Chapter 12 — Plans, Specifications & Estimate

PS&E responsibility, Financial Plan / PMP thresholds, NHS approvals

Chapter 12 reflects current federal requirements for the PS&E phase of local projects off the SHS. The chapter does not address state laws and local regulations the LPA must also comply with. PS&E preparation is the LPA's responsibility.

The LPA certifies on LAPM 3-A that the project PS&E complies with all applicable federal and state regulations. Exhibit 12-D: PS&E Checklist summarizes the required items. Both are submitted to the DLAE with the Request for Authorization to Proceed with Construction.

Major Project Thresholds

Locally-administered projects on the SHS require a cooperative agreement with Caltrans to establish responsibility for project PS&Es (see Caltrans PDPM Ch 1).

Significant Projects on the NHS (as defined in Ch 7 §7.2): the LPA's written PS&E procedures must be approved by Caltrans before final design is started. DLAE determines which projects require this approval at the Field Review. The written PS&E procedures must cover:

• Project management personnel and procedures
• Highway design standards (and any other technical standards as appropriate)
• Consultant selection procedures
• Project DBE participation procedures
• Review and approval procedures
• Oversight procedures if a state highway is involved
• Maintenance of records and access

The DLAE consults with HQ DLA for assistance.

23 CFR 771.113 — no final design until environmental approval

23 CFR 771.113 prohibits starting work on the final design phase of a federally-funded project until after approval of the final environmental document. Failure to comply will make a project ineligible for federal reimbursement.

Mitigation commitments must be incorporated into appropriate contract documents, plans, specifications, and estimates prior to proceeding with major construction activities. Failure to meet mitigation commitments may render the project ineligible for federal reimbursement.

Final Design proceed authority: LPAs may not proceed with final design until:

• For CE projects: Caltrans District Senior Environmental Planner AND DLAE have signed the CE Form
• For EA projects: Caltrans Deputy District Director has signed the FONSI
• For EIS projects: Caltrans District Director has signed the ROD

List of mitigation commitments provided to DLAE (CE), in FONSI (EA), or in ROD (EIS). Permits include: USACE §404 Nationwide or Individual Permit, §10 Permit, NEPA/§404 Integration MOU, USCG Bridge Permit, RWQCB §401 WQ Certification, NPDES Permit, CDFW Streambed Alteration Agreement, CCC Coastal Development Permit, BCDC Permit. Permit conditions translate into final design.

Documentation: Environmental Commitments Record (ECR) or equivalent, with page numbers/plan sheets where commitments are illustrated, submitted with other PS&E documents.

Competitive bidding as default; force account exceptions; PIF justification

Per 23 CFR 635.104: all Federal-aid construction projects must be completed by contracts awarded to the lowest responsible bidder of a competitive bid process. LPAs may not, under any circumstances, negotiate with a bidder prior to award to reduce the price of a construction contract.

Non-competitive construction contracting may be approved:

1. Emergency exists of such magnitude that work cannot be delayed
2. There is only one organization qualified to do the work
3. Competition is deemed inadequate after soliciting bids
4. More cost-effective to perform by force account
5. Design/Build or CMGC procurement (PIF justification not required per 23 CFR 635.104(c)(d); CMGC follows Caltrans Local Assistance Procedures for CMGC)

Use of non-competitive contracting (other than DB/CMGC/ID-IQ) must be thoroughly justified in writing — typically via Public Interest Finding (PIF) (Exhibit 12-F).

Force Account (Day Labor)

Per 23 CFR 635.203: force account is the direct performance of construction work by the LPA, railroad, or public utility using labor, equipment, materials, and supplies furnished by them and under their direct control. Payment based on actual cost of labor/equipment/materials with consideration for overhead and profit.

