[Title 23 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2008 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          23

                         Revised as of April 1, 2008


          Highways
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2008
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register
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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 23:
          Chapter I--Federal Highway Administration, 
          Department of Transportation                               3
          Chapter II--National Highway Traffic Safety 
          Administration and Federal Highway Administration, 
          Department of Transportation                             487
          Chapter III--National Highway Traffic Safety 
          Administration, Department of Transportation             531
  Finding Aids:
      Material Approved for Incorporation by Reference........     577
      Table of CFR Titles and Chapters........................     579
      Alphabetical List of Agencies Appearing in the CFR......     597
      List of CFR Sections Affected...........................     607

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 23 CFR 1.1 refers to 
                       title 23, part 1, section 
                       1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
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    To determine whether a Code volume has been amended since its 
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Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
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Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

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Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
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OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
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OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
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INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
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to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
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This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Regulations containing properly approved incorporations by reference 
in this volume are listed in the Finding Aids at the end of their CFR 
volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
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20408, or call 202-741-6010.

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3 CFR.
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This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

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    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    April 1, 2008.







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                               THIS TITLE

    Title 23--Highways is composed of one volume. The contents of this 
volume represent the current regulations of the National Highway Traffic 
Safety Administration and the Federal Highway Administration, Department 
of Transportation, issued under this title of the CFR as of April 1, 
2008.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.


[[Page 1]]



                           TITLE 23--HIGHWAYS




  --------------------------------------------------------------------
                                                                    Part

chapter i--Federal Highway Administration, Department of 
  Transportation............................................           1

chapter ii--National Highway Traffic Safety Administration 
  and Federal Highway Administration, Department of 
  Transportation............................................        1200

chapter iii--National Highway Traffic Safety Administration, 
  Department of Transportation..............................        1313

[[Page 3]]



 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION




  --------------------------------------------------------------------

           SUBCHAPTER A--GENERAL MANAGEMENT AND ADMINISTRATION
Part                                                                Page
1               General.....................................           7
                    SUBCHAPTER B--PAYMENT PROCEDURES
140             Reimbursement...............................          12
172             Administration of engineering and design 
                    related service contracts...............          19
180             Credit assistance for Surface Transportation 
                    projects................................          22
190             Incentive payments for controlling outdoor 
                    advertising on the interstate system....          22
192             Drug offender's driver's license suspension.          23
                       SUBCHAPTER C--CIVIL RIGHTS
200             Title VI program and related statutes--
                    implementation and review procedures....          27
230             External programs...........................          30
                SUBCHAPTER D--NATIONAL HIGHWAY INSTITUTE
260             Education and training programs.............          72
                   SUBCHAPTER E--PLANNING AND RESEARCH
420             Planning and research program administration          78
450             Planning assistance and standards...........          89
460             Public road mileage for apportionment of 
                    highway safety funds....................         131
470             Highway systems.............................         132
         SUBCHAPTER F--TRANSPORTATION INFRASTRUCTURE MANAGEMENT
500             Management and monitoring systems...........         139

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511

[Reserved]

            SUBCHAPTER G--ENGINEERING AND TRAFFIC OPERATIONS
620             Engineering.................................         146
625             Design standards for highways...............         148
626             Pavement policy.............................         151
627             Value engineering...........................         151
630             Preconstruction procedures..................         152
633             Required contract provisions................         167
634             Worker visibility...........................         181
635             Construction and maintenance................         182
636             Design-build contracting....................         206
637             Construction inspection and approval........         222
645             Utilities...................................         224
646             Railroads...................................         242
650             Bridges, structures, and hydraulics.........         251
652             Pedestrian and bicycle accommodations and 
                    projects................................         267
655             Traffic operations..........................         270
656             Carpool and vanpool projects................         276
657             Certification of size and weight enforcement         278
658             Truck size and weight, route designations--
                    length, width and weight limitations....         283
660             Special programs (Direct Federal)...........         343
661             Indian Reservation Road Bridge Program......         350
667

[Reserved]

668             Emergency relief program....................         359
669             Enforcement of heavy vehicle use tax........         366
               SUBCHAPTER H--RIGHT-OF-WAY AND ENVIRONMENT
710             Right-of-way and real estate................         369
750             Highway beautification......................         384
751             Junkyard control and acquisition............         402
752             Landscape and roadside development..........         407
771             Environmental impact and related procedures.         410
772             Procedures for abatement of highway traffic 
                    noise and construction noise............         428
773             Surface Transportation Project Delivery 
                    Pilot Program...........................         433
774             Parks, recreation areas, wildlife and 
                    waterfowl refuges, and historic sites 
                    (Section 4(f)) (Eff. 4-11-08)...........         436

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777             Mitigation of impacts to wetlands and 
                    natural habitat.........................         446
                   SUBCHAPTER I--PUBLIC TRANSPORTATION
810             Mass transit and special use highway 
                    projects................................         451
                      SUBCHAPTER J--HIGHWAY SAFETY
924             Highway safety improvement program..........         457
            SUBCHAPTER K--INTELLIGENT TRANSPORTATION SYSTEMS
940             Intelligent transportation system 
                    architecture and standards..............         460
                  SUBCHAPTER L--FEDERAL LANDS HIGHWAYS
970             National Park Service management systems....         463
971             Forest Service management systems...........         468
972             Fish and Wildlife Service management systems         474
973             Management systems pertaining to the Bureau 
                    of Indian Affairs and the Indian 
                    Reservation Roads Program...............         480

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           SUBCHAPTER A_GENERAL MANAGEMENT AND ADMINISTRATION





PART 1_GENERAL--Table of Contents




Sec.
1.1 Purpose.
1.2 Definitions.
1.3 Federal-State cooperation; authority of State highway departments.
1.5 Information furnished by State highway departments.
1.7 Urban area boundaries.
1.8 [Reserved]
1.9 Limitation on Federal participation.
1.11 Engineering services.
1.23 Rights-of-way.
1.27 Maintenance.
1.28 Diversion of highway revenues.
1.32 Issuance of directives.
1.33 Conflicts of interest.
1.35 Bonus program.
1.36 Compliance with Federal laws and regulations.

    Authority: 23 U.S.C. 315; 49 CFR 1.48(b).

    Source: 25 FR 4162, May 11, 1960, unless otherwise noted.



Sec. 1.1  Purpose.

    The purpose of the regulations in this part is to implement and 
carry out the provisions of Federal law relating to the administration 
of Federal aid for highways.



Sec. 1.2  Definitions.

    (a) Terms defined in 23 U.S.C. 101(a), shall have the same meaning 
where used in the regulations in this part, except as modified herein.
    (b) The following terms where used in the regulations in this part 
shall have the following meaning:
    Administrator. The Federal Highway Administrator.
    Advertising policy. The national policy relating to the regulation 
of outdoor advertising declared in title 23 U.S.C. 131.
    Advertising standards. The ``National Standards for Regulation by 
States of Outdoor Advertising Signs, Displays and Devices Adjacent to 
the National System of Interstate and Defense Highways'' promulgated by 
the Secretary (part 20 of this chapter).
    Federal laws. The provisions of title 23 U.S.C., and all other 
Federal laws, heretofore or hereafter enacted, relating to Federal aid 
for highways.
    Latest available Federal census. The latest available Federal 
decennial census, except for the establishment of urban area.
    Project. An undertaking by a State highway department for highway 
construction, including preliminary engineering, acquisition of rights-
of-way and actual construction, or for highway planning and research, or 
for any other work or activity to carry out the provisions of the 
Federal laws for the administration of Federal aid for highways.
    Secondary road plan. A plan for administration of Federal aid for 
highways on the Federal-aid secondary highway system pursuant to 23 
U.S.C. 117.
    Secretary. The Secretary of Transportation.
    State. Any State of the United States, the District of Columbia and 
Puerto Rico.
    Urban area. An area including and adjacent to a municipality or 
other urban place having a population of five thousand or more, as 
determined by the latest available published official Federal census, 
decennial or special, within boundaries to be fixed by a State highway 
department, subject to the approval of the Administrator.

[25 FR 4162, May 11, 1960, as amended at 35 FR 18719, Dec. 10, 1970]



Sec. 1.3  Federal-State cooperation; authority of State highway departments.

    The Administrator shall cooperate with the States, through their 
respective State highway departments, in the construction of Federal-aid 
highways. Each State highway department, maintained in conformity with 
23 U.S.C. 302, shall be authorized, by the laws of the State, to make 
final decisions for the State in all matters relating to, and to enter 
into, on behalf of the State, all contracts and agreements for projects 
and to take such other actions on behalf of the State as may be 
necessary

[[Page 8]]

to comply with the Federal laws and the regulations in this part.



Sec. 1.5  Information furnished by State highway departments.

    At the request of the Administrator the State highway department 
shall furnish to him such information as the Administrator shall deem 
desirable in administering the Federal-aid highway program.



Sec. 1.7  Urban area boundaries.

    Boundaries of an urban area shall be submitted by the State highway 
department and be approved by the Administrator prior to the inclusion 
in a program of any project wholly or partly in such area involving 
funds authorized for and limited to urban areas.



Sec. 1.8  [Reserved]



Sec. 1.9  Limitation on Federal participation.

    (a) Federal-aid funds shall not participate in any cost which is not 
incurred in conformity with applicable Federal and State law, the 
regulations in this title, and policies and procedures prescribed by the 
Administrator. Federal funds shall not be paid on account of any cost 
incurred prior to authorization by the Administrator to the State 
highway department to proceed with the project or part thereof involving 
such cost.
    (b) Notwithstanding the provisions of paragraph (a) of this section 
the Administrator may, upon the request of a State highway department, 
approve the participation of Federal-aid funds in a previously incurred 
cost if he finds:
    (1) That his approval will not adversely affect the public,
    (2) That the State highway department has acted in good faith, and 
that there has been no willful violation of Federal requirements,
    (3) That there has been substantial compliance with all other 
requirements prescribed by the Administrator, and full compliance with 
requirements mandated by Federal statute,
    (4) That the cost to the United States will not be in excess of the 
cost which it would have incurred had there been full compliance, and
    (5) That the quality of work undertaken has not been impaired.
    (c) Any request submitted under paragraph (b) of this section shall 
be accompanied by a detailed description of the relevant circumstances 
and facts, and shall explain the necessity for incurring the costs in 
question.

[38 FR 18368, July 10, 1973]



Sec. 1.11  Engineering services.

    (a) Federal participation. Costs of engineering services performed 
by the State highway department or any instrumentality or entity 
referred to in paragraph (b) of this section may be eligible for Federal 
participation only to the extent that such costs are directly 
attributable and properly allocable to specific projects.
    (b) Governmental engineering organizations. The State highway 
department may utilize, under its supervision, the services of well-
qualified and suitably equipped engineering organizations of other 
governmental instrumentalities for making surveys, preparing plans, 
specifications and estimates, and for supervising the construction of 
any project.
    (c) Railroad and utility engineering organizations. The State 
highway department may utilize, under its supervision, the services of 
well-qualified and suitably equipped engineering organizations of the 
affected railroad companies for railway-highway crossing projects and of 
the affected utility companies for projects involving utility 
installations.
    (d) [Reserved]
    (e) Responsibility of the State highway department. The State 
highway department is not relieved of its responsibilities under Federal 
law and the regulations in this part in the event it utilizes the 
services of any engineering organization under paragraphs (b), (c) or 
(d) of this section.

[25 FR 4162, May 11, 1960, as amended at 53 FR 18276, May 23, 1988; 57 
FR 60728, Dec. 22, 1992; 66 FR 58666, Nov. 23, 2001]



Sec. 1.23  Rights-of-way.

    (a) Interest to be acquired. The State shall acquire rights-of-way 
of such nature and extent as are adequate for the

[[Page 9]]

construction, operation and maintenance of a project.
    (b) Use for highway purposes. Except as provided under paragraph (c) 
of this section, all real property, including air space, within the 
right-of-way boundaries of a project shall be devoted exclusively to 
public highway purposes. No project shall be accepted as complete until 
this requirement has been satisfied. The State highway department shall 
be responsible for preserving such right-of-way free of all public and 
private installations, facilities or encroachments, except (1) those 
approved under paragraph (c) of this section; (2) those which the 
Administrator approves as constituting a part of a highway or as 
necessary for its operation, use or maintenance for public highway 
purposes and (3) informational sites established and maintained in 
accordance with Sec. 1.35 of the regulations in this part.
    (c) Other use or occupancy. Subject to 23 U.S.C. 111, the temporary 
or permanent occupancy or use of right-of-way, including air space, for 
nonhighway purposes and the reservation of subsurface mineral rights 
within the boundaries of the rights-of-way of Federal-aid highways, may 
be approved by the Administrator, if he determines that such occupancy, 
use or reservation is in the public interest and will not impair the 
highway or interfere with the free and safe flow of traffic thereon.



Sec. 1.27  Maintenance.

    The responsibility imposed upon the State highway department, 
pursuant to 23 U.S.C. 116, for the maintenance of projects shall be 
carried out in accordance with policies and procedures issued by the 
Administrator. The State highway department may provide for such 
maintenance by formal agreement with any adequately equipped county, 
municipality or other governmental instrumentality, but such an 
agreement shall not relieve the State highway department of its 
responsibility for such maintenance.



Sec. 1.28  Diversion of highway revenues.

    (a) Reduction in apportionment. If the Secretary shall find that any 
State has diverted funds contrary to 23 U.S.C. 126, he shall take such 
action as he may deem necessary to comply with said provision of law by 
reducing the first Federal-aid apportionment of primary, secondary and 
urban funds made to the State after the date of such finding. In any 
such reduction, each of these funds shall be reduced in the same 
proportion.
    (b) Furnishing of information. The Administrator may require any 
State to submit to him such information as he may deem necessary to 
assist the Secretary in carrying out the provisions of 23 U.S.C. 126 and 
paragraph (a) of this section.



Sec. 1.32  Issuance of directives.

    (a) The Administrator shall promulgate and require the observance of 
policies and procedures, and may take other action as he deems 
appropriate or necessary for carrying out the provisions and purposes of 
Federal laws, the policies of the Federal Highway Administration, and 
the regulations of this part.
    (b) The Administrator or his delegated representative, as 
appropriate, is authorized to issue the following type of directives:
    (1) Federal Highway Administration Regulations are issued by the 
Administrator or his delegate, as necessary, to implement and carry out 
the provisions of title 23 U.S.C., relating to the administration of 
Federal aid for highways, direct Federal programs and State and 
community safety programs; and title 49 U.S.C., relating to motor 
carrier safety; and other applicable laws and programs under his 
jurisdiction.
    (2) Notices are temporary issuances transmitting one-time or short-
term instructions or information which is expected to remain in effect 
for less than 90 days or for a predetermined period of time normally not 
to exceed one year.
    (3) Orders are directives limited in volume and contain permanent or 
longlasting policy, instructions, and procedures. FHWA Orders are to be 
used primarily as internal FHWA directives.

[[Page 10]]

    (4) Joint Interagency Orders and Notices are used by FHWA and the 
National Highway Traffic Safety Administration (NHTSA) to issue joint 
policies, procedures, and information pertaining to the joint 
administration of the State and Community Highway Safety Program. Where 
necessary, other joint directives may be issued with other modal 
administrations within the Department of Transportation.
    (5) Manuals are generally designed for use in issuing permanent or 
long-lasting detailed policy and procedure. Some of the major manuals 
recognized by the FHWA Directives System follow:
    (i) The Federal-Aid Highway Program Manual has been established to 
assemble and organize program material of the type previously contained 
in the Policy and Procedure and Instructional Memoranda which will 
continue in effect until specifically revoked or published in the new 
manual. Regulatory material is printed in italics in the manual and also 
appears in this code. Nonregulatory material is printed in delegate 
type.
    (ii) The Administrative Manual covers all internal FHWA 
administrative support functions.
    (iii) The Highway Planning Program Manual covers the methods and 
procedures necessary to conduct the highway planning functions.
    (iv) The Research and Development Manual series entitled, ``The 
Federally Coordinated Program of Research and Development in Highway 
Transportation'' describes the FHWA research and development program.
    (v) The External Audit Manual provides guidance to FHWA auditors in 
their review of State programs and processes.
    (vi) The Civil Rights and Equal Opportunity Manual provides guidance 
to FHWA and State Civil Rights and Equal Employment Opportunity 
Officers.
    (vii) The BMCS Operations Manual provides program guidance for all 
field employees assigned to the motor carrier safety program.
    (viii) The Highway Safety Program Manual, issued jointly by FHWA and 
NHTSA, contains volumes relating to the joint administration of the 
program.
    (6) Handbooks are internal operating instructions published in book 
form where, because of the program area covered, it is desirable to 
provide greater detail of administrative and technical instructions.
    (7) Transmittals identify and explain the original issuance or page 
change, provide background information, and provide filing instructions 
for insertion of new pages and removal of changed pages, or both.

(49 U.S.C. 1655)

[39 FR 1512, Jan. 10, 1974]



Sec. 1.33  Conflicts of interest.

    No official or employee of a State or any other governmental 
instrumentality who is authorized in his official capacity to negotiate, 
make, accept or approve, or to take part in negotiating, making, 
accepting or approving any contract or subcontract in connection with a 
project shall have, directly or indirectly, any financial or other 
personal interest in any such contract or subcontract. No engineer, 
attorney, appraiser, inspector or other person performing services for a 
State or a governmental instrumentality in connection with a project 
shall have, directly or indirectly, a financial or other personal 
interest, other than his employment or retention by a State or other 
governmental instrumentality, in any contract or subcontract in 
connection with such project. No officer or employee of such person 
retained by a State or other governmental instrumentality shall have, 
directly or indirectly, any financial or other personal interest in any 
real property acquired for a project unless such interest is openly 
disclosed upon the public records of the State highway department and of 
such other governmental instrumentality, and such officer, employee or 
person has not participated in such acquisition for and in behalf of the 
State. It shall be the responsibility of the State to enforce the 
requirements of this section.

[[Page 11]]



Sec. 1.35  Bonus program.

    (a) Any agreement entered into by a State pursuant to the provisions 
of section 12 of the Federal-Aid Highway Act of 1958, Pub. L. 85-381, 72 
Stat. 95, as amended, shall provide for the control or regulation of 
outdoor advertising, consistent with the advertising policy and 
standards promulgated by the Administrator, in areas adjacent to the 
entire mileage of the Interstate System within that State, except such 
segments as may be excluded from the application of such policy and 
standards by section 12.
    (b) Any such agreement for the control of advertising may provide 
for establishing publicly owned informational sites, whether publicly or 
privately operated, within the limits of or adjacent to the right-of-way 
of the Interstate System on condition that no such site shall be 
established or maintained except at locations and in accordance with 
plans, in furtherance of the advertising policy and standards, submitted 
to and approved by the Administrator.
    (c) No advertising right in the acquisition of which Federal funds 
participated shall be disposed of without the prior approval of the 
Administrator.

[39 FR 28628, Aug. 9, 1974]



Sec. 1.36  Compliance with Federal laws and regulations.

    If the Administrator determines that a State has violated or failed 
to comply with the Federal laws or the regulations in this part with 
respect to a project, he may withhold payment to the State of Federal 
funds on account of such project, withhold approval of further projects 
in the State, and take such other action that he deems appropriate under 
the circumstances, until compliance or remedial action has been 
accomplished by the State to the satisfaction of the Administrator.

[[Page 12]]



                     SUBCHAPTER B_PAYMENT PROCEDURES





PART 140_REIMBURSEMENT--Table of Contents




Subparts A-D [Reserved]

        Subpart E_Administrative Settlement Costs_Contract Claims

Sec.
140.501 Purpose.
140.503 Definition.
140.505 Reimbursable costs.

             Subpart F_Reimbursement for Bond Issue Projects

140.601 Purpose.
140.602 Requirements and conditions.
140.603 Programs.
140.604 Reimbursable schedule.
140.605 Approval actions.
140.606 Project agreements.
140.607 Construction.
140.608 Reimbursable bond interest costs of Interstate projects.
140.609 Progress and final vouchers.
140.610 Conversion from bond issue to funded project status.
140.611 Determination of bond retirement.
140.612 Cash management.

Appendix to Subpart F--Reimbursable Schedule for Converted ``E'' (Bond 
          Issue) Projects (Other Than Interstate Projects)

Subpart G [Reserved]

              Subpart H_State Highway Agency Audit Expense

140.801 Purpose.
140.803 Policy.
140.805 Definitions.
140.807 Reimbursable costs.

                Subpart I_Reimbursement for Railroad Work

140.900 Purpose.
140.902 Applicability.
140.904 Reimbursement basis.
140.906 Labor costs.
140.907 Overhead and indirect construction costs.
140.908 Materials and supplies.
140.910 Equipment.
140.912 Transportation.
140.914 Credits for improvements.
140.916 Protection.
140.918 Maintenance and extended construction.
140.920 Lump sum payments.
140.922 Billings.

    Authority: 23 U.S.C. 101(e), 106, 109(e), 114(a), 120(g), 121, 122, 
130, and 315; and 49 CFR 1.48(b).

Subparts A-D [Reserved]



        Subpart E_Administrative Settlement Costs_Contract Claims

    Source: 44 FR 59233, Oct. 15, 1979, unless otherwise noted.



Sec. 140.501  Purpose.

    This regulation establishes the criteria for eligibility for 
reimbursement of administrative settlement costs in defense of contract 
claims on projects performed by a State under Federal-aid procedures.



Sec. 140.503  Definition.

    Administrative settlement costs are costs related to the defense and 
settlement of contract claims including, but not limited to, salaries of 
a contracting officer or his/her authorized representative, attorneys, 
and/or members of State boards of arbitration, appeals boards, or 
similar tribunals, which are allocable to the findings and 
determinations of contract claims, but not including administrative or 
overhead costs.



Sec. 140.505  Reimbursable costs.

    (a) Federal funds may participate in administrative settlement costs 
which are:
    (1) Incurred after notice of claim,
    (2) Properly supported,
    (3) Directly allocable to a specific Federal-aid or Federal project,
    (4) For employment of special counsel for review and defense of 
contract claims, when
    (i) Recommended by the State Attorney General or State Highway 
Agency (SHA) legal counsel and
    (ii) Approved in advance by the FHWA Division Administrator, with 
advice of FHWA Regional Counsel, and
    (5) For travel and transportation expenses, if in accord with 
established policy and practices.

[[Page 13]]

    (b) No reimbursement shall be made if it is determined by FHWA that 
there was negligence or wrongdoing of any kind by SHA officials with 
respect to the claim.



             Subpart F_Reimbursement for Bond Issue Projects

    Source: 48 FR 54971, Dec. 8, 1983, unless otherwise noted.



Sec. 140.601  Purpose.

    To prescribe policies and procedures for the use of Federal funds by 
State highway agencies (SHAs) to aid in the retirement of the principal 
and interest of bonds, pursuant to 23 U.S.C. 122 and the payment of 
interest on bonds of eligible Interstate projects.



Sec. 140.602  Requirements and conditions.

    (a) An SHA that uses the proceeds of bonds issued by the State, a 
county, city or other political subdivision of the State, for the 
construction of projects on the Federal-aid primary or Interstate 
system, or extensions of any of the Federal-aid highway systems in urban 
areas, or for substitute highway projects approved under 23 U.S.C. 
103(e)(4), may claim payment of any portion of such sums apportioned to 
it for expenditures on such system to aid in the retirement of the 
principal of bonds at their maturities, to the extent that the proceeds 
of bonds have actually been expended in the construction of projects.
    (b) Any interest earned and payable on bonds, the proceeds of which 
were expended on Interstate projects after November 6, 1978, is an 
eligible cost of construction. The amount of interest eligible for 
participation will be based on (1) the date the proceeds were expended 
on the project, (2) amount expended, and (3) the date of conversion to a 
regularly funded project. As provided for in section 115(c), Pub. L. 95-
599, November 6, 1978, interest on bonds issued in any fiscal year by a 
State after November 6, 1978, may be paid under the authority of 23 
U.S.C. 122 only if such SHA was eligible to obligate Interstate 
Discretionary funds under the provisions of 23 U.S.C. 118(b) during such 
fiscal year, and the Administrator certifies that such eligible SHA has 
utilized, or will utilize to the fullest extent possible during such 
fiscal year, its authority to obligate funds under 23 U.S.C. 118(b).
    (c) The Federal share payable at the time of conversion, as provided 
for in Sec. 140.610 shall be the legal pro rata in effect at the time 
of execution of the project agreement for the bond issue project.
    (d) The authorization of a bond issue project does not constitute a 
commitment of Federal funds until the project is converted to a regular 
Federal-aid project as provided for in Sec. 140.610.
    (e) Reimbursements for the redemption of bonds may not precede, by 
more than 60 days, the scheduled date of the retirement of the bonds.
    (f) Federal funds are not eligible for payment into sinking funds 
created and maintained for the subsequent retirement of bonds.



Sec. 140.603  Programs.

    Programs covering projects to be financed from the proceeds of bonds 
shall be prepared and submitted to FHWA. Project designations shall be 
the same as for regular Federal-aid projects except that the prefix 
letter ``B'' for bond issue shall be used as the first letter of each 
project designation, e.g., ``BI'' for Bond Issue Projects--Interstate.



Sec. 140.604  Reimbursable schedule.

    Projects to be financed from other than Interstate funds shall be 
subject to a 36-month reimbursable schedule upon conversion to regular 
Federal-aid financing (See appendix). FHWA will consider requests for 
waiver of this provision at the time of conversion action. Waivers are 
subject to the availability of liquidating cash.



Sec. 140.605  Approval actions.

    (a) Authorization to proceed with preliminary engineering and 
acquisition of rights-of-way shall be issued in the same manner as for 
regularly financed Federal-aid projects.
    (b) Authorization of physical construction shall be given in the 
same manner as for regularly financed Federal-aid projects. The total 
cost and

[[Page 14]]

Federal funds required, including interest, shall be indicated in the 
plans, specifications, and estimates.
    (c) Projects subject to the reimbursable schedule shall be 
identified as an ``E'' project when the SHA is authorized to proceed 
with all or any phase of the work.
    (d) Concurrence in the award of contracts shall be given.



Sec. 140.606  Project agreements.

    Project Agreements, Form PR-2, shall be prepared and executed. 
Agreement provision 8 on the reverse side of Form PR-2 \1\ shall apply 
for bond issue projects.
---------------------------------------------------------------------------

    \1\ The text of FHWA Form PR-2 is found in 23 CFR part 630, subpart 
C, appendix A.
---------------------------------------------------------------------------



Sec. 140.607  Construction.

    Construction shall be supervised by the SHA in the same manner as 
for regularly financed Federal-aid projects. The FHWA will make 
construction inspections and reports.



Sec. 140.608  Reimbursable bond interest costs of Interstate projects.

    (a) Bond interest earned on bonds actually retired may be reimbursed 
on the Federal pro rata basis applicable to such projects in accordance 
with Sec. 140.602(b) and (c).
    (b) No interest will be reimbursed for bonds issued after November 
6, 1978, used to retire or otherwise refinance bonds issued prior to 
that date.



Sec. 140.609  Progress and final vouchers.

    (a) Progress vouchers may be submitted for the Federal share of 
bonds retired or about to be retired, including eligible interest on 
Interstate Bond Issue Projects, the proceeds of which have actually been 
expended for the construction of the project.
    (b) Upon completion of a bond issue project, a final voucher shall 
be submitted by the SHA. After final review, the SHA will be advised as 
to the total cost and Federal fund participation for the project.



Sec. 140.610  Conversion from bond issue to funded project status.

    (a) At such time as the SHA elects to apply available apportioned 
Federal-aid funds to the retirement of bonds, including eligible 
interest earned and payable on Interstate Bond Projects, subject to 
available obligational authority, its claim shall be supported by 
appropriate certifications as follows:

    I hereby certify that the following bonds, (list), the proceeds of 
which have been actually expended in the construction of bond issue 
projects authorized by title 23 U.S.C., section 122, (1) have been 
retired on ------, or (2) mature and are scheduled for retirement on --
----, which is ---- days in advance of the maturity date of ------.

    Eligible interest claimed on Interstate Bond Projects shall be shown 
for each bond and the certification shall include the statement:

    I also certify that interest earned and paid or payable for each 
bond listed has been determined from the date on and after which the 
respective bond proceeds were actually expended on the project.

    (b) The SHA's request for full conversion of a completed projects), 
or partial conversion of an active or completed project(s), may be made 
by letter, inclusive of the appropriate certification as described in 
Sec. 140.610(a) making reference to any progress payments received or 
the final voucher(s) previously submitted and approved in accordance 
with Sec. 140.609.
    (c) Approval of the conversion action shall be by the Division 
Administrator.
    (d) The SHA's request for partial conversion of an active or 
completed bond issue project shall provide for: (1) Conversion to funded 
project status of the portion to be financed out of the balance of 
currently available apportioned funds, and (2) retention of the unfunded 
portion of the project in the bond program.
    (e) Where the SHA's request involves the partial conversion of a 
completed bond issue project, payment of the Federal funds made 
available under the conversion action shall be accomplished through use 
of Form PR-20, Voucher for Work Performed under Provisions of the 
Federal-aid and Federal Highway Acts, prepared in the division office 
and appropriately cross-referenced to the Bond Issue Project final 
voucher previously submitted and approved. The final voucher will be 
reduced by the amount of the approved reimbursement.

[[Page 15]]



Sec. 140.611  Determination of bond retirement.

    Division Administrators shall be responsible for the prompt review 
of the SHA's records to determine that bonds issued to finance the 
projects and for which reimbursement has been made, including eligible 
bond interest expense, have been retired pursuant to the State's 
certification required by Sec. 140.610(a), and that such action is 
documented in the project file.



Sec. 140.612  Cash management.

    By July 1 of each year the SHA will provide FHWA with a schedule, 
including the anticipated claims for reimbursement, of bond projects to 
be converted during the next two fiscal years. The data will be used by 
FHWA in determining liquidating cash required to finance such 
conversions.



   Sec. Appendix to Subpart F to Part 140--Reimbursable Schedule for 

 Converted ``E'' (Bond Issue) Projects (other than Interstate Projects)

------------------------------------------------------------------------
                                                             Cumulative
                                                               amount
                                                            reimbursable
   Time in months following conversion from ``E'' (bond      (percent of
             issue) project to regular project                 Federal
                                                                funds
                                                             obligated)
------------------------------------------------------------------------
1.........................................................             1
2.........................................................             2
3.........................................................             5
4.........................................................             9
5.........................................................            13
6.........................................................            18
7.........................................................            23
8.........................................................            29
9.........................................................            34
10........................................................            39
11........................................................            44
12........................................................            49
13........................................................            54
14........................................................            58
15........................................................            61
16........................................................            64
17........................................................            67
18........................................................            70
19........................................................            73
20........................................................            75
21........................................................            77
22........................................................            79
23........................................................            81
24........................................................            83
25........................................................            85
26........................................................            87
27........................................................            89
28........................................................            91
29........................................................            93
30........................................................            94
31........................................................            95
32........................................................            96
34........................................................            97
35........................................................            99
36........................................................           100
------------------------------------------------------------------------

Subpart G [Reserved]



              Subpart H_State Highway Agency Audit Expense

    Source: 49 FR 45578, Nov. 19, 1984, unless otherwise noted.



Sec. 140.801  Purpose.

    To establish the reimbursement criteria for Federal participation in 
project related audit expenses.



Sec. 140.803  Policy.

    Project related audits performed in accordance with generally 
accepted auditing standards (as modified by the Comptroller General of 
the United States) and applicable Federal laws and regulations are 
eligible for Federal participation. The State highway agency (SHA) may 
use other State, local public agency, and Federal audit organizations as 
well as licensed or certified public accounting firms to augment its 
audit force.



Sec. 140.805  Definitions.

    (a) Project related audits. Audits which directly benefit Federal-
aid highway projects. Audits performed in accordance with the 
requirements of 23 CFR part 12, audits of third party contract costs, 
and other audits providing assurance that a recipient has complied with 
FHWA regulations are all considered project related audits. Audits 
benefiting only nonfederal projects, those performed for SHA management 
use only, or those serving similar nonfederal purposes are not 
considered project related.
    (b) Third party contract costs. Project related costs incurred by 
railroads, utilities, consultants, governmental instrumentalities, 
universities, nonprofit

[[Page 16]]

organizations, construction contractors (force account work), and 
organizations engaged in right-of-way studies, planning, research, or 
related activities where the terms of a proposal or contract (including 
lump sum) necessitate an audit. Construction contracts (except force 
account work) are not included in this group.



Sec. 140.807  Reimbursable costs.

    (a) Federal funds may be used to reimburse an SHA for the following 
types of project related audit costs:
    (1) Salaries, wages, and related costs paid to public employees in 
accordance with subpart G of this part,
    (2) Payments by the SHA to any Federal, State, or local public 
agency audit organization, and
    (3) Payments by the SHA to licensed or certified public accounting 
firms.
    (b) Audit costs incurred by an SHA shall be equitably distributed to 
all benefiting parties. The portion of these costs allocated to the 
Federal-Aid Highway Program which are not directly related to a specific 
project or projects shall be equitably distributed, as a minimum, to the 
major FHWA funding categories in that State.



                Subpart I_Reimbursement for Railroad Work

    Source: 40 FR 16057, Apr. 9, 1975, unless otherwise noted.



Sec. 140.900  Purpose.

    The purpose of this subpart is to prescribe policies and procedures 
on reimbursement to the States for railroad work done on projects 
undertaken pursuant to the provisions of 23 CFR part 646, subpart B.



Sec. 140.902  Applicability.

    This subpart, and all references hereinafter made to ``projects,'' 
applies to Federal-aid projects involving railroad facilities, including 
projects for the elimination of hazards of railroad-highway crossings, 
and other projects which use railroad properties or which involve 
adjustments required by highway construction to either railroad 
facilities or facilities that are jointly owned or used by railroad and 
utility companies.



Sec. 140.904  Reimbursement basis.

    (a) General. On projects involving the elimination of hazards of 
railroad-highway crossings, and on other projects where a railroad 
company is not obligated to move or to change its facilities at its own 
expense, reimbursement will be made for the costs incurred by the State 
in making changes to railroad facilities as required in connection with 
a Federal-aid highway project, in accordance with the provisions of this 
subpart.
    (b) Eligibility. To be eligible, the costs must be:
    (1) For work which is included in an approved statewide 
transportation improvement program.
    (2) Incurred subsequent to the date of authorization by the Federal 
Highway Administration (FHWA),
    (3) Incurred in accordance with the provisions of 23 CFR, part 646, 
subpart B, and
    (4) Properly attributable to the project.

[40 FR 16057, Apr. 9, 1975, as amended at 53 FR 18276, May 23, 1988; 62 
FR 45328, Aug. 27, 1997]



Sec. 140.906  Labor costs.

    (a) General. (1) Salaries and wages, at actual or average rates, and 
related expenses paid by a company to individuals, for the time they are 
working on the project, are reimbursable when supported by adequate 
records. This shall include labor costs associated with preliminary 
engineering, construction engineering, right-of-way, and force account 
construction.
    (2) Salaries and expenses paid to individuals who are normally part 
of the overhead organization of the company may be reimbursed for the 
time they are working directly on the project, such as for accounting 
and bill preparation, when supported by adequate records and when the 
work performed by such individuals is essential to the project and could 
not have been accomplished as economically by employees outside the 
overhead organization.
    (3) Amounts paid to engineers, architects and others for services 
directly related to projects may be reimbursed.

[[Page 17]]

    (b) Labor surcharges. (1) Labor surcharges include worker 
compensation insurance, public liability and property damage insurance, 
and such fringe benefits as the company has established for the benefit 
of its employees. The cost of labor surcharges will be reimbursed at 
actual cost to the company or a company may, at its option, use an 
additive rate or other similar technique in lieu of actual costs 
provided that (i) the rate is based on historical cost data of the 
company, (ii) such rate is representative of actual costs incurred, 
(iii) the rate is adjusted at least annually taking into consideration 
known anticipated changes and correcting for any over or under applied 
costs for the preceding period, and (iv) the rate is approved by the SHA 
and FHWA.
    (2) Where the company is a self-insurer there may be reimbursement:
    (i) At experience rates properly developed from actual costs, not to 
exceed the rates of a regular insurance company for the class of 
employment covered, or
    (ii) At the option of the company, a fixed rate of 8 percent of 
direct labor costs for worker compensation and public liability and 
property damage insurance together.

[40 FR 16057, Apr. 9, 1975, as amended at 47 FR 33955, Aug. 5, 1982; 56 
FR 56578, Nov. 6, 1991]



Sec. 140.907  Overhead and indirect construction costs.

    (a) A State may elect to reimburse the railroad company for its 
overhead and indirect construction costs.
    (b) The FHWA will participate in these costs provided that:
    (1) The costs are distributed to all applicable work orders and 
other functions on an equitable and uniform basis in accordance with 
generally accepted accounting principles;
    (2) The costs included in the distribution are limited to costs 
actually incurred by the railroad;
    (3) The costs are eligible in accordance with the Federal 
Acquisition Regulation (48 CFR), part 31, Contract Cost Principles and 
Procedures, relating to contracts with commercial organizations;
    (4) The costs are considered reasonable;
    (5) Records are readily available at a single location which 
adequately support the costs included in the distribution, the method 
used for distributing the costs, and the basis for determining additive 
rates;
    (6) The rates are adjusted at least annually taking into 
consideration any overrecovery or underrecovery of costs; and
    (7) The railroad maintains written procedures which assure proper 
control and distribution of the overhead and indirect construction 
costs.

[53 FR 18276, May 23, 1988]



Sec. 140.908  Materials and supplies.

    (a) Procurement. Materials and supplies, if available, are to be 
furnished from company stock, except they may be obtained from other 
sources near the project site when available at less cost. Where not 
available from company stock, they may be purchased either under 
competitive bids or existing continuing contracts, under which the 
lowest available prices are developed. Minor quantities and proprietary 
products are excluded from these requirements. The company shall not be 
required to change its existing standards for materials used in 
permanent changes to its facilities.
    (b) Costs. (1) Materials and supplies furnished from company stock 
shall be billed at current stock price of such new or used material at 
time of issue.
    (2) Materials and supplies not furnished from company stock shall be 
billed at actual costs to the company delivered to the point of entry on 
the railroad company's line nearest the source of procurement.
    (3) A reasonable cost of plant inspection and testing may be 
included in the costs of materials and supplies where such expense has 
been incurred. The computation of actual costs of materials and supplies 
shall include the deduction of all offered discounts, rebates and 
allowances.
    (c) Materials recovered. (1) Materials recovered from temporary use 
and accepted for reuse by the company shall be credited to the project 
at prices charged to the job, less a consideration for loss in service 
life at 10 percent for

[[Page 18]]

rails, angle bars, tie plates and metal turnout materials and 15 percent 
for all other materials. Materials recovered from the permanent facility 
of the company that are accepted by the company for return to stock 
shall be credited to the project at current stock prices of such used 
material.
    (2) Materials recovered and not accepted for reuse by the company, 
if determined to have a net sale value, shall be sold by the State or 
railroad following an opportunity for State inspection and appropriate 
solicitation for bids, to the highest bidder; or if the company 
practices a system of periodic disposal by sale, credit to the project 
shall be at the going prices supported by the records of the company. 
Where applicable, credit for materials recovered from the permanent 
facility in length or quantities in excess of that being placed should 
be reduced to reflect any increased cost of railroad operation resulting 
from the adjustment.
    (d) Removal costs. Federal participation in the costs of removing, 
salvaging, transporting, and handling recovered materials will be 
limited to the value of materials recovered, except where FHWA approves 
additional measures for restoration of affected areas as required by the 
physical construction or by reason of safety or aesthetics.
    (e) Handling costs. The actual and direct costs of handling and 
loading out of materials and supplies at and from company stores or 
material yards and of unloading and handling of recovered materials 
accepted by the company at its stores or material yards, are 
reimbursable. At the option of the company, 5 percent of the amounts 
billed for the materials and supplies which are issued from company 
stores and material yards will be reimbursable in lieu of actual costs.
    (f) Credit losses. On projects where a company actually suffers loss 
by application of credits, the company shall have the opportunity of 
submitting a detailed statement of such loss as a basis for further 
adjustment.



Sec. 140.910  Equipment.

    (a) Company owned equipment. Cost of company-owned equipment may be 
reimbursed for the average or actual cost of operation, light and 
running repairs, and depreciation, or at industry rates representative 
of actual costs as agreed to by the railroad, SHA, and FHWA. 
Reimbursement for company-owned vehicles may be made at average or 
actual costs or at rates of recorded use per mile which are 
representative of actual costs and agreed to by the company, SHA, and 
FHWA.
    (b) Other equipment. Where company owned equipment is not available, 
reimbursement will be limited to the amount of rental paid (1) to the 
lowest qualified bidder, (2) under existing continuing contracts at 
reasonable cost, or (3) as an exception, by negotiation where (b) (1) 
and (2) are impractical due to project location or schedule.

[40 FR 16057, Apr. 9, 1975, as amended at 47 FR 33955, Aug. 5, 1982]



Sec. 140.912  Transportation.

    (a) Employees. The company's cost of necessary employee 
transportation and subsistence directly attributable to the project, 
which is consistent with overall policy of the company, is reimbursable.
    (b) Materials, supplies, and equipment. The most economical movement 
of materials, supplies and equipment to the project and necessary return 
to storage, including the associated costs of loading and unloading 
equipment, is reimbursable. Transportation by a railroad company over 
its own lines in a revenue train is reimbursable at average or actual 
costs, at rates which are representative of actual costs, or at rates 
which the company charges its customers for similar shipments provided 
the rate structure is documented and available to the public. These 
rates are to be agreed to by the company, SHA, and FHWA. No charge will 
be made for transportation by work train other than the operating 
expenses of the work train. When it is more practicable or more 
economical to move equipment on its own wheels, reimbursement may be 
made at average or actual costs or at rates which are representative of 
actual costs and are agreed to by the railroad, SHA, and FHWA.

[40 FR 16057, Apr. 9, 1975, as amended at 47 FR 33955, Aug. 5, 1982]

[[Page 19]]



Sec. 140.914  Credits for improvements.

    (a) Credit shall be made to the project for additions or 
improvements which provide for higher quality or increased service 
capability of the operating facility and which are provided solely for 
the benefit of the company.
    (b) Where buildings and other depreciable structures of a company 
which are integral to operation of rail traffic must be replaced, credit 
shall be made to the project as set forth in 23 CFR 646.216(c)(2).
    (c) No credit is required for additions or improvements which are:
    (1) Necessitated by the requirements of the highway project.
    (2) Replacements which, although not identical, are of equivalent 
standard.
    (3) Replacements of devices or materials no longer regularly 
manufactured and the next highest grade or size is used.
    (4) Required by governmental and appropriate regulatory commission 
requirements.



Sec. 140.916  Protection.

    The cost of essential protective services which, in the opinion of a 
railroad company, are required to ensure safety to railroad operations 
during certain periods of the construction of a project, is reimbursable 
provided an item for such services is incorporated in the State-railroad 
agreement or in a work order issued by the State and approved by FHWA.



Sec. 140.918  Maintenance and extended construction.

    The cost of maintenance and extended construction is reimbursable to 
the extent provided for in 23 CFR 646.216(f)(4), and where included in 
the State-Railroad Agreement or otherwise approved by the State and 
FHWA.



Sec. 140.920  Lump sum payments.

    Where approved by FHWA, pursuant to 23 CFR 646.216(d)(3), 
reimbursement may be made as a lump sum payment, in lieu of actual 
costs.



Sec. 140.922  Billings.

    (a) After the executed State-Railroad Agreement has been approved by 
FHWA, the company may be reimbursed on progress billings of incurred 
costs. Costs for materials stockpiled at the project site or 
specifically purchased and delivered to the company for use on the 
project may be reimbursed on progress billings following approval of the 
executed State-Railroad Agreement or the written agreement under 23 CFR 
646.218(c).
    (b) The company shall provide one final and complete billing of all 
incurred costs, or of the agreed-to lump sum, within one year following 
completion of the reimbursable railroad work. Otherwise, previous 
payments to the company may be considered final, except as agreed to 
between the SHA and the railroad.
    (c) All company cost records and accounts relating to the project 
are subject to audit by representatives of the State and/or the Federal 
Government for a period of three years from the date final payment has 
been received by the company.
    (d) A railroad company must advise the State promptly of any 
outstanding obligation of the State's contractor for services furnished 
by the company such as protective services.

[40 FR 16057, Apr. 9, 1975, as amended at 40 FR 29712, July 15, 1975; 62 
FR 45328, Aug. 27, 1997]



PART 172_ADMINISTRATION OF ENGINEERING AND DESIGN RELATED SERVICE CONTRACTS--Table of Contents




Sec.
172.1 Purpose and applicability.
172.3 Definitions.
172.5 Methods of procurement.
172.7 Audits.
172.9 Approvals.

    Authority: 23 U.S.C. 112, 114(a), 302, 315, and 402; 40 U.S.C. 541 
et seq.; sec.1205(a), Pub. L. 105-178, 112 Stat. 107 (1998); sec. 307, 
Pub. L. 104-59, 109 Stat. 568 (1995); sec. 1060, Pub. L. 102-240, 105 
Stat. 1914, 2003 (1991); 48 CFR 12 and 31; 49 CFR 1.48(b) and 18.

    Source: 67 FR 40155, June 12, 2002, unless otherwise noted.



Sec. 172.1  Purpose and applicability.

    This part prescribes policies and procedures for the administration 
of engineering and design related service contracts under 23 U.S.C. 112 
as supplemented by the common grant rule, 49

[[Page 20]]

CFR part 18. It is not the intent of this part to release the grantee 
from the requirements of the common grant rule. The policies and 
procedures involve federally funded contracts for engineering and design 
related services for projects subject to the provisions of 23 U.S.C. 
112(a) and are issued to ensure that a qualified consultant is obtained 
through an equitable selection process, that prescribed work is properly 
accomplished in a timely manner, and at fair and reasonable cost. 
Recipients of Federal funds shall ensure that their subrecipients comply 
with this part.



Sec. 172.3  Definitions.

    As used in this part:
    Audit means a review to test the contractor's compliance with the 
requirements of the cost principles contained in 48 CFR part 31.
    Cognizant agency means any Federal or State agency that has 
conducted and issued an audit report of the consultant's indirect cost 
rate that has been developed in accordance with the requirements of the 
cost principles contained in 48 CFR part 31.
    Competitive negotiation means any form of negotiation that utilizes 
the following:
    (1) Qualifications-based procedures complying with title IX of the 
Federal Property and Administrative Services Act of 1949 (Public Law 92-
582, 86 Stat. 1278 (1972));
    (2) Equivalent State qualifications-based procedures; or
    (3) A formal procedure permitted by State statute that was enacted 
into State law prior to the enactment of Public Law 105-178 (TEA-21) on 
June 9, 1998.
    Consultant means the individual or firm providing engineering and 
design related services as a party to the contract.
    Contracting agencies means State Departments of Transportation 
(State DOTs) or local governmental agencies that are responsible for the 
procurement of engineering and design related services.
    Engineering and design related services means program management, 
construction management, feasibility studies, preliminary engineering, 
design, engineering, surveying, mapping, or architectural related 
services with respect to a construction project subject to 23 U.S.C. 
112(a).
    One-year applicable accounting period means the annual accounting 
period for which financial statements are regularly prepared for the 
consultant.



Sec. 172.5  Methods of procurement.

    (a) Procurement. The procurement of Federal-aid highway contracts 
for engineering and design related services shall be evaluated and 
ranked by the contracting agency using one of the following procedures:
    (1) Competitive negotiation. Contracting agencies shall use 
competitive negotiation for the procurement of engineering and design 
related services when Federal-aid highway funds are involved in the 
contract. These contracts shall use qualifications-based selection 
procedures in the same manner as a contract for architectural and 
engineering services is negotiated under title IX of the Federal 
Property and Administrative Services Act of 1949 (40 U.S.C. 541-544) or 
equivalent State qualifications-based requirements. The proposal 
solicitation (project, task, or service) process shall be by public 
announcement, advertisement, or any other method that assures qualified 
in-State and out-of-State consultants are given a fair opportunity to be 
considered for award of the contract. Price shall not be used as a 
factor in the analysis and selection phase. Alternatively, a formal 
procedure adopted by State Statute enacted into law prior to June 9, 
1998 is also permitted under paragraph (a)(4) of this section.
    (2) Small purchases. Small purchase procedures are those relatively 
simple and informal procurement methods where an adequate number of 
qualified sources are reviewed and the total contract costs do not 
exceed the simplified acquisition threshold fixed in 41 U.S.C. 403(11). 
Contract requirements should not be broken down into smaller components 
merely to permit the use of small purchase requirements. States and 
subrecipients of States may use the State's small purchase procedures 
for the procurement of engineering and design related services provided 
the total contract costs do not exceed the

[[Page 21]]

simplified acquisition threshold fixed in 41 U.S.C. 403(11).
    (3) Noncompetitive negotiation. Noncompetitive negotiation may be 
used to procure engineering and design related services on Federal-aid 
participating contracts when it is not feasible to award the contract 
using competitive negotiation, equivalent State qualifications-based 
procedures, or small purchase procedures. Contracting agencies shall 
submit justification and receive approval from the FHWA before using 
this form of contracting. Circumstances under which a contract may be 
awarded by noncompetitive negotiation are limited to the following:
    (i) The service is available only from a single source;
    (ii) There is an emergency which will not permit the time necessary 
to conduct competitive negotiations; or
    (iii) After solicitation of a number of sources, competition is 
determined to be inadequate.
    (4) State statutory procedures. Contracting agencies may procure 
engineering and design related services using an alternate selection 
procedure established in State statute enacted into law before June 9, 
1998.
    (b) Disadvantaged Business Enterprise (DBE) program. The contracting 
agency shall give consideration to DBE consultants in the procurement of 
engineering and design related service contracts subject to 23 U.S.C. 
112(b)(2) in accordance with 49 CFR part 26.
    (c) Compensation. The cost plus a percentage of cost and percentage 
of construction cost methods of compensation shall not be used.



Sec. 172.7  Audits.

    (a) Performance of audits. When State procedures call for audits of 
contracts or subcontracts for engineering design services, the audit 
shall be performed to test compliance with the requirements of the cost 
principles contained in 48 CFR part 31. Other procedures may be used if 
permitted by State statutes that were enacted into law prior to June 9, 
1998.
    (b) Audits for indirect cost rate. Contracting agencies shall use 
the indirect cost rate established by a cognizant agency audit for the 
cost principles contained in 48 CFR part 31 for the consultant, if such 
rates are not under dispute. A lower indirect cost rate may be used if 
submitted by the consultant firm, however the consultant's offer of a 
lower indirect cost rate shall not be a condition of contract award. The 
contracting agencies shall apply these indirect cost rates for the 
purposes of contract estimation, negotiation, administration, reporting, 
and contract payment and the indirect cost rates shall not be limited by 
any administrative or de facto ceilings. The consultant's indirect cost 
rates for its one-year applicable accounting period shall be applied to 
the contract, however once an indirect cost rate is established for a 
contract it may be extended beyond the one year applicable accounting 
period provided all concerned parties agree. Agreement to the extension 
of the one-year applicable period shall not be a condition of contract 
award. Other procedures may be used if permitted by State statutes that 
were enacted into law prior to June 9, 1998.
    (c) Disputed audits. If the indirect cost rate(s) as established by 
the cognizant audit in paragraph (b) of this section are in dispute, the 
parties of any proposed new contract must negotiate a provisional 
indirect cost rate or perform an independent audit to establish a rate 
for the specific contract. Only the consultant and the parties involved 
in performing the indirect cost audit may dispute the established 
indirect cost rate. If an error is discovered in the established 
indirect cost rate, the rate may be disputed by any prospective user.
    (d) Prenotification; confidentiality of data. The FHWA and 
recipients and subrecipients of Federal-aid highway funds may share the 
audit information in complying with the State or subrecpient's 
acceptance of a consultant's overhead rates pursuant to 23 U.S.C. 112 
and this part provided that the consultant is given notice of each use 
and transfer. Audit information shall not be provided to other 
consultants or any other government agency not sharing the cost data, or 
to any firm or government agency for purposes other than complying with 
the State or subrecpient's acceptance of a consultant's overhead rates 
pursuant

[[Page 22]]

to 23 U.S.C. 112 and this part without the written permission of the 
affected consultants. If prohibited by law, such cost and rate data 
shall not be disclosed under any circumstance, however should a release 
be required by law or court order, such release shall make note of the 
confidential nature of the data.



Sec. 172.9  Approvals.

    (a) Written procedures. The contracting agency shall prepare written 
procedures for each method of procurement it proposes to utilize. These 
written procedures and all revisions shall be approved by the FHWA for 
recipients of federal funds. Recipients shall approve the written 
procedures and all revisions for their subrecipients. These procedures 
shall, as appropriate to the particular method of procurement, cover the 
following steps:
    (1) In preparing a scope of work, evaluation factors and cost 
estimate for selecting a consultant;
    (2) In soliciting proposals from prospective consultants;
    (3) In the evaluation of proposals and the ranking/selection of a 
consultant;
    (4) In negotiation of the reimbursement to be paid to the selected 
consultant;
    (5) In monitoring the consultant's work and in preparing a 
consultant's performance evaluation when completed; and
    (6) In determining the extent to which the consultant, who is 
responsible for the professional quality, technical accuracy, and 
coordination of services, may be reasonably liable for costs resulting 
from errors or deficiencies in design furnished under its contract.
    (b) Contracts. Contracts and contract settlements involving design 
services for projects that have not been delegated to the State under 23 
U.S.C. 106(c), that do not fall under the small purchase procedures in 
Sec. 172.5(a)(2), shall be subject to the prior approval by FHWA, 
unless an alternate approval procedure has been approved by FHWA.
    (c) Major projects. Any contract, revision of a contract or 
settlement of a contract for design services for a project that is 
expected to fall under 23 U.S.C. 106(h) shall be submitted to the FHWA 
for approval.
    (d) Consultant services in management roles. When Federal-aid 
highway funds participate in the contract, the contracting agency shall 
receive approval from the FHWA before hiring a consultant to act in a 
management role for the contracting agency.



PART 180_CREDIT ASSISTANCE FOR SURFACE TRANSPORTATION PROJECTS--Table of Contents




    Authority: Secs. 1501 et seq., Pub. L. 105-178, 112 Stat. 107, 241, 
as amended; 23 U.S.C. 181-189 and 315; 49 CFR 1.48.

    Source: 64 FR 29750, June 2, 1999, unless otherwise noted.



Sec. 180.1  Cross-reference to credit assistance.

    The regulations in 49 CFR part 80 shall be followed in complying 
with the requirements of this part. Title 49 CFR part 80 implements the 
Transportation Infrastructure Finance and Innovation Act of 1998, secs. 
1501 et seq., Pub. L. 105-178, 112 Stat. 107, 241.



PART 190_INCENTIVE PAYMENTS FOR CONTROLLING OUTDOOR ADVERTISING ON THE INTERSTATE SYSTEM--Table of Contents




Sec.
190.1 Purpose.
190.3 Agreement to control advertising.
190.5 Bonus project claims.
190.7 Processing of claims.

    Authority: 23 U.S.C. 131(j) and 315; 49 CFR 1.48(b).

    Source: 43 FR 42742, Sept. 21, 1978, unless otherwise noted.



Sec. 190.1  Purpose.

    The purpose of this regulation is to prescribe project procedures 
for making the incentive payments authorized by 23 U.S.C. 131(j).



Sec. 190.3  Agreement to control advertising.

    To qualify for the bonus payment, a State must have entered into an 
agreement with the Secretary to control outdoor advertising. It must 
fulfill, and must continue to fulfill its obligations

[[Page 23]]

under such agreement consistent with 23 CFR 750.101.



Sec. 190.5  Bonus project claims.

    (a) The State may claim payment by submitting a form PR-20 voucher, 
supported by strip maps which identify advertising control limits and 
areas excluded from the claim and form FHWA-1175, for the one-half 
percent bonus claim.
    (b) The bonus payment computation is based on projects or portions 
thereof for which (1) the section of highway on which the project is 
located has been opened to traffic, and (2) final payment has been made. 
A bonus project may cover an individual project, a part thereof, or a 
combination of projects, on a section of an Interstate route.
    (c) The eligible system mileage to be shown for a bonus project is 
that on which advertising controls are in effect. The eligible system 
mileage reported in subsequent projects on the same Interstate route 
section should cover only the additional system mileage not previously 
reported. Eligible project cost is the total participating cost (State 
and Federal share of approved preliminary engineering (PE), right-of-way 
(R-O-W), and construction) exclusive of any ineligible costs. The amount 
of the bonus payment is to be based on the eligible total costs of the 
supporting projects included in each claim.
    (d) Progress vouchers for route sections on which additional one-
half percent bonus payments are to be claimed are to be so identified, 
and the final claim for each route section is to be identified as the 
final voucher.



Sec. 190.7  Processing of claims.

    Audited and approved PR-20 vouchers with form FHWA-1175 shall be 
forwarded to the regional office for submission to the Finance Division, 
Washington Headquarters, for payment. The associated strip maps shall be 
retained with the division office copies of the PR-20 vouchers.



PART 192_DRUG OFFENDER'S DRIVER'S LICENSE SUSPENSION--Table of Contents




Sec.
192.1 Scope.
192.2 Purpose.
192.3 Definitions.
192.4 Adoption of drug offender's driver's license suspension.
192.5 Certification requirements.
192.6 Period of availability of withheld funds.
192.7 Apportionment of withheld funds after compliance.
192.8 Period of availability of subsequently apportioned funds.
192.9 Effect of noncompliance.
192.10 Procedures affecting States in noncompliance.

    Authority: 23 U.S.C. 159 and 315.

    Source: 57 FR 35999, Aug. 12, 1992, unless otherwise noted. 
Redesignated at 60 FR 50100, Sept. 28, 1995.



Sec. 192.1  Scope.

    This part prescribes the requirements necessary to implement 23 
U.S.C. Sec. 159, which encourages States to enact and enforce drug 
offender's driver's license suspensions.



Sec. 192.2  Purpose.

    The purpose of this part is to specify the steps that States must 
take in order to avoid the withholding of Federal-aid highway funds for 
noncompliance with 23 U.S.C. 159.



Sec. 192.3  Definitions.

    As used in this part:
    (a) Convicted includes adjudicated under juvenile proceedings.
    (b) Driver's license means a license issued by a State to any 
individual that authorizes the individual to operate a motor vehicle on 
highways.
    (c) Drug offense means:
    (1) The possession, distribution, manufacture, cultivation, sale, 
transfer, or the attempt or conspiracy to possess, distribute, 
manufacture, cultivate, sell, or transfer any substance the possession 
of which is prohibited under the Controlled Substances Act, or
    (2) The operation of a motor vehicle under the influence of such a 
substance.
    (d) Substance the possession of which is prohibited under the 
Controlled Substances Act or substance means a controlled or counterfeit 
chemical, as those terms are defined in subsections 102 (6) and (7) of 
the Comprehensive Drug Abuse Prevention and Control

[[Page 24]]

Act of 1970 (21 U.S.C. 802 (6) and (7) and listed in 21 CFR 1308.11-.15.

[57 FR 35999, Aug. 12, 1992; 58 FR 62415, Nov. 26, 1993; 59 FR 39256, 
Aug. 2, 1994]



Sec. 192.4  Adoption of drug offender's driver's license suspension.

    (a) The Secretary shall withhold five percent of the amount required 
to be apportioned to any State under each of sections 104(b)(1), 
104(b)(3), and 104(b)(5) of title 23 of the United States Code on the 
first day of fiscal years 1994 and 1995 if the States does not meet the 
requirements of this section on that date.
    (b) The Secretary shall withhold ten percent of the amount required 
to be apportioned to any State under each of sections 104(b)(1), 
104(b)(3), and 104(b)(5) of title 23 of the United States Code on the 
first day of fiscal year 1996 and any subsequent fiscal year if the 
State does not meet the requirements of this section on that date.
    (c) A State meets the requirements of this section if:
    (1) The State has enacted and is enforcing a law that requires in 
all circumstances, or requires in the absence of compelling 
circumstances warranting an exception:
    (i) The revocation, or suspension for at least 6 months, of the 
driver's license of any individual who is convicted, after the enactment 
of such law, of
    (A) Any violation of the Controlled Substances Act, or
    (B) Any drug offense, and
    (ii) A delay in the issuance or reinstatement of a driver's license 
to such an individual for at least 6 months after the individual 
otherwise would have been eligible to have a driver's license issued or 
reinstated if the individual does not have a driver's license, or the 
driver's license of the individual is suspended, at the time the 
individual is so convicted, or
    (2) The Governor of the State:
    (i) Submits to the Secretary no earlier than the adjournment sine 
die of the first regularly scheduled session of the State's legislature 
which begins after November 5, 1990, a written certification stating 
that he or she is opposed to the enactment or enforcement in the State 
of a law described in paragraph (c)(1) of this section relating to the 
revocation, suspension, issuance, or reinstatement of driver's licenses 
to convicted drug offenders; and
    (ii) Submits to the Secretary a written certification that the 
legislature (including both Houses where applicable) has adopted a 
resolution expressing its opposition to a law described in paragraph 
(c)(1) of this section.
    (d) A State that makes exceptions for compelling circumstances must 
do so in accordance with a State law, regulation, binding policy 
directive or Statewide published guidelines establishing the conditions 
for making such exceptions and in exceptional circumstances specific to 
the offender.



Sec. 192.5  Certification requirements.

    (a) Each State shall certify to the Secretary of Transportation by 
April 1, 1993 and by January 1 of each subsequent year that it meets the 
requirements of 23 U.S.C. 159 and this regulation.
    (b) If the State believes it meets the requirements of 23 U.S.C. 159 
and this regulation on the basis that it has enacted and is enforcing a 
law that suspends or revokes the driver's license of drug offenders, the 
certification shall contain:
    (1) A statement by the Governor of the State that the State has 
enacted and is enforcing a Drug Offender's Driver's License Suspension 
law that conforms to 23 U.S.C. 159(a)(3)(A). The certifying statement 
may be worded as follows: I, (Name of Governor), Governor of the (State 
or Commonwealth) of ------------, do hereby certify that the (State or 
Commonwealth) of ------------, has enacted is enforcing a Drug 
Offender's Driver's License Suspension law that conforms to section 23 
U.S. C. 159(a)(3)(A).
    (2) Until a State has been determined to be in compliance with the 
requirements of 23 U.S.C. 159 and this regulation, the certification 
shall include also:
    (i) A copy of the State law, regulation, or binding policy directive 
implementing or interpreting such law or regulation relating to the 
suspension, revocation, issuance or reinstatement or driver's licenses 
of drug offenders, and

[[Page 25]]

    (ii) A statement describing the steps the State is taking to enforce 
its law with regard to within State convictions, out-of-State 
convictions, Federal convictions and juvenile adjudications. The 
statement shall demonstrate that, upon receiving notification that a 
State driver has been convicted of a within State, out-of-State or 
Federal conviction or juvenile adjudication, the State is revoking, 
suspending or delaying the issuance of that drug offender's driver's 
license; and that, when the State convicts an individual of a drug 
offense, it is notifying the appropriate State office or, if the 
offender is a non-resident driver, the appropriate office in the 
driver's home State. If the State is not yet making these notifications, 
the State may satisfy this element by submitting a plan describing the 
steps it is taking to establish notification procedures.
    (c) If the State believes it meets the requirements of 23 U.S.C. 
159(a)(3)(B) on the basis that it opposes a law that requires the 
suspension, revocation or delay in issuance or reinstatement of the 
driver's license of drug offenders that conforms to 23 U.S.C. 
159(a)(3)(A), the certification shall contain:
    (1) A statement by the Governor of the State that he or she is 
opposed to the enactment or enforcement of a law that conforms to 23 
U.S.C. 159(a)(3)(A) and that the State legislature has adopted a 
resolution expressing its opposition to such a law. The certifying 
statement may be worded as follows: I, (Name of Governor), Governor of 
the (State or Commonwealth of ------------, do hereby certify that I am 
opposed to the enactment or enforcement of a law that conforms to 23 
U.S.C. 159(a)(3)(A) and that the legislature of the (State or 
Commonwealth) of ------------, has adopted a resolution expressing its 
opposition to such a law.
    (2) Until a State has been determined to be in compliance with the 
requirements of 23 U.S.C. 159(a)(3)(B) and this regulation, the 
certification shall include a copy of the resolution.
    (d) The Governor each year shall submit the original and three 
copies of the certification to the local FHWA Division Administrator. 
The FHWA Division Administrator shall retain the original and forward 
one copy each to the FHWA Regional Administrator, FHWA Chief Counsel, 
and the Director of the Office of Highway Safety.
    (e) Any changes to the original certification or supplemental 
information necessitated by the review of the certifications as they are 
forwarded, State legislative changes or changes in State enforcement 
activity (including failure to make progress in a plan previously 
submitted) shall be submitted in the same manner as the original.

