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Environmental Review Toolkit

Interagency Guidance: Transportation Funding
for Federal Agency Coordination
Associated with Environmental Streamlining Activities


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As a normal practice, the FHWA and FTA encourage appropriate Federal and State agencies and Federally recognized Indian tribes to participate in the project development process, become participating agencies, perform routine analyses, conduct studies (if appropriate), and/or prepare a portion of the environmental documentation. However, Federal and State agencies and Federally recognized Indian tribes cannot substantially increase their involvement in planning, scoping, and alternatives development without additional resources. This up-front investment, if well-planned and executed in a timely manner, will result in lower overall project costs and reduced time periods, producing a win-win situation. Agencies should consider the following elements when preparing interagency agreements, and customize the agreements to meet their specific needs. A generic template for interagency personnel agreements between a State and a Federal agency is provided in Appendix A. Examples of interagency agreements currently in use by several State DOTs are included in Appendix B.


  • Establish the purpose, background, and objectives. The agreement should address why the parties are engaging in the agreement; what benefits the respective agencies hope to realize; how the agreement is expected to improve transportation projects, environmental quality, and timeliness of decisions.
  • Identify the funding mechanism(s) and resources to be funded under the agreement (e.g., project activity, FTE/staff, research, etc.).
  • Explain how the agreement directly and meaningfully contributes to expediting and improving transportation project planning and delivery. The agreement should not be construed in such manner or imply that either party is intending to abrogate its obligation and duty to comply with its relevant statutory and regulatory responsibilities.


  • Clearly define the scope of work to be performed.
  • Identify priority areas, if any, on which the State DOT or transit agency would like the Federal or State agency or Indian tribe positions or activities to focus their efforts (e.g., individual projects, transportation project planning, types of projects, certain geographical bounds, programmatic agreements, training, checklists, information gathering, mapping, etc.) Also, if expertise is needed in a particular discipline, or if there are any special requirements, those should be clearly articulated in the agreement. The agencies may want to consider, as appropriate, developing a process for identifying future priorities.
  • Identify the expected work product. This should include an explanation of how the work will reduce the time for completing environmental reviews or reaching decisions on specific projects.
  • Where a proposal is to fund activities that are not project-specific, such as process improvement or programmatic agreements, the criteria relating to environmental review time limits will be deemed satisfied so long as the efforts are designed to produce a reduction in the customary time for environmental reviews in the State.


  • Clearly define the roles and responsibilities of the parties to the agreement. What will each agency do to facilitate a smooth working relationship? How will they handle routine coordination? How will they resolve disputes?
  • Describe how conflicts of interest (e.g., time allocation for the work, conflict between agency responsibilities, etc.) will be addressed through supervisory arrangements.
  • Emphasize that signatory agencies should focus on resolving issues in the planning (pre-scoping) and scoping stages, where environmental issues can most readily and efficiently be resolved.


  • Identify as appropriate, the costs to be covered (e.g., for personnel, travel, training, etc.)
  • Identify how the needed resources were determined and the costs estimated
  • Identify the source of the funds and how payment is to be made. The agreement must comply with the appropriate state and Federal agency's procurement and funding requirements.
  • Describe how the expenditure of funds and accounting will be monitored, and include any restrictions on their use.
  • Identify the commitment term (e.g., multi-year, etc.).
  • Describe the agreed upon coordination process for progress reports.
  • Identify the agencies' contacts.
  • Identify the process for amending the agreement.
  • Other Agreements: Reference or attach existing cooperative interagency agreements (e.g., NEPA/ 404 merger agreements, etc.), and existing and ongoing Federal, State, and local plans that complement the workings and relationship between the agencies involved.


  • Identify performance measures and evaluation methods (including a pre-set evaluation period) to be used to determine the effectiveness of the agreement. This will help all parties to understand, manage, and allow for modification of the agreement, as necessary.
  • Performance measures can be grouped into one or more of the following general categories:
    • Effectiveness: Measures the degree to which the process output (work product) conforms to requirements.
    • Efficiency: Measures how well the work product was completed at minimum resource cost.
    • Quality: Measures the degree to which a product or service meets customer requirements and expectations.
    • Timeliness: Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criteria are usually based on customer requirements.
    • Productivity: The value added by the process divided by the value of the labor and capital consumed. The Environmental Streamlining National MOU encourages agencies to avoid delays and promotes enhanced environmental protection.
  • Agencies should also consider conducting a baseline study of the past 2 - 3 years to establish the current review times to help to identify a definitive point from which to measure improvement.
  • Be flexible. Have contingencies to accommodate changing needs during the term of the agreement.
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