80_FR_12301 80 FR 12257 - Contracting Initiative

80 FR 12257 - Contracting Initiative

DEPARTMENT OF TRANSPORTATION
Office of the Secretary

Federal Register Volume 80, Issue 44 (March 6, 2015)

Page Range12257-12259
FR Document2015-05204

The DOT is announcing an initiative to permit, on an experimental basis, Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) recipients and subrecipients to utilize various contracting requirements that generally have been disallowed due to concerns about adverse impacts on competition. This initiative will be carried out as a pilot program for a period of 1 year (unless extended) under the FHWA and FTA's existing authorities. The purpose of this pilot program is to determine whether the use of such requirements ``unduly limit competition,'' as provided in an August 23, 2013, opinion from the Department of Justice's Office of Legal Counsel (OLC). Should DOT find that such restrictions do not unduly limit competition, DOT may provide further guidance regarding their use.

Federal Register, Volume 80 Issue 44 (Friday, March 6, 2015)
[Federal Register Volume 80, Number 44 (Friday, March 6, 2015)]
[Notices]
[Pages 12257-12259]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-05204]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary


Contracting Initiative

AGENCY: Office of the Secretary (OST), Department of Transportation 
(DOT).

ACTION: Notice.

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SUMMARY: The DOT is announcing an initiative to permit, on an 
experimental basis, Federal Highway Administration (FHWA) and Federal 
Transit Administration (FTA) recipients and subrecipients to utilize 
various contracting requirements that generally have been disallowed 
due to concerns about adverse impacts on competition. This initiative 
will be carried out as a pilot program for a period of 1 year (unless 
extended) under the FHWA and FTA's existing authorities. The purpose of 
this pilot program is to determine whether the use of such requirements 
``unduly limit competition,'' as provided in an August 23, 2013, 
opinion from the Department of Justice's Office of Legal Counsel (OLC). 
Should DOT find that such restrictions do not unduly limit competition, 
DOT may provide further guidance regarding their use.

DATES: This pilot program is effective March 6, 2015.

FOR FURTHER INFORMATION CONTACT: For technical information: Mr. Michael 
Harkins, Deputy Assistant General Counsel for General Law, Office, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., Washington, 
DC 20590, 202-366-0590 (telephone), [email protected] (email).

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may also be downloaded from the 
Office of the Federal Register's home page at http://www.archives.gov/federal_register and the Government Publishing Office's Web page at 
http://www.gpoaccess.gov.

Background

Interpretation of Competition Mandate

    Traditionally, DOT has prohibited its recipients and subrecipients 
from using certain contracting provisions that do not directly relate 
to the bidder's performance of work in a competent and responsible 
manner. An example of such provisions includes local and other 
geographic-based labor hiring preferences. The DOT's position was 
reinforced by a 1986 opinion of the OLC, which concluded that 23 U.S.C. 
112 (``section 112'') obligated the Secretary of Transportation to 
withhold Federal funding from highway construction contracts that were 
subject to a New York City law imposing disadvantages on a class of 
responsible bidders, where the city failed to demonstrate that its 
departure from competitive bidding requirements was justified by 
considerations of cost-effectiveness. See Compatibility of New York 
City Local Law 19 with Federal Highway Act Competitive Bidding 
Requirements, 10 Op. O.L.C. 101 (1986).
    However, in August 2013, at DOT's request, the OLC provided DOT 
with a memorandum opinion, clarifying its 1986 opinion on section 112. 
See Competitive Bidding Requirements Under the Federal-Aid Highway 
Program, 23 U.S.C. 112, (Aug. 23, 2013) (``2013 opinion''). The 2013 
opinion is available at http://www.justice.gov/olc/opinions. The 2013 
opinion clarifies that section 112 does not compel the DOT's position 
with respect to contracting requirements that do not directly relate to 
the bidder's performance of work, but rather provides the Secretary 
with discretion to permit other types of state or local requirements as 
long as they do not ``unduly limit competition.'' \1\
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    \1\ While the 2013 opinion was specific to section 112, which 
only applies to highway projects, it also is relevant in 
interpreting and implementing FTA's statutory mandate under 49 
U.S.C. 5325(a) that broadly requires full and open competition in 
the award of contracts utilizing financial assistance from the FTA.
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    The 2013 opinion explains that competition would not be unduly 
limited by ``[a] state or local requirement that has only an incidental 
effect on the pool of potential bidders or that imposes reasonable 
requirements related to the performance of the necessary work. . . .'' 
2013 opinion at 2. In contrast, ``a requirement that has more than an 
incidental effect on the pool of potential bidders and does not relate 
to the work's performance would unduly limit competition unless it 
promotes the efficient and effective use of federal funds.'' Id. at 2-
3. In assessing whether a requirement does promote the efficient and 
effective use of federal funds, the agency ``may take into account 
whether the requirement promotes such efficiency in connection with the 
letting of a particular contract and also whether it more generally 
furthers the efficient and effective use of federal funds in the long 
run or protects the integrity of the competitive bidding process 
itself.'' Id. at 3. So long as a state or local requirement serves 
these purposes, ``the Administrator may reasonably determine, 
consistent with section 112, that the requirement does not unduly limit 
competition, even if it may have the effect of reducing the number of 
eligible bidders for a particular contract.'' Id.
    Thus, DOT retains discretion under the statute to evaluate whether 
a particular State or local law or policy that has more than an 
incidental effect on the pool of potential bidders is nonetheless 
compatible with section 112(b)(1)'s competitive bidding requirement. 
The process used to evaluate whether state and local requirements 
satisfy section 112 also is a matter of agency discretion. Id. at 17-18 
(``It is for FHWA and DOT to determine the regulatory approach the 
agency should take in exercising this discretion and in evaluating 
whether certain state and local requirements are consistent with 
[section 112's] statutory mandates. . . .'').

