Programed vs. Obligated

This is one of the more important concepts, and least understood out there. I will try and walk you through it.

So, your city/county has an STP balance or some other balance of Federal or State funds. This money is what is called PROGRAMED.

PROGRAMED funds are the equivalent of me having $100 in my pocket for you to use on your project. Can you write a check on money that is in my pocket? No, you can’t.

To OBLIGATE the funds is the equivalent of taking that $100 out of my pocket and putting it into the checking account for THAT PHASE of your project. NOW you can spend it.

In order to get your funds obligated for each phase you must have accomplished the necessary tasks. Take a look at my “Notice to Proceed” posting, I go into detail on what those things are.

This is NOT an automatic process. The local programs office (in Tennessee for Region’s II and IV that is me) we have to request for this to be done, and it can take anywhere from a couple of days to a few weeks for it to happen. Once the funds are actually obligated we get what is called a POFA 5 form from the FHWA. Only when we have the POFA 5 can we send out the NTP for that phase of work.

The POFA 5 form is phase specific (PE-NEPA, PE-Design, ROW, Construction, Implementation). But once we have it, it is just as good as money in the bank.

Programed funds are programed into the Transportation Improvement Plan (TIP) if you are in a MPO area. If your community is outside of a MPO area then your project will have to be included into the State Transportation Improvement Plan (STIP).

In order to obligate funds, they must first be programed.

The good news is that if you are in a MPO area your local community leaders are MORE than familiar with the process of getting their projects programed into the TIP (this is a whole post of its own). If you are outside of a MPO then your project usually falls into a “bucket” STIP project.

A STIP bucket would be one that covers “Resurfacing, Safety, Traffic Signals, Turn lanes, guardrail, lighting, projects Statewide”. Kind of a broad catch all. In my experience it is fairly rare that individual projects will need to be included into the STIP.

It is fairly common that in MPO areas for individual projects to be put in TIP. If you live in a major metro area Google your city then “MPO” and look at your cities TIP. For public involvement purposes they almost always have it on their website. I will go into another post to explain the TIP and STIP a little better.

This is the quick and dirty that leaves out a lot, but I hope this helps clear things up a little.

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About arran375

I work for Askew, Hargraves, Harcourt and Associates, Inc. here in Nashville, Tennessee. The short version of what I do is that we help local governments spend the Federal funds they get from TDOT on road, and bridge projects.
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