Local Empowerment for Accelerating Projects (LEAP) Pilot Program |
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Gregory G. Nadeau
Federal Highway Administration
26 October 2016
[Federal Register Volume 81, Number 207 (Wednesday, October 26, 2016)]
[Notices]
[Pages 74490-74494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25894]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[Docket No: FHWA-2016-0030]
Local Empowerment for Accelerating Projects (LEAP) Pilot Program
AGENCY: Federal Highway Administration, U.S. Department of
Transportation.
ACTION: Notice. Solicitation of interest and participation in Direct
Aid Pilot Program.
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[[Page 74491]]
SUMMARY: The Federal Highway Administration (FHWA) is announcing a
pilot program to permit, on an experimental basis, direct delivery of
Federal-aid funding of up to five Local Public Agencies (LPAs). These
LPAs will be subject to Federal oversight, and the State DOT will be
relieved of direct oversight and accountability for projects funded
under the LEAP pilot program. The pilot program will be carried out for
a period of 5 years (unless extended). It will be implemented in
accordance with FHWA's experimental authority provided by the project
flexibility authority granted under section 1420 of the Fixing
America's Surface Transportation Act.
DATES: Applications must be received by November 25, 2016.
ADDRESSES: To ensure that you do not duplicate your docket submissions,
please submit them by only one of the following means:
Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting
applications.
Electronic mail: LEAPFRN@Sharepointmail.dot.gov.
Mail: U.S. Department of Transportation, Dockets
Management Facility, Room W12-140, 1200 New Jersey Ave. SE.,
Washington, DC 20590-0001.
Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Ave. SE., between 9 a.m. and 5p.m., Monday through
Friday, except Federal holidays. The telephone number is (202) 366-
9329.
All applications must include the docket number DOT-FHWA-2016-0030
at the beginning of the submission.
FOR FURTHER INFORMATION CONTACT: Mr. Robert (Bob) Wright, Local Public
Agencies Program Manager, 1200 New Jersey Avenue SE., Washington, DC
20590, 202-366-4630, Robert.Wright@dot.gov., or Mr. Steve Rochlis,
Office of Chief Counsel, 202-366-1395, Steve.Rochlis@dot.gov.
SUPPLEMENTARY INFORMATION:
Electronic Access
A copy of this notice and the related Attachment A: Sequencing of
Certain Key Direct Recipient Requirements is available for download and
public inspection under the docket number noted above at the Federal
eRulemaking portal at: http://www.regulations.gov. The Web site is
available 24 hours each day, 365 days each year. Electronic retrieval
help and guidelines are available under the help section of the Web
site.
An electronic copy of this document may also be downloaded from the
Office of the Federal Register's home page at: https://www.federalregister.gov/ and the Government Publishing Office's Web
page at: https://www.gpo.gov/fdsys/.
Background
The Federal-aid highway program is a federally funded, State-
administered program, under which State DOTs are responsible for
determining which projects are federally funded, including highway
projects within the boundaries of the LPAs.
The American Public Works Association (APWA), National Association
of County Engineers (NACE), and other local entities have advocated for
improvements to the Federal-aid Highway Program delivery to LPAs. The
FHWA is aware of concerns expressed by LPAs related to cost and time
delays in delivery of projects, inadequate communication and
collaboration among transportation partners, accessibility to Federal
funding, and the need for improved statewide consistency in project
administration and oversight, including the need for clarity and
consistency as to direction and interpretation.
The FHWA has long supported innovative approaches to project
delivery and is constantly searching for new and better ways to
oversee, accelerate, and reduce the cost of the delivery of highway
projects. FHWA's goals in launching the LEAP pilot program are twofold.
The first is to evaluate the impact of direct Federal-aid funding on
the effectiveness, efficiency, and expediency of projects delivered by
LPAs utilizing innovative approaches to project delivery. The second is
to assess the cost and benefit of direct Federal-aid funding of LPAs as
well as FHWA's ability, administrative costs, and resources needed to
oversee an expanded base of direct aid recipients by using various
approaches to oversight.