Experimental Authority

    In 1988, a Transportation Research Board (TRB) task force, 
comprised of representatives from all segments of the highway industry, 
was formed to evaluate Innovative Contracting Practices. This TRB task 
force requested

[[Page 12258]]

that the FHWA establish a project to evaluate and validate certain 
findings of the task force regarding innovative contracting practices, 
which are documented in Transportation Research Circular Number 386, 
titled, ``Innovative Contracting Practices,'' dated December 1991. In 
response, the FHWA initiated Special Experimental Project No. 14 (SEP-
14) pursuant to the authority granted to the Secretary, which now is 
codified at 23 U.S.C. 502. The SEP-14 program strives to identify, 
evaluate, and document innovative contracting practices that have the 
potential to reduce the life cycle cost of projects, while at the same 
time, maintain product quality. Under SEP-14, the FHWA has the 
flexibility to experiment with innovative approaches to contracting.
    The innovative practices originally approved for evaluation under 
SEP-14 were: Cost-plus-time bidding, lane rental, design-build 
contracting, and warranty clauses. Forty-one States have used at least 
one of the innovative practices under SEP-14. Based on their collective 
experiences, FHWA decided that cost-plus-time bidding, lane rental, and 
warranty clauses were techniques suitable for use as non-experimental, 
operational practices and in 1995 these were made regular Federal-aid 
procedures. Design-build contracting in the Federal-aid highway program 
was conducted under SEP-14 until Congress modified section 112 in 
section 1307 of the Transportation Equity Act for the 21st Century to 
permanently authorize the use of this contracting method. Additionally, 
the construction manager/general contractor method of contracting in 
the Federal-aid highway program was originally conducted under SEP-14 
until Congress modified section 112 in section 1303 of the Moving Ahead 
for Progress in the 21st Century Act to permanently authorize the use 
of this contracting method. The SEP-14 program continues to be used to 
test and evaluate experimental contracting practices.
    Also, the FTA has authority under 49 U.S.C. 5312 to carry out 
research, development, demonstration, and deployment projects that will 
improve public transportation. Additionally, 49 U.S.C. 5314 authorizes 
FTA to carry out activities that will assist recipients of assistance 
to administer funds received under Chapter 53 in compliance with 
Federal law, including the development of voluntary and consensus-based 
standards and best practices by the public transportation industry, 
including standards and best practices for procurement.

Pilot Program

    The DOT is interested in permitting State and local recipients of 
Federal financial assistance to utilize contracting requirements that 
traditionally have been prohibited on the basis that they would 
restrict competition by not directly relating to the bidder's 
performance of work. Thus, DOT is establishing a pilot program under 
the existing authorities of the FHWA and FTA grant programs. The 
objective of this pilot program is to enable DOT to determine which 
requirements may be used consistently with the 2013 OLC opinion by 
promoting efficiency in connection with the letting of a particular 
contract, furthering the efficient and effective use of federal funds 
in the long run, or protecting the integrity of the competitive bidding 
process.
    In particular, with respect to procurements for which FHWA or FTA 
funds will be used, recipients and subrecipients may request those 
agencies to permit the use of a particular contracting requirement that 
otherwise may be found to be inconsistent with the general requirement 
for full and open competition. DOT is particularly interested in 
contracts for which recipients and subrecipients wish to utilize a 
local or other geographic labor hiring preferences, economic-based 
labor hiring preferences (i.e., low-income workers), and labor hiring 
preferences for veterans \2\ because, in the DOT's view, such 
requirements can promote Ladders of Opportunity by ensuring that 
disadvantaged workers in the communities in which the projects are 
located benefit from the economic opportunities such projects present. 
DOT, however, will not approve projects for which recipients wish to 
alter the requirements of the Disadvantaged Business Enterprise 
Program.
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    \2\ See also 23 U.S.C. 114(d), which requires recipients, to the 
extent practicable, to encourage contractors to make a best faith 
effort to hire veterans on Federal-aid highway projects.
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    This pilot program will be carried out for a period of 1 year from 
the date of publication of this notice. As such, DOT is only interested 
in contracts that will be advertised during this time frame. For any 
such contracts, the DOT will monitor and evaluate whether contracting 
requirements that traditionally have been prohibited on the basis that 
they would restrict competition by not directly relating to the 
bidder's performance of work have an undue restriction on competition. 
While DOT's current plan is to conduct this pilot program for 1 year, 
DOT reserves the right to extend this time period at its discretion.