Force account may be appropriate when:

• Rights or responsibilities of community require special course of action (lack of competition, unreasonable bids; must be documented)
• Minor adjustments of railroad and utility facilities while major work goes by competitive bidding (predetermined cost-effective without further documentation)
• Cost-effective to perform some incidental work while major work is competitively bid
• Necessary for emergency relief

PIF must include (per Exhibit 12-F):

1. Identification and description of project and kinds of work
2. Comparison of detailed cost estimates for force account vs competitive bid contract
3. Estimate of federal funds based on reimbursement ratio
4. Reasons cost-effective or emergency
5. City/County PW Director authorization for LPA forces and certification that documentation reflects true and current estimates

The LPA must demonstrate (per FHWA Order 5060.1, March 12, 2012):

1. Availability of equipment — LPA owns (or currently leases) most equipment. Leasing should be minor portion of overall cost; FHWA/Caltrans may limit percentage.
2. Use of minor agreements — appropriate for specific minor services (e.g., guardrail installation); documented and pre-approved; subject to prevailing wage
3. Compliance with design, construction, material, quality standards
4. Ability to document quality assurance per 23 CFR 637
5. Schedule — completion time equal for LPA and contract estimates
6. Cost comparison using Actual Cost (audit-based) or Unit Price (agreed unit prices × actual units); LPA estimate must include overhead/indirect cost rates per 2 CFR 225; cannot reduce by potential savings from less complete plans, reduced QA, reduced CM/documentation

DLAE signs to approve the submitted PIF. Force account is the exception, not the norm.

Emergency Work

Competitive bidding may be waived for emergency situations. For projects exempt from FHWA oversight, waiver approved by DLAE. Emergency = requires emergency repair work under Emergency Relief Program OR a major element or segment of a highway system has failed and competitive bidding is not possible or impractical.

Waiver only applies to emergency repairs. Reconstruction work and permanent repairs that can be separated from emergency repairs must be performed using competitive bidding.

The VA thresholds — $50M NHS, $40M bridge, major projects, $40M HBP

Federal requirements mandate a VA on:

1. All Federal-aid highway projects on the NHS with total estimated project cost ≥ $50M
2. All Federal-aid bridge projects on the NHS with estimated total cost ≥ $40M
3. Any major project (as defined in 23 USC 106(h)) on or off NHS using Federal-aid highway funding
4. Any project where a VA has not been conducted and a change is made to scope/design between final design and construction letting that results in cost increase exceeding thresholds (1)–(3)
5. Any other project FHWA determines appropriate

Additionally: local HBP projects require a VA for both NHS and non-NHS bridge projects with estimated total cost ≥ $40M. Design/Build excluded. CMGC subject to VA requirements — approved recommendations must be incorporated into project plans prior to requesting construction price proposal from CMGC contractor.

VA = systematic process of review and analysis during concept and design phases, by a multi-disciplined team of persons not involved in the project. LPA administering the project has delegated responsibility under Caltrans delegation authority. For each project, the LPA indicates on Exhibit 12-D whether VA was performed.

VA report submitted to DLAE → District Value Analysis Coordinator (DVAC) in Caltrans' Division of Design → Value Analysis Branch in HQ → annual report to FHWA. PDPM Ch 19 used as guide.

Signatures, seals, expiration dates — the PE responsibility chain

Plans describe location, design features, and construction requirements in sufficient detail. LPA may use Caltrans Plans Preparation Manual as a guide.

Design Decisions (cross-reference Ch 11): The Public Works Director, or person to whom approval authority has been delegated, signs approval for design decisions. The person with approval authority must be a registered Civil Engineer in the State of California.

Standard Plans (§12.6.4)

Current Caltrans Standard Plans required for locally-sponsored projects on the SHS. Off-SHS may use: current Caltrans Standard Plans, current edition of Greenbook (APWA/AGC SoCal), or locally-developed standards signed (with registration number) by the CA-registered engineer in the professional field. Local standards on NHS must meet statewide geometric standards. Bridge construction details in local standard plans must meet Caltrans bridge design standards.

Work Zone Safety and Mobility (§12.6.6)

Per 23 CFR 630 Subpart J: LPA must implement a policy for systematic consideration and management of work zone impacts on all Federal-aid transportation projects. Policy may take the form of processes, procedures, guidance. May vary based on project characteristics and expected impacts.

Significant Project (per 23 CFR 630.1010) = one anticipated to cause sustained work zone impacts greater than tolerable per agency policy/judgment. If significant, the TMP must contain Transportation Operations (TO) and Public Information (PI) components.

Transportation Management Plan (TMP) required for all Federal-aid construction projects. Must include a Temporary Traffic Control (TTC) Plan consistent with CA MUTCD Part 6 and AASHTO Roadside Design Guide Chapter 9.

PS&E must include either a TMP or provisions for contractors to develop a TMP. Pay item provisions for TMP implementation must be included — method-based (individual pay items, lump sum) or performance-based (safety, mobility, incident response, work duration criteria).