Objective of the Leap Pilot Program
The objectives of the LEAP pilot program are as follows:
1. To determine whether qualified LPAs can deliver Federal-aid
highway projects more expeditiously and at a lower cost via innovative
approaches to project delivery when the LPA is a direct Federal-aid
recipient and employs its own project delivery processes, in compliance
with Federal and State requirements.
2. To assess the additional costs and other impacts to FHWA
associated with providing effective and efficient stewardship and
oversight to an expanded number of direct Federal-aid recipients, and
to explore various approaches to stewardship and oversight.
Leap Pilot Program Description
The Federal-aid highway program (FAHP), under which the LEAP pilot
program is being administered, is a Federally-assisted, State
administered program. The FAHP supports States and localities by
providing financial assistance for the design, construction, preventive
maintenance, and other Federal eligible costs associated with about 25
percent of the 3.9 million mile highway network of the United States,
including the Interstate Highway System and the National Highway
System, as well as primary highways and other major collector roads.
Federal funds and obligation authority are distributed to the State
DOTs, which act on behalf of the States in accordance with 23 U.S.C.
145, 302, and 23 CFR 1.3. State DOTs, in turn, make subawards of
Federal-aid highway funds to LPAs. These subrecipient LPAs are jointly
responsible with the State DOTs for meeting Federal and State
requirements. The LEAP pilot program, carried out pursuant to authority
in 23 U.S.C. 502(b)(1)(B), 502(b)(5) and 23 U.S.C. 104(f)(3)(A), will
rely upon a cooperative partnership among State DOTs, participating
LPAs, and FHWA to fund and administer the program and to assess its
impact on project delivery and on FHWA's ability to carry out the
additional responsibilities that the direct aid to the LPAs would
require.
The LPAs (primarily counties, cities, and towns) own and operate
about 43 percent of the roughly 1.0 million miles of the Nation's
Federal-aid highways. These LPAs build and maintain this network using
a variety of funding sources, including FAHP funding. An estimated
7,000 LPAs deliver about $7 billion annually in Federal-aid projects,
or roughly 15 percent of the total Federal-aid program. As noted in the
Background Section above, LPAs have requested direct accessibility to
Federal funding. At the same time, some States are experiencing
budgetary constraints that result in oversight challenges and project
delivery delays associated with LPA administered projects. The LEAP
pilot program will reduce State DOTs' oversight responsibility of their
LPAs for projects delivered under the LEAP pilot program. The pilot
program will also test the impact of direct LPA funding on project
delivery efficiency and effectiveness.
FHWA believes this pilot program is in alignment with the findings
of the draft report Beyond Traffic: Trends and
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Choices 2045. Beyond Traffic was released by the Department in February
2015. It examines the long-term and emerging trends affecting our
Nation's transportation system and the implications of those trends. It
describes how demographic and economic trends, as well as changes in
technology, governance, and our climate, will increase the importance
of our metropolitan regions in making decisions that cross State,
political, socioeconomic, and often transportation planning lines. By
2045, the population is anticipated to increase by 70 million people,
with most of that growth occurring in metropolitan areas. Providing
LPAs with direct funding is consistent with these trends.
Application and Submission Information for the Leap Pilot Program
Applications must include all of the information below. Incomplete
applications will not be considered. The FHWA may ask any applicant to
supplement data in its application, but expects the applications to be
complete upon submission. The FHWA will expect finalist LPAs to provide
additional information described in the participant selection section,
if requested.
Applications must include all of the following information for it
to be considered for the LEAP pilot program:
Title page: The title page must include the name, location, and
population of the LPA, Federal program funding size, total program
funding size (Federal plus other), and primary point of contact for the
LEAP pilot program.