FHWA

    For contracts to be funded by FHWA, State and local recipients and 
subrecipients must request prior approval from the FHWA to use a 
specific contracting requirement under SEP-14. In order to receive SEP-
14 approval, States and local recipients and subrecipients would follow 
the normal process that includes submitting work plans to the 
appropriate FHWA division office. For more information on the SEP-14 
process, please see: http://www.fhwa.dot.gov/programadmin/contracts/sep_a.cfm.
    In developing requests to FHWA to use contracting requirements 
under SEP-14, recipients and subrecipients should address, at a 
minimum, the following points:
    (1) Describe the project, including the amount of FHWA funding 
involved in the as well as the estimated total project cost.
    (2) Describe the contracting requirement that may otherwise be 
found to be inconsistent with the general requirement for full and open 
competition.
    (3) Describe how they will evaluate the effects of relevant 
contracting requirements on competitive bidding. In doing so, the 
recipient or subrecipient should, at a minimum, provide comparisons of 
bids received for the projects utilizing the relevant contract 
requirements to other projects of similar size and scope and in the 
same geographic area not utilizing such requirements. If a reduction in 
the pool of bidders is evident, explain the potential offsetting 
benefits resulting from the use of the requirement.
    (1) Describe and quantify how the relevant contracting requirement 
would lead to increases in the effectiveness and efficiency of Federal 
funds for the project.
    (2) Describe and quantify how the experimental contracting 
technique would protect the integrity of the competitive bidding 
process either in connection with the particular contract or when 
considered over the long term for that agency's program.
    For contracts involving the use of local and other geographic labor 
hiring preferences, economic-based labor hiring preferences, and/or 
labor hiring preferences for veterans, FHWA may approve, at the request 
of the recipient or subrecipient, the use of such requirements for a 
specific contract, a specific group of, or on a more general 
programmatic basis. The use of other contracting requirements may be

[[Page 12259]]

approved by FHWA after coordination with the DOT Office of General 
Counsel.

FTA

    For contracts to be funded by FTA (including federal financial 
assistance under any FTA formula or discretionary program), State and 
local recipients and subrecipients must request prior approval from the 
FTA to use a specific contracting requirement pursuant to FTA's 
research and assistance authorities discussed above. In making such 
requests, recipients and subrecipients must submit an application to 
their FTA Regional Office. In their application, recipients should 
address, at a minimum, the following points:
    (1) Describe the contracting opportunity, including the schedule 
for the type of project and type of asset being constructed and the 
amount of FTA funding involved in the project as well as the estimated 
total project cost.
    (2) Describe the contracting requirement that may otherwise be 
found to be inconsistent with the general requirement for full and open 
competition.
    (3) Describe how they will evaluate the effects of relevant 
contracting requirements on competitive bidding. In doing so, the 
recipient and subrecipient should, at a minimum, provide comparisons of 
bids received for the projects utilizing the relevant contract 
requirements to other projects of similar size and scope and in the 
same geographic area not utilizing such requirements. If a reduction in 
the pool of bidders is evident, explain the potential offsetting 
benefits resulting from the use of the requirement.
    (4) Describe how the relevant contracting requirement would lead to 
increases in the effectiveness and efficiency of Federal funds for the 
project.
    (5) Describe and quantify how the experimental contracting 
technique would protect the integrity of the competitive bidding 
process either in connection with the particular contract or when 
considered over the long term for that agency's program.
    An evaluation committee comprised of FTA staff will evaluate 
applications for inclusion in the pilot program. The evaluation 
committee reserves the right to evaluate applications it receives and 
to seek clarification from any proposer about any statement that is 
made in an application. FTA also may request additional documentation 
or information to be considered during the evaluation process. The 
evaluation committee will provide a recommendation to the FTA 
Administrator regarding each application. The FTA Administrator will 
provide a final written determination to each applicant, on a rolling 
basis, regarding whether an application has been accepted into the 
pilot program.
    For projects involving the use of local and other geographic labor 
hiring preferences, economic-based labor hiring preferences, and/or 
labor hiring preferences for veterans, FTA may approve, at the request 
of the recipient or subrecipient, the use of such requirements for a 
specific contract, a specific group of, or on a more general 
programmatic basis. The use of other contracting requirements may be 
approved by FTA after coordination with the DOT Office of General 
Counsel.
    With respect to in-state or local geographic labor hiring 
preferences, please note that Section 418 of the Consolidated and 
further Continuing Appropriations Act, 2015, Public Law 113-235 (FY 
2015 Appropriations Act), prohibits FTA from using FY 2015 funds to 
implement, administer, or enforce 49 CFR 18.36(c)(2), for construction 
hiring. Section 18.36(c)(2) prohibits the use of statutorily or 
administratively imposed in-State or local geographical preferences in 
the evaluation of bids or proposals.\3\ Accordingly, for construction 
contracts awarded or advertised in FY 2015, FTA recipients may use in-
state or local geographic preferences for construction labor hiring. 
Additional guidance on FTA's implementation of Section 418 may be found 
on FTA's Web site at www.fta.dot.gov.
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    \3\ Effective December 26, 2014, 49 CFR part 18 will apply only 
to grants obligated on or before December 25, 2014. Grants obligated 
on or after December 26, 2014 will be subject to 2 CFR part 200. 
This provision (18.36(c)(2)) has been recodified at 2 CFR 200.319(b) 
and is substantively the same as 18.36(c)(2). Although Congress did 
not address the change in codification in section 418, FTA intends 
to apply section 418 to grants obligated on or after December 26, 
2014 and subject to 2 CFR 200.319(b).
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    As a result of the enactment of Section 418, recipients and 
subrecipients do not need to submit applications for participation in 
the pilot program for the use of in-state or local geographic labor 
hiring preferences for contracts awarded or advertised on or before 
September 30, 2015. In other words, prior FTA approval is not required 
to use such requirements, and FTA recipients and subrecipients may 
impose such requirements for their contracts at their discretion. Such 
projects will receive automatic admission into the pilot program. 
However, in order to assess the effect of such preferences on 
competition, recipients and subrecipients that plan to utilize in-state 
or local geographic labor hiring preferences must notify their FTA 
Regional Office prior to advertising contracts that use such 
preferences. For in-state or local geographic hiring preferences 
proposed for inclusion in contracts advertised after September 30, 
2015, recipients and subrecipients must request prior approval from the 
FTA to utilize such hiring preferences through the above-described 
process unless provisions similar to section 418 are included in a new 
appropriations or re-authorization act. Requests to use requirements 
other than in-state or local geographic preferences for construction 
hiring, including requirements involving the procurement of rolling 
stock, must request prior FTA approval as described above.