LPA and contractor must each designate a trained person with primary responsibility and sufficient authority for implementing the TMP.

ADA Compliance Plans (§12.6.8)

Per 28 CFR 35 and 28 CFR 36: each new or altered facility constructed by, on behalf of, or for the use of a public entity must be designed and constructed so it's readily accessible to and usable by individuals with disabilities. (See Ch 11 for the alteration vs maintenance test.)

Alterations include reconstruction, major rehabilitation, widening, resurfacing (structural overlays, mills, fills), signal installation and upgrades. Normal maintenance activities NOT considered alterations: thin surface treatments (non-structural), joint repair, pavement patching, shoulder repair, signing, striping, minor signal upgrades, drainage repairs.

Specs hierarchy + special provisions

SHS: current Caltrans Standard Specifications and Standard Special Provisions (with all revisions, amendments, updates).

Off-SHS Federal-aid: Current Caltrans Standard Specs + Standard Special Provisions, OR current Greenbook (APWA/AGC SoCal). LPA-developed standards permitted off-NHS subject to: (a) local assistance procedures apply if conflict with LAPM, and (b) bridge construction methods/materials must meet Caltrans bridge requirements.

Exhibit 12-G combines required federal contract language into a single document. Exhibit 12-H is the Sample Bid (federal certifications, disclosures, requirements).

The provisions every Federal-aid construction contract must carry

DBE (§12.8.2): contract DBE goals will be established (see Ch 9). Bidders list compiled per 49 CFR 26.11 and Cal Public Contract Code §4104. Exhibit 12-B sample form.

Contract Time (§12.8.3): defined as maximum time for completion. Established by specific date or fixed working days. Insufficient time → higher bid prices, increased overruns, claims. Excess time → inefficiencies, public delay.

Changed Conditions Clauses (§12.8.4): three different clauses required in all contracts. Standardized changed condition clauses in Caltrans Standard Specs and Greenbook.

Differing Site Conditions (§12.8.5): adjustment if contractor encounters (a) subsurface or latent physical conditions differing materially from contract, or (b) unknown physical conditions of unusual nature differing materially from those ordinarily encountered.

Suspensions of Work Ordered by Engineer (§12.8.6): adjustment if RE suspends performance in writing for unreasonable period. Contractor submits request within 7 calendar days of receipt of notice to resume work. Recovery of profit on costs from suspensions NOT allowed.

Material Changes in Scope of Work (§12.8.7): adjustment if RE orders alteration that significantly changes character of work. "Significant change" = altered character differs materially, OR major item increased/decreased by more than 25% of original quantity. Adjustments apply only to portion in excess of 125% (or actual quantity if decreased).

Liquidated Damages (§12.8.8 — Table 12-1)

Federal law requires the provision for liquidated damages on all Federal-aid projects on the NHS. Off-NHS: optional. LD based on estimated cost of field construction engineering. Greater LD may be specified for project-related delay/inconvenience costs with documentation.

If all work except plant establishment or permanent erosion establishment is complete and all working days expired: $950 per day. LD not used as disincentive/incentive — use I/D provisions instead.

$500K threshold; iron/steel, manufactured products, construction materials

FHWA's Buy America policy requires a domestic manufacturing process for all steel and iron products, manufactured products, and construction materials permanently incorporated in a federally funded project.

Buy America may also apply to non-federally funded projects IF (1) the non-federally funded contract is within the scope of the NEPA document, AND (2) at least one other contract within the same NEPA scope is or will be federally funded (environmental, design, ROW, construction, etc.). Award of a non-federally funded contract without Buy America provisions in that scenario could render all contracts within the NEPA scope ineligible for federal funds.

Three Product Categories

Exceptions and Minimal-Use Tolerance

Buy America does NOT apply to:

• Pig iron and processed/pelletized/reduced iron ore manufactured outside the U.S.
• Tools and construction equipment used in performing the work
• Temporary work not incorporated into finished work
• §70917(c) materials: cement and cementitious material, aggregates (stone/sand/gravel), aggregate binding agents or additives — per 2 CFR 184.3

Minimal use of foreign iron or steel permitted if cost ≤ 0.1% of total contract cost OR $2,500, whichever is greater. Cost = value of products as delivered to the project site.

