.1C Grant Management Guidelines (please see the table of contents link in the lower right hand corner)

In addition, the following circular/link sets forth the requirements a grantee must adhere to in the solicitation, award, and administration of its third party contracts:

• C 4220.1E Third Party Contracting Requirements

Requirements found in the circulars are based on the common grant rules as well as Federal statutes, Executive Orders and their implementing regulations, and FTA policy.

2. FTA Project Management and Technical Guidance

Also in the Publications, Circulars/Guidance window please click on the link for “Reports”. The following publications shown in this window are related to the topic of Project Management and Technical Guidance:

• Best Practices Procurement Manual
• PMO Lessons Learned Reference in Guidelines
• Project & Construction-Management Guidelines (2003 Update)
• Quality Assurance & Quality Control Guidelines
• Guidance for Transit Financial Plans (June 2000)

In addition, we would like to direct your attention to the web site for the National Transit Institute (NTI) which is useful for related training.

Please note the following project management recommendations/requirements:

• Environmental Process

The National Environmental Policy Act (NEPA) (42 U.S.C. 4321) and the FTA's implementing procedures (23 CFR Part 771) require that the environmental effects of proposed transit projects be documented and that environmental protection be considered before a decision can be made to proceed with the project as well the acquisition of real property for the planned project.  Measures to avoid or mitigate environmental harm are to be described in the environmental document prepared for the project where adverse environmental effects are likely to result.  These measures are developed jointly by FTA and the grantee to respond to State and local as well as Federal environmental requirements.  Mitigation measures in the final environmental document will be expressed as commitments on the part of the grantee, which will be implemented for the project receiving Federal funding.  When a grant is made, the mitigation measures are incorporated by reference in the grant agreement for construction and become legally binding terms and conditions of the grant.  These terms and conditions cannot be withdrawn or substantively changed without FTA's approval.

Progress in implementing adopted mitigation measures is monitored by the FTA regional staff through review of the Milestone Status Report submitted to FTA in the Transportation Electronic Award and Management (TEAM-Web) system.  The grantee has the responsibility to apprise FTA at the earliest possible time of any problems in implementing the adopted measures and any need for changes.  Additional information about FTA's environmental protection process is available through the FTA regional office.

• Project Management

FTA Circular 5010.1C, chapter 1, Project Administration and Management provides an outline of grantee project management responsibilities.

Grantees and sub-grantees are responsible for establishing and maintaining adequate internal control over all their functions that affect implementation of a grant.  The grantee is responsible for administration and management of the grant in compliance with the grant agreement and applicable FTA circulars and regulations.  The grantee is also responsible for funds that "pass through" to a sub recipient. FTA monitors grants to confirm that grantees establish and follow procedures that are reasonable and comply with FTA requirements.

• Project Cost Estimate

The project cost estimate begins with the development of an "order of magnitude" project estimate.  The project cost estimate is a key item for the beginning of the budget and project management process.  Design consultants or in-house staff prepares "order of magnitude" estimates as well as all subsequent iterations of the project cost estimate that are based on further design. The project cost estimate is a calculation of all costs of the project necessary to complete the full scope of work. In developing cost estimate and the budget for a project, care should be taken to properly identify and compute the various cost elements of the project. The cost estimate needs to also reflect cost/price escalation, contingencies, and schedule dates pertaining to the individual cost elements or contract units.  Cost escalation may be based either on year of expenditure or mid-point of construction for projects with a protracted timeframe.  Escalation may be calculated by applying an acceptable assumed fixed annual percentage to probable construction costs. Projects that encompass many construction contracts should add a program contingency over and above design and construction contingencies. The program contingency addresses interfaces between and among construction contracts, in addition to the contingency for differing site conditions, and other project risk uncertainties.

• Land Acquisition

Acquisition of real property and relocation activities necessary to secure property for a project in which there will be Federal funds must be carried out in accordance with the requirements in the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (the Uniform Act), as amended. The Uniform Act is implemented by regulation 49 CFR part 24.

The objective of the Uniform Act is that owners of real property to be acquired for federally assisted projects be treated fairly and consistently; that persons displaced be treated fairly, consistently and equitably; and that acquiring agencies implement the regulations in a manner that is efficient and cost effective.  The regulations implementing the Uniform Act are very specific in naming the means to achieve those legislated objectives.
Additional guidance for property acquisition is provided in FTA Circular 5010.1C, chapter II, paragraph 2.