    Issued in Washington, DC, on February 24, 2015.
Anthony R. Foxx,
Secretary of Transportation.
[FR Doc. 2015-05204 Filed 3-5-15; 8:45 am]
BILLING CODE 4910-9X-P



                                                                                  Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices                                                     12257

                                                  will not result in the creation a Class I               find that such restrictions do not unduly             requirements as long as they do not
                                                  or Class II rail carrier and will not                   limit competition, DOT may provide                    ‘‘unduly limit competition.’’ 1
                                                  exceed $5 million.                                      further guidance regarding their use.                    The 2013 opinion explains that
                                                     The transaction may be consummated                   DATES: This pilot program is effective                competition would not be unduly
                                                  on or after March 20, 2015, the effective               March 6, 2015.                                        limited by ‘‘[a] state or local
                                                  date of the exemption (30 days after the                                                                      requirement that has only an incidental
                                                                                                          FOR FURTHER INFORMATION CONTACT: For
                                                  verified notice of exemption was filed).                                                                      effect on the pool of potential bidders or
                                                     If the verified notice contains false or             technical information: Mr. Michael                    that imposes reasonable requirements
                                                  misleading information, the exemption                   Harkins, Deputy Assistant General                     related to the performance of the
                                                  is void ab initio. Petitions to revoke the              Counsel for General Law, Office, U.S.                 necessary work. . . .’’ 2013 opinion at
                                                  exemption under 49 U.S.C. 10502(d)                      Department of Transportation, 1200                    2. In contrast, ‘‘a requirement that has
                                                  may be filed at any time. The filing of                 New Jersey Avenue SE., Washington,                    more than an incidental effect on the
                                                  a petition to revoke will not                           DC 20590, 202–366–0590 (telephone),                   pool of potential bidders and does not
                                                  automatically stay the effectiveness of                 Michael.Harkins@dot.gov (email).                      relate to the work’s performance would
                                                  the exemption. Petitions for stay must                  SUPPLEMENTARY INFORMATION:                            unduly limit competition unless it
                                                  be filed no later than March 13, 2015 (at               Electronic Access                                     promotes the efficient and effective use
                                                  least seven days before the exemption                                                                         of federal funds.’’ Id. at 2–3. In assessing
                                                  becomes effective).                                       An electronic copy of this document                 whether a requirement does promote the
                                                     An original and 10 copies of all                     may also be downloaded from the Office                efficient and effective use of federal
                                                  pleadings, referring to Docket No. FD                   of the Federal Register’s home page at                funds, the agency ‘‘may take into
                                                  35902, must be filed with Surface                       http://www.archives.gov/federal_register              account whether the requirement
                                                  Transportation Board, 395 E Street SW.,                 and the Government Publishing Office’s                promotes such efficiency in connection
                                                  Washington, DC 20423–0001. In                           Web page at http://www.gpoaccess.gov.                 with the letting of a particular contract
                                                  addition, one copy of each pleading                     Background                                            and also whether it more generally
                                                  must be served on John K. Fiorilla,                                                                           furthers the efficient and effective use of
                                                  Capehart & Scatchard, P.A., 8000                        Interpretation of Competition Mandate                 federal funds in the long run or protects
                                                  Midlantic Drive, Suite 300S, Mount                         Traditionally, DOT has prohibited its              the integrity of the competitive bidding
                                                  Laurel, NJ 08054.                                       recipients and subrecipients from using               process itself.’’ Id. at 3. So long as a state
                                                     Board decisions and notices are                      certain contracting provisions that do                or local requirement serves these
                                                  available on our Web site at                            not directly relate to the bidder’s                   purposes, ‘‘the Administrator may
                                                  www.stb.dot.gov.                                        performance of work in a competent and                reasonably determine, consistent with
                                                    Decided: March 3, 2015.                               responsible manner. An example of                     section 112, that the requirement does
                                                    By the Board, Rachel D. Campbell,                     such provisions includes local and other              not unduly limit competition, even if it
                                                  Director, Office of Proceedings.                        geographic-based labor hiring                         may have the effect of reducing the
                                                  Brendetta S. Jones,                                     preferences. The DOT’s position was                   number of eligible bidders for a
                                                                                                          reinforced by a 1986 opinion of the                   particular contract.’’ Id.
                                                  Clearance Clerk.