De Minimis and Small Grants Waiver: applies to manufactured products and construction materials when (a) total value of non-compliant products ≤ lesser of $1,000,000 or 5% of total applicable project costs; or (b) total Federal financial assistance is below $500,000.

The 5% threshold formula: (total value of non-compliant MP and CM) / (total actual material costs for steel, iron, MP, CM). The cost of non-compliant products must be accompanied by invoices including transportation to the project site.

Waivers beyond de minimis require approval by the appropriate federal administration authority prior to advertisement. The LPA may request waiver if (a) Buy America is inconsistent with public interest, or (b) insufficient supply of domestic materials of satisfactory quality. Submit to DLAE → Caltrans → FHWA. Approval authority not delegated to Caltrans or LPAs. Plan for the waiver request to take at least one year; could be longer.

Non-compliance: failure to comply with Buy America provisions results in loss of federal funding for not only the applicable contract items but potentially all federal funding authorized for the construction phase. If non-compliant foreign materials discovered after-the-fact: expeditiously inform DLAE → coordinate with FHWA for resolution.

Form FHWA-1273 (§12.8.10)

FHWA-1273 is a package of federally-required contract provisions that must be physically included, unmodified, in the executed contract for all Federal-aid projects. Applies to all work performed on the contract including subcontract.

"Directly incorporated" means ONE of the following:

1. FHWA-1273 inserted in the project's final contract agreement package signed by LPA and contractor, with continuous page numbering on all pages including FHWA-1273
2. FHWA-1273 referenced and numbered in the table of contents of the contract, attached as appendix; appendix and final contract agreement package signed by LPA and contractor within the same document

FHWA-1273 must be physically inserted into any subsequent subcontracts. FHWA does not consider simply placing or stapling Form FHWA-1273 in the special provisions or standard specifications to be directly incorporated.

Failure to incorporate Form FHWA-1273 makes the construction phase of the project ineligible for federal reimbursement. The prime contractor is responsible for subcontractor compliance. Failure of prime to comply is grounds for LPA termination of contract and debarment of contractor by FHWA.

Modifications of Form FHWA-1273 by Special Provision: Section IV (Davis-Bacon and Related Act Provisions) and Section VI (Subletting or Assigning the Contract) may not be applicable to some projects. If exempted, must be specified elsewhere in contract by special provision.

Federal Trainee Program / OJT (§12.8.11)

On selected Federal-aid highway construction projects, OJT special provisions must be included to establish number of trainees.

Procedure for establishing number of trainees:

1. If proposed construction contract has less than 100 working days: no trainees, no OJT special provisions needed
2. If 100+ working days: sum totals for work categories (earthwork except imported borrow; pile driving; PCC except precast; masonry; bar reinforcing and pre-stressing steel; structural steel erection; electrical; buildings)
3. Apply Table 12-2 schedule (e.g., ≥$400K = 1 trainee; $700K = 2; $1M = 3; $2M = 5; up to 25 trainees at $50M plus 1 additional per $5M over $50M)
4. If all work category totals < $400K: no trainees needed
5. Calculate contract cost using $800 per trainee; include Federal Trainee Program in Engineer's Estimate

Federal trainees in CA are registered apprentices. Generally journeyman:apprentice ratio 5:1. OJT provision costs reimbursed by FHWA at $0.80/hour, or training can be a bid item.

Federal Wage Rate Determinations (§12.8.12)

Federal prevailing wage from Davis-Bacon Act of 1931, prescribed by 23 USC §113. Federal prevailing wage rates must be physically inserted into the contract OR referenced by the applicable Wage Determination (WD) # website address (sam.gov/content/wage-determinations) during advertisement. See Ch 15.3 for conformance with 29 CFR 1.6.