Structure: The LPA must show its organizational structure and
clearly articulate that it is adequately staffed and suitably equipped
to administer the Federal-aid program and deliver Federal-aid projects
in compliance with Federal requirements.
Narrative: The narrative should include and address the following:
(1) Describe and quantify how participation in the LEAP pilot
program will accelerate project delivery and improve efficiency and
accessibility to the benefits derived from the Federal-aid highway
program, generally and specifically, with regard to LPA program
administration in the applicant's State. The benefits discussion must
address the anticipated overall program and project delivery cost and
schedule savings. The LPAs should compare the anticipated savings
between current and proposed delivery and oversight approaches
utilizing innovations, streamlined processes and procedures, and
technology. The LPAs should identify administrative impediments or
delays associated with the current project delivery and oversight
process that would be modified or eliminated under the LEAP pilot
program.
(2) Describe and quantify how participation in the LEAP pilot
program will provide added value to the LPA, FHWA, community, and
project delivery (e.g., creates jobs and paves the way for business,
particularly small and disadvantaged business enterprises; provides
Americans with safe, reliable, and affordable connections to
employment, education, healthcare, and other essential services; lifts
up neighborhoods and regions by attracting new opportunities, jobs, and
housing; ensures intellectual opportunity to improve the LPA staffing
abilities and/or strategic delivery capability; fosters effective and
efficient stewardship and oversight as well as integrity of the FAHP
funds; promotes sustainability; captures higher impact opportunities;
and includes technological or collaborative processes and procedures).
(3) Describe how the LPA will evaluate the effects of applicable
Federal-aid project delivery requirements on the LPA's project delivery
capacity under the LEAP pilot program. In doing so, the LPA should
consider comparing the costs and efficiency of project delivery as a
subrecipient of the State DOT with delivery as a direct recipient under
the LEAP pilot program.
(4) Describe how the LPA currently administers State funded (State
only and Federal-aid funds subawarded by the State) capital improvement
projects and the level of State administration and oversight associated
with these projects.
Application Review and Selection
This section outlines the process and factors that FHWA will use to
evaluate and select applicants to participate in the LEAP pilot
program. The FHWA will use a two-step process for the selection of LEAP
pilot program participants.
Step 1--Selection of Finalists
The FHWA will provide an initial evaluation of applicants by
reviewing the application information with particular consideration of
the rating factors listed below.
Rating Factors
1. Anticipated project delivery cost savings;
2. Anticipated project delivery time savings;
3. The added value of the proposed approaches to the LPA, FHWA,
community, and project delivery (e.g., creates jobs and paves the way
for business, particularly small and disadvantaged business
enterprises; provides Americans with safe, reliable, and affordable
connections to employment, education, healthcare, and other essential
services; lifts up neighborhoods and regions by attracting new
opportunities, jobs, and housing; ensures intellectual opportunity to
improve the LPA staffing abilities and/or strategic delivery
capability; fosters effective and efficient stewardship and oversight
as well as integrity of the FAHP funds; promotes sustainability;
captures higher impact opportunities; and includes technological or
collaborative processes and procedures); and
4. The population affected by the projects included in the pilot.
Step 2--Selection of Leap Pilot Program Participants
FHWA intends to ask specific LPAs, based on the initial evaluation
in Step 1 above, to provide the following supplemental information for
further evaluation of their applications:
(1) A certification verifying that:
a. The applicant LPA has legal authority under State law to act
independently or on behalf of the State to fulfill the State's
responsibilities under title 23 of the United States Code.
b. The State has agreed or will agree to transfer to FHWA (i)
formula funds and obligation authority in accordance with 23 U.S.C.