                                                                                                          OLC, which concluded that 23 U.S.C.                      Thus, DOT retains discretion under
                                                  [FR Doc. 2015–05212 Filed 3–5–15; 8:45 am]                                                                    the statute to evaluate whether a
                                                                                                          112 (‘‘section 112’’) obligated the
                                                  BILLING CODE 4915–01–P
                                                                                                          Secretary of Transportation to withhold               particular State or local law or policy
                                                                                                          Federal funding from highway                          that has more than an incidental effect
                                                                                                          construction contracts that were subject              on the pool of potential bidders is
                                                  DEPARTMENT OF TRANSPORTATION                                                                                  nonetheless compatible with section
                                                                                                          to a New York City law imposing
                                                  Office of the Secretary                                 disadvantages on a class of responsible               112(b)(1)’s competitive bidding
                                                                                                          bidders, where the city failed to                     requirement. The process used to
                                                  Contracting Initiative                                  demonstrate that its departure from                   evaluate whether state and local
                                                                                                          competitive bidding requirements was                  requirements satisfy section 112 also is
                                                  AGENCY: Office of the Secretary (OST),                                                                        a matter of agency discretion. Id. at 17–
                                                  Department of Transportation (DOT).                     justified by considerations of cost-
                                                                                                          effectiveness. See Compatibility of New               18 (‘‘It is for FHWA and DOT to
                                                  ACTION: Notice.                                                                                               determine the regulatory approach the
                                                                                                          York City Local Law 19 with Federal
                                                                                                          Highway Act Competitive Bidding                       agency should take in exercising this
                                                  SUMMARY:    The DOT is announcing an                                                                          discretion and in evaluating whether
                                                  initiative to permit, on an experimental                Requirements, 10 Op. O.L.C. 101 (1986).
                                                                                                             However, in August 2013, at DOT’s                  certain state and local requirements are
                                                  basis, Federal Highway Administration                                                                         consistent with [section 112’s] statutory
                                                  (FHWA) and Federal Transit                              request, the OLC provided DOT with a
                                                                                                          memorandum opinion, clarifying its                    mandates. . . .’’).
                                                  Administration (FTA) recipients and
                                                  subrecipients to utilize various                        1986 opinion on section 112. See                      Experimental Authority
                                                  contracting requirements that generally                 Competitive Bidding Requirements                        In 1988, a Transportation Research
                                                  have been disallowed due to concerns                    Under the Federal-Aid Highway                         Board (TRB) task force, comprised of
                                                  about adverse impacts on competition.                   Program, 23 U.S.C. 112, (Aug. 23, 2013)               representatives from all segments of the
                                                  This initiative will be carried out as a                (‘‘2013 opinion’’). The 2013 opinion is               highway industry, was formed to
                                                  pilot program for a period of 1 year                    available at http://www.justice.gov/olc/              evaluate Innovative Contracting
                                                                                                          opinions. The 2013 opinion clarifies
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  (unless extended) under the FHWA and                                                                          Practices. This TRB task force requested
                                                  FTA’s existing authorities. The purpose                 that section 112 does not compel the
                                                  of this pilot program is to determine                   DOT’s position with respect to                           1 While the 2013 opinion was specific to section

                                                  whether the use of such requirements                    contracting requirements that do not                  112, which only applies to highway projects, it also
                                                  ‘‘unduly limit competition,’’ as                        directly relate to the bidder’s                       is relevant in interpreting and implementing FTA’s
                                                                                                          performance of work, but rather                       statutory mandate under 49 U.S.C. 5325(a) that
                                                  provided in an August 23, 2013, opinion                                                                       broadly requires full and open competition in the
                                                  from the Department of Justice’s Office                 provides the Secretary with discretion                award of contracts utilizing financial assistance
                                                  of Legal Counsel (OLC). Should DOT                      to permit other types of state or local               from the FTA.