[57 FR 35999, Aug. 12, 1992. Redesignated and amended at 60 FR 50100, 
Sept. 28, 1995]



Sec. 192.6  Period of availability of withheld funds.

    (a) Funds withheld under Sec. 1212.4 from apportionment to any 
State on or before September 30, 1995, will remain available for 
apportionment as follows:
    (1) If the funds would have been apportioned under 23 U.S.C. 
104(b)(5)(A) but for this section, the funds will remain available until 
the end of the fiscal year for which the funds are authorized to be 
appropriated.
    (2) If the funds would have been apportioned under 23 U.S.C. 
104(b)(5)(B) but for this section, the funds will remain available until 
the end of the second fiscal year following the fiscal year for which 
the funds are authorized to be appropriated.
    (3) If the funds would have been apportioned under 23 U.S.C. 
104(b)(1) or 104(b)(3) but for this section, the funds will remain 
available until the end of the third fiscal year following the fiscal 
year for which the funds are authorized to be appropriated.
    (b) Funds withheld under Sec. 1212.4 from apportionment to any 
State after September 30, 1995 will not be available for apportionment 
to the State.



Sec. 192.7  Apportionment of withheld funds after compliance.

    Funds withheld under Sec. 1212.4 from apportionment, which remain 
available for apportionment under Sec. 1212.6(a), will be made 
available to any State that conforms to the requirements of Sec. 1212.4 
before the last day of the period of availability as defined in Sec. 
1212.6(a).

[57 FR 35999, Aug. 12, 1992, as amended at 59 FR 39256, Aug. 2, 1994]

[[Page 26]]



Sec. 192.8  Period of availability of subsequently apportioned funds.

    (a) Funds apportioned pursuant to Sec. 1212.7 will remain available 
for expenditure as follows:
    (1) Funds originally apportioned under 23 U.S.C. 104(b)(5)(A) will 
remain available until the end of the fiscal year succeeding the fiscal 
year in which the funds are apportioned.
    (2) Funds originally apportioned under 23 U.S.C. 104(b)(1), 
104(b)(2), 104(b)(5)(B), or 104(b)(6) will remain available until the 
end of the third fiscal year succeeding the fiscal year in which the 
funds are apportioned.
    (b) Sums apportioned to a State pursuant to Sec. 1212.7 and not 
obligated at the end of the periods defined in Sec. 1212.8(a), shall 
lapse or, in the case of funds apportioned under 23 U.S.C. 104(b)(5), 
shall lapse and be made available by the Secretary for projects in 
accordance with 23 U.S.C. 118(b).



Sec. 192.9  Effect of noncompliance.

    If a State has not met the requirements of 23 U.S.C. 159(a)(3) at 
the end of the period for which funds withheld under Sec. 1212.4 are 
available for apportionment to a State under Sec. 1212.6, then such 
funds shall lapse or, in the case of funds withheld from apportionment 
under 23 U.S.C. 104(b)(5), shall lapse and be made available by the 
Secretary for projects in accordance with 23 U.S.C. 118(b).



Sec. 192.10  Procedures affecting States in noncompliance.

    (a) Each fiscal year, each State determined to be in noncompliance 
with 23 U.S.C. 159, based on FHWA's preliminary review of its statutes, 
will be advised of the funds expected to be withheld under Sec. 1212.4 
from apportionment, as part of the advance notice of apportionments 
required under 23 U.S.C. 104(e), normally not later than ninety days 
prior to final apportionment.
    (b) If FHWA determines that the State is not in compliance with 23 
U.S.C. 159 based on the agencies' preliminary review, the State may, 
within 30 days of its receipt of the advance notice of apportionments, 
submit documentation showing why it is in compliance. Documentation 
shall be submitted to the Federal Highway Administration, 400 Seventh 
Street, SW., Washington, DC 20590.
    (c) Each fiscal year, each State determined not to be in compliance 
with 23 U.S.C. 159(a)(3), based on FHWA's final determination, will 
receive notice of the funds being withheld under Sec. 1212.4 from 
apportionment, as part of the certification of apportionments required 
under 23 U.S.C. 104(e), which normally occurs on October 1 of each 
fiscal year.

[57 FR 35999, Aug. 12, 1992. Redesignated and amended at 60 FR 50100, 
Sept. 28, 1995]

[[Page 27]]



                        SUBCHAPTER C_CIVIL RIGHTS





PART 200_TITLE VI PROGRAM AND RELATED STATUTES_IMPLEMENTATION AND REVIEW PROCEDURES--Table of Contents




Sec.
200.1 Purpose.
200.3 Application of this part.
200.5 Definitions.
200.7 FHWA Title VI policy.
200.9 State highway agency responsibilities.
200.11 Procedures for processing Title VI reviews.

    Authority: Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d 
to 2000d-4; Title VIII of the Civil Rights Act of 1968, 42 U.S.C. 3601-
3619; 42 U.S.C. 4601 to 4655; 23 U.S.C. 109(h); 23 U.S.C. 324.

    Source: 41 FR 53982, Dec. 10, 1976, unless otherwise noted.



Sec. 200.1  Purpose.

    To provide guidelines for: (a) Implementing the Federal Highway 
Administration (FHWA) Title VI compliance program under Title VI of the 
Civil Rights Act of 1964 and related civil rights laws and regulations, 
and (b) Conducting Title VI program compliance reviews relative to the 
Federal-aid highway program.



Sec. 200.3  Application of this part.

    The provisions of this part are applicable to all elements of FHWA 
and provide requirements and guidelines for State highway agencies to 
implement the Title VI Program requirements. The related civil rights 
laws and regulations are listed under Sec. 200.5(p) of this part. Title 
VI requirements for 23 U.S.C. 402 will be covered under a joint FHWA/
NHTSA agreement.



Sec. 200.5  Definitions.

    The following definitions shall apply for the purpose of this part:
    (a) Affirmative action. A good faith effort to eliminate past and 
present discrimination in all federally assisted programs, and to ensure 
future nondiscriminatory practices.
    (b) Beneficiary. Any person or group of persons (other than States) 
entitled to receive benefits, directly or indirectly, from any federally 
assisted program, i.e., relocatees, impacted citizens, communities, etc.
    (c) Citizen participation. An open process in which the rights of 
the community to be informed, to provide comments to the Government and 
to receive a response from the Government are met through a full 
opportunity to be involved and to express needs and goals.
    (d) Compliance. That satisfactory condition existing when a 
recipient has effectively implemented all of the Title VI requirements 
or can demonstrate that every good faith effort toward achieving this 
end has been made.
    (e) Deficiency status. The interim period during which the recipient 
State has been notified of deficiencies, has not voluntarily complied 
with Title VI Program guidelines, but has not been declared in 
noncompliance by the Secretary of Transportation.
    (f) Discrimination. That act (or action) whether intentional or 
unintentional, through which a person in the United States, solely 
because of race, color, religion, sex, or national origin, has been 
otherwise subjected to unequal treatment under any program or activity 
receiving financial assistance from the Federal Highway Administration 
under title 23 U.S.C.
    (g) Facility. Includes all, or any part of, structures, equipment or 
other real or personal property, or interests therein, and the provision 
of facilities includes the construction, expansion, renovation, 
remodeling, alternation or acquisition of facilities.
    (h) Federal assistance. Includes:
    (1) Grants and loans of Federal funds,
    (2) The grant or donation of Federal property and interests in 
property,
    (3) The detail of Federal personnel,
    (4) The sale and lease of, and the permission to use (on other than 
a casual or transient basis), Federal property or any interest in such 
property without consideration or at a nominal consideration, or at a 
consideration which is reduced for the purpose of assisting the 
recipient, or in recognition of the public interest to be served by such 
sale or lease to the recipient, and

[[Page 28]]

    (5) Any Federal agreement, arrangement, or other contract which has, 
as one of its purposes, the provision of assistance.
    (i) Noncompliance. A recipient has failed to meet prescribed 
requirements and has shown an apparent lack of good faith effort in 
implementing all of the Title VI requirements.
    (j) Persons. Where designation of persons by race, color, or 
national origin is required, the following designations ordinarily may 
be used: ``White not of Hispanic origin'', ``Black not of Hispanic 
origin'', ``Hispanic'', ``Asian or Pacific Islander'', ``American Indian 
or Alaskan Native.'' Additional subcategories based on national origin 
or primary language spoken may be used, where appropriate, on either a 
national or a regional basis.
    (k) Program. Includes any highway, project, or activity for the 
provision of services, financial aid, or other benefits to individuals. 
This includes education or training, work opportunities, health, 
welfare, rehabilitation, housing, or other services, whether provided 
directly by the recipient of Federal financial assistance or provided by 
others through contracts or other arrangements with the recipient.
    (l) State highway agency. That department, commission, board, or 
official of any State charged by its laws with the responsibility for 
highway construction. The term State would be considered equivalent to 
State highway agency if the context so implies.
    (m) Program area officials. The officials in FHWA who are 
responsible for carrying out technical program responsibilities.
    (n) Recipient. Any State, territory, possession, the District of 
Columbia, Puerto Rico, or any political subdivision, or instrumentality 
thereof, or any public or private agency, institution, or organization, 
or other entity, or any individual, in any State, territory, possession, 
the District of Columbia, or Puerto Rico, to whom Federal assistance is 
extended, either directly or through another recipient, for any program. 
Recipient includes any successor, assignee, or transferee thereof. The 
term recipient does not include any ultimate beneficiary under any such 
program.
    (o) Secretary. The Secretary of Transportation as set forth in 49 
CFR 21.17(g)(3) or the Federal Highway Administrator to whom the 
Secretary has delegated his authority in specific cases.
    (p) Title VI Program. The system of requirements developed to 
implement Title VI of the Civil Rights Act of 1964. References in this 
part to Title VI requirements and regulations shall not be limited to 
only Title VI of the Civil Rights Act of 1964. Where appropriate, this 
term also refers to the civil rights provisions of other Federal 
statutes to the extent that they prohibit discrimination on the grounds 
of race, color, sex, or national origin in programs receiving Federal 
financial assistance of the type subject to Title VI itself. These 
Federal statutes are:
    (1) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d-d4 (49 
CFR part 21; the standard DOT Title VI assurances signed by each State 
pursuant to DOT Order 1050.2; Executive Order 11764; 28 CFR 50.3);
    (2) Uniform Relocation Assistance and Real Property Acquisition 
Policies Act of 1970 (42 U.S.C. 4601-4655) (49 CFR part 25; Pub. L. 91-
646);
    (3) Title VIII of the Civil Rights Act of 1968, amended 1974 (42 
U.S.C. 3601- 3619);
    (4) 23 U.S.C. 109(h);
    (5) 23 U.S.C. 324;
    (6) Subsequent Federal-Aid Highway Acts and related statutes.



Sec. 200.7  FHWA Title VI policy.

    It is the policy of the FHWA to ensure compliance with Title VI of 
the Civil Rights Act of 1964; 49 CFR part 21; and related statutes and 
regulations.



Sec. 200.9  State highway agency responsibilities.

    (a) State assurances in accordance with Title VI of the Civil Rights 
Act of 1964.
    (1) Title 49, CFR part 21 (Department of Transportation Regulations 
for the implementation of Title VI of the Civil Rights Act of 1964) 
requires assurances from States that no person in the United States 
shall, on the grounds of race, color, or national origin, be excluded 
from participation in, be denied

[[Page 29]]

the benefits of, or be otherwise subjected to discrimination under any 
program or activity for which the recipient receives Federal assistance 
from the Department of Transportation, including the Federal Highway 
Administration.
    (2) Section 162a of the Federal-Aid Highway Act of 1973 (section 
324, title 23 U.S.C.) requires that there be no discrimination on the 
ground of sex. The FHWA considers all assurances heretofore received to 
have been amended to include a prohibition against discrimination on the 
ground of sex. These assurances were signed by the 50 States, the 
District of Columbia, Puerto Rico, the Virgin Islands, Guam, and 
American Samoa. The State highway agency shall submit a certification to 
the FHWA indicating that the requirements of section 162a of the 
Federal-Aid Highway Act of 1973 have been added to its assurances.
    (3) The State highway agency shall take affirmative action to 
correct any deficiencies found by the FHWA within a reasonable time 
period, not to exceed 90 days, in order to implement Title VI compliance 
in accordance with State-signed assurances and required guidelines. The 
head of the State highway agency shall be held responsible for 
implementing Title VI requirements.
    (4) The State program area officials and Title VI Specialist shall 
conduct annual reviews of all pertinent program areas to determine the 
effectiveness of program area activities at all levels.
    (b) State actions. (1) Establish a civil rights unit and designate a 
coordinator who has a responsible position in the organization and easy 
access to the head of the State highway agency. This unit shall contain 
a Title VI Equal Employment Opportunity Coordinator or a Title VI 
Specialist, who shall be responsible for initiating and monitoring Title 
VI activities and preparing required reports.
    (2) Adequately staff the civil rights unit to effectively implement 
the State civil rights requirements.
    (3) Develop procedures for prompt processing and disposition of 
Title VI and Title VIII complaints received directly by the State and 
not by FHWA. Complaints shall be investigated by State civil rights 
personnel trained in compliance investigations. Identify each 
complainant by race, color, sex, or national origin; the recipient; the 
nature of the complaint; the dates the complaint was filed and the 
investigation completed; the disposition; the date of the disposition; 
and other pertinent information. Each recipient (State) processing Title 
VI complaints shall be required to maintain a similar log. A copy of the 
complaint, together with a copy of the State's report of investigation, 
shall be forwarded to the FHWA division office within 60 days of the 
date the complaint was received by the State.
    (4) Develop procedures for the collection of statistical data (race, 
color, religion, sex, and national origin) of participants in, and 
beneficiaries of State highway programs, i.e., relocatees, impacted 
citizens and affected communities.
    (5) Develop a program to conduct Title VI reviews of program areas.
    (6) Conduct annual reviews of special emphasis program areas to 
determine the effectiveness or program area activities at all levels.
    (7) Conduct Title VI reviews of cities, counties, consultant 
contractors, suppliers, universities, colleges, planning agencies, and 
other recipients of Federal-aid highway funds.
    (8) Review State program directives in coordination with State 
program officials and, where applicable, include Title VI and related 
requirements.
    (9) The State highway agency Title VI designee shall be responsible 
for conducting training programs on Title VI and related statutes for 
State program and civil rights officials.
    (10) Prepare a yearly report of Title VI accomplishments for the 
past year and goals for the next year.
    (11) Beginning October 1, 1976, each State highway agency shall 
annually submit an updated Title VI implementing plan to the Regional 
Federal Highway Administrator for approval or disapproval.
    (12) Develop Title VI information for dissemination to the general 
public and, where appropriate, in languages other than English.

[[Page 30]]

    (13) Establishing procedures for pregrant and postgrant approval 
reviews of State programs and applicants for compliance with Title VI 
requirements; i.e., highway location, design and relocation, and persons 
seeking contracts with the State.
    (14) Establish procedures to identify and eliminate discrimination 
when found to exist.
    (15) Establishing procedures for promptly resolving deficiency 
status and reducing to writing the remedial action agreed to be 
necessary, all within a period not to exceed 90 days.



Sec. 200.11  Procedures for processing Title VI reviews.

    (a) If the regional Title VI review report contains deficiencies and 
recommended actions, the report shall be forwarded by the Regional 
Federal Highway Administrator to the Division Administrator, who will 
forward it with a cover letter to the State highway agency for 
corrective action.
    (b) The division office, in coordination with the Regional Civil 
Rights Officer, shall schedule a meeting with the recipient, to be held 
not later than 30 days from receipt of the deficiency report.
    (c) Recipients placed in a deficiency status shall be given a 
reasonable time, not to exceed 90 days after receipt of the deficiency 
letter, to voluntarily correct deficiencies.
    (d) The Division Administrator shall seek the cooperation of the 
recipient in correcting deficiencies found during the review. The FHWA 
officials shall also provide the technical assistance and guidance 
needed to aid the recipient to comply voluntarily.
    (e) When a recipient fails or refuses to voluntarily comply with 
requirements within the time frame allotted, the Division Administrator 
shall submit to the Regional Administrator two copies of the case file 
and a recommendation that the State be found in noncompliance.
    (f) The Office of Civil Rights shall review the case file for a 
determination of concurrence or noncurrence with a recommendation to the 
Federal Highway Administrator. Should the Federal Highway Administrator 
concur with the recommendation, the file is referred to the Department 
of Transportation, Office of the Secretary, for appropriate action in 
accordance with 49 CFR.



PART 230_EXTERNAL PROGRAMS--Table of Contents




   Subpart A_Equal Employment Opportunity on Federal and Federal-Aid 
         Construction Contracts (Including Supportive Services)

Sec.
230.101 Purpose.
230.103 Definitions.
230.105 Applicability.
230.107 Policy.
230.109 Implementation of specific Equal Employment Opportunity 
          requirements.
230.111 Implementation of special requirements for the provision of on-
          the-job training.
230.113 Implementation of supportive services.
230.115 Special contract requirements for ``Hometown'' or ``Imposed'' 
          Plan areas.
230.117 Reimbursement procedures (Federal-aid highway construction 
          projects only).
230.119 Monitoring of supportive services.
230.121 Reports.

Appendix A to Subpart A of Part 230--Special Provisions
Appendix B to Subpart A of Part 230--Training Special Provisions
Appendix C to Subpart A of Part 230--Federal-Aid Highway Contractors 
          Annual EEO Report (Form PR-1391)
Appendix D to Subpart A of Part 230--Federal-Aid Highway Construction 
          Summary of Employment Data (Form PR-1392)
Appendixes E-F to Subpart A of Part 230 [Reserved]
Appendix G to Subpart A of Part 230--Special Reporting Requirements for 
          ``Hometown'' or ``Imposed'' Plan Areas

  Subpart B_Supportive Services for Minority, Disadvantaged, and Women 
                          Business Enterprises

230.201 Purpose.
230.202 Definitions.
230.203 Policy.
230.204 Implementation of supportive services.
230.205 Supportive services funds obligation.
230.206 Monitoring supportive services.
230.207 Sources of assistance.

  Subpart C_State Highway Agency Equal Employment Opportunity Programs

230.301 Purpose.
230.303 Applicability.

[[Page 31]]

230.305 Definitions.
230.307 Policy.
230.309 Program format.
230.311 State responsibilities.
230.313 Approval procedure.

Appendix A to Subpart C of Part 230--State Highway Agency Equal 
          Employment Opportunity Programs

 Subpart D_Construction Contract Equal Opportunity Compliance Procedures

230.401 Purpose.
230.403 Applicability.
230.405 Administrative responsibilities.
230.407 Definitions.
230.409 Contract compliance review procedures.
230.411 Guidance for conducting reviews.
230.413 Review reports.
230.415 Consolidated compliance reviews.

Appendix A to Subpart D of Part 230--Sample Show Cause Notice
Appendix B to Subpart D of Part 230--Sample Corrective Action Plan
Appendix C to Subpart D of Part 230--Sample Show Cause Rescission
Appendix D to Subpart D of Part 230--Equal Opportunity Compliance Review 
          Process Flow Chart

    Authority: 23 U.S.C. 101, 140, and 315; 42 U.S.C. 2000d et seq.; 49 
CFR 1.48 and 60-1.

    Source: 40 FR 28053, July 3, 1975, unless otherwise noted.



   Subpart A_Equal Employment Opportunity on Federal and Federal-Aid 
         Construction Contracts (Including Supportive Services)



Sec. 230.101  Purpose.

    The purpose of the regulations in this subpart is to prescribe the 
policies, procedures, and guides relative to the implementation of an 
equal employment opportunity program on Federal and Federal-aid highway 
construction contracts, except for those contracts awarded under 23 
U.S.C. 117, and to the preparation and submission of reports pursuant 
thereto.



Sec. 230.103  Definitions.

    For purposes of this subpart--
    Administrator means the Federal Highway Administrator.
    Areawide Plan means an affirmative action plan to increase minority 
utilization of crafts in a specified geographical area pursuant to 
Executive Order 11246, and taking the form of either a ``Hometown'' or 
an ``Imposed'' plan.
    Bid conditions means contract requirements which have been issued by 
OFCC for purposes of implementing a Hometown Plan.
    Division Administrator means the chief Federal Highway 
Administration (FHWA) official assigned to conduct FHWA business in a 
particular State, the District of Columbia, or the Commonwealth of 
Puerto Rico.
    Division Equal Opportunity Officer means an individual with staff 
level responsibilities and necessary authority by which to operate as an 
Equal Opportunity Officer in a Division office. Normally the Equal 
Opportunity Officer will be a full-time civil rights specialist serving 
as staff assistant to the Division Administrator.
    Hometown Plan means a voluntary areawide plan which was developed by 
representatives of affected groups (usually labor unions, minority 
organizations, and contractors), and subsequently approved by the Office 
of Federal Contract Compliance (OFCC), for purposes of implementing the 
equal employment opportunity requirements pursuant to Executive Order 
11246, as amended.
    Imposed Plan means an affirmative action requirement for a specified 
geographical area made mandatory by OFCC and, in some areas, by the 
courts.
    Journeyman means a person who is capable of performing all the 
duties within a given job classification or craft.
    State highway agency means that department, commission, board, or 
official of any State charged by its laws with the responsibility for 
highway construction. The term State should be considered equivalent to 
State highway agency.
    Suggested minimum annual training goals means goals which have been 
assigned to each State highway agency annually for the purpose of 
specifying training positions on selected Federal-aid highway 
construction projects.
    Supportive services means those services provided in connection with 
approved on-the-job training programs for highway construction workers 
and

[[Page 32]]

highway contractors which are designed to increase the overall 
effectiveness of training programs through the performance of functions 
determined to be necessary in connection with such programs, but which 
are not generally considered as comprising part of actual on-the-job 
craft training.
    Trainee means a person who received on-the-job training, whether 
through an apprenticeship program or other programs approved or accepted 
by the FHWA.

[40 FR 28053, July 3, 1975, as amended at 41 FR 3080, Jan. 21, 1976]



Sec. 230.105  Applicability.

    (a) Federal-aid highway construction projects. This subpart applies 
to all Federal-aid highway construction projects and to Appalachian 
highway construction projects and other State supervised cooperative 
highway construction projects except:
    (1) Federal-aided highway construction projects being constructed 
pursuant to 23 U.S.C. 117; and
    (2) Those projects located in areas where the Office of Federal 
Contract Compliance has implemented an ``Imposed'' or a ``Hometown'' 
Plan, except for those requirements pertaining to specific provisions 
involving on-the-job training and those provisions pertaining to 
supportive services and reporting requirements.
    (b) Direct Federal highway construction projects. This subpart 
applies to all direct Federal highway construction projects except:
    (1) For those provisions relating to the special requirements for 
the provision of supportive services; and
    (2) For those provisions relating to implementation of specific 
equal employment opportunity requirements in areas where the Office of 
Federal Contract Compliance has implemented an ``Imposed'' or 
``Hometown'' plan.



Sec. 230.107  Policy.

    (a) Direct Federal and Federal-aid highway construction projects. It 
is the policy of the FHWA to require that all direct Federal and 
Federal-aid highway construction contracts include the same specific 
equal employment opportunity requirements. It is also the policy to 
require that all direct Federal and Federal-aid highway construction 
subcontracts of $10,000 or more (not including contracts for supplying 
materials) include these same requirements.
    (b) Federal-aid highway construction projects. It is the policy of 
the FHWA to require full utilization of all available training and 
skill-improvement opportunities to assure the increased participation of 
minority groups and disadvantaged persons and women in all phases of the 
highway construction industry. Moreover, it is the policy of the Federal 
Highway Administration to encourage the provision of supportive services 
which will increase the effectiveness of approved on-the-job training 
programs conducted in connection with Federal-aid highway construction 
projects.



Sec. 230.109  Implementation of specific Equal Employment Opportunity requirements.

    (a) Federal-aid highway construction projects. The special 
provisions set forth in appendix A shall be included in the advertised 
bidding proposal and made part of the contract for each contract and 
each covered Federal-aid highway construction subcontract.
    (b) Direct Federal highway construction projects. Advertising, award 
and contract administration procedures for direct Federal highway 
construction contracts shall be as set forth in Federal Acquisition 
Regulations (48 CFR, chapter 1, section 22.803(c)). In order to obtain 
information required by 48 CFR, chapter 1, Sec. 22.804-2(c), the 
following requirement shall be included at the end of the bid schedule 
in the proposal and contract assembly:

    I expect to employ the following firms as subcontractors on this 
project: (Naming subcontractors at this time does not constitute a 
binding commitment on the bidder to retain such subcontractors, nor will 
failure to enter names affect the contract award):

Name____________________________________________________________________
Address_________________________________________________________________
Name____________________________________________________________________
Address_________________________________________________________________

[40 FR 28053, July 3, 1975, as amended at 51 FR 22800, June 23, 1986]

[[Page 33]]



Sec. 230.111  Implementation of special requirements for the provision of on-the-job training.

    (a) The State highway agency shall determine which Federal-aid 
highway construction contracts shall include the ``Training Special 
Provisions'' (appendix B) and the minimum number of trainees to be 
specified therein after giving appropriate consideration to the 
guidelines set forth in Sec. 230.111(c). The ``Training Special 
Provisions'' shall supersede section 7(b) of the Special Provisions 
(appendix A) entitled ``Specific Equal Employment Opportunity 
Responsibilities.'' Minor wording revisions will be required to the 
``Training Special Provisions'' in areas having ``Hometown'' or 
``Imposed Plan'' requirements.
    (b) The Washington Headquarters shall establish and publish annually 
suggested minimum training goals. These goals will be based on the 
Federal-aid apportioned amounts and the minority population. A State 
will have achieved its goal if the total number of training slots on 
selected federally aided highway construction contracts which have been 
awarded during each 12-month period equals or exceeds the State's 
suggested minimum annual goal. In the event a State highway agency does 
not attain its goal during a calendar year, the State highway agency at 
the end of the calendar year shall inform the Administrator of the 
reasons for its inability to meet the suggested minimum number of 
training slots and the steps to be taken to achieve the goal during the 
next calendar year. The information is to be submitted not later than 30 
days from the end of the calendar year and should be factual, and should 
not only indicate the situations occurring during the year but show the 
project conditions at least through the coming year. The final 
determination will be made on what training goals are considered to be 
realistic based on the information submitted by a State.
    (c) The following guidelines shall be utilized by the State highway 
agency in selecting projects and determining the number of trainees to 
be provided training therein:
    (1) Availability of minorities, women, and disadvantaged for 
training.
    (2) The potential for effective training.
    (3) Duration of the contract.
    (4) Dollar value of the contract.
    (5) Total normal work force that the average bidder could be 
expected to use.
    (6) Geographic location.
    (7) Type of work.
    (8) The need for additional journeymen in the area.
    (9) Recognition of the suggested minimum goal for the State.
    (10) A satisfactory ratio of trainees to journeymen expected to be 
on the contractor's work force during normal operations (considered to 
fall between 1:10 and 1:4).
    (d) Training programs which are established shall be approved only 
if they meet the standards set forth in appendix B with regard to:
    (1) The primary objectives of training and upgrading minority group 
workers, women and disadvantaged persons.
    (2) The development of full journeymen.
    (3) The minimum length and type of training.
    (4) The minimum wages of trainees.
    (5) Trainees certifications.
    (6) Keeping records and furnishing reports.
    (e)(1) Training programs considered by a State highway agency to 
meet the standards under this directive shall be submitted to the FHWA 
division Administrator with a recommendation for approval.
    (2) Employment pursuant to training programs approved by the FHWA 
division Administrator will be exempt from the minimum wage rate 
provisions of section 113 of title 23 U.S.C. Approval, however, shall 
not be given to training programs which provide for employment of 
trainees at wages less than those required by the Special Training 
Provisions. (Appendix B.)
    (f)(1) Apprenticeship programs approved by the U.S. Department of 
Labor as of the date of proposed use by a Federal-aid highway contractor 
or subcontractor need not be formally approved by the State highway 
agency or the FHWA division Administrator. Such programs, including 
their minimum wage provisions, are acceptable for use, provided they are 
administered

[[Page 34]]

in a manner reasonably calculated to meet the equal employment 
opportunity obligations of the contractor.
    (2) Other training programs approved by the U.S. Department of Labor 
as of the date of proposed use by a Federal-aid highway contractor or 
subcontractor are also acceptable for use without the formal approval of 
the State highway agency or the division Administrator provided:
    (i) The U.S. Department of Labor has clearly approved the program 
aspects relating to equal employment opportunity and the payment of 
trainee wage rates in lieu of prevailing wage rates.
    (ii) They are reasonably calculated to qualify the average trainees 
for journeyman status in the classification concerned by the end of the 
training period.
    (iii) They are administered in a manner calculated to meet the equal 
employment obligations of the contractors.
    (g) The State highway agencies have the option of permitting 
Federal-aid highway construction contractors to bid on training to be 
given under this directive. The following procedures are to be utilized 
by those State highway agencies that elect to provide a bid item for 
training:
    (1) The number of training positions shall continue to be specified 
in the Special Training Provisions. Furthermore, this number should be 
converted into an estimated number of hours of training which is to be 
used in arriving at the total bid price for the training item. Increases 
and decreases from the estimated amounts would be handled as overruns or 
underruns;
    (2) A section concerning the method of payment should be included in 
the Special Training Provisions. Some offsite training is permissible as 
long as the training is an integral part of an approved training program 
and does not comprise a substantial part of the overall training. 
Furthermore, the trainee must be concurrently employed on a federally 
aided highway construction project subject to the Special Training 
Provisions attached to this directive. Reimbursement for offsite 
training may only be made to the contractor where he does one or more of 
the following: Contributes to the cost of the training, provides the 
instruction to the trainee, or pays the trainee's wages during the 
offsite training period;
    (3) A State highway agency may modify the special provisions to 
specify the numbers to be trained in specific job classifications;
    (4) A State highway agency can specify training standards provided 
any prospective bidder can use them, the training standards are made 
known in the advertised specifications, and such standards are found 
acceptable by FHWA.

[40 FR 28053, July 3, 1975; 40 FR 57358, Dec. 9, 1975, as amended at 41 
FR 3080, Jan. 21, 1976]



Sec. 230.113  Implementation of supportive services.

    (a) The State highway agency shall establish procedures, subject to 
the availability of funds under 23 U.S.C. 140(b), for the provision of 
supportive services in support of training programs approved under this 
directive. Funds made available to implement this paragraph shall not be 
used to finance the training of State highway agency employees or to 
provide services in support of such training. State highway agencies are 
not required to match funds allocated to them under this section.
    (b) In determining the types of supportive services to be provided 
which will increase the effectiveness of approved training programs. 
State highway agencies shall give preference to the following types of 
services in the order listed:
    (1) Services related to recruiting, counseling, transportation, 
physical examinations, remedial training, with special emphasis upon 
increasing training opportunities for members of minority groups and 
women;
    (2) Services in connection with the administration of on-the-job 
training programs being sponsored by individual or groups of contractors 
and/or minority groups and women's groups;
    (3) Services designed to develop the capabilities of prospective 
trainees for undertaking on-the-job training;
    (4) Services in connection with providing a continuation of training 
during periods of seasonal shutdown;

[[Page 35]]

    (5) Followup services to ascertain outcome of training being 
provided.
    (c) State highway agencies which desire to provide or obtain 
supportive services other than those listed above shall submit their 
proposals to the Federal Highway Administration for approval. The 
proposal, together with recommendations of the division and regional 
offices shall be submitted to the Administrator for appropriate action.
    (d) When the State highway agency provides supportive services by 
contract, formal advertising is not required by the FHWA, however, the 
State highway agency shall solicit proposals from such qualified sources 
as will assure the competitive nature of the procurement. The evaluation 
of proposals by the State highway agency must include consideration of 
the proposer's ability to effect a productive relationship with 
contractors, unions (if appropriate), minority and women groups, 
minority and women trainees, and other persons or organizations whose 
cooperation and assistance will contribute to the successful performance 
of the contract work.
    (e) In the selection of contractors to provide supportive services, 
State highway agencies shall make conscientious efforts to search out 
and utilize the services of qualified minority or women organizations, 
or minority or women business enterprises.
    (f) As a minimum, State highway agency contracts to obtain 
supportive services shall include the following provisions:
    (1) A statement that a primary purpose of the supportive services is 
to increase the effectiveness of approved on-the-job training programs, 
particularly their effectiveness in providing meaningful training 
opportunities for minorities, women, and the disadvantaged on Federal-
aid highway projects;
    (2) A clear and complete statement of the services to be provided 
under the contract, such as services to construction contractors, 
subcontractors, and trainees, for recruiting, counseling, remedial 
educational training, assistance in the acquisition of tools, special 
equipment and transportation, followup procedures, etc.;
    (3) The nondiscrimination provisions required by Title VI of the 
Civil Rights Act of 1964 as set forth in FHWA Form PR-1273, and a 
statement of nondiscrimination in employment because of race, color, 
religion, national origin or sex;
    (4) The establishment of a definite perriod of contract performance 
together with, if appropriate, a schedule stating when specific 
supportive services are to be provided;
    (5) Reporting requirements pursuant to which the State highway 
agency will receive monthly or quarterly reports containing sufficient 
statistical data and narrative content to enable evaluation of both 
progress and problems;
    (6) A requirement that the contractor keep track of trainees 
receiving training on Federal-aid highway construction projects for up 
to 6 months during periods when their training is interrupted. Such 
contracts shall also require the contractor to conduct a 6 month 
followup review of the employment status of each graduate who completes 
an on-the-job training program on a Federal-aid highway construction 
project subsequent to the effective date of the contract for supportive 
services.
    (7) The basis of payment;
    (8) An estimated schedule for expenditures;
    (9) The right of access to contractor and subcontractor records and 
the right to audit shall be granted to authorize State highway agency 
and FHWA officials;
    (10) Noncollusion certification;
    (11) A requirement that the contractor provide all information 
necessary to support progress payments if such are provided for in the 
contract;
    (12) A termination clause.
    (g) The State highway agency is to furnish copies of the reports 
received under paragraph (b)(5) of this section, to the division office.

[40 FR 28053, July 3, 1975, as amended at 41 FR 3080, Jan. 21, 1976]



Sec. 230.115  Special contract requirements for ``Hometown'' or ``Imposed'' Plan areas.

    Direct Federal and Federal-aid contracts to be performed in 
``Hometown''

[[Page 36]]

or ``Imposed'' Plan areas will incorporate the special provision set 
forth in appendix G.



Sec. 230.117  Reimbursement procedures (Federal-aid highway construction projects only).

    (a) On-the-job special training provisions. State highway agencies 
will be reimbursed on the same pro-rata basis as the construction costs 
of the Federal-aid project.
    (b) Supportive services. (1) The State highway agency must keep a 
separate account of supportive services funds since they cannot be 
interchanged with regular Federal-aid funds. In addition, these funds 
may not be expended in a manner that would provide for duplicate payment 
of Federal or Federal-aid funds for the same service.
    (2) Where a State highway agency does not obligate all its funds 
within the time specified in the particular year's allocation directive, 
the funds shall revert to the FHWA Headquarters Office to be made 
available for use by other State highway agencies, taking into 
consideration each State's need for and ability to use such funds.



Sec. 230.119  Monitoring of supportive services.

    Supportive services procured by a State highway agency shall be 
monitored by both the State highway agency and the division office.



Sec. 230.121  Reports.

    (a) Employment reports on Federal-aid highway construction contracts 
not subject to ``Hometown'' or ``Imposed'' plan requirements.
    (1) Paragraph 10c of the special provisions (appendix A) sets forth 
specific reporting requirements. FHWA Form PR-1391, Federal-Aid Highway 
Construction Contractors Annual EEO Report, (appendix C) and FHWA Form 
PR 1392, Federal-Aid Highway Construction Summary of Employment Data 
(including minority breakdown) for all Federal-Aid Highway Projects for 
month ending July 31st, 19--, (appendix D) are to be used to fulfill 
these reporting requirements.
    (2) Form PR 1391 is to be completed by each contractor and each 
subcontractor subject to this part for every month of July during which 
work is performed, and submitted to the State highway agency. A separate 
report is to be completed for each covered contract or subcontract. The 
employment data entered should reflect the work force on board during 
all or any part of the last payroll period preceding the end of the 
month. The State highway agency is to forward a single copy of each 
report to the FHWA division office.
    (3) Form PR 1392 is to be completed by the State highway agencies, 
summarizing the reports on PR 1391 for the month of July received from 
all active contractors and subcontractors. Three (3) copies of completed 
Forms PR 1392 are to be forwarded to the division office.
    (b) Employment reports on direct Federal highway construction 
contracts not subject to ``Hometown'' or ``Imposed'' plan requirements. 
Forms PR 1391 (appendix C) and PR 1392 (appendix D) shall be used for 
reporting purposes as prescribed in Sec. 230.121(a).
    (c) Employment reports on direct Federal and Federal-aid highway 
construction contracts subject to ``Hometown'' or ``Imposed'' plan 
requirements.
    (1) Reporting requirements for direct Federal and Federal-aid 
highway construction projects located in areas where ``Hometown'' or 
``Imposed'' plans are in effect shall be in accordance with those issued 
by the U.S. Department of Labor, Office of Federal Contract Compliance.
    (2) In order that we may comply with the U.S. Senate Committee on 
Public Works' request that the Federal Highway Administration submit a 
report annually on the status of the equal employment opportunity 
program, Form PR 1391 is to be completed annually by each contractor and 
each subcontractor holding contracts or subcontracts exceeding $10,000 
except as otherwise provided for under 23 U.S.C. 117. The employment 
data entered should reflect the work force on board during all or any 
part of the last payroll period preceding the end of the month of July.
    (d) [Reserved]
    (e) Reports on supportive services contracts. The State highway 
agency is

[[Page 37]]

to furnish copies of the reports received from supportive services 
contractors to the FHWA division office which will furnish a copy to the 
regional office.

[40 FR 28053, July 3, 1975, as amended at 43 FR 19386, May 5, 1978; 61 
FR 14616, Apr. 3, 1996]



      Sec. Appendix A to Subpart A of Part 230--Special Provisions

         specific equal employment opportunity responsibilities

    1. General. a. Equal employment opportunity requirements not to 
discriminate and to take affirmative action to assure equal employment 
opportunity as required by Executive Order 11246 and Executive Order 
11375 are set forth in Required Contract, Provisions (Form PR-1273 or 
1316, as appropriate) and these Special Provisions which are imposed 
pursuant to section 140 of title 23 U.S.C., as established by section 22 
of the Federal-Aid Highway Act of 1968. The requirements set forth in 
these Special Provisions shall constitute the specific affirmative 
action requirements for project activities under this contract and 
supplement the equal employment opportunity requirements set forth in 
the Required Contract Provisions.
    b. The contractor will work with the State highway agencies and the 
Federal Government in carrying out equal employment opportunity 
obligations and in their review of his/her activities under the 
contract.
    c. The contractor and all his/her subcontractors holding 
subcontracts not including material suppliers, of $10,000 or more, will 
comply with the following minimum specific requirement activities of 
equal employment opportunity: (The equal employment opportunity 
requirements of Executive Order 11246, as set forth in volume 6, chapter 
4, section 1, subsection 1 of the Federal-Aid Highway Program Manual, 
are applicable to material suppliers as well as contractors and 
subcontractors.) The contractor will include these requirements in every 
subcontract of $10,000 or more with such modification of language as is 
necessary to make them binding on the subcontractor.
    2. Equal Employment Opportunity Policy. The contractor will accept 
as his operating policy the following statement which is designed to 
further the provision of equal employment opportunity to all persons 
without regard to their race, color, religion, sex, or national origin, 
and to promote the full realization of equal employment opportunity 
through a positive continuing program:
    It is the policy of this Company to assure that applicants are 
employed, and that employees are treated during employment, without 
regard to their race, religion, sex, color, or national origin. Such 
action shall include: employment, upgrading, demotion, or transfer; 
recruitment or recruitment advertising; layoff or termination; rates of 
pay or other forms of compensation; and selection for training, 
including apprenticeship, preapprenticeship, and/or on-the-job training.
    3. Equal Employment Opportunity Officer. The contractor will 
designate and make known to the State highway agency contracting 
officers and equal employment opportunity officer (hereinafter referred 
to as the EEO Officer) who will have the responsibility for and must be 
capable of effectively administering and promoting an active contractor 
program of equal employment opportunity and who must be assigned 
adequate authority and responsibility to do so.
    4. Dissemination of Policy. a. All members of the contractor's staff 
who are authorized to hire, supervise, promote, and discharge employees, 
or who recommend such action, or who are substantially involved in such 
action, will be made fully cognizant of, and will implement, the 
contractor's equal employment opportunity policy and contractual 
responsibilities to provide equal employment opportunity in each grade 
and classification of employment. To ensure that the above agreement 
will be met, the following actions will be taken as a minimum:
    (1) Periodic meetings of supervisory and personnel office employees 
will be conducted before the start of work and then not less often than 
once every six months, at which time the contractor's equal employment 
opportunity policy and its implementation will be reviewed and 
explained. The meetings will be conducted by the EEO Officer or other 
knowledgeable company official.
    (2) All new supervisory or personnel office employees will be given 
a thorough indoctrination by the EEO Officer or other knowledgeable 
company official, covering all major aspects of the contractor's equal 
employment opportunity obligations within thirty days following their 
reporting for duty with the contractor.
    (3) All personnel who are engaged in direct recruitment for the 
project will be instructed by the EEO Officer or appropriate company 
official in the contractor's procedures for locating and hiring minority 
group employees.
    b. In order to make the contractor's equal employment opportunity 
policy known to all employees, prospective employees and potential 
sources of employees, i.e., schools, employment agencies, labor unions 
(where appropriate), college placement officers, etc., the contractor 
will take the following actions:
    (1) Notices and posters setting forth the contractor's equal 
employment opportunity

[[Page 38]]

policy will be placed in areas readily accessible to employees, 
applicants for employment and potential employees.
    (2) The contractor's equal employment opportunity policy and the 
procedures to implement such policy will be brought to the attention of 
employees by means of meetings, employee handbooks, or other appropriate 
means.
    5. Recruitment. a. When advertising for employees, the contractor 
will include in all advertisements for employees the notation: ``An 
Equal Opportunity Employer.'' All such advertisements will be published 
in newspapers or other publications having a large circulation among 
minority groups in the area from which the project work force would 
normally be derived.
    b. The contractor will, unless precluded by a valid bargaining 
agreement, conduct systematic and direct recruitment through public and 
private employee referral sources likely to yield qualified minority 
group applicants, including, but not limited to, State employment 
agencies, schools, colleges and minority group organizations. To meet 
this requirement, the contractor will, through his EEO Officer, identify 
sources of potential minority group employees, and establish with such 
identified sources procedures whereby minority group applicants may be 
referred to the contractor for employment consideration.
    In the event the contractor has a valid bargaining agreement 
providing for exclusive hiring hall referrals, he is expected to observe 
the provisions of that agreement to the extent that the system permits 
the contractor's compliance with equal employment opportunity contract 
provisions. (The U.S. Department of Labor has held that where 
implementation of such agreements have the effect of discriminating 
against minorities or women, or obligates the contractor to do the same, 
such implementation violates Executive Order 11246, as amended.)
    c. The contractor will encourage his present employees to refer 
minority group applicants for employment by posting appropriate notices 
or bulletins in areas accessible to all such employees. In addition, 
information and procedures with regard to referring minority group 
applicants will be discussed with employees.
    6. Personnel Actions. Wages, working conditions, and employee 
benefits shall be established and administered, and personnel actions of 
every type, including hiring, upgrading, promotion, transfer, demotion, 
layoff, and termination, shall be taken without regard to race, color, 
religion, sex, or national origin. The following procedures shall be 
followed:
    a. The contractor will conduct periodic inspections of project sites 
to insure that working conditions and employee facilities do not 
indicate discriminatory treatment of project site personnel.
    b. The contractor will periodically evaluate the spread of wages 
paid within each classification to determine any evidence of 
discriminatory wage practices.
    c. The contractor will periodically review selected personnel 
actions in depth to determine whether there is evidence of 
discrimination. Where evidence is found, the contractor will promptly 
take corrective action. If the review indicates that the discrimination 
may extend beyond the actions reviewed, such corrective action shall 
include all affected persons.
    d. The contractor will promptly investigate all complaints of 
alleged discrimination made to the contractor in connection with his 
obligations under this contract, will attempt to resolve such 
complaints, and will take appropriate corrective action within a 
reasonable time. If the investigation indicates that the discrimination 
may affect persons other than the complainant, such corrective action 
shall include such other persons. Upon completion of each investigation, 
the contractor will inform every complainant of all of his avenues of 
appeal.
    7. Training and Promotion. a. The contractor will assist in 
locating, qualifying, and increasing the skills of minority group and 
women employees, and applicants for employment.
    b. Consistent with the contractor's work force requirements and as 
permissible under Federal and State regulations, the contractor shall 
make full use of training programs, i.e., apprenticeship, and on-the-job 
training programs for the geographical area of contract performance. 
Where feasible, 25 percent of apprentices or trainees in each occupation 
shall be in their first year of apprenticeship or training. In the event 
the Training Special Provision is provided under this contract, this 
subparagraph will be superseded as indicated in Attachment 2.
    c. The contractor will advise employees and applicants for 
employment of available training programs and entrance requirements for 
each.
    d. The contractor will periodically review the training and 
promotion potential of minority group and women employees and will 
encourage eligible employees to apply for such training and promotion.
    8. Unions. If the contractor relies in whole or in part upon unions 
as a source of employees, the contractor will use his/her best efforts 
to obtain the cooperation of such unions to increase opportunities for 
minority groups and women within the unions, and to effect referrals by 
such unions of minority and female employees. Actions by the contractor 
either directly or through a contractor's association acting as agent 
will include the procedures set forth below:

[[Page 39]]

    a. The contractor will use best efforts to develop, in cooperation 
with the unions, joint training programs aimed toward qualifying more 
minority group members and women for membership in the unions and 
increasing the skills of minority group employees and women so that they 
may qualify for higher paying employment.
    b. The contractor will use best efforts to incorporate an equal 
employment opportunity clause into each union agreement to the end that 
such union will be contractually bound to refer applicants without 
regard to their race, color, religion, sex, or national origin.
    c. The contractor is to obtain information as to the referral 
practices and policies of the labor union except that to the extent such 
information is within the exclusive possession of the labor union and 
such labor union refuses to furnish such information to the contractor, 
the contractor shall so certify to the State highway department and 
shall set forth what efforts have been made to obtain such information.
    d. In the event the union is unable to provide the contractor with a 
reasonable flow of minority and women referrals within the time limit 
set forth in the collective bargaining agreement, the contractor will, 
through independent recruitment efforts, fill the employment vacancies 
without regard to race, color, religion, sex, or national origin; making 
full efforts to obtain qualified and/or qualifiable minority group 
persons and women. (The U.S. Department of Labor has held that it shall 
be no excuse that the union with which the contractor has a collective 
bargaining agreement providing for exclusive referral failed to refer 
minority employees.) In the event the union referral practice prevents 
the contractor from meeting the obligations pursuant to Executive Order 
11246, as amended, and these special provisions, such contractor shall 
immediately notify the State highway agency.
    9. Subcontracting. a. The contractor will use his best efforts to 
solicit bids from and to utilize minority group subcontractors or 
subcontractors with meaningful minority group and female representation 
among their employees. Contractors shall obtain lists of minority-owned 
construction firms from State highway agency personnel.
    b. The contractor will use his best efforts to ensure subcontractor 
compliance with their equal employment opportunity obligations.
    10. Records and Reports. a. The contractor will keep such records as 
are necessary to determine compliance with the contractor's equal 
employment opportunity obligations. The records kept by the contractor 
will be designed to indicate:
    (1) The number of minority and nonminority group members and women 
employed in each work classification on the project.
    (2) The progress and efforts being made in cooperation with unions 
to increase employment opportunities for minorities and women 
(applicable only to contractors who rely in whole or in part on unions 
as a source of their work force),
    (3) The progress and efforts being made in locating, hiring, 
training, qualifying, and upgrading minority and female employees, and
    (4) The progress and efforts being made in securing the services of 
minority group subcontractors or subcontractors with meaningful minority 
and female representation among their employees.
    b. All such records must be retained for a period of three years 
following completion of the contract work and shall be available at 
reasonable times and places for inspection by authorized representatives 
of the State highway agency and the Federal Highway Administration.
    c. The contractors will submit an annual report to the State highway 
agency each July for the duration of the project, indicating the number 
of minority, women, and non-minority group employees currently engaged 
in each work classification required by the contract work. This 
information is to be reported on Form PR 1391. If on-the-job training is 
being required by ``Training Special Provision'', the contractor will be 
required to furnish Form FHWA 1409.

[40 FR 28053, July 3, 1975, as amended at 43 FR 19386, May 5, 1978. 
Correctly redesignated at 46 FR 21156, Apr. 9, 1981]



  Sec. Appendix B to Subpart A of Part 230--Training Special Provisions

    This Training Special Provision supersedes subparagraph 7b of the 
Special Provision entitled ``Specific Equal Employment Opportunity 
Responsibilities,'' (Attachment 1), and is in implementation of 23 
U.S.C. 140(a).
    As part of the contractor's equal employment opportunity affirmative 
action program training shall be provided as follows:
    The contractor shall provide on-the-job training aimed at developing 
full journeymen in the type of trade or job classification involved.
    The number of trainees to be trained under the special provisions 
will be -------- (amount to be filled in by State highway department).
    In the event that a contractor subcontracts a portion of the 
contract work, he shall determine how many, if any, of the trainees are 
to be trained by the subcontractor, provided, however, that the 
contractor shall retain the primary responsibility for meeting the 
training requirements imposed by this special provision. The contractor 
shall also insure that this training

[[Page 40]]

special provision is made applicable to such subcontract. Where 
feasible, 25 percent of apprentices or trainees in each occupation shall 
be in their first year of apprenticeship or training.
    The number of trainees shall be distributed among the work 
classifications on the basis of the contractor's needs and the 
availability of journeymen in the various classifications within a 
reasonable area of recruitment. Prior to commencing construction, the 
contractor shall submit to the State highway agency for approval the 
number of trainees to be trained in each selected classification and 
training program to be used. Furthermore, the contractor shall specify 
the starting time for training in each of the classifications. The 
contractor will be credited for each trainee employed by him on the 
contract work who is currently enrolled or becomes enrolled in an 
approved program and will be reimbursed for such trainees as provided 
hereinafter.
    Training and upgrading of minorities and women toward journeymen 
status is a primary objective of this Training Special Provision. 
Accordingly, the contractor shall make every effort to enroll minority 
trainees and women (e.g., by conducting systematic and direct 
recruitment through public and private sources likely to yield minority 
and women trainees) to the extent that such persons are available within 
a reasonable area of recruitment. The contractor will be responsible for 
demonstrating the steps that he has taken in pursuance thereof, prior to 
a determination as to whether the contractor is in compliance with this 
Training Special Provision. This training commitment is not intended, 
and shall not be used, to discriminate against any applicant for 
training, whether a member of a minority group or not.
    No employee shall be employed as a trainee in any classification in 
which he has successfully completed a training course leading to 
journeyman status or in which he has been employed as a journeyman. The 
contractor should satisfy this requirement by including appropriate 
questions in the employee application or by other suitable means. 
Regardless of the method used the contractor's records should document 
the findings in each case.
    The minimum length and type of training for each classification will 
be as established in the training program selected by the contractor and 
approved by the State highway agency and the Federal Highway 
Administration. The State highway agency and the Federal Highway 
Administration shall approve a program if it is reasonably calculated to 
meet the equal employment opportunity obligations of the contractor and 
to qualify the average trainee for journeyman status in the 
classification concerned by the end of the training period. Furthermore, 
apprenticeship programs registered with the U.S. Department of Labor, 
Bureau of Apprenticeship and Training, or with a State apprenticeship 
agency recognized by the Bureau and training programs approved but not 
necessarily sponsored by the U.S. Department of Labor, Manpower 
Administration, Bureau of Apprenticeship and Training shall also be 
considered acceptable provided it is being administered in a manner 
consistent with the equal employment obligations of Federal-aid highway 
construction contracts. Approval or acceptance of a training program 
shall be obtained from the State prior to commencing work on the 
classification covered by the program. It is the intention of these 
provisions that training is to be provided in the construction crafts 
rather than clerk-typists or secretarial-type positions. Training is 
permissible in lower level management positions such as office 
engineers, estimators, timekeepers, etc., where the training is oriented 
toward construction applications. Training in the laborer classification 
may be permitted provided that significant and meaningful training is 
provided and approved by the division office. Some offsite training is 
permissible as long as the training is an integral part of an approved 
training program and does not comprise a significant part of the overall 
training.
    Except as otherwise noted below, the contractor will be reimbursed 
80 cents per hour of training given an employee on this contract in 
accordance with an approved training program. As approved by the 
engineer, reimbursement will be made for training persons in excess of 
the number specified herein. This reimbursement will be made even though 
the contractor receives additional training program funds from other 
sources, provided such other does not specifically prohibit the 
contractor from receiving other reimbursement. Reimbursement for offsite 
training indicated above may only be made to the contractor where he 
does one or more of the following and the trainees are concurrently 
employed on a Federal-aid project; contributes to the cost of the 
training, provides the instruction to the trainee or pays the trainee's 
wages during the offsite training period.
    No payment shall be made to the contractor if either the failure to 
provide the required training, or the failure to hire the trainee as a 
journeyman, is caused by the contractor and evidences a lack of good 
faith on the part of the contractor in meeting the requirements of this 
Training Special Provision. It is normally expected that a trainee will 
begin his training on the project as soon as feasible after start of 
work utilizing the skill involved and remain on the project as long as 
training opportunities exist in his work classification or until he has 
completed his training program. It is not required that all trainees be 
on board for the entire length

[[Page 41]]

of the contract. A contractor will have fulfilled his responsibilities 
under this Training Special Provision if he has provided acceptable 
training to the number of trainees specified. The number trained shall 
be determined on the basis of the total number enrolled on the contract 
for a significant period.
    Trainees will be paid at least 60 percent of the appropriate minimum 
journeyman's rate specified in the contract for the first half of the 
training period, 75 percent for the third quarter of the training 
period, and 90 percent for the last quarter of the training period, 
unless apprentices or trainees in an approved existing program are 
enrolled as trainees on this project. In that case, the appropriate 
rates approved by the Departments of Labor or Transportation in 
connection with the existing program shall apply to all trainees being 
trained for the same classification who are covered by this Training 
Special Provision.
    The contractor shall furnish the trainee a copy of the program he 
will follow in providing the training. The contractor shall provide each 
trainee with a certification showing the type and length of training 
satisfactorily completed.
    The contractor will provide for the maintenance of records and 
furnish periodic reports documenting his performance under this Training 
Special Provision.

[40 FR 28053, July 3, 1975. Correctly redesignated at 46 FR 21156, Apr. 
9, 1981]

[[Page 42]]



                Sec. Appendix C to Subpart A of Part 230

[GRAPHIC] [TIFF OMITTED] TC14OC91.000

[[Page 43]]


                Sec. Appendix D to Subpart A of Part 230

[GRAPHIC] [TIFF OMITTED] TC14OC91.001

                  General Information and Instructions

    This form is to be developed from the ``Contractor's Annual EEO 
Report.'' This data is to be compiled by the State and submitted 
annually. It should reflect the total employment on all Federal-Aid 
Highway Projects in the State as of July 31st. The staffing figures to 
be reported should represent the project work force on board in all

[[Page 44]]

or any part of the last payroll period preceding the end of July. The 
staffing figures to be reported in Table A should include journey-level 
men and women, apprentices, and on-the-job trainees. Staffing figures to 
be reported in Table B should include only apprentices and on-the-job 
trainees as indicated.
    Entries made for ``Job Categories'' are to be confined to the 
listing shown. Miscellaneous job classifications are to be incorporated 
in the most appropriate category listed on the form. All employees on 
projects should thus be accounted for.
    This information will be useful in complying with the U.S. Senate 
Committee on Public Works request that the Federal Highway 
Administration submit a report annually on the status of the Equal 
Employment Opportunity Program, its effectiveness, and progress made by 
the States and the Administration in carrying out section 22(A) of the 
Federal-Aid Highway Act of 1968. In addition, the form should be used as 
a valuable tool for States to evaluate their own programs for ensuring 
equal opportunity.
    It is requested that States submit this information annually to the 
FHWA Divisions no later than September 25.
    Line 01--State & Region Code. Enter the 4-digit code from the list 
below.

Alabama.....................     01-04  Montana...............     30-08
Alaska......................     02-10  Nebraska..............     31-07
Arizona.....................     04-09  Nevada................     32-09
Arkansas....................     05-06  New Hampshire.........     33-01
California..................     06-09  New Jersey............     34-01
Colorado....................     08-08  New Mexico............     35-06
Delaware....................     10-03  North Carolina........     37-04
District of Columbia........     11-03  North Dakota..........     38-08
Florida.....................     12-04  Ohio..................     39-05
Georgia.....................     13-04  Oklahoma..............     40-06
Hawaii......................     15-09  Oregon................     41-10
Idaho.......................     16-10  Pennsylvania..........     42-03
Illinois....................     17-05  Puerto Rico...........     43-01
Iowa........................     19-07  South Carolina........     45-04
Kansas......................     20-07  South Dakota..........     46-08
Kentucky....................     21-04  Tennessee.............     47-04
Louisiana...................     22-06  Texas.................     48-06
Maine.......................     23-01  Utah..................     49-08
Maryland....................     24-03  Vermont...............     50-01
Massachusetts...............     25-01  Virginia..............     51-03
Michigan....................     26-05  Washington............     53-10
Minnesota...................     27-05  West Virginia.........     54-03
Mississippi.................     28-04  Wisconsin.............     55-05
Missouri....................     29-07  Wyoming...............     56-08
 


(23 U.S.C. sec. 140(a), 315, 49 CFR 1.48(b))

[44 FR 46832, Aug. 8, 1979. Correctly redesignated at 46 FR 21156, Apr. 
9, 1981, and amended at 56 FR 4721, Feb. 6, 1991]



         Sec. Appendixes E-F to Subpart A of Part 230 [Reserved]



Sec. Appendix G to Subpart A of Part 230--Special Reporting Requirements 

               for ``Hometown'' or ``Imposed'' Plan Areas

    In addition to the reporting requirements set forth elsewhere in 
this contract the contractor and the subcontractors holding 
subcontracts, not including material suppliers, of $10,000 or more, 
shall submit for every month of July during which work is performed, 
employment data as contained under Form PR-1391 (appendix C to 23 CFR 
part 230) and in accordance with the instructions included thereon.

[40 FR 28053, July 3, 1975. Correctly redesignated at 46 FR 21156, Apr. 
9, 1981]



  Subpart B_Supportive Services for Minority, Disadvantaged, and Women 
                          Business Enterprises

    Source: 50 FR 51243, Dec. 16, 1985, unless otherwise noted.



Sec. 230.201  Purpose.

    To prescribe the policies, procedures, and guidance to develop, 
conduct, and administer supportive services assistance programs for 
minority, disadvantaged, and women business enterprises.



Sec. 230.202  Definitions.

    (a) Minority Business Enterprise, as used in this subpart, refers to 
all small businesses which participate in the

[[Page 45]]

Federal-aid highway program as a minority business enterprise (MBE), 
women business enterprise (WBE), or disadvantaged business enterprise 
(DBE), all defined under 49 CFR part 23. This expanded definition is 
used only in this subpart as a simplified way of defining the firms 
eligible to benefit from this supportive services program.
    (b) Supportive Services means those services and activities provided 
in connection with minority business enterprise programs which are 
designed to increase the total number of minority businesses active in 
the highway program and contribute to the growth and eventual self-
sufficiency of individual minority businesses so that such businesses 
may achieve proficiency to compete, on an equal basis, for contracts and 
subcontracts.
    (c) State highway agency means that department, commission, board, 
or official of any State charged by its laws with the responsibility for 
highway construction. The term State is considered equivalent to State 
highway agency if the context so implies.



Sec. 230.203  Policy.

    Based on the provisions of Pub. L. 97-424, dated January 6, 1983, it 
is the policy of the Federal Highway Administration (FHWA) to promote 
increased participation of minority business enterprises in Federal-aid 
highway contracts in part through the development and implementation of 
cost effective supportive services programs through the State highway 
agencies.



Sec. 230.204  Implementation of supportive services.

    (a) Subject to the availability of funds under 23 U.S.C. 140(c), the 
State highway agency shall establish procedures to develop, conduct, and 
administer minority business enterprise training and assistance programs 
specifically for the benefit of women and minority businesses. 
Supportive services funds allocated to the States shall not be used to 
finance the training of State highway agency employees or to provide 
services in support of such training. State highway agencies are not 
required to match funds allocated to them under this section. Individual 
States are encouraged to be actively involved in the provision of 
supportive services. Such involvement can take the form of staff, 
funding, and/or direct assistance to augment the supportive services 
efforts financed by Federal-aid funds.
    (b) State highway agencies shall give preference to the following 
types of services:
    (1) Services relating to identification, prequalification, and 
certification assistance, with emphasis on increasing the total number 
of legitimate minority business enterprises participating in the 
Federal-aid highway program;
    (2) Services in connection with estimating, bidding, and technical 
assistance designed to develop and improve the capabilities of minority 
businesses and assist them in achieving proficiency in the technical 
skills involved in highway construction;
    (3) Services designed to develop and improve the immediate and long-
term business management, recordkeeping, and financial accounting 
capabilities;
    (4) Services to assist minority business enterprises to become 
eligible for and to obtain bonding and financial assistance;
    (5) Services relating to verification procedures to ensure that only 
bona fide minority business enterprises are certified as eligible for 
participation in the Federal-aid highway program;
    (6) Follow-up services to ascertain the outcome of training and 
assistance being provided; and
    (7) Other services which contribute to long-term development, 
increased opportunities, and eventual self-sufficiency of minority 
business enterprises.
    (c) A detailed work statement of the supportive services which the 
State highway agency considers to meet the guidance under this 
regulation and a program plan for meeting the requirements of paragraph 
(b) of this section and accomplishing other objectives shall be 
submitted to the FHWA for approval.
    (d) State highway agencies which desire to provide or obtain 
services other than those listed in paragraph (b) of this section shall 
submit their proposals to the FHWA for approval.

