Step 3: State Revolving Fund - Construction

Construction Section

The Construction Section oversees project bidding, construction, and post-construction activities to assure the project and components meet the SRF program requirements.   The SRF Program has "crosscutter" requirements that are mandated by the EPA and are necessary in order to maintain eligibility.  The "cross cutter" requirements include American Iron and Steel, Davis Bacon and Related Acts, and Disadvantaged Business Enterprise rules.  Each project is assigned a Staff Engineer as a Project Manager who is trained and knowledgeable on these requirements.  Construction Section Project Managers attend pre-bid meetings, bid openings, contract signings, progress meetings, as well as substantial and final completions in order to assist the Recipient through the SRF construction process and make determinations on eligibility.  

Single Audit and Other Audits

Municipalities receiving more than $750,000 in Federal funding in a year are required to undergo a financial audit.  Additionally, FED conducts internal audits of select SRF projects.  The audits are intended to ensure compliance with EPA "cross cutter" requirements as well as with FED standard operating procedures.


The scope of construction is dictated by the approved Preliminary Engineering Report (PER) and the earthwork disturbances and tracts of land examined in the Environmental Information Documents (EID), which undergo the Environmental Review for compliance with NEPA.  Construction activities may not be expanded beyond what has been presented to FED in the PER and NEPA reviews.  Expansion of project scope beyond what is detailed in the PER and EID may result in loss of SRF eligibility and loss of Facilities Planning or Final Design Approvals and may trigger additional Environmental Reviews.  Environmental Reviews expire after five years.

To contact your Construction Engineer or Auditor, please go to the FED Contacts webpage.

Below is a table which lays out the detailed steps of the SRF Step 3 process and provides links to important guidance documents and forms:

Step 3: Construction Detailed Task List
Task Description and Guidance Document Applicable Documents
Apply for Project Priority List  
Select a Consultant - (Request For Qualifications required for CWSRF Recipients ONLY)
Develop and/or Certify an Existing Fiscal Sustainability Plan (Required for CWSRF Recipients ONLY)

Step 3 Engineering Service Agreement

  1. Submit draft Step 3 Engineering Service Agreement to FED Construction Manager for review and comment.  Include draft DEC Certification Form.
  2. Receive comment from FED
  3. Finalize and receive Step 3 ESA Approval Letter from FED
  4. Execute Step 3 ESA & DEC Certification Page

Note:  FED requires use of the EJCDC Engineering Service Agreement (2014 Version) and Front End Documents for Construction Projects (2013 Version).

  • Step 3 ESA Review
  • Step 3 ESA Amendment Review

Step 3 Loan Application

  1. Submit Step 3 Funding application (YOU MUST RIGHT CLICK, 'SAVE LINK AS', and save remotely before completing). Municipalities must also complete the Supplemental Financial Information document.
  2. Execute loan documents

Bid Advertisement Phase

  1. DBE Notification
  2. Official Bid Advertisement
  3. Prebid Meeting 
  4. FED to review draft DBE Addendum and addedum including prebid meeting minutes and contractors questions
  5. Issue DBE Addendum (prebid meeting minutes and questions can be issued in this addendum or a separate addendum)
  6. Submit Completed Attorney Title Easement Certification

Bid Opening Phase

  1. Hold official Bid Opening
  2. Submit and circulate Certified Bid Tabulation to FED (and all necessary parties)
  3. Submit Award Concurrence Package (including all DBE Effort) to FED for Award Concurrence

Award Concurrence and Contract Award Phase

  1. Receive Award Concurrence from FED Construction Section
  2. Award Contract (Owner to submit conformed and executed contract documents to FED)
  3. Hold Preconstruction Meeting and submission of Project Schedule

Construction Phase

  1. Hold monthly progress meeting and distribute meeting minutes
  2. Review and submit Partial Pay Estimates and Certified Payrolls to FED Construction Manager
  3. Submit draft change orders and small purchases to FED for approval and eligiblity determination
  4. Submit Payment Requests for Reimbursment to FED Financial Manager
  5. Complete Annual DBE Report (due Sept 30th) and Final DBE Reports (due within 30 days of Final Completion)
  6. Complete annual Single Audit Requirement and submit to FED (required for any projects over $750,000)

Completion of Construction Phase

  1. Substantial Completion Walkthrough
  2. Development of Project Punchlist and execution of Substantial Completion Certificate
  3. Final Completion Walkthrough
  4. Execution of Balancing Change Order
  5. Release of all liens
  6. Execution of Final Completion Certificate

Project Close-Out Phase

  1. Submit PTC close-out/ O&M/Record Drawings
  2. Quarterly Performance Report (required for treatment plants)
  3. 11 Month Warranty Inspection
  4. Submit 1 Year Performance Letter

Loan Closeout Phase

  1. Begin Loan Forgiveness Determination
  2. Loan Closeout Routine
  3. Loan Recipient Begins Repayment



FED-Construction-Davis-Bacon and Related Acts

FED-Construction-Disadvantaged Business Enterprise

FED-Construction-NEPA Requirements

FED-Construction-Project Signage

FED-Construction-Single Audit Requirements

FED-Construction-Small Purchases