Phase: Applied learning · Worked scenarios · Calculations · Audit findings · Document drills
Apply what you've read — scenario by scenario, calculation by calculation
Master Agreement, PSA, Pre-Award gate. Each exercise has a hidden solution — work through your answer before revealing.
I
Scenario 01
First federal-aid project — sequence of agreements
Setup
A small town with no prior federal-aid history has been selected for an HSIP intersection improvement. The MPO has programmed the project in the FTIP. The LPA Public Works Director asks PlanCheck what agreements need to be executed and in what sequence.
Question
List the agreements/actions in sequence from "first federal-aid project ever" through "first invoice submitted."
Solution
1. CIAO Pre-Award audit (LAPM Ch 20). Conducted before any Master Agreement is processed. Findings (if any) must be addressed.
2. Master Agreement (Exhibit 4-C: Federal-Aid Master Agreement, since federal funds are involved). LPA signs, returns with authorizing resolution. Cannot change funding or agreement language. DLA conforms and executes.
3. New Locode established for the LPA.
4. FTIP/FSTIP confirmation that project is included.
5. Annual submittals filed: Exhibit 9-A (DBE Implementation Agreement), Exhibit 9-B (DBE Annual Submittal), Exhibit 9-C (ADA Annual Certification) — all due June 30 for the next FFY.
6. LAPM 3-A (Request for Authorization) submitted to DLAE.
7. E-76 issued upon FHWA obligation of federal funds.
8. Caltrans Local Programs Accounting (CLPA) encumbers state budget authority.
9. PSA (Exhibit 4-D, Sample PSA) prepared by DLA and sent to LPA for signature.
10. LPA signs PSA with authorizing resolution.
11. DLA conforms and executes PSA. Copy to CLPA and LPA.
12. First invoice now eligible to be submitted.
For an LPA administering many federal-aid projects, a blanket authorizing resolution (authorizing the PWD to execute project-specific PSAs) saves significant Council/Board agenda items.
Authority: LAPM Ch 4 §4.2-4.4
Scenario 02
LPA modifies the agreement
Setup
A Public Works Director receives a PSA from DLA and notices a typo in the LPA's name. The Director crosses out the typo, initials the correction, signs the PSA, and returns it with the authorizing resolution.
Question
What is the consequence? How should the LPA proceed?
Solution
Consequence: LAPM Ch 4 §4.4: "Any changes in funding or agreement language made by the LPA will void the agreement." The cross-out, no matter how minor, voids the PSA.
Proper handling:
1. LPA contacts DLA to identify the typo and request a corrected agreement.
2. DLA prepares a fresh PSA with the typo corrected.
3. LPA signs the corrected PSA cleanly (no marks, modifications, or initials beyond the signature line).
4. LPA returns with authorizing resolution.
This principle applies to all changes — even ones that seem clerical. The Master Agreement and PSA documents are standard Caltrans-approved forms; any LPA modification voids them.
Real-world tip: Read the PSA carefully BEFORE signing. If there are any LPA-identifying errors (name, address, Locode), contact DLA immediately. Don't initial corrections.
Authority: LAPM Ch 4 §4.4
III
Audit Finding 01
Read the fact pattern — what's the finding?
Facts
An LPA received E-76 authorization for the construction phase of a federal-aid project on March 1, 2026. The LPA submitted its first construction invoice on March 15, 2026, well within the project timeline. The PSA was executed on April 22, 2026.
Analysis
What is the finding and the consequence?
Finding · Citation · Corrective action
Finding: Invoice submitted prior to PSA execution. LAPM Ch 4 §4.2: "No reimbursement payments can be made until the PSA has been fully executed. Invoices must not be submitted prior to this execution."
Consequence: The March 15 invoice is not processable. CLPA cannot pay until PSA is executed (April 22). The LPA can resubmit after PSA execution.
Key point: The E-76 obligates FEDERAL funds (Caltrans-FHWA relationship under 23 USC §106(a)). The PSA encumbers STATE budget authority and is the LPA-Caltrans contractual basis for payment. Both are required. The LPA cannot skip from E-76 directly to invoicing.
Corrective action: Resubmit the invoice after April 22, 2026. The work covered by the invoice is reimbursable (it occurred after E-76), but the invoice itself had to wait for PSA execution.
Authority: LAPM Ch 4 §4.2
Audit Finding 02
Read the fact pattern — what's the finding?
Facts
A federal-aid grade crossing project requires the railroad to perform signal work funded with Grade Crossing funds. The LPA prepared a railroad service contract directly between itself and the railroad, included it as a sub-contract in its PSA, and submitted both for execution.
Analysis
What is the procedural error?
Finding · Citation · Corrective action
Finding: Procedural error in railroad service contract handling.
LAPM Ch 4 §4.6: "When the work is funded with Grade Crossing funds, the contracts are made between Caltrans and a railroad company and are directly processed with the railroad. The PSAs for these Federal-aid projects are processed as described previously."
For Grade Crossing fund-financed railroad work, the LPA is NOT a party to the railroad service contract. Caltrans contracts directly with the railroad. The PSA for the project is processed normally between Caltrans and the LPA, but the railroad service contract is a separate, parallel Caltrans-railroad contract.
Corrective action: Withdraw the LPA-railroad contract. Coordinate with DLA and Caltrans Office of Rail to initiate a Caltrans-railroad service contract. The PSA can proceed without the LPA-railroad contract attached.
Reason: Grade Crossing funds are state funds administered by Caltrans for railroad coordination. The LPA-railroad relationship for these funds is a Caltrans matter, not an LPA matter.
Authority: LAPM Ch 4 §4.6
IV
Document Drill 01
Authorizing resolution for blanket PSA execution
Drill
A mid-sized city administers ~15 federal-aid projects/year. The Council wants to streamline PSA execution. Draft the key elements of a blanket authorizing resolution.
Model answer
Key elements of a blanket authorizing resolution (per LAPM Ch 4 §4.4):
1. Authority granted to: "The Public Works Director, or in their absence, the City Engineer." (Per LAPM: "the resolution should clearly indicate the title of the person who is authorized to sign and for which agreement(s) or agreement types.")
2. Scope of authorization: Execute Program Supplement Agreements (PSAs), Cooperative Work Agreements (CWAs), Master Agreement updates, Local Advance Construction authorizations, and Project Authorization/Adjustment Requests (LAPM 3-A) related to federal-aid projects under Caltrans Local Assistance.
3. Limitations (optional but recommended): Authorization applies to projects already programmed in the FTIP and approved by Council. (Distinguishes routine procedural execution from new substantive commitments.)
4. Effective date and term: Effective immediately and continuing until rescinded by Council. (Avoids annual re-authorization burden.)
5. Reporting: Public Works Director shall report quarterly to Council on PSAs executed under this authority.
6. Signature block: Mayor and City Clerk attesting to Council adoption with date and resolution number.
LAPM Ch 4 §4.4: "The latter method [blanket authorization] may reduce significant amounts of effort and time and should be considered by any LPA that administers a large number of Federal-aid or state-funded projects."
Authority: LAPM Ch 4 §4.4
Applied learning · Companion chapter
These exercises apply the procedural framework presented in LAPM Chapter 04: Agreements. For the full chapter reference, glossary, and recall quiz, see the deep chapter file.