Please note that the acquisition of any property valued at more than $250,000 requires previous FTA approval.  Please submit a copy of both the appraisal and the review appraisal for the parcel(s) to be acquired to your grant representative in Region 10 and to the following:

Ronald Fannin-Real Estate Specialist
Federal Transit Administration
400-7th Street, S.W., Room 9305D
Washington, DC 20590
ronald.fannin@dot.gov

Please note that far market appraisals and review appraisals are to be carried out following the environmental determination.

• Preliminary Engineering

Preliminary Engineering (PE) takes the project from a conceptual project planning phase to a level of design that defines all significant elements and allows a more accurate estimate of project costs and impacts. The resultant technical and financial information will be a basis for subsequent funding and implementation decisions. A major objective of PE is to investigate the merits of all sound configurations and designs. These investigations require in-depth analysis of all components, their interrelationships, and their costs. In addition, environmental compliance requirements are completed during this phase of design. Among the outcomes of the PE process will be an environmental determination, selection of a preferred alternative, a defined project scope, cost estimate and schedule.

The PE portion of the total design effort, when properly conducted, will permit the project to move rapidly through Final Design with a minimum of design changes, disruptions, or delays.  Value engineering (VE) should be accomplished at or prior to the end of PE (see value engineering below).  Please note that once an environmental determination has been completed, design changes of significant magnitude may result in the need for an environmental re-evaluation.  This applies till completion of construction.

• Final Design

The purpose of the Final Design (FD) Phase is to prepare final contract drawings and technical specifications to obtain construction contract bids.  This includes clear statements of testing requirements and acceptance criteria for the safety and functionality of all subsystems.  Typically, this phase also includes the preparation of the engineer's estimate and schedule, analysis of the construction bids, award or recommendation for construction award, and recommendations for the scope of real estate acquisition.

FD is the last phase of project development prior to construction.  FTA policy is that FD cannot begin prior to completion of National Environmental Policy Act (NEPA) requirements as denoted by an FTA Record of Decision (ROD), Finding of No Significant Impact (FONSI), or a Categorical Exclusion (CE) determination.

• Peer Reviews

We encourage grantees to confer with other transit operations and maintenance experts in order to benefit from their experience.  The purpose of the Peer Review is to improve the performance of the process or product being reviewed.  The Peer Review is a separate step in the design process that can add an external perspective to enhance the quality of design, construction, and operations.  Basically, the question is "can we do this better?  The Peer Review is a grant eligible expense that is included in the final design costs and should therefore be conducted at the beginning of final design.  Peer Reviews are an appropriate vehicle for specialized independent input to the grantee on issues that present unique problems or when an outside critique is desired.  Although the grantee is encouraged to conduct Peer Reviews with all capital projects, in some instances we may require it.  For example, we require the Peer Review process for projects funded under the Section 5309 discretionary program, and strongly recommends it for bus facilities funded under other programs.  This item needs to be coordinated with the FTA regional engineer.

• Value Engineering 

We encourage the application of value engineering (VE) techniques to all construction projects including bus maintenance and storage facilities whose costs are estimated to exceed $2 million.  The objective of a VE study/workshop is to evaluate satisfying the required function of the project at the lowest total cost over the life of the facility.  VE studies should be performed early in the design process before major decisions have been finalized or incorporated, and should include civil, systems, and architectural elements.  This should be accomplished at or prior to the end of PE and followed by a report to the FTA regional office summarizing the VE process and the results of the study.  Depending on scope and complexity of the project, it may be advantageous to conduct two VE workshops.  The first VE study should be conducted at round the 10 percent level with the second VE study conducted at the around the 30 percent level of completion.  Otherwise, we recommend one VE study at around the 30 percent level of completion.  VE is a grant eligible expense that is usually included in final design costs.  References for this recommendation and associated guidelines are contained in FTA Circular 5010.1C, chapter I, paragraph 9, item g and the Project and Construction Management Guidelines, chapter 4.6.6.