[[Page 46]]

    (e) When the State highway agency provides supportive services by 
contract, formal advertising is not required by FHWA; however, the State 
highway agency shall solicit proposals from such qualified sources as 
will assure the competitive nature of the procurement. The evaluation of 
proposals by the State highway agency must include consideration of the 
proposer's ability to effect a productive relationship with majority and 
minority contractors, contractors' associations, minority groups, and 
other persons or organizations whose cooperation and assistance will 
increase the opportunities for minority business enterprises to compete 
for and perform contracts and subcontracts.
    (f) In the selection of contractors to perform supportive services, 
State highway agencies shall make conscientious efforts to search out, 
and utilize the services of qualified minority or women organizations, 
or minority or women enterprises.
    (g) As a minimum, State highway agency contracts to obtain 
supportive services shall include the following provisions:
    (1) A statement that a primary purpose of the supportive services is 
to increase the total number of minority firms participating in the 
Federal-aid highway program and to contribute to the growth and eventual 
self-sufficiency of minority firms;
    (2) A statement that supportive services shall be provided only to 
those minority business enterprises determined to be eligible for 
participation in the Federal-aid highway program in accordance with 49 
CFR part 23 and have a work specialty related to the highway 
construction industry;
    (3) A clear and complete statement of the services to be provided 
under the contract, such as technical assistance, managerial assistance, 
counseling, certification assistance, and follow-up procedures as set 
forth in Sec. 230.204(b) of this part;
    (4) The nondiscrimination provisions required by Title VI of the 
Civil Rights Act of 1964 as set forth in Form FHWA-1273, Required 
Contract Provisions, Federal-Aid Construction Contracts, \1\ and a 
statement of nondiscrimination in employment because of race, color, 
religion, sex, or national origin;
---------------------------------------------------------------------------

    \1\ Form FHWA-1273 is available for inspection and copying at the 
locations given in 49 CFR part 7, appendix D, under Document Inspection 
Facilities, and at all State highway agencies.
---------------------------------------------------------------------------

    (5) The establishment of a definite period of contract performance 
together with, if appropriate, a schedule stating when specific 
supportive services are to be provided;
    (6) Monthly or quarterly reports to the State highway agency 
containing sufficient data and narrative content to enable evaluation of 
both progress and problems;
    (7) The basis of payment;
    (8) An estimated schedule for expenditures;
    (9) The right of access to records and the right to audit shall be 
granted to authorize State highway agency and FHWA officials;
    (10) Noncollusion certification;
    (11) A requirement that the contractor provide all information 
necessary to support progress payments if such are provided for in the 
contract; and
    (12) A termination clause.
    (h) The State highway agency is to furnish copies of the reports 
received under paragraph(g)(6) of this section to the FHWA division 
office.

[50 FR 51243, Dec. 16, 1985, as amended at 52 FR 36922, Oct. 2, 1987]



Sec. 230.205  Supportive services funds obligation.

    Supportive services funds shall be obligated in accordance with the 
procedures set forth in Sec. 230.117(b) of this part. The point of 
obligation is defined as that time when the FHWA has approved a detailed 
work statement for the supportive services.



Sec. 230.206  Monitoring supportive services.

    Supportive services programs shall be continually monitored and 
evaluated by the State highway agency so that needed improvements can be 
identified and instituted. This requires the documentation of valid 
effectiveness

[[Page 47]]

measures by which the results of program efforts may be accurately 
assessed.



Sec. 230.207  Sources of assistance.

    It is the policy of the FHWA that all potential sources of 
assistance to minority business enterprises be utilized. The State 
highway agency shall take actions to ensure that supportive services 
contracts reflect the availability of all sources of assistance in order 
to maximize resource utilization and avoid unnecessary duplication.



  Subpart C_State Highway Agency Equal Employment Opportunity Programs

    Source: 41 FR 28270, July 9, 1976, unless otherwise noted.



Sec. 230.301  Purpose.

    The purpose of the regulations in this subpart is to set forth 
Federal Highway Administration (FHWA) Federal-aid policy and FHWA and 
State responsibilities relative to a State highway agency's internal 
equal employment opportunity program and for assuring compliance with 
the equal employment opportunity requirements of federally-assisted 
highway construction contracts.



Sec. 230.303  Applicability.

    The provisions of this subpart are applicable to all States that 
receive Federal financial assistance in connection with the Federal-aid 
highway program.



Sec. 230.305  Definitions.

    As used in this subpart, the following definitions apply:
    (a) Affirmative Action Plan means:
    (1) With regard to State highway agency work forces, a written 
document detailing the positive action steps the State highway agency 
will take to assure internal equal employment opportunity (internal 
plan).
    (2) With regard to Federal-aid construction contract work forces, 
the Federal equal employment opportunity bid conditions, to be enforced 
by a State highway agency in the plan areas established by the Secretary 
of Labor and FHWA special provisions in nonplan areas (external plan).
    (b) Equal employment opportunity program means the total State 
highway agency program, including the affirmative action plans, for 
ensuring compliance with Federal requirements both in State highway 
agency internal employment and in employment on Federal-aid construction 
projects.
    (c) Minority groups. An employee may be included in the minority 
group to which he or she appears to belong, or is regarded in the 
community as belonging. As defined by U.S. Federal agencies for 
employment purposes, minority group persons in the U.S. are identified 
as Blacks (not of Hispanic origin), Hispanics, Asian or Pacific 
Islanders, and American Indians or Alaskan Natives.
    (d) Racial/ethnic identification. For the purpose of this regulation 
and any accompanying report requirements, an employee may be included in 
the group to which he or she appears to belong, identifies with, or is 
regarded in the community as belonging. However, no person should be 
counted in more than one racial/ethnic category. The following group 
categories will be used:
    (1) The category White (not of Hispanic origin): All persons having 
origins in any of the original peoples of Europe, North Africa, the 
Middle East, or the Indian Subcontinent.
    (2) The category Black (not of Hispanic origin): All persons having 
origins in any of the Black racial groups.
    (3) The category Hispanic: All persons of Mexican, Puerto Rican, 
Cuban, Central or South American, or other Spanish culture or origin, 
regardless of race.
    (4) The category Asian or Pacific Islanders: All persons having 
origins in any of the original peoples of the Far East, Southeast Asia, 
or the Pacific Islands. This area includes, for example, China, Japan, 
Korea, the Philippine Islands, and Samoa.
    (5) The category American Indian or Alaskan Native: All persons 
having origins in any of the original peoples of North America.
    (e) State means any of the 50 States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, American 
Samoa, and the Virgin Islands.

[[Page 48]]

    (f) State highway agency means that department, commission, board, 
or official of any State charged by its laws with the responsibility for 
highway construction. The term State should be considered equivalent to 
State highway agency if the context so implies.

[41 FR 28270, July 9, 1976, as amended at 41 FR 46293, Oct. 20, 1976]



Sec. 230.307  Policy.

    Every employee and representative of State highway agencies shall 
perform all official equal employment opportunity actions in an 
affirmative manner, and in full accord with applicable statutes, 
executive orders, regulations, and policies enunciated thereunder, to 
assure the equality of employment opportunity, without regard to race, 
color, religion, sex, or national origin both in its own work force and 
in the work forces of contractors, subcontractors, and material 
suppliers engaged in the performance of Federal-aid highway construction 
contracts.



Sec. 230.309  Program format.

    It is essential that a standardized Federal approach be taken in 
assisting the States in development and implementation of EEO programs. 
The format set forth in appendix A provides that standardized approach. 
State equal employment opportunity programs that meet or exceed the 
prescribed standards will comply with basic FHWA requirements.



Sec. 230.311  State responsibilities.

    (a) Each State highway agency shall prepare and submit an updated 
equal employment opportunity program, one year from the date of approval 
of the preceding program by the Federal Highway Administrator, over the 
signature of the head of the State highway agency, to the Federal 
Highway Administrator through the FHWA Division Administrator. The 
program shall consist of the following elements:
    (1) The collection and analysis of internal employment data for its 
entire work force in the manner prescribed in part II, paragraph III of 
appendix A; and
    (2) The equal employment opportunity program, including the internal 
affirmative action plan, in the format and manner set forth in appendix 
A.
    (b) In preparation of the program required by Sec. 230.311(a), the 
State highway agency shall consider and respond to written comments from 
FHWA regarding the preceding program.



Sec. 230.313  Approval procedure.

    After reviewing the State highway agency equal employment 
opportunity program and the summary analysis and recommendations from 
the FHWA regional office, the Washington Headquarters Office of Civil 
Rights staff will recommend approval or disapproval of the program to 
the Federal Highway Administrator. The State highway agency will be 
advised of the Administrator's decision. Each program approval is 
effective for a period of one year from date of approval.



  Sec. Appendix A to Subpart C of Part 230--State Highway Agency Equal 

                     Employment Opportunity Programs

    Each State highway agency's (SHA) equal employment opportunity (EEO) 
program shall be in the format set forth herein and shall address 
Contractor Compliance (part I) and SHA Internal Employment (part II), 
including the organizational structure of the SHA total EEO Program 
(internal and external).

                      part i--contractor compliance

    I. Organization and structure. A. Statehighway agency EEO 
Coordinator (External) and staff support. 1. Describe the organizational 
location and responsibilities of the State highway agency EEO 
Coordinator. (Provided organization charts of the State highway agency 
and of the EEO staff.)
    2. Indicate whether full or part-time; if part-time, indicate 
percentage of time devoted to EEO.
    3. Indicate length of time in position, civil rights experience and 
training, and supervision.
    4. Indicate whether compliance program is centralized or 
decentralized.
    5. Identify EEO Coordinator's staff support (full- and part-time) by 
job title and indicate areas of their responsibilities.
    6. Identify any other individuals in the central office having a 
responsibility for the implementation of this program and describe their 
respective roles and training received in program area.
    B. District or division personnel. 1. Describe the responsibilities 
and duties of any district

[[Page 49]]

EEO personnel. Identify to whom they report.
    2. Explain whether district EEO personnel are full-time or have 
other responsibilities such as labor compliance or engineering.
    3. Describe training provided for personnel having EEO compliance 
responsibility.
    C. Project personnel. Describe the EEO role of project personnel.
    II. Compliance procedures. A. Applicable directives. 1. FHWA 
Contract Compliance Procedures.
    2. EEO Special Provisions (FHWA Federal-Aid Highway Program Manual, 
vol. 6, chap. 4, sec. 1, subsec. 2, Attachment 1) \1\
---------------------------------------------------------------------------

    \1\ The Federal-Aid Highway Program Manual is available for 
inspection and copying at the Federal Highway Administration (FHWA), 400 
7th St., SW., Washington, DC 20590, or at FHWA offices listed in 49 CFR 
part 7, appendix D.
---------------------------------------------------------------------------

    3. Training Special Provisions (FHWA Federal-Aid Highway Program 
Manual, vol. 6, chap. 4, sec. 1, subsec. 2, Attachment 2) \1\
    4. FHWA Federal-Aid Highway Program Manual, vol. 6, chap. 4, sec. 1, 
subsec. 6 (Contract Procedures), and subsec. 8 (Minority Business 
Enterprise). \1\
    B. Implementation. 1. Describe process (methods) of incorporating 
the above FHWA directives into the SHA compliance program.
    2. Describe the methods used by the State to familiarize State 
compliance personnel with all FHWA contract compliance directives. 
Indicate frequency of work shops, training sessions, etc.
    3. Describe the procedure for advising the contractor of the EEO 
contract requirements at any preconstruction conference held in 
connection with a Federal-aid contract.
    III. Accomplishments. Describe accomplishments in the construction 
EEO compliance program during the past fiscal year.
    A. Regular project compliance review program. This number should 
include at least all of the following items:
    1. Number of compliance reviews conducted.
    2. Number of contractors reviewed.
    3. Number of contractors found in compliance.
    4. Number of contractors found in noncompliance.
    5. Number of show cause notices issued.
    6. Number of show cause notices rescinded.
    7. Number of show cause actions still under conciliation and 
unresolved.
    8. Number of followup reviews conducted.
    (Note: In addition to information requested in items 4-8 above, 
include a brief summary of total show cause and followup activities--
findings and achievements.)
    B. Consolidated compliance reviews. 1. Identify the target areas 
that have been reviewed since the inception of the consolidated 
compliance program. Briefly summarize total findings.
    2. Identify any significant impact or effect of this program on 
contractor compliance.
    C. Home office reviews. If the State conducts home office reviews, 
describe briefly the procedures followed by State.
    D. Major problems encountered. Describe major problems encountered 
in connection with any review activities during the past fiscal year.
    E. Major breakthroughs. Comment briefly on any major breakthrough or 
other accomplishment significant to the compliance review program.
    IV. Areawide plans/Hometown and Imposed (if applicable). A. Provide 
overall analysis of the effectiveness of each areawide plan in the 
State.
    B. Indicate by job titles the number of State personnel involved in 
the collection, consolidation, preparation, copying, reviewing, 
analysis, and transmittal of area plan reports (Contracting Activity and 
Post Contract Implementation). Estimate the amount of time (number of 
hours) spent collectively on this activity each month. How does the 
State use the plan report data?
    C. Identify Office of Federal Contract Compliance Programs (OFCCP) 
area plan audits or compliance checks in which State personnel 
participated during the last fiscal year. On the average, how many hours 
have been spent on these audits and/or checks during the past fiscal 
year?
    D. Describe the working relationship of State EEO compliance 
personnel with representatives of plan administrative committee(s).
    E. Provide recommendations for improving the areawide plan program 
and the reporting system.
    V. Contract sanctions. A. Describe the procedures used by the State 
to impose contract sanctions or institute legal proceedings.
    B. Indicate the State or Federal laws which are applicable.
    C. Does the State withhold a contractor's progress payments for 
failure to comply with EEO requirements? If so, identify contractors 
involved in such actions during the past fiscal year. If not, identify 
other actions taken.
    VI. Complaints. A. Describe the State's procedures for handling 
discrimination complaints against contractors.
    B. If complaints are referred to a State fair employment agency or 
similar agency, describe the referral procedure.
    C. Identify the Federal-aid highway contractors that have had 
discrimination complaints filed against them during the past fiscal year 
and provide current status.
    VII. External training programs, including supportive services. A. 
Describe the State's process for reviewing the work classifications of 
trainees to determine that there is a

[[Page 50]]

proper and reasonable distribution among appropriate craft.
    B. Describe the State's procedures for identifying the number of 
minorities and women who have completed training programs.
    C. Describe the extent of participation by women in construction 
training programs.
    D. Describe the efforts made by the State to locate and use the 
services of qualified minority and female supportive service 
consultants. Indicate if the State's supportive service contractor is a 
minority or female owned enterprise.
    E. Describe the extent to which reports from the supportive service 
contractors provide sufficient data to evaluate the status of training 
programs, with particular reference to minorities and women.
    VIII. Minority business enterprise program. FHPM 6-4-1-8 sets forth 
the FHWA policy regarding the minority business enterprise program. The 
implementation of this program should be explained by responding to the 
following:
    A. Describe the method used for listing of minority contractors 
capable of, or interested in, highway construction contracting or 
subcontracting. Describe the process used to circulate names of 
appropriate minority firms and associations to contractors obtaining 
contract proposals.
    B. Describe the State's procedure for insuring that contractors take 
action to affirmatively solicit the interest, capability, and prices of 
potential minority subcontractors.
    C. Describe the State's procedure for insuring that contractors have 
designated liaison officers to administer the minority business 
enterprise program in an effective manner. Specify resource material, 
including contracts, which the State provides to liaison officers.
    D. Describe the action the State has taken to meet its goals for 
prequalification or licensing of minority business. Include dollar goals 
established for the year, and describe what criteria or formula the 
State has adopted for setting such goals. If it is different from the 
previous year, describe in detail.
    E. Outline the State's procedure for evaluating its 
prequalification/licensing requirements.
    F. Identify instances where the State has waived prequalification 
for subcontractors on Federal-aid construction work or for prime 
contractors on Federal-aid contracts with an estimated dollar value 
lower than $100,000.
    G. Describe the State's methods of monitoring the progress and 
results of its minority business enterprise efforts.
    IX. Liaison. Describe the liaison established by the State between 
public (State, county, and municpal) agencies and private organizations 
involved in EEO programs. How is the liaison maintained on a continuing 
basis?
    X. Innovative programs. Identify any innovative EEO programs or 
management procedures initiated by the State and not previously covered.

                part ii--state highway agency employment

    I. General. The State highway agency's (SHA) internal program is an 
integral part of the agency's total activities. It should include the 
involvement, commitment and support of executives, managers, supervisors 
and all other employees. For effective administration and implementation 
of the EEO Program, an affirmative action plan (AAP) is required. The 
scope of an EEO program and an AAP must be comprehensive, covering all 
elements of the agency's personnel management policies and practices. 
The major part of an AAP must be recognition and removal of any barriers 
to equal employment opportunity, identification of problem areas and of 
persons unfairly excluded or held back and action enabling them to 
compete for jobs on an equal basis. An effective AAP not only benefits 
those who have been denied equal employment opportunity but will also 
greatly benefit the organization which often has overlooked, screened 
out or underutilized the great reservoir of untapped human resources and 
skills, especially among women and minority groups.
    Set forth are general guidelines designed to assist the State 
highway agencies in implementing internal programs, including the 
development and implementation of AAP's to ensure fair and equal 
treatment for all persons, regardless of race, color, religion, sex or 
national origin in all employment practices.
    II. Administration and implementation. The head of each State 
highway agency is responsible for the overall administration of the 
internal EEO program, including the total integration of equal 
opportunity into all facets of personnel management. However, specific 
program responsibilities should be assigned for carrying out the program 
at all management levels.
    To ensure effectiveness in the implementation of the internal EEO 
program, a specific and realistic AAP should be developed. It should 
include both short and long-range objectives, with priorities and target 
dates for achieving goals and measuring progress, according to the 
agency's individual need to overcome existing problems.
    A. State Highway Agency Affirmative Action Officer (internal). 1. 
Appointment of Affirmative Action Officer. The head of the SHA should 
appoint a qualified Affirmative Action (AA) Officer (Internal EEO 
Officer) with responsibility and authority to implement the internal EEO 
program. In making the selection, the following factors should be 
considered:

[[Page 51]]

    a. The person appointed should have proven ability to accomplish 
major program goals.
    b. Managing the internal EEO program requires a major time 
commitment; it cannot be added on to an existing full-time job.
    c. Appointing qualified minority and/or female employees to head or 
staff the program may offer good role models for present and potential 
employees and add credibility to the programs involved. However, the 
most essential requirements for such position(s) are sensitivity to 
varied ways in which discrimination limits job opportunities, commitment 
to program goals and sufficient status and ability to work with others 
in the agency to achieve them.
    2. Responsibilities of the Affirmative Action Officer. The 
responsibilities of the AA Officer should include, but not necessarily 
be limited to:
    a. Developing the written AAP.
    b. Publicizing its content internally and externally.
    c. Assisting managers and supervisors in collecting and analyzing 
employment data, identifying problem areas, setting goals and timetables 
and developing programs to achieve goals. Programs should include 
specific remedies to eliminate any discriminatory practices discovered 
in the employment system.
    d. Handling and processing formal discrimination complaints.
    e. Designing, implementing and monitoring internal audit and 
reporting systems to measure program effectiveness and to determine 
where progress has been made and where further action is needed.
    f. Reporting, at least quarterly, to the head of the SHA on progress 
and deficiencies of each unit in relation to agency goals.
    g. In addition, consider the creation of:
    (1) An EEO Advisory Committee, whose membership would include top 
management officials,
    (2) An EEO Employee Committee, whose membership would include rank 
and file employees, with minority and female representatives from 
various job levels and departments to meet regularly with the AA 
officer, and
    (3) An EEO Counseling Program to attempt informal resolution of 
discrimination complaints.
    B. Contents of an affirmative action plan. The Affirmative Action 
Plan (AAP) is an integral part of the SHA's EEO program. Although the 
style and format of AAP's may vary from one SHA to another, the basic 
substance will generally be the same. The essence of the AAP should 
include, but not necessarily be limited to:
    1. Inclusion of a strong agency policy statement of commitment to 
EEO.
    2. Assignment of responsibility and authority for program to a 
qualified individual.
    3. A survey of the labor market area in terms of population makeup, 
skills, and availability for employment.
    4. Analyzing the present work force to identify jobs, departments 
and units where minorities and females are underutilized.
    5. Setting specific, measurable, attainable hiring and promotion 
goals, with target dates, in each area of underutilization.
    6. Making every manager and supervisor responsible and accountable 
for meeting these goals.
    7. Reevaluating job descriptions and hiring criteria to assure that 
they reflect actual job needs.
    8. Finding minorities and females who are qualified or qualifiable 
to fill jobs.
    9. Getting minorities and females into upward mobility and relevant 
training programs where they have not had previous access.
    10. Developing systems to monitor and measure progress regularly. If 
results are not satisfactory to meet goals, determine the reasons and 
make necessary changes.
    11. Developing a procedure whereby employees and applicants may 
process allegations of discrimination to an impartial body without fear 
of reprisal.
    C. Implementation of an affirmative action plan. The written AAP is 
the framework and management tool to be used at all organizational 
levels to actively implement, measure and evaluate program progress on 
the specific action items which represent EEO program problems or 
deficiencies. The presence of a written plan alone does not constitute 
an EEO program, nor is it, in itself, evidence of an ongoing program. As 
a minimum, the following specific actions should be taken.
    1. Issue written equal employment opportunity policy statement and 
affirmative action commitment. To be effective, EEO policy provisions 
must be enforced by top management, and all employees must be made aware 
that EEO is basic agency policy. The head of the SHA (1) should issue a 
firm statement of personal commitment, legal obligation and the 
importance of EEO as an agency goal, and (2) assign specific 
responsibility and accountability to each executive, manager and 
supervisor.
    The statement should include, but not necessarily be limited to, the 
following elements:
    a. EEO for all persons, regardless of race, color, religion, sex or 
national origin as a fundamental agency policy.
    b. Personal commitment to and support of EEO by the head of the SHA.
    c. The requirement that special affirmative action be taken 
throughout the agency to overcome the effects of past discrimination.
    d. The requirement that the EEO program be a goal setting program 
with measurement

[[Page 52]]

and evaluation factors similar to other major agency programs.
    e. Equal opportunity in all employment practices, including (but not 
limited to) recruiting, hiring, transfers, promotions, training, 
compensation, benefits, recognition (awards), layoffs, and other 
terminations.
    f. Responsibility for positive affirmative action in the discharge 
of EEO programs, including performance evaluations of managers and 
supervisors in such functions, will be expected of and shared by all 
management personnel.
    g. Accountability for action or inaction in the area of EEO by 
management personnel.
    2. Publicize the affirmative action plan. a. Internally: (1) 
Distribute written communications from the head of the SHA.
    (2) Include the AAP and the EEO policy statement in agency 
operations manual.
    (3) Hold individual meetings with managers and supervisors to 
discuss the program, their individual responsibilities and to review 
progress.
    (4) Place Federal and State EEO posters on bulletin boards, near 
time clocks and in personnel offices.
    (5) Publicize the AAP in the agency newsletters and other 
publications.
    (6) Present and discuss the AAP as a part of employee orientation 
and all training programs.
    (7) Invite employee organization representatives to cooperate and 
assist in developing and implementing the AAP.
    b. Externally: Distribute the AAP to minority groups and women's 
organizations, community action groups, appropriate State agencies, 
professional organizations, etc.
    3. Develop and implement specific programs to eliminate 
discriminatory barriers and achieve goals. a. Job structuring and upward 
mobility: The AAP should include specific provisions for:
    (1) Periodic classification plan reviews to correct inaccurate 
position descriptions and to ensure that positions are allocated to the 
appropriate classification.
    (2) Plans to ensure that all qualification requirements are closely 
job related.
    (3) Efforts to restructure jobs and establish entry level and 
trainee positions to facilitate progression within occupational areas.
    (4) Career counseling and guidance to employees.
    (5) Creating career development plans for lower grade employees who 
are underutilized or who demonstrate potential for advancement.
    (6) Widely publicizing upward mobility programs and opportunities 
within each work unit and within the total organizational structure.
    b. Recruitment and placement. The AAP should include specific 
provisions for, but not necessarily limited to:
    (1) Active recruitment efforts to support and supplement those of 
the central personnel agency or department, reaching all appropriate 
sources to obtain qualified employees on a nondiscriminatory basis.
    (2) Maintaining contracts with organizations representing minority 
groups, women, professional societies, and other sources of candidates 
for technical, professional and management level positions.
    (3) Ensuring that recruitment literature is relevant to all 
employees, including minority groups and women.
    (4) Reviewing and monitoring recruitment and placement procedures so 
as to assure that no discriminatory practices exist.
    (5) Cooperating with management and the central personnel agency on 
the review and validation of written tests and other selection devices.
    (6) Analyzing the flow of applicants through the selection and 
appointment process, including an analytical review of reasons for 
rejections.
    (7) Monitoring the placement of employees to ensure the assignment 
of work and workplace on a nondiscriminatory basis.
    c. Promotions. The AAP should include specific provisions for, but 
not necessarily limited to:
    1. Establishing an agency-wide merit promotion program, including a 
merit promotion plan, to provide equal opportunity for all persons based 
on merit and without regard to race, color, religion, sex or national 
origin.
    2. Monitoring the operation of the merit promotion program, 
including a review of promotion actions, to assure that requirements 
procedures and practices support EEO program objectives and do not have 
a discriminatory impact in actual operation.
    3. Establishing skills banks to match employee skills with available 
job advancement opportunities.
    4. Evaluating promotion criteria (supervisory evaluations, oral 
interviews, written tests, qualification standards, etc.) and their use 
by selecting officials to identify and eliminate factors which may lead 
to improper ``selection out'' of employees or applicants, particularly 
minorities and women, who traditionally have not had access to better 
jobs. It may be appropriate to require selecting officials to submit a 
written justification when well qualified persons are passed over for 
upgrading or promotion.
    5. Assuring that all job vacancies are posted conspicuously and that 
all employees are encouraged to bid on all jobs for which they feel they 
are qualified.
    6. Publicizing the agency merit promotion program by highlighting 
breakthrough promotions, i.e., advancement of minorities and women to 
key jobs, new career heights, etc.

[[Page 53]]

    d. Training. The AAP should include specific provisions for, but not 
necessarily limited to:
    (1) Requiring managers and supervisors to participate in EEO 
seminars covering the AAP, the overall EEO program and the 
administration of the policies and procedures incorporated therein, and 
on Federal, State and local laws relating to EEO.
    (2) Training in proper interviewing techniques of employees who 
conduct employment selection interviews.
    (3) Training and education programs designed to provide 
opportunities for employees to advance in relation to the present and 
projected manpower needs of the agency and the employees' career goals.
    (4) The review of profiles of training course participants to ensure 
that training opportunities are being offered to all eligible employees 
on an equal basis and to correct any inequities discovered.
    e. Layoffs, recalls, discharges, demotions, and disciplinary 
actions. The standards for deciding when a person shall be terminated, 
demoted, disciplined, laid off or recalled should be the same for all 
employees, including minorities and females. Seemingly neutral practices 
should be reexamined to see if they have a disparate effect on such 
groups. For example, if more minorities and females are being laid off 
because they were the last hired, then, adjustments should be made to 
assure that the minority and female ratios do not decrease because of 
these actions.
    (1) When employees, particularly minorities and females, are 
disciplined, laid off, discharged or downgraded, it is advisable that 
the actions be reviewed by the AA Officer before they become final.
    (2) Any punitive action (i.e., harassment, terminations, demotions), 
taken as a result of employees filing discrimination complaints, is 
illegal.
    (3) The following records should be kept to monitor this area of the 
internal EEO program:
    On all terminations, including layoffs and discharges: indicate 
total number, name, (home address and phone number), employment date, 
termination date, recall rights, sex, racial/ethnic identification (by 
job category), type of termination and reason for termination.
    On all demotions: indicate total number, name, (home address and 
phone number), demotion date, sex, racial/ethnic identification (by job 
category), and reason for demotion.
    On all recalls: indicate total number, name, (home address and phone 
number) recall date, sex, and racial/ethnic identification (by job 
category).
    Exit interviews should be conducted with employees who leave the 
employment of the SHA.
    f. Other personnel actions. The AAP should include specific 
provisions for, but not necessarily limited to:
    (1) Assuring that information on EEO counseling and grievance 
procedures is easily available to all employees.
    (2) A system for processing complaints alleging discrimination 
because of race, color, religion, sex or national origin to an impartial 
body.
    (3) A system for processing grievances and appeals (i.e., 
disciplinary actions, adverse actions, adverse action appeals, etc).
    (4) Including in the performance appraisal system a factor to rate 
manager's and supervisors' performance in discharging the EEO program 
responsibilities assigned to them.
    (5) Reviewing and monitoring the performance appraisal program 
periodically to determine its objectivity and effectiveness.
    (6) Ensuring the equal availability of employee benefits to all 
employees.
    4. Program evaluation. An internal reporting system to continually 
audit, monitor and evaluate programs is essential for a successful AAP. 
Therefore, a system providing for EEO goals, timetables, and periodic 
evaluations needs to be established and implemented. Consideration 
should be given to the following actions:
    a. Defining the major objectives of EEO program evaluation.
    b. The evaluation should be directed toward results accomplished, 
not only at efforts made.
    c. The evaluation should focus attention on assessing the adequacy 
of problem identification in the AAP and the extent to which the 
specific action steps in the plan provide solutions.
    d. The AAP should be reviewed and evaluated at least annually. The 
review and evaluation procedures should include, but not be limited to, 
the following:
    (1) Each bureau, division or other major component of the agency 
should make annual and such other periodic reports as are needed to 
provide an accurate review of the operations of the AAP in that 
component.
    (2) The AA Officer should make an annual report to the head of the 
SHA, containing the overall status of the program, results achieved 
toward established objectives, identity of any particular problems 
encountered and recommendations for corrective actions needed.
    e. Specific, numerical goals and objectives should be established 
for the ensuing year. Goals should be developed for the SHA as a whole, 
as well as for each unit and each job category.
    III. Employment statistical data. A. As a minimum, furnish the most 
recent data on the following:
    1. The total population in the State,

[[Page 54]]

    2. The total labor market in State, with a breakdown by racial/
ethnic identification and sex, and
    3. An analysis of (1) and (2) above, in connection with the 
availability of personnel and jobs within SHA's.
    B. State highway agencies shall use the EEO-4 Form in providing 
current work force data. This data shall reflect only State department 
of transportation/State highway department employment.

[[Page 55]]

[GRAPHIC] [TIFF OMITTED] TC14OC91.002


[[Page 56]]


[GRAPHIC] [TIFF OMITTED] TC14OC91.003


[41 FR 28270, July 9, 1976, as amended at 41 FR 46294, Oct. 20, 1976]

[[Page 57]]



 Subpart D_Construction Contract Equal Opportunity Compliance Procedures

    Source: 41 FR 34239, Aug. 13, 1976, unless otherwise noted.



Sec. 230.401  Purpose.

    The purpose of the regulations in this subpart is to prescribe 
policies and procedures to standardize the implementation of the equal 
opportunity contract compliance program, including compliance reviews, 
consolidated compliance reviews, and the administration of areawide 
plans.



Sec. 230.403  Applicability.

    The procedures set forth hereinafter apply to all nonexempt direct 
Federal and Federal-aid highway construction contracts and subcontracts, 
unless otherwise specified.



Sec. 230.405  Administrative responsibilities.

    (a) Federal Highway Administration (FHWA) responsibilities. (1) The 
FHWA has the responsibility to ensure that contractors meet contractural 
equal opportunity requirements under E.O. 11246, as amended, and title 
23 U.S.C., and to provide guidance and direction to States in the 
development and implementation of a program to assure compliance with 
equal opportunity requirements.
    (2) The Federal Highway Administrator or a designee may inquire into 
the status of any matter affecting the FHWA equal opportunity program 
and, when considered necessary, assume jurisdiction over the matter, 
proceeding in coordination with the State concerned. This is without 
derogation of the authority of the Secretary of Transportation, 
Department of Transportation (DOT), the Director, DOT Departmental 
Office of Civil Rights (OCR) or the Director, Office of Federal Contract 
Compliance Programs (OFCCP), Department of Labor.
    (3) Failure of the State highway agency (SHA) to discharge the 
responsibilities stated in Sec. 230.405(b)(1) may result in DOT's 
taking any or all of the following actions (see appendix A to 23 CFR 
part 630, subpart C ``Federal-aid project agreement''):
    (i) Cancel, terminate, or suspend the Federal-aid project agreement 
in whole or in part;
    (ii) Refrain from extending any further assistance to the SHA under 
the program with respect to which the failure or refusal occurred until 
satisfactory assurance of future compliance has been received from the 
SHA; and
    (iii) Refer the case to an appropriate Federal agency for legal 
proceedings.
    (4) Action by the DOT, with respect to noncompliant contractors, 
shall not relieve a SHA of its responsibilities in connection with these 
same matters; nor is such action by DOT a substitute for corrective 
action utilized by a State under applicable State laws or regulations.
    (b) State responsibilities. (1) The SHA's, as contracting agencies, 
have a responsibility to assure compliance by contractors with the 
requirements of Federal-aid construction contracts, including the equal 
opportunity requirements, and to assist in and cooperate with FHWA 
programs to assure equal opportunity.
    (2) The corrective action procedures outlined herein do not preclude 
normal contract administration procedures by the States to ensure the 
contractor's completion of specific contract equal opportunity 
requirements, as long as such procedures support, and sustain the 
objectives of E.O. 11246, as amended. The State shall inform FHWA of any 
actions taken against a contractor under normal State contract 
administration procedures, if that action is precipitated in whole or in 
part by noncompliance with equal opportunity contract requirements.



Sec. 230.407  Definitions.

    For the purpose of this subpart, the following definitions shall 
apply, unless the context requires otherwise:
    (a) Actions, identified by letter and number, shall refer to those 
items identified in the process flow chart. (Appendix D);
    (b) Affirmative Action Plan means a written positive management tool 
of a total equal opportunity program indicating the action steps for all 
organizational levels of a contractor to initiate

[[Page 58]]

and measure equal opportunity program progress and effectiveness. (The 
Special Provisions [23 CFR part 230 A, appendix A] and areawide plans 
are Affirmative Action Plans.);
    (c) Affirmative Actions means the efforts exerted towards achieving 
equal opportunity through positive, aggressive, and continuous result-
oriented measures to correct past and present discriminatory practices 
and their effects on the conditions and privileges of employment. These 
measures include, but are not limited to, recruitment, hiring, 
promotion, upgrading, demotion, transfer, termination, compensation, and 
training;
    (d) Areawide Plan means an Affirmative Action Plan approved by the 
Department of Labor to increase minority and female utilization in 
crafts of the construction industry in a specified geographical area 
pursuant to E.O. 11246, as amended, and taking the form of either a 
``Hometown'' or an ``Imposed'' Plan.
    (1) Hometown Plan means a voluntary areawide agreement usually 
developed by representatives of labor unions, minority organizations, 
and contractors, and approved by the OFCCP for the purpose of 
implementing the equal employment opportunity requirements pursuant to 
E.O. 11246, as amended;
    (2) Imposed Plan means mandatory affirmative action requirements for 
a specified geographical area issued by OFCCP and, in some areas, by the 
courts;
    (e) Compliance Specialist means a Federal or State employee 
regularly employed and experienced in civil rights policies, practices, 
procedures, and equal opportunity compliance review and evaluation 
functions;
    (f) Consolidated Compliance Review means a review and evaluation of 
all significant construction employment in a specific geographical 
(target) area;
    (g) Construction shall have the meanings set forth in 41 CFR 60-
1.3(e) and 23 U.S.C. 101(a). References in both definitions to expenses 
or functions incidental to construction shall include preliminary 
engineering work in project development or engineering services 
performed by or for a SHA;
    (h) Corrective Action Plan means a contractor's unequivocal written 
and signed commitment outlining actions taken or proposed, with time 
limits and goals, where appropriate to correct, compensate for, and 
remedy each violation of the equal opportunity requirements as specified 
in a list of deficiencies. (Sometimes called a conciliation agreement or 
a letter of commitment.);
    (i) Contractor means, any person, corporation, partnership, or 
unincorporated association that holds a FHWA direct or federally 
assisted construction contract or subcontract regardless of tier;
    (j) Days shall mean calendar days;
    (k) Discrimination means a distinction in treatment based on race, 
color, religion, sex, or national origin;
    (l) Equal Employment Opportunity means the absence of partiality or 
distinction in employment treatment, so that the right of all persons to 
work and advance on the basis of merit, ability, and potential is 
maintained;
    (m) Equal Opportunity Compliance Review means an evaluation and 
determination of a nonexempt direct Federal or Federal-aid contractor's 
or subcontractor's compliance with equal opportunity requirements based 
on:
    (1) Project work force--employees at the physical location of the 
construction activity;
    (2) Area work force--employees at all Federal-aid, Federal, and non-
Federal projects in a specific geographical area as determined under 
Sec. 230.409 (b)(9); or
    (3) Home office work force--employees at the physical location of 
the corporate, company, or other ownership headquarters or regional 
managerial, offices, including ``white collar'' personnel (managers, 
professionals, technicians, and clericals) and any maintenance or 
service personnel connected thereto;
    (n) Equal Opportunity Requirements is a general term used throughout 
this document to mean all contract provisions relative to equal 
employment opportunity (EEO), subcontracting, and training;
    (o) Good Faith Effort means affirmative action measures designed to 
implement the established objectives of an Affirmative Action Plan;
    (p) Show Cause Notice means a written notification to a contractor 
based

[[Page 59]]

on the determination of the reviewer (or in appropriate cases by higher 
level authority) to be in noncompliance with the equal opportunity 
requirements. The notice informs the contractor of the specific basis 
for the determination and provides the opportunity, within 30 days from 
receipt, to present an explanation why sanctions should not be imposed;
    (q) State highway agency (SHA) means that department, commission, 
board, or official of any State charged by its laws with the 
responsibility for highway construction. The term State should be 
considered equivalent to State highway agency. With regard to direct 
Federal contracts, references herein to SHA's shall be considered to 
refer to FHWA regional offices, as appropriate.



Sec. 230.409  Contract compliance review procedures.

    (a) General. A compliance review consists of the following elements:
    (1) Review Scheduling (Actions R-1 and R-2).
    (2) Contractor Notification (Action R-3).
    (3) Preliminary Analysis (Phase I) (Action R-4).
    (4) Onsite Verification and Interviews (Phase II) (Action R-5).
    (5) Exit Conference (Action R-6).
    (6) Compliance Determination and Formal Notification (Actions R-8, 
R-9, R-10, R-11, R-12).

The compliance review procedure, as described herein and in appendix D 
provides for continual monitoring of the employment process. Monitoring 
officials at all levels shall analyze submissions from field offices to 
ensure proper completion of procedural requirements and to ascertain the 
effectiveness of program implementation.
    (b) Review scheduling. (Actions R-1 and R-2). Because construction 
work forces are not constant, particular attention should be paid to the 
proper scheduling of equal opportunity compliance reviews. Priority in 
scheduling equal opportunity compliance reviews shall be given to 
reviewing those contractor's work forces:
    (1) Which hold the greatest potential for employment and promotion 
of minorities and women (particularly in higher skilled crafts or 
occupations);
    (2) Working in areas which have significant minority and female 
labor forces within a reasonable recruitment area;
    (3) Working on projects that include special training provisions; 
and
    (4) Where compliance with equal opportunity requirements is 
questionable. (Based on previous PR-1391's (23 CFR part 230, subpart A, 
appendix C) Review Reports and Hometown Plan Reports).

In addition, the following considerations shall apply:
    (5) Reviews specifically requested by the Washington Headquarters 
shall receive priority scheduling;
    (6) Compliance Reviews in geographical areas covered by areawide 
plans would normally be reviewed under the Consolidated Compliance 
Review Procedures set forth in Sec. 230.415.
    (7) Reviews shall be conducted prior to or during peak employment 
periods.
    (8) No compliance review shall be conducted that is based on a home 
office work force of less than 15 employees unless requested or approved 
by Washington Headquarters; and
    (9) For compliance reviews based on an area work force (outside of 
areawide plan coverage), the Compliance Specialist shall define the 
applicable geographical area by considering:
    (i) Union geographical boundaries;
    (ii) The geographical area from which the contractor recruits 
employees, i.e., reasonable recruitment area;
    (iii) Standard Metropolitan Statistical Area (SMSA) or census 
tracts; and
    (iv) The county in which the Federal or Federal-aid project(s) is 
located and adjacent counties.
    (c) Contractor notification (Action R-3). (1) The Compliance 
Specialist should usually provide written notification to the contractor 
of the pending compliance review at least 2 weeks prior to the onsite 
verification and interviews. This notification shall include the 
scheduled date(s), an outline of the mechanics and basis of the review, 
requisite interviews, and documents required.
    (2) The contractor shall be requested to provide a meeting place on 
the day

[[Page 60]]

of the visit either at the local office of the contractor or at the 
jobsite.
    (3) The contractor shall be requested to supply all of the following 
information to the Compliance Specialist prior to the onsite 
verification and interviews.
    (i) Current Form PR-1391 developed from the most recent payroll;
    (ii) Copies of all current bargaining agreements;
    (iii) Copies of purchase orders and subcontracts containing the EEO 
clause;
    (iv) A list of recruitment sources available and utilized;
    (v) A statement of the status of any action pertaining to employment 
practices taken by the Equal Employment Opportunity Commission (EEOC) or 
other Federal, State, or local agency regarding the contractor or any 
source of employees;
    (vi) A list of promotions made during the past 6 months, to include 
race, national origin, and sex of employee, previous job held, job 
promoted into; and corresponding wage rates;
    (vii) An annotated payroll to show job classification, race, 
national origin and sex;
    (viii) A list of minority- or female-owned companies contacted as 
possible subcontractors, vendors, material suppliers, etc.; and
    (ix) Any other necessary documents or statements requested by the 
Compliance Specialist for review prior to the actual onsite visit.
    (4) For a project review, the prime contractor shall be held 
responsible for ensuring that all active subcontractors are present at 
the meeting and have supplied the documentation listed in Sec. 
230.409(c)(3).
    (d) Preliminary analysis (Phase I) (Action R-4). Before the onsite 
verification and interviews, the Compliance Specialist shall analyze the 
employment patterns, policies, practices, and programs of the contractor 
to determine whether or not problems exist by reviewing information 
relative to:
    (1) The contractor's current work force;
    (2) The contractor's relationship with referral sources, e.g., 
unions, employment agencies, community action agencies, minority and 
female organizations, etc.;
    (3) The minority and female representation of sources;
    (4) The availability of minorities and females with requisite skills 
in a reasonable recruitment area;
    (5) Any pending EEOC or Department of Justice cases or local or 
State Fair Employment Agency cases which are relevant to the contractor 
and/or the referral sources; and
    (6) The related projects (and/or contractor) files of FHWA regional 
or division and State Coordinator's offices to obtain current 
information relating to the status of the contractor's project(s), 
value, scheduled duration, written corrective action plans, PR-1391 or 
Manpower Utilization Reports, training requirements, previous compliance 
reviews, and other pertinent correspondence and/or reports.
    (e) Onsite verification and interviews (Phase II) (Action R-5). (1) 
Phase II of the review consists of the construction or home office site 
visit(s). During the initial meeting with the contractor, the following 
topics shall be discussed:
    (i) Objectives of the visit;
    (ii) The material submitted by the contractor, including the actual 
implementation of the employee referral source system and any 
discrepancies found in the material; and
    (iii) Arrangements for the site tour(s) and employee interviews.
    (2) The Compliance Specialist shall make a physical tour of the 
employment site(s) to determine that:
    (i) EEO posters are displayed in conspicuous places in a legible 
fashion;
    (ii) Facilities are provided on a nonsegregated basis (e.g. work 
areas, washroom, timeclocks, locker rooms, storage areas, parking lots, 
and drinking fountains);
    (iii) Supervisory personnel have been oriented to the contractor's 
EEO commitments;
    (iv) The employee referral source system is being implemented;
    (v) Reported employment data is accurate;
    (vi) Meetings have been held with employees to discuss EEO policy, 
particularly new employees; and

[[Page 61]]

    (vii) Employees are aware of their right to file complaints of 
discrimination.
    (3) The Compliance Specialist should interview at least one 
minority, one nonminority, and one woman in each trade, classification, 
or occupation. The contractor's superintendent or home office manager 
should also be interviewed.
    (4) The Compliance Specialist shall, on a sample basis, determine 
the union membership status of union employees on the site (e.g. whether 
they have permits, membership cards, or books, and in what category they 
are classified [e.g., A, B, or C]).
    (5) The Compliance Specialist shall also determine the method 
utilized to place employees on the job and whether equal opportunity 
requirements have been followed.
    (6) The Compliance Specialist shall determine, and the report shall 
indicate the following:
    (i) Is there reasonable representation and utilization of minorities 
and women in each craft, classification or occupation? If not, what has 
the contractor done to increase recruitment, hiring, upgrading, and 
training of minorities and women?
    (ii) What action is the contractor taking to meet the contractual 
requirement to provide equal employment opportunity?
    (iii) Are the actions taken by the contractor acceptable? Could they 
reasonably be expected to result in increased utilization of minorities 
and women?
    (iv) Is there impartiality in treatment of minorities and women?
    (v) Are affirmative action measures of an isolated nature or are 
they continuing?
    (vi) Have the contractor's efforts produced results?
    (f) Exit conference (Action R-6). (1) During the exit conference 
with the contractor, the following topics shall be discussed:
    (i) Any preliminary findings that, if not corrected immediately or 
not corrected by the adoption of an acceptable voluntary corrective 
action plan, would necessitate a determination of noncompliance;
    (ii) The process and time in which the contractor shall be informed 
of the final determination (15 days following the onsite verification 
and interviews); and
    (iii) Any other matters that would best be resolved before 
concluding the onsite portion of the review.
    (2) Voluntary corrective action plans may be negotiated at the exit 
conference, so that within 15 days following the exit portion of the 
review, the Compliance Specialist shall prepare the review report and 
make a determination of either:
    (i) Compliance, and so notify the contractor; or
    (ii) Noncompliance, and issue a 30-day show cause notice.

The acceptance of a voluntary corrective action plan at the exit 
conference does not preclude a determination of noncompliance, 
particularly if deficiencies not addressed by the plan are uncovered 
during the final analysis and report writing. (Action R-7) A voluntary 
corrective action plan should be accepted with the understanding that it 
only address those problems uncovered prior to the exit conference.
    (g) Compliance determinations (Action R-8). (1) The evidence 
obtained at the compliance review shall constitute a sufficient basis 
for an objective determination by the Compliance Specialist conducting 
the review of the contractor's compliance or noncompliance with 
contractual provisions pursuant to E.O. 11246, as amended, and FHWA EEO 
Special Provisions implementing the Federal-Aid Highway Act of 1968, 
where applicable.
    (2) Compliance determinations on contractors working in a Hometown 
Plan Area shall reflect the status of those crafts covered by part II of 
the plan bid conditions. Findings regarding part I crafts shall be 
transmitted through channels to the Washington Headquarters, Office of 
Civil Rights.
    (3) The compliance status of the contractor will usually be 
reflected by positive efforts in the following areas:
    (i) The contractor's equal employment opportunity (EEO) policy;
    (ii) Dissemination of the policy and education of supervisory 
employees concerning their responsibilities in implementing the EEO 
policy;

[[Page 62]]

    (iii) The authority and responsibilities of the EEO officer;
    (iv) The contractor's recruitment activities, especially 
establishing minority and female recruitment and referral procedures;
    (v) The extent of participation and minority and female utilization 
in FHWA training programs;
    (vi) The contractor's review of personnel actions to ensure equal 
opportunities;
    (vii) The contractor's participation in apprenticeship or other 
training;
    (viii) The contractor's relationship (if any) with unions and 
minority and female union membership;
    (ix) Effective measures to assure nonsegregated facilities, as 
required by contract provisions;
    (x) The contractor's procedures for monitoring subcontractors and 
utilization of minority and female subcontractors and/or subcontractors 
with substantial minority and female employment; and
    (xi) The adequacy of the contractor's records and reports.
    (4) A contractor shall be considered to be in compliance (Action R-
9) when the equal opportunity requirements have been effectively 
implemented, or there is evidence that every good faith effort has been 
made toward achieving this end. Efforts to acheive this goal shall be 
result-oriented, initiated and maintained in good faith, and emphasized 
as any other vital management function.
    (5) A contractor shall be considered to be in noncompliance (Action 
R-10) when:
    (i) The contractor has discriminated against applicants or employees 
with respect to the conditions or privileges of employment; or
    (ii) The contractor fails to provide evidence of every good faith 
effort to provide equal opportunity.
    (h) Show cause procedures--(1) General. Once the onsite verification 
and exit conference (Action R-5) have been completed and a compliance 
determination made, (Action R-8), the contractor shall be notified in 
writing of the compliance determination. (Action R-11 or R-12) This 
written notification shall be sent to the contractor within 15 days 
following the completion of the onsite verification and exit conference. 
If a contractor is found in noncompliance (Action R-10), action efforts 
to bring the contractor into compliance shall be initiated through the 
issuance of a show cause notice (Action R-12). The notice shall advise 
the contractor to show cause within 30 days why sanctions should not be 
imposed.
    (2) When a show cause notice is required. A show cause notice shall 
be issued when a determination of noncompliance is made based upon:
    (i) The findings of a compliance review;
    (ii) The results of an investigation which verifies the existence of 
discrimination; or
    (iii) Areawide plan reports that show an underutilization of 
minorities (based on criteria of U.S. Department of Labor's Optional 
Form 66 ``Manpower Utilization Report'') throughout the contractor's 
work force covered by part II of the plan bid conditions.
    (3) Responsibility for issuance. (i) Show cause notices will 
normally be issued by SHA's to federally assisted contractors when the 
State has made a determination of noncompliance, or when FHWA has made 
such a determination and has requested the State to issue the notice.
    (ii) When circumstances warrant, the Regional Federal Highway 
Administrator or a designee may exercise primary compliance 
responsibility by issuing the notice directly to the contractor.
    (iii) The Regional Federal Highway Administrators in Regions 8, 10, 
and the Regional Engineer in Region 15, shall issue show cause notices 
to direct Federal contractors found in noncompliance.
    (4) Content of show cause notice. The show cause notice must: (See 
sample--appendix A of this subpart)
    (i) Notify the contractor of the determination of noncompliance;
    (ii) Provide the basis for the determination of noncompliance;
    (iii) Notify the contractor of the obligation to show cause within 
30 days why formal proceedings should not be instituted;

[[Page 63]]

    (iv) Schedule (date, time, and place) a compliance conference to be 
held approximately 15 days from the contractor's receipt of the notice;
    (v) Advise the contractor that the conference will be held to 
receive and discuss the acceptability of any proposed corrective action 
plan and/or correction of deficiencies; and
    (vi) Advise the contractor of the availability and willingness of 
the Compliance Specialist to conciliate within the time limits of the 
show cause notice.
    (5) Preparing and processing the show cause notice. (i) The State or 
FHWA official who conducted the investigation or review shall develop 
complete background data for the issuance of the show cause notice and 
submit the recommendation to the head of the SHA or the Regional Federal 
Highway Administrator, as appropriate.
    (ii) The recommendation, background data, and final draft notice 
shall be reviewed by appropriate State or FHWA legal counsel.
    (iii) Show cause notices issued by the SHA shall be issued by the 
head of that agency or a designee.
    (iv) The notice shall be personally served to the contractor or 
delivered by certified mail, return receipt requested, with a 
certificate of service or the return receipt filed with the case record.
    (v) The date of the contractor's receipt of the show cause notice 
shall begin the 30-day show cause period. (Action R-13).
    (vi) The 30-day show cause notice shall be issued directly to the 
noncompliant contractor or subcontractor with an informational copy sent 
to any concerned prime contractors.
    (6) Conciliation efforts during show cause period. (i) The 
Compliance Specialist is required to attempt conciliation with the 
contractor throughout the show cause time period. Conciliation and 
negotiation efforts shall be directed toward correcting contractor 
program deficiencies and initiating corrective action which will 
maintain and assure equal opportunity. Records shall be maintained in 
the State, FHWA division, or FHWA regional office's case files, as 
appropriate, indicating actions and reactions of the contractor, a brief 
synopsis of any meetings with the contractor, notes on verbal 
communication and written correspondence, requests for assistance or 
interpretations, and other relevant matters.
    (ii) In instances where a contractor is determined to be in 
compliance after a show cause notice has been issued, the show cause 
notice will be recinded and the contractor formally notified (Action R-
17). The FHWA Washington Headquarters, Office of Civil Rights, shall 
immediately be notified of any change in status.
    (7) Corrective action plans. (i) When a contractor is required to 
show cause and the deficiencies cannot be corrected within the 30-day 
show cause period, a written corrective action plan may be accepted. The 
written corrective action plan shall specify clear unequivocal action by 
the contractor with time limits for completion. Token actions to correct 
cited deficiencies will not be accepted. (See Sample Corrective Action 
Plan--appendix B of this subpart)
    (ii) When a contractor submits an acceptable written corrective 
action plan, the contractor shall be considered in compliance during the 
plan's effective implementation and submission of required progress 
reports. (Action R-15 and R-17).
    (iii) When an acceptable corrective action plan is not agreed upon 
and the contractor does not otherwise show cause as required, the formal 
hearing process shall be recommended through appropriate channels by the 
compliance specialist immediately upon expiration of the 30-day show 
cause period. (Action R-16, R-18, R-19)
    (iv) When a contractor, after having submitted an acceptable 
corrective action plan and being determined in compliance is 
subsequently determined to be in noncompliance based upon the 
contractor's failure to implement the corrective action plan, the formal 
hearing process must be recommended immediately. There are no provisions 
for reinstituting a show cause notice.
    (v) When, however, a contractor operating under an acceptable 
corrective action plan carries out the provisions of the corrective 
action plan but the actions do not result in the necessary

[[Page 64]]

changes, the corrective action plan shall be immediately amended through 
negotiations. If, at this point, the contractor refuses to appropriately 
amend the corrective action plan, the formal hearing process shall be 
recommended immediately.
    (vi) A contractor operating under an approved voluntary corrective 
action plan (i.e., plan entered into prior to the issuance of a show 
cause) must be issued a 30-day show cause notice in the situations 
referred to in paragraphs (h) (7) (iv) and (v) of this section, i.e., 
failure to implement an approved corrective action plan or failure of 
corrective actions to result in necessary changes.
    (i) Followup reviews. (1) A followup review is an extension of the 
initial review process to verify the contractors performance of 
corrective action and to validate progress report information. 
Therefore, followup reviews shall only be conducted of those contractors 
where the initial review resulted in a finding of noncompliance and a 
show cause notice was issued.
    (2) Followup reviews shall be reported as a narrative summary 
referencing the initial review report.
    (j) Hearing process. (1) When such procedures as show cause issuance 
and conciliation conferences have been unsuccessful in bringing 
contractors into compliance within the prescribed 30 days, the reviewer 
(or other appropriate level) shall immediately recommend, through 
channels, that the Department of Transportation obtain approval from the 
Office of Federal Contract Compliance Programs for a formal hearing 
(Action R-19). The Contractor should be notified of this action.
    (2) Recommendations to the Federal Highway Administrator for hearing 
approval shall be accompanied by full reports of findings and case files 
containing any related correspondence. The following items shall be 
included with the recommendation:
    (i) Copies of all Federal and Federal-aid contracts and/or 
subcontracts to which the contractor is party;
    (ii) Copies of any contractor or subcontractor certifications;
    (iii) Copy of show cause notice;
    (iv) Copies of any corrective action plans; and
    (v) Copies of all pertinent Manpower Utilization Reports, if 
applicable.
    (3) SHA's through FHWA regional and division offices, will be 
advised of decisions and directions affecting contractors by the FHWA 
Washington Headquarters, Office of Civil Rights, for the Department of 
Transportation.
    (k) Responsibility determinations. (1) In instances where requests 
for formal hearings are pending OFCCP approval, the contractor may be 
declared a nonresponsible contractor for inability to comply with the 
equal opportunity requirements.
    (2) SHA's shall refrain from entering into any contract or contract 
modification subject to E.O. 11246, as amended, with a contractor who 
has not demonstrated eligibility for Government contracts and federally 
assisted construction contracts pursuant to E.O. 11246, as amended.



Sec. 230.411  Guidance for conducting reviews.

    (a) Extensions of time. Reasonable extensions of time limits set 
forth in these instructions may be authorized by the SHA's or the FHWA 
regional office, as appropriate. However, all extensions are subject to 
Washington Headquarters approval and should only be granted with this 
understanding. The Federal Highway Administrator shall be notified of 
all time extensions granted and the justification therefor. In sensitive 
or special interest cases, simultaneous transmittal of reports and other 
pertinent documents is authorized.
    (b) Contract completion. Completion of a contract or seasonal 
shutdown shall not preclude completion of the administrative procedures 
outlined herein or the possible imposition of sanctions or debarment.
    (c) Home office reviews outside regions. When contractor's home 
offices are located outside the FHWA region in which the particular 
contract is being performed, and it is determined that the contractors' 
home offices should be reviewed, requests for such reviews with 
accompanying justification shall be forwarded through appropriate

[[Page 65]]

channels to the Washington Headquarters, Office of Civil Rights. After 
approval, the Washington Headquarters, Office of Civil Rights, (OCR) 
shall request the appropriate region to conduct the home office review.
    (d) Employment of women. Executive Order 11246, as amended, 
implementing rules and regulations regarding sex discrimination are 
outlined in 41 CFR part 60-20. It is the responsibility of the 
Compliance Specialist to ensure that contractors provide women full 
participation in their work forces.
    (e) Effect of exclusive referral agreements. (1) The OFCCP has 
established the following criteria for determining compliance when an 
exclusive referral agreement is involved;
    (i) It shall be no excuse that the union, with which the contractor 
has a collective bargaining agreement providing for exclusive referral, 
failed to refer minority or female employees.
    (ii) Discrimination in referral for employment, even if pursuant to 
provisions of a collective bargaining agreement, is prohibited by the 
National Labor Relations Act and Title VII of the Civil Rights Act of 
1964, as amended.
    (iii) Contractors and subcontractors have a responsibility to 
provide equal opportunity if they want to participate in federally 
involved contracts. To the extent they have delegated the responsibility 
for some of their employment practices to some other organization or 
agency which prevents them from meeting their obligations, these 
contractors must be found in noncompliance.
    (2) If the contractor indicates that union action or inaction is a 
proximate cause of the contractor's failure to provide equal 
opportunity, a finding of noncompliance will be made and a show cause 
notice issued, and:
    (i) The contractor will be formally directed to comply with the 
equal opportunity requirements.
    (ii) Reviews of other contractors with projects within the 
jurisdiction of the applicable union locals shall be scheduled.
    (iii) If the reviews indicate a pattern and/or practice of 
discrimination on the part of specific union locals, each contractor in 
the area shall be informed of the criteria outlined in Sec. 
230.411(e)(1) of this section. Furthermore, the FHWA Washington 
Headquarters, OCR, shall be provided with full documentary evidence to 
support the discriminatory pattern indicated.
    (iv) In the event the union referral practices prevent the 
contractor from meeting the equal opportunity requirements pursuant to 
the E.O. 11246, as amended, such contractor shall immediately notify the 
SHA.



Sec. 230.413  Review reports.

    (a) General. (1) The Compliance Specialist shall maintain detailed 
notes from the beginning of the review from which a comprehensive 
compliance review report can be developed.
    (2) The completed compliance review report shall contain documentary 
evidence to support the determination of a contractor's or 
subcontractor's compliance status.
    (3) Findings, conclusions, and recommendations shall be explicitly 
stated and, when necessary, supported by documentary evidence.
    (4) The compliance review report shall contain at least the 
following information. \1\ (Action R-20)
---------------------------------------------------------------------------

    \1\ The Federal Highway Administration will accept completed Form 
FHWA-86 for the purpose. The form is available at the offices listed in 
49 CFR part 7, appendix D.
---------------------------------------------------------------------------

    (i) Complete name and address of contractor.
    (ii) Project(s) identification.
    (iii) Basis for the review, i.e., area work force, project work 
force, home office work force, and target area work force.
    (iv) Identification of Federal or Federal-aid contract(s).
    (v) Date of review.
    (vi) Employment data by job craft, classification, or occupation by 
race and sex in accordance with (iii) above. This shall be the data 
verified during the onsite.
    (vii) Identification of local unions involved with contractor, when 
applicable.
    (viii) Determination of compliance status: compliance or 
noncompliance.
    (ix) Copy of show cause notice or compliance notification sent to 
contractor.

[[Page 66]]

    (x) Name of the Compliance Specialist who conducted the review and 
whether that person is a State, division or regional Compliance 
Specialist.
    (xi) Concurrences at appropriate levels.
    (5) Each contractor (joint venture is one contractor) will be 
reported separately. When a project review is conducted, the reports 
should be attached, with the initial report being that of the prime 
contractor followed by the reports of each subcontractor.
    (6) Each review level is responsible for ensuring that required 
information is contained in the report.
    (7) When a project review is conducted, the project work force shall 
be reported. When an areawide review is conducted (all Federal-aid, 
Federal, and non-Federal projects in an area), then areawide work force 
shall be reported. When a home office review is conducted, only home 
office work force shall be reported. Other information required by 
regional offices shall be detached before forwarding the reports to the 
Washington Headquarters, OCR.
    (8) The Washington Headquarters, OCR, shall be provided all of the 
following:
    (i) The compliance review report required by Sec. 230.413(a)(4).
    (ii) Corrective action plans.
    (iii) Show cause notices or compliance notifications.
    (iv) Show cause recissions.