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                                                  12258                           Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices

                                                  that the FHWA establish a project to                    Pilot Program                                         reserves the right to extend this time
                                                  evaluate and validate certain findings of                  The DOT is interested in permitting                period at its discretion.
                                                  the task force regarding innovative                     State and local recipients of Federal                 FHWA
                                                  contracting practices, which are                        financial assistance to utilize
                                                  documented in Transportation Research                                                                            For contracts to be funded by FHWA,
                                                                                                          contracting requirements that
                                                  Circular Number 386, titled, ‘‘Innovative                                                                     State and local recipients and
                                                                                                          traditionally have been prohibited on
                                                  Contracting Practices,’’ dated December                                                                       subrecipients must request prior
                                                                                                          the basis that they would restrict
                                                  1991. In response, the FHWA initiated                                                                         approval from the FHWA to use a
                                                                                                          competition by not directly relating to
                                                  Special Experimental Project No. 14                                                                           specific contracting requirement under
                                                                                                          the bidder’s performance of work. Thus,
                                                  (SEP–14) pursuant to the authority                                                                            SEP–14. In order to receive SEP–14
                                                                                                          DOT is establishing a pilot program
                                                  granted to the Secretary, which now is                                                                        approval, States and local recipients and
                                                                                                          under the existing authorities of the
                                                  codified at 23 U.S.C. 502. The SEP–14                                                                         subrecipients would follow the normal
                                                                                                          FHWA and FTA grant programs. The
                                                  program strives to identify, evaluate,                  objective of this pilot program is to                 process that includes submitting work
                                                  and document innovative contracting                     enable DOT to determine which                         plans to the appropriate FHWA division
                                                  practices that have the potential to                    requirements may be used consistently                 office. For more information on the
                                                  reduce the life cycle cost of projects,                 with the 2013 OLC opinion by                          SEP–14 process, please see: http://www.
                                                  while at the same time, maintain                        promoting efficiency in connection with               fhwa.dot.gov/programadmin/contracts/
                                                  product quality. Under SEP–14, the                      the letting of a particular contract,                 sep_a.cfm.
                                                  FHWA has the flexibility to experiment                                                                           In developing requests to FHWA to
                                                                                                          furthering the efficient and effective use
                                                  with innovative approaches to                                                                                 use contracting requirements under
                                                                                                          of federal funds in the long run, or
                                                  contracting.                                            protecting the integrity of the                       SEP–14, recipients and subrecipients
                                                    The innovative practices originally                   competitive bidding process.                          should address, at a minimum, the
                                                  approved for evaluation under SEP–14                       In particular, with respect to                     following points:
                                                                                                          procurements for which FHWA or FTA                       (1) Describe the project, including the
                                                  were: Cost-plus-time bidding, lane
                                                                                                          funds will be used, recipients and                    amount of FHWA funding involved in
                                                  rental, design-build contracting, and
                                                                                                          subrecipients may request those                       the as well as the estimated total project
                                                  warranty clauses. Forty-one States have
                                                                                                          agencies to permit the use of a particular            cost.
                                                  used at least one of the innovative                                                                              (2) Describe the contracting
                                                  practices under SEP–14. Based on their                  contracting requirement that otherwise
                                                                                                                                                                requirement that may otherwise be
                                                  collective experiences, FHWA decided                    may be found to be inconsistent with
                                                                                                          the general requirement for full and                  found to be inconsistent with the
                                                  that cost-plus-time bidding, lane rental,                                                                     general requirement for full and open
                                                  and warranty clauses were techniques                    open competition. DOT is particularly
                                                                                                          interested in contracts for which                     competition.
                                                  suitable for use as non-experimental,                                                                            (3) Describe how they will evaluate
                                                  operational practices and in 1995 these                 recipients and subrecipients wish to
                                                                                                                                                                the effects of relevant contracting
                                                  were made regular Federal-aid                           utilize a local or other geographic labor
