STEWARDSHIP AND OVERSIGHT.

SEC. 1904. STEWARDSHIP AND OVERSIGHT.(a) In General.—Section 106 of title 23, United States Code, is amended—(1) by striking subsection (e) and inserting the following:“(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;119 STAT. 1466“(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.”; and(2) by striking subsections (g) and (h) and inserting the following:“(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.119 STAT. 1467“(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.”.(b) Conforming Amendments.—Section 114(a) of title 23, United States Code, is amended—(1) in the first sentence by striking “highways or portions of highways located on a Federal-aid system” and inserting “Federal-aid highway or a portion of a Federal-aid highway”; and(2) by striking the second sentence and inserting “The Secretary shall have the right to conduct such inspections and take such corrective action as the Secretary determines to be appropriate.”.