What can't be in the contract, what may be, and material rules

Restricted Contract Provisions:

• Indian Preference — permitted for Federal-aid projects on or near Indian reservations or Indian lands. Must apply without regard to tribal affiliation or place of enrollment. TERO tax reimbursable as long as doesn't single out Federal-aid contracts
• Bonding and Prequalification — not required by FHWA but if LPA has procedures, must not restrict competition; no license required before bid submission
• Price Adjustment Clauses — may be used when material costs extremely volatile, suppliers can't provide full-term quotes, market subject to shortages. Based on quantifiable indices (CPI, PPI). Upper/lower limits; bidirectional. Only significant changes trigger adjustment. Contractor cannot opt-in/out
• Project Labor Agreements — per EO 13502, PLAs may be used on Federal-aid projects ≥$25M with documentation showing advancement of government interest. LPA submits draft PLA + justification at least 5 months before construction. FHWA review required

Optional Contract Provisions:

• Additive/Deductive Bid Items — per Cal Public Contract Code §20103.8 (option (d) not allowed for Federal-aid as it doesn't provide for public bid opening with full disclosure)
• Alternate Bids — for cost minimization through increased competition
• Incentive/Disincentive Provisions — for early completion on critical projects. Distinct from liquidated damages: I/D incentivizes; LD recovers costs. Should not be used routinely
• Quality – Price Adjustment Clauses — incentives up to 5% of unit bid price for improved quality. Greater than 5% on NHS reviewed case-by-case; greater than 5% on non-NHS delegated to LPA
• Alternative Contracting Practices — A+B bidding, Lane Rental, Design/Build, Warranty (see Caltrans memo Delegation of Authority for Use of A+B Bidding and I/D Provisions)

Materials and Equipment:

• Publicly-Owned Equipment — should not normally compete with private. LPA may approve with Cost-Effectiveness Determination (Exhibit 12-F). Contractor must have option to provide or rent equipment
• Contractor Purchases for Local Ownership — equipment with useful life >1 year and acquisition cost ≥$5K per unit; only amortized portion attributable to time used on Federal-aid project is CE-eligible
• Convict-Produced Materials — usable if produced by convicts on parole/supervised release/probation OR in qualified prison facility (amount in 12-month period ≤ amount in 12-month period ending July 1, 1987)
• Local Preferences — NOT allowed on Federal-aid project contracts. Materials produced in-state must not be favored over comparable out-of-state. In-state material sources cannot be given preference over foreign unless permitted by federal law (e.g., Buy America)
• Warranty Clauses — may include for specific construction products or features. Maintenance items NOT eligible for federal participation — including would result in non-participation and federal fund payback
• Proprietary Items — federal funds may be used for patented/proprietary materials, specifications, or processes. Not restricted when LPA specifies trade name. Cal Public Contract Code 3400 still applies for state requirements
• Equipment Rental Rates — actual costs required for extra work; Caltrans Equipment Rental Rates conform with FHWA Contract Administration Core Curriculum requirements

The Engineer's Estimate structure — and CE / contingencies thresholds

The estimate must reflect anticipated cost of the project in sufficient detail. Preliminary estimate prepared by LPA includes basic items contractor will be asked to bid. Confidential document — not made available to contractors or general public prior to bid opening.

Format: item of work, unit amount, quantity, unit price, amount, subtotal, contingencies, total (LAPM 3-A). Detail Estimate prepared after award using actual bid amounts.

Key Cost Categories

Optional Bridge Review (§12.12.9): When a bridge or major structure involved, the LPA may request cursory review by Caltrans DES Structures Local Assistance. Caltrans review and comments are advisory only. Major Federal-aid construction projects on the NHS involving a bridge: bridge review must be in accordance with PS&E procedures described in §12.2 (Significant NHS Projects).

Responsible Charge Certification + Exhibit 12-D

Responsible Charge Certification. LAPM 3-A must be signed by the engineer responsible for the project — must be either an LPA employee OR a consultant retained by the LPA AND a professional civil engineer registered to practice in California.

In the certification, the LPA certifies that:

• PS&E prepared in accordance with the LAPM
• Any necessary design decisions approved by PW Director or designee

The certification acknowledges that review of PS&E will NOT be performed by Caltrans. By this certification, the LPA accepts responsibility for compliance with applicable design standards, Title 23 USC, and other applicable federal requirements (DBE, EEO, Buy America, federal and state wage rates, license requirements). Failure to comply may cause withdrawal of funds.

Exhibit 12-D PS&E Checklist (§12.13.2)

Developed to address the flexibility allowed under federal regulations while ensuring minimum required provisions in each set of contract documents. If any required provisions are left out, the project may be ineligible for federal reimbursement.

Checklist Review by Caltrans (§12.13.3): Caltrans reviews the Exhibit 12-D checklist along with the Request for Authorization. The checklist is reviewed; the PS&E is NOT. The certification is the trust mechanism.