This Manual and the apply to projects involving both state (TxDOT) and Federal Highway Administration (FHWA) funds. They do not apply to projects involving public transportation, aviation or other projects funded through the Federal Transit Administration, Federal Aviation Administration or Federal Railroad Administration. Federal regulations apply to all federally funded projects and are referenced throughout this Manual. Title 23 CFR (Highways) is the primary regulatory reference; however, other titles have applicability, such as Title 2 CFR (Uniform Administrative Requirements and Cost Principles), Title 49 CFR (Transportation) and Title 29 CFR (Labor). can be found on its website. All federal regulations can be searched on either the website or the website.

FHWA funds managed by TxDOT on LG projects are part of the Federal-aid Highway Program. The Federal-aid Highway Program is primarily a reimbursement program – not a grant program where the LG receives funds prior to their expenditure. Eligible costs incurred in compliance with the regulations will be reimbursed to the LG by TxDOT. Then TxDOT will receive reimbursement from FHWA. TxDOT and FHWA have an oversight and monitoring responsibility on projects with federal funds directly administered by LGs. If any of the federal share of project costs are incurred without following the pertinent federal regulations, they are subject to being declared non-participating and will not be reimbursed. This includes Pass-Through Finance projects (also called Pass-Through Toll projects). Pass-Through Financing is one method of the LG incurring costs for development of a transportation project and then obtaining reimbursement from TxDOT over an extended time period after construction is complete. TxDOT may seek reimbursement from FHWA after reimbursing the LG. All state and federal regulations outlined in this Manual apply to Pass-Through Finance project agreements for either design-bid-build projects or design-build projects.

In accordance with Title 49 CFR Part 26, TxDOT’s Disadvantaged Business Enterprise (DBE) program includes the adoption of TxDOT’s DBE plan and is monitored by TxDOT’s Civil Rights Division. The importance of Title 49 CFR and adoption TxDOT’s DBE program in the implementation of LG projects cannot be over-stated. It is an important commitment made by every LG and any LG contractors and consultants participating in the LG program. As stated in 49 CFR §26.13(b) every contract that TxDOT (and by adoption of TxDOT’s DBE program, the LG) executes with a sub-recipient (including contractors and consultants) must include the standardized assurance statement which states: 1) these parties will not discriminate based on race, color, national origin, or sex in the performance of any FHWA-assisted contract; 2) the contractor shall carry out the requirements of 49 CFR 26 in the award and administration of FHWA-assisted contracts; and 3) failure by the contractor to carry out these requirements is a material breach of contract, which may result in contract termination or other remedy as deemed appropriate by the recipient. TxDOT’s Civil Rights Division is established to provide assistance, resources and monitor activities for DBE. LG’s can refer to the DBE Program Compliance and Monitoring Guide for further information regarding important goals and requirements.

The LG is responsible for ensuring all project requirements are met so federal funding is not jeopardized. This provision is covered in the TxDOT/LG Advanced Funding Agreement for the project, which is described later in this chapter.