104(f)(3)(A) for purposes of the LEAP pilot program and (ii) a schedule
of the annual amount of such funds and obligation authority to be
transferred.
c. The LPA and/or partnering State has agreed or will agree to a
voluntary contribution from non-Federal funds (LPA, State, or other) in
an amount equal to one percent (for the first year) of the funds
transferred to FHWA. The FHWA will use these non-Federal funds to
administer the pilot program and provide direct stewardship and
oversight of the LPA's delivery of Federal-aid projects that would have
otherwise been provided by the State. The amount is to be deposited
into a special account, as authorized by 23 U.S.C. 502(b)(5). The LPA
must identify the source of the funds and certify that those funds can
and will be used for this purpose. The LPA and/or State will need to
acknowledge that FHWA may adjust this amount annually to ensure that
adequate funds are allocated for the proper administration and
associated experimental activities of the pilot program.
(2) Input from the State DOT as to whether the applicant LPA:
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a. Has an adequate project delivery system as required in 23 U.S.C.
106(g); and
b. has in place the necessary financial management systems and
processes to carry out government requirements outlined in 23 U.S.C.
106(g) and 2 CFR 200.302-303.
(3) The auditor's reports of the LPA's last 5 years of Federal and/
or State required audits, including those conducted in accordance with
2 CFR 200 Subpart F.
(4) A description of the funding categories and annual amounts the
State DOT agrees to transfer to FHWA under 23 U.S.C. 104(f)(3)(A) for
purposes of the LEAP pilot program.
(5) A description of the state of the LPA's Federal-aid obligation
and expenditure history over the last 5 years, with a particular
emphasis on inactive obligations (see 23 CFR 630.106(a)(4)-(6)). If the
LPA has a high rate of inactive obligations, the LPA should explain the
circumstances associated with that high inactive obligation rate and
quantify how the LEAP pilot program would increase the effectiveness
and efficiency associated with use of Federal funds and project
delivery.
The FHWA will use the supplemental information above to assess the
LPA's likelihood of success, readiness, and capability to successfully
deliver Federal-aid projects effectively, efficiently, and in
compliance with Federal and State requirements. Based upon this
evaluation, the FHWA will select up to five LPA applicants as LEAP
pilot program participants, pending further verification as described
below.
Verification of Leap Pilot Program Participants
Before FHWA can grant authority for direct administration of
Federal Funds, LPAs selected as LEAP pilot program participants must
fulfill key Federal-aid requirements as shown in Attachment A. As
deemed necessary by FHWA, participating LPAs must verify their
capability to comply with requirements applicable to State DOTs under
23 U.S.C. 302. In particular, eligible LPAs, including cities and
counties that apply with a State DOT partner, must be adequately
staffed and suitably equipped and have (or able to quickly integrate)
requisite project delivery, financial, accounting, recordkeeping, and
internal controls to carry out the FAHP as a direct recipient of FAHP
funding. The LPAs must match direct aid in accordance with 23 U.S.C.
120 and other applicable cost sharing requirements. Finally, LPAs must
contribute funds at the beginning of each pilot year from non-Federal
(State, local, or other) resources to cover FHWA's administration,
oversight, and other pilot costs. This amount will be equal to one
percent of the LPA's annual Federal-aid allotment and may be adjusted
annually by FHWA as needed, based upon administrative costs.
The verification required may include, but is not limited to, the
following:
Evaluation of the LPA's financial management and project
delivery systems in accordance with 23 U.S.C. 106 (g)(2)(A) and (g)(3);
compliance assessment of the LPA's financial controls and
project delivery program in accordance with government-wide
requirements in 2 CFR 200.302-303; and
review and assessment of critical core program areas.
Based upon the verification above and the associated documentation,
FHWA will confirm, or adjust as necessary, the selected LPAs as LEAP
pilot program participants.