                                                                                                                                                                requirements on competitive bidding. In
                                                  procedures. Design-build contracting in                 hiring preferences, economic-based
                                                                                                                                                                doing so, the recipient or subrecipient
                                                  the Federal-aid highway program was                     labor hiring preferences (i.e., low-
                                                                                                                                                                should, at a minimum, provide
                                                  conducted under SEP–14 until Congress                   income workers), and labor hiring
                                                                                                                                                                comparisons of bids received for the
                                                  modified section 112 in section 1307 of                 preferences for veterans 2 because, in the
                                                                                                                                                                projects utilizing the relevant contract
                                                  the Transportation Equity Act for the                   DOT’s view, such requirements can
                                                                                                                                                                requirements to other projects of similar
                                                  21st Century to permanently authorize                   promote Ladders of Opportunity by
                                                                                                                                                                size and scope and in the same
                                                  the use of this contracting method.                     ensuring that disadvantaged workers in
                                                                                                                                                                geographic area not utilizing such
                                                  Additionally, the construction manager/                 the communities in which the projects
                                                                                                                                                                requirements. If a reduction in the pool
                                                  general contractor method of contracting                are located benefit from the economic
                                                                                                                                                                of bidders is evident, explain the
                                                  in the Federal-aid highway program was                  opportunities such projects present.
                                                                                                                                                                potential offsetting benefits resulting
                                                  originally conducted under SEP–14                       DOT, however, will not approve
                                                                                                                                                                from the use of the requirement.
                                                  until Congress modified section 112 in                  projects for which recipients wish to                    (1) Describe and quantify how the
                                                  section 1303 of the Moving Ahead for                    alter the requirements of the                         relevant contracting requirement would
                                                  Progress in the 21st Century Act to                     Disadvantaged Business Enterprise                     lead to increases in the effectiveness
                                                  permanently authorize the use of this                   Program.                                              and efficiency of Federal funds for the
                                                  contracting method. The SEP–14                             This pilot program will be carried out
                                                                                                                                                                project.
                                                  program continues to be used to test and                for a period of 1 year from the date of                  (2) Describe and quantify how the
                                                  evaluate experimental contracting                       publication of this notice. As such, DOT              experimental contracting technique
                                                  practices.                                              is only interested in contracts that will             would protect the integrity of the
                                                    Also, the FTA has authority under 49                  be advertised during this time frame.                 competitive bidding process either in
                                                  U.S.C. 5312 to carry out research,                      For any such contracts, the DOT will                  connection with the particular contract
                                                  development, demonstration, and                         monitor and evaluate whether                          or when considered over the long term
                                                  deployment projects that will improve                   contracting requirements that                         for that agency’s program.
                                                  public transportation. Additionally, 49                 traditionally have been prohibited on                    For contracts involving the use of
                                                  U.S.C. 5314 authorizes FTA to carry out                 the basis that they would restrict                    local and other geographic labor hiring
                                                  activities that will assist recipients of               competition by not directly relating to               preferences, economic-based labor
                                                                                                          the bidder’s performance of work have
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                                                  assistance to administer funds received                                                                       hiring preferences, and/or labor hiring
                                                  under Chapter 53 in compliance with                     an undue restriction on competition.                  preferences for veterans, FHWA may
                                                  Federal law, including the development                  While DOT’s current plan is to conduct                approve, at the request of the recipient
                                                  of voluntary and consensus-based                        this pilot program for 1 year, DOT                    or subrecipient, the use of such
                                                  standards and best practices by the                       2 See also 23 U.S.C. 114(d), which requires
                                                                                                                                                                requirements for a specific contract, a
                                                  public transportation industry,                         recipients, to the extent practicable, to encourage
                                                                                                                                                                specific group of, or on a more general
                                                  including standards and best practices                  contractors to make a best faith effort to hire       programmatic basis. The use of other
                                                  for procurement.                                        veterans on Federal-aid highway projects.             contracting requirements may be


