23 U.S.C. § 106 : US Code - Section 106: Project approval and oversight

      (a) In General. - 
        (1) Submission of plans, specifications, and estimates. -
      Except as otherwise provided in this section, each State
      transportation department shall submit to the Secretary for
      approval such plans, specifications, and estimates for each
      proposed project as the Secretary may require.
        (2) Project agreement. - The Secretary shall act on the plans,
      specifications, and estimates as soon as practicable after the
      date of their submission and shall enter into a formal project
      agreement with the State transportation department formalizing
      the conditions of the project approval.
        (3) Contractual obligation. - The execution of the project
      agreement shall be deemed a contractual obligation of the Federal
      Government for the payment of the Federal share of the cost of
      the project.
        (4) Guidance. - In taking action under this subsection, the
      Secretary shall be guided by section 109.

      (b) Project Agreement. - 
        (1) Provision of state funds. - The project agreement shall
      make provision for State funds required to pay the State's non-
      Federal share of the cost of construction of the project and to
      pay for maintenance of the project after completion of
      construction.
        (2) Representations of state. - If a part of the project is to
      be constructed at the expense of, or in cooperation with,
      political subdivisions of the State, the Secretary may rely on
      representations made by the State transportation department with
      respect to the arrangements or agreements made by the State
      transportation department and appropriate local officials for
      ensuring that the non-Federal contribution will be provided under
      paragraph (1).

      (c) Assumption by States of Responsibilities of the Secretary. - 
        (1) Non-interstate nhs projects. - For projects under this
      title that are on the National Highway System but not on the
      Interstate System, the State may assume the responsibilities of
      the Secretary under this title for design, plans, specifications,
      estimates, contract awards, and inspections of projects unless
      the State or the Secretary determines that such assumption is not
      appropriate.
        (2) Non-nhs projects. - For projects under this title that are
      not on the National Highway System, the State shall assume the
      responsibilities of the Secretary under this title for design,
      plans, specifications, estimates, contract awards, and inspection
      of projects, unless the State determines that such assumption is
      not appropriate.
        (3) Agreement. - The Secretary and the State shall enter into
      an agreement relating to the extent to which the State assumes
      the responsibilities of the Secretary under this subsection.
        (4) Limitation on authority of secretary. - The Secretary may
      not assume any greater responsibility than the Secretary is
      permitted under this title on September 30, 1997, except upon
      agreement by the Secretary and the State.

      (d) Responsibilities of the Secretary. - Nothing in this section,
    section 133, or section 149 shall affect or discharge any
    responsibility or obligation of the Secretary under - 
        (1) section 113 or 114; or
        (2) any Federal law other than this title (including section
      5333 of title 49).

      (e) Value Engineering Analysis. - 
        (1) Definition of value engineering analysis. - 
          (A) In general. - In this subsection, the term "value
        engineering analysis" means a systematic process of review and
        analysis of a project, during the concept and design phases, by
        a multidisciplined team of persons not involved in the project,
        that is conducted to provide recommendations such as those
        described in subparagraph (B) for - 
            (i) providing the needed functions safely, reliably, and at
          the lowest overall cost;
            (ii) improving the value and quality of the project; and
            (iii) reducing the time to complete the project.

          (B) Inclusions. - The recommendations referred to in
        subparagraph (A) include, with respect to a project - 
            (i) combining or eliminating otherwise inefficient use of
          costly parts of the original proposed design for the project;
          and
            (ii) completely redesigning the project using different
          technologies, materials, or methods so as to accomplish the
          original purpose of the project.

        (2) Analysis. - The State shall provide a value engineering
      analysis or other cost-reduction analysis for - 
          (A) each project on the Federal-aid system with an estimated
        total cost of $25,000,000 or more;
          (B) a bridge project with an estimated total cost of
        $20,000,000 or more; and
          (C) any other project the Secretary determines to be
        appropriate.