While other data and information should be kept by regional offices 
(including progress reports, correspondence, and similar review backup 
material), it should not be routinely forwarded to the Washington 
Headquarters, OCR.
    (b) Administrative requirements--(1) State conducted reviews. (i) 
Within 15 days from the completion of the onsite verification and exit 
conference, the State Compliance Specialist will:
    (A) Prepare the compliance review report, based on information 
obtained;
    (B) Determine the contractor's compliance status;
    (C) Notify the contractor of the compliance determination, i.e., 
send the contractor either notification of compliance or show cause 
notice; and
    (D) Forward three copies of the compliance review report, and the 
compliance notification or show cause notice to the FHWA division EEO 
Specialist.
    (ii) Within 10 days of receipt, the FHWA division EEO Specialist 
shall:
    (A) Analyze the State's report, ensure that it is complete and 
accurate;
    (B) Resolve nonconcurrence, if any;
    (C) Indicate concurrence, and, where appropriate, prepare comments; 
and
    (D) Forward two copies of the compliance review report, and the 
compliance notification or show cause notice to the Regional Civil 
Rights Director.
    (iii) Within 15 days of receipt, the FHWA Regional Civil Rights 
Director shall:
    (A) Analyze the report, ensure that it is complete and accurate;
    (B) Resolve nonconcurrence, if any;
    (C) Indicate concurrence, and, where appropriate, prepare comments; 
and
    (D) Forward one copy of the compliance review report, and the 
compliance notification or show cause notice to the Washington 
Headquarters, OCR.
    (2) FHWA division conducted reviews. (i) Within 15 days from the 
completion of the onsite verification and exit conference, the division 
EEO Specialist shall:
    (A) Prepare compliance review report, based on information obtained;
    (B) Determine the contractor's compliance status;
    (C) Notify the State to send the contractor the compliance 
determination, i.e., either notification of compliance or show cause 
notice; and
    (D) Forward two copies of the compliance review report and the 
compliance notification or show cause notice to the Regional Civil 
Rights Director.
    (ii) Within 15 days of receipt, the FHWA Regional Civil Rights 
Director will take the steps outlined in Sec. 230.413(b)(1)(iii).
    (3) FHWA region conducted reviews. (i) Within 15 days from the 
completion of the onsite verification and exit conference the regional 
EEO Specialist shall:
    (A) Prepare the compliance review report, based on information 
obtained;
    (B) Determine the contractor's compliance status;
    (C) Inform the appropriate division to notify the State to send the 
contractor

[[Page 67]]

the compliance determination i.e., either notification of compliance or 
show cause notice; and
    (D) Forward one copy of the compliance review report, and the 
compliance notification or show cause notice to the Washington 
Headquarters, OCR.
    (4) Upon receipt of compliance review reports, the Washington 
Headquarters, OCR, shall review, resolve any nonconcurrences, and record 
them for the purpose of:
    (i) Providing ongoing technical assistance to FHWA regional and 
division offices and SHA's;
    (ii) Gathering a sufficient data base for program evaluation;
    (iii) Ensuring uniform standards are being applied in the compliance 
review process;
    (iv) Initiating appropriate changes in FHWA policy and implementing 
regulations; and
    (v) Responding to requests from the General Accounting Office, 
Office of Management and Budget, Senate Subcommittee on Public Roads, 
and other agencies and organizations.



Sec. 230.415  Consolidated compliance reviews.

    (a) General. Consolidated compliance reviews shall be implemented to 
determine employment opportunities on an areawide rather than an 
individual project basis. The consolidated compliance review approach 
shall be adopted and directed by either Headquarters, region, division, 
or SHA, however, consolidated reviews shall at all times remain a 
cooperative effort.
    (b) OFCCP policy requires contracting agencies to ensure compliance, 
in hometown an imposed plan areas, on an areawide rather than a project 
basis. The consolidated compliance review approach facilitates 
implementation of this policy.
    (c) Methodology--(1) Selection of a target area. In identifying the 
target area of a consolidated compliance review (e.g. SMSA, hometown or 
imposed plan area, a multicounty area, or an entire State), 
consideration shall at least be given to the following facts:
    (i) Minority and female work force concentrations;
    (ii) Suspected or alleged discrimination in union membership or 
referral practices by local unions involved in highway construction;
    (iii) Present or potential problem areas;
    (iv) The number of highway projects in the target area; and
    (v) Hometown or imposed plan reports that indicate underutilization 
of minorities or females.
    (2) Determine the review period. After the target area has been 
selected, the dates for the actual onsite reviews shall be established.
    (3) Obtain background information. EEO-3's Local Union Reports, 
should be obtained from regional offices of the EEOC. Target area 
civilian labor force statistics providing percent minorities and percent 
females in the target area shall be obtained from State employment 
security agencies or similar State agencies.
    (4) Identify contractors. Every nonexempt federally assisted or 
direct Federal contractor and subcontractor in the target area shall be 
identified. In order to establish areawide employment patterns in the 
target area, employment data is needed for all contractors and 
subcontractors in the area. However, only those contractors with 
significant work forces (working prior to peak and not recently 
reviewed) may need to be actually reviwed onsite. Accordingly, once all 
contractors are identified, those contractors which will actually be 
reviewed onsite shall be determined. Compliance determinations shall 
only reflect the status of crafts covered by part II of plan bid 
conditions. Employment data of crafts covered by part I of plan bid 
conditions shall be gathered and identified as such in the composite 
report, however, OFCCP has reserved the responsibility for compliance 
determinations on crafts covered by part I of the plan bid conditions.
    (5) Contractor notification. Those contractors selected for onsite 
review shall be sent a notification letter as outlined in Sec. 
230.409(c) along with a request for current workforce data \2\ for 
completion

[[Page 68]]

and submission at the onsite review. Those contractors in the target 
area not selected for onsite review shall also be requested to supply 
current workforce data as of the onsite review period, and shall return 
the data within 15 days following the onsite review period.
---------------------------------------------------------------------------

    \2\ The Consolidated Workforce Questionnaire is convenient for the 
purpose and appears as attachment 4 to volume 2, chapter 2, section 3 of 
the Federal-Aid Highway Program Manual, which is available at the 
offices listed in 49 CFR part 7, appendix D.
---------------------------------------------------------------------------

    (6) Onsite reviews. Compliance reviews shall then be conducted in 
accordance with the requirements set forth in Sec. 230.409. Reviewers 
may use Form FHWA-86, Compliance Data Report, if appropriate. It is of 
particular importance during the onsite reviews that the review team 
provide for adequate coordination of activities at every stage of the 
review process.
    (7) Compliance determinations. Upon completion of the consolidated 
reviews, compliance determinations shall be made on each review by the 
reviewer. Individual show cause notices or compliance notifications 
shall be sent (as appropriate) to each reviewed contractor.

The compliance determination shall be based on the contractor's target 
area work force (Federal, Federal-aid and non-Federal), except when the 
target area is coincidental with hometown plan area, compliance 
determinations must not be based on that part of a contractor's work 
force covered by part I of the plan bid conditions, as previously set 
forth in this regulation. For example: ABC Contracting, Inc. employs 
carpenters, operating engineers, and cement masons. Carpenters and 
operating engineers are covered by part II of the plan bid conditions, 
however, cement masons are covered by part I of the plan bid conditions. 
The compliance determination must be based only on the contractor's 
utilization of carpenters and operating engineers.
    (d) Reporting--(1) Composite report. A final composite report shall 
be submitted as a complete package to the Washington Headquarters, OCR, 
within 45 days after the review period and shall consist of the 
following:
    (i) Compliance review report, for each contractor and subcontractor 
with accompanying show cause notice or compliance notification.
    (ii) Work force data to show the aggregate employment of all 
contractors in the target area.
    (iii) A narrative summary of findings and recommendations to include 
the following:
    (A) A summary of highway construction employment in the target area 
by craft, race, and sex. This summary should explore possible patterns 
of discrimination or underutilization and possible causes, and should 
compare the utilization of minorities and females on contractor's work 
forces to the civilian labor force percent for minorities and females in 
the target area.
    (B) If the target area is a plan area, a narrative summary of the 
plan's effectiveness with an identification of part I and part II 
crafts. This summary shall discuss possible differences in minority and 
female utilization between part I and part II crafts, documenting any 
inferences drawn from such comparisons.
    (C) If applicable, discuss local labor unions' membership and/or 
referral practices that impact on the utilization of minorities and 
females in the target area. Complete and current copies of all 
collective bargaining agreements and copies of EEO-3, Local Union 
Reports, for all appropriate unions shall accompany the composite 
report.
    (D) Any other appropriate data, analyses, or information deemed 
necessary for a complete picture of the areawide employment.
    (E) Considering the information compiled from the summaries listed 
above, make concrete recommendations on possible avenues for correcting 
problems uncovered by the analyses.
    (2) Annual planning report. The proper execution of consolidated 
compliance reviews necessitates scheduling, along with other fiscal 
program planning. The Washington Headquarters, OCR, shall be notified of 
all planned consolidated reviews by August 10 of each year and of any 
changes in the target area or review periods, as they become known. The 
annual consolidated planning report shall indicate:
    (i) Selected target areas:

[[Page 69]]

    (ii) The basis for selection of each area; and
    (iii) The anticipated review period (dates) for each target area.



   Sec. Appendix A to Subpart D of Part 230--Sample Show Cause Notice

Certified Mail, Return Receipt Requested
Date
Contractor's Name
Address
City, State, and Zip Code.

    Dear Contractor: As a result of the review of your (Project Number) 
project located at (Project Location) conducted on (Date) by (Reviewing 
Agency), it is our determination that you are not in compliance with 
your equal opportunity requirements and that good faith efforts have not 
been made to meet your equal opportunity requirements in the following 
areas:
    List of Deficiencies
    1.
    2.
    3.

    Your failure to take the contractually required affirmative action 
has contributed to the unacceptable level of minority and female 
employment in your operations, particularly in the semiskilled and 
skilled categories of employees.
    The Department of Labor regulations (41 CFR 60) implementing 
Executive Order 11246, as amended, are applicable to your Federal-aid 
highway construction contract and are controlling in this matter (see 
Required Contract Provisions, Form PR-1273, Clause II). Section 60-
1.20(b) of these regulations provides that when equal opportunity 
deficiencies exist, it is necessary that you make a commitment in 
writing to correct such deficiencies before you may be found in 
compliance. The commitment must include the specific action which you 
propose to take to correct each deficiency and the date of completion of 
such action. The time period allotted shall be no longer than the 
minimum period necessary to effect the necessary correction. In 
accordance with instructions issued by the Office of Federal Contract 
Compliance Programs (OFCCP), U.S. Department of Labor, your written 
commitment must also provide for the submission of monthly progress 
reports which shall include a head count of minority and female 
representation at each level of each trade and a list of minority 
employees.
    You are specifically advised that making the commitment discussed 
above will not preclude a further determination of noncompliance upon a 
finding that the commitment is not sufficient to achieve compliance.
    We will hold a compliance conference at ----------------(Address) at 
---------------- (Time) on ----------------(Date) for you to submit and 
discuss your written commitment. If your written commitment is 
acceptable and if the commitment is sufficient to achieve compliance, 
you will be found in compliance during the effective implementation of 
that commitment. You are cautioned, however, that our determination is 
subject to review by the Federal Highway Administration, the Department 
of Transportation, and OFCCP and may be disapproved if your written 
commitment is not considered sufficient to achieve compliance.
    If you indicate either directly or by inaction that you do not wish 
to participate in the scheduled conference and do not otherwise show 
cause within 30 days from receipt of this notice why enforcement 
proceedings should not be instituted, this agency will commence 
enforcement proceedings under Executive Order 11246, as amended.
    If your written commitment is accepted and it is subsequently found 
that you have failed to comply with its provisions, you will be advised 
of this determination and formal sanction proceedings will be instituted 
immediately.
    In the event formal sanction proceedings are instituted and the 
final determination is that a violation of your equal opportunity 
contract requirements has taken place, any Federal-aid highway 
construction contracts or subcontracts which you hold may be canceled, 
terminated, or suspended, and you may be debarred from further such 
contracts or subcontracts. Such other sanctions as are authorized by 
Executive Order 11246, as amended, may also be imposed.
    We encourage you to take whatever action is necessary to resolve 
this matter and are anxious to assist you in achieving compliance. Any 
questions concerning this notice should be addressed to (Name, Address, 
and Phone).
Sincerely yours,

[41 FR 34245, Aug. 13, 1976]



 Sec. Appendix B to Subpart D of Part 230--Sample Corrective Action Plan

    Deficiency 1: Sources likely to yield minority employees have not 
been contacted for recruitment purposes.
    Commitment: We have developed a system of written job applications 
at our home office which readily identifies minority applicants. In 
addition to this, as a minimum, we will contact the National Association 
for the Advancement of Colored People (NAACP), League of Latin American 
Citizens (LULAC), Urban League, and the Employment Security Office 
within 20 days to establish a referral system for minority group 
applicants and expand our recruitment base. We are in the process of 
identifying other community organizations and associations that may be 
able to provide minority applicants and will

[[Page 70]]

submit an updated listing of recruitment sources and evidence of contact 
by ----------------(Date).
    Deficiency 2: There have been inadequate efforts to locate, qualify, 
and increase skills of minority and female employees and applicants for 
employment.
    Commitment: We will set up an individual file for each apprentice or 
trainee by ------------(Date) in order to carefully screen the progress, 
ensure that they are receiving the necessary training, and being 
promoted promptly upon completion of training requirements. We have 
established a goal of at least 50 percent of our apprentices and 
trainees will be minorities and 15 percent will be female. In addition 
to the commitment made to deficiency number 1, we will conduct a similar 
identification of organizations able to supply female applicants. Based 
on our projected personnel needs, we expect to have reached our 50 
percent goal for apprentices and trainees by --------------(Date).
    Deficiency 3: Very little effort to assure subcontractors have 
meaningful minority group representation among their employees.
    Commitment: In cooperation with the Regional Office of Minority 
Business Enterprise, Department of Commerce, and the local NAACP, we 
have identified seven minority-owned contractors that may be able to 
work on future contracts we may receive. These contractors (identified 
in the attached list) will be contacted prior to our bidding on all 
future contracts. In addition, we have scheduled a meeting with all 
subcontractors currently working on our contracts. This meeting will be 
held to inform the subcontractors of our intention to monitor their 
reports and require meaningful minority representation. This meeting 
will be held on --------------------(Date) and we will summarize the 
discussions and current posture of each subcontractor for your review by 
--------------------(Date) Additionally, as requested, we will submit a 
PR-1391 on --------------------(Date), --------------------------------
--------(Date), --------------------(Date). Finally, we have committed 
ourselves to maintaining at least 20 percent minority and female 
representation in each trade during the time we are carrying out the 
above commitments. We plan to have completely implemented all the 
provisions of these commitments by --------------------(Date).

[41 FR 34245, Aug. 13, 1976]



 Sec. Appendix C to Subpart D of Part 230--Sample Show Cause Rescission

Certified Mail, Return Receipt Requested
Date
Contractor
Address
City, State, and Zip Code

    Dear Contractor: On --------------, (Date) you received a 30-day 
show cause notice from this office for failing to implement the required 
contract requirements pertaining to equal employment opportunity.
    Your corrective action plan, discussed and submitted at the 
compliance conference held on --------------------(Date), has been 
reviewed and determined to be acceptable. Your implementation of your 
corrective action plan shows that you are now taking the required 
affirmative action and can be considered in compliance with Executive 
Order 11246, as amended. If it should later be determined that your 
corrective action plan is not sufficient to achieve compliance, this 
Rescission shall not preclude a subsequent finding of noncompliance.
    In view of the above, this letter is to inform you that the 30-day 
show cause notice of --------------------(Date) is hereby rescinded. You 
are further advised that if it is found that you have failed to comply 
with the provisions of your corrective action plan, formal sanction 
proceedings will be instituted immediately.
Sincerely,

[[Page 71]]



 Sec. Appendix D to Subpart D of Part 230--Equal Opportunity Compliance 

                        Review Process Flow Chart

[GRAPHIC] [TIFF OMITTED] TC14OC91.004

[41 FR 34245, Aug. 13, 1976]

[[Page 72]]


                 SUBCHAPTER D_NATIONAL HIGHWAY INSTITUTE





PART 260_EDUCATION AND TRAINING PROGRAMS--Table of Contents




               Subpart A_Fellowship and Scholarship Grants

Sec.
260.101 Purpose.
260.103 Definitions.
260.105 Policy.
260.107 Eligibility.
260.109 Selection.
260.111 Responsibilities of educational institutions.
260.113 Responsibilities of employing agencies.
260.115 Equal opportunity.
260.117 Application procedures.

Subparts B-C [Reserved]

             Subpart D_State Education and Training Programs

260.401 Purpose.
260.403 Policy.
260.405 Application and approval procedures.
260.407 Implementation and reimbursement.

Appendix A to Part 260--Request for Use of Federal-Aid Highway Funds for 
          Education or Training (Form FHWA-1422)



               Subpart A_Fellowship and Scholarship Grants

    Authority: 23 U.S.C. 307(a), 315, 321 and 403; and 49 CFR 1.48(b).

    Source: 43 FR 3558, Jan. 26, 1978, unless otherwise noted.



Sec. 260.101  Purpose.

    To establish policy for the Federal Highway Administration (FHWA) 
Fellowship and Scholarship Programs as administered by the National 
Highway Institute (NHI).



Sec. 260.103  Definitions.

    As used in this regulation, the following definitions apply:
    (a) Candidate. One who meets the eligibility criteria set forth in 
Sec. 260.107, and who has completed and submitted the necessary forms 
and documents in order to be considered for selection for a fellowship 
or scholarship.
    (b) Direct educational expenses. Those expenses directly related to 
attending school including tuition, student fees, books, and expendable 
supplies but excluding travel expenses to and from the school.
    (c) Employing agency. The agency for which the candidate works. This 
may be either a State or local highway/transportation agency or the 
FHWA.
    (d) Fellowship. The grant presented to the recipient's school and 
administered by the school to assist the candidate financially during 
the period of graduate study.
    (e) Living stipend. The portion of the fellowship or scholarship 
grant remaining after the direct educational expenses have been 
deducted.
    (f) Local highway/transportation agency. The agency or metropolitan 
planning organization with the responsibility for initiating and 
carrying forward a highway program or public transportation program 
utilizing highways at the local level, usually the city or county level.
    (g) National Highway Institute (NHI). The organization located 
within the FHWA responsible for the administration of the FHWA 
fellowship and scholarship grant programs.
    (h) Recipient. The successful candidate receiving a fellowship or 
scholarship.
    (i) Scholarship. The grant presented to the recipient's school and 
administered by the school to assist the candidate financially during 
the period of post-secondary study.
    (j) State highway/transportation agency. The agency with the 
responsibility for initiating and carrying forward a highway program or 
public transportation program utilizing highways at the State level.



Sec. 260.105  Policy.

    It is the policy of the FHWA to administer, through the NHI, 
fellowship and scholarship grant programs to assist State and local 
agencies and the FHWA in developing the expertise needed for the 
implementation of their highway programs and to assist in the

[[Page 73]]

development of more effective transportation programs at all levels of 
government. These programs shall provide financial support for up to 24 
months of either full-time or part-time study in the field of highway 
transportation. The programs for each year shall be announced by FHWA 
notices. \1\ These notices shall contain an application form and shall 
announce the number of grants to be awarded and their value.
---------------------------------------------------------------------------

    \1\ The Federal Highway Administration notices are available for 
inspection and copying as prescribed in 49 CFR part 7, appendix D.

[43 FR 3558, Jan. 26, 1978, as amended at 45 FR 67091, Oct. 9, 1980]



Sec. 260.107  Eligibility.

    (a) Prior recipients of FHWA scholarships or fellowships are 
eligible if they will have completed all specific work commitments 
before beginining study under the programs for which applications are 
made.
    (b) Candidates for the fellowship program shall have earned 
bachelor's or comparable college-level degrees prior to beginining 
advanced studies under the program.
    (c) Candidates shall submit evidence of acceptance, or probable 
acceptance, for study in programs that will enhance their contributions 
to their employers. Evidence of probable acceptance may be a letter from 
the department chairman or other school official.
    (d) Candidates shall agree to pursue certain minimum study loads as 
determined by the FHWA and designated in the FHWA notices announcing the 
programs each year.
    (e) FHWA employees who receive awards will be required to execute 
continued service agreements, consistent with the Government Employees 
Training Act requirements, which obligate the employees to continue to 
work for the agency for three times the duration of the training 
received.
    (f) Candidates who are students or employees of State or local 
highway/transportation agencies shall agree in writing to work on a 
full-time basis in public service with State or local highway/
transportation agencies for a specified period of time after completing 
study under the program. The FHWA notices announcing the programs each 
year shall specify the time period of the work commitment.
    (g) Candidates shall agree to respond to brief questionnaires 
designed to assist the NHI in program evaluation both during and 
following the study period.
    (h) Recipients of awards for full-time shall agree to limit their 
part-time employment as stipulated in the FHWA notice announcing the 
programs.
    (i) Candidates shall not profit financially from FHWA grants. Where 
acceptance of the living stipend portion of the grant would result in a 
profit to the candidate, as determined by comparing the candidate's 
regular full-time salary with the candidate's part-time salary and 
employer salary support plus living stipend, the grant amount will be 
reduced accordingly. In cases where a candidate must relocate and 
maintain two households, exceptions to this condition will be 
considered.
    (j) Candidates shall be citizens, or shall declare their intent to 
become citizens of the United States.



Sec. 260.109  Selection.

    (a) Candidates shall be rated by a selection panel appointed by the 
Director of the NHI. Members of the panel shall represent the highway 
transportation interests of government, industry, and the academic 
community. The factors considered by the selection panel are weighed in 
accordance with specific program objectives.
    (b) The major factors to be considered by the panel are:
    (1) Candidate's potential to contribute to a public agency's highway 
transportation program,
    (2) Relevance of a candidate's study program to the objectives of 
the fellowship or scholarship program,
    (3) Relevant experience, and
    (4) Academic and professional achievements.
    (c) Using ratings given by the selection panel, the Director of the 
NHI shall select candidates for awards and designate alternates.
    (d) The FHWA may designate in the FHWA notices announcing the 
programs the maximum number of awards

[[Page 74]]

that will be made to employees of any one agency.



Sec. 260.111  Responsibilities of educational institutions.

    (a) The college or university chosen by the grant recipient shall 
enter into an appropriate agreement with the FHWA providing for the 
administration of the grant by the college or university.
    (b) The college or university chosen by the recipient shall 
designate a faculty advisor prior to the commitment of funds by the 
FHWA. The faculty advisor will be requested to submit reports of the 
recipient's study progress following completion of each study period. 
These reports are oriented toward total program evaluation. To assure 
the recipient's rights to privacy, the FHWA will obtain appropriate 
advance concurrences from the recipient.



Sec. 260.113  Responsibilities of employing agencies.

    (a) A candidate's employing agency is responsible for furnishing a 
statement of endorsement and information concerning the relevancy of the 
candidate's study to agency requirements. The agency is encouraged to 
identify educational and training priorities and to provide backup to 
support its priority candidates for these programs.
    (b) Employing agencies are encouraged to give favorable 
consideration to the requests of candidates for educational leave and 
salary support for the study period to facilitate the candidates' 
applications. Agency decisions involving salary support and educational 
leave that will affect the acceptance of awards by recipients should be 
made at the earliest possible date to provide adequate time for the FHWA 
to select alternates to replace candidates that decline their awards.
    (c) Agencies are responsible for negotiations with their candidates 
concerning conditions of reinstatement and the candidates' commitments 
to return to work.
    (d) Employing agencies are encouraged to publicize the availability 
of these grants throughout the agencies, to implement procedures for 
internal evaluation of applications, and to forward the applications to 
the FHWA division office in their State.
    (e) Employing agencies that choose to process their employees' 
applications are responsible for observing the cutoff date for the FHWA 
to receive applications. This date will be stipulated in the Notices 
announcing the program for each academic year.



Sec. 260.115  Equal opportunity.

    (a) Consistent with the provisions of the Civil Rights Act of 1964 
and Title VI, assurances executed by each State, 23 U.S.C. 324, and 29 
U.S.C. 794, no applicant, including otherwise qualified handicapped 
individuals, shall on the grounds of race, color, religion, sex, 
national origin, or handicap, be excluded from participation in, be 
denied benefits of, or be otherwise subjected to discrimination under 
this program.
    (b) In accordance with Executive Order 11141, no individual shall be 
denied benefits of this program because of age.
    (c) Agencies should make information on this program available to 
all eligible employees, including otherwise qualified handicapped 
individuals, so as to assure nondiscrimination on the grounds of race, 
color, religion, sex, national origin, age, or handicap.



Sec. 260.117  Application procedures.

    (a) The FHWA notices announcing each year's programs and containing 
the application form may be obtained from FHWA regional and division 
offices, State highway agencies, metropolitan planning organizations, 
Governors' highway safety representatives, Urban Mass Transportation 
Administration regional directors, major transit authorities and from 
colleges and universities. Forms may also be obtained from the NHI, HHI-
3, FHWA, Washington, DC 20590.
    (b) In order to become a candidate, the applicant shall complete and 
forward the application form according to the instructions in the FHWA 
notice announcing the programs. The cutoff date for submitting the 
application stipulated in the notices should be observed.

Subparts B-C [Reserved]

[[Page 75]]



             Subpart D_State Education and Training Programs

    Authority: 23 U.S.C. 315, 321 (b) and (c); 49 CFR 1.48(b).

    Source: 43 FR 35477, Aug. 10, 1978, unless otherwise noted.



Sec. 260.401  Purpose.

    To prescribe policy and implement procedures for the administration 
of Federal-aid funds for education and training of State and local 
highway department employees.



Sec. 260.403  Policy.

    It is the policy of the Federal Highway Administration (FHWA) to 
provide continuing education of State and local highway agency employees 
engaged or to be engaged in Federal-aid highway work. To carry out this 
policy, States are encouraged to fully utilize the authority contained 
in 23 U.S.C. 321(b) and 321(c).



Sec. 260.405  Application and approval procedures.

    The State may apply for education and training funds by submitting a 
signed agreement designating the desired Federal-aid funds, not to 
exceed the limits in 23 U.S.C. 321(b). The FHWA's approval of the 
agreement will constitute obligation of funds and authorization for work 
to proceed.



Sec. 260.407  Implementation and reimbursement.

    (a) After execution of the fiscal agreement, the State may make 
grants and contracts with public and private agencies, institutions, 
individuals, and the National Highway Institute to provide highway-
related training and education. The principal recipients of this 
training shall be employees who are engaged or likely to be engaged, in 
Federal-aid highway work.
    (b) Claims for Federal-aid reimbursement of costs incurred may be 
submitted following established procedures to cover 75 percent of the 
cost of tuition and direct educational expenses (including incidental 
training, equipment, and program materials) exclusive of travel, 
subsistence, or salary of trainees.
    (c) As provided in 23 U.S.C. 321(c), education and training for 
subject areas that are identified by the FHWA as Federal program 
responsibilities, shall be provided at no cost to State and local 
governments.

[43 FR 35477, Aug. 10, 1978, as amended at 45 FR 6378, Jan. 28, 1980; 53 
FR 3745, Feb. 9, 1988]

[[Page 76]]



  Sec. Appendix A to Part 260--Request for Use of Federal-Aid Highway 

            Funds for Education or Training (Form FHWA-1422)
[GRAPHIC] [TIFF OMITTED] TC14OC91.005

[[Page 77]]

[GRAPHIC] [TIFF OMITTED] TC14OC91.006

[[Page 78]]



                   SUBCHAPTER E_PLANNING AND RESEARCH





PART 420_PLANNING AND RESEARCH PROGRAM ADMINISTRATION--Table of Contents




      Subpart A_Administration of FHWA Planning and Research Funds

Sec.
420.101 What is the purpose of this part?
420.103 How does the FHWA define the terms used in this part?
420.105 What is the FHWA's policy on use of FHWA planning and research 
          funds?
420.107 What is the minimum required expenditure of State planning and 
          research funds for research development and technology 
          transfer?
420.109 What are the requirements for distribution of metropolitan 
          planning funds?
420.111 What are the documentation requirements for use of FHWA planning 
          and research funds?
420.113 What costs are eligible?
420.115 What are the FHWA approval and authorization requirements?
420.117 What are the program monitoring and reporting requirements?
420.119 What are the fiscal requirements?
420.121 What other requirements apply to the administration of FHWA 
          planning and research funds?

    Subpart B_Research, Development, and Technology Transfer Program 
                               Management

420.201 What is the purpose of this subpart?
420.203 How does the FHWA define the terms used in this subpart?
420.205 What is the FHWA's policy for research, development, and 
          technology transfer funding?
420.207 What are the requirements for research, development, and 
          technology transfer work programs?
420.209 What are the conditions for approval?

    Authority: 23 U.S.C. 103(b)(6), 104(f), 115, 120, 133(b), 134(n), 
303(g), 505, and 315; and 49 CFR 1.48(b).

    Source: 67 FR 47271, July 18, 2002, unless otherwise noted.



      Subpart A_Administration of FHWA Planning and Research Funds



Sec. 420.101  What is the purpose of this part?

    This part prescribes the Federal Highway Administration (FHWA) 
policies and procedures for the administration of activities undertaken 
by State departments of transportation (State DOTs) and their 
subrecipients, including metropolitan planning organizations (MPOs), 
with FHWA planning and research funds. Subpart A identifies the 
administrative requirements that apply to use of FHWA planning and 
research funds both for planning and for research, development, and 
technology transfer (RD&T) activities. Subpart B describes the policies 
and procedures that relate to the approval and authorization of RD&T 
work programs. The requirements in this part supplement those in 49 CFR 
part 18, Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments and 49 CFR part 19, Uniform 
Administrative Requirements for Grants and Cooperative Agreements with 
Institutions of Higher Education, Hospitals and Other Non-Profit 
Organizations.



Sec. 420.103  How does the FHWA define the terms used in this part?

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) are applicable to this part. As used in this part:
    FHWA planning and research funds include:
    (1) State planning and research (SPR) funds (the two percent set 
aside of funds apportioned or allocated to a State DOT for activities 
authorized under 23 U.S.C. 505);
    (2) Metropolitan planning (PL) funds (the one percent of funds 
authorized under 23 U.S.C. 104(f) to carry out the provisions of 23 
U.S.C. 134);
    (3) National highway system (NHS) funds authorized under 23 U.S.C. 
104(b)(1) used for transportation planning in accordance with 23 U.S.C. 
134

[[Page 79]]

and 135, highway research and planning in accordance with 23 U.S.C. 505, 
highway-related technology transfer activities, or development and 
establishment of management systems under 23 U.S.C. 303;
    (4) Surface transportation program (STP) funds authorized under 23 
U.S.C. 104(b)(3) used for highway and transit research and development 
and technology transfer programs, surface transportation planning 
programs, or development and establishment of management systems under 
23 U.S.C. 303; and
    (5) Minimum guarantee (MG) funds authorized under 23 U.S.C. 505 used 
for transportation planning and research, development and technology 
transfer activities that are eligible under title 23, U.S.C.
    Grant agreement means a legal instrument reflecting a relationship 
between an awarding agency and a recipient or subrecipient when the 
principal purpose of the relationship is to transfer a thing of value to 
the recipient or subrecipient to carry out a public purpose of support 
or stimulation authorized by a law instead of acquiring (by purchase, 
lease, or barter) property or services for the direct benefit or use of 
the awarding agency.
    Metropolitan planning area means the geographic area in which the 
metropolitan transportation planning process required by 23 U.S.C. 134 
and 49 U.S.C. 5303-5305 must be carried out.
    Metropolitan planning organization (MPO) means the forum for 
cooperative transportation decisionmaking for a metropolitan planning 
area.
    National Cooperative Highway Research Program (NCHRP) means the 
cooperative RD&T program directed toward solving problems of national or 
regional significance identified by State DOTs and the FHWA, and 
administered by the Transportation Research Board, National Academy of 
Sciences.
    Procurement contract means a legal instrument reflecting a 
relationship between an awarding agency and a recipient or subrecipient 
when the principal purpose of the instrument is to acquire (by purchase, 
lease, or barter) property or services for the direct benefit or use of 
the awarding agency.
    State Department of Transportation (State DOT) means that 
department, commission, board, or official of any State charged by its 
laws with the responsibility for highway construction.
    Transportation management area (TMA) means an urbanized area with a 
population over 200,000 (as determined by the latest decennial census) 
and designated by the Secretary of Transportation or other area when TMA 
designation is requested by the Governor and the MPO (or affected local 
officials), and officially designated by the Secretary of 
Transportation.
    Transportation pooled fund study means a planning, research, 
development, or technology transfer activity administered by the FHWA, a 
lead State DOT, or other organization that is supported by two or more 
participants and that addresses an issue of significant or widespread 
interest related to highway, public, or intermodal transportation. A 
transportation pooled fund study is intended to address a new area or 
provide information that will complement or advance previous 
investigations of the subject matter.
    Work program means a periodic statement of proposed work, covering 
no less than one year, and estimated costs that documents eligible 
activities to be undertaken by State DOTs and/or their subrecipients 
with FHWA planning and research funds.



Sec. 420.105  What is the FHWA's policy on use of FHWA planning and research funds?

    (a) If the FHWA determines that planning activities of national 
significance, identified in paragraph (b) of this section, and the 
requirements of 23 U.S.C. 134, 135, 303, and 505 are being adequately 
addressed, the FHWA will allow State DOTs and MPOs:
    (1) Maximum possible flexibility in the use of FHWA planning and 
research funds to meet highway and local public transportation planning 
and RD&T needs at the national, State, and local levels while ensuring 
legal use of such funds and avoiding unnecessary duplication of efforts; 
and
    (2) To determine which eligible planning and RD&T activities they 
desire

[[Page 80]]

to support with FHWA planning and research funds and at what funding 
level.
    (b) The State DOTs must provide data that support the FHWA's 
responsibilities to the Congress and to the public. These data include, 
but are not limited to, information required for: preparing proposed 
legislation and reports to the Congress; evaluating the extent, 
performance, condition, and use of the Nation's transportation systems; 
analyzing existing and proposed Federal-aid funding methods and levels 
and the assignment of user cost responsibility; maintaining a critical 
information base on fuel availability, use, and revenues generated; and 
calculating apportionment factors.
    (c) The policy in paragraph (a) of this section does not remove the 
FHWA's responsibility and authority to determine which activities are 
eligible for funding. Activities proposed to be funded with FHWA 
planning and research funds by the State DOTs and their subrecipients 
shall be documented and submitted for FHWA approval and authorization as 
prescribed in Sec. Sec. 420.111 and 420.113. (The information 
collection requirements in paragraph (b) of Sec. 420.105 have been 
approved by the Office of Management and Budget (OMB) under control 
numbers 2125-0028 and 2125-0032.)



Sec. 420.107  What is the minimum required expenditure of State planning and research funds for research development and technology transfer?

    (a) A State DOT must expend no less than 25 percent of its annual 
SPR funds on RD&T activities relating to highway, public transportation, 
and intermodal transportation systems in accordance with the provisions 
of 23 U.S.C. 505(b), unless a State DOT certifies, and the FHWA accepts 
the State DOT's certification, that total expenditures by the State DOT 
during the fiscal year for transportation planning under 23 U.S.C. 134 
and 135 will exceed 75 percent of the amount apportioned for the fiscal 
year.
    (b) Prior to submitting a request for an exception to the 25 percent 
requirement, the State DOT must ensure that:
    (1) The additional planning activities are essential, and there are 
no other reasonable options available for funding these planning 
activities (including the use of NHS, STP, MG, or FTA State planning and 
research funds (49 U.S.C. 5313(b)) or by deferment of lower priority 
planning activities);
    (2) The planning activities have a higher priority than RD&T 
activities in the overall needs of the State DOT for a given fiscal 
year; and
    (3) The total level of effort by the State DOT in RD&T (using both 
Federal and State funds) is adequate.
    (c) If the State DOT chooses to pursue an exception, it must send 
the request, along with supporting justification, to the FHWA Division 
Administrator for action by the FHWA Associate Administrator for 
Research, Development, and Technology. The Associate Administrator's 
decision will be based upon the following considerations:
    (1) Whether the State DOT has a process for identifying RD&T needs 
and for implementing a viable RD&T program.
    (2) Whether the State DOT is contributing to cooperative RD&T 
programs or activities, such as the National Cooperative Highway 
Research Program, the Transportation Research Board, and transportation 
pooled fund studies.
    (3) Whether the State DOT is using SPR funds for technology transfer 
and for transit or intermodal research and development to help meet the 
25 percent minimum requirement.
    (4) Whether the State DOT can demonstrate that it will meet the 
requirement or substantially increase its RD&T expenditures over a 
multi-year period, if an exception is granted for the fiscal year.
    (5) Whether Federal funds needed for planning exceed the 75 percent 
limit for the fiscal year and whether any unused planning funds are 
available from previous fiscal years.
    (d) If the FHWA Associate Administrator for Research, Development, 
and Technology approves the State DOT's request for an exception, the 
exception is valid only for that fiscal year's funds. A new request must 
be submitted and approved for subsequent fiscal year funds.

[[Page 81]]



Sec. 420.109  What are the requirements for distribution of metropolitan planning funds?

    (a) The State DOTs shall make all PL funds authorized by 23 U.S.C. 
104(f) available to the MPOs in accordance with a formula developed by 
the State DOT, in consultation with the MPOs, and approved by the FHWA 
Division Administrator. The formula may allow for a portion of the PL 
funds to be used by the State DOT, or other agency agreed to by the 
State DOT and the MPOs, for activities that benefit all MPOs in the 
State, but State DOTs shall not use any PL funds for grant or subgrant 
administration. The formula may also provide for a portion of the funds 
to be made available for discretionary grants to MPOs to supplement 
their annual amount received under the distribution formula.
    (b) In developing the formula for distributing PL funds, the State 
DOT shall consider population, status of planning, attainment of air 
quality standards, metropolitan area transportation needs, and other 
factors necessary to provide for an appropriate distribution of funds to 
carry out the requirements of 23 U.S.C. 134 and other applicable 
requirements of Federal law.
    (c) The State DOTs shall inform the MPOs and the FHWA Division 
Office of the amounts allocated to each MPO as soon as possible after PL 
funds have been apportioned by the FHWA to the State DOTs.
    (d) If the State DOT, in a State receiving the minimum apportionment 
of PL funds under the provisions of 23 U.S.C. 104(f)(2), determines that 
the share of funds to be allocated to any MPO results in the MPO 
receiving more funds than necessary to carry out the provisions of 23 
U.S.C. 134, the State DOT may, after considering the views of the 
affected MPO(s) and with the approval of the FHWA Division 
Administrator, use those funds for transportation planning outside of 
metropolitan planning areas.
    (e) In accordance with the provisions of 23 U.S.C. 134(n), any PL 
funds not needed for carrying out the metropolitan planning provisions 
of 23 U.S.C. 134 in any State may be made available by the MPO(s) to the 
State DOT for funding statewide planning activities under 23 U.S.C. 135, 
subject to approval by the FHWA Division Administrator.
    (f) Any State PL fund distribution formula that does not meet the 
requirements of paragraphs (a) and (b) of this section shall be brought 
into conformance with those requirements before distribution on any new 
apportionment of PL funds.



Sec. 420.111  What are the documentation requirements for use of FHWA planning and research funds?

    (a) Proposed use of FHWA planning and research funds must be 
documented by the State DOTs and subrecipients in a work program, or 
other document that describes the work to be accomplished, that is 
acceptable to the FHWA Division Administrator. Statewide, metropolitan, 
other transportation planning activities, and transportation RD&T 
activities may be documented in separate programs, paired in various 
combinations, or brought together as a single work program. The 
expenditure of PL funds for transportation planning outside of 
metropolitan planning areas under Sec. 420.109(d) may be included in 
the work program for statewide transportation planning activities or in 
a separate work program submitted by the State DOT.
    (b)(1) A work program(s) for transportation planning activities must 
include a description of work to be accomplished and cost estimates by 
activity or task. In addition, each work program must include a summary 
that shows:
    (i) Federal share by type of fund;
    (ii) Matching rate by type of fund;
    (iii) State and/or local matching share; and
    (iv) Other State or local funds.
    (2) Additional information on metropolitan planning area work 
programs is contained in 23 CFR part 450. Additional information on RD&T 
work program content and format is contained in subpart B of this part.
    (c) In areas not designated as TMAs, a simplified statement of work 
that describes who will perform the work and the work that will be 
accomplished using Federal funds may be used in lieu of a work program. 
If a simplified statement of work is used, it may be

[[Page 82]]

submitted separately or as part of the Statewide planning work program.
    (d) The State DOTs that use separate Federal-aid projects in 
accordance with paragraph (a) of this section must submit an overall 
summary that identifies the amounts and sources of FHWA planning and 
research funds available, matching funds, and the amounts budgeted for 
each activity (e.g., statewide planning, RD&T, each metropolitan area, 
contributions to NCHRP and transportation pooled fund studies, etc.).
    (e) The State DOTs and MPOs also are encouraged to include cost 
estimates for transportation planning, research, development, and 
technology transfer related activities funded with other Federal or 
State and/or local funds; particularly for producing the FHWA-required 
data specified in paragraph (b) of Sec. 420.105, for planning for other 
transportation modes, and for air quality planning activities in areas 
designated as non-attainment for transportation-related pollutants in 
their work programs. The MPOs in TMAs must include such information in 
their work programs. (The information collection requirements in 
Sec. Sec. 420.111 have been approved by the OMB and assigned control 
numbers 2125-0039 for States and 2132-0529 for MPOs.)



Sec. 420.113  What costs are eligible?

    (a) Costs will be eligible for FHWA participation provided that the 
costs:
    (1) Are for work performed for activities eligible under the section 
of title 23, U.S.C., applicable to the class of funds used for the 
activities;
    (2) Are verifiable from the State DOT's or the subrecipient's 
records;
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project objectives and meet the other criteria for 
allowable costs in the applicable cost principles cited in 49 CFR 18.22;
    (4) Are included in the approved budget, or amendment thereto; and
    (5) Were not incurred prior to FHWA authorization.
    (b) Indirect costs of State DOTs and their subrecipients are 
allowable if supported by a cost allocation plan and indirect cost 
proposal prepared, submitted (if required), and approved by the 
cognizant or oversight agency in accordance with the OMB requirements 
applicable to the State DOT or subrecipient specified in 49 CFR 
18.22(b).



Sec. 420.115  What are the FHWA approval and authorization requirements?

    (a) The State DOT and its subrecipients must obtain approval and 
authorization to proceed prior to beginning work on activities to be 
undertaken with FHWA planning and research funds. Such approvals and 
authorizations should be based on final work programs or other documents 
that describe the work to be performed. The State DOT and its 
subrecipients also must obtain prior approval for budget and 
programmatic changes as specified in 49 CFR 18.30 or 49 CFR 19.25 and 
for those items of allowable costs which require approval in accordance 
with the cost principles specified in 49 CFR 18.22(b) applicable to the 
entity expending the funds.
    (b) Authorization to proceed with the FHWA funded work in whole or 
in part is a contractual obligation of the Federal government pursuant 
to 23 U.S.C. 106 and requires that appropriate funds be available for 
the full Federal share of the cost of work authorized. Those State DOTs 
that do not have sufficient FHWA planning and research funds or 
obligation authority available to obligate the full Federal share of a 
work program or project may utilize the advance construction provisions 
of 23 U.S.C. 115(a) in accordance with the requirements of 23 CFR part 
630, subpart G. The State DOTs that do not meet the advance construction 
provisions, or do not wish to utilize them, may request authorization to 
proceed with that portion of the work for which FHWA planning and 
research funds are available. In the latter case, authorization to 
proceed may be given for either selected work activities or for a 
portion of the program period, but such authorization does not 
constitute a commitment by the FHWA to fund the remaining portion of the 
work if additional funds do become available.
    (c) A project agreement must be executed by the State DOT and the 
FHWA Division Office for each statewide transportation planning, 
metropolitan

[[Page 83]]

planning area, or RD&T work program, individual activity or study, or 
any combination administered as a single Federal-aid project. The 
project agreement may be executed concurrent with or after authorization 
has been given by the FHWA Division Administrator to proceed with the 
work in whole or in part. In the event that the project agreement is 
executed for only part of the work, the project agreement must be 
amended when authorization is given to proceed with additional work.

(The information collection requirements in Sec. 420.115(c) have been 
approved by the OMB and assigned control numbers 2125-0529.)



Sec. 420.117  What are the program monitoring and reporting requirements?

    (a) In accordance with 49 CFR 18.40, the State DOT shall monitor all 
activities performed by its staff or by subrecipients with FHWA planning 
and research funds to assure that the work is being managed and 
performed satisfactorily and that time schedules are being met.
    (b)(1) The State DOT must submit performance and expenditure 
reports, including a report from each subrecipient, that contain as a 
minimum:
    (i) Comparison of actual performance with established goals;
    (ii) Progress in meeting schedules;
    (iii) Status of expenditures in a format compatible with the work 
program, including a comparison of budgeted (approved) amounts and 
actual costs incurred;
    (iv) Cost overruns or underruns;
    (v) Approved work program revisions; and
    (vi) Other pertinent supporting data.
    (2) Additional information on reporting requirements for individual 
RD&T studies is contained in subpart B of this part.
    (c) Reports required by paragraph (b) of this section shall be 
annual unless more frequent reporting is determined to be necessary by 
the FHWA Division Administrator. The FHWA may not require more frequent 
than quarterly reporting unless the criteria in 49 CFR 18.12 or 49 CFR 
19.14 are met. Reports are due 90 days after the end of the reporting 
period for annual and final reports and no later than 30 days after the 
end of the reporting period for other reports.
    (d) Events that have significant impact on the work must be reported 
as soon as they become known. The types of events or conditions that 
require reporting include: problems, delays, or adverse conditions that 
will materially affect the ability to attain program objectives. This 
disclosure must be accompanied by a statement of the action taken, or 
contemplated, and any Federal assistance needed to resolve the 
situation.
    (e) Suitable reports that document the results of activities 
performed with FHWA planning and research funds must be prepared by the 
State DOT or subrecipient and submitted for approval by the FHWA 
Division Administrator prior to publication. The FHWA Division 
Administrator may waive this requirement for prior approval. The FHWA's 
approval of reports constitutes acceptance of such reports as evidence 
of work performed but does not imply endorsement of a report's findings 
or recommendations. Reports prepared for FHWA-funded work must include 
appropriate credit references and disclaimer statements. (The 
information collection requirements in Sec. 420.117 have been approved 
by the OMB and assigned control numbers 2125-0039 for States and 2132-
0529 for MPOs.)



Sec. 420.119  What are the fiscal requirements?

    (a) The maximum rate of Federal participation for FHWA planning and 
research funds shall be as prescribed in title 23, U.S.C., for the 
specific class of funds used (i.e., SPR, PL, NHS, STP, or MG) except as 
specified in paragraph (d) of this section. The provisions of 49 CFR 
18.24 or 49 CFR 19.23 are applicable to any necessary matching of FHWA 
planning and research funds.
    (b) The value of third party in-kind contributions may be accepted 
as the match for FHWA planning and research funds, in accordance with 
the provisions of 49 CFR 18.24(a)(2) or 49 CFR 19.23(a) and may be on 
either a total planning work program basis or for specific line items or 
projects. The use of third party in-kind contributions must be 
identified in the original work program/scope of work and the grant/

[[Page 84]]

subgrant agreement, or amendments thereto. The use of third-party in-
kind contributions must be approved in advance by the FHWA Division 
Administrator and may not be made retroactive prior to approval of the 
work program/scope of work or an amendment thereto. The State DOT or 
subrecipient is responsible for ensuring that the following additional 
criteria are met:
    (1) The third party performing the work agrees to allow the value of 
the work to be used as the match;
    (2) The cost of the third party work is not paid for by other 
Federal funds or used as a match for other federally funded grants/
subgrants;
    (3) The work performed by the third party is an eligible 
transportation planning or RD&T related activity that benefits the 
federally funded work;
    (4) The third party costs (i.e., salaries, fringe benefits, etc.) 
are allowable under the applicable Office of Management and Budget (OMB) 
cost principles (i.e., OMB Circular A-21, A-87, or A-122);\1\
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    \1\ OMB Circulars are available on the Internet at http://
www.whitehouse.gov/omb/circulars/index.html.
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    (5) The third party work is performed during the period to which the 
matching requirement applies;
    (6) The third party in-kind contributions are verifiable from the 
records of the State DOT or subrecipient and these records show how the 
value placed on third party in-kind contributions was derived; and
    (7) If the total amount of third party expenditures at the end of 
the program period is not sufficient to match the total expenditure of 
Federal funds by the recipient/subrecipient, the recipient/subrecipient 
will need to make up any shortfall with its own funds.
    (c) In accordance with the provisions of 23 U.S.C. 120(j), toll 
revenues that are generated and used by public, quasi-public, and 
private agencies to build, improve, or maintain highways, bridges, or 
tunnels that serve the public purpose of interstate commerce may be used 
as a credit for the non-Federal share of an FHWA planning and research 
funded project.
    (d) In accordance with 23 U.S.C. 505(c) or 23 U.S.C. 104(f)(3), the 
requirement for matching SPR or PL funds may be waived if the FHWA 
determines the interests of the Federal-aid highway program would be 
best served. Waiver of the matching requirement is intended to encourage 
State DOTs and/or MPOs to pool SPR and/or PL funds to address national 
or regional high priority planning or RD&T problems that would benefit 
multiple States and/or MPOs. Requests for waiver of matching 
requirements must be submitted to the FHWA headquarters office for 
approval by the Associate Administrator for Planning and Environment 
(for planning activities) or the Associate Administrator for Research, 
Development, and Technology (for RD&T activities). The matching 
requirement may not be waived for NHS, STP, or MG funds.
    (e) NHS, STP, or MG funds used for eligible planning and RD&T 
purposes must be identified separately from SPR or PL funds in the work 
program(s) and must be administered and accounted for separately for 
fiscal purposes. In accordance with the statewide and metropolitan 
planning process requirements for fiscally constrained transportation 
improvement program (TIPs) planning or RD&T activities funded with NHS, 
STP, or MG funds must be included in the Statewide and/or metropolitan 
TIP(s) unless the State DOT and MPO (for a metropolitan area) agree that 
they may be excluded from the TIP.
    (f) Payment shall be made in accordance with the provisions of 49 
CFR 18.21 or 49 CFR 19.22.



Sec. 420.121  What other requirements apply to the administration of FHWA planning and research funds?

    (a) Audits. Audits of the State DOTs and their subrecipients shall 
be performed in accordance with OMB Circular A-133, Audits of States, 
Local Governments, and Non-Profit Organizations.\2\ Audits of for-profit 
contractors are to be performed in accordance with State DOT or 
subrecipient contract administration procedures.
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    \2\ See footnote 1.

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[[Page 85]]

    (b) Copyrights. The State DOTs and their subrecipients may copyright 
any books, publications, or other copyrightable materials developed in 
the course of the FHWA planning and research funded project. The FHWA 
reserves a royalty-free, nonexclusive and irrevocable right to 
reproduce, publish, or otherwise use, and to authorize others to use, 
the work for Government purposes.
    (c) Disadvantaged business enterprises. The State DOTs must 
administer the transportation planning and RD&T program(s) consistent 
with their overall efforts to implement section 1001(b) of the 
Transportation Equity Act for the 21st Century (Pub. L. 105-178) and 49 
CFR part 26 regarding disadvantaged business enterprises.
    (d) Drug free workplace. In accordance with the provisions of 49 CFR 
part 29, subpart F, State DOTs must certify to the FHWA that they will 
provide a drug free workplace. This requirement may be satisfied through 
the annual certification for the Federal-aid highway program.
    (e) Equipment. Acquisition, use, and disposition of equipment 
purchased with FHWA planning and research funds by the State DOTs must 
be in accordance with 49 CFR 18.32(b). Local government subrecipients of 
State DOTs must follow the procedures specified by the State DOT. 
Universities, hospitals, and other non-profit organizations must follow 
the procedures in 49 CFR 19.34.
    (f) Financial management systems. The financial management systems 
of the State DOTs and their local government subrecipients must be in 
accordance with the provisions of 49 CFR 18.20(a). The financial 
management systems of universities, hospitals, and other non-profit 
organizations must be in accordance with 49 CFR 19.21.
    (g) Lobbying. The provisions of 49 CFR part 20 regarding 
restrictions on influencing certain Federal activities are applicable to 
all tiers of recipients of FHWA planning and research funds.
    (h) Nondiscrimination. The nondiscrimination provisions of 23 CFR 
parts 200 and 230 and 49 CFR part 21, with respect to Title VI of the 
Civil Rights Act of 1964 and the Civil Rights Restoration Act of 1987, 
apply to all programs and activities of recipients, subrecipients, and 
contractors receiving FHWA planning and research funds whether or not 
those programs or activities are federally funded.
    (i) Patents. The State DOTs and their subrecipients are subject to 
the provisions of 37 CFR part 401 governing patents and inventions and 
must include or cite the standard patent rights clause at 37 CFR 401.14, 
except for Sec. 401.14(g), in all subgrants or contracts. In addition, 
State DOTs and their subrecipients must include the following clause, 
suitably modified to identify the parties, in all subgrants or 
contracts, regardless of tier, for experimental, developmental or 
research work: ``The subgrantee or contractor will retain all rights 
provided for the State in this clause, and the State will not, as part 
of the consideration for awarding the subgrant or contract, obtain 
rights in the subgrantee's or contractor's subject inventions.''
    (j) Procurement. Procedures for the procurement of property and 
services with FHWA planning and research funds by the State DOTs must be 
in accordance with 49 CFR 18.36(a) and (i) and, if applicable, 18.36(t). 
Local government subrecipients of State DOTs must follow the procedures 
specified by the State DOT. Universities, hospitals, and other non-
profit organizations must follow the procedures in 49 CFR 19.40 through 
19.48. The State DOTs and their subrecipients must not use FHWA funds 
for procurements from persons (as defined in 49 CFR 29.105) who have 
been debarred or suspended in accordance with the provisions of 49 CFR 
part 29, subparts A through E.
    (k) Program income. Program income, as defined in 49 CFR 18.25(b) or 
49 CFR 19.24, must be shown and deducted from total expenditures to 
determine the Federal share to be reimbursed, unless the FHWA Division 
Administrator has given prior approval to use the program income to 
perform additional eligible work or as the non-Federal match.
    (l) Record retention. Recordkeeping and retention requirements must 
be in accordance with 49 CFR 18.42 or 49 CFR 19.53.
    (m) Subgrants to local governments. The State DOTs and subrecipients 
are

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responsible for administering FHWA planning and research funds passed 
through to MPOs and local governments, for ensuring that such funds are 
expended for eligible activities, and for ensuring that the funds are 
administered in accordance with this part, 49 CFR part 18, Uniform 
Administrative Requirements for Grants and Agreements to State and Local 
Governments, and applicable OMB cost principles. The State DOTs shall 
follow State laws and procedures when awarding and administering 
subgrants to MPOs and local governments and must ensure that the 
requirements of 49 CFR 18.37(a) have been satisfied.
    (n) Subgrants to universities, hospitals, and other non-profit 
organizations. The State DOTs and subrecipients are responsible for 
ensuring that FHWA planning and research funds passed through to 
universities, hospitals, and other non-profit organizations are expended 
for eligible activities and for ensuring that the funds are administered 
in accordance with this part, 49 CFR part 19, Uniform Administrative 
Requirements for Grants and Agreements with Institutions of Higher 
Education, Hospitals, and Other Non-Profit Organizations, and applicable 
OMB cost principles.
    (o) Suspension and debarment. (1) The State DOTs and their 
subrecipients shall not award grants or cooperative agreements to 
entities who are debarred or suspended, or otherwise excluded from or 
ineligible for participation in Federal assistance programs under 
Executive Order 12549 of February 18, 1986 (3 CFR, 1986 Comp., p. 189); 
and
    (2) The State DOTs and their subrecipients shall comply with the 
provisions of 49 CFR part 29, subparts A through E, for procurements 
from persons (as defined in 49 CFR 29.105) who have been debarred or 
suspended.
    (p) Supplies. Acquisition and disposition of supplies acquired by 
the State DOTs and their subrecipients with FHWA planning and research 
funds must be in accordance with 49 CFR 18.33 or 49 CFR 19.35.



    Subpart B_Research, Development and Technology Transfer Program 
                               Management



Sec. 420.201  What is the purpose of this subpart?

    The purpose of this subpart is to prescribe requirements for 
research, development, and technology transfer (RD&T) activities, 
programs, and studies undertaken by State DOTs and their subrecipients 
with FHWA planning and research funds.



Sec. 420.203  How does the FHWA define the terms used in this subpart?

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) and subpart A of this part, are applicable to this 
subpart. As used in this subpart:
    Applied research means the study of phenomena to gain knowledge or 
understanding necessary for determining the means by which a recognized 
need may be met; the primary purpose of this kind of research is to 
answer a question or solve a problem.
    Basic research means the study of phenomena, and of observable 
facts, without specific applications towards processes or products in 
mind; the primary purpose of this kind of research is to increase 
knowledge.
    Development means the systematic use of the knowledge or 
understanding gained from research, directed toward the production of 
useful materials, devices, systems or methods, including design and 
development of prototypes and processes.
    Final report means a report documenting a completed RD&T study or 
activity.
    Intermodal RD&T means research, development, and technology transfer 
activities involving more than one mode of transportation, including 
transfer facilities between modes.
    Peer exchange means a periodic review of a State DOT's RD&T program, 
or portion thereof, by representatives of other State DOT's, for the 
purpose of exchange of information or best practices. The State DOT may 
also invite the participation of the FHWA, and other Federal, State, 
regional or local

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transportation agencies, the Transportation Research Board, academic 
institutions, foundations or private firms that support transportation 
research, development or technology transfer activities.
    RD&T activity means a basic or applied research project or study, 
development or technology transfer activity.
    Research means a systematic study directed toward fuller scientific 
knowledge or understanding of the subject studied. Research can be basic 
or applied.
    Technology transfer means those activities that lead to the adoption 
of a new technique or product by users and involves dissemination, 
demonstration, training, and other activities that lead to eventual 
innovation.
    Transportation Research Information Services (TRIS) means the 
database produced and maintained by the Transportation Research Board 
and available online through the National Transportation Library. TRIS 
includes bibliographic records and abstracts of on-going and completed 
RD&T activities. TRIS Online also includes links to the full text of 
public-domain documents.



Sec. 420.205  What is the FHWA's policy for research, development, and technology transfer funding?

    (a) It is the FHWA's policy to administer the RD&T program 
activities utilizing FHWA planning and research funds consistent with 
the policy specified in Sec. 420.105 and the following general 
principles in paragraphs (b) through (g) of this section.
    (b) The State DOTs must provide information necessary for peer 
exchanges.
    (c) The State DOTs are encouraged to develop, establish, and 
implement an RD&T program, funded with Federal and State DOT resources 
that anticipates and addresses transportation concerns before they 
become critical problems. Further, the State DOTs are encouraged to 
include in this program development and technology transfer programs to 
share the results of their own research efforts and promote the use of 
new technology.
    (d) To promote effective use of available resources, the State DOTs 
are encouraged to cooperate with other State DOTs, the FHWA, and other 
appropriate agencies to achieve RD&T objectives established at the 
national level and to develop a technology transfer program to promote 
and use those results. This includes contributing to cooperative RD&T 
programs such as the NCHRP, the TRB, and transportation pooled fund 
studies as a means of addressing national and regional issues and as a 
means of leveraging funds.
    (e) The State DOTs will be allowed the authority and flexibility to 
manage and direct their RD&T activities as presented in their work 
programs, and to initiate RD&T activities supported by FHWA planning and 
research funds, subject to the limitation of Federal funds and to 
compliance with program conditions set forth in subpart A of this part 
and Sec. 420.207.
    (f) The State DOTs will have primary responsibility for managing 
RD&T activities supported with FHWA planning and research funds carried 
out by other State agencies and organizations and for ensuring that such 
funds are expended for purposes consistent with this subpart.
    (g) Each State DOT must develop, establish, and implement a 
management process that ensures effective use of available FHWA planning 
and research funds for RD&T activities on a statewide basis. Each State 
DOT is permitted to tailor its management process to meet State or local 
needs; however, the process must comply with the minimum requirements 
and conditions of this subpart.
    (h) The State DOTs are encouraged to make effective use of the FHWA 
Division, Resource Center, and Headquarters office expertise in 
developing and carrying out their RD&T activities. Participation of the 
FHWA on advisory panels and in program exchange meetings is encouraged.



Sec. 420.207  What are the requirements for research, development, and technology transfer work programs?

    (a) The State DOT's RD&T work program must, as a minimum, consist of 
a description of RD&T activities to be accomplished during the program 
period, estimated costs for each eligible

[[Page 88]]

activity, and a description of any cooperative activities including the 
State DOT's participation in any transportation pooled fund studies and 
the NCHRP. The State DOT's work program should include a list of the 
major items with a cost estimate for each item. The work program should 
also include any study funded under a previous work program until a 
final report has been completed for the study.
    (b) The State DOT's RD&T work program must include financial 
summaries showing the funding levels and share (Federal, State, and 
other sources) for RD&T activities for the program year. State DOTs are 
encouraged to include any activity funded 100 percent with State or 
other funds for information purposes.
    (c) Approval and authorization procedures in Sec. 420.115 are 
applicable to the State DOT's RD&T work program.



Sec. 420.209  What are the conditions for approval?

    (a) As a condition for approval of FHWA planning and research funds 
for RD&T activities, a State DOT must develop, establish, and implement 
a management process that identifies and results in implementation of 
RD&T activities expected to address high priority transportation issues. 
The management process must include:
    (1) An interactive process for identification and prioritization of 
RD&T activities for inclusion in an RD&T work program;
    (2) Use of all FHWA planning and research funds set aside for RD&T 
activities, either internally or for participation in transportation 
pooled fund studies or other cooperative RD&T programs, to the maximum 
extent possible;
    (3) Procedures for tracking program activities, schedules, 
accomplishments, and fiscal commitments;
    (4) Support and use of the TRIS database for program development, 
reporting of active RD&T activities, and input of the final report 
information;
    (5) Procedures to determine the effectiveness of the State DOT's 
management process in implementing the RD&T program, to determine the 
utilization of the State DOT's RD&T outputs, and to facilitate peer 
exchanges of its RD&T Program on a periodic basis;
    (6) Procedures for documenting RD&T activities through the 
preparation of final reports. As a minimum, the documentation must 
include the data collected, analyses performed, conclusions, and 
recommendations. The State DOT must actively implement appropriate 
research findings and should document benefits; and
    (7) Participation in peer exchanges of its RD&T management process 
and of other State DOTs' programs on a periodic basis. To assist peer 
exchange teams in conducting an effective exchange, the State DOT must 
provide to them the information and documentation required to be 
collected and maintained under this subpart. Travel and other costs 
associated with the State DOT's peer exchange may be identified as a 
line item in the State DOT's work program and will be eligible for 100 
percent Federal funding. The peer exchange team must prepare a written 
report of the exchange.
    (b) Documentation that describes the State DOT's management process 
and the procedures for selecting and implementing RD&T activities must 
be developed by the State DOT and submitted to the FHWA Division office 
for approval. Significant changes in the management process also must be 
submitted by the State DOT to the FHWA for approval. The State DOT must 
make the documentation available, as necessary, to facilitate peer 
exchanges.
    (c) The State DOT must include a certification that it is in full 
compliance with the requirements of this subpart in each RD&T work 
program. If the State DOT is unable to certify full compliance, the FHWA 
Division Administrator may grant conditional approval of the State DOT's 
work program. A conditional approval must cite those areas of the State 
DOT's management process that are deficient and require that the 
deficiencies be corrected within 6 months of conditional approval. The 
certification must consist of a statement signed by the Administrator, 
or an official designated by the Administrator, of the State DOT 
certifying as follows: ``I (name of certifying official), (position 
title), of the State (Commonwealth) of --------, do hereby

[[Page 89]]

certify that the State (Commonwealth) is in compliance with all 
requirements of 23 U.S.C. 505 and its implementing regulations with 
respect to the research, development, and technology transfer program, 
and contemplate no changes in statutes, regulations, or administrative 
procedures which would affect such compliance.''
    (d) The FHWA Division Administrator shall periodically review the 
State DOT's management process to determine if the State is in 
compliance with the requirements of this subpart. If the Division 
Administrator determines that a State DOT is not complying with the 
requirements of this subpart, or is not performing in accordance with 
its RD&T management process, the FHWA Division Administrator shall issue 
a written notice of proposed determination of noncompliance to the State 
DOT. The notice will set forth the reasons for the proposed 
determination and inform the State DOT that it may reply in writing 
within 30 calendar days from the date of the notice. The State DOT's 
reply should address the deficiencies cited in the notice and provide 
documentation as necessary. If the State DOT and the Division 
Administrator cannot resolve the differences set forth in the 
determination of nonconformity, the State DOT may appeal to the Federal 
Highway Administrator whose action shall constitute the final decision 
of the FHWA. An adverse decision shall result in immediate withdrawal of 
approval of FHWA planning and research funds for the State DOT's RD&T 
activities until the State DOT is in full compliance.

