7.8 Project Financial Clearance

For projects with Local Government (LG) participation and Advanced Funding Agreements (AFA) a
Notice of Financial Clearance
 is needed prior to the bid process. This section contains the following pre-letting information:
  • Other participation field;
  • Additional payments; and
  • Financial clearance reference.

7.8.1 Other Participation Field

The funding for any project involving participation by another agency, county, city, etc., must be checked prior to and after letting. Most funding agreements require the entity to pay their share of the costs
45 days prior to the proposed letting date
.
The District personnel who coordinated the agreement with the entity normally receive these payments. Once the total estimated payments are received, the District must prepare and submit a
Notice of Financial Clearance for Bid Opening and Award
 form. This form certifies that all the necessary estimated payments from the entity have been received.

7.8.2 Additional Payments

After letting, the entity’s participation needs to be recalculated based on the apparent low bidder’s unit prices
. If the entity’s participation increases based on the apparent low bid, the District must contact the entity to request payment of the additional costs. The project is conditionally awarded, pending receipt of any additional funds from the participating entities. Once the District has received the additional payments, the District should prepare and submit the financial clearance form to the Contract Services Division (CSD). This office verifies that the necessary funds have been received and has CST issue a letter of award of contracts to the contractor. Once the contract is executed the work order by which construction can commence is issued. This entire process should be initiated and completed as soon as possible so that construction is not delayed. Long delays have resulted in the apparent low bidder electing to withdraw from the contract, and in some instances, filing claims against the department to recover financial losses resulting from the delay.

7.8.3 Financial Clearance Reference

Projects with outside funds are conditionally awarded, and contracts are released only after all terms as outlined in the project’s AFA have been met. The responsibility for the financial clearance function has been delegated to the District Engineer (DE).
The Notice of Financial Clearance for Bid Opening and Award
 form signed by the DE needs to be sent to CSD once
30 days prior to bid opening and once prior to award.
 If a project overruns after letting, the District needs to discuss the bid prices with the LG participating in the funding of the project and ensure that the outside entity concurs with the acceptance of the higher costs. If they do not concur, the contract is not to be recommended to Administration for award.
Refer to TxDOT’s
Negotiated Contracts Procedures Manual
for more information about the financial clearance process. Contact the CSO for additional information.