• Security/Crime Prevention

We strongly encourage the use of design practices to improve security of facilities.  Much of this can be achieved through naturally controlling access to a site, and by ensuring that entrances are visible, clearly defined, well lit, and overlooked by windows where applicable.  People using designated spaces offer natural surveillance, which increases the likelihood that criminal activity will be observed.  Criminals are more likely to commit their crimes in an environment where they are not observed.

A useful resource for crime prevention considerations in design is the International Crime Prevention through Environmental Design Association (ICA).  ICA is committed to creating safer environments and improving the quality of life through the use of Crime prevention through environmental design (CPTED) principles and strategies.  CPTED is based on the idea that property crime can be prevented through manipulating site design and its relationship to the surrounding area.

• Construction

The Construction Phase includes the physical building of all structures of the transit improvement, the fabrication or manufacturing of the components and subsystems which will be installed with the fixed facilities, and the testing of all subsystems.  Construction bid packages are prepared during final design and are bid upon by contractors for various aspects of work.  Construction management is performed by the general contractor or a separate construction management consultant.  The architect or engineer of record may also be retained as an owner’s representative to perform specialized inspections on behalf of the transit agency.  The grantee is responsible for oversight of the work in progress through holding the contractors accountable to the terms of their contracts, and by monitoring payments, schedules, records, subsystem inspection and testing, quality assurance, documentation of construction through as-built drawings, Quality Control inspection records, and deficiency lists.

Prior to the award of each construction contract, all real estate necessary for the contract work should be acquired, including land that may be leased for staging areas, and access and work rights-of-ways.  During the Construction Phase, revisions of the design or even redesign may be necessary to accommodate unanticipated site conditions, accepted value engineering proposals, final manufacturer's drawings, errors, and other risk factors.  If disputes or law suites arise as a result of these or other design/construction issues, please advise the FTA regional office in the milestones/progress reports or prior through separate correspondence where applicable.

3. The FTA TEAM Grant Process

FTA implemented its TEAM-Web system in September 2000.  TEAM-Web is the means through which grantees submit project grant applications to FTA.  Please see the FTA TEAM WEB Training Dear Colleague Letter Number 2001-06 for instructions.  Also included in the bulletin is an electronic link to the front page of TEAM-Web.  At the bottom of the page you will see the “Links” button that will take you to the TEAM-Web User’s Guide that is also referred to above.

The grant application process is also one of the means through which there is on-going active monitoring and technical assistance from the FTA Community Planner and Regional Engineer.  During all phases of project development the FTA Community Planner is the grantees primary point of contact with the FTA Regional Engineer acting as a technical assistant to both the FTA Community Planner and the grantee.  The role of the FTA Regional Engineer as a technical resource is to help assure project success from the standpoint of project scope, schedule, and budget.

4. FTA Monitoring/Oversight

FTA technical monitoring and oversight for small construction projects will begin with the grant application process.  The FTA Regional Engineer contributes to review and comments in the TEAM file along with the Community Planner for the project description, budget, and milestone schedule.  Once the project grant has been approved, the Regional Engineer will monitor the project progress in the TEAM file through the Milestone Status Report and the Financial Status Report.  For instructions for the content and form for these reports please see the following web link to the User’s Guide referred to above and click on chapter 8 for project management:

• The TEAM-Web User’s Guide

General the frequency for submittal of these reports in TEAM is annual for grantees in urbanized areas with populations under 200,000, and quarterly for grantees in urbanized areas with populations over 200,000.  Submittal frequency for grantees with small construction projects will be quarterly.

The reports need to include the following:

o Milestone Schedule
o Financial Status Report
o A means of tracking the progress/status of items for mitigation included in the environmental determination.
o A descriptive list of all outstanding claims exceeding $100,000 and a descriptive list of all claims settled during the reporting period.
o The grantee must notify FTA of any prospective or current litigation or any major disputed claim in excess of $100,000 relating to any third party contract.

• TEAM Grant Closeout

As indicated in FTA Circular 5010.1C, chapter 1, “Close-out is the process by which FTA determines that all responsibilities and work by the grantee are completed and the associated financial records are closed.  FTA grant close-out begins immediately after all work activities under the grant are completed.  All close-out documentation must be submitted within the following 90 days.”  Please see additional details in this circular in chapter I, paragraph 15.

If you have questions please contact Michael J. Williams at (206) 220-7965 or (michael.williams@dot.gov).

Sincerely,

 

Richard Krochalis
Regional Administrator