(The information collection requirements in Sec. 420.209 have been 
approved by the OMB and assigned control number 2125-0039.)



PART 450_PLANNING ASSISTANCE AND STANDARDS--Table of Contents




      Subpart A_Transportation Planning and Programming Definitions

Sec.
450.100 Purpose.
450.102 Applicability.
450.104 Definitions.

       Subpart B_Statewide Transportation Planning and Programming

450.200 Purpose.
450.202 Applicability.
450.204 Definitions.
450.206 Scope of the statewide transportation planning process.
450.208 Coordination of planning process activities.
450.210 Interested parties, public involvement, and consultation.
450.212 Transportation planning studies and project development.
450.214 Development and content of the long-range statewide 
          transportation plan.
450.216 Development and content of the statewide transportation 
          improvement program (STIP).
450.218 Self-certifications, Federal findings, and Federal approvals.
450.220 Project selection from the STIP.
450.222 Applicability of NEPA to statewide transportation plans and 
          programs.
450.224 Phase-in of new requirements.

     Subpart C_Metropolitan Transportation Planning and Programming

450.300 Purpose.
450.302 Applicability.
450.304 Definitions.
450.306 Scope of the metropolitan transportation planning process.
450.308 Funding for transportation planning and unified planning work 
          programs.
450.310 Metropolitan planning organization designation and 
          redesignation.
450.312 Metropolitan planning area boundaries.
450.314 Metropolitan planning agreements.
450.316 Interested parties, participation, and consultation.
450.318 Transportation planning studies and project development.
450.320 Congestion management process in transportation management 
          areas.
450.322 Development and content of the metropolitan transportation plan.
450.324 Development and content of the transportation improvement 
          program (TIP).
450.326 TIP revisions and relationship to the STIP.
450.328 TIP action by the FHWA and the FTA.
450.330 Project selection from the TIP.
450.332 Annual listing of obligated projects.
450.334 Self-certifications and Federal certifications.
450.336 Applicability of NEPA to metropolitan transportation plans and 
          programs.
450.338 Phase-in of new requirements.

Appendix A to Part 450--Linking the Transportation Planning and NEPA 
          Processes.


[[Page 90]]


    Authority: 23 U.S.C. 134 and 135; 42 U.S.C. 7410 et seq.; 49 U.S.C. 
5303 and 5304; 49 CFR 1.48 and 1.51.

    Source: 72 FR 7261, Feb. 14, 2007, unless otherwise noted.



      Subpart A_Transportation Planning and Programming Definitions



Sec. 450.100  Purpose.

    The purpose of this subpart is to provide definitions for terms used 
in this part.



Sec. 450.102  Applicability.

    The definitions in this subpart are applicable to this part, except 
as otherwise provided.



Sec. 450.104  Definitions.

    Unless otherwise specified, the definitions in 23 U.S.C. 101(a) and 
49 U.S.C. 5302 are applicable to this part.
    Administrative modification means a minor revision to a long-range 
statewide or metropolitan transportation plan, Transportation 
Improvement Program (TIP), or Statewide Transportation Improvement 
Program (STIP) that includes minor changes to project/project phase 
costs, minor changes to funding sources of previously-included projects, 
and minor changes to project/project phase initiation dates. An 
administrative modification is a revision that does not require public 
review and comment, redemonstration of fiscal constraint, or a 
conformity determination (in nonattainment and maintenance areas).
    Alternatives analysis (AA) means a study required for eligibility of 
funding under the Federal Transit Administration's (FTA's) Capital 
Investment Grant program (49 U.S.C. 5309), which includes an assessment 
of a range of alternatives designed to address a transportation problem 
in a corridor or subarea, resulting in sufficient information to support 
selection by State and local officials of a locally preferred 
alternative for adoption into a metropolitan transportation plan, and 
for the Secretary to make decisions to advance the locally preferred 
alternative through the project development process, as set forth in 49 
CFR part 611 (Major Capital Investment Projects).
    Amendment means a revision to a long-range statewide or metropolitan 
transportation plan, TIP, or STIP that involves a major change to a 
project included in a metropolitan transportation plan, TIP, or STIP, 
including the addition or deletion of a project or a major change in 
project cost, project/project phase initiation dates, or a major change 
in design concept or design scope (e.g., changing project termini or the 
number of through traffic lanes). Changes to projects that are included 
only for illustrative purposes do not require an amendment. An amendment 
is a revision that requires public review and comment, redemonstration 
of fiscal constraint, or a conformity determination (for metropolitan 
transportation plans and TIPs involving ``non-exempt'' projects in 
nonattainment and maintenance areas). In the context of a long-range 
statewide transportation plan, an amendment is a revision approved by 
the State in accordance with its public involvement process.
    Attainment area means any geographic area in which levels of a given 
criteria air pollutant (e.g., ozone, carbon monoxide, PM10, PM2.5, and 
nitrogen dioxide) meet the health-based National Ambient Air Quality 
Standards (NAAQS) for that pollutant. An area may be an attainment area 
for one pollutant and a nonattainment area for others. A ``maintenance 
area'' (see definition below) is not considered an attainment area for 
transportation planning purposes.
    Available funds means funds derived from an existing source 
dedicated to or historically used for transportation purposes. For 
Federal funds, authorized and/or appropriated funds and the 
extrapolation of formula and discretionary funds at historic rates of 
increase are considered ``available.'' A similar approach may be used 
for State and local funds that are dedicated to or historically used for 
transportation purposes.
    Committed funds means funds that have been dedicated or obligated 
for transportation purposes. For State funds that are not dedicated to 
transportation purposes, only those funds over which the Governor has 
control

[[Page 91]]

may be considered ``committed.'' Approval of a TIP by the Governor is 
considered a commitment of those funds over which the Governor has 
control. For local or private sources of funds not dedicated to or 
historically used for transportation purposes (including donations of 
property), a commitment in writing (e.g., letter of intent) by the 
responsible official or body having control of the funds may be 
considered a commitment. For projects involving 49 U.S.C. 5309 funding, 
execution of a Full Funding Grant Agreement (or equivalent) or a Project 
Construction Grant Agreement with the USDOT shall be considered a multi-
year commitment of Federal funds.
    Conformity means a Clean Air Act (42 U.S.C. 7506(c)) requirement 
that ensures that Federal funding and approval are given to 
transportation plans, programs and projects that are consistent with the 
air quality goals established by a State Implementation Plan (SIP). 
Conformity, to the purpose of the SIP, means that transportation 
activities will not cause new air quality violations, worsen existing 
violations, or delay timely attainment of the NAAQS. The transportation 
conformity rule (40 CFR part 93) sets forth policy, criteria, and 
procedures for demonstrating and assuring conformity of transportation 
activities.
    Conformity lapse means, pursuant to section 176(c) of the Clean Air 
Act (42 U.S.C. 7506(c)), as amended, that the conformity determination 
for a metropolitan transportation plan or TIP has expired and thus there 
is no currently conforming metropolitan transportation plan or TIP.
    Congestion management process means a systematic approach required 
in transportation management areas (TMAs) that provides for effective 
management and operation, based on a cooperatively developed and 
implemented metropolitan-wide strategy, of new and existing 
transportation facilities eligible for funding under title 23 U.S.C., 
and title 49 U.S.C., through the use of operational management 
strategies.
    Consideration means that one or more parties takes into account the 
opinions, action, and relevant information from other parties in making 
a decision or determining a course of action.
    Consultation means that one or more parties confer with other 
identified parties in accordance with an established process and, prior 
to taking action(s), considers the views of the other parties and 
periodically informs them about action(s) taken. This definition does 
not apply to the ``consultation'' performed by the States and the MPOs 
in comparing the long-range statewide transportation plan and the 
metropolitan transportation plan, respectively, to State and Tribal 
conservation plans or maps or inventories of natural or historic 
resources (see Sec. 450.214(i) and Sec. 450.322(g)(1) and (g)(2)).
    Cooperation means that the parties involved in carrying out the 
transportation planning and programming processes work together to 
achieve a common goal or objective.
    Coordinated public transit-human services transportation plan means 
a locally developed, coordinated transportation plan that identifies the 
transportation needs of individuals with disabilities, older adults, and 
people with low incomes, provides strategies for meeting those local 
needs, and prioritizes transportation services for funding and 
implementation.
    Coordination means the cooperative development of plans, programs, 
and schedules among agencies and entities with legal standing and 
adjustment of such plans, programs, and schedules to achieve general 
consistency, as appropriate.
    Design concept means the type of facility identified for a 
transportation improvement project (e.g., freeway, expressway, arterial 
highway, grade-separated highway, toll road, reserved right-of-way rail 
transit, mixed-traffic rail transit, or busway).
    Design scope means the aspects that will affect the proposed 
facility's impact on the region, usually as they relate to vehicle or 
person carrying capacity and control (e.g., number of lanes or tracks to 
be constructed or added, length of project, signalization, safety 
features, access control including approximate number and location of 
interchanges, or preferential treatment for high-occupancy vehicles).

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    Designated recipient means an entity designated, in accordance with 
the planning process under 49 U.S.C. 5303, 5304, and 5306, by the chief 
executive officer of a State, responsible local officials, and publicly-
owned operators of public transportation, to receive and apportion 
amounts under 49 U.S.C. 5336 that are attributable to transportation 
management areas (TMAs) identified under 49 U.S.C. 5303, or a State 
regional authority if the authority is responsible under the laws of a 
State for a capital project and for financing and directly providing 
public transportation.
    Environmental mitigation activities means strategies, policies, 
programs, actions, and activities that, over time, will serve to avoid, 
minimize, or compensate for (by replacing or providing substitute 
resources) the impacts to or disruption of elements of the human and 
natural environment associated with the implementation of a long-range 
statewide transportation plan or metropolitan transportation plan. The 
human and natural environment includes, for example, neighborhoods and 
communities, homes and businesses, cultural resources, parks and 
recreation areas, wetlands and water sources, forested and other natural 
areas, agricultural areas, endangered and threatened species, and the 
ambient air. The environmental mitigation strategies and activities are 
intended to be regional in scope, and may not necessarily address 
potential project-level impacts.
    Federal land management agency means units of the Federal Government 
currently responsible for the administration of public lands (e.g., U.S. 
Forest Service, U.S. Fish and Wildlife Service, Bureau of Land 
Management, and the National Park Service).
    Federally funded non-emergency transportation services means 
transportation services provided to the general public, including those 
with special transport needs, by public transit, private non-profit 
service providers, and private third-party contractors to public 
agencies.
    Financial plan means documentation required to be included with a 
metropolitan transportation plan and TIP (and optional for the long-
range statewide transportation plan and STIP) that demonstrates the 
consistency between reasonably available and projected sources of 
Federal, State, local, and private revenues and the costs of 
implementing proposed transportation system improvements.
    Financially constrained or Fiscal constraint means that the 
metropolitan transportation plan, TIP, and STIP includes sufficient 
financial information for demonstrating that projects in the 
metropolitan transportation plan, TIP, and STIP can be implemented using 
committed, available, or reasonably available revenue sources, with 
reasonable assurance that the federally supported transportation system 
is being adequately operated and maintained. For the TIP and the STIP, 
financial constraint/fiscal constraint applies to each program year. 
Additionally, projects in air quality nonattainment and maintenance 
areas can be included in the first two years of the TIP and STIP only if 
funds are ``available'' or ``committed.''
    Freight shippers means any business that routinely transports its 
products from one location to another by providers of freight 
transportation services or by its own vehicle fleet.
    Full funding grant agreement means an instrument that defines the 
scope of a project, the Federal financial contribution, and other terms 
and conditions for funding New Starts projects as required by 49 U.S.C. 
5309(d)(1).
    Governor means the Governor of any of the 50 States or the 
Commonwealth of Puerto Rico or the Mayor of the District of Columbia.
    Illustrative project means an additional transportation project that 
may (but is not required to) be included in a financial plan for a 
metropolitan transportation plan, TIP, or STIP if reasonable additional 
resources were to become available.
    Indian Tribal government means a duly formed governing body for an 
Indian or Alaska Native tribe, band, nation, pueblo, village, or 
community that the Secretary of the Interior acknowledges to exist as an 
Indian Tribe pursuant to the Federally Recognized Indian Tribe List Act 
of 1994, Public Law 103-454.

[[Page 93]]

    Intelligent transportation system (ITS) means electronics, 
photonics, communications, or information processing used singly or in 
combination to improve the efficiency or safety of a surface 
transportation system.
    Interim metropolitan transportation plan means a transportation plan 
composed of projects eligible to proceed under a conformity lapse and 
otherwise meeting all other applicable provisions of this part, 
including approval by the MPO.
    Interim transportation improvement program (TIP) means a TIP 
composed of projects eligible to proceed under a conformity lapse and 
otherwise meeting all other applicable provisions of this part, 
including approval by the MPO and the Governor.
    Long-range statewide transportation plan means the official, 
statewide, multimodal, transportation plan covering a period of no less 
than 20 years developed through the statewide transportation planning 
process.
    Maintenance area means any geographic region of the United States 
that the EPA previously designated as a nonattainment area for one or 
more pollutants pursuant to the Clean Air Act Amendments of 1990, and 
subsequently redesignated as an attainment area subject to the 
requirement to develop a maintenance plan under section 175A of the 
Clean Air Act, as amended.
    Management system means a systematic process, designed to assist 
decisionmakers in selecting cost effective strategies/actions to improve 
the efficiency or safety of, and protect the investment in the nation's 
infrastructure. A management system can include: Identification of 
performance measures; data collection and analysis; determination of 
needs; evaluation and selection of appropriate strategies/actions to 
address the needs; and evaluation of the effectiveness of the 
implemented strategies/actions.
    Metropolitan planning area (MPA) means the geographic area 
determined by agreement between the metropolitan planning organization 
(MPO) for the area and the Governor, in which the metropolitan 
transportation planning process is carried out.
    Metropolitan planning organization (MPO) means the policy board of 
an organization created and designated to carry out the metropolitan 
transportation planning process.
    Metropolitan transportation plan means the official multimodal 
transportation plan addressing no less than a 20-year planning horizon 
that is developed, adopted, and updated by the MPO through the 
metropolitan transportation planning process.
    National ambient air quality standard (NAAQS) means those standards 
established pursuant to section 109 of the Clean Air Act.
    Nonattainment area means any geographic region of the United States 
that has been designated by the EPA as a nonattainment area under 
section 107 of the Clean Air Act for any pollutants for which an NAAQS 
exists.
    Non-metropolitan area means a geographic area outside a designated 
metropolitan planning area.
    Non-metropolitan local officials means elected and appointed 
officials of general purpose local government in a non-metropolitan area 
with responsibility for transportation.
    Obligated projects means strategies and projects funded under title 
23 U.S.C. and title 49 U.S.C. Chapter 53 for which the supporting 
Federal funds were authorized and committed by the State or designated 
recipient in the preceding program year, and authorized by the FHWA or 
awarded as a grant by the FTA.
    Operational and management strategies means actions and strategies 
aimed at improving the performance of existing and planned 
transportation facilities to relieve congestion and maximizing the 
safety and mobility of people and goods.
    Project construction grant agreement means an instrument that 
defines the scope of a project, the Federal financial contribution, and 
other terms and conditions for funding Small Starts projects as required 
by 49 U.S.C. 5309(e)(7).
    Project selection means the procedures followed by MPOs, States, and 
public transportation operators to advance projects from the first four 
years of an approved TIP and/or STIP to implementation, in accordance 
with agreed upon procedures.

[[Page 94]]

    Provider of freight transportation services means any entity that 
transports or otherwise facilitates the movement of goods from one 
location to another for others or for itself.
    Public transportation operator means the public entity which 
participates in the continuing, cooperative, and comprehensive 
transportation planning process in accordance with 23 U.S.C. 134 and 135 
and 49 U.S.C. 5303 and 5304, and is the designated recipient of Federal 
funds under title 49 U.S.C. Chapter 53 for transportation by a 
conveyance that provides regular and continuing general or special 
transportation to the public, but does not include school bus, charter, 
or intercity bus transportation or intercity passenger rail 
transportation provided by Amtrak.
    Regional ITS architecture means a regional framework for ensuring 
institutional agreement and technical integration for the implementation 
of ITS projects or groups of projects.
    Regionally significant project means a transportation project (other 
than projects that may be grouped in the TIP and/or STIP or exempt 
projects as defined in EPA's transportation conformity regulation (40 
CFR part 93)) that is on a facility which serves regional transportation 
needs (such as access to and from the area outside the region; major 
activity centers in the region; major planned developments such as new 
retail malls, sports complexes, or employment centers; or transportation 
terminals) and would normally be included in the modeling of the 
metropolitan area's transportation network. At a minimum, this includes 
all principal arterial highways and all fixed guideway transit 
facilities that offer a significant alternative to regional highway 
travel.
    Revision means a change to a long-range statewide or metropolitan 
transportation plan, TIP, or STIP that occurs between scheduled periodic 
updates. A major revision is an ``amendment,'' while a minor revision is 
an ``administrative modification.''
    State means any one of the fifty States, the District of Columbia, 
or Puerto Rico.
    State implementation plan (SIP) means, as defined in section 302(q) 
of the Clean Air Act (CAA), the portion (or portions) of the 
implementation plan, or most recent revision thereof, which has been 
approved under section 110 of the CAA, or promulgated under section 
110(c) of the CAA, or promulgated or approved pursuant to regulations 
promulgated under section 301(d) of the CAA and which implements the 
relevant requirements of the CAA.
    Statewide transportation improvement program (STIP) means a 
statewide prioritized listing/program of transportation projects 
covering a period of four years that is consistent with the long-range 
statewide transportation plan, metropolitan transportation plans, and 
TIPs, and required for projects to be eligible for funding under title 
23 U.S.C. and title 49 U.S.C. Chapter 53.
    Strategic highway safety plan means a plan developed by the State 
DOT in accordance with the requirements of 23 U.S.C. 148(a)(6).
    Transportation control measure (TCM) means any measure that is 
specifically identified and committed to in the applicable SIP that is 
either one of the types listed in section 108 of the Clean Air Act or 
any other measure for the purpose of reducing emissions or 
concentrations of air pollutants from transportation sources by reducing 
vehicle use or changing traffic flow or congestion conditions. 
Notwithstanding the above, vehicle technology-based, fuel-based, and 
maintenance-based measures that control the emissions from vehicles 
under fixed traffic conditions are not TCMs.
    Transportation improvement program (TIP) means a prioritized 
listing/program of transportation projects covering a period of four 
years that is developed and formally adopted by an MPO as part of the 
metropolitan transportation planning process, consistent with the 
metropolitan transportation plan, and required for projects to be 
eligible for funding under title 23 U.S.C. and title 49 U.S.C. Chapter 
53.
    Transportation management area (TMA) means an urbanized area with a 
population over 200,000, as defined by the Bureau of the Census and 
designated by the Secretary of Transportation, or any additional area 
where TMA designation is requested by the

[[Page 95]]

Governor and the MPO and designated by the Secretary of Transportation.
    Unified planning work program (UPWP) means a statement of work 
identifying the planning priorities and activities to be carried out 
within a metropolitan planning area. At a minimum, a UPWP includes a 
description of the planning work and resulting products, who will 
perform the work, time frames for completing the work, the cost of the 
work, and the source(s) of funds.
    Update means making current a long-range statewide transportation 
plan, metropolitan transportation plan, TIP, or STIP through a 
comprehensive review. Updates require public review and comment, a 20-
year horizon year for metropolitan transportation plans and long-range 
statewide transportation plans, a four-year program period for TIPs and 
STIPs, demonstration of fiscal constraint (except for long-range 
statewide transportation plans), and a conformity determination (for 
metropolitan transportation plans and TIPs in nonattainment and 
maintenance areas).
    Urbanized area means a geographic area with a population of 50,000 
or more, as designated by the Bureau of the Census.
    Users of public transportation means any person, or groups 
representing such persons, who use transportation open to the general 
public, other than taxis and other privately funded and operated 
vehicles.
    Visualization techniques means methods used by States and MPOs in 
the development of transportation plans and programs with the public, 
elected and appointed officials, and other stakeholders in a clear and 
easily accessible format such as maps, pictures, and/or displays, to 
promote improved understanding of existing or proposed transportation 
plans and programs.



       Subpart B_Statewide Transportation Planning and Programming



Sec. 450.200  Purpose.

    The purpose of this subpart is to implement the provisions of 23 
U.S.C. 135 and 49 U.S.C. 5304, as amended, which require each State to 
carry out a continuing, cooperative, and comprehensive statewide 
multimodal transportation planning process, including the development of 
a long-range statewide transportation plan and statewide transportation 
improvement program (STIP), that facilitates the safe and efficient 
management, operation, and development of surface transportation systems 
that will serve the mobility needs of people and freight (including 
accessible pedestrian walkways and bicycle transportation facilities) 
and that fosters economic growth and development within and between 
States and urbanized areas, while minimizing transportation-related fuel 
consumption and air pollution in all areas of the State, including those 
areas subject to the metropolitan transportation planning requirements 
of 23 U.S.C. 134 and 49 U.S.C. 5303.



Sec. 450.202  Applicability.

    The provisions of this subpart are applicable to States and any 
other organizations or entities (e.g., metropolitan planning 
organizations (MPOs) and public transportation operators) that are 
responsible for satisfying the requirements for transportation plans and 
programs throughout the State pursuant to 23 U.S.C. 135 and 49 U.S.C. 
5304.



Sec. 450.204  Definitions.

    Except as otherwise provided in subpart A of this part, terms 
defined in 23 U.S.C. 101(a) and 49 U.S.C. 5302 are used in this subpart 
as so defined.



Sec. 450.206  Scope of the statewide transportation planning process.

    (a) Each State shall carry out a continuing, cooperative, and 
comprehensive statewide transportation planning process that provides 
for consideration and implementation of projects, strategies, and 
services that will address the following factors:
    (1) Support the economic vitality of the United States, the States, 
metropolitan areas, and non-metropolitan areas, especially by enabling 
global competitiveness, productivity, and efficiency;
    (2) Increase the safety of the transportation system for motorized 
and non-motorized users;

[[Page 96]]

    (3) Increase the security of the transportation system for motorized 
and non-motorized users;
    (4) Increase accessibility and mobility of people and freight;
    (5) Protect and enhance the environment, promote energy 
conservation, improve the quality of life, and promote consistency 
between transportation improvements and State and local planned growth 
and economic development patterns;
    (6) Enhance the integration and connectivity of the transportation 
system, across and between modes throughout the State, for people and 
freight;
    (7) Promote efficient system management and operation; and
    (8) Emphasize the preservation of the existing transportation 
system.
    (b) Consideration of the planning factors in paragraph (a) of this 
section shall be reflected, as appropriate, in the statewide 
transportation planning process. The degree of consideration and 
analysis of the factors should be based on the scale and complexity of 
many issues, including transportation systems development, land use, 
employment, economic development, human and natural environment, and 
housing and community development.
    (c) The failure to consider any factor specified in paragraph (a) of 
this section shall not be reviewable by any court under title 23 U.S.C., 
49 U.S.C. Chapter 53, subchapter II of title 5 U.S.C. Chapter 5, or 
title 5 U.S.C Chapter 7 in any matter affecting a long-range statewide 
transportation plan, STIP, project or strategy, or the statewide 
transportation planning process findings.
    (d) Funds provided under 23 U.S.C. 505 and 49 U.S.C. 5305(e) are 
available to the State to accomplish activities in this subpart. At the 
State's option, funds provided under 23 U.S.C. 104(b)(1) and (3) and 105 
and 49 U.S.C. 5307 may also be used. Statewide transportation planning 
activities performed with funds provided under title 23 U.S.C. and title 
49 U.S.C. Chapter 53 shall be documented in a statewide planning work 
program in accordance with the provisions of 23 CFR part 420. The work 
program should include a discussion of the transportation planning 
priorities facing the State.



Sec. 450.208  Coordination of planning process activities.

    (a) In carrying out the statewide transportation planning process, 
each State shall, at a minimum:
    (1) Coordinate planning carried out under this subpart with the 
metropolitan transportation planning activities carried out under 
subpart C of this part for metropolitan areas of the State. The State is 
encouraged to rely on information, studies, or analyses provided by MPOs 
for portions of the transportation system located in metropolitan 
planning areas;
    (2) Coordinate planning carried out under this subpart with 
statewide trade and economic development planning activities and related 
multistate planning efforts;
    (3) Consider the concerns of Federal land management agencies that 
have jurisdiction over land within the boundaries of the State;
    (4) Consider the concerns of local elected and appointed officials 
with responsibilities for transportation in non-metropolitan areas;
    (5) Consider the concerns of Indian Tribal governments that have 
jurisdiction over land within the boundaries of the State;
    (6) Consider related planning activities being conducted outside of 
metropolitan planning areas and between States; and
    (7) Coordinate data collection and analyses with MPOs and public 
transportation operators to support statewide transportation planning 
and programming priorities and decisions.
    (b) The State air quality agency shall coordinate with the State 
department of transportation (State DOT) to develop the transportation 
portion of the State Implementation Plan (SIP) consistent with the Clean 
Air Act (42 U.S.C. 7401 et seq.).
    (c) Two or more States may enter into agreements or compacts, not in 
conflict with any law of the United States, for cooperative efforts and 
mutual assistance in support of activities under this subpart related to 
interstate areas and localities in the States and establishing 
authorities the States

[[Page 97]]

consider desirable for making the agreements and compacts effective. The 
right to alter, amend, or repeal interstate compacts entered into under 
this part is expressly reserved.
    (d) States may use any one or more of the management systems (in 
whole or in part) described in 23 CFR part 500.
    (e) States may apply asset management principles and techniques in 
establishing planning goals, defining STIP priorities, and assessing 
transportation investment decisions, including transportation system 
safety, operations, preservation, and maintenance.
    (f) The statewide transportation planning process shall (to the 
maximum extent practicable) be consistent with the development of 
applicable regional intelligent transportation systems (ITS) 
architectures, as defined in 23 CFR part 940.
    (g) Preparation of the coordinated public transit-human services 
transportation plan, as required by 49 U.S.C. 5310, 5316, and 5317, 
should be coordinated and consistent with the statewide transportation 
planning process.
    (h) The statewide transportation planning process should be 
consistent with the Strategic Highway Safety Plan, as specified in 23 
U.S.C. 148, and other transit safety and security planning and review 
processes, plans, and programs, as appropriate.



Sec. 450.210  Interested parties, public involvement, and consultation.

    (a) In carrying out the statewide transportation planning process, 
including development of the long-range statewide transportation plan 
and the STIP, the State shall develop and use a documented public 
involvement process that provides opportunities for public review and 
comment at key decision points.
    (1) The State's public involvement process at a minimum shall:
    (i) Establish early and continuous public involvement opportunities 
that provide timely information about transportation issues and 
decisionmaking processes to citizens, affected public agencies, 
representatives of public transportation employees, freight shippers, 
private providers of transportation, representatives of users of public 
transportation, representatives of users of pedestrian walkways and 
bicycle transportation facilities, representatives of the disabled, 
providers of freight transportation services, and other interested 
parties;
    (ii) Provide reasonable public access to technical and policy 
information used in the development of the long-range statewide 
transportation plan and the STIP;
    (iii) Provide adequate public notice of public involvement 
activities and time for public review and comment at key decision 
points, including but not limited to a reasonable opportunity to comment 
on the proposed long-range statewide transportation plan and STIP;
    (iv) To the maximum extent practicable, ensure that public meetings 
are held at convenient and accessible locations and times;
    (v) To the maximum extent practicable, use visualization techniques 
to describe the proposed long-range statewide transportation plan and 
supporting studies;
    (vi) To the maximum extent practicable, make public information 
available in electronically accessible format and means, such as the 
World Wide Web, as appropriate to afford reasonable opportunity for 
consideration of public information;
    (vii) Demonstrate explicit consideration and response to public 
input during the development of the long-range statewide transportation 
plan and STIP;
    (viii) Include a process for seeking out and considering the needs 
of those traditionally underserved by existing transportation systems, 
such as low-income and minority households, who may face challenges 
accessing employment and other services; and
    (ix) Provide for the periodic review of the effectiveness of the 
public involvement process to ensure that the process provides full and 
open access to all interested parties and revise the process, as 
appropriate.
    (2) The State shall provide for public comment on existing and 
proposed processes for public involvement in the development of the 
long-range statewide transportation plan and the STIP. At a minimum, the 
State shall allow 45 calendar days for public review and

[[Page 98]]

written comment before the procedures and any major revisions to 
existing procedures are adopted. The State shall provide copies of the 
approved public involvement process document(s) to the FHWA and the FTA 
for informational purposes.
    (b) The State shall provide for non-metropolitan local official 
participation in the development of the long-range statewide 
transportation plan and the STIP. The State shall have a documented 
process(es) for consulting with non-metropolitan local officials 
representing units of general purpose local government and/or local 
officials with responsibility for transportation that is separate and 
discrete from the public involvement process and provides an opportunity 
for their participation in the development of the long-range statewide 
transportation plan and the STIP. Although the FHWA and the FTA shall 
not review or approve this consultation process(es), copies of the 
process document(s) shall be provided to the FHWA and the FTA for 
informational purposes.
    (1) At least once every five years (as of February 24, 2006), the 
State shall review and solicit comments from non-metropolitan local 
officials and other interested parties for a period of not less than 60 
calendar days regarding the effectiveness of the consultation process 
and any proposed changes. A specific request for comments shall be 
directed to the State association of counties, State municipal league, 
regional planning agencies, or directly to non-metropolitan local 
officials.
    (2) The State, at its discretion, shall be responsible for 
determining whether to adopt any proposed changes. If a proposed change 
is not adopted, the State shall make publicly available its reasons for 
not accepting the proposed change, including notification to non-
metropolitan local officials or their associations.
    (c) For each area of the State under the jurisdiction of an Indian 
Tribal government, the State shall develop the long-range statewide 
transportation plan and STIP in consultation with the Tribal government 
and the Secretary of Interior. States shall, to the extent practicable, 
develop a documented process(es) that outlines roles, responsibilities, 
and key decision points for consulting with Indian Tribal governments 
and Federal land management agencies in the development of the long-
range statewide transportation plan and the STIP.



Sec. 450.212  Transportation planning studies and project development.

    (a) Pursuant to section 1308 of the Transportation Equity Act for 
the 21st Century, TEA-21 (Pub. L. 105-178), a State(s), MPO(s), or 
public transportation operator(s) may undertake a multimodal, systems-
level corridor or subarea planning study as part of the statewide 
transportation planning process. To the extent practicable, development 
of these transportation planning studies shall involve consultation 
with, or joint efforts among, the State(s), MPO(s), and/or public 
transportation operator(s). The results or decisions of these 
transportation planning studies may be used as part of the overall 
project development process consistent with the National Environmental 
Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and associated 
implementing regulations (23 CFR part 771 and 40 CFR parts 1500-1508). 
Specifically, these corridor or subarea studies may result in producing 
any of the following for a proposed transportation project:
    (1) Purpose and need or goals and objective statement(s);
    (2) General travel corridor and/or general mode(s) definition (e.g., 
highway, transit, or a highway/transit combination);
    (3) Preliminary screening of alternatives and elimination of 
unreasonable alternatives;
    (4) Basic description of the environmental setting; and/or
    (5) Preliminary identification of environmental impacts and 
environmental mitigation.
    (b) Publicly available documents or other source material produced 
by, or in support of, the transportation planning process described in 
this subpart may be incorporated directly or by reference into 
subsequent NEPA documents, in accordance with 40 CFR 1502.21, if:

[[Page 99]]

    (1) The NEPA lead agencies agree that such incorporation will aid in 
establishing or evaluating the purpose and need for the Federal action, 
reasonable alternatives, cumulative or other impacts on the human and 
natural environment, or mitigation of these impacts; and
    (2) The systems-level, corridor, or subarea planning study is 
conducted with:
    (i) Involvement of interested State, local, Tribal, and Federal 
agencies;
    (ii) Public review;
    (iii) Reasonable opportunity to comment during the statewide 
transportation planning process and development of the corridor or 
subarea planning study;
    (iv) Documentation of relevant decisions in a form that is 
identifiable and available for review during the NEPA scoping process 
and can be appended to or referenced in the NEPA document; and
    (v) The review of the FHWA and the FTA, as appropriate.
    (c) By agreement of the NEPA lead agencies, the above integration 
may be accomplished through tiering (as described in 40 CFR 1502.20), 
incorporating the subarea or corridor planning study into the draft 
Environmental Impact Statement or Environmental Assessment, or other 
means that the NEPA lead agencies deem appropriate. Additional 
information to further explain the linkages between the transportation 
planning and project development/NEPA processes is contained in Appendix 
A to this part, including an explanation that is non-binding guidance 
material.



Sec. 450.214  Development and content of the long-range statewide transportation plan.

    (a) The State shall develop a long-range statewide transportation 
plan, with a minimum 20-year forecast period at the time of adoption, 
that provides for the development and implementation of the multimodal 
transportation system for the State. The long-range statewide 
transportation plan shall consider and include, as applicable, elements 
and connections between public transportation, non-motorized modes, 
rail, commercial motor vehicle, waterway, and aviation facilities, 
particularly with respect to intercity travel.
    (b) The long-range statewide transportation plan should include 
capital, operations and management strategies, investments, procedures, 
and other measures to ensure the preservation and most efficient use of 
the existing transportation system. The long-range statewide 
transportation plan may consider projects and strategies that address 
areas or corridors where current or projected congestion threatens the 
efficient functioning of key elements of the State's transportation 
system.
    (c) The long-range statewide transportation plan shall reference, 
summarize, or contain any applicable short-range planning studies; 
strategic planning and/or policy studies; transportation needs studies; 
management systems reports; emergency relief and disaster preparedness 
plans; and any statements of policies, goals, and objectives on issues 
(e.g., transportation, safety, economic development, social and 
environmental effects, or energy) that were relevant to the development 
of the long-range statewide transportation plan.
    (d) The long-range statewide transportation plan should include a 
safety element that incorporates or summarizes the priorities, goals, 
countermeasures, or projects contained in the Strategic Highway Safety 
Plan required by 23 U.S.C. 148.
    (e) The long-range statewide transportation plan should include a 
security element that incorporates or summarizes the priorities, goals, 
or projects set forth in other transit safety and security planning and 
review processes, plans, and programs, as appropriate.
    (f) Within each metropolitan area of the State, the long-range 
statewide transportation plan shall be developed in cooperation with the 
affected MPOs.
    (g) For non-metropolitan areas, the long-range statewide 
transportation plan shall be developed in consultation with affected 
non-metropolitan officials with responsibility for transportation using 
the State's consultation process(es) established under Sec. 450.210(b).

[[Page 100]]

    (h) For each area of the State under the jurisdiction of an Indian 
Tribal government, the long-range statewide transportation plan shall be 
developed in consultation with the Tribal government and the Secretary 
of the Interior consistent with Sec. 450.210(c).
    (i) The long-range statewide transportation plan shall be developed, 
as appropriate, in consultation with State, Tribal, and local agencies 
responsible for land use management, natural resources, environmental 
protection, conservation, and historic preservation. This consultation 
shall involve comparison of transportation plans to State and Tribal 
conservation plans or maps, if available, and comparison of 
transportation plans to inventories of natural or historic resources, if 
available.
    (j) A long-range statewide transportation plan shall include a 
discussion of potential environmental mitigation activities and 
potential areas to carry out these activities, including activities that 
may have the greatest potential to restore and maintain the 
environmental functions affected by the long-range statewide 
transportation plan. The discussion may focus on policies, programs, or 
strategies, rather than at the project level. The discussion shall be 
developed in consultation with Federal, State, and Tribal land 
management, wildlife, and regulatory agencies. The State may establish 
reasonable timeframes for performing this consultation.
    (k) In developing and updating the long-range statewide 
transportation plan, the State shall provide citizens, affected public 
agencies, representatives of public transportation employees, freight 
shippers, private providers of transportation, representatives of users 
of public transportation, representatives of users of pedestrian 
walkways and bicycle transportation facilities, representatives of the 
disabled, providers of freight transportation services, and other 
interested parties with a reasonable opportunity to comment on the 
proposed long-range statewide transportation plan. In carrying out these 
requirements, the State shall, to the maximum extent practicable, 
utilize the public involvement process described under Sec. 450.210(a).
    (l) The long-range statewide transportation plan may (but is not 
required to) include a financial plan that demonstrates how the adopted 
long-range statewide transportation plan can be implemented, indicates 
resources from public and private sources that are reasonably expected 
to be made available to carry out the plan, and recommends any 
additional financing strategies for needed projects and programs. In 
addition, for illustrative purposes, the financial plan may (but is not 
required to) include additional projects that would be included in the 
adopted long-range statewide transportation plan if additional resources 
beyond those identified in the financial plan were to become available.
    (m) The State shall not be required to select any project from the 
illustrative list of additional projects included in the financial plan 
described in paragraph (l) of this section.
    (n) The long-range statewide transportation plan shall be published 
or otherwise made available, including (to the maximum extent 
practicable) in electronically accessible formats and means, such as the 
World Wide Web, as described in Sec. 450.210(a).
    (o) The State shall continually evaluate, revise, and periodically 
update the long-range statewide transportation plan, as appropriate, 
using the procedures in this section for development and establishment 
of the long-range statewide transportation plan.
    (p) Copies of any new or amended long-range statewide transportation 
plan documents shall be provided to the FHWA and the FTA for 
informational purposes.



Sec. 450.216  Development and content of the statewide transportation improvement program (STIP).

    (a) The State shall develop a statewide transportation improvement 
program (STIP) for all areas of the State. The STIP shall cover a period 
of no less than four years and be updated at least every four years, or 
more frequently if the Governor elects a more frequent update cycle. 
However, if the STIP covers more than four years, the FHWA and the FTA 
will consider the projects

[[Page 101]]

in the additional years as informational. In case of difficulties 
developing a portion of the STIP for a particular area (e.g., 
metropolitan planning area, nonattainment or maintenance area, or Indian 
Tribal lands), a partial STIP covering the rest of the State may be 
developed.
    (b) For each metropolitan area in the State, the STIP shall be 
developed in cooperation with the MPO designated for the metropolitan 
area. Each metropolitan transportation improvement program (TIP) shall 
be included without change in the STIP, directly or by reference, after 
approval of the TIP by the MPO and the Governor. A metropolitan TIP in a 
nonattainment or maintenance area is subject to a FHWA/FTA conformity 
finding before inclusion in the STIP. In areas outside a metropolitan 
planning area but within an air quality nonattainment or maintenance 
area containing any part of a metropolitan area, projects must be 
included in the regional emissions analysis that supported the 
conformity determination of the associated metropolitan TIP before they 
are added to the STIP.
    (c) For each non-metropolitan area in the State, the STIP shall be 
developed in consultation with affected non-metropolitan local officials 
with responsibility for transportation using the State's consultation 
process(es) established under Sec. 450.210.
    (d) For each area of the State under the jurisdiction of an Indian 
Tribal government, the STIP shall be developed in consultation with the 
Tribal government and the Secretary of the Interior.
    (e) Federal Lands Highway program TIPs shall be included without 
change in the STIP, directly or by reference, once approved by the FHWA 
pursuant to 23 U.S.C. 204(a) or (j).
    (f) The Governor shall provide all interested parties with a 
reasonable opportunity to comment on the proposed STIP as required by 
Sec. 450.210(a).
    (g) The STIP shall include capital and non-capital surface 
transportation projects (or phases of projects) within the boundaries of 
the State proposed for funding under title 23 U.S.C. and title 49 U.S.C. 
Chapter 53 (including transportation enhancements; Federal Lands Highway 
program projects; safety projects included in the State's Strategic 
Highway Safety Plan; trails projects; pedestrian walkways; and bicycle 
facilities), except the following that may (but are not required to) be 
included:
    (1) Safety projects funded under 23 U.S.C. 402 and 49 U.S.C. 31102;
    (2) Metropolitan planning projects funded under 23 U.S.C. 104(f), 49 
U.S.C. 5305(d), and 49 U.S.C. 5339;
    (3) State planning and research projects funded under 23 U.S.C. 505 
and 49 U.S.C. 5305(e);
    (4) At the State's discretion, State planning and research projects 
funded with National Highway System, Surface Transportation Program, 
and/or Equity Bonus funds;
    (5) Emergency relief projects (except those involving substantial 
functional, locational, or capacity changes);
    (6) National planning and research projects funded under 49 U.S.C. 
5314; and
    (7) Project management oversight projects funded under 49 U.S.C. 
5327.
    (h) The STIP shall contain all regionally significant projects 
requiring an action by the FHWA or the FTA whether or not the projects 
are to be funded with 23 U.S.C. Chapters 1 and 2 or title 49 U.S.C. 
Chapter 53 funds (e.g., addition of an interchange to the Interstate 
System with State, local, and/or private funds, and congressionally 
designated projects not funded under title 23 U.S.C. or title 49 U.S.C. 
Chapter 53). For informational and conformity purposes, the STIP shall 
include (if appropriate and included in any TIPs) all regionally 
significant projects proposed to be funded with Federal funds other than 
those administered by the FHWA or the FTA, as well as all regionally 
significant projects to be funded with non-Federal funds.
    (i) The STIP shall include for each project or phase (e.g., 
preliminary engineering, environment/NEPA, right-of-way, design, or 
construction) the following:
    (1) Sufficient descriptive material (i.e., type of work, termini, 
and length) to identify the project or phase;
    (2) Estimated total project cost, or a project cost range, which may 
extend beyond the four years of the STIP;

[[Page 102]]

    (3) The amount of Federal funds proposed to be obligated during each 
program year (for the first year, this includes the proposed category of 
Federal funds and source(s) of non-Federal funds. For the second, third, 
and fourth years, this includes the likely category or possible 
categories of Federal funds and sources of non-Federal funds); and
    (4) Identification of the agencies responsible for carrying out the 
project or phase.
    (j) Projects that are not considered to be of appropriate scale for 
individual identification in a given program year may be grouped by 
function, work type, and/or geographic area using the applicable 
classifications under 23 CFR 771.117(c) and (d) and/or 40 CFR part 93. 
In nonattainment and maintenance areas, project classifications must be 
consistent with the ``exempt project'' classifications contained in the 
EPA's transportation conformity regulation (40 CFR part 93). In 
addition, projects proposed for funding under title 23 U.S.C. Chapter 2 
that are not regionally significant may be grouped in one line item or 
identified individually in the STIP.
    (k) Each project or project phase included in the STIP shall be 
consistent with the long-range statewide transportation plan developed 
under Sec. 450.214 and, in metropolitan planning areas, consistent with 
an approved metropolitan transportation plan developed under Sec. 
450.322.
    (l) The STIP may include a financial plan that demonstrates how the 
approved STIP can be implemented, indicates resources from public and 
private sources that are reasonably expected to be made available to 
carry out the STIP, and recommends any additional financing strategies 
for needed projects and programs. In addition, for illustrative 
purposes, the financial plan may (but is not required to) include 
additional projects that would be included in the adopted STIP if 
reasonable additional resources beyond those identified in the financial 
plan were to become available. The State is not required to select any 
project from the illustrative list for implementation, and projects on 
the illustrative list cannot be advanced to implementation without an 
action by the FHWA and the FTA on the STIP. Starting December 11, 2007, 
revenue and cost estimates for the STIP must use an inflation rate(s) to 
reflect ``year of expenditure dollars,'' based on reasonable financial 
principles and information, developed cooperatively by the State, MPOs, 
and public transportation operators.
    (m) The STIP shall include a project, or an identified phase of a 
project, only if full funding can reasonably be anticipated to be 
available for the project within the time period contemplated for 
completion of the project. In nonattainment and maintenance areas, 
projects included in the first two years of the STIP shall be limited to 
those for which funds are available or committed. Financial constraint 
of the STIP shall be demonstrated and maintained by year and shall 
include sufficient financial information to demonstrate which projects 
are to be implemented using current and/or reasonably available 
revenues, while federally-supported facilities are being adequately 
operated and maintained. In the case of proposed funding sources, 
strategies for ensuring their availability shall be identified in the 
financial plan consistent with paragraph (l) of this section. For 
purposes of transportation operations and maintenance, the STIP shall 
include financial information containing system-level estimates of costs 
and revenue sources that are reasonably expected to be available to 
adequately operate and maintain Federal-aid highways (as defined by 23 
U.S.C. 101(a)(5)) and public transportation (as defined by title 49 
U.S.C. Chapter 53).
    (n) Projects in any of the first four years of the STIP may be 
advanced in place of another project in the first four years of the 
STIP, subject to the project selection requirements of Sec. 450.220. In 
addition, the STIP may be revised at any time under procedures agreed to 
by the State, MPO(s), and public transportation operator(s) consistent 
with the STIP development procedures established in this section, as 
well as the procedures for participation by interested parties (see 
Sec. 450.210(a)), subject to FHWA/FTA approval (see Sec. 450.218). 
Changes that affect fiscal constraint must take place by amendment of 
the STIP.

[[Page 103]]

    (o) In cases that the FHWA and the FTA find a STIP to be fiscally 
constrained and a revenue source is subsequently removed or 
substantially reduced (i.e., by legislative or administrative actions), 
the FHWA and the FTA will not withdraw the original determination of 
fiscal constraint. However, in such cases, the FHWA and the FTA will not 
act on an updated or amended STIP that does not reflect the changed 
revenue situation.



Sec. 450.218  Self-certifications, Federal findings, and Federal approvals.

    (a) At least every four years, the State shall submit an updated 
STIP concurrently to the FHWA and the FTA for joint approval. STIP 
amendments shall also be submitted to the FHWA and the FTA for joint 
approval. At the time the entire proposed STIP or STIP amendments are 
submitted to the FHWA and the FTA for joint approval, the State shall 
certify that the transportation planning process is being carried out in 
accordance with all applicable requirements of:
    (1) 23 U.S.C. 134 and 135, 49 U.S.C. 5303 and 5304, and this part;
    (2) Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 
2000d-1) and 49 CFR part 21;
    (3) 49 U.S.C. 5332, prohibiting discrimination on the basis of race, 
color, creed, national origin, sex, or age in employment or business 
opportunity;
    (4) Section 1101(b) of the SAFETEA-LU (Pub. L. 109-59) and 49 CFR 
part 26 regarding the involvement of disadvantaged business enterprises 
in USDOT funded projects;
    (5) 23 CFR part 230, regarding implementation of an equal employment 
opportunity program on Federal and Federal-aid highway construction 
contracts;
    (6) The provisions of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12101 et seq.) and 49 CFR parts 27, 37, and 38;
    (7) In States containing nonattainment and maintenance areas, 
sections 174 and 176 (c) and (d) of the Clean Air Act, as amended (42 
U.S.C. 7504, 7506 (c) and (d)) and 40 CFR part 93;
    (8) The Older Americans Act, as amended (42 U.S.C. 6101), 
prohibiting discrimination on the basis of age in programs or activities 
receiving Federal financial assistance;
    (9) Section 324 of title 23 U.S.C., regarding the prohibition of 
discrimination based on gender; and
    (10) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
and 49 CFR part 27 regarding discrimination against individuals with 
disabilities.
    (b) The FHWA and the FTA shall review the STIP or the amended STIP, 
and make a joint finding on the extent to which the STIP is based on a 
statewide transportation planning process that meets or substantially 
meets the requirements of 23 U.S.C. 134 and 135, 49 U.S.C. 5303 and 
5304, and subparts A, B, and C of this part. Approval of the STIP by the 
FHWA and the FTA, in its entirety or in part, will be based upon the 
results of this joint finding.
    (1) If the FHWA and the FTA determine that the STIP or amended STIP 
is based on a statewide transportation planning process that meets or 
substantially meets the requirements of 23 U.S.C. 135, 49 U.S.C. 5304, 
and this part, the FHWA and the FTA may jointly:
    (i) Approve the entire STIP;
    (ii) Approve the STIP subject to certain corrective actions being 
taken; or
    (iii) Under special circumstances, approve a partial STIP covering 
only a portion of the State.
    (2) If the FHWA and the FTA jointly determine and document in the 
planning finding that a submitted STIP or amended STIP does not 
substantially meet the requirements of 23 U.S.C. 135, 49 U.S.C. 5304, 
and this part for any identified categories of projects, the FHWA and 
the FTA will not approve the STIP.
    (c) The approval period for a new or amended STIP shall not exceed 
four years. If a State demonstrates, in writing, that extenuating 
circumstances will delay the submittal of a new or amended STIP past its 
update deadline, the FHWA and the FTA will consider and take appropriate 
action on a request to extend the approval beyond four years for all or 
part of the STIP for a period not to exceed 180 calendar days. In these 
cases, priority consideration will be given to projects and strategies 
involving the operation and management of the multimodal transportation 
system. Where the request

[[Page 104]]

involves projects in a metropolitan planning area(s), the affected 
MPO(s) must concur in the request. If the delay was due to the 
development and approval of a metropolitan TIP(s), the affected MPO(s) 
must provide supporting information, in writing, for the request.
    (d) Where necessary in order to maintain or establish highway and 
transit operations, the FHWA and the FTA may approve operating 
assistance for specific projects or programs, even though the projects 
or programs may not be included in an approved STIP.



Sec. 450.220  Project selection from the STIP.

    (a) Except as provided in Sec. 450.216(g) and Sec. 450.218(d), 
only projects in a FHWA/FTA approved STIP shall be eligible for funds 
administered by the FHWA or the FTA.
    (b) In metropolitan planning areas, transportation projects proposed 
for funds administered by the FHWA or the FTA shall be selected from the 
approved STIP in accordance with project selection procedures provided 
in Sec. 450.330.
    (c) In non-metropolitan areas, transportation projects undertaken on 
the National Highway System, under the Bridge and Interstate Maintenance 
programs in title 23 U.S.C. and under sections 5310, 5311, 5316, and 
5317 of title 49 U.S.C. Chapter 53 shall be selected from the approved 
STIP by the State in consultation with the affected non-metropolitan 
local officials with responsibility for transportation.
    (d) Federal Lands Highway program projects shall be selected from 
the approved STIP in accordance with the procedures developed pursuant 
to 23 U.S.C. 204.
    (e) The projects in the first year of an approved STIP shall 
constitute an ``agreed to'' list of projects for subsequent scheduling 
and implementation. No further action under paragraphs (b) through (d) 
of this section is required for the implementing agency to proceed with 
these projects. If Federal funds available are significantly less than 
the authorized amounts, or where there is significant shifting of 
projects among years, Sec. 450.330(a) provides for a revised list of 
``agreed to'' projects to be developed upon the request of the State, 
MPO, or public transportation operator(s). If an implementing agency 
wishes to proceed with a project in the second, third, or fourth year of 
the STIP, the procedures in paragraphs (b) through (d) of this section 
or expedited procedures that provide for the advancement of projects 
from the second, third, or fourth years of the STIP may be used, if 
agreed to by all parties involved in the selection process.



Sec. 450.222  Applicability of NEPA to statewide transportation plans and programs.

    Any decision by the Secretary concerning a long-range statewide 
transportation plan or STIP developed through the processes provided for 
in 23 U.S.C. 135, 49 U.S.C. 5304, and this subpart shall not be 
considered to be a Federal action subject to review under NEPA.



Sec. 450.224  Phase-in of new requirements.

    (a) Long-range statewide transportation plans and STIPs adopted or 
approved prior to July 1, 2007 may be developed using the TEA-21 
requirements or the provisions and requirements of this part.
    (b) For STIPs that are developed under TEA-21 requirements prior to 
July 1, 2007, the FHWA/FTA action (i.e., STIP approval) must be 
completed no later than June 30, 2007. For long-range statewide 
transportation plans that are completed under TEA-21 requirements prior 
to July 1, 2007, the State adoption action must be completed no later 
than June 30, 2007. If these actions are completed on or after July 1, 
2007, the provisions and requirements of this part shall take effect, 
regardless of when the long-range statewide transportation plan or the 
STIP were developed.
    (c) The applicable action (see paragraph (b) of this section) on any 
amendments or updates to STIPs or long-range statewide transportation 
plans on or after July 1, 2007, shall be based on the provisions and 
requirements of this part. However, administrative modifications may be 
made to the STIP on or after July 1, 2007 in the

[[Page 105]]

absence of meeting the provisions and requirements of this part.



     Subpart C_Metropolitan Transportation Planning and Programming



Sec. 450.300  Purpose.

    The purposes of this subpart are to implement the provisions of 23 
U.S.C. 134 and 49 U.S.C. 5303, as amended, which:
    (a) Sets forth the national policy that the MPO designated for each 
urbanized area is to carry out a continuing, cooperative, and 
comprehensive multimodal transportation planning process, including the 
development of a metropolitan transportation plan and a transportation 
improvement program (TIP), that encourages and promotes the safe and 
efficient development, management, and operation of surface 
transportation systems to serve the mobility needs of people and freight 
(including accessible pedestrian walkways and bicycle transportation 
facilities) and foster economic growth and development, while minimizing 
transportation-related fuel consumption and air pollution; and
    (b) Encourages continued development and improvement of metropolitan 
transportation planning processes guided by the planning factors set 
forth in 23 U.S.C. 134(h) and 49 U.S.C. 5303(h).



Sec. 450.302  Applicability.

    The provisions of this subpart are applicable to organizations and 
entities responsible for the transportation planning and programming 
processes in metropolitan planning areas.



Sec. 450.304  Definitions.

    Except as otherwise provided in subpart A of this part, terms 
defined in 23 U.S.C. 101(a) and 49 U.S.C. 5302 are used in this subpart 
as so defined.



Sec. 450.306  Scope of the metropolitan transportation planning process.

    (a) The metropolitan transportation planning process shall be 
continuous, cooperative, and comprehensive, and provide for 
consideration and implementation of projects, strategies, and services 
that will address the following factors:
    (1) Support the economic vitality of the metropolitan area, 
especially by enabling global competitiveness, productivity, and 
efficiency;
    (2) Increase the safety of the transportation system for motorized 
and non-motorized users;
    (3) Increase the security of the transportation system for motorized 
and non-motorized users;
    (4) Increase accessibility and mobility of people and freight;
    (5) Protect and enhance the environment, promote energy 
conservation, improve the quality of life, and promote consistency 
between transportation improvements and State and local planned growth 
and economic development patterns;
    (6) Enhance the integration and connectivity of the transportation 
system, across and between modes, for people and freight;
    (7) Promote efficient system management and operation; and
    (8) Emphasize the preservation of the existing transportation 
system.
    (b) Consideration of the planning factors in paragraph (a) of this 
section shall be reflected, as appropriate, in the metropolitan 
transportation planning process. The degree of consideration and 
analysis of the factors should be based on the scale and complexity of 
many issues, including transportation system development, land use, 
employment, economic development, human and natural environment, and 
housing and community development.
    (c) The failure to consider any factor specified in paragraph (a) of 
this section shall not be reviewable by any court under title 23 U.S.C., 
49 U.S.C. Chapter 53, subchapter II of title 5, U.S.C. Chapter 5, or 
title 5 U.S.C. Chapter 7 in any matter affecting a metropolitan 
transportation plan, TIP, a project or strategy, or the certification of 
a metropolitan transportation planning process.
    (d) The metropolitan transportation planning process shall be 
carried out in coordination with the statewide transportation planning 
process required by 23 U.S.C. 135 and 49 U.S.C. 5304.
    (e) In carrying out the metropolitan transportation planning 
process,

[[Page 106]]

MPOs, States, and public transportation operators may apply asset 
management principles and techniques in establishing planning goals, 
defining TIP priorities, and assessing transportation investment 
decisions, including transportation system safety, operations, 
preservation, and maintenance, as well as strategies and policies to 
support homeland security and to safeguard the personal security of all 
motorized and non-motorized users.
    (f) The metropolitan transportation planning process shall (to the 
maximum extent practicable) be consistent with the development of 
applicable regional intelligent transportation systems (ITS) 
architectures, as defined in 23 CFR part 940.
    (g) Preparation of the coordinated public transit-human services 
transportation plan, as required by 49 U.S.C. 5310, 5316, and 5317, 
should be coordinated and consistent with the metropolitan 
transportation planning process.
    (h) The metropolitan transportation planning process should be 
consistent with the Strategic Highway Safety Plan, as specified in 23 
U.S.C. 148, and other transit safety and security planning and review 
processes, plans, and programs, as appropriate.
    (i) The FHWA and the FTA shall designate as a transportation 
management area (TMA) each urbanized area with a population of over 
200,000 individuals, as defined by the Bureau of the Census. The FHWA 
and the FTA shall also designate any additional urbanized area as a TMA 
on the request of the Governor and the MPO designated for that area.
    (j) In an urbanized area not designated as a TMA that is an air 
quality attainment area, the MPO(s) may propose and submit to the FHWA 
and the FTA for approval a procedure for developing an abbreviated 
metropolitan transportation plan and TIP. In developing proposed 
simplified planning procedures, consideration shall be given to whether 
the abbreviated metropolitan transportation plan and TIP will achieve 
the purposes of 23 U.S.C. 134, 49 U.S.C. 5303, and these regulations, 
taking into account the complexity of the transportation problems in the 
area. The simplified procedures shall be developed by the MPO in 
cooperation with the State(s) and public transportation operator(s).



Sec. 450.308  Funding for transportation planning and unified planning work programs.

    (a) Funds provided under 23 U.S.C. 104(f), 49 U.S.C. 5305(d), 49 
U.S.C. 5307, and 49 U.S.C. 5339 are available to MPOs to accomplish 
activities in this subpart. At the State's option, funds provided under 
23 U.S.C. 104(b)(1) and (b)(3) and 23 U.S.C. 105 may also be provided to 
MPOs for metropolitan transportation planning. In addition, an MPO 
serving an urbanized area with a population over 200,000, as designated 
by the Bureau of the Census, may at its discretion use funds sub-
allocated under 23 U.S.C. 133(d)(3)(E) for metropolitan transportation 
planning activities.
    (b) Metropolitan transportation planning activities performed with 
funds provided under title 23 U.S.C. and title 49 U.S.C. Chapter 53 
shall be documented in a unified planning work program (UPWP) or 
simplified statement of work in accordance with the provisions of this 
section and 23 CFR part 420.
    (c) Except as provided in paragraph (d) of this section, each MPO, 
in cooperation with the State(s) and public transportation operator(s), 
shall develop a UPWP that includes a discussion of the planning 
priorities facing the MPA. The UPWP shall identify work proposed for the 
next one- or two-year period by major activity and task (including 
activities that address the planning factors in Sec. 450.306(a)), in 
sufficient detail to indicate who (e.g., MPO, State, public 
transportation operator, local government, or consultant) will perform 
the work, the schedule for completing the work, the resulting products, 
the proposed funding by activity/task, and a summary of the total 
amounts and sources of Federal and matching funds.
    (d) With the prior approval of the State and the FHWA and the FTA, 
an MPO in an area not designated as a TMA may prepare a simplified 
statement of work, in cooperation with the State(s) and the public 
transportation

[[Page 107]]

operator(s), in lieu of a UPWP. A simplified statement of work would 
include a description of the major activities to be performed during the 
next one- or two-year period, who (e.g., State, MPO, public 
transportation operator, local government, or consultant) will perform 
the work, the resulting products, and a summary of the total amounts and 
sources of Federal and matching funds. If a simplified statement of work 
is used, it may be submitted as part of the State's planning work 
program, in accordance with 23 CFR part 420.
    (e) Arrangements may be made with the FHWA and the FTA to combine 
the UPWP or simplified statement of work with the work program(s) for 
other Federal planning funds.
    (f) Administrative requirements for UPWPs and simplified statements 
of work are contained in 23 CFR part 420 and FTA Circular C8100.1B 
(Program Guidance and Application Instructions for Metropolitan Planning 
Grants).



Sec. 450.310  Metropolitan planning organization designation and redesignation.

    (a) To carry out the metropolitan transportation planning process 
under this subpart, a metropolitan planning organization (MPO) shall be 
designated for each urbanized area with a population of more than 50,000 
individuals (as determined by the Bureau of the Census).
    (b) MPO designation shall be made by agreement between the Governor 
and units of general purpose local government that together represent at 
least 75 percent of the affected population (including the largest 
incorporated city, based on population, as named by the Bureau of the 
Census) or in accordance with procedures established by applicable State 
or local law.
    (c) Each Governor with responsibility for a portion of a multistate 
metropolitan area and the appropriate MPOs shall, to the extent 
practicable, provide coordinated transportation planning for the entire 
MPA. The consent of Congress is granted to any two or more States to:
    (1) Enter into agreements or compacts, not in conflict with any law 
of the United States, for cooperative efforts and mutual assistance in 
support of activities authorized under 23 U.S.C. 134 and 49 U.S.C. 5303 
as the activities pertain to interstate areas and localities within the 
States; and
    (2) Establish such agencies, joint or otherwise, as the States may 
determine desirable for making the agreements and compacts effective.
    (d) Each MPO that serves a TMA, when designated or redesignated 
under this section, shall consist of local elected officials, officials 
of public agencies that administer or operate major modes of 
transportation in the metropolitan planning area, and appropriate State 
transportation officials. Where appropriate, MPOs may increase the 
representation of local elected officials, public transportation 
agencies, or appropriate State officials on their policy boards and 
other committees as a means for encouraging greater involvement in the 
metropolitan transportation planning process, subject to the 
requirements of paragraph (k) of this section.
    (e) To the extent possible, only one MPO shall be designated for 
each urbanized area or group of contiguous urbanized areas. More than 
one MPO may be designated to serve an urbanized area only if the 
Governor(s) and the existing MPO, if applicable, determine that the size 
and complexity of the urbanized area make designation of more than one 
MPO appropriate. In those cases where two or more MPOs serve the same 
urbanized area, the MPOs shall establish official, written agreements 
that clearly identify areas of coordination and the division of 
transportation planning responsibilities among the MPOs.
    (f) Nothing in this subpart shall be deemed to prohibit an MPO from 
using the staff resources of other agencies, non-profit organizations, 
or contractors to carry out selected elements of the metropolitan 
transportation planning process.
    (g) An MPO designation shall remain in effect until an official 
redesignation has been made in accordance with this section.
    (h) An existing MPO may be redesignated only by agreement between 
the Governor and units of general purpose

[[Page 108]]

local government that together represent at least 75 percent of the 
existing metropolitan planning area population (including the largest 
incorporated city, based on population, as named by the Bureau of the 
Census).
    (i) Redesignation of an MPO serving a multistate metropolitan 
planning area requires agreement between the Governors of each State 
served by the existing MPO and units of general purpose local government 
that together represent at least 75 percent of the existing metropolitan 
planning area population (including the largest incorporated city, based 
on population, as named by the Bureau of the Census).
    (j) For the purposes of redesignation, units of general purpose 
local government may be defined as elected officials from each unit of 
general purpose local government located within the metropolitan 
planning area served by the existing MPO.
    (k) Redesignation of an MPO (in accordance with the provisions of 
this section) is required whenever the existing MPO proposes to make:
    (1) A substantial change in the proportion of voting members on the 
existing MPO representing the largest incorporated city, other units of 
general purpose local government served by the MPO, and the State(s); or
    (2) A substantial change in the decisionmaking authority or 
responsibility of the MPO, or in decisionmaking procedures established 
under MPO by-laws.
    (l) The following changes to an MPO do not require a redesignation 
(as long as they do not trigger a substantial change as described in 
paragraph (k) of the section):
    (1) The identification of a new urbanized area (as determined by the 
Bureau of the Census) within an existing metropolitan planning area;
    (2) Adding members to the MPO that represent new units of general 
purpose local government resulting from expansion of the metropolitan 
planning area;
    (3) Adding members to satisfy the specific membership requirements 
for an MPO that serves a TMA; or
    (4) Periodic rotation of members representing units of general-
purpose local government, as established under MPO by-laws.



