Risk Assessments, Evaluations of LG Qualifications and Project Update Evaluations

General
LGs may manage elements of the project development process (environmental, right-of-way acquisition, utility relocation, design/bid document preparation, letting and award, and construction/project close-out) with written TxDOT approval. This approval is typically provided by language in the AFA executed by TxDOT and the LG.
As required by federal law, federal regulations and state regulations, TxDOT has a responsibility to determine if each LG is qualified and has adequate resources and controls to perform the project work, prior to authorizing it to perform any element of the project development process. This determination is made through the completion of the LG Agency Risk Assessment (RA), which assigns an overall risk score (ORS) for the LG. LGP maintains a centralized list for LG Risk Assessment program data, supports the districts and divisions, and monitors requirements for periodic updates of RAs based on the established ORS. The district or division determines the appropriate communication with the LG regarding the ORS. Additional oversight is established when a new LG project is identified, and the “Oversight Level Special Approval, Part A and Part B” form is completed.
Federal Requirements
  1. 23 U.S.C. §106(g)(4)
    – Requires TxDOT to determine if a LG that is a sub-recipient of federal funds has adequate project delivery systems and sufficient accounting controls in place to successfully complete the project element(s) managed by the LG.
  2. 2 CFR §200.332(c)
    – Requires TxDOT to evaluate a LG’s risk of noncompliance with applicable laws and regulations, as well as the terms and conditions of its sub-award in order to determine TxDOT’s appropriate monitoring level.
  3. 23 CFR §1.11
    – TxDOT may utilize, under its supervision, the services of well-qualified and suitably equipped engineering organizations of other governmental instrumentalities for making surveys, preparing plans, specifications and estimates, and for supervising the construction of any project.
  4. 23 CFR §635.105
    – TxDOT is not relieved of its responsibility for the construction of all federal-aid projects, even when it has authorized a LG to perform element(s) of the project. TxDOT is further responsible for ensuring such projects receive adequate supervision and inspection to ensure projects are completed in conformance with approved plans and specifications; all federal requirements are met; and the LG is adequately staffed and suitably equipped to undertake and satisfactorily complete the work.
State Requirements
  1. 43 TAC §15.52(4)
    – Requires the agreement between TxDOT and the LG specifies the funding arrangement agreed upon between the parties.
  2. 43 TAC §15.52(3)
    – Requires the agreement to identify which party is responsible for each element of the project. In addition, TxDOT may only approve the LG’s performance of an element of the project after consideration of the LG’s previous experience and capability to perform the type of work proposed for completion by the LG.
Required Practices
The
LGPM Guide
provides the procedures and practices associated with addressing LG risk assessments and evaluations of LG qualifications. All new LG projects require completion of a risk assessment and an evaluation of LG qualifications prior to execution of the project AFA.
Additionally, the requirement for TxDOT approval is referenced in many areas throughout this Manual. If no specific office is referenced, the appropriate TxDOT district office should be contacted for coordination of TxDOT approval. TxDOT personnel should refer to the approved signature authority delegation documents maintained by the Contract Services Division.