        (3) Major projects. - The Secretary may require more than 1
      analysis described in paragraph (2) for a major project described
      in subsection (h).
        (4) Requirements. - Analyses described in paragraph (1) for a
      bridge project shall - 
          (A) include bridge substructure requirements based on
        construction material; and
          (B) be evaluated - 
            (i) on engineering and economic bases, taking into
          consideration acceptable designs for bridges; and
            (ii) using an analysis of life-cycle costs and duration of
          project construction.

      (f) Life-Cycle Cost Analysis. - 
        (1) Use of life-cycle cost analysis. - The Secretary shall
      develop recommendations for the States to conduct life-cycle cost
      analyses. The recommendations shall be based on the principles
      contained in section 2 of Executive Order No. 12893 and shall be
      developed in consultation with the American Association of State
      Highway and Transportation Officials. The Secretary shall not
      require a State to conduct a life-cycle cost analysis for any
      project as a result of the recommendations required under this
      subsection.
        (2) Life-cycle cost analysis defined. - In this subsection, the
      term "life-cycle cost analysis" means a process for evaluating
      the total economic worth of a usable project segment by analyzing
      initial costs and discounted future costs, such as maintenance,
      user costs, reconstruction, rehabilitation, restoring, and
      resurfacing costs, over the life of the project segment.

      (g) Oversight Program. - 
        (1) Establishment. - 
          (A) In general. - The Secretary shall establish an oversight
        program to monitor the effective and efficient use of funds
        authorized to carry out this title.
          (B) Minimum requirement. - At a minimum, the program shall be
        responsive to all areas relating to financial integrity and
        project delivery.

        (2) Financial integrity. - 
          (A) Financial management systems. - The Secretary shall
        perform annual reviews that address elements of the State
        transportation departments' financial management systems that
        affect projects approved under subsection (a).
          (B) Project costs. - The Secretary shall develop minimum
        standards for estimating project costs and shall periodically
        evaluate the practices of States for estimating project costs,
        awarding contracts, and reducing project costs.

        (3) Project delivery. - The Secretary shall perform annual
      reviews that address elements of the project delivery system of a
      State, which elements include one or more activities that are
      involved in the life cycle of a project from conception to
      completion of the project.
        (4) Responsibility of the states. - 
          (A) In general. - The States shall be responsible for
        determining that subrecipients of Federal funds under this
        title have - 
            (i) adequate project delivery systems for projects approved
          under this section; and
            (ii) sufficient accounting controls to properly manage such
          Federal funds.

          (B) Periodic review. - The Secretary shall periodically
        review the monitoring of subrecipients by the States.

        (5) Specific oversight responsibilities. - 
          (A) Effect of section. - Nothing in this section shall affect
        or discharge any oversight responsibility of the Secretary
        specifically provided for under this title or other Federal
        law.
          (B) Appalachian development highways. - The Secretary shall
        retain full oversight responsibilities for the design and
        construction of all Appalachian development highways under
        section 14501 of title 40.

      (h) Major Projects. - 
        (1) In general. - Notwithstanding any other provision of this
      section, a recipient of Federal financial assistance for a
      project under this title with an estimated total cost of
      $500,000,000 or more, and recipients for such other projects as
      may be identified by the Secretary, shall submit to the Secretary
      for each project - 
          (A) a project management plan; and
          (B) an annual financial plan.

        (2) Project management plan. - A project management plan shall
      document - 
          (A) the procedures and processes that are in effect to
        provide timely information to the project decisionmakers to
        effectively manage the scope, costs, schedules, and quality of,
        and the Federal requirements applicable to, the project; and
          (B) the role of the agency leadership and management team in
        the delivery of the project.

        (3) Financial plan. - A financial plan shall - 
          (A) be based on detailed estimates of the cost to complete
        the project; and
          (B) provide for the annual submission of updates to the
        Secretary that are based on reasonable assumptions, as
        determined by the Secretary, of future increases in the cost to
        complete the project.

      (i) Other Projects. - A recipient of Federal financial assistance
    for a project under this title with an estimated total cost of
    $100,000,000 or more that is not covered by subsection (h) shall
    prepare an annual financial plan. Annual financial plans prepared
    under this subsection shall be made available to the Secretary for
    review upon the request of the Secretary.