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                                                                                  Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices                                                    12259

                                                  approved by FHWA after coordination                     Administrator regarding each                            competition, recipients and
                                                  with the DOT Office of General Counsel.                 application. The FTA Administrator                      subrecipients that plan to utilize in-state
                                                                                                          will provide a final written                            or local geographic labor hiring
                                                  FTA
                                                                                                          determination to each applicant, on a                   preferences must notify their FTA
                                                     For contracts to be funded by FTA                    rolling basis, regarding whether an                     Regional Office prior to advertising
                                                  (including federal financial assistance                 application has been accepted into the                  contracts that use such preferences. For
                                                  under any FTA formula or discretionary                  pilot program.                                          in-state or local geographic hiring
                                                  program), State and local recipients and                   For projects involving the use of local              preferences proposed for inclusion in
                                                  subrecipients must request prior                        and other geographic labor hiring                       contracts advertised after September 30,
                                                  approval from the FTA to use a specific                 preferences, economic-based labor                       2015, recipients and subrecipients must
                                                  contracting requirement pursuant to                     hiring preferences, and/or labor hiring                 request prior approval from the FTA to
                                                  FTA’s research and assistance                           preferences for veterans, FTA may                       utilize such hiring preferences through
                                                  authorities discussed above. In making                  approve, at the request of the recipient                the above-described process unless
                                                  such requests, recipients and                           or subrecipient, the use of such                        provisions similar to section 418 are
                                                  subrecipients must submit an                            requirements for a specific contract, a                 included in a new appropriations or re-
                                                  application to their FTA Regional                       specific group of, or on a more general                 authorization act. Requests to use
                                                  Office. In their application, recipients                programmatic basis. The use of other                    requirements other than in-state or local
                                                  should address, at a minimum, the                       contracting requirements may be                         geographic preferences for construction
                                                  following points:                                       approved by FTA after coordination                      hiring, including requirements
                                                     (1) Describe the contracting                         with the DOT Office of General Counsel.                 involving the procurement of rolling
                                                  opportunity, including the schedule for                    With respect to in-state or local                    stock, must request prior FTA approval
                                                  the type of project and type of asset                   geographic labor hiring preferences,                    as described above.
                                                  being constructed and the amount of                     please note that Section 418 of the
                                                  FTA funding involved in the project as                  Consolidated and further Continuing                       Issued in Washington, DC, on February 24,
                                                  well as the estimated total project cost.                                                                       2015.
                                                                                                          Appropriations Act, 2015, Public Law
                                                     (2) Describe the contracting                         113–235 (FY 2015 Appropriations Act),                   Anthony R. Foxx,
                                                  requirement that may otherwise be                       prohibits FTA from using FY 2015                        Secretary of Transportation.
                                                  found to be inconsistent with the                       funds to implement, administer, or                      [FR Doc. 2015–05204 Filed 3–5–15; 8:45 am]
                                                  general requirement for full and open                   enforce 49 CFR 18.36(c)(2), for                         BILLING CODE 4910–9X–P
                                                  competition.                                            construction hiring. Section 18.36(c)(2)
                                                     (3) Describe how they will evaluate                  prohibits the use of statutorily or
                                                  the effects of relevant contracting                     administratively imposed in-State or                    DEPARTMENT OF TRANSPORTATION
                                                  requirements on competitive bidding. In                 local geographical preferences in the
                                                  doing so, the recipient and subrecipient                evaluation of bids or proposals.3                       National Highway Traffic Safety
                                                  should, at a minimum, provide                           Accordingly, for construction contracts                 Administration
                                                  comparisons of bids received for the                    awarded or advertised in FY 2015, FTA                   [Docket No. NHTSA–2015–0013]
                                                  projects utilizing the relevant contract                recipients may use in-state or local
                                                  requirements to other projects of similar               geographic preferences for construction                 National Emergency Medical Services
                                                  size and scope and in the same                          labor hiring. Additional guidance on                    Advisory Council (NEMSAC); Notice of
                                                  geographic area not utilizing such                      FTA’s implementation of Section 418                     Federal Advisory Committee Meeting
                                                  requirements. If a reduction in the pool                may be found on FTA’s Web site at
                                                  of bidders is evident, explain the                      www.fta.dot.gov.                                        AGENCY:  National Highway Traffic
                                                  potential offsetting benefits resulting                    As a result of the enactment of                      Safety Administration (NHTSA), U.S.
                                                  from the use of the requirement.                        Section 418, recipients and                             Department of Transportation (DOT)
                                                     (4) Describe how the relevant                        subrecipients do not need to submit                     ACTION: Meeting Notice—National
                                                  contracting requirement would lead to                   applications for participation in the                   Emergency Medical Services Advisory
                                                  increases in the effectiveness and                      pilot program for the use of in-state or                Council.
                                                  efficiency of Federal funds for the                     local geographic labor hiring
                                                  project.                                                preferences for contracts awarded or                    SUMMARY:   The NHTSA announces a
                                                     (5) Describe and quantify how the                    advertised on or before September 30,                   meeting of NEMSAC to be held in the
                                                  experimental contracting technique                      2015. In other words, prior FTA                         Metropolitan Washington, DC, area.
                                                  would protect the integrity of the                      approval is not required to use such                    This notice announces the date, time,
                                                  competitive bidding process either in                   requirements, and FTA recipients and                    and location of the meeting, which will
                                                  connection with the particular contract                 subrecipients may impose such                           be open to the public, as well as
                                                  or when considered over the long term                   requirements for their contracts at their               opportunities for public input to the
                                                  for that agency’s program.                              discretion. Such projects will receive                  NEMSAC. The purpose of NEMSAC, a
                                                     An evaluation committee comprised                    automatic admission into the pilot                      nationally recognized council of
                                                  of FTA staff will evaluate applications                 program. However, in order to assess the                emergency medical services
                                                  for inclusion in the pilot program. The                 effect of such preferences on                           representatives and consumers, is to
                                                  evaluation committee reserves the right                                                                         advise and consult with the U.S.
                                                  to evaluate applications it receives and                   3 Effective December 26, 2014, 49 CFR part 18        Department of Transportation (DOT)
                                                                                                          will apply only to grants obligated on or before        and the Federal Interagency Committee
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                                                  to seek clarification from any proposer
                                                                                                          December 25, 2014. Grants obligated on or after         on EMS (FICEMS) on matters relating to
                                                  about any statement that is made in an                  December 26, 2014 will be subject to 2 CFR part
                                                  application. FTA also may request                       200. This provision (18.36(c)(2)) has been recodified
                                                                                                                                                                  emergency medical services (EMS). Pre-
                                                  additional documentation or                             at 2 CFR 200.319(b) and is substantively the same       registration is required to attend.
                                                  information to be considered during the                 as 18.36(c)(2). Although Congress did not address       DATES: This open meeting will be held
                                                                                                          the change in codification in section 418, FTA
                                                  evaluation process. The evaluation                      intends to apply section 418 to grants obligated on
                                                                                                                                                                  on March 31, 2015, from 1 p.m. to 5:00
                                                  committee will provide a                                or after December 26, 2014 and subject to 2 CFR         p.m. EDT, and on April 1, 2015 from, 9
                                                  recommendation to the FTA                               200.319(b).                                             a.m. to 12 p.m. EDT. A public comment


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Document Created: 2018-02-21 09:33:23
Document Modified: 2018-02-21 09:33:23
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice.
DatesThis pilot program is effective March 6, 2015.
ContactFor technical information: Mr. Michael Harkins, Deputy Assistant General Counsel for General Law, Office, U.S. Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, 202-366-0590 (telephone), [email protected] (email).
FR Citation80 FR 12257 

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