Sec. 450.312  Metropolitan planning area boundaries.

    (a) The boundaries of a metropolitan planning area (MPA) shall be 
determined by agreement between the MPO and the Governor. At a minimum, 
the MPA boundaries shall encompass the entire existing urbanized area 
(as defined by the Bureau of the Census) plus the contiguous area 
expected to become urbanized within a 20-year forecast period for the 
metropolitan transportation plan. The MPA boundaries may be further 
expanded to encompass the entire metropolitan statistical area or 
combined statistical area, as defined by the Office of Management and 
Budget.
    (b) An MPO that serves an urbanized area designated as a 
nonattainment area for ozone or carbon monoxide under the Clean Air Act 
(42 U.S.C. 7401 et seq.) as of August 10, 2005, shall retain the MPA 
boundary that existed on August 10, 2005. The MPA boundaries for such 
MPOs may only be adjusted by agreement of the Governor and the affected 
MPO in accordance with the redesignation procedures described in Sec. 
450.310(h). The MPA boundary for an MPO that serves an urbanized area 
designated as a nonattainment area for ozone or carbon monoxide under 
the Clean Air Act (42 U.S.C. 7401 et seq.) after August 10, 2005 may be 
established to coincide with the designated boundaries of the ozone and/
or carbon monoxide nonattainment area, in accordance with the 
requirements in Sec. 450.310(b).
    (c) An MPA boundary may encompass more than one urbanized area.
    (d) MPA boundaries may be established to coincide with the geography 
of regional economic development and growth forecasting areas.
    (e) Identification of new urbanized areas within an existing 
metropolitan planning area by the Bureau of the Census shall not require 
redesignation of the existing MPO.
    (f) Where the boundaries of the urbanized area or MPA extend across 
two or more States, the Governors with responsibility for a portion of 
the multistate area, MPO(s), and the public

[[Page 109]]

transportation operator(s) are strongly encouraged to coordinate 
transportation planning for the entire multistate area.
    (g) The MPA boundaries shall not overlap with each other.
    (h) Where part of an urbanized area served by one MPO extends into 
an adjacent MPA, the MPOs shall, at a minimum, establish written 
agreements that clearly identify areas of coordination and the division 
of transportation planning responsibilities among and between the MPOs. 
Alternatively, the MPOs may adjust their existing boundaries so that the 
entire urbanized area lies within only one MPA. Boundary adjustments 
that change the composition of the MPO may require redesignation of one 
or more such MPOs.
    (i) The MPA boundaries shall be reviewed after each Census by the 
MPO (in cooperation with the State and public transportation 
operator(s)) to determine if existing MPA boundaries meet the minimum 
statutory requirements for new and updated urbanized area(s), and shall 
be adjusted as necessary. As appropriate, additional adjustments should 
be made to reflect the most comprehensive boundary to foster an 
effective planning process that ensures connectivity between modes, 
reduces access disadvantages experienced by modal systems, and promotes 
efficient overall transportation investment strategies.
    (j) Following MPA boundary approval by the MPO and the Governor, the 
MPA boundary descriptions shall be provided for informational purposes 
to the FHWA and the FTA. The MPA boundary descriptions shall be 
submitted either as a geo-spatial database or described in sufficient 
detail to enable the boundaries to be accurately delineated on a map.



Sec. 450.314  Metropolitan planning agreements.

    (a) The MPO, the State(s), and the public transportation operator(s) 
shall cooperatively determine their mutual responsibilities in carrying 
out the metropolitan transportation planning process. These 
responsibilities shall be clearly identified in written agreements among 
the MPO, the State(s), and the public transportation operator(s) serving 
the MPA. To the extent possible, a single agreement between all 
responsible parties should be developed. The written agreement(s) shall 
include specific provisions for cooperatively developing and sharing 
information related to the development of financial plans that support 
the metropolitan transportation plan (see Sec. 450.322) and the 
metropolitan TIP (see Sec. 450.324) and development of the annual 
listing of obligated projects (see Sec. 450.332).
    (b) If the MPA does not include the entire nonattainment or 
maintenance area, there shall be a written agreement among the State 
department of transportation, State air quality agency, affected local 
agencies, and the MPO describing the process for cooperative planning 
and analysis of all projects outside the MPA within the nonattainment or 
maintenance area. The agreement must also indicate how the total 
transportation-related emissions for the nonattainment or maintenance 
area, including areas outside the MPA, will be treated for the purposes 
of determining conformity in accordance with the EPA's transportation 
conformity rule (40 CFR part 93). The agreement shall address policy 
mechanisms for resolving conflicts concerning transportation-related 
emissions that may arise between the MPA and the portion of the 
nonattainment or maintenance area outside the MPA.
    (c) In nonattainment or maintenance areas, if the MPO is not the 
designated agency for air quality planning under section 174 of the 
Clean Air Act (42 U.S.C. 7504), there shall be a written agreement 
between the MPO and the designated air quality planning agency 
describing their respective roles and responsibilities for air quality 
related transportation planning.
    (d) If more than one MPO has been designated to serve an urbanized 
area, there shall be a written agreement among the MPOs, the State(s), 
and the public transportation operator(s) describing how the 
metropolitan transportation planning processes will be coordinated to 
assure the development of consistent metropolitan transportation plans 
and TIPs across the MPA boundaries, particularly in cases in which a

[[Page 110]]

proposed transportation investment extends across the boundaries of more 
than one MPA. If any part of the urbanized area is a nonattainment or 
maintenance area, the agreement also shall include State and local air 
quality agencies. The metropolitan transportation planning processes for 
affected MPOs should, to the maximum extent possible, reflect 
coordinated data collection, analysis, and planning assumptions across 
the MPAs. Alternatively, a single metropolitan transportation plan and/
or TIP for the entire urbanized area may be developed jointly by the 
MPOs in cooperation with their respective planning partners. 
Coordination efforts and outcomes shall be documented in subsequent 
transmittals of the UPWP and other planning products, including the 
metropolitan transportation plan and TIP, to the State(s), the FHWA, and 
the FTA.
    (e) Where the boundaries of the urbanized area or MPA extend across 
two or more States, the Governors with responsibility for a portion of 
the multistate area, the appropriate MPO(s), and the public 
transportation operator(s) shall coordinate transportation planning for 
the entire multistate area. States involved in such multistate 
transportation planning may:
    (1) Enter into agreements or compacts, not in conflict with any law 
of the United States, for cooperative efforts and mutual assistance in 
support of activities authorized under this section as the activities 
pertain to interstate areas and localities within the States; and
    (2) Establish such agencies, joint or otherwise, as the States may 
determine desirable for making the agreements and compacts effective.
    (f) If part of an urbanized area that has been designated as a TMA 
overlaps into an adjacent MPA serving an urbanized area that is not 
designated as a TMA, the adjacent urbanized area shall not be treated as 
a TMA. However, a written agreement shall be established between the 
MPOs with MPA boundaries including a portion of the TMA, which clearly 
identifies the roles and responsibilities of each MPO in meeting 
specific TMA requirements (e.g., congestion management process, Surface 
Transportation Program funds suballocated to the urbanized area over 
200,000 population, and project selection).



Sec. 450.316  Interested parties, participation, and consultation.

    (a) The MPO shall develop and use a documented participation plan 
that defines a process for providing citizens, affected public agencies, 
representatives of public transportation employees, freight shippers, 
providers of freight transportation services, private providers of 
transportation, representatives of users of public transportation, 
representatives of users of pedestrian walkways and bicycle 
transportation facilities, representatives of the disabled, and other 
interested parties with reasonable opportunities to be involved in the 
metropolitan transportation planning process.
    (1) The participation plan shall be developed by the MPO in 
consultation with all interested parties and shall, at a minimum, 
describe explicit procedures, strategies, and desired outcomes for:
    (i) Providing adequate public notice of public participation 
activities and time for public review and comment at key decision 
points, including but not limited to a reasonable opportunity to comment 
on the proposed metropolitan transportation plan and the TIP;
    (ii) Providing timely notice and reasonable access to information 
about transportation issues and processes;
    (iii) Employing visualization techniques to describe metropolitan 
transportation plans and TIPs;
    (iv) Making public information (technical information and meeting 
notices) available in electronically accessible formats and means, such 
as the World Wide Web;
    (v) Holding any public meetings at convenient and accessible 
locations and times;
    (vi) Demonstrating explicit consideration and response to public 
input received during the development of the metropolitan transportation 
plan and the TIP;

[[Page 111]]

    (vii) Seeking out and considering the needs of those traditionally 
underserved by existing transportation systems, such as low-income and 
minority households, who may face challenges accessing employment and 
other services;
    (viii) Providing an additional opportunity for public comment, if 
the final metropolitan transportation plan or TIP differs significantly 
from the version that was made available for public comment by the MPO 
and raises new material issues which interested parties could not 
reasonably have foreseen from the public involvement efforts;
    (ix) Coordinating with the statewide transportation planning public 
involvement and consultation processes under subpart B of this part; and
    (x) Periodically reviewing the effectiveness of the procedures and 
strategies contained in the participation plan to ensure a full and open 
participation process.
    (2) When significant written and oral comments are received on the 
draft metropolitan transportation plan and TIP (including the financial 
plans) as a result of the participation process in this section or the 
interagency consultation process required under the EPA transportation 
conformity regulations (40 CFR part 93), a summary, analysis, and report 
on the disposition of comments shall be made as part of the final 
metropolitan transportation plan and TIP.
    (3) A minimum public comment period of 45 calendar days shall be 
provided before the initial or revised participation plan is adopted by 
the MPO. Copies of the approved participation plan shall be provided to 
the FHWA and the FTA for informational purposes and shall be posted on 
the World Wide Web, to the maximum extent practicable.
    (b) In developing metropolitan transportation plans and TIPs, the 
MPO should consult with agencies and officials responsible for other 
planning activities within the MPA that are affected by transportation 
(including State and local planned growth, economic development, 
environmental protection, airport operations, or freight movements) or 
coordinate its planning process (to the maximum extent practicable) with 
such planning activities. In addition, metropolitan transportation plans 
and TIPs shall be developed with due consideration of other related 
planning activities within the metropolitan area, and the process shall 
provide for the design and delivery of transportation services within 
the area that are provided by:
    (1) Recipients of assistance under title 49 U.S.C. Chapter 53;
    (2) Governmental agencies and non-profit organizations (including 
representatives of the agencies and organizations) that receive Federal 
assistance from a source other than the U.S. Department of 
Transportation to provide non-emergency transportation services; and
    (3) Recipients of assistance under 23 U.S.C. 204.
    (c) When the MPA includes Indian Tribal lands, the MPO shall 
appropriately involve the Indian Tribal government(s) in the development 
of the metropolitan transportation plan and the TIP.
    (d) When the MPA includes Federal public lands, the MPO shall 
appropriately involve the Federal land management agencies in the 
development of the metropolitan transportation plan and the TIP.
    (e) MPOs shall, to the extent practicable, develop a documented 
process(es) that outlines roles, responsibilities, and key decision 
points for consulting with other governments and agencies, as defined in 
paragraphs (b), (c), and (d) of this section, which may be included in 
the agreement(s) developed under Sec. 450.314.



Sec. 450.318  Transportation planning studies and project development.

    (a) Pursuant to section 1308 of the Transportation Equity Act for 
the 21st Century, TEA-21 (Pub. L. 105-178), an MPO(s), State(s), or 
public transportation operator(s) may undertake a multimodal, systems-
level corridor or subarea planning study as part of the metropolitan 
transportation planning process. To the extent practicable, development 
of these transportation planning studies shall involve consultation 
with, or joint efforts among, the MPO(s), State(s), and/or public

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transportation operator(s). The results or decisions of these 
transportation planning studies may be used as part of the overall 
project development process consistent with the National Environmental 
Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and associated 
implementing regulations (23 CFR part 771 and 40 CFR parts 1500-1508). 
Specifically, these corridor or subarea studies may result in producing 
any of the following for a proposed transportation project:
    (1) Purpose and need or goals and objective statement(s);
    (2) General travel corridor and/or general mode(s) definition (e.g., 
highway, transit, or a highway/transit combination);
    (3) Preliminary screening of alternatives and elimination of 
unreasonable alternatives;
    (4) Basic description of the environmental setting; and/or
    (5) Preliminary identification of environmental impacts and 
environmental mitigation.
    (b) Publicly available documents or other source material produced 
by, or in support of, the transportation planning process described in 
this subpart may be incorporated directly or by reference into 
subsequent NEPA documents, in accordance with 40 CFR 1502.21, if:
    (1) The NEPA lead agencies agree that such incorporation will aid in 
establishing or evaluating the purpose and need for the Federal action, 
reasonable alternatives, cumulative or other impacts on the human and 
natural environment, or mitigation of these impacts; and
    (2) The systems-level, corridor, or subarea planning study is 
conducted with:
    (i) Involvement of interested State, local, Tribal, and Federal 
agencies;
    (ii) Public review;
    (iii) Reasonable opportunity to comment during the metropolitan 
transportation planning process and development of the corridor or 
subarea planning study;
    (iv) Documentation of relevant decisions in a form that is 
identifiable and available for review during the NEPA scoping process 
and can be appended to or referenced in the NEPA document; and
    (v) The review of the FHWA and the FTA, as appropriate.
    (c) By agreement of the NEPA lead agencies, the above integration 
may be accomplished through tiering (as described in 40 CFR 1502.20), 
incorporating the subarea or corridor planning study into the draft 
Environmental Impact Statement (EIS) or Environmental Assessment, or 
other means that the NEPA lead agencies deem appropriate.
    (d) For transit fixed guideway projects requiring an Alternatives 
Analysis (49 U.S.C. 5309(d) and (e)), the Alternatives Analysis 
described in 49 CFR part 611 constitutes the planning required by 
section 1308 of the TEA-21. The Alternatives Analysis may or may not be 
combined with the preparation of a NEPA document (e.g., a draft EIS). 
When an Alternatives Analysis is separate from the preparation of a NEPA 
document, the results of the Alternatives Analysis may be used during a 
subsequent environmental review process as described in paragraph (a).
    (e) Additional information to further explain the linkages between 
the transportation planning and project development/NEPA processes is 
contained in Appendix A to this part, including an explanation that it 
is non-binding guidance material.



Sec. 450.320  Congestion management process in transportation management areas.

    (a) The transportation planning process in a TMA shall address 
congestion management through a process that provides for safe and 
effective integrated management and operation of the multimodal 
transportation system, based on a cooperatively developed and 
implemented metropolitan-wide strategy, of new and existing 
transportation facilities eligible for funding under title 23 U.S.C. and 
title 49 U.S.C. Chapter 53 through the use of travel demand reduction 
and operational management strategies.
    (b) The development of a congestion management process should result 
in

[[Page 113]]

multimodal system performance measures and strategies that can be 
reflected in the metropolitan transportation plan and the TIP. The level 
of system performance deemed acceptable by State and local 
transportation officials may vary by type of transportation facility, 
geographic location (metropolitan area or subarea), and/or time of day. 
In addition, consideration should be given to strategies that manage 
demand, reduce single occupant vehicle (SOV) travel, and improve 
transportation system management and operations. Where the addition of 
general purpose lanes is determined to be an appropriate congestion 
management strategy, explicit consideration is to be given to the 
incorporation of appropriate features into the SOV project to facilitate 
future demand management strategies and operational improvements that 
will maintain the functional integrity and safety of those lanes.
    (c) The congestion management process shall be developed, 
established, and implemented as part of the metropolitan transportation 
planning process that includes coordination with transportation system 
management and operations activities. The congestion management process 
shall include:
    (1) Methods to monitor and evaluate the performance of the 
multimodal transportation system, identify the causes of recurring and 
non-recurring congestion, identify and evaluate alternative strategies, 
provide information supporting the implementation of actions, and 
evaluate the effectiveness of implemented actions;
    (2) Definition of congestion management objectives and appropriate 
performance measures to assess the extent of congestion and support the 
evaluation of the effectiveness of congestion reduction and mobility 
enhancement strategies for the movement of people and goods. Since 
levels of acceptable system performance may vary among local 
communities, performance measures should be tailored to the specific 
needs of the area and established cooperatively by the State(s), 
affected MPO(s), and local officials in consultation with the operators 
of major modes of transportation in the coverage area;
    (3) Establishment of a coordinated program for data collection and 
system performance monitoring to define the extent and duration of 
congestion, to contribute in determining the causes of congestion, and 
evaluate the efficiency and effectiveness of implemented actions. To the 
extent possible, this data collection program should be coordinated with 
existing data sources (including archived operational/ITS data) and 
coordinated with operations managers in the metropolitan area;
    (4) Identification and evaluation of the anticipated performance and 
expected benefits of appropriate congestion management strategies that 
will contribute to the more effective use and improved safety of 
existing and future transportation systems based on the established 
performance measures. The following categories of strategies, or 
combinations of strategies, are some examples of what should be 
appropriately considered for each area:
    (i) Demand management measures, including growth management and 
congestion pricing;
    (ii) Traffic operational improvements;
    (iii) Public transportation improvements;
    (iv) ITS technologies as related to the regional ITS architecture; 
and
    (v) Where necessary, additional system capacity;
    (5) Identification of an implementation schedule, implementation 
responsibilities, and possible funding sources for each strategy (or 
combination of strategies) proposed for implementation; and
    (6) Implementation of a process for periodic assessment of the 
effectiveness of implemented strategies, in terms of the area's 
established performance measures. The results of this evaluation shall 
be provided to decisionmakers and the public to provide guidance on 
selection of effective strategies for future implementation.
    (d) In a TMA designated as nonattainment area for ozone or carbon 
monoxide pursuant to the Clean Air Act, Federal funds may not be 
programmed for any project that will result in a significant increase in 
the carrying capacity for SOVs (i.e., a new

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general purpose highway on a new location or adding general purpose 
lanes, with the exception of safety improvements or the elimination of 
bottlenecks), unless the project is addressed through a congestion 
management process meeting the requirements of this section.
    (e) In TMAs designated as nonattainment for ozone or carbon 
monoxide, the congestion management process shall provide an appropriate 
analysis of reasonable (including multimodal) travel demand reduction 
and operational management strategies for the corridor in which a 
project that will result in a significant increase in capacity for SOVs 
(as described in paragraph (d) of this section) is proposed to be 
advanced with Federal funds. If the analysis demonstrates that travel 
demand reduction and operational management strategies cannot fully 
satisfy the need for additional capacity in the corridor and additional 
SOV capacity is warranted, then the congestion management process shall 
identify all reasonable strategies to manage the SOV facility safely and 
effectively (or to facilitate its management in the future). Other 
travel demand reduction and operational management strategies 
appropriate for the corridor, but not appropriate for incorporation into 
the SOV facility itself, shall also be identified through the congestion 
management process. All identified reasonable travel demand reduction 
and operational management strategies shall be incorporated into the SOV 
project or committed to by the State and MPO for implementation.
    (f) State laws, rules, or regulations pertaining to congestion 
management systems or programs may constitute the congestion management 
process, if the FHWA and the FTA find that the State laws, rules, or 
regulations are consistent with, and fulfill the intent of, the purposes 
of 23 U.S.C. 134 and 49 U.S.C. 5303.



Sec. 450.322  Development and content of the metropolitan transportation plan.

    (a) The metropolitan transportation planning process shall include 
the development of a transportation plan addressing no less than a 20-
year planning horizon as of the effective date. In nonattainment and 
maintenance areas, the effective date of the transportation plan shall 
be the date of a conformity determination issued by the FHWA and the 
FTA. In attainment areas, the effective date of the transportation plan 
shall be its date of adoption by the MPO.
    (b) The transportation plan shall include both long-range and short-
range strategies/actions that lead to the development of an integrated 
multimodal transportation system to facilitate the safe and efficient 
movement of people and goods in addressing current and future 
transportation demand.
    (c) The MPO shall review and update the transportation plan at least 
every four years in air quality nonattainment and maintenance areas and 
at least every five years in attainment areas to confirm the 
transportation plan's validity and consistency with current and 
forecasted transportation and land use conditions and trends and to 
extend the forecast period to at least a 20-year planning horizon. In 
addition, the MPO may revise the transportation plan at any time using 
the procedures in this section without a requirement to extend the 
horizon year. The transportation plan (and any revisions) shall be 
approved by the MPO and submitted for information purposes to the 
Governor. Copies of any updated or revised transportation plans must be 
provided to the FHWA and the FTA.
    (d) In metropolitan areas that are in nonattainment for ozone or 
carbon monoxide, the MPO shall coordinate the development of the 
metropolitan transportation plan with the process for developing 
transportation control measures (TCMs) in a State Implementation Plan 
(SIP).
    (e) The MPO, the State(s), and the public transportation operator(s) 
shall validate data utilized in preparing other existing modal plans for 
providing input to the transportation plan. In updating the 
transportation plan, the MPO shall base the update on the latest 
available estimates and assumptions for population, land use, travel, 
employment, congestion, and economic activity. The MPO shall approve 
transportation plan contents and

[[Page 115]]

supporting analyses produced by a transportation plan update.
    (f) The metropolitan transportation plan shall, at a minimum, 
include:
    (1) The projected transportation demand of persons and goods in the 
metropolitan planning area over the period of the transportation plan;
    (2) Existing and proposed transportation facilities (including major 
roadways, transit, multimodal and intermodal facilities, pedestrian 
walkways and bicycle facilities, and intermodal connectors) that should 
function as an integrated metropolitan transportation system, giving 
emphasis to those facilities that serve important national and regional 
transportation functions over the period of the transportation plan. In 
addition, the locally preferred alternative selected from an 
Alternatives Analysis under the FTA's Capital Investment Grant program 
(49 U.S.C. 5309 and 49 CFR part 611) needs to be adopted as part of the 
metropolitan transportation plan as a condition for funding under 49 
U.S.C. 5309;
    (3) Operational and management strategies to improve the performance 
of existing transportation facilities to relieve vehicular congestion 
and maximize the safety and mobility of people and goods;
    (4) Consideration of the results of the congestion management 
process in TMAs that meet the requirements of this subpart, including 
the identification of SOV projects that result from a congestion 
management process in TMAs that are nonattainment for ozone or carbon 
monoxide;
    (5) Assessment of capital investment and other strategies to 
preserve the existing and projected future metropolitan transportation 
infrastructure and provide for multimodal capacity increases based on 
regional priorities and needs. The metropolitan transportation plan may 
consider projects and strategies that address areas or corridors where 
current or projected congestion threatens the efficient functioning of 
key elements of the metropolitan area's transportation system;
    (6) Design concept and design scope descriptions of all existing and 
proposed transportation facilities in sufficient detail, regardless of 
funding source, in nonattainment and maintenance areas for conformity 
determinations under the EPA's transportation conformity rule (40 CFR 
part 93). In all areas (regardless of air quality designation), all 
proposed improvements shall be described in sufficient detail to develop 
cost estimates;
    (7) A discussion of types of potential environmental mitigation 
activities and potential areas to carry out these activities, including 
activities that may have the greatest potential to restore and maintain 
the environmental functions affected by the metropolitan transportation 
plan. The discussion may focus on policies, programs, or strategies, 
rather than at the project level. The discussion shall be developed in 
consultation with Federal, State, and Tribal land management, wildlife, 
and regulatory agencies. The MPO may establish reasonable timeframes for 
performing this consultation;
    (8) Pedestrian walkway and bicycle transportation facilities in 
accordance with 23 U.S.C. 217(g);
    (9) Transportation and transit enhancement activities, as 
appropriate; and
    (10) A financial plan that demonstrates how the adopted 
transportation plan can be implemented.
    (i) For purposes of transportation system operations and 
maintenance, the financial plan shall contain system-level estimates of 
costs and revenue sources that are reasonably expected to be available 
to adequately operate and maintain Federal-aid highways (as defined by 
23 U.S.C. 101(a)(5)) and public transportation (as defined by title 49 
U.S.C. Chapter 53).
    (ii) For the purpose of developing the metropolitan transportation 
plan, the MPO, public transportation operator(s), and State shall 
cooperatively develop estimates of funds that will be available to 
support metropolitan transportation plan implementation, as required 
under Sec. 450.314(a). All necessary financial resources from public 
and private sources that are reasonably expected to be made available to 
carry out the transportation plan shall be identified.
    (iii) The financial plan shall include recommendations on any 
additional financing strategies to fund projects and programs included 
in the metropolitan

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transportation plan. In the case of new funding sources, strategies for 
ensuring their availability shall be identified.
    (iv) In developing the financial plan, the MPO shall take into 
account all projects and strategies proposed for funding under title 23 
U.S.C., title 49 U.S.C. Chapter 53 or with other Federal funds; State 
assistance; local sources; and private participation. Starting December 
11, 2007, revenue and cost estimates that support the metropolitan 
transportation plan must use an inflation rate(s) to reflect ``year of 
expenditure dollars,'' based on reasonable financial principles and 
information, developed cooperatively by the MPO, State(s), and public 
transportation operator(s).
    (v) For the outer years of the metropolitan transportation plan 
(i.e., beyond the first 10 years), the financial plan may reflect 
aggregate cost ranges/cost bands, as long as the future funding 
source(s) is reasonably expected to be available to support the 
projected cost ranges/cost bands.
    (vi) For nonattainment and maintenance areas, the financial plan 
shall address the specific financial strategies required to ensure the 
implementation of TCMs in the applicable SIP.
    (vii) For illustrative purposes, the financial plan may (but is not 
required to) include additional projects that would be included in the 
adopted transportation plan if additional resources beyond those 
identified in the financial plan were to become available.
    (viii) In cases that the FHWA and the FTA find a metropolitan 
transportation plan to be fiscally constrained and a revenue source is 
subsequently removed or substantially reduced (i.e., by legislative or 
administrative actions), the FHWA and the FTA will not withdraw the 
original determination of fiscal constraint; however, in such cases, the 
FHWA and the FTA will not act on an updated or amended metropolitan 
transportation plan that does not reflect the changed revenue situation.
    (g) The MPO shall consult, as appropriate, with State and local 
agencies responsible for land use management, natural resources, 
environmental protection, conservation, and historic preservation 
concerning the development of the transportation plan. The consultation 
shall involve, as appropriate:
    (1) Comparison of transportation plans with State conservation plans 
or maps, if available; or
    (2) Comparison of transportation plans to inventories of natural or 
historic resources, if available.
    (h) The metropolitan transportation plan should include a safety 
element that incorporates or summarizes the priorities, goals, 
countermeasures, or projects for the MPA contained in the Strategic 
Highway Safety Plan required under 23 U.S.C. 148, as well as (as 
appropriate) emergency relief and disaster preparedness plans and 
strategies and policies that support homeland security (as appropriate) 
and safeguard the personal security of all motorized and non-motorized 
users.
    (i) The MPO shall provide citizens, affected public agencies, 
representatives of public transportation employees, freight shippers, 
providers of freight transportation services, private providers of 
transportation, representatives of users of public transportation, 
representatives of users of pedestrian walkways and bicycle 
transportation facilities, representatives of the disabled, and other 
interested parties with a reasonable opportunity to comment on the 
transportation plan using the participation plan developed under Sec. 
450.316(a).
    (j) The metropolitan transportation plan shall be published or 
otherwise made readily available by the MPO for public review, including 
(to the maximum extent practicable) in electronically accessible formats 
and means, such as the World Wide Web.
    (k) A State or MPO shall not be required to select any project from 
the illustrative list of additional projects included in the financial 
plan under paragraph (f)(10) of this section.
    (l) In nonattainment and maintenance areas for transportation-
related pollutants, the MPO, as well as the FHWA and the FTA, must make 
a conformity determination on any updated or amended transportation plan 
in accordance with the Clean Air Act and the EPA transportation 
conformity regulations (40 CFR part 93). During a conformity lapse, MPOs 
can prepare an

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interim metropolitan transportation plan as a basis for advancing 
projects that are eligible to proceed under a conformity lapse. An 
interim metropolitan transportation plan consisting of eligible projects 
from, or consistent with, the most recent conforming transportation plan 
and TIP may proceed immediately without revisiting the requirements of 
this section, subject to interagency consultation defined in 40 CFR part 
93. An interim metropolitan transportation plan containing eligible 
projects that are not from, or consistent with, the most recent 
conforming transportation plan and TIP must meet all the requirements of 
this section.



Sec. 450.324  Development and content of the transportation improvement program (TIP).

    (a) The MPO, in cooperation with the State(s) and any affected 
public transportation operator(s), shall develop a TIP for the 
metropolitan planning area. The TIP shall cover a period of no less than 
four years, be updated at least every four years, and be approved by the 
MPO and the Governor. However, if the TIP covers more than four years, 
the FHWA and the FTA will consider the projects in the additional years 
as informational. The TIP may be updated more frequently, but the cycle 
for updating the TIP must be compatible with the STIP development and 
approval process. The TIP expires when the FHWA/FTA approval of the STIP 
expires. Copies of any updated or revised TIPs must be provided to the 
FHWA and the FTA. In nonattainment and maintenance areas subject to 
transportation conformity requirements, the FHWA and the FTA, as well as 
the MPO, must make a conformity determination on any updated or amended 
TIP, in accordance with the Clean Air Act requirements and the EPA's 
transportation conformity regulations (40 CFR part 93).
    (b) The MPO shall provide all interested parties with a reasonable 
opportunity to comment on the proposed TIP as required by Sec. 
450.316(a). In addition, in nonattainment area TMAs, the MPO shall 
provide at least one formal public meeting during the TIP development 
process, which should be addressed through the participation plan 
described in Sec. 450.316(a). In addition, the TIP shall be published 
or otherwise made readily available by the MPO for public review, 
including (to the maximum extent practicable) in electronically 
accessible formats and means, such as the World Wide Web, as described 
in Sec. 450.316(a).
    (c) The TIP shall include capital and non-capital surface 
transportation projects (or phases of projects) within the boundaries of 
the metropolitan planning area proposed for funding under 23 U.S.C. and 
49 U.S.C. Chapter 53 (including transportation enhancements; Federal 
Lands Highway program projects; safety projects included in the State's 
Strategic Highway Safety Plan; trails projects; pedestrian walkways; and 
bicycle facilities), except the following that may (but are not required 
to) be included:
    (1) Safety projects funded under 23 U.S.C. 402 and 49 U.S.C. 31102;
    (2) Metropolitan planning projects funded under 23 U.S.C. 104(f), 49 
U.S.C. 5305(d), and 49 U.S.C. 5339;
    (3) State planning and research projects funded under 23 U.S.C. 505 
and 49 U.S.C. 5305(e);
    (4) At the discretion of the State and MPO, State planning and 
research projects funded with National Highway System, Surface 
Transportation Program, and/or Equity Bonus funds;
    (5) Emergency relief projects (except those involving substantial 
functional, locational, or capacity changes);
    (6) National planning and research projects funded under 49 U.S.C. 
5314; and
    (7) Project management oversight projects funded under 49 U.S.C. 
5327.
    (d) The TIP shall contain all regionally significant projects 
requiring an action by the FHWA or the FTA whether or not the projects 
are to be funded under title 23 U.S.C. Chapters 1 and 2 or title 49 
U.S.C. Chapter 53 (e.g., addition of an interchange to the Interstate 
System with State, local, and/or private funds and congressionally 
designated projects not funded under 23 U.S.C. or 49 U.S.C. Chapter 53). 
For public information and conformity purposes, the TIP shall include 
all regionally significant projects proposed to be funded with Federal 
funds other than

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those administered by the FHWA or the FTA, as well as all regionally 
significant projects to be funded with non-Federal funds.
    (e) The TIP shall include, for each project or phase (e.g., 
preliminary engineering, environment/NEPA, right-of-way, design, or 
construction), the following:
    (1) Sufficient descriptive material (i.e., type of work, termini, 
and length) to identify the project or phase;
    (2) Estimated total project cost, which may extend beyond the four 
years of the TIP;
    (3) The amount of Federal funds proposed to be obligated during each 
program year for the project or phase (for the first year, this includes 
the proposed category of Federal funds and source(s) of non-Federal 
funds. For the second, third, and fourth years, this includes the likely 
category or possible categories of Federal funds and sources of non-
Federal funds);
    (4) Identification of the agencies responsible for carrying out the 
project or phase;
    (5) In nonattainment and maintenance areas, identification of those 
projects which are identified as TCMs in the applicable SIP;
    (6) In nonattainment and maintenance areas, included projects shall 
be specified in sufficient detail (design concept and scope) for air 
quality analysis in accordance with the EPA transportation conformity 
regulation (40 CFR part 93); and
    (7) In areas with Americans with Disabilities Act required 
paratransit and key station plans, identification of those projects that 
will implement these plans.
    (f) Projects that are not considered to be of appropriate scale for 
individual identification in a given program year may be grouped by 
function, work type, and/or geographic area using the applicable 
classifications under 23 CFR 771.117(c) and (d) and/or 40 CFR part 93. 
In nonattainment and maintenance areas, project classifications must be 
consistent with the ``exempt project'' classifications contained in the 
EPA transportation conformity regulation (40 CFR part 93). In addition, 
projects proposed for funding under title 23 U.S.C. Chapter 2 that are 
not regionally significant may be grouped in one line item or identified 
individually in the TIP.
    (g) Each project or project phase included in the TIP shall be 
consistent with the approved metropolitan transportation plan.
    (h) The TIP shall include a financial plan that demonstrates how the 
approved TIP can be implemented, indicates resources from public and 
private sources that are reasonably expected to be made available to 
carry out the TIP, and recommends any additional financing strategies 
for needed projects and programs. In developing the TIP, the MPO, 
State(s), and public transportation operator(s) shall cooperatively 
develop estimates of funds that are reasonably expected to be available 
to support TIP implementation, in accordance with Sec. 450.314(a). Only 
projects for which construction or operating funds can reasonably be 
expected to be available may be included. In the case of new funding 
sources, strategies for ensuring their availability shall be identified. 
In developing the financial plan, the MPO shall take into account all 
projects and strategies funded under title 23 U.S.C., title 49 U.S.C. 
Chapter 53 and other Federal funds; and regionally significant projects 
that are not federally funded. For purposes of transportation operations 
and maintenance, the financial plan shall contain system-level estimates 
of costs and revenue sources that are reasonably expected to be 
available to adequately operate and maintain Federal-aid highways (as 
defined by 23 U.S.C. 101(a)(5)) and public transportation (as defined by 
title 49 U.S.C. Chapter 53). In addition, for illustrative purposes, the 
financial plan may (but is not required to) include additional projects 
that would be included in the TIP if reasonable additional resources 
beyond those identified in the financial plan were to become available. 
Starting December 11, 2007, revenue and cost estimates for the TIP must 
use an inflation rate(s) to reflect ``year of expenditure dollars,'' 
based on reasonable financial principles and information, developed 
cooperatively by the MPO, State(s), and public transportation 
operator(s).
    (i) The TIP shall include a project, or a phase of a project, only 
if full funding

[[Page 119]]

can reasonably be anticipated to be available for the project within the 
time period contemplated for completion of the project. In nonattainment 
and maintenance areas, projects included in the first two years of the 
TIP shall be limited to those for which funds are available or 
committed. For the TIP, financial constraint shall be demonstrated and 
maintained by year and shall include sufficient financial information to 
demonstrate which projects are to be implemented using current and/or 
reasonably available revenues, while federally supported facilities are 
being adequately operated and maintained. In the case of proposed 
funding sources, strategies for ensuring their availability shall be 
identified in the financial plan consistent with paragraph (h) of this 
section. In nonattainment and maintenance areas, the TIP shall give 
priority to eligible TCMs identified in the approved SIP in accordance 
with the EPA transportation conformity regulation (40 CFR part 93) and 
shall provide for their timely implementation.
    (j) Procedures or agreements that distribute suballocated Surface 
Transportation Program funds or funds under 49 U.S.C. 5307 to individual 
jurisdictions or modes within the MPA by pre-determined percentages or 
formulas are inconsistent with the legislative provisions that require 
the MPO, in cooperation with the State and the public transportation 
operator, to develop a prioritized and financially constrained TIP and 
shall not be used unless they can be clearly shown to be based on 
considerations required to be addressed as part of the metropolitan 
transportation planning process.
    (k) For the purpose of including projects funded under 49 U.S.C. 
5309 in a TIP, the following approach shall be followed:
    (1) The total Federal share of projects included in the first year 
of the TIP shall not exceed levels of funding committed to the MPA; and
    (2) The total Federal share of projects included in the second, 
third, fourth, and/or subsequent years of the TIP may not exceed levels 
of funding committed, or reasonably expected to be available, to the 
MPA.
    (l) As a management tool for monitoring progress in implementing the 
transportation plan, the TIP should:
    (1) Identify the criteria and process for prioritizing 
implementation of transportation plan elements (including multimodal 
trade-offs) for inclusion in the TIP and any changes in priorities from 
previous TIPs;
    (2) List major projects from the previous TIP that were implemented 
and identify any significant delays in the planned implementation of 
major projects; and
    (3) In nonattainment and maintenance areas, describe the progress in 
implementing any required TCMs, in accordance with 40 CFR part 93.
    (m) During a conformity lapse, MPOs may prepare an interim TIP as a 
basis for advancing projects that are eligible to proceed under a 
conformity lapse. An interim TIP consisting of eligible projects from, 
or consistent with, the most recent conforming metropolitan 
transportation plan and TIP may proceed immediately without revisiting 
the requirements of this section, subject to interagency consultation 
defined in 40 CFR part 93. An interim TIP containing eligible projects 
that are not from, or consistent with, the most recent conforming 
transportation plan and TIP must meet all the requirements of this 
section.
    (n) Projects in any of the first four years of the TIP may be 
advanced in place of another project in the first four years of the TIP, 
subject to the project selection requirements of Sec. 450.330. In 
addition, the TIP may be revised at any time under procedures agreed to 
by the State, MPO(s), and public transportation operator(s) consistent 
with the TIP development procedures established in this section, as well 
as the procedures for the MPO participation plan (see Sec. 450.316(a)) 
and FHWA/FTA actions on the TIP (see Sec. 450.328).
    (o) In cases that the FHWA and the FTA find a TIP to be fiscally 
constrained and a revenue source is subsequently removed or 
substantially reduced (i.e., by legislative or administrative actions), 
the FHWA and the FTA will not withdraw the original determination of 
fiscal constraint. However, in such cases, the FHWA and the

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FTA will not act on an updated or amended TIP that does not reflect the 
changed revenue situation.

[72 FR 7261, Feb. 14, 2007; 72 FR 11089, Mar. 12, 2007]



Sec. 450.326  TIP revisions and relationship to the STIP.

    (a) An MPO may revise the TIP at any time under procedures agreed to 
by the cooperating parties consistent with the procedures established in 
this part for its development and approval. In nonattainment or 
maintenance areas for transportation-related pollutants, if a TIP 
amendment involves non-exempt projects (per 40 CFR part 93), or is 
replaced with an updated TIP, the MPO and the FHWA and the FTA must make 
a new conformity determination. In all areas, changes that affect fiscal 
constraint must take place by amendment of the TIP. Public participation 
procedures consistent with Sec. 450.316(a) shall be utilized in 
revising the TIP, except that these procedures are not required for 
administrative modifications.
    (b) After approval by the MPO and the Governor, the TIP shall be 
included without change, directly or by reference, in the STIP required 
under 23 U.S.C. 135. In nonattainment and maintenance areas, a 
conformity finding on the TIP must be made by the FHWA and the FTA 
before it is included in the STIP. A copy of the approved TIP shall be 
provided to the FHWA and the FTA.
    (c) The State shall notify the MPO and Federal land management 
agencies when a TIP including projects under the jurisdiction of these 
agencies has been included in the STIP.



Sec. 450.328  TIP action by the FHWA and the FTA.

    (a) The FHWA and the FTA shall jointly find that each metropolitan 
TIP is consistent with the metropolitan transportation plan produced by 
the continuing and comprehensive transportation process carried on 
cooperatively by the MPO(s), the State(s), and the public transportation 
operator(s) in accordance with 23 U.S.C. 134 and 49 U.S.C. 5303. This 
finding shall be based on the self-certification statement submitted by 
the State and MPO under Sec. 450.334, a review of the metropolitan 
transportation plan by the FHWA and the FTA, and upon other reviews as 
deemed necessary by the FHWA and the FTA.
    (b) In nonattainment and maintenance areas, the MPO, as well as the 
FHWA and the FTA, shall determine conformity of any updated or amended 
TIP, in accordance with 40 CFR part 93. After the FHWA and the FTA issue 
a conformity determination on the TIP, the TIP shall be incorporated, 
without change, into the STIP, directly or by reference.
    (c) If the metropolitan transportation plan has not been updated in 
accordance with the cycles defined in Sec. 450.322(c), projects may 
only be advanced from a TIP that was approved and found to conform (in 
nonattainment and maintenance areas) prior to expiration of the 
metropolitan transportation plan and meets the TIP update requirements 
of Sec. 450.324(a). Until the MPO approves (in attainment areas) or the 
FHWA/FTA issues a conformity determination on (in nonattainment and 
maintenance areas) the updated metropolitan transportation plan, the TIP 
may not be amended.
    (d) In the case of extenuating circumstances, the FHWA and the FTA 
will consider and take appropriate action on requests to extend the STIP 
approval period for all or part of the TIP in accordance with Sec. 
450.218(c).
    (e) If an illustrative project is included in the TIP, no Federal 
action may be taken on that project by the FHWA and the FTA until it is 
formally included in the financially constrained and conforming 
metropolitan transportation plan and TIP.
    (f) Where necessary in order to maintain or establish operations, 
the FHWA and the FTA may approve highway and transit operating 
assistance for specific projects or programs, even though the projects 
or programs may not be included in an approved TIP.



Sec. 450.330  Project selection from the TIP.

    (a) Once a TIP that meets the requirements of 23 U.S.C. 134(j), 49 
U.S.C. 5303(j), and Sec. 450.324 has been developed and approved, the 
first year of the TIP shall constitute an ``agreed to'' list of projects 
for project selection purposes and no further project selection action

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is required for the implementing agency to proceed with projects, except 
where the appropriated Federal funds available to the metropolitan 
planning area are significantly less than the authorized amounts or 
where there are significant shifting of projects between years. In this 
case, a revised ``agreed to'' list of projects shall be jointly 
developed by the MPO, the State, and the public transportation 
operator(s) if requested by the MPO, the State, or the public 
transportation operator(s). If the State or public transportation 
operator(s) wishes to proceed with a project in the second, third, or 
fourth year of the TIP, the specific project selection procedures stated 
in paragraphs (b) and (c) of this section must be used unless the MPO, 
the State, and the public transportation operator(s) jointly develop 
expedited project selection procedures to provide for the advancement of 
projects from the second, third, or fourth years of the TIP.
    (b) In metropolitan areas not designated as TMAs, projects to be 
implemented using title 23 U.S.C. funds (other than Federal Lands 
Highway program projects) or funds under title 49 U.S.C. Chapter 53, 
shall be selected by the State and/or the public transportation 
operator(s), in cooperation with the MPO from the approved metropolitan 
TIP. Federal Lands Highway program projects shall be selected in 
accordance with procedures developed pursuant to 23 U.S.C. 204.
    (c) In areas designated as TMAs, all 23 U.S.C. and 49 U.S.C. Chapter 
53 funded projects (excluding projects on the National Highway System 
(NHS) and projects funded under the Bridge, Interstate Maintenance, and 
Federal Lands Highway programs) shall be selected by the MPO in 
consultation with the State and public transportation operator(s) from 
the approved TIP and in accordance with the priorities in the approved 
TIP. Projects on the NHS and projects funded under the Bridge and 
Interstate Maintenance programs shall be selected by the State in 
cooperation with the MPO, from the approved TIP. Federal Lands Highway 
program projects shall be selected in accordance with procedures 
developed pursuant to 23 U.S.C. 204.
    (d) Except as provided in Sec. 450.324(c) and Sec. 450.328(f), 
projects not included in the federally approved STIP shall not be 
eligible for funding with funds under title 23 U.S.C. or 49 U.S.C. 
Chapter 53.
    (e) In nonattainment and maintenance areas, priority shall be given 
to the timely implementation of TCMs contained in the applicable SIP in 
accordance with the EPA transportation conformity regulations (40 CFR 
part 93).



Sec. 450.332  Annual listing of obligated projects.

    (a) In metropolitan planning areas, on an annual basis, no later 
than 90 calendar days following the end of the program year, the State, 
public transportation operator(s), and the MPO shall cooperatively 
develop a listing of projects (including investments in pedestrian 
walkways and bicycle transportation facilities) for which funds under 23 
U.S.C. or 49 U.S.C. Chapter 53 were obligated in the preceding program 
year.
    (b) The listing shall be prepared in accordance with Sec. 
450.314(a) and shall include all federally funded projects authorized or 
revised to increase obligations in the preceding program year, and shall 
at a minimum include the TIP information under Sec. 450.324(e)(1) and 
(4) and identify, for each project, the amount of Federal funds 
requested in the TIP, the Federal funding that was obligated during the 
preceding year, and the Federal funding remaining and available for 
subsequent years.
    (c) The listing shall be published or otherwise made available in 
accordance with the MPO's public participation criteria for the TIP.



Sec. 450.334  Self-certifications and Federal certifications.

    (a) For all MPAs, concurrent with the submittal of the entire 
proposed TIP to the FHWA and the FTA as part of the STIP approval, the 
State and the MPO shall certify at least every four years that the 
metropolitan transportation planning process is being carried out in 
accordance with all applicable requirements including:
    (1) 23 U.S.C. 134, 49 U.S.C. 5303, and this subpart;

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    (2) In nonattainment and maintenance areas, sections 174 and 176 (c) 
and (d) of the Clean Air Act, as amended (42 U.S.C. 7504, 7506 (c) and 
(d)) and 40 CFR part 93;
    (3) Title VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 
2000d-1) and 49 CFR part 21;
    (4) 49 U.S.C. 5332, prohibiting discrimination on the basis of race, 
color, creed, national origin, sex, or age in employment or business 
opportunity;
    (5) Section 1101(b) of the SAFETEA-LU (Pub. L. 109-59) and 49 CFR 
part 26 regarding the involvement of disadvantaged business enterprises 
in USDOT funded projects;
    (6) 23 CFR part 230, regarding the implementation of an equal 
employment opportunity program on Federal and Federal-aid highway 
construction contracts;
    (7) The provisions of the Americans with Disabilities Act of 1990 
(42 U.S.C. 12101 et seq.) and 49 CFR parts 27, 37, and 38;
    (8) The Older Americans Act, as amended (42 U.S.C. 6101), 
prohibiting discrimination on the basis of age in programs or activities 
receiving Federal financial assistance;
    (9) Section 324 of title 23 U.S.C. regarding the prohibition of 
discrimination based on gender; and
    (10) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
and 49 CFR part 27 regarding discrimination against individuals with 
disabilities.
    (b) In TMAs, the FHWA and the FTA jointly shall review and evaluate 
the transportation planning process for each TMA no less than once every 
four years to determine if the process meets the requirements of 
applicable provisions of Federal law and this subpart.
    (1) After review and evaluation of the TMA planning process, the 
FHWA and FTA shall take one of the following actions:
    (i) If the process meets the requirements of this part and a TIP has 
been approved by the MPO and the Governor, jointly certify the 
transportation planning process;
    (ii) If the process substantially meets the requirements of this 
part and a TIP has been approved by the MPO and the Governor, jointly 
certify the transportation planning process subject to certain specified 
corrective actions being taken; or
    (iii) If the process does not meet the requirements of this part, 
jointly certify the planning process as the basis for approval of only 
those categories of programs or projects that the FHWA and the FTA 
jointly determine, subject to certain specified corrective actions being 
taken.
    (2) If, upon the review and evaluation conducted under paragraph 
(b)(1)(iii) of this section, the FHWA and the FTA do not certify the 
transportation planning process in a TMA, the Secretary may withhold up 
to 20 percent of the funds attributable to the metropolitan planning 
area of the MPO for projects funded under title 23 U.S.C. and title 49 
U.S.C. Chapter 53 in addition to corrective actions and funding 
restrictions. The withheld funds shall be restored to the MPA when the 
metropolitan transportation planning process is certified by the FHWA 
and FTA, unless the funds have lapsed.
    (3) A certification of the TMA planning process will remain in 
effect for four years unless a new certification determination is made 
sooner by the FHWA and the FTA or a shorter term is specified in the 
certification report.
    (4) In conducting a certification review, the FHWA and the FTA shall 
provide opportunities for public involvement within the metropolitan 
planning area under review. The FHWA and the FTA shall consider the 
public input received in arriving at a decision on a certification 
action.
    (5) The MPO(s), the State(s), and public transportation operator(s) 
shall be notified of the actions taken under paragraphs (b)(1) and 
(b)(2) of this section. The FHWA and the FTA will update the 
certification status of the TMA when evidence of satisfactory completion 
of a corrective action(s) is provided to the FHWA and the FTA.



Sec. 450.336  Applicability of NEPA to metropolitan transportation plans and programs.

    Any decision by the Secretary concerning a metropolitan 
transportation plan or TIP developed through the processes provided for 
in 23 U.S.C. 134, 49 U.S.C. 5303, and this subpart shall

[[Page 123]]

not be considered to be a Federal action subject to review under NEPA.



Sec. 450.338  Phase-in of new requirements.

    (a) Metropolitan transportation plans and TIPs adopted or approved 
prior to July 1, 2007 may be developed using the TEA-21 requirements or 
the provisions and requirements of this part.
    (b) For metropolitan transportation plans and TIPs that are 
developed under TEA-21 requirements prior to July 1, 2007, the FHWA/FTA 
action (i.e., conformity determinations and STIP approvals) must be 
completed no later than June 30, 2007. For metropolitan transportation 
plans in attainment areas that are developed under TEA-21 requirements 
prior to July 1, 2007, the MPO adoption action must be completed no 
later than June 30, 2007. If these actions are completed on or after 
July 1, 2007, the provisions and requirements of this part shall take 
effect, regardless of when the metropolitan transportation plan or TIP 
were developed.
    (c) On and after July 1, 2007, the FHWA and the FTA will take action 
on a new TIP developed under the provisions of this part, even if the 
MPO has not yet adopted a new metropolitan transportation plan under the 
provisions of this part, as long as the underlying transportation 
planning process is consistent with the requirements in the SAFETEA-LU.
    (d) The applicable action (see paragraph (b) of this section) on any 
amendments or updates to metropolitan transportation plans and TIPs on 
or after July 1, 2007, shall be based on the provisions and requirements 
of this part. However, administrative modifications may be made to the 
metropolitan transportation plan or TIP on or after July 1, 2007 in the 
absence of meeting the provisions and requirements of this part.
    (e) For new TMAs, the congestion management process described in 
Sec. 450.320 shall be implemented within 18 months of the designation 
of a new TMA.



  Sec. Appendix A to Part 450--Linking the Transportation Planning and 
                             NEPA Processes

                        Background and Overview:

    This Appendix provides additional information to explain the linkage 
between the transportation planning and project development/National 
Environmental Policy Act (NEPA) processes. It is intended to be non-
binding and should not be construed as a rule of general applicability.
    For 40 years, the Congress has directed that federally-funded 
highway and transit projects must flow from metropolitan and statewide 
transportation planning processes (pursuant to 23 U.S.C. 134-135 and 49 
U.S.C. 5303-5306). Over the years, the Congress has refined and 
strengthened the transportation planning process as the foundation for 
project decisions, emphasizing public involvement, consideration of 
environmental and other factors, and a Federal role that oversees the 
transportation planning process but does not second-guess the content of 
transportation plans and programs.
    Despite this statutory emphasis on transportation planning, the 
environmental analyses produced to meet the requirements of the NEPA of 
1969 (42 U.S.C. 4231 et seq.) have often been conducted de novo, 
disconnected from the analyses used to develop long-range transportation 
plans, statewide and metropolitan Transportation Improvement Programs 
(STIPs/TIPs), or planning-level corridor/subarea/feasibility studies. 
When the NEPA and transportation planning processes are not well 
coordinated, the NEPA process may lead to the development of information 
that is more appropriately developed in the planning process, resulting 
in duplication of work and delays in transportation improvements.
    The purpose of this Appendix is to change this culture, by 
supporting congressional intent that statewide and metropolitan 
transportation planning should be the foundation for highway and transit 
project decisions. This Appendix was crafted to recognize that 
transportation planning processes vary across the country. This document 
provides details on how information, analysis, and products from 
transportation planning can be incorporated into and relied upon in NEPA 
documents under existing laws, regardless of when the Notice of Intent 
has been published. This Appendix presents environmental review as a 
continuum of sequential study, refinement, and expansion performed in 
transportation planning and during project development/NEPA, with 
information developed and conclusions drawn in early stages utilized in 
subsequent (and more detailed) review stages.
    The information below is intended for use by State departments of 
transportation

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(State DOTs), metropolitan planning organizations (MPOs), and public 
transportation operators to clarify the circumstances under which 
transportation planning level choices and analyses can be adopted or 
incorporated into the process required by NEPA. Additionally, the FHWA 
and the FTA will work with Federal environmental, regulatory, and 
resource agencies to incorporate the principles of this Appendix in 
their day-to-day NEPA policies and procedures related to their 
involvement in highway and transit projects.
    This Appendix does not extend NEPA requirements to transportation 
plans and programs. The Transportation Efficiency Act for the 21st 
Century (TEA-21) and the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) specifically 
exempted transportation plans and programs from NEPA review. Therefore, 
initiating the NEPA process as part of, or concurrently with, a 
transportation planning study does not subject transportation plans and 
programs to NEPA.
    Implementation of this Appendix by States, MPOs, and public 
transportation operators is voluntary. The degree to which studies, 
analyses, or conclusions from the transportation planning process can be 
incorporated into the project development/NEPA processes will depend 
upon how well they meet certain standards established by NEPA 
regulations and guidance. While some transportation planning processes 
already meet these standards, others will need some modification.
    The remainder of this Appendix document utilizes a ``Question and 
Answer'' format, organized into three primary categories (``Procedural 
Issues,'' ``Substantive Issues,'' and ``Administrative Issues'').

                          I. Procedural Issues:

    1. In what format should the transportation planning information be 
included?
    To be included in the NEPA process, work from the transportation 
planning process must be documented in a form that can be appended to 
the NEPA document or incorporated by reference. Documents may be 
incorporated by reference if they are readily available so as to not 
impede agency or public review of the action. Any document incorporated 
by reference must be ``reasonably available for inspection by 
potentially interested persons within the time allowed for comment.'' 
Incorporated materials must be cited in the NEPA document and their 
contents briefly described, so that the reader understands why the 
document is cited and knows where to look for further information. To 
the extent possible, the documentation should be in a form such as 
official actions by the MPO, State DOT, or public transportation 
operator and/or correspondence within and among the organizations 
involved in the transportation planning process.
    2. What is a reasonable level of detail for a planning product that 
is intended to be used in a NEPA document? How does this level of detail 
compare to what is considered a full NEPA analysis?
    For purposes of transportation planning alone, a planning-level 
analysis does not need to rise to the level of detail required in the 
NEPA process. Rather, it needs to be accurate and up-to-date, and should 
adequately support recommended improvements in the statewide or 
metropolitan long-range transportation plan. The SAFETEA-LU requires 
transportation planning processes to focus on setting a context and 
following acceptable procedures. For example, the SAFETEA-LU requires a 
``discussion of the types of potential environmental mitigation 
activities'' and potential areas for their implementation, rather than 
details on specific strategies. The SAFETEA-LU also emphasizes 
consultation with Federal, State, and Tribal land management, wildlife, 
and regulatory agencies.
    However, the Environmental Assessment (EA) or Environmental Impact 
Statement (EIS) ultimately will be judged by the standards applicable 
under the NEPA regulations and guidance from the Council on 
Environmental Quality (CEQ). To the extent the information incorporated 
from the transportation planning process, standing alone, does not 
contain all of the information or analysis required by NEPA, then it 
will need to be supplemented by other information contained in the EIS 
or EA that would, in conjunction with the information from the plan, 
collectively meet the requirements of NEPA. The intent is not to require 
NEPA studies in the transportation planning process. As an option, the 
NEPA analyses prepared for project development can be integrated with 
transportation planning studies (see the response to Question 9 for 
additional information).
    3. What type and extent of involvement from Federal, Tribal, State, 
and local environmental, regulatory, and resource agencies is needed in 
the transportation planning process in order for planning-level 
decisions to be more readily accepted in the NEPA process?
    Sections 3005, 3006, and 6001 of the SAFETEA-LU established formal 
consultation requirements for MPOs and State DOTs to employ with 
environmental, regulatory, and resource agencies in the development of 
long-range transportation plans. For example, metropolitan 
transportation plans now ``shall include a discussion of the types of 
potential environmental mitigation activities and potential areas to 
carry out these activities, including activities that may have the 
greatest potential to restore and maintain the environmental functions 
affected by the

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[transportation] plan,'' and that these planning-level discussions 
``shall be developed in consultation with Federal, State, and Tribal 
land management, wildlife, and regulatory agencies.'' In addition, MPOs 
``shall consult, as appropriate, with State and local agencies 
responsible for land use management, natural resources, environmental 
protection, conservation, and historic preservation concerning the 
development of a long-range transportation plan,'' and that this 
consultation ``shall involve, as appropriate, comparison of 
transportation plans with State conservation plans or maps, if 
available, or comparison of transportation plans to inventories of 
natural or historic resources, if available.'' Similar SAFETEA-LU 
language addresses the development of the long-range statewide 
transportation plan, with the addition of Tribal conservation plans or 
maps to this planning-level ``comparison.''
    In addition, section 6002 of the SAFETEA-LU established several 
mechanisms for increased efficiency in environmental reviews for project 
decision-making. For example, the term ``lead agency'' collectively 
means the U. S. Department of Transportation and a State or local 
governmental entity serving as a joint lead agency for the NEPA process. 
In addition, the lead agency is responsible for inviting and designating 
``participating agencies'' (i.e., other Federal or non-Federal agencies 
that may have an interest in the proposed project). Any Federal agency 
that is invited by the lead agency to participate in the environmental 
review process for a project shall be designated as a participating 
agency by the lead agency unless the invited agency informs the lead 
agency, in writing, by the deadline specified in the invitation that the 
invited agency:
    (a) Has no jurisdiction or authority with respect to the project; 
(b) has no expertise or information relevant to the project; and (c) 
does not intend to submit comments on the project.
    Past successful examples of using transportation planning products 
in NEPA analysis are based on early and continuous involvement of 
environmental, regulatory, and resource agencies. Without this early 
coordination, environmental, regulatory, and resource agencies are more 
likely to expect decisions made or analyses conducted in the 
transportation planning process to be revisited during the NEPA process. 
Early participation in transportation planning provides environmental, 
regulatory, and resource agencies better insight into the needs and 
objectives of the locality. Additionally, early participation provides 
an important opportunity for environmental, regulatory, and resource 
agency concerns to be identified and addressed early in the process, 
such as those related to permit applications. Moreover, Federal, Tribal, 
State, and local environmental, regulatory, and resource agencies are 
able to share data on particular resources, which can play a critical 
role in determining the feasibility of a transportation solution with 
respect to environmental impacts. The use of other agency planning 
outputs can result in a transportation project that could support 
multiple goals (transportation, environmental, and community). Further, 
planning decisions by these other agencies may have impacts on long-
range transportation plans and/or the STIP/TIP, thereby providing 
important input to the transportation planning process and advancing 
integrated decision-making.
    4. What is the procedure for using decisions or analyses from the 
transportation planning process?
    The lead agencies jointly decide, and must agree, on what processes 
and consultation techniques are used to determine the transportation 
planning products that will be incorporated into the NEPA process. At a 
minimum, a robust scoping/early coordination process (which explains to 
Federal and State environmental, regulatory, and resource agencies and 
the public the information and/or analyses utilized to develop the 
planning products, how the purpose and need was developed and refined, 
and how the design concept and scope were determined) should play a 
critical role in leading to informed decisions by the lead agencies on 
the suitability of the transportation planning information, analyses, 
documents, and decisions for use in the NEPA process. As part of a 
rigorous scoping/early coordination process, the FHWA and the FTA should 
ensure that the transportation planning results are appropriately 
documented, shared, and used.
    5. To what extent can the FHWA/FTA provide up-front assurance that 
decisions and additional investments made in the transportation planning 
process will allow planning-level decisions and analyses to be used in 
the NEPA process?
    There are no guarantees. However, the potential is greatly improved 
for transportation planning processes that address the ``3-C'' planning 
principles (comprehensive, cooperative, and continuous); incorporate the 
intent of NEPA through the consideration of natural, physical, and 
social effects; involve environmental, regulatory, and resource 
agencies; thoroughly document the transportation planning process 
information, analysis, and decision; and vet the planning results 
through the applicable public involvement processes.
    6. What considerations will the FHWA/FTA take into account in their 
review of transportation planning products for acceptance in project 
development/NEPA?
    The FHWA and the FTA will give deference to decisions resulting from 
the transportation planning process if the FHWA and FTA determine that 
the planning process is

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consistent with the ``3-C'' planning principles and when the planning 
study process, alternatives considered, and resulting decisions have a 
rational basis that is thoroughly documented and vetted through the 
applicable public involvement processes. Moreover, any applicable 
program-specific requirements (e.g., those of the Congestion Mitigation 
and Air Quality Improvement Program or the FTA's Capital Investment 
Grant program) also must be met.
    The NEPA requires that the FHWA and the FTA be able to stand behind 
the overall soundness and credibility of analyses conducted and 
decisions made during the transportation planning process if they are 
incorporated into a NEPA document. For example, if systems-level or 
other broad objectives or choices from the transportation plan are 
incorporated into the purpose and need statement for a NEPA document, 
the FHWA and the FTA should not revisit whether these are the best 
objectives or choices among other options. Rather, the FHWA and the FTA 
review would include making sure that objectives or choices derived from 
the transportation plan were: Based on transportation planning factors 
established by Federal law; reflect a credible and articulated planning 
rationale; founded on reliable data; and developed through 
transportation planning processes meeting FHWA and FTA statutory and 
regulatory requirements. In addition, the basis for the goals and 
choices must be documented and included in the NEPA document. The FHWA/
FTA reviewers do not need to review whether assumptions or analytical 
methods used in the studies are the best available, but, instead, need 
to assure that such assumptions or analytical methods are reasonable, 
scientifically acceptable, and consistent with goals, objectives, and 
policies set forth in long-range transportation plans. This review would 
include determining whether: (a) Assumptions have a rational basis and 
are up-to-date and (b) data, analytical methods, and modeling techniques 
are reliable, defensible, reasonably current, and meet data quality 
requirements.

