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In order for TxDOT to spend funds or other resources on a transportation project with a local government, both parties must first execute a written contract. An Advance Funding Agreement (AFA) in which TxDOT and the local government allocate participation is the most frequently used contract for project development.  TxDOT and a local government negotiate an agreement that determines which party is responsible for conducting work, providing funding or contributing items in-kind.

TxDOT or the local government may be financially responsible for all or a portion of the work regardless of which party is responsible for performing the work.


Examples of work included in an AFA are:

  • Acquiring right of way
  • Drafting engineering plans
  • Providing for utility relocation
  • Performing environmental studies and environmental mitigation
  • Supplying construction services
  • Providing maintenance of a transportation project

Standard Contracting System

TxDOT has a standard contracting system that simplifies the majority of local project agreements and substantially reduces volume and processing time. This includes a Master Advance Funding Agreement (MAFA), which identifies the general terms and conditions of the relationship and cites the federal and state laws that govern the agreements with local governments.

The MAFA does not specify the cost or scope of work for individual projects. A Local Project Advance Funding Agreement (LPAFA) is used to define the scope of work and funding responsibilities for a specific project.