The amount of direct aid funding, the formula fund categories, and
obligation authority that a selected LPA will ultimately receive
depends upon the cooperative relationship between the LPA and the State
DOT. A State DOT and LPA that desire to participate in the LEAP pilot
program should assess current annual and out-year program needs at the
State and local levels. Collaboratively, they should develop a budget
that addresses current and projected required budgetary resources to be
made available by the State DOT to FHWA, and then in turn by FHWA to
the LPA throughout the term of the pilot. This budget should be based
upon the formula (apportioned) contract authority, program funding, and
obligation authority the State DOT agrees to transfer. For any LPA that
is selected for the pilot, the State DOT must submit a request to
transfer formula program funding and obligation authority to FHWA in
accordance with 23 U.S.C 104(f)(3)(A). After receipt and processing of
the transfer request and the receipt of FHWA's anticipated
administrative expenses from non-Federal funds, FHWA will directly
award the transferred funding and obligation authority to the
participating LPA. Under the LEAP pilot program, the State DOT is not
accountable for the funding transferred by the State to FHWA and
directly awarded by FHWA to the LPA.
Other Pertinent Requirements
The FHWA will establish a special account under 23 U.S.C. 502(b)(5)
to which a selected participating LPA (or State) will contribute from
non-Federal resources an amount equal to one percent (for the first
year) from the LPA's Federal-aid allotment that a State transfers to
FHWA. The FHWA will use these funds to administer the pilot and provide
direct stewardship and oversight of LPAs that the LPA's State DOT would
have provided otherwise under the FAHP. The LPA agrees to deposit such
amount on an annual basis within 30 days of acceptance into the LEAP
pilot program and annually thereafter, no later than October 15 of each
succeeding year. The FHWA may adjust this amount annually to ensure
that adequate funds are allocated for the proper administration and
associated experimental activities of the pilot program. When adjusted,
FHWA will provide the LPAs and/or States with a 60-day advance notice.
The FHWA will carry out the LEAP pilot program for a period of five
years, unless FHWA elects to extend the program.
Performance of Leap Pilot Program Participants
An LPA selected to participate in the LEAP pilot program will
assume responsibility under this section for compliance with all
procedural and substantive requirements as would apply if that
responsibility were carried out by the State DOT. These requirements
include LEAP pilot program specific reporting, regular Federal-aid
reporting, right-of-way acquisition, environmental compliance,
engineering, civil rights, design and inspection, procurement,
construction administration, financial administration, performance
management, and all other applicable Federal requirements, unless FHWA
determines that such assumption of responsibility for one or more of
the procedural or substantive requirements is not appropriate. Each
applicant selected for the LEAP pilot program must work with FHWA to
develop and implement a plan to collect information and report on the
LPA's performance with respect to the relevant objectives outlined in
the LEAP pilot program.
Each recipient will enter into a Memorandum of Agreement (MOA) with
FHWA and its respective State DOT. The MOA will have a term of no more
than 5 years, with the option to extend if approved by FHWA. The MOA
will also require the LPA to provide to FHWA any information that FHWA
considers necessary to ensure that the LPA carries out the requirements
of the LEAP pilot program, the Federal-aid Highway Program, and project
related
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requirements. To ensure compliance with the LEAP pilot program by
participating LPAs, FHWA will conduct audits, reviews, and/or
assessments during the pilot program. Such audits will be in addition
to any of FHWA's other stewardship and oversight responsibilities
relating to the LEAP pilot program, as well as any other projects and/
or other activities carried out under the LEAP pilot program.
The FHWA will assess the partnership developed under this pilot
program in accordance with existing requirements. The FHWA may
terminate the agreement and/or pilot program at any time or for any
reason consistent with 2 CFR 200.339, including, but not limited to,
inadequate LPA performance or inadequate FHWA resources to administer
the LEAP pilot program. The participating LPA may also terminate the
pilot program upon FHWA's receipt of a 90-day notice from both the LPA
and State DOT.
Authority: 23 U.S.C. 502; Sec. 1420, Pub. L. 114-94, 129
Stat.1423; 49 CFR 1.85.
Issued on: October 21, 2016.
Gregory G. Nadeau,
Administrator, Federal Highway Administration.
[FR Doc. 2016-25894 Filed 10-25-16; 8:45 am]
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