                         II. Substantive Issues

    General Issues To Be Considered:
    7. What should be considered in order to rely upon transportation 
planning studies in NEPA?
    The following questions should be answered prior to accepting 
studies conducted during the transportation planning process for use in 
NEPA. While not a ``checklist,'' these questions are intended to guide 
the practitioner's analysis of the planning products:
     How much time has passed since the planning 
studies and corresponding decisions were made?
     Were the future year policy assumptions used in 
the transportation planning process related to land use, economic 
development, transportation costs, and network expansion consistent with 
those to be used in the NEPA process?
     Is the information still relevant/valid?
     What changes have occurred in the area since the 
study was completed?
     Is the information in a format that can be 
appended to an environmental document or reformatted to do so?
     Are the analyses in a planning-level report or 
document based on data, analytical methods, and modeling techniques that 
are reliable, defensible, and consistent with those used in other 
regional transportation studies and project development activities?
     Were the FHWA and FTA, other agencies, and the 
public involved in the relevant planning analysis and the corresponding 
planning decisions?
     Were the planning products available to other 
agencies and the public during NEPA scoping?
     During NEPA scoping, was a clear connection 
between the decisions made in planning and those to be made during the 
project development stage explained to the public and others? What was 
the response?
     Are natural resource and land use plans being 
informed by transportation planning products, and vice versa?
    Purpose and Need:
    8. How can transportation planning be used to shape a project's 
purpose and need in the NEPA process?
    A sound transportation planning process is the primary source of the 
project purpose and need. Through transportation planning, State and 
local governments, with involvement of stakeholders and the public, 
establish a vision for the region's future transportation system, define 
transportation goals and objectives for realizing that vision, decide 
which needs to address, and determine the timeframe for addressing these 
issues. The transportation planning process also provides a potential 
forum to define a project's purpose and need by framing the scope of the 
problem to be addressed by a proposed project. This scope may be further 
refined during the transportation planning process as more information 
about the transportation need is collected and consultation with the 
public and other stakeholders clarifies other issues and goals for the 
region.
    23 U.S.C. 139(f), as amended by the SAFETEA-LU Section 6002, 
provides additional focus regarding the definition of the purpose and 
need and objectives. For example, the lead agency, as early as 
practicable during the environmental review process, shall provide an 
opportunity for involvement by participating agencies and the public in 
defining the purpose and need for a project.

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The statement of purpose and need shall include a clear statement of the 
objectives that the proposed action is intended to achieve, which may 
include: (a) Achieving a transportation objective identified in an 
applicable statewide or metropolitan transportation plan; (b) supporting 
land use, economic development, or growth objectives established in 
applicable Federal, State, local, or Tribal plans; and (c) serving 
national defense, national security, or other national objectives, as 
established in Federal laws, plans, or policies.
    The transportation planning process can be utilized to develop the 
purpose and need in the following ways:
    (a) Goals and objectives from the transportation planning process 
may be part of the project's purpose and need statement;
    (b) A general travel corridor or general mode or modes (e.g., 
highway, transit, or a highway/transit combination) resulting from 
planning analyses may be part of the project's purpose and need 
statement;
    (c) If the financial plan for a metropolitan transportation plan 
indicates that funding for a specific project will require special 
funding sources (e.g., tolls or public-private financing), such 
information may be included in the purpose and need statement; or
    (d) The results of analyses from management systems (e.g., 
congestion, pavement, bridge, and/or safety) may shape the purpose and 
need statement.
    The use of these planning-level goals and choices must be 
appropriately explained during NEPA scoping and in the NEPA document.
    Consistent with NEPA, the purpose and need statement should be a 
statement of a transportation problem, not a specific solution. However, 
the purpose and need statement should be specific enough to generate 
alternatives that may potentially yield real solutions to the problem 
at-hand. A purpose and need statement that yields only one alternative 
may indicate a purpose and need that is too narrowly defined.
    Short of a fully integrated transportation decisionmaking process, 
many State DOTs develop information for their purpose and need 
statements when implementing interagency NEPA/Section 404 process merger 
agreements. These agreements may need to be expanded to include 
commitments to share and utilize transportation planning products when 
developing a project's purpose and need.
    9. Under what conditions can the NEPA process be initiated in 
conjunction with transportation planning studies?
    The NEPA process may be initiated in conjunction with transportation 
planning studies in a number of ways. A common method is the ``tiered 
EIS,'' in which the first-tier EIS evaluates general travel corridors, 
modes, and/or packages of projects at a planning level of detail, 
leading to the refinement of purpose and need and, ideally, selection of 
the design concept and scope for a project or series of projects. 
Subsequently, second-tier NEPA review(s) of the resulting projects would 
be performed in the usual way. The first-tier EIS uses the NEPA process 
as a tool to involve environmental, regulatory, and resource agencies 
and the public in the planning decisions, as well as to ensure the 
appropriate consideration of environmental factors in these planning 
decisions.
    Corridor or subarea analyses/studies are another option when the 
long-range transportation plan leaves open the possibility of multiple 
approaches to fulfill its goals and objectives. In such cases, the 
formal NEPA process could be initiated through publication of a NOI in 
conjunction with a corridor or subarea planning study. Similarly, some 
public transportation operators developing major capital projects 
perform the mandatory planning Alternatives Analysis required for 
funding under FTA's Capital Investment Grant program [49 U.S.C. 5309(d) 
and (e)] within the NEPA process and combine the planning Alternatives 
Analysis with the draft EIS.
    Alternatives:
    10. In the context of this Appendix, what is the meaning of the term 
``alternatives''?
    This Appendix uses the term ``alternatives'' as specified in the 
NEPA regulations (40 CFR 1502.14), where it is defined in its broadest 
sense to include everything from major modal alternatives and location 
alternatives to minor design changes that would mitigate adverse 
impacts. This Appendix does not use the term as it is used in many other 
contexts (e.g., ``prudent and feasible alternatives'' under Section 4(f) 
of the Department of Transportation Act, the ``Least Environmentally 
Damaging Practicable Alternative'' under the Clean Water Act, or the 
planning Alternatives Analysis in 49 U.S.C. 5309(d) and (e)).
    11. Under what circumstances can alternatives be eliminated from 
detailed consideration during the NEPA process based on information and 
analysis from the transportation planning process?
    There are two ways in which the transportation planning process can 
begin limiting the alternative solutions to be evaluated during the NEPA 
process: (a) Shaping the purpose and need for the project; or (b) 
evaluating alternatives during planning studies and eliminating some of 
the alternatives from detailed study in the NEPA process prior to its 
start. Each approach requires careful attention, and is summarized 
below.
    (a) Shaping the Purpose and Need for the Project: The transportation 
planning process should shape the purpose and need and,

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thereby, the range of reasonable alternatives. With proper documentation 
and public involvement, a purpose and need derived from the planning 
process can legitimately narrow the alternatives analyzed in the NEPA 
process. See the response to Question 8 for further discussion on how 
the planning process can shape the purpose and need used in the NEPA 
process.
    For example, the purpose and need may be shaped by the 
transportation planning process in a manner that consequently narrows 
the range of alternatives that must be considered in detail in the NEPA 
document when:
    (1) The transportation planning process has selected a general 
travel corridor as best addressing identified transportation problems 
and the rationale for the determination in the planning document is 
reflected in the purpose and need statement of the subsequent NEPA 
document;
    (2) The transportation planning process has selected a general mode 
(e.g., highway, transit, or a highway/transit combination) that 
accomplishes its goals and objectives, and these documented 
determinations are reflected in the purpose and need statement of the 
subsequent NEPA document; or
    (3) The transportation planning process determines that the project 
needs to be funded by tolls or other non-traditional funding sources in 
order for the long-range transportation plan to be fiscally constrained 
or identifies goals and objectives that can only be met by toll roads or 
other non-traditional funding sources, and that determination of those 
goals and objectives is reflected in the purpose and need statement of 
the subsequent NEPA document.
    (b) Evaluating and Eliminating Alternatives During the 
Transportation Planning Process: The evaluation and elimination of 
alternatives during the transportation planning process can be 
incorporated by reference into a NEPA document under certain 
circumstances. In these cases, the planning study becomes part of the 
NEPA process and provides a basis for screening out alternatives. As 
with any part of the NEPA process, the analysis of alternatives to be 
incorporated from the process must have a rational basis that has been 
thoroughly documented (including documentation of the necessary and 
appropriate vetting through the applicable public involvement 
processes). This record should be made available for public review 
during the NEPA scoping process.
    See responses to Questions 4, 5, 6, and 7 for additional elements to 
consider with respect to acceptance of planning products for NEPA 
documentation and the response to Question 12 on the information or 
analysis from the transportation planning process necessary for 
supporting the elimination of an alternative(s) from detailed 
consideration in the NEPA process.
    For instance, under FTA's Capital Investment Grant program, the 
alternatives considered in the NEPA process may be narrowed in those 
instances that the planning Alternatives Analysis required by 49 U.S.C. 
5309(e) is conducted as a planning study prior to the NEPA review. In 
fact, the FTA may be able to narrow the alternatives considered in 
detail in the NEPA document to the No-Build (No Action) alternative and 
the Locally Preferred Alternative. Alternatives must meet the following 
criteria if they are deemed sufficiently considered by a planning 
Alternatives Analysis under FTA's Capital Investment Grant program 
conducted prior to NEPA without a programmatic NEPA analysis and 
documentation:
     During the planning Alternatives Analysis, all of 
the reasonable alternatives under consideration must be fully evaluated 
in terms of their transportation impacts; capital and operating costs; 
social, economic, and environmental impacts; and technical 
considerations;
     There must be appropriate public involvement in 
the planning Alternatives Analysis;
     The appropriate Federal, State, and local 
environmental, regulatory, and resource agencies must be engaged in the 
planning Alternatives Analysis;
     The results of the planning Alternatives Analysis 
must be documented;
     The NEPA scoping participants must agree on the 
alternatives that will be considered in the NEPA review; and
     The subsequent NEPA document must include the 
evaluation of alternatives from the planning Alternatives Analysis.
    The above criteria apply specifically to FTA's Capital Investment 
Grant process. However, for other transportation projects, if the 
planning process has included the analysis and stakeholder involvement 
that would be undertaken in a first tier NEPA process, then the 
alternatives screening conducted in the transportation planning process 
may be incorporated by reference, described, and relied upon in the 
project-level NEPA document. At that point, the project-level NEPA 
analysis can focus on the remaining alternatives.
    12. What information or analysis from the transportation planning 
process is needed in an EA or EIS to support the elimination of an 
alternative(s) from detailed consideration?
    The section of the EA or EIS that discusses alternatives considered 
but eliminated from detailed consideration should:
    (a) Identify any alternatives eliminated during the transportation 
planning process (this could include broad categories of alternatives, 
as when a long-range transportation plan selects a general travel 
corridor based

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on a corridor study, thereby eliminating all alternatives along other 
alignments);
    (b) Briefly summarize the reasons for eliminating the alternative; 
and
    (c) Include a summary of the analysis process that supports the 
elimination of alternatives (the summary should reference the relevant 
sections or pages of the analysis or study) and incorporate it by 
reference or append it to the NEPA document.
    Any analyses or studies used to eliminate alternatives from detailed 
consideration should be made available to the public and participating 
agencies during the NEPA scoping process and should be reasonably 
available during comment periods.
    Alternatives passed over during the transportation planning process 
because they are infeasible or do not meet the NEPA ``purpose and need'' 
can be omitted from the detailed analysis of alternatives in the NEPA 
document, as long as the rationale for elimination is explained in the 
NEPA document. Alternatives that remain ``reasonable'' after the 
planning-level analysis must be addressed in the EIS, even when they are 
not the preferred alternative. When the proposed action evaluated in an 
EA involves unresolved conflicts concerning alternative uses of 
available resources, NEPA requires that appropriate alternatives be 
studied, developed, and described.
    Affected Environment and Environmental Consequences:
    13. What types of planning products provide analysis of the affected 
environment and environmental consequences that are useful in a project-
level NEPA analysis and document?
    The following planning products are valuable inputs to the 
discussion of the affected environment and environmental consequences 
(both its current state and future state in the absence of the proposed 
action) in the project-level NEPA analysis and document:
     Regional development and growth analyses;
     Local land use, growth management, or development 
plans; and
     Population and employment projections.
    The following are types of information, analysis, and other products 
from the transportation planning process that can be used in the 
discussion of the affected environment and environmental consequences in 
an EA or EIS:
    (a) Geographic information system (GIS) overlays showing the past, 
current, or predicted future conditions of the natural and built 
environments;
    (b) Environmental scans that identify environmental resources and 
environmentally sensitive areas;
    (c) Descriptions of airsheds and watersheds;
    (d) Demographic trends and forecasts;
    (e) Projections of future land use, natural resource conservation 
areas, and development; and
    (f) The outputs of natural resource planning efforts, such as 
wildlife conservation plans, watershed plans, special area management 
plans, and multiple species habitat conservation plans.
    However, in most cases, the assessment of the affected environment 
and environmental consequences conducted during the transportation 
planning process will not be detailed or current enough to meet NEPA 
standards and, thus, the inventory and evaluation of affected resources 
and the analysis of consequences of the alternatives will need to be 
supplemented with more refined analysis and possibly site-specific 
details during the NEPA process.
    14. What information from the transportation planning process is 
useful in describing a baseline for the NEPA analysis of indirect and 
cumulative impacts?
    Because the nature of the transportation planning process is to look 
broadly at future land use, development, population increases, and other 
growth factors, the planning analysis can provide the basis for the 
assessment of indirect and cumulative impacts required under NEPA. The 
consideration in the transportation planning process of development, 
growth, and consistency with local land use, growth management, or 
development plans, as well as population and employment projections, 
provides an overview of the multitude of factors in an area that are 
creating pressures not only on the transportation system, but on the 
natural ecosystem and important environmental and community resources. 
An analysis of all reasonably foreseeable actions in the area also 
should be a part of the transportation planning process. This planning-
level information should be captured and utilized in the analysis of 
indirect and cumulative impacts during the NEPA process.
    To be used in the analysis of indirect and cumulative impacts, such 
information should:
    (a) Be sufficiently detailed that differences in consequences of 
alternatives can be readily identified;
    (b) Be based on current data (e.g., data from the most recent 
Census) or be updated by additional information;
    (c) Be based on reasonable assumptions that are clearly stated; and/
or
    (d) Rely on analytical methods and modeling techniques that are 
reliable, defensible, and reasonably current.
    Environmental Mitigation:
    15. How can planning-level efforts best support advance mitigation, 
mitigation banking, and priorities for environmental mitigation 
investments?
    A lesson learned from efforts to establish mitigation banks and 
advance mitigation

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agreements and alternative mitigation options is the importance of 
beginning interagency discussions during the transportation planning 
process. Development pressures, habitat alteration, complicated real 
estate transactions, and competition for potential mitigation sites by 
public and private project proponents can encumber the already difficult 
task of mitigating for ``like'' value and function and reinforce the 
need to examine mitigation strategies as early as possible.
    Robust use of remote sensing, GIS, and decision support systems for 
evaluating conservation strategies are all contributing to the 
advancement of natural resource and environmental planning. The outputs 
from environmental planning can now better inform transportation 
planning processes, including the development of mitigation strategies, 
so that transportation and conservation goals can be optimally met. For 
example, long-range transportation plans can be screened to assess the 
effect of general travel corridors or density, on the viability of 
sensitive plant and animal species or habitats. This type of screening 
provides a basis for early collaboration among transportation and 
environmental staffs, the public, and regulatory agencies to explore 
areas where impacts must be avoided and identify areas for mitigation 
investments. This can lead to mitigation strategies that are both more 
economical and more effective from an environmental stewardship 
perspective than traditional project-specific mitigation measures.

                       III. Administrative Issues:

    16. Are Federal funds eligible to pay for these additional, or more 
in depth, environmental studies in transportation planning?
    Yes. For example, the following FHWA and FTA funds may be utilized 
for conducting environmental studies and analyses within transportation 
planning:
     FHWA planning and research funds, as defined 
under 23 CFR Part 420 (e.g., Metropolitan Planning (PL), Statewide 
Planning and Research (SPR), National Highway System (NHS), Surface 
Transportation Program (STP), and Equity Bonus); and
     FTA planning and research funds (49 U.S.C. 5303 
and 49 U.S.C. 5313(b)), urban formula funds (49 U.S.C. 5307), and (in 
limited circumstances) transit capital investment funds (49 U.S.C. 
5309).
    The eligible transportation planning-related uses of these funds may 
include: (a) Conducting feasibility or subarea/corridor needs studies 
and (b) developing system-wide environmental information/inventories 
(e.g., wetland banking inventories or standards to identify historically 
significant sites). Particularly in the case of PL and SPR funds, the 
proposed expenditure must be closely related to the development of 
transportation plans and programs under 23 U.S.C. 134-135 and 49 U.S.C. 
5303-5306.
    For FHWA funding programs, once a general travel corridor or 
specific project has progressed to a point in the preliminary 
engineering/NEPA phase that clearly extends beyond transportation 
planning, additional in-depth environmental studies must be funded 
through the program category for which the ultimate project qualifies 
(e.g., NHS, STP, Interstate Maintenance, and/or Bridge), rather than PL 
or SPR funds.
    Another source of funding is FHWA's Transportation Enhancement 
program, which may be used for activities such as: conducting 
archeological planning and research; developing inventories such as 
those for historic bridges and highways, and other surface 
transportation-related structures; conducting studies to determine the 
extent of water pollution due to highway runoff; and conducting studies 
to reduce vehicle-caused wildlife mortality while maintaining habitat 
connectivity.
    The FHWA and the FTA encourage State DOTs, MPOs, and public 
transportation operators to seek partners for some of these studies from 
environmental, regulatory, and resource agencies, non-government 
organizations, and other government and private sector entities with 
similar data needs, or environmental interests. In some cases, these 
partners may contribute data and expertise to the studies, as well as 
funding.
    17. What staffing or organizational arrangements may be helpful in 
allowing planning products to be accepted in the NEPA process?
    Certain organizational and staffing arrangements may support a more 
integrated approach to the planning/NEPA decision-making continuum. In 
many cases, planning organizations do not have environmental expertise 
on staff or readily accessible. Likewise, the review and regulatory 
responsibilities of many environmental, regulatory, and resource 
agencies make involvement in the transportation planning process a 
challenge for staff resources. These challenges may be partially met by 
improved use of the outputs of each agency's planning resources and by 
augmenting their capabilities through greater use of GIS and remote 
sensing technologies (see http://www.gis.fhwa.dot.gov/ for additional 
information on the use of GIS). Sharing databases and the planning 
products of local land use decision-makers and State and Federal 
environmental, regulatory, and resource agencies also provide 
efficiencies in acquiring and sharing the data and information needed 
for both transportation planning and NEPA work.
    Additional opportunities such as shared staff, training across 
disciplines, and (in some cases) reorganizing to eliminate structural 
divisions between planning and NEPA practitioners may also need to be 
considered

[[Page 131]]

in order to better integrate NEPA considerations into transportation 
planning studies. The answers to the following two questions also 
contain useful information on training and staffing opportunities.
    18. How have environmental, regulatory, and resource agency liaisons 
(Federally- and State DOT-funded positions) and partnership agreements 
been used to provide the expertise and interagency participation needed 
to enhance the consideration of environmental factors in the planning 
process?
    For several years, States have utilized Federal and State 
transportation funds to support focused and accelerated project review 
by a variety of local, State, Tribal, and Federal agencies. While 
Section 1309(e) of the TEA-21 and its successor in SAFETEA-LU section 
6002 speak specifically to transportation project streamlining, there 
are other authorities that have been used to fund positions, such as the 
Intergovernmental Cooperation Act (31 U.S.C. 6505). In addition, long-
term, on-call consultant contracts can provide backfill support for 
staff that are detailed to other parts of an agency for temporary 
assignments. At last count (as of 2003), 246 positions were being 
funded. Additional information on interagency funding agreements is 
available at: http://environment.fhwa.dot.gov/strmlng/igdocs/index.htm.
    Moreover, every State has advanced a variety of stewardship and 
streamlining initiatives that necessitate early involvement of 
environmental, regulatory, and resource agencies in the project 
development process. Such process improvements have: addressed the 
exchange of data to support avoidance and impact analysis; established 
formal and informal consultation and review schedules; advanced 
mitigation strategies; and resulted in a variety of programmatic 
reviews. Interagency agreements and workplans have evolved to describe 
performance objectives, as well as specific roles and responsibilities 
related to new streamlining initiatives. Some States have improved 
collaboration and efficiency by co-locating environmental, regulatory, 
and resource and transportation agency staff.
    19. What training opportunities are available to MPOs, State DOTs, 
public transportation operators and environmental, regulatory, and 
resource agencies to assist in their understanding of the transportation 
planning and NEPA processes?
    Both the FHWA and the FTA offer a variety of transportation 
planning, public involvement, and NEPA courses through the National 
Highway Institute and/or the National Transit Institute. Of particular 
note is the Linking Planning and NEPA Workshop, which provides a forum 
and facilitated group discussion among and between State DOT; MPO; 
Federal, Tribal, and State environmental, regulatory, and resource 
agencies; and FHWA/FTA representatives (at both the executive and 
program manager levels) to develop a State-specific action plan that 
will provide for strengthened linkages between the transportation 
planning and NEPA processes.
    Moreover, the U.S. Fish and Wildlife Service offers Green 
Infrastructure Workshops that are focused on integrating planning for 
natural resources (``green infrastructure'') with the development, 
economic, and other infrastructure needs of society (``gray 
infrastructure'').
    Robust planning and multi-issue environmental screening requires 
input from a wide variety of disciplines, including information 
technology; transportation planning; the NEPA process; and regulatory, 
permitting, and environmental specialty areas (e.g., noise, air quality, 
and biology). Senior managers at transportation and partner agencies can 
arrange a variety of individual training programs to support learning 
curves and skill development that contribute to a strengthened link of 
the transportation planning and NEPA processes. Formal and informal 
mentoring on an intra-agency basis can be arranged. Employee exchanges 
within and between agencies can be periodically scheduled, and persons 
involved with professional leadership programs can seek temporary 
assignments with partner agencies.

                IV. Additional Information on this Topic

    Valuable sources of information are FHWA's environment website 
(http://www.fhwa.dot.gov/environment/index.htm) and FTA's environmental 
streamlining website (http://www.environment.fta.dot.gov). Another 
source of information and case studies is NCHRP Report 8-38 
(Consideration of Environmental Factors in Transportation Systems 
Planning), which is available at http://www4.trb.org/trb/crp.nsf/
All+Projects/NCHRP+8-38. In addition, AASHTO's Center for Environmental 
Excellence website is continuously updated with news and links to 
information of interest to transportation and environmental 
professionals (www.transportation.environment.org).



PART 460_PUBLIC ROAD MILEAGE FOR APPORTIONMENT OF HIGHWAY SAFETY FUNDS--Table of Contents




Sec.
460.1 Purpose.
460.2 Definitions.
460.3 Procedures.

    Authority: 23 U.S.C. 315, 402(c); 49 CFR 1.48.

    Source: 40 FR 44322, Sept. 26, 1975, unless otherwise noted.

[[Page 132]]



Sec. 460.1  Purpose.

    The purpose of this part is to prescribe the policies and procedures 
followed in identifying and reporting public road mileage for 
utilization in the statutory formula for the apportionment of highway 
safety funds under 23 U.S.C. 402(c).



Sec. 460.2  Definitions.

    As used in this part:
    (a) Public road means any road under the jurisdiction of and 
maintained by a public authority and open to public travel.
    (b) Public authority means a Federal, State, county, town, or 
township, Indian tribe, municipal or other local government or 
instrumentality thereof, with authority to finance, build, operate or 
maintain toll or toll-free highway facilities.
    (c) Open to public travel means that the road section is available, 
except during scheduled periods, extreme weather or emergency 
conditions, passable by four-wheel standard passenger cars, and open to 
the general public for use without restrictive gates, prohibitive signs, 
or regulation other than restrictions based on size, weight, or class of 
registration. Toll plazas of public toll roads are not considered 
restrictive gates.
    (d) Maintenance means the preservation of the entire highway, 
including surfaces, shoulders, roadsides, structures, and such traffic 
control devices as are necessary for its safe and efficient utilization.
    (e) State means any one of the 50 States, the District of Columbia, 
Puerto Rico, the Virgin Islands, Guam, and American Samoa. For the 
purpose of the application of 23 U.S.C. 402 on Indian reservations, 
State and Governor of a State include the Secretary of the Interior.



Sec. 460.3  Procedures.

    (a) General requirements. 23 U.S.C. 402(c) provides that funds 
authorized to carry out section 402 shall be apportioned according to a 
formula based on population and public road mileage of each State. 
Public road mileage shall be determined as of the end of the calendar 
year preceding the year in which the funds are apportioned and shall be 
certified to by the Governor of the State or his designee and subject to 
the approval of the Federal Highway Administrator.
    (b) State public road mileage. Each State must annually submit a 
certification of public road mileage within the State to the Federal 
Highway Administration Division Administrator by the date specified by 
the Division Administrator. Public road mileage on Indian reservations 
within the State shall be identified and included in the State mileage 
and in computing the State's apportionment.
    (c) Indian reservation public road mileage. The Secretary of the 
Interior or his designee will submit a certification of public road 
mileage within Indian reservations to the Federal Highway Administrator 
by June 1 of each year.
    (d) Action by the Federal Highway Administrator. (1) The 
certification of Indian reservation public road mileage, and the State 
certifications of public road mileage together with comments thereon, 
will be reviewed by the Federal Highway Administrator. He will make a 
final determination of the public road mileage to be used as the basis 
for apportionment of funds under 23 U.S.C. 402(c). In any instance in 
which the Administrator's final determination differs from the public 
road mileage certified by a State or the Secretary of the Interior, the 
Administrator will advise the State or the Secretary of the Interior of 
his final determination and the reasons therefor.
    (2) If a State fails to submit a certification of public road 
mileage as required by this part, the Federal Highway Administrator may 
make a determination of the State's public road mileage for the purpose 
of apportioning funds under 23 U.S.C. 402(c). The State's public road 
mileage determined by the Administrator under this subparagraph may not 
exceed 90 percent of the State's public road mileage utilized in 
determining the most recent apportionment of funds under 23 U.S.C. 
402(c).



PART 470_HIGHWAY SYSTEMS--Table of Contents




                  Subpart A_Federal-aid Highway Systems

Sec.
470.101 Purpose.

[[Page 133]]

470.103 Definitions.
470.105 Urban area boundaries and highway functional classification.
470.107 Federal-aid highway systems.
470.109 System procedures--General.
470.111 Interstate System procedures.
470.113 National Highway System procedures.
470.115 Approval authority.

Appendix A to Subpart A of Part 470--Guidance Criteria for Evaluating 
          Requests for Interstate System Designations under 23 U.S.C. 
          139 (a) and (b)
Appendix B to Subpart A of Part 470--Designation of Segments of Section 
          332(a)(2) Corridors as Parts of the Interstate System
Appendix C to Subpart A of Part 470--Policy for the Signing and 
          Numbering of Future Interstate Corridors Designated by Section 
          332 of the NHS Designation Act of 1995 or Designated Under 23 
          U.S.C. 139(b)
Appendix D to Subpart A of Part 470--Guidance Criteria for Evaluating 
          Requests for Modifications to the National Highway System

Subparts B-C [Reserved]

    Authority: 23 U.S.C. 103(b)(2), 103 (e)(1), (e)(2), and (e)(3), 
103(f), 134, 135, and 315; and 49 CFR 1.48(b)(2).

    Source: 40 FR 42344, Sept. 12, 1975, unless otherwise noted. 
Redesignated at 41 FR 51396, Nov. 22, 1976.



                  Subpart A_Federal-aid Highway Systems

    Source: 62 FR 33355, June 19, 1997, unless otherwise noted.



Sec. 470.101  Purpose.

    This part sets forth policies and procedures relating to the 
identification of Federal-aid highways, the functional classification of 
roads and streets, the designation of urban area boundaries, and the 
designation of routes on the Federal-aid highway systems.



Sec. 470.103  Definitions.

    Except as otherwise provided in this part, terms defined in 23 
U.S.C. 101(a) are used in this part as so defined.
    Consultation means that one party confers with another identified 
party and, prior to taking action(s), considers that party's views.
    Cooperation means that the parties involved in carrying out the 
planning, programming and management systems processes work together to 
achieve a common goal or objective.
    Coordination means the comparison of the transportation plans, 
programs, and schedules of one agency with related plans, programs, and 
schedules of other agencies or entities with legal standing, and 
adjustment of plans, programs, and schedules to achieve general 
consistency.
    Federal-aid highway systems means the National Highway System and 
the Dwight D. Eisenhower National System of Interstate and Defense 
Highways (the ``Interstate System'').
    Federal-aid highways means highways on the Federal-aid highway 
systems and all other public roads not classified as local roads or 
rural minor collectors.
    Governor means the chief executive of the State and includes the 
Mayor of the District of Columbia.
    Metropolitan planning organization (MPO) means the forum for 
cooperative transportation decisionmaking for the metropolitan planning 
area in which the metropolitan transportation planning process required 
by 23 U.S.C. 134 and 49 U.S.C. 5303-5305 must be carried out.
    Responsible local officials means--
    (1) In urbanized areas, principal elected officials of general 
purpose local governments acting through the Metropolitan Planning 
Organization designated by the Governor, or
    (2) In rural areas and urban areas not within any urbanized area, 
principal elected officials of general purpose local governments.
    State means any one of the fifty States, the District of Columbia, 
Puerto Rico, or, for purposes of functional classification of highways, 
the Virgin Islands, American Samoa, Guam, or the Commonwealth of the 
Northern Marianas.



Sec. 470.105  Urban area boundaries and highway functional classification.

    (a) Urban area boundaries. Routes on the Federal-aid highway systems 
may be designated in both rural and urban areas. Guidance for 
determining the boundaries of urbanized and nonurbanized urban areas is 
provided in the

[[Page 134]]

``Federal-Aid Policy Guide,'' Chapter 4 [G 4063.0], dated December 9, 
1991. \1\
---------------------------------------------------------------------------

    \1\ The ``Federal-aid Policy Guide'' is available for inspection and 
copying as prescribed in 49 CFR part 7, Appendix D.
---------------------------------------------------------------------------

    (b) Highway Functional Classification. (1) The State transportation 
agency shall have the primary responsibility for developing and updating 
a statewide highway functional classification in rural and urban areas 
to determine functional usage of the existing roads and streets. 
Guidance criteria and procedures are provided in the FHWA publication 
``Highway Functional Classification--Concepts, Criteria and 
Procedures.'' \2\ The State shall cooperate with responsible local 
officials, or appropriate Federal agency in the case of areas under 
Federal jurisdiction, in developing and updating the functional 
classification.
---------------------------------------------------------------------------

    \2\ This publication, revised in March 1989, is available on request 
to the FHWA, Office of Environment and Planning, HEP-10, 400 Seventh 
Street, SW., Washington, DC 20590.
---------------------------------------------------------------------------

    (2) The results of the functional classification shall be mapped and 
submitted to the Federal Highway Administration (FHWA) for approval and 
when approved shall serve as the official record for Federal-aid 
highways and the basis for designation of the National Highway System.



Sec. 470.107  Federal-aid highway systems.

    (a) Interstate System. (1) The Dwight D. Eisenhower National System 
of Interstate and Defense Highways (Interstate System) shall consist of 
routes of highest importance to the Nation, built to the uniform 
geometric and construction standards of 23 U.S.C. 109(h), which connect, 
as directly as practicable, the principal metropolitan areas, cities, 
and industrial centers, including important routes into, through, and 
around urban areas, serve the national defense and, to the greatest 
extent possible, connect at suitable border points with routes of 
continental importance in Canada and Mexico.
    (2) The portion of the Interstate System designated under 23 U.S.C. 
103 (e)(1), (e)(2), and (e)(3) shall not exceed 69,230 kilometers 
(43,000 miles). Additional Interstate System segments are permitted 
under the provisions of 23 U.S.C. 139 (a) and (c) and section 
1105(e)(5)(A) of the Intermodal Surface Transportation Efficiency Act of 
1991 (ISTEA), Pub. L. 102-240, 105 Stat. 1914, as amended.
    (b) National Highway System. (1) The National Highway System shall 
consist of interconnected urban and rural principal arterials and 
highways (including toll facilities) which serve major population 
centers, international border crossings, ports, airports, public 
transportation facilities, other intermodal transportation facilities 
and other major travel destinations; meet national defense requirements; 
and serve interstate and interregional travel. All routes on the 
Interstate System are a part of the National Highway System.
    (2) The National Highway System shall not exceed 286,983 kilometers 
(178,250 miles).
    (3) The National Highway System shall include the Strategic Highway 
Corridor Network (STRAHNET) and its highway connectors to major military 
installations, as designated by the Administrator in consultation with 
appropriate Federal agencies and the States. The STRAHNET includes 
highways which are important to the United States strategic defense 
policy and which provide defense access, continuity, and emergency 
capabilities for the movement of personnel, materials, and equipment in 
both peace time and war time.
    (4) The National Highway System shall include all high priority 
corridors identified in section 1105(c) of the ISTEA.



Sec. 470.109  System procedures--General.

    (a) The State transportation agency, in consultation with 
responsible local officials, shall have the responsibility for proposing 
to the Federal Highway Administration all official actions regarding the 
designation, or revision, of the Federal-aid highway systems.
    (b) The routes of the Federal-aid highway systems shall be proposed 
by coordinated action of the State transportation agencies where the 
routes involve State-line connections.
    (c) The designation of routes on the Federal-aid highway systems 
shall be in accordance with the planning process required, pursuant to 
the provisions

[[Page 135]]

at 23 U.S.C. 135, and, in urbanized areas, the provisions at 23 U.S.C. 
134(a). The State shall cooperate with local and regional officials. In 
urbanized areas, the local officials shall act through the metropolitan 
planning organizations designated for such areas under 23 U.S.C. 134.
    (d) In areas under Federal jurisdiction, the designation of routes 
on the Federal-aid highway systems shall be coordinated with the 
appropriate Federal agency.



Sec. 470.111  Interstate System procedures.

    (a) Proposals for system actions on the Interstate System shall 
include a route description and a statement of justification. Proposals 
shall also include statements regarding coordination with adjoining 
States on State-line connections, with responsible local officials, and 
with officials of areas under Federal jurisdiction.
    (b) Proposals for Interstate or future Interstate designation under 
23 U.S.C. 139(a) or (b), as logical additions or connections, shall 
consider the criteria contained in appendix A of this subpart. For 
designation as a part of the Interstate system, 23 U.S.C. 139(a) 
requires that a highway meet all the standards of a highway on the 
Interstate System, be a logical addition or connection to the Interstate 
System, and have the affirmative recommendation of the State or States 
involved. For designation as a future part of the Interstate System, 23 
U.S.C. 139(b) requires that a highway be a logical addition or 
connection to the Interstate System, have the affirmative recommendation 
of the State or States involved, and have the written agreement of the 
State or States involved that such highway will be constructed to meet 
all the standards of a highway on the Interstate System within twelve 
years of the date of the agreement between the FHWA Administrator and 
the State or States involved. Such highways must also be on the National 
Highway System.
    (c) Proposals for Interstate designation under 23 U.S.C. 139(c) 
shall pertain only to Alaska or Puerto Rico. For designation as parts of 
the Interstate System, 23 U.S.C. 139(c) requires that highway segments 
be in States which have no Interstate System; be logical components to a 
system serving the State's principal cities, national defense needs and 
military installations, and traffic generated by rail, water, and air 
transportation modes; and have been constructed to the geometric and 
construction standards adequate for current and probable future traffic 
demands and the needs of the locality of the segment. Such highways must 
also be on the National Highway System.
    (d) Routes proposed for Interstate designation under section 
332(a)(2) of the NHS Designation Act of 1995 (NHS Act) shall be 
constructed to Interstate standards and connect to the Interstate 
System. Proposals shall consider the criteria contained in appendix B of 
this subpart.
    (e) Proposals for Interstate route numbering shall be submitted by 
the State transportation agency to the Route Numbering Committee of the 
American Association of State Highway and Transportation Officials.
    (f) Signing of corridors federally designated as future Interstate 
routes can follow the criteria contained in appendix C of this subpart. 
No law, rule, regulation, map, document, or other record of the United 
States, or of any State or political subdivision thereof, shall refer to 
any highway under 23 U.S.C. 139, nor shall any such highway be signed or 
marked, as a highway on the Interstate System until such time as such 
highway is constructed to the geometric and construction standards for 
the Interstate System and has been designated as a part of the 
Interstate System.



Sec. 470.113  National Highway System procedures.

    (a) Proposals for system actions on the National Highway System 
shall include a route description, a statement of justification, and 
statements of coordination with adjoining States on State-line 
connections, with responsible local officials, and with officials of 
areas under Federal jurisdiction.
    (b) Proposed modifications to the National Highway System shall 
enhance the national transportation characteristics of the National 
Highway System and shall follow the criteria listed in

[[Page 136]]

Sec. 470.107. Proposals shall also consider the criteria contained in 
appendix D of this subpart.



Sec. 470.115  Approval authority.

    (a) The Federal Highway Administrator will approve Federal-aid 
highway system actions involving the designation, or revision, of routes 
on the Interstate System, including route numbers, future Interstate 
routes, and routes on the National Highway System.
    (b) The Federal Highway Administrator will approve functional 
classification actions.



    Sec. Appendix A to Subpart A of Part 470--Guidance Criteria for 

 Evaluating Requests for Interstate System Designations Under 23 U.S.C. 
                             139 (a) and (b)

    Section 139 (a) and (b), of title 23, U.S.C., permits States to 
request the designation of National Highway System routes as parts or 
future parts of the Interstate System. The FHWA Administrator may 
approve such a request if the route is a logical addition or connection 
to the Interstate System and has been, or will be, constructed to meet 
Interstate standards. The following are the general criteria to be used 
to evaluate 23 U.S.C. 139 requests for Interstate System designations.
    1. The proposed route should be of sufficient length to serve long-
distance Interstate travel, such as connecting routes between principal 
metropolitan cities or industrial centers important to national defense 
and economic development.
    2. The proposed route should not duplicate other Interstate routes. 
It should serve Interstate traffic movement not provided by another 
Interstate route.
    3. The proposed route should directly serve major highway traffic 
generators. The term ``major highway traffic generator'' means either an 
urbanized area with a population over 100,000 or a similar major 
concentrated land use activity that produces and attracts long-distance 
Interstate and statewide travel of persons and goods. Typical examples 
of similar major concentrated land use activities would include a 
principal industrial complex, government center, military installation, 
or transportation terminal.
    4. The proposed route should connect to the Interstate System at 
each end, with the exception of Interstate routes that connect with 
continental routes at an international border, or terminate in a ``major 
highway traffic generator'' that is not served by another Interstate 
route. In the latter case, the terminus of the Interstate route should 
connect to routes of the National Highway System that will adequately 
handle the traffic. The proposed route also must be functionally 
classified as a principal arterial and be a part of the National Highway 
System system.
    5. The proposed route must meet all the current geometric and safety 
standards criteria as set forth in 23 CFR part 625 for highways on the 
Interstate System, or a formal agreement to construct the route to such 
standards within 12 years must be executed between the State(s) and the 
Federal Highway Administration. Any proposed exceptions to the standards 
shall be approved at the time of designation.
    6. A route being proposed for designation under 23 U.S.C. 139(b) 
must have an approved final environmental document (including, if 
required, a 49 U.S.C. 303(c) [Section 4(f)] approval) covering the route 
and project action must be ready to proceed with design at the time of 
designation. Routes constructed to Interstate standards are not 
necessarily logical additions to the Interstate System unless they 
clearly meet all of the above criteria.



  Sec. Appendix B to Subpart A of Part 470--Designation of Segments of 

      Section 332(a)(2) Corridors as Parts of the Interstate System

    The following guidance is comparable to current procedures for 
Interstate System designation requests under 23 U.S.C. 139(a). All 
Interstate System additions must be approved by the Federal Highway 
Administrator. The provisions of section 332(a)(2) of the NHS Act have 
also been incorporated into the ISTEA as section 1105(e)(5)(A).
    1. The request must be submitted through the appropriate FHWA 
Division and Regional Offices to the Associate Administrator for Program 
Development (HEP-10). Comments and recommendations by the division and 
regional offices are requested.
    2. The State DOT secretary (or equivalent) must request that the 
route segment be added to the Interstate System. The exact location and 
termini must be specified. If the route segment involves more than one 
State, each affected State must submit a separate request.
    3. The request must provide information to support findings that the 
segment (a) is built to Interstate design standards and (b) connects to 
the existing Interstate System. The segment should be of sufficient 
length to provide substantial service to the travelling public.
    4. The request must also identify and justify any design exceptions 
for which approval is requested.
    5. Proposed Interstate route numbering for the segment must be 
submitted to FHWA

[[Page 137]]

and the American Association of State Highway and Transportation 
Officials Route Numbering



  Sec. Appendix C to Subpart A of Part 470--Policy for the Signing and 

 Numbering of Future Interstate Corridors Designated by Section 332 of 
  the NHS Designation Act of 1995 or Designated Under 23 U.S.C. 139(b)

                                 Policy

    State transportation agencies are permitted to erect informational 
Interstate signs along a federally designated future Interstate corridor 
only after the specific route location has been established for the 
route to be constructed to Interstate design standards.

                               Conditions

    1. The corridor must have been designated a future part of the 
Interstate System under section 332(a)(2) of the NHS Designation Act of 
1995 or 23 U.S.C. 139(b).
    2. The specific route location to appropriate termini must have 
received Federal Highway (FHWA) environmental clearance. Where FHWA 
environmental clearance is not required or Interstate standards have 
been met, the route location must have been publicly announced by the 
State.
    3. Numbering of future Interstate route segments must be coordinated 
with affected States and be approved by the American Association of 
State Highway and Transportation Officials and the FHWA at Headquarters. 
Short portions of a multistate corridor may require use of an interim 3-
digit number.
    4. The State shall coordinate the location and content of signing 
near the State line with the adjacent State.
    5. Signing and other identification of a future Interstate route 
segment must not indicate, nor imply, that the route is on the 
Interstate System.
    6. The FHWA Regional Office must confirm in advance that the above 
conditions have been met and approve the general locations of signs.

                              Sign Details

    1. Signs may not be used to give directions and should be away from 
directional signs, particularly at interchanges.
    2. An Interstate shield may be located on a green informational sign 
of a few words. For example: Future Interstate Corridor or Future I-00 
Corridor.
    3. The Interstate shield may not include the word ``Interstate.''
    4. The FHWA Division Office must approve the signs as to design, 
wording, and detailed location.



    Sec. Appendix D to Subpart A of Part 470--Guidance Criteria for 

  Evaluating Requests for Modifications to the National Highway System

    Section 103(b), of title 23, U.S.C., allows the States to propose 
modifications to the National Highway System (NHS) and authorizes the 
Secretary to approve such modifications provided that they meet the 
criteria established for the NHS and enhance the characteristics of the 
NHS. In proposing modifications under 23 U.S.C. 103(b), the States must 
cooperate with local and regional officials. In urbanized areas, the 
local officials must act through the metropolitan planning organization 
(MPO) designated for such areas under 23 U.S.C. 134. The following 
guidance criteria should be used by the States to develop proposed 
modifications to the NHS.
    1. Proposed additions to the NHS should be included in either an 
adopted State or metropolitan transportation plan or program.
    2. Proposed additions should connect at each end with other routes 
on the NHS or serve a major traffic generator.
    3. Proposals should be developed in consultation with local and 
regional officials.
    4. Proposals to add routes to the NHS should include information on 
the type of traffic served (i.e., percent of trucks, average trip 
length, local, commuter, interregional, interstate) by the route, the 
population centers or major traffic generators served by the route, and 
how this service compares with existing NHS routes.
    5. Proposals should include information on existing and anticipated 
needs and any planned improvements to the route.
    6. Proposals should include information concerning the possible 
effects of adding or deleting a route to or from the NHS might have on 
other existing NHS routes that are in close proximity.
    7. Proposals to add routes to the NHS should include an assessment 
of whether modifications (adjustments or deletions) to existing NHS 
routes, which provide similar service, may be appropriate.
    8. Proposed modifications that might affect adjoining States should 
be developed in cooperation with those States.
    9. Proposed modifications consisting of connections to major 
intermodal facilities should be developed using the criteria set forth 
below. These criteria were used for identifying initial NHS connections 
to major intermodal terminals. The primary criteria are based on annual 
passenger volumes, annual freight volumes, or daily vehicular traffic on 
one or more principal routes that serve the intermodal facility. The 
secondary

[[Page 138]]

criteria include factors which underscore the importance of an 
intermodal facility within a specific State.

                            Primary Criteria

                      Commercial Aviation Airports

    1. Passengers--scheduled commercial service with more than 250,000 
annual enplanements.
    2. Cargo--100 trucks per day in each direction on the principal 
connecting route, or 100,000 tons per year arriving or departing by 
highway mode.

                                  Ports

    1. Terminals that handle more than 50,000 TEUs (a volumetric measure 
of containerized cargo which stands for twenty-foot equivalent units) 
per year, or other units measured that would convert to more than 100 
trucks per day in each direction. (Trucks are defined as large single-
unit trucks or combination vehicles handling freight.)
    2. Bulk commodity terminals that handle more than 500,000 tons per 
year by highway or 100 trucks per day in each direction on the principal 
connecting route. (If no individual terminal handles this amount of 
freight, but a cluster of terminals in close proximity to each other 
does, then the cluster of terminals could be considered in meeting the 
criteria. In such cases, the connecting route might terminate at a point 
where the traffic to several terminals begins to separate.)
    3. Passengers--terminals that handle more than 250,000 passengers 
per year or 1,000 passengers per day for at least 90 days during the 
year.

                               Truck/Rail

    1. 50,000 TEUs per year, or 100 trucks per day, in each direction on 
the principal connecting route, or other units measured that would 
convert to more than 100 trucks per day in each direction. (Trucks are 
defined as large single-unit trucks or combination vehicles carrying 
freight.)

                                Pipelines

    1. 100 trucks per day in each direction on the principal connecting 
route.

                                 Amtrak

    1. 100,000 passengers per year (entrainments and detrainments). 
Joint Amtrak, intercity bus and public transit terminals should be 
considered based on the combined passenger volumes. Likewise, two or 
more separate facilities in close proximity should be considered based 
on combined passenger volumes.

                              Intercity Bus

    1. 100,000 passengers per year (boardings and deboardings).

                             Public Transit

    1. Stations with park and ride lots with more than 500 vehicle 
parking spaces, or 5,000 daily bus or rail passengers, with significant 
highway access (i.e., a high percentage of the passengers arrive by cars 
and buses using a route that connects to another NHS route), or a major 
hub terminal that provides for the transfer of passengers among several 
bus routes. (These hubs should have a significant number of buses using 
a principal route connecting with the NHS.)

                                 Ferries

    1. Interstate/international--1,000 passengers per day for at least 
90 days during the year. (A ferry which connects two terminals within 
the same metropolitan area should be considered as local, not 
interstate.)
    2. Local--see public transit criteria above.

                           Secondary Criteria

    Any of the following criteria could be used to justify an NHS 
connection to an intermodal terminal where there is a significant 
highway interface:
    1. Intermodal terminals that handle more than 20 percent of 
passenger or freight volumes by mode within a State;
    2. Intermodal terminals identified either in the Intermodal 
Management System or the State and metropolitan transportation plans as 
a major facility;
    3. Significant investment in, or expansion of, an intermodal 
terminal; or
    4. Connecting routes targeted by the State, MPO, or others for 
investment to address an existing, or anticipated, deficiency as a 
result of increased traffic.

                          Proximate Connections

    Intermodal terminals, identified under the secondary criteria noted 
above, may not have sufficient highway traffic volumes to justify an NHS 
connection to the terminal. States and MPOs should fully consider 
whether a direct connection should be identified for such terminals, or 
whether being in the proximity (2 to 3 miles) of an NHS route is 
sufficient.

Subparts B-C [Reserved]

[[Page 139]]



          SUBCHAPTER F_TRANSPORTATION INFRASTRUCTURE MANAGEMENT





PART 500_MANAGEMENT AND MONITORING SYSTEMS--Table of Contents




                      Subpart A_Management systems

Sec.
500.101 Purpose.
500.102 Policy.
500.103 Definitions.
500.104 State option.
500.105 Requirements.
500.106 PMS.
500.107 BMS.
500.108 SMS.
500.109 CMS.
500.110 PTMS.
500.111 IMS.

                   Subpart B_Traffic Monitoring System

500.201 Purpose.
500.202 TMS definitions.
500.203 TMS general requirements.
500.204 TMS components for highway traffic data.

    Authority: 23 U.S.C. 134, 135, 303, and 315; 49 U.S.C. 5303-5305; 23 
CFR 1.32; and 49 CFR 1.48 and 1.51.

    Source: 61 FR 67170, Dec. 19, 1996, unless otherwise noted.



                      Subpart A_Management Systems



Sec. 500.101  Purpose.

    The purpose of this part is to implement the requirements of 23 
U.S.C. 303(a) which directs the Secretary of Transportation (the 
Secretary) to issue regulations for State development, establishment, 
and implementation of systems for managing highway pavement of Federal-
aid highways (PMS), bridges on and off Federal-aid highways (BMS), 
highway safety (SMS), traffic congestion (CMS), public transportation 
facilities and equipment (PTMS), and intermodal transportation 
facilities and systems (IMS). This regulation also implements 23 U.S.C. 
303(b) which directs the Secretary to issue guidelines and requirements 
for State development, establishment, and implementation of a traffic 
monitoring system for highways and public transportation facilities and 
equipment (TMS).



Sec. 500.102  Policy.

    (a) Federal, State, and local governments are under increasing 
pressure to balance their budgets and, at the same time, respond to 
public demands for quality services. Along with the need to invest in 
America's future, this leaves transportation agencies with the task of 
trying to manage current transportation systems as cost-effectively as 
possible to meet evolving, as well as backlog needs. The use of existing 
or new transportation management systems provides a framework for cost-
effective decision making that emphasizes enhanced service at reduced 
public and private life-cycle cost. The primary outcome of 
transportation management systems is improved system performance and 
safety. The Federal Highway Administration (FHWA) and the Federal 
Transit Administration (FTA) strongly encourage implementation of 
transportation management systems consistent with State, metropolitan 
planning organization, transit operator, or local government needs.
    (b) Whether the systems are developed under the provisions of this 
part or under a State's own procedures, the following categories of FHWA 
administered funds may be used for development, establishment, and 
implementation of any of the management systems and the traffic 
monitoring system: National highway system; surface transportation 
program; State planning and research and metropolitan planning funds 
(including the optional use of minimum allocation funds authorized under 
23 U.S.C. 157(c) and restoration funds authorized under Sec. 202(f) of 
the National Highway System Designation Act of 1995 (Pub.L. 104-59) for 
carrying out the provisions of 23 U.S.C. 307(c)(1) and 23 U.S.C. 
134(a)); congestion mitigation and air quality improvement program funds 
for those management systems that can be shown to contribute to the 
attainment of a national ambient air quality standard; and apportioned 
bridge funds for development

[[Page 140]]

and establishment of the bridge management system. The following 
categories of FTA administered funds may be used for development, 
establishment, and implementation of the CMS, PTMS, IMS, and TMS: 
Metropolitan planning; State planning and research, and formula transit 
funds.



Sec. 500.103  Definitions.

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) are applicable to this part. As used in this part:
    Federal-aid highways means those highways eligible for assistance 
under title 23, U.S.C., except those functionally classified as local or 
rural minor collectors.
    Metropolitan planning organization (MPO) means the forum for 
cooperative transportation decision making for a metropolitan planning 
area.
    National Highway System (NHS) means the system of highways 
designated and approved in accordance with the provisions of 23 U.S.C. 
103(b).
    State means any one of the fifty States, the District of Columbia, 
or Puerto Rico.
    Transportation management area (TMA) means an urbanized area with a 
population over 200,000 (as determined by the latest decennial census) 
or other area when TMA designation is requested by the Governor and the 
MPO (or affected local officials), and officially designated by the 
Administrators of the FHWA and the FTA. The TMA designation applies to 
the entire metropolitan planning area(s).



Sec. 500.104  State option.

    Except as specified in Sec. 500.105 (a) and (b), a State may elect 
at any time not to implement any one or more of the management systems 
required under 23 U.S.C. 303, in whole or in part.



Sec. 500.105  Requirements.

    (a) The metropolitan transportation planning process (23 U.S.C. 134 
and 49 U.S.C. 5303-5005) in TMAs shall include a CMS that meets the 
requirements of Sec. 500.109 of this regulation.
    (b) States shall develop, establish, and implement a TMS that meets 
the requirements of subpart B of this regulation.
    (c) Any of the management systems that the State chooses to 
implement under 23 U.S.C. 303 and this regulation shall be developed in 
cooperation with MPOs in metropolitan areas, affected agencies receiving 
assistance under the Federal Transit Act (49 U.S.C., Chapter 53), and 
other agencies (including private owners and operators) that have 
responsibility for operation of the affected transportation systems or 
facilities.
    (d) The results (e.g., policies, programs, projects, etc.) of any of 
the management systems that a State chooses to develop under 23 U.S.C. 
303 and this regulation shall be considered in the development of 
metropolitan and statewide transportation plans and improvement programs 
and in making project selection decisions under title 23, U.S.C., and 
under the Federal Transit Act. Plans and programs adopted after 
September 30, 1997, shall demonstrate compliance with this requirement.



Sec. 500.106  PMS.

    An effective PMS for Federal-aid highways is a systematic process 
that provides information for use in implementing cost-effective 
pavement reconstruction, rehabilitation, and preventative maintenance 
programs and that results in pavements designed to accommodate current 
and forecasted traffic in a safe, durable, and cost-effective manner. 
The PMS should be based on the ``AASHTO Guidelines for Pavement 
Management Systems.'' \1\
---------------------------------------------------------------------------

    \1\ AASHTO Guidelines for Pavement Management Systems, July 1990, 
can be purchased from the American Association of State Highway and 
Transportation Officials, 444 N. Capitol Street, NW., Suite 249, 
Washington, D.C. 20001. Available for inspection as prescribed in 49 CFR 
part 7, appendix D.
---------------------------------------------------------------------------



Sec. 500.107  BMS.

    An effective BMS for bridges on and off Federal-aid highways that 
should be based on the ``AASHTO Guidelines for Bridge Management 
Systems'' \2\ and

[[Page 141]]

that supplies analyses and summaries of data, uses mathematical models 
to make forecasts and recommendations, and provides the means by which 
alternative policies and programs may be efficiently considered. An 
effective BMS should include, as a minimum, formal procedures for:
---------------------------------------------------------------------------

    \2\ AASHTO Guidelines for Bridge Management Systems, 1992, can be 
purchased from the American Association of State Highway and 
Transportation Officials, 444 N. Capitol Street, NW., Suite 249, 
Washington, D.C. 20001. Available for inspection as prescribed in 49 CFR 
part 7, appendix D.
---------------------------------------------------------------------------

    (a) Collecting, processing, and updating data;
    (b) Predicting deterioration;
    (c) Identifying alternative actions;
    (d) Predicting costs;
    (e) Determining optimal policies;
    (f) Performing short- and long-term budget forecasting; and
    (g) Recommending programs and schedules for implementation within 
policy and budget constraints.



Sec. 500.108  SMS.

    An SMS is a systematic process with the goal of reducing the number 
and severity of traffic crashes by ensuring that all opportunities to 
improve highway safety are identified, considered, implemented as 
appropriate, and evaluated in all phases of highway planning, design, 
construction, maintenance, and operation and by providing information 
for selecting and implementing effective highway safety strategies and 
projects. The development of the SMS may be based on the guidance in 
``Safety Management Systems: Good Practices for Development and 
Implementation.'' \3\ An effective SMS should include, at a minimum:
---------------------------------------------------------------------------

    \3\ Safety Management Systems: Good Practices for Development and 
Implementation, FHWA and NHTSA, May 1996. Available for inspection and 
copying as prescribed in 49 CFR part 7, appendix D.
---------------------------------------------------------------------------

    (a) Communication, coordination, and cooperation among the 
organizations responsible for the roadway, human, and vehicle safety 
elements;
    (b) A focal point for coordination of the development, 
establishment, and implementation of the SMS among the agencies 
responsible for these major safety elements;
    (c) Establishment of short- and long-term highway safety goals to 
address identified safety problems;
    (d) Collection, analysis, and linkage of highway safety data;
    (e) Identification of the safety responsibilities of units and 
positions;
    (f) Public information and education activities; and
    (g) Identification of skills, resources, and training needs to 
implement highway safety programs.



Sec. 500.109  CMS.

    (a) For purposes of this part, congestion means the level at which 
transportation system performance is unacceptable due to excessive 
travel times and delays. Congestion management means the application of 
strategies to improve system performance and reliability by reducing the 
adverse impacts of congestion on the movement of people and goods in a 
region. A congestion management system or process is a systematic and 
regionally accepted approach for managing congestion that provides 
accurate, up-to-date information on transportation system operations and 
performance and assesses alternative strategies for congestion 
management that meet State and local needs.
    (b) The development of a congestion management system or process 
should result in performance measures and strategies that can be 
integrated into transportation plans and programs. The level of system 
performance deemed acceptable by State and local officials may vary by 
type of transportation facility, geographic location (metropolitan area 
or subarea and/or non-metropolitan area), and/or time of day. In both 
metropolitan and non-metropolitan areas, consideration needs to be given 
to strategies that manage demand, reduce single occupant vehicle (SOV) 
travel, and improve transportation system management and operations. 
Where the addition of general purpose lanes is determined to be an 
appropriate congestion management strategy, explicit consideration is to 
be given to the incorporation of appropriate features into the SOV 
project to facilitate future demand management strategies and 
operational improvements that will maintain the functional integrity of 
those lanes.

[72 FR 7285, Feb. 14, 2007]

[[Page 142]]



Sec. 500.110  PTMS.

    An effective PTMS for public transportation facilities (e.g., 
maintenance facilities, stations, terminals, transit related 
structures), equipment, and rolling stock is a systematic process that 
collects and analyzes information on the condition and cost of transit 
assets on a continual basis, identifies needs, and enables decision 
makers to select cost-effective strategies for providing and maintaining 
transit assets in serviceable condition. The PTMS should cover public 
transportation systems operated by the State, local jurisdictions, 
public transportation agencies and authorities, and private (for profit 
and non-profit) transit operators receiving funds under the Federal 
Transit Act and include, at a minimum:
    (a) Development of transit asset condition measures and standards;
    (b) An inventory of the transit assets including age, condition, 
remaining useful life, and replacement cost; and
    (c) Identification, evaluation, and implementation of appropriate 
strategies and projects.



Sec. 500.111  IMS.

    An effective IMS for intermodal facilities and systems provides 
efficient, safe, and convenient movement of people and goods through 
integration of transportation facilities and systems and improvement in 
the coordination in planning, and implementation of air, water, and the 
various land-based transportation facilities and systems. An IMS should 
include, at a minimum:
    (a) Establishment of performance measures;
    (b) Identification of key linkages between one or more modes of 
transportation, where the performance or use of one mode will affect 
another;
    (c) Definition of strategies for improving the effectiveness of 
these modal interactions; and
    (d) Evaluation and implementation of these strategies to enhance the 
overall performance of the transportation system.



                   Subpart B_Traffic Monitoring System



Sec. 500.201  Purpose.

    The purpose of this subpart is to set forth requirements for 
development, establishment, implementation, and continued operation of a 
traffic monitoring system for highways and public transportation 
facilities and equipment (TMS) in each State in accordance with the 
provisions of 23 U.S.C. 303 and subpart A of this part.



Sec. 500.202  TMS definitions.

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) and Sec. 500.103 are applicable to this subpart. As used 
in this part:
    Highway traffic data means data used to develop estimates of the 
amount of person or vehicular travel, vehicle usage, or vehicle 
characteristics associated with a system of highways or with a 
particular location on a highway. These types of data support the 
estimation of the number of vehicles traversing a section of highway or 
system of highways during a prescribed time period (traffic volume), the 
portion of such vehicles that may be of a particular type (vehicle 
classification), the weights of such vehicles including the weight of 
each axle and associated distances between axles on a vehicle (vehicle 
weight), or the average number of persons being transported in a vehicle 
(vehicle occupancy).
    Traffic monitoring system means a systematic process for the 
collection, analysis, summary, and retention of highway and transit 
related person and vehicular traffic data.
    Transit traffic data means person and vehicular data for public 
transportation on public highways and streets and the number of vehicles 
and ridership for dedicated transit rights-of-way (e.g., rail and 
busways), at the maximum load points for the peak period in the peak 
direction and for the daily time period.



Sec. 500.203  TMS general requirements.

    (a) Each State shall develop, establish, and implement, on a 
continuing basis, a TMS to be used for obtaining highway traffic data 
when:

[[Page 143]]

    (1) The data are supplied to the U.S. Department of Transportation 
(U.S. DOT);
    (2) The data are used in support of transportation management 
systems;
    (3) The data are used in support of studies or systems which are the 
responsibility of the U.S. DOT;
    (4) The collection of the data is supported by the use of Federal 
funds provided from programs of the U.S. DOT;
    (5) The data are used in the apportionment or allocation of Federal 
funds by the U.S. DOT;
    (6) The data are used in the design or construction of an FHWA 
funded project; or
    (7) The data are required as part of a federally mandated program of 
the U.S. DOT.
    (b) The TMS for highway traffic data should be based on the concepts 
described in the American Association of State Highway and 
Transportation Officials (AASHTO) ``AASHTO Guidelines for Traffic Data 
Programs'' \4\ and the FHWA ``Traffic Monitoring Guide (TMG),'' \5\ and 
shall be consistent with the FHWA ``Highway Performance Monitoring 
System Field Manual.'' \6\
---------------------------------------------------------------------------

    \4\ AASHTO Guidelines for Traffic Data Programs, 1992, ISBN 1-56051-
054-4, can be purchased from the American Association of State Highway 
and Transportation Officials, 444 N. Capitol Street, NW., Suite 249, 
Washington, D.C. 20001. Available for inspection as prescribed in 49 CFR 
part 7, appendix D.
    \5\ Traffic Monitoring Guide, DOT/FHWA, publication No. FHWA-PL-95-
031, February 1995. Available for inspection and copying as prescribed 
in 49 CFR part 7, appendix D.
    \6\ Highway Performance Monitoring System (HPMS) Field Manual for 
the Continuing Analytical and Statistical Data Base, DOT/FHWA, August 
30, 1993 (FHWA Order M5600.1B). Available for inspection and copying as 
prescribed in 49 CFR part 7, appendix D.
---------------------------------------------------------------------------

    (c) The TMS shall cover all public roads except those functionally 
classified as local or rural minor collector or those that are federally 
owned. Coverage of federally owned public roads shall be determined 
cooperatively by the State, the FHWA, and the agencies that own the 
roads.
    (d) The State's TMS shall apply to the activities of local 
governments and other public or private non-State government entities 
collecting highway traffic data within the State if the collected data 
are to be used for any of the purposes enumerated in Sec. 500.203(a) of 
this subpart.
    (e) Procedures other than those referenced in this subpart may be 
used if the alternative procedures are documented by the State to 
furnish the precision levels as defined for the various purposes 
enumerated in Sec. 500.203(a) of this subpart and are found acceptable 
by the FHWA.
    (f) Nothing in this subpart shall prohibit the collection of 
additional highway traffic data if such data are needed in the 
administration or management of a highway activity or are needed in the 
design of a highway project.
    (g) Transit traffic data shall be collected in cooperation with MPOs 
and transit operators.
    (h) The TMS for highways and public transportation facilities and 
equipment shall be fully operational and in use by October 1, 1997.



Sec. 500.204  TMS components for highway traffic data.

    (a) General. Each State's TMS, including those using alternative 
procedures, shall address the components in paragraphs (b) through (h) 
of this section.
    (b) Precision of reported data. Traffic data supplied for the 
purposes identified in Sec. 500.203(a) of this subpart shall be to the 
statistical precision applicable at the time of the data's collection as 
specified by the data users at various levels of government. A State's 
TMS shall meet the statistical precisions established by FHWA for the 
HPMS.
    (c) Continuous counter operations. Within each State, there shall be 
sufficient continuous counters of traffic volumes, vehicle 
classification, and vehicle weight to provide estimates of changes in 
highway travel patterns and to provide for the development of day-of-
week, seasonal, axle correction, growth factors, or other comparable 
factors approved by the FHWA that support the development of traffic 
estimates to meet the statistical precision requirements of the data 
uses identified in Sec. 500.203(a) of this subpart. As appropriate, 
sufficient continuous

[[Page 144]]

counts of vehicle classification and vehicle weight should be available 
to address traffic data program needs.
    (d) Short term traffic monitoring. (1) Count data for traffic 
volumes collected in the field shall be adjusted to reflect annual 
average conditions. The estimation of annual average daily traffic will 
be through the appropriate application of only the following: Seasonal 
factors, day-of-week factors, and, when necessary, axle correction and 
growth factors or other comparable factors approved by the FHWA. Count 
data that have not been adjusted to represent annual average conditions 
will be noted as being unadjusted when they are reported. The duration 
and frequency of such monitoring shall comply to the data needs 
identified in Sec. 500.203(a) of this subpart.
    (2) Vehicle classification activities on the National Highway System 
(NHS), shall be sufficient to assure that, on a cycle of no greater than 
three years, every major system segment (i.e., segments between 
interchanges or intersections of principal arterials of the NHS with 
other principal arterials of the NHS) will be monitored to provide 
information on the numbers of single-trailer combination trucks, 
multiple-trailer combination trucks, two-axle four-tire vehicles, buses 
and the total number of vehicles operating on an average day. If it is 
determined that two or more continuous major system segments have both 
similar traffic volumes and distributions of the vehicle types 
identified above, a single monitoring session will be sufficient to 
monitor these segments.
    (e) Vehicle occupancy monitoring. As deemed appropriate to support 
the data uses identified in Sec. 500.203(a) of this subpart, data will 
be collected on the average number of persons per automobile, light two-
axle truck, and bus. The duration, geographic extent, and level of 
detail shall be consistent with the intended use of the data, as 
cooperatively agreed to by the organizations that will use the data and 
the organizations that will collect the data. Such vehicle occupancy 
data shall be reviewed at least every three years and updated as 
necessary. Acceptable data collection methods include roadside 
monitoring, traveler surveys, the use of administrative records (e.g., 
accident reports or reports developed in support of public 
transportation programs), or any other method mutually acceptable to the 
responsible organizations and the FHWA.
    (f) Field operations. (1) Each State's TMS for highway traffic data 
shall include the testing of equipment used in the collection of the 
data. This testing shall be based on documented procedures developed by 
the State. This documentation will describe the test procedure as well 
as the frequency of testing. Standards of the American Society for 
Testing and Materials or guidance from the AASHTO may be used. Only 
equipment passing the test procedures will be used for the collection of 
data for the purposes identified in Sec. 500.203(a) of this subpart.
    (2) Documentation of field operations shall include the number of 
counts, the period of monitoring, the cycle of monitoring, and the 
spatial and temporal distribution of count sites. Copies of the State's 
documentation shall be provided to the FHWA Division Administrator when 
it is initially developed and after each revision.
    (g) Source data retention. For estimates of traffic or travel, the 
value or values collected during a monitoring session, as well as 
information on the date(s) and hour(s) of monitoring, will remain 
available until the traffic or travel estimates based on the count 
session are updated. Data shall be available in formats that conform to 
those in the version of the TMG current at the time of data collection 
or as then amended by the FHWA.
    (h) Office factoring procedures. (1) Factors to adjust data from 
short term monitoring sessions to estimates of average daily conditions 
shall be used to adjust for month, day of week, axle correction, and 
growth or other comparable factors approved by the FHWA. These factors 
will be reviewed annually and updated at least every three years.
    (2) The procedures used by a State to edit and adjust highway 
traffic data collected from short term counts at field locations to 
estimates of average traffic volume shall be documented. The 
documentation shall include the factors discussed in paragraph (d)(1) of 
this section. The documentation shall remain available as long as the 
traffic

[[Page 145]]

or travel estimates discussed in paragraph (g) of this section remain 
current. Copies of the State's documentation shall be provided to the 
FHWA Division Administrator when it is initially developed and after 
each revision.

                           PART 511 [RESERVED]

[[Page 146]]



             SUBCHAPTER G_ENGINEERING AND TRAFFIC OPERATIONS





PART 620_ENGINEERING--Table of Contents




       Subpart A_Highway Improvements in the Vicinity of Airports

Sec.
620.101 Purpose.
620.102 Applicability.
620.103 Policy.
620.104 Standards.

             Subpart B_Relinquishment of Highway Facilities

620.201 Purpose.
620.202 Applicability.
620.203 Procedures.

    Authority: 23 U.S.C. 315 and 318; 49 CFR 1.48, 23 CFR 1.32.

    Source: 39 FR 33311, Sept. 17, 1974, unless otherwise noted.



       Subpart A_Highway Improvements in the Vicinity of Airports

    Source: 39 FR 35145, Sept. 30, 1974, unless otherwise noted.



Sec. 620.101  Purpose.

    The purpose of this section is to implement title 23 U.S.C., section 
318 which requires coordination of airport and highway developments to 
insure (a) that airway-highway clearances are adequate for the safe 
movement of air and highway traffic, and (b) that the expenditure of 
public funds for airport and highway improvements is in the public 
interest.



Sec. 620.102  Applicability.

    The requirements of this section apply to all projects on which 
Federal-aid highway funds are to be expended and to both civil and 
military airports.



Sec. 620.103  Policy.

    (a) Federal-aid highway funds shall not participate in the costs of 
reconstruction or relocation of any highway to which this section 
applies unless the Federal Highway Administration (FHWA) and State 
officials, in cooperation with the Federal Aviation Administration (FAA) 
or appropriate military authority, or in the case of privately owned 
airports, the owner of that airport, determine that the location or 
extension of the airport in question and the consequent relocation or 
reconstruction of the highway is in the public interest.
    (b) In addition to complying with 23 U.S.C. 318 and insuring the 
prudent use of public funds, it is the policy of FHWA to provide a high 
degree of safety in the location, design, construction and operation of 
highways and airports.
    (c) Federal-aid funds shall not participate in projects where 
substandard clearances are created or will continue to exist.



Sec. 620.104  Standards.

    A finding of public interest by FHWA will be based on compliance 
with airway-highway clearances which conform to FAA standards for 
aeronautical safety.



             Subpart B_Relinquishment of Highway Facilities

    Source: 39 FR 33311, Sept. 17, 1974, unless otherwise noted.



Sec. 620.201  Purpose.

    To prescribe Federal Highway Administration (FHWA) procedures 
relating to relinquishment of highway facilities.



Sec. 620.202  Applicability.

    The provisions of this subpart apply to highway facilities where 
Federal-aid funds have participated in either right-of-way or physical 
construction costs of a project. The provisions of this subpart apply 
only to relinquishment of facilities for continued highway purposes. 
Other real property disposals and modifications or disposal of access 
rights are governed by the requirements of 23 CFR part 710.

[64 FR 71289, Dec. 21, 1999]



Sec. 620.203  Procedures.

    (a) After final acceptance of a project on the Federal-aid primary, 
urban, or

[[Page 147]]

secondary system or after the date that the plans, specifications and 
estimates (PS&E) for the physical construction on the right-of-way for a 
Federal-aid Interstate project have been approved by the FHWA, 
relinquishment of the right-of-way or any change made in control of 
access shall be in accordance with the provisions of this section. For 
the purposes of this section, final acceptance for a project involving 
physical construction is the date of the acceptance of the physical 
construction by the FHWA and for right-of-way projects, the date the 
division engineer determines to be the date of the completion of the 
acquisition of the right-of-way shown on the final plans.
    (b) For the purposes of this section, relinquishment is defined as 
the conveyance of a portion of a highway right-of-way or facility by a 
State highway agency (SHA) to another Government agency for highway use.
    (c) The following facilities may be relinquished in accordance with 
paragraph 203(f):
    (1) Sections of a State highway which have been superseded by 
construction on new location and removed from the Federal-aid system and 
the replaced section thereof is approved by the FHWA as the new location 
of the Federal-aid route. Federal-aid funds may not participate in 
rehabilitation work performed for the purpose of placing the superseded 
section of the highway in a condition acceptable to the local authority. 
The relinquishment of any Interstate mileage shall be submitted to the 
Federal Highway Administrator as a special case for prior approval.
    (2) Sections of reconstructed local facilities that are located 
outside the control of access lines, such as turn-arounds of severed 
local roads or streets adjacent to the Federal-aid project's right-of-
way, and local roads and streets crossing over or under said project 
that have been adjusted in grade and/or alignment, including new right-
of-way required for adjustments. Eligibility for Federal-aid 
participation in the costs of the foregoing adjustments is as determined 
at the time of PS&E approval under policies of the FHWA.
    (3) Frontage roads or portions thereof that are constructed 
generally parallel to and outside the control of access lines of a 
Federal-aid project for the purpose of permitting access to private 
properties rather than to serve as extensions of ramps to connect said 
Federal-aid project with the nearest crossroad or street.
    (d) The following facilities may be relinquished only with the 
approval of the Federal Highway Administrator in accordance with 
paragraph 203(g).
    (1) Frontage roads or portions thereof located outside the access 
control lines of a Federal-aid project that are constructed to service 
(in lieu of or in addition to the purposes outlined under paragraph 
(c)(3) of this section) as connections between ramps to or from the 
Federal-aid project and existing public roads or streets.
    (2) Ramps constructed to serve as connections for interchange of 
traffic between the Federal-aid project and local roads or streets.
    (e) Where a frontage road is not on an approved Federal-aid system 
title to the right-of-way may be acquired initially in the name of the 
political subdivision which is to assume control thus eliminating the 
necessity of a formal transfer later. Such procedure would be subject to 
prior FHWA approval and would be limited to those facilities which meet 
the criteria set forth in paragraphs (c) (2) and (3) of this section.
    (f) Upon presentation by a State that it intends to relinquish 
facilities such as described in paragraph (c) (1), (2) or (3) of this 
section to local authorities, the division engineer of the FHWA shall 
have appropriate field and office examination made thereof to assure 
that such relinquishments are in accordance with the provisions of the 
cited paragraphs. Relinquishments of the types described in paragraph 
(c) (1), (2) or (3) of this section may be made on an individual basis 
or on a project or route basis subject to the following conditions and 
understandings:
    (1) Immediately following action by the State in approving a 
relinquishment, it shall furnish to the Division Administrator for 
record purposes a copy of a suitable map or maps identified by the 
Federal-aid project number, with the facilities to be relinquished

[[Page 148]]

and the date of such relinquishment action clearly delineated thereon.
    (2) If it is found at any time after relinquishment that a 
relinquished facility is in fact required for the safe and proper 
operation of the Federal-aid highway, the State shall take immediate 
action to restore such facility to its jurisdiction without cost to 
Federal-aid highway funds.
    (3) If it is found at any time that a relinquished frontage road or 
portion thereof or any part of the right-of-way therefor has been 
abandoned by local governmental authority and a showing cannot be made 
that such abandoned facility is no longer required as a public road, it 
is to be understood that the Federal Highway Administrator may cause to 
be withheld from Federal-aid highway funds due to the State an amount 
equal to the Federal-aid participation in the abandoned facility.
    (4) In no case shall any relinquishment include any portion of the 
right-of-way within the access control lines as shown on the plans for a 
Federal-aid project approved by the FHWA, without the prior approval of 
the Federal Highway Administrator.
    (5) There cannot be additional Federal-aid participation in future 
construction or reconstruction on any relinquished ``off the Federal-aid 
system'' facility unless the underlying reason for such future work is 
caused by future improvement of the associated Federal-aid highway.
    (g) In the event that a State desires to apply for approval by the 
Federal Highway Administrator for the relinquishment of a facility such 
as described in paragraph (d) (1) and (2) of this section, the facts 
pertinent to such proposal are to be presented to the division engineer 
of the FHWA. The division engineer shall have appropriate review made of 
such presentation and forward the material presented by the State 
together with his findings thereon through the Regional Federal Highway 
Administrator for consideration by the Federal Highway Administrator and 
determination of action to be taken.
    (h) No change may be made in control of access, without the joint 
determination and approval of the SHA and FHWA. This would not prevent 
the relinquishment of title, without prior approval of the FHWA, of a 
segment of the right-of-way provided there is an abandonment of a 
section of highway inclusive of such segment.
    (i) Relinquishments must be justified by the State's finding 
concurred in by the FHWA, that:
    (1) The subject land will not be needed for Federal-aid highway 
purposes in the foreseeable future;
    (2) That the right-of-way being retained is adequate under present 
day standards for the facility involved;
    (3) That the release will not adversely affect the Federal-aid 
highway facility or the traffic thereon;
    (4) That the lands to be relinquished are not suitable for retention 
in order to restore, preserve, or improve the scenic beauty adjacent to 
the highway consonant with the intent of 23 U.S.C. 319 and Pub. L. 89-
285, Title III, sections 302-305 (Highway Beautification Act of 1965).
    (j) If a relinquishment is to a Federal, State, or local government 
agency for highway purposes, there need not be a charge to the said 
agency, nor in such event any credit to Federal funds. If for any reason 
there is a charge, the STD may retain the Federal share of the proceeds 
if used for projects eligible under title 23 of the United States Code.

[39 FR 33311, Sept. 17, 1974, as amended at 64 FR 71289, Dec. 21, 1999]



PART 625_DESIGN STANDARDS FOR HIGHWAYS--Table of Contents




Sec.
625.1 Purpose.
625.2 Policy.
625.3 Application.
625.4 Standards, policies, and standard specifications.

    Authority: 23 U.S.C. 109, 315, and 402; Sec. 1073 of Pub. L. 102-
240, 105 Stat. 1914, 2012; 49 CFR 1.48(b) and (n).

    Source: 62 FR 15397, Apr. 1, 1997, unless otherwise noted.



Sec. 625.1  Purpose.

    To designate those standards, policies, and standard specifications 
that are acceptable to the Federal Highway Administration (FHWA) for 
application

[[Page 149]]

in the geometric and structural design of highways.



Sec. 625.2  Policy.

    (a) Plans and specifications for proposed National Highway System 
(NHS) projects shall provide for a facility that will--
    (1) Adequately serve the existing and planned future traffic of the 
highway in a manner that is conducive to safety, durability, and economy 
of maintenance; and
    (2) Be designed and constructed in accordance with criteria best 
suited to accomplish the objectives described in paragraph (a)(1) of 
this section and to conform to the particular needs of each locality.
    (b) Resurfacing, restoration, and rehabilitation (RRR) projects, 
other than those on the Interstate system and other freeways, shall be 
constructed in accordance with standards which preserve and extend the 
service life of highways and enhance highway safety. Resurfacing, 
restoration, and rehabilitation work includes placement of additional 
surface material and/or other work necessary to return an existing 
roadway, including shoulders, bridges, the roadside, and appurtenances 
to a condition of structural or functional adequacy.
    (c) An important goal of the FHWA is to provide the highest 
practical and feasible level of safety for people and property 
associated with the Nation's highway transportation systems and to 
reduce highway hazards and the resulting number and severity of 
accidents on all the Nation's highways.



Sec. 625.3  Application.

    (a) Applicable Standards. (1) Design and construction standards for 
new construction, reconstruction, resurfacing (except for maintenance 
resurfacing), restoration, or rehabilitation of a highway on the NHS 
(other than a highway also on the Interstate System or other freeway) 
shall be those approved by the Secretary in cooperation with the State 
highway departments. These standards may take into account, in addition 
to the criteria described in Sec. 625.2(a), the following:
    (i) The constructed and natural environment of the area;
    (ii) The environmental, scenic, aesthetic, historic, community, and 
preservation impacts of the activity; and
    (iii) Access for other modes of transportation.
    (2) Federal-aid projects not on the NHS are to be designed, 
constructed, operated, and maintained in accordance with State laws, 
regulations, directives, safety standards, design standards, and 
construction standards.
    (b) The standards, policies, and standard specifications cited in 
Sec. 625.4 of this part contain specific criteria and controls for the 
design of NHS projects. Deviations from specific minimum values therein 
are to be handled in accordance with procedures in paragraph (f) of this 
section. If there is a conflict between criteria in the documents 
enumerated in Sec. 625.4 of this part, the latest listed standard, 
policy, or standard specification will govern.
    (c) Application of FHWA regulations, although cited in Sec. 625.4 
of this part as standards, policies, and standard specifications, shall 
be as set forth therein.
    (d) This regulation establishes Federal standards for work on the 
NHS regardless of funding source.
    (e) The Division Administrator shall determine the applicability of 
the roadway geometric design standards to traffic engineering, safety, 
and preventive maintenance projects which include very minor or no 
roadway work. Formal findings of applicability are expected only as 
needed to resolve controversies.
    (f) Exceptions. (1) Approval within the delegated authority provided 
by FHWA Order M1100.1A may be given on a project basis to designs which 
do not conform to the minimum criteria as set forth in the standards, 
policies, and standard specifications for:
    (i) Experimental features on projects; and
    (ii) Projects where conditions warrant that exceptions be made.
    (2) The determination to approve a project design that does not 
conform to the minimum criteria is to be made only after due 
consideration is given to all project conditions such as maximum service 
and safety benefits for the dollar invested, compatibility with adjacent 
sections of roadway and the probable time before reconstruction of

[[Page 150]]

the section due to increased traffic demands or changed conditions.



Sec. 625.4  Standards, policies, and standard specifications.

    The documents listed in this section are incorporated by reference 
with the approval of the Director of the Federal Register in accordance 
with 5 U.S.C. 552(a) and 1 CFR part 51 and are on file at the Office of 
the Federal Register in Washington, DC. They are available as noted in 
paragraph (d) of this section. The other CFR references listed in this 
section are included for cross-reference purposes only.
    (a) Roadway and appurtenances. (1) A Policy on Geometric Design of 
Highways and Streets, AASHTO 2001. [See Sec. 625.4(d)(1)]
    (2) A Policy on Design Standards Interstate System, AASHTO, January 
2005. [See Sec. 625.4(d)(1)]
    (3) The geometric design standards for resurfacing, restoration, and 
rehabilitation (RRR) projects on NHS highways other than freeways shall 
be the procedures and the design or design criteria established for 
individual projects, groups of projects, or all nonfreeway RRR projects 
in a State, and as approved by the FHWA. The other geometric design 
standards in this section do not apply to RRR projects on NHS highways 
other than freeways, except as adopted on an individual State basis. The 
RRR design standards shall reflect the consideration of the traffic, 
safety, economic, physical, community, and environmental needs of the 
projects.
    (4) Erosion and Sediment Control on Highway Construction Projects, 
refer to 23 CFR part 650, subpart B.
    (5) Location and Hydraulic Design of Encroachments on Flood Plains, 
refer to 23 CFR part 650, subpart A.
    (6) Procedures for Abatement of Highway Traffic Noise and 
Construction Noise, refer to 23 CFR part 772.
    (7) Accommodation of Utilities, refer to 23 CFR part 645, subpart B.
    (8) Pavement Design, refer to 23 CFR part 626.
    (b) Bridges and structures. (1) Standard Specifications for Highway 
Bridges, Fifteenth Edition, AASHTO 1992. [See Sec. 625.4(d)(1)]
    (2) Interim Specifications--Bridges, AASHTO 1993. [See Sec. 
625.4(d)(1)]
    (3) Interim Specifications--Bridges, AASHTO 1994. [See Sec. 
625.4(d)(1)]
    (4) Interim Specifications--Bridges, AASHTO 1995. [See Sec. 
625.4(d)(1)]
    (5) AASHTO LRFD Bridge Design Specifications, First Edition, AASHTO 
1994 (U.S. Units). [See Sec. 625.4(d)(1)]
    (6) AASHTO LRFD Bridge Design Specifications, First Edition, AASHTO 
1994 (SI Units). [See Sec. 625.4(d)(1)]
    (7) Standard Specifications for Movable Highway Bridges, AASHTO 
1988. [See Sec. 625.4(d)(1)]
    (8) Bridge Welding Code, ANSI/AASHTO/AWS D1.5-95, AASHTO. [See Sec. 
625.4(d) (1) and (2)]
    (9) Structural Welding Code--Reinforcing Steel, ANSI/AWS D1.4-92, 
1992. [See Sec. 625.4(d)(2)]
    (10) Standard Specifications for Structural Supports for Highway 
Signs, Luminaires and Traffic Signals, AASHTO 1994. [See Sec. 
625.4(d)(1)]
    (11) Navigational Clearances for Bridges, refer to 23 CFR part 650, 
subpart H.
    (c) Materials. (1) General Materials Requirements, refer to 23 CFR 
part 635, subpart D.
    (2) Standard Specifications for Transportation Materials and Methods 
of Sampling and Testing, parts I and II, AASHTO 1995. [See Sec. 
625.4(d)(1)]
    (3) Sampling and Testing of Materials and Construction, refer to 23 
CFR part 637, subpart B.
    (d) Availability of documents incorporated by reference. The 
documents listed in Sec. 625.4 are incorporated by reference and are on 
file and available for inspection at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal--register/code--of--federal--regulations/ibr--locations.html. 
These documents may also be reviewed at the Department of Transportation 
Library, 400 Seventh Street, SW., Washington, DC, in Room 2200. These 
documents are also available for inspection and copying as provided in 
49 CFR part 7, appendix D. Copies of these documents may be obtained 
from the following organizations:

[[Page 151]]

    (1) American Association of State Highway and Transportation 
Officials (AASHTO), Suite 249, 444 North Capitol Street, NW., 
Washington, DC 20001.
    (2) American Welding Society (AWS), 2501 Northwest Seventh Street, 
Miami, FL 33125.

[62 FR 15397, Apr. 1, 1997, as amended at 67 FR 6395, Feb. 12, 2002; 69 
FR 18803, Apr. 9, 2004; 71 FR 26414, May 5, 2006]



PART 626_PAVEMENT POLICY--Table of Contents




Sec.
626.1 Purpose.
626.2 Definitions.
626.3 Policy.

    Authority: 23 U.S.C. 101(e), 109, and 315; 49 CFR 1.48(b)

    Source: 61 FR 67174, Dec. 19, 1996, unless otherwise noted.



Sec. 626.1  Purpose.

    To set forth pavement design policy for Federal-aid highway 
projects.



Sec. 626.2  Definitions.

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) are applicable to this part. As used in this part:
    Pavement design means a project level activity where detailed 
engineering and economic considerations are given to alternative 
combinations of subbase, base, and surface materials which will provide 
adequate load carrying capacity. Factors which are considered include: 
Materials, traffic, climate, maintenance, drainage, and life-cycle 
costs.



Sec. 626.3  Policy.

    Pavement shall be designed to accommodate current and predicted 
traffic needs in a safe, durable, and cost effective manner.



PART 627_VALUE ENGINEERING--Table of Contents




Sec.
627.1 Purpose and applicability.
627.3 Definitions.
627.5 General principles and procedures.

    Authority: 23 U.S.C. 106(d), 106(f), 112(b), 302, 307, and 315; 49 
CFR 18.

    Source: 62 FR 6868, Feb. 14, 1997, unless otherwise noted.



Sec. 627.1  Purpose and applicability.

    (a) This regulation will establish a program to improve project 
quality, reduce project costs, foster innovation, eliminate unnecessary 
and costly design elements, and ensure efficient investments by 
requiring the application of value engineering (VE) to all Federal-aid 
highway projects on the National Highway System (NHS) with an estimated 
cost of $25 million or more.
    (b) In accordance with the Federal-State relationship established 
under the Federal-aid highway program, State transportation departments 
(STDs) shall assure that a VE analysis has been performed on all 
applicable projects and that all resulting, approved recommendations are 
incorporated into the plans, specifications and estimate.

[62 FR 6868, Feb. 14, 1997, as amended at 67 FR 75924, Dec. 10, 2002]



Sec. 627.3  Definitions.

    Project. A portion of a highway that a State proposes to construct, 
reconstruct, or improve as described in the preliminary design report or 
applicable environmental document. A project may consist of several 
contracts or phases over several years.
    Value engineering. The systematic application of recognized 
techniques by a multi-disciplined team to identify the function of a 
product or service, establish a worth for that function, generate 
alternatives through the use of creative thinking, and provide the 
needed functions to accomplish the original purpose of the project, 
reliably, and at the lowest life-cycle cost without sacrificing safety, 
necessary quality, and environmental attributes of the project.



Sec. 627.5  General principles and procedures.

    (a) State VE programs. State transportation departments must 
establish programs to assure that VE studies are performed on all 
Federal-aid highway projects on the NHS with an estimated cost of $25 
million or more. Program procedures should provide for the 
identification of candidate projects for VE studies early in the 
development of the

[[Page 152]]

State's multi-year Statewide Transportation Improvement Program.
    (1) Project selection. The program may, at the State's discretion, 
establish specific criteria and guidelines for selecting other highway 
projects for VE studies.
    (2) Studies. Value engineering studies shall follow the widely 
recognized systematic problem-solving analysis process that is used 
throughout private industry and governmental agencies. Studies must be 
performed using multi-disciplined teams of individuals not personally 
involved in the design of the project. Study teams should consist of a 
team leader and individuals from different speciality areas, such as 
design, construction, environment, planning, maintenance, right-of-way, 
and other areas depending upon the type of project being reviewed. 
Individuals from the public and other agencies may also be included on 
the team when their inclusion is found to be in the public interest.
    (i) Each team leader should be trained and knowledgeable in VE 
techniques and be able to serve as the coordinator and facilitator of 
the team.
    (ii) Studies should be employed as early as possible in the project 
development or design process so that accepted VE recommendations can be 
implemented without delaying the progress of the project.
    (iii) Studies should conclude with a formal report outlining the 
study team's recommendations for improving the project and reducing its 
overall cost.
    (3) Recommendations. The program should include procedures to 
approve or reject recommendations and ensure the prompt review of VE 
recommendations by staff offices whose speciality areas are implicated 
in proposed changes and by offices responsible for implementing accepted 
recommendations. Reviews by these offices should be performed promptly 
to minimize delays to the project.
    (4) Incentives. The program may include a VE or cost reduction 
incentive clause in an STD's standard specifications or project special 
provisions that allows construction contractors to submit change 
proposals and share the resulting cost savings with the STD.
    (5) Monitoring. The program should include procedures for monitoring 
the implementation of VE study team recommendations and VE change 
proposal recommendations submitted by construction contractors.
    (b) State VE coordinators. Individuals knowledgeable in VE shall be 
assigned responsibilities to coordinate and monitor the STD's program 
and be actively involved in all phases of the program.
    (c) Use of consultants. Consultants or firms with experience in VE 
may be retained by STDs to conduct the studies of Federal-aid highway 
projects or elements of Federal-aid highway projects required under 
Sec. 627.1(a) of this part. Consultants or firms should not be retained 
to conduct studies of their own designs unless they maintain separate 
and distinct organizational separation of their VE and design sections.
    (d) Funding eligibility. The cost of performing VE studies is 
project related and is, therefore, eligible for reimbursement with 
Federal-aid highway funds at the appropriate pro-rata share for the 
project studied.
    (e) In the case of a Federal-aid design-build project meeting the 
project criteria in 23 CFR 627.1(a), the STDs shall fulfill the value 
engineering analysis requirement by performing a value engineering 
analysis prior to the release of the Request for Proposals document.

[62 FR 6868, Feb. 14, 1997, as amended at 67 FR 75924, Dec. 10, 2002]



PART 630_PRECONSTRUCTION PROCEDURES--Table of Contents




             Subpart A_Project Authorization and Agreements

Sec.
630.102 Purpose.
630.104 Applicability.
630.106 Authorization to proceed.
630.108 Preparation of agreement.
630.110 Modification of original agreement.
630.112 Agreement provisions.

             Subpart B_Plans, Specifications, and Estimates

630.201 Purpose.
630.203 Applicability.
630.205 Preparation, submission, and approval.

[[Page 153]]

Subpart C [Reserved]

                       Subpart D_Geodetic Markers

630.401 Purpose.
630.402 Policy.
630.403 Initiation of projects.
630.404 Standards.

Subparts E-F [Reserved]

         Subpart G_Advance Construction of Federal-Aid Projects

630.701 Purpose.
630.703 Eligibility.
630.705 Procedures.
630.707 [Reserved]
630.709 Conversion to a regular Federal-aid project.

                    Subpart H_Bridges on Federal Dams

630.801 Purpose.
630.802 Applicability.
630.803 Procedures.

Subpart I [Reserved]

                 Subpart J_Work Zone Safety and Mobility

630.1002 Purpose.
630.1004 Definitions and explanation of terms.
630.1006 Work zone safety and mobility policy.
630.1008 State-level processes and procedures.
630.1010 Significant projects.
630.1012 Project-level procedures.
630.1014 Implementation.
630.1016 Compliance date.

               Subpart K_Temporary Traffic Control Devices

630.1102 Purpose.
630.1104 Definitions.
630.1106 Policy and procedures for work zone safety management.
630.1108 Work zone safety management measures and strategies.
630.1110 Maintenance of temporary traffic control devices.

    Authority: Sec. 1503 of Pub. L. 109-59, 119 Stat. 1144; 23 U.S.C. 
106, 109, 112, 115, 315, 320, and 402(a); 23 CFR 1.32 and 49 CFR 
1.48(b).



             Subpart A_Project Authorization and Agreements

    Source: 66 FR 23847, May 10, 2001, unless otherwise noted.



Sec. 630.102  Purpose.

    The purpose of this subpart is to prescribe policies for authorizing 
Federal-aid projects through execution of the project agreement required 
by 23 U.S.C. 106(a)(2).



Sec. 630.104  Applicability.

    (a) This subpart is applicable to all Federal-aid projects unless 
specifically exempted.
    (b) Other projects which involve special procedures are to be 
approved, or authorized as set out in the implementing instructions or 
regulations for those projects.



Sec. 630.106  Authorization to proceed.

    (a)(1) The State transportation department (STD) must obtain an 
authorization to proceed from the FHWA before beginning work on any 
Federal-aid project. The STD may request an authorization to proceed in 
writing or by electronic mail for a project or a group of projects.
    (2) The FHWA will issue the authorization to proceed either through 
or after the execution of a formal project agreement with the State. The 
agreement can be executed only after applicable prerequisite 
requirements of Federal laws and implementing regulations and directives 
are satisfied. Except as provided in paragraphs (c)(1) through (c)(4) of 
this section, the FHWA will obligate Federal funds in the project or 
group of projects upon execution of the project agreement.
    (3) The State's request that Federal funds be obligated shall be 
supported by a documented cost estimate that is based on the State's 
best estimate of costs.
    (4) The State shall maintain a process to adjust project cost 
estimates. For example, the process would require a review of the 
project cost estimate when the bid is approved, a project phase is 
completed, a design change is approved, etc. Specifically, the State 
shall revise the Federal funds obligated within 90 days after it has 
determined that the estimated Federal share of project costs has 
decreased by $250,000 or more.
    (5) The State shall review, on a quarterly basis, inactive projects 
(for the purposes of this subpart an ``inactive

[[Page 154]]

project'' means a project for which no expenditures have been charged 
against Federal funds for the past 12 months) with unexpended Federal 
obligations and shall revise the Federal funds obligated for a project 
within 90 days to reflect the current cost estimate, based on the 
following criteria:
    (i) Projects inactive for the past 12 months with unexpended 
balances more than $500,000,
    (ii) Projects inactive for the past 24 months with unexpended 
balances of $50,000 to $500,000, and
    (iii) Projects inactive for the past 36 months with unexpended 
balances less than $50,000.
    (6) If the State fails to comply with the requirements of paragraphs 
(a)(3), (4), or (5) of this section, then the FHWA shall revise the 
obligations or take such other action as authorized by 23 CFR 1.36. The 
FHWA shall advise the State of its proposed actions and provide the 
State with the opportunity to respond before actions are taken. The FHWA 
shall not adjust obligations without a State's consent during the August 
redistribution process, August 1 to September 30.
    (7) For design-build projects, the execution or modification of the 
project agreement for final design and physical construction, and 
authorization to proceed, shall not occur until after the completion of 
the NEPA process. However, preliminary design (as defined in 23 CFR 
636.103) and preliminary engineering may be authorized in accordance 
with this section.
    (b) Federal funds shall not participate in costs incurred prior to 
the date of a project agreement except as provided by 23 CFR 1.9(b).
    (c) The execution of the project agreement shall be deemed a 
contractual obligation of the Federal government under 23 U.S.C. 106 and 
shall require that appropriate funds be available at the time of 
authorization for the agreed Federal share, either pro rata or lump sum, 
of the cost of eligible work to be incurred by the State except as 
follows:
    (1) Advance construction projects authorized under 23 U.S.C. 115.
    (2) Projects for preliminary studies for the portion of the 
preliminary engineering and right-of-way (ROW) phase(s) through the 
selection of a location.
    (3) Projects for ROW acquisition in hardship and protective buying 
situations through the selection of a particular location. This includes 
ROW acquisition within a potential highway corridor under consideration 
where necessary to preserve the corridor for future highway purposes. 
Authorization of work under this paragraph shall be in accord with the 
provisions of 23 CFR part 710.
    (4) In special cases where the Federal Highway Administrator 
determines it to be in the best interest of the Federal-aid highway 
program.
    (d) For projects authorized to proceed under paragraphs (c)(1) 
through (c)(4) of this section, the executed project agreement shall 
contain the following statement: ``Authorization to proceed is not a 
commitment or obligation to provide Federal funds for that portion of 
the undertaking not fully funded herein.''
    (e) For projects authorized under paragraphs (c)(2) and (c)(3) of 
this section, subsequent authorizations beyond the location stage shall 
not be given until appropriate available funds have been obligated to 
cover eligible costs of the work covered by the previous authorization.
    (f)(1) The Federal-aid share of eligible project costs shall be 
established at the time the project agreement is executed in one of the 
following manners:
    (i) Pro rata, with the agreement stating the Federal share as a 
specified percentage; or
    (ii) Lump sum, with the agreement stating that Federal funds are 
limited to a specified dollar amount not to exceed the legal pro rata.
    (2) The pro-rata or lump sum share may be adjusted before or shortly 
after contract award to reflect any substantive change in the bids 
received as compared to the STD's estimated cost of the project at the 
time of FHWA authorization, provided that Federal funds are available.
    (3) Federal participation is limited to the agreed Federal share of 
eligible costs actually incurred by the State, not to exceed the maximum 
permitted by enabling legislation.

[[Page 155]]

    (g) The State may contribute more than the normal non-Federal share 
of title 23, U.S.C. projects. In general, financing proposals that 
result in only minimal amounts of Federal funds in projects should be 
avoided unless they are based on sound project management decisions.
    (h)(1) Donations of cash, land, material or services may be credited 
to the State's non-Federal share of the participating project work in 
accordance with title 23, U.S.C., and implementing regulations.
    (2) Contributions may not exceed the total costs incurred by the 
State on the project. Cash contributions from all sources plus the 
Federal funds may not exceed the total cost of the project.

[66 FR 23847, May 10, 2001, as amended at 71 FR 4995, Jan. 31, 2006; 72 
FR 45336, Aug. 14, 2007]



Sec. 630.108  Preparation of agreement.

    (a) The STD shall prepare a project agreement for each Federal-aid 
project.
    (b) The STD may develop the project agreement in a format acceptable 
to both the STD and the FHWA provided the following are included:
    (1) A description of each project location including State and 
project termini;
    (2) The Federal-aid project number;
    (3) The work covered by the agreement;
    (4) The total project cost and amount of Federal funds under 
agreement;
    (5) The Federal-aid share of eligible project costs expressed as 
either a pro rata percentage or a lump sum as set forth in Sec. 
630.106(f)(1);
    (6) A statement that the State accepts and will comply with the 
agreement provisions set forth in Sec. 630.112;
    (7) A statement that the State stipulates that its signature on the 
project agreement constitutes the making of the certifications set for 
in Sec. 630.112; and
    (8) Signatures of officials from both the State and the FHWA, and 
the date executed.
    (c) The project agreement should also document, by comment, 
instances where:
    (1) The State is applying amounts of credits from special accounts 
(such as the 23 U.S.C. 120(j) toll credits, 23 U.S.C. 144(n) off-system 
bridge credits and 23 U.S.C. 323 land value credits) to cover all or a 
portion of the normal percent non-Federal share of the project;
    (2) The project involves other arrangements affecting Federal 
funding or non-Federal matching provisions, including tapered match, 
donations, or use of other Federal agency funds, if known at the time 
the project agreement is executed; and
    (3) The State is claiming finance related costs for bond and other 
debt instrument financing (such as payments to States under 23 U.S.C. 
122).
    (d) The STD may use an electronic version of the agreement as 
provided by the FHWA.

(Approved by the Office of Management and Budget under control number 
2125-0529)



Sec. 630.110  Modification of original agreement.

    (a) When changes are needed to the original project agreement, a 
modification of agreement shall be prepared. Agreements should not be 
modified to replace one Federal fund category with another unless 
specifically authorized by statute.
    (b) The STD may develop the modification of project agreement in a 
format acceptable to both the STD and the FHWA provided the following 
are included:
    (1) The Federal-aid project number and State;
    (2) A sequential number identifying the modification;
    (3) A reference to the date of the original project agreement to be 
modified;
    (4) The original total project cost and the original amount of 
Federal funds under agreement;
    (5) The revised total project cost and the revised amount of Federal 
funds under agreement;
    (6) The reason for the modifications; and,
    (7) Signatures of officials from both the State and the FHWA and 
date executed.
    (c) The STD may use an electronic version of the modification of 
project agreement as provided by the FHWA.

[[Page 156]]



Sec. 630.112  Agreement provisions.

    (a) The State, through its transportation department, accepts and 
agrees to comply with the applicable terms and conditions set forth in 
title 23, U.S.C., the regulations issued pursuant thereto, the policies 
and procedures promulgated by the FHWA relative to the designated 
project covered by the agreement, and all other applicable Federal laws 
and regulations.
    (b) Federal funds obligated for the project must not exceed the 
amount agreed to on the project agreement, the balance of the estimated 
total cost being an obligation of the State. Such obligation of Federal 
funds extends only to project costs incurred by the State after the 
execution of a formal project agreement with the FHWA.
    (c) The State must stipulate that as a condition to payment of the 
Federal funds obligated, it accepts and will comply with the following 
applicable provisions:
    (1) Project for acquisition of rights-of-way. In the event that 
actual construction of a road on this right-of-way is not undertaken by 
the close of the twentieth fiscal year following the fiscal year in 
which the project is authorized, the STD will repay to the FHWA the sum 
or sums of Federal funds paid to the transportation department under the 
terms of the agreement. The State may request a time extension beyond 
the 20-year limit with no repayment of Federal funds, and the FHWA may 
approve this request if it is considered reasonable.
    (2) Preliminary engineering project. In the event that right-of-way 
acquisition for, or actual construction of, the road for which this 
preliminary engineering is undertaken is not started by the close of the 
tenth fiscal year following the fiscal year in which the project is 
authorized, the STD will repay to the FHWA the sum or sums of Federal 
funds paid to the transportation department under the terms of the 
agreement. The State may request a time extension for any preliminary 
engineering project beyond the 10-year limit with no repayment of 
Federal funds, and the FHWA may approve this request if it is considered 
reasonable.
    (3) Drug-free workplace certification. By signing the project 
agreement, the STD agrees to provide a drug-free workplace as required 
by 49 CFR part 29, subpart F. In signing the project agreement, the 
State is providing the certification required in appendix C to 49 CFR 
part 29, unless the State provides an annual certification.
    (4) Suspension and debarment certification. By signing the project 
agreement, the STD agrees to fulfill the responsibility imposed by 49 
CFR 29.510 regarding debarment, suspension, and other responsibility 
matters. In signing the project agreement, the State is providing the 
certification for its principals required in appendix A to 49 CFR part 
29.
    (5) Lobbying certification. By signing the project agreement, the 
STD agrees to abide by the lobbying restrictions set forth in 49 CFR 
part 20. In signing the project agreement, the State is providing the 
certification required in appendix A to 49 CFR part 20.



             Subpart B_Plans, Specifications, and Estimates

    Source: 43 FR 58564, Dec. 15, 1978, unless otherwise noted.



Sec. 630.201  Purpose.

    The purpose of this subpart is to prescribe Federal Highway 
Administration (FHWA) procedures relating to the preparation, 
submission, and approval of plans, specifications and estimates (PS&E), 
and supporting documents for Federal-aid projects.



Sec. 630.203  Applicability.

    The provisions of this regulation apply to all highway construction 
projects financed in whole or in part with Federal-aid highway funds and 
to be undertaken by a State or political subdivision.

[69 FR 7118, Feb. 13, 2004]



Sec. 630.205  Preparation, submission, and approval.

    (a) The contents and number of copies of the PS&E assembly shall be 
determined by the FHWA.
    (b) Plans and specifications shall describe the location and design 
features and the construction requirements in

[[Page 157]]

sufficient detail to facilitate the construction, the contract control 
and the estimation of construction costs of the project. The estimate 
shall reflect the anticipated cost of the project in sufficient detail 
to provide an initial prediction of the financial obligations to be 
incurred by the State and FHWA and to permit an effectice review and 
comparison of the bids received.
    (c) PS&E assemblies for Federal-aid highway projects shall be 
submitted to the FHWA for approval.
    (d) The State highway agency (SHA) shall be advised of approval of 
the PS&E by the FHWA.
    (e) No project or part thereof for actual construction shall be 
advertised for contract nor work commenced by force account until the 
PS&E has been approved by the FHWA and the SHA has been so notified.

Subpart C [Reserved]



                       Subpart D_Geodetic Markers

    Source: 39 FR 26414, July 19, 1974, unless otherwise noted.



Sec. 630.401  Purpose.

    The purpose of this subpart is to prescribe procedures for 
conducting geodetic control surveys when participation with Federal-aid 
highway funds in the cost thereof is proposed and to encourage inter-
agency cooperation in setting station markers, surveying to measure 
their position, and preserving the control so established.



Sec. 630.402  Policy.

    (a) Geodetic surveys along Federal-aid highway routes may be 
programmed as Federal-aid highway projects.
    (b) All geodetic survey work performed as a Federal-aid highway 
project will conform to National Ocean Survey (NOS) specifications. NOS 
will, as the representative of FHWA, be responsible for the inspection 
and verification of the work to ascertain that the specifications for 
the work have been met. Final project acceptance by FHWA will be 
predicated on a finding of acceptability by NOS.



Sec. 630.403  Initiation of projects.

    All projects shall be coordinated by the FHWA Division 
Administrator, the State highway department and the National Ocean 
Survey.



Sec. 630.404  Standards.

    (a) Highway purposes may best be served by the establishment of 
station markings for horizontal control along Federal-aid highway routes 
at spacings of three to eight kilometers (about 2 to 5 miles) and 
station markers for vertical control of spacings no closer than one 
kilometer. These requirements may be waived only with the approval of 
the Administrator.
    (b) Projects should be of sufficient scope to permit efficient use 
of field parties. Projects should extend at least 30 kilometers. 
Projects may be coordinated with adjoining States to attain greater 
efficiency.
    (c) Where geodetic station markers cannot be established inititally 
at points readily accessible from the Federal-aid route, or where 
unavoidable circumstances result in their being established within 
construction limits, supplemental projects may later be approved to set 
and survey markers at satisfactory permanent points, preferably within 
the right-of-way but at points where their use does not introduce 
traffic hazards.

Subparts E-F [Reserved]



         Subpart G_Advance Construction of Federal-Aid Projects

    Source: 60 FR 36993, July 19, 1995, unless otherwise noted.



Sec. 630.701  Purpose.

    The purpose of this subpart is to prescribe procedures for advancing 
the construction of Federal-aid highway projects without obligating 
Federal funds apportioned or allocated to the State.



Sec. 630.703  Eligibility.

    (a) The State Highway Agency (SHA) may proceed with a highway 
substitute, congestion mitigation and air quality improvement program, 
surface

[[Page 158]]

transportation program, bridge replacement and rehabilitation, or 
planning and research project in accordance with this subpart, provided 
the SHA:
    (1) Has obligated all funds apportioned or allocated to it under 23 
U.S.C. 103(e)(4)(H), 104(b)(2), 104(b)(3), 104(f), 144, or 307, as the 
case may be for the proposed project, or
    (2) Has used all obligation authority distributed to it, or
    (3) Demonstrates that it will use all obligation authority 
distributed to it.
    (b) The SHA may proceed with a National Highway System (NHS) or 
Interstate project in accordance with this subpart without regard to 
apportionment or obligation authority balances. Interstate projects 
include Interstate construction and Interstate maintenance.



Sec. 630.705  Procedures.

    (a) An advance construction project shall meet the same requirements 
and be processed in the same manner as a regular Federal-aid project, 
except,
    (1) The FHWA authorization does not constitute any commitment of 
Federal funds on the project, and
    (2) The FHWA shall not reimburse the State until the project is 
converted under Sec. 630.709.
    (b) Project numbers shall be identified by the letters ``AC'' 
preceding the regular project number prefix.

[60 FR 36993, July 19, 1995, as amended at 68 FR 60033, Oct. 21, 2003]



Sec. 630.707  [Reserved]



Sec. 630.709  Conversion to a regular Federal-aid project.

    (a) The SHA may submit a written request to the FHWA that a project 
be converted to a regular Federal-aid project at any time provided that 
sufficient Federal-aid funds and obligation authority are available.
    (b) Subsequent to FHWA approval the SHA may claim reimbursement for 
the Federal share of project costs incurred, provided the project 
agreement has been executed. If the SHA has previously submitted a final 
voucher, the FHWA will process the voucher for payment.



                    Subpart H_Bridges on Federal Dams

    Source: 39 FR 36474, Oct. 10, 1974, unless otherwise noted.



Sec. 630.801  Purpose.

    The purpose of this subpart is to prescribe procedures for the 
construction and financing, by an agency of the Federal Government, of 
public highway bridges over dams constructed and owned by or for the 
United States.



Sec. 630.802  Applicability.

    A proposed bridge over a dam, together with the approach roads to 
connect the bridge with existing public highways, must be eligible for 
inclusion in the Federal-aid highway system, if not already a part 
thereof.



Sec. 630.803  Procedures.

    A State's application to qualify a project under this subpart will 
include:
    (a) A certification that the bridge is economically desirable and 
needed as a link in the Federal-aid highway system.
    (b) A statement showing the source and availability of funds to be 
used in construction of the roadway approaches.
    (c) A statement of any obligation on the part of the agency 
constructing the dam to provide such bridge or approach roads to satisfy 
a legal liability incurred independently of this subpart.

Subpart I [Reserved]



                 Subpart J_Work Zone Safety and Mobility

    Source: 69 FR 54569, Sept. 9, 2004, unless otherwise noted.



Sec. 630.1002  Purpose.

    Work zones directly impact the safety and mobility of road users and 
highway workers. These safety and mobility impacts are exacerbated by an 
aging highway infrastructure and growing congestion in many locations. 
Addressing these safety and mobility issues requires considerations that 
start early in project development and continue through project 
completion.

[[Page 159]]

Part 6 of the Manual On Uniform Traffic Control Devices (MUTCD) \1\ sets 
forth basic principles and prescribes standards for the design, 
application, installation, and maintenance of traffic control devices 
for highway and street construction, maintenance operation, and utility 
work. In addition to the provisions in the MUTCD, there are other 
actions that could be taken to further help mitigate the safety and 
mobility impacts of work zones. This subpart establishes requirements 
and provides guidance for systematically addressing the safety and 
mobility impacts of work zones, and developing strategies to help manage 
these impacts on all Federal-aid highway projects.
---------------------------------------------------------------------------

    \1\ The MUTCD is approved by the FHWA and recognized as the national 
standard for traffic control on all public roads. It is incorporated by 
reference into the Code of Federal Regulations at 23 CFR part 655. It is 
available on the FHWA's Web site at http://mutcd.fhwa.dot.gov and is 
available for inspection and copying at the FHWA Washington, DC 
Headquarters and all FHWA Division Offices as prescribed at 49 CFR part 
7.
---------------------------------------------------------------------------



Sec. 630.1004  Definitions and explanation of terms.

    As used in this subpart:
    Highway workers include, but are not limited to, personnel of the 
contractor, subcontractor, DOT, utilities, and law enforcement, 
performing work within the right-of-way of a transportation facility.
    Mobility is the ability to move from place to place and is 
significantly dependent on the availability of transportation facilities 
and on system operating conditions. With specific reference to work 
zones, mobility pertains to moving road users efficiently through or 
around a work zone area with a minimum delay compared to baseline travel 
when no work zone is present, while not compromising the safety of 
highway workers or road users. The commonly used performance measures 
for the assessment of mobility include delay, speed, travel time and 
queue lengths.
    Safety is a representation of the level of exposure to potential 
hazards for users of transportation facilities and highway workers. With 
specific reference to work zones, safety refers to minimizing potential 
hazards to road users in the vicinity of a work zone and highway workers 
at the work zone interface with traffic. The commonly used measures for 
highway safety are the number of crashes or the consequences of crashes 
(fatalities and injuries) at a given location or along a section of 
highway during a period of time. Highway worker safety in work zones 
refers to the safety of workers at the work zone interface with traffic 
and the impacts of the work zone design on worker safety. The number of 
worker fatalities and injuries at a given location or along a section of 
highway, during a period of time are commonly used measures for highway 
worker safety.
    Work zone \2\ is an area of a highway with construction, 
maintenance, or utility work activities. A work zone is typically marked 
by signs, channelizing devices, barriers, pavement markings, and/or work 
vehicles. It extends from the first warning sign or high-intensity 
rotating, flashing, oscillating, or strobe lights on a vehicle to the 
END ROAD WORK sign or the last temporary traffic control (TTC) device.
---------------------------------------------------------------------------

    \2\ MUTCD, Part 6, ``Temporary Traffic Control,'' Section 6C.02, 
``Temporary Traffic Control Zones.''
---------------------------------------------------------------------------

    Work zone crash \3\ means a traffic crash in which the first harmful 
event occurs within the boundaries of a work zone or on an approach to 
or exit from a work zone, resulting from an activity, behavior, or 
control related to the movement of the traffic units through

[[Page 160]]

the work zone. This includes crashes occurring on approach to, exiting 
from or adjacent to work zones that are related to the work zone.
---------------------------------------------------------------------------

    \3\ ``Model Minimum Uniform Crash Criteria Guideline'' (MMUCC), 2d 
Ed. (Electronic), 2003, produced by National Center for Statistics and 
Analysis, National Highway Traffic Safety Administration (NHTSA). 
Telephone 1-(800)-934-8517. Available at the URL: http://www-
nrd.nhtsa.dot.gov. The NHTSA, the FHWA, the Federal Motor Carrier Safety 
Administration (FMCSA), and the Governors Highway Safety Association 
(GHSA) sponsored the development of the MMUCC Guideline which recommends 
voluntary implementation of the 111 MMUCC data elements and serves as a 
reporting threshold that includes all persons (injured and uninjured) in 
crashes statewide involving death, personal injury, or property damage 
of $1,000 or more. The Guideline is a tool to strengthen existing State 
crash data systems.
---------------------------------------------------------------------------

    Work zone impacts refer to work zone-induced deviations from the 
normal range of transportation system safety and mobility. The extent of 
the work zone impacts may vary based on factors such as, road 
classification, area type (urban, suburban, and rural), traffic and 
travel characteristics, type of work being performed, time of day/night, 
and complexity of the project. These impacts may extend beyond the 
physical location of the work zone itself, and may occur on the roadway 
on which the work is being performed, as well as other highway 
corridors, other modes of transportation, and/or the regional 
transportation network.



Sec. 630.1006  Work zone safety and mobility policy.

    Each State shall implement a policy for the systematic consideration 
and management of work zone impacts on all Federal-aid highway projects. 
This policy shall address work zone impacts throughout the various 
stages of the project development and implementation process. This 
policy may take the form of processes, procedures, and/or guidance, and 
may vary based on the characteristics and expected work zone impacts of 
individual projects or classes of projects. The States should institute 
this policy using a multi-disciplinary team and in partnership with the 
FHWA. The States are encouraged to implement this policy for non-
Federal-aid projects as well.



Sec. 630.1008  State-level processes and procedures.

    (a) This section consists of State-level processes and procedures 
for States to implement and sustain their respective work zone safety 
and mobility policies. State-level processes and procedures, data and 
information resources, training, and periodic evaluation enable a 
systematic approach for addressing and managing the safety and mobility 
impacts of work zones.
    (b) Work zone assessment and management procedures. States should 
develop and implement systematic procedures to assess work zone impacts 
in project development, and to manage safety and mobility during project 
implementation. The scope of these procedures shall be based on the 
project characteristics.
    (c) Work zone data. States shall use field observations, available 
work zone crash data, and operational information to manage work zone 
impacts for specific projects during implementation. States shall 
continually pursue improvement of work zone safety and mobility by 
analyzing work zone crash and operational data from multiple projects to 
improve State processes and procedures. States should maintain elements 
of the data and information resources that are necessary to support 
these activities.
    (d) Training. States shall require that personnel involved in the 
development, design, implementation, operation, inspection, and 
enforcement of work zone related transportation management and traffic 
control be trained, appropriate to the job decisions each individual is 
required to make. States shall require periodic training updates that 
reflect changing industry practices and State processes and procedures.
    (e) Process review. In order to assess the effectiveness of work 
zone safety and mobility procedures, the States shall perform a process 
review at least every two years. This review may include the evaluation 
of work zone data at the State level, and/or review of randomly selected 
projects throughout their jurisdictions. Appropriate personnel who 
represent the project development stages and the different offices 
within the State, and the FHWA should participate in this review. Other 
non-State stakeholders may also be included in this review, as 
appropriate. The results of the review are intended to lead to 
improvements in work zone processes and procedures, data and information 
resources, and training programs so as to enhance efforts to address 
safety and mobility on current and future projects.



Sec. 630.1010  Significant projects.

    (a) A significant project is one that, alone or in combination with 
other concurrent projects nearby is anticipated to cause sustained work 
zone impacts (as defined in Sec. 630.1004) that are

[[Page 161]]

greater than what is considered tolerable based on State policy and/or 
engineering judgment.
    (b) The applicability of the provisions in Sec. Sec. 630.1012(b)(2) 
and 630.1012(b)(3) is dependent upon whether a project is determined to 
be significant. The State shall identify upcoming projects that are 
expected to be significant. This identification of significant projects 
should be done as early as possible in the project delivery and 
development process, and in cooperation with the FHWA. The State's work 
zone policy provisions, the project's characteristics, and the magnitude 
and extent of the anticipated work zone impacts should be considered 
when determining if a project is significant or not.
    (c) All Interstate system projects within the boundaries of a 
designated Transportation Management Area (TMA) that occupy a location 
for more than three days with either intermittent or continuous lane 
closures shall be considered as significant projects.
    (d) For an Interstate system project or categories of Interstate 
system projects that are classified as significant through the 
application of the provisions in Sec. 630.1010(c), but in the judgment 
of the State they do not cause sustained work zone impacts, the State 
may request from the FHWA, an exception to Sec. Sec. 630.1012(b)(2) and 
630.1012(b)(3). Exceptions to these provisions may be granted by the 
FHWA based on the State's ability to show that the specific Interstate 
system project or categories of Interstate system projects do not have 
sustained work zone impacts.



Sec. 630.1012  Project-level procedures.

    (a) This section provides guidance and establishes procedures for 
States to manage the work zone impacts of individual projects.
    (b) Transportation Management Plan (TMP). A TMP consists of 
strategies to manage the work zone impacts of a project. Its scope, 
content, and degree of detail may vary based upon the State's work zone 
policy, and the State's understanding of the expected work zone impacts 
of the project. For significant projects (as defined in Sec. 630.1010), 
the State shall develop a TMP that consists of a Temporary Traffic 
Control (TTC) plan and addresses both Transportation Operations (TO) and 
Public Information (PI) components. For individual projects or classes 
of projects that the State determines to have less than significant work 
zone impacts, the TMP may consist only of a TTC plan. States are 
encouraged to consider TO and PI issues for all projects.
    (1) A TTC plan describes TTC measures to be used for facilitating 
road users through a work zone or an incident area. The TTC plan plays a 
vital role in providing continuity of reasonably safe and efficient road 
user flow and highway worker safety when a work zone, incident, or other 
event temporarily disrupts normal road user flow. The TTC plan shall be 
consistent with the provisions under Part 6 of the MUTCD and with the 
work zone hardware recommendations in Chapter 9 of the American 
Association of State Highway and Transportation Officials (AASHTO) 
Roadside Design Guide. Chapter 9 of the AASHTO Roadside Design Guide: 
``Traffic Barriers, Traffic Control Devices, and Other Safety Features 
for Work Zones'' 2002, is incorporated by reference in accordance with 5 
U.S.C. 552(a) and 1 CFR part 51 and is on file at the National Archives 
and Record Administration (NARA). For information on the availability of 
this material at NARA call (202) 741-6030, or go to http://
www.archives.gov/federal--register/code--of--federal--regulations/ibr--
locations.html. The entire document is available for purchase from the 
American Association of State Highway and Transportation Officials 
(AASHTO), 444 North Capitol Street, NW., Suite 249, Washington, DC 20001 
or at the URL: http://www.aashto.org/bookstore. It is available for 
inspection from the FHWA Washington Headquarters and all Division 
Offices as listed in 49 CFR part 7. In developing and implementing the 
TTC plan, pre-existing roadside safety hardware shall be maintained at 
an equivalent or better level than existed prior to project 
implementation. The scope of the TTC plan is determined by the project 
characteristics, and the traffic safety and control requirements 
identified by the State for that project. The TTC plan

[[Page 162]]

shall either be a reference to specific TTC elements in the MUTCD, 
approved standard TTC plans, State transportation department TTC manual, 
or be designed specifically for the project.
    (2) The TO component of the TMP shall include the identification of 
strategies that will be used to mitigate impacts of the work zone on the 
operation and management of the transportation system within the work 
zone impact area. Typical TO strategies may include, but are not limited 
to, demand management, corridor/network management, safety management 
and enforcement, and work zone traffic management. The scope of the TO 
component should be determined by the project characteristics, and the 
transportation operations and safety strategies identified by the State.
    (3) The PI component of the TMP shall include communications 
strategies that seek to inform affected road users, the general public, 
area residences and businesses, and appropriate public entities about 
the project, the expected work zone impacts, and the changing conditions 
on the project. This may include traveler information strategies. The 
scope of the PI component should be determined by the project 
characteristics and the public information and outreach strategies 
identified by the State. Public information should be provided through 
methods best suited for the project, and may include, but not be limited 
to, information on the project characteristics, expected impacts, 
closure details, and commuter alternatives.
    (4) States should develop and implement the TMP in sustained 
consultation with stakeholders (e.g., other transportation agencies, 
railroad agencies/operators, transit providers, freight movers, utility 
suppliers, police, fire, emergency medical services, schools, business 
communities, and regional transportation management centers).
    (c) The Plans, Specifications, and Estimates (PS&Es) shall include 
either a TMP or provisions for contractors to develop a TMP at the most 
appropriate project phase as applicable to the State's chosen 
contracting methodology for the project. A contractor developed TMP 
shall be subject to the approval of the State, and shall not be 
implemented before it is approved by the State.
    (d) The PS&Es shall include appropriate pay item provisions for 
implementing the TMP, either through method or performance based 
specifications.
    (1) For method-based specifications individual pay items, lump sum 
payment, or a combination thereof may be used.
    (2) For performance based specifications, applicable performance 
criteria and standards may be used (e.g., safety performance criteria 
such as number of crashes within the work zone; mobility performance 
criteria such as travel time through the work zone, delay, queue length, 
traffic volume; incident response and clearance criteria; work duration 
criteria).
    (e) Responsible persons. The State and the contractor shall each 
designate a trained person, as specified in Sec. 630.1008(d), at the 
project level who has the primary responsibility and sufficient 
authority for implementing the TMP and other safety and mobility aspects 
of the project.



Sec. 630.1014  Implementation.

    Each State shall work in partnership with the FHWA in the 
implementation of its policies and procedures to improve work zone 
safety and mobility. At a minimum, this shall involve an FHWA review of 
conformance of the State's policies and procedures with this regulation 
and reassessment of the State's implementation of its procedures at 
appropriate intervals. Each State is encouraged to address 
implementation of this regulation in its stewardship agreement with the 
FHWA.



Sec. 630.1016  Compliance date.

    States shall comply with all the provisions of this rule no later 
than October 12, 2007. For projects that are in the later stages of 
development at or about the compliance date, and if it is determined 
that the delivery of those projects would be significantly impacted as a 
result of this rule's provisions, States may request variances for those 
projects from the FHWA, on a project-by-project basis.

[[Page 163]]



               Subpart K_Temporary Traffic Control Devices

    Authority: 23 U.S.C. 109(c) and 112; Sec. 1110 of Pub. L. 109-59; 23 
CFR 1.32; and 49 CFR 1.48(b).

    Source: 72 FR 68489, Dec. 5, 2007, unless otherwise noted.

    Effective Date Note: At 72 FR 68489, Dec. 5, 2007, subpart K, 
consisting of Sec. Sec. 630.1102 through 630.1110, was added to part 
630, effective Dec. 4, 2008.



Sec. 630.1102  Purpose.

    To decrease the likelihood of highway work zone fatalities and 
injuries to workers and road users by establishing minimum requirements 
and providing guidance for the use of positive protection devices 
between the work space and motorized traffic, installation and 
maintenance of temporary traffic control devices, and use of uniformed 
law enforcement officers during construction, utility, and maintenance 
operations, and by requiring contract pay items to ensure the 
availability of funds for these provisions. This subpart is applicable 
to all Federal-aid highway projects, and its application is encouraged 
on other highway projects as well.



Sec. 630.1104  Definitions.

    For the purposes of this subpart, the following definitions apply:
    Agency means a State or local highway agency or authority that 
receives Federal-aid highway funding.
    Exposure Control Measures means traffic management strategies to 
avoid work zone crashes involving workers and motorized traffic by 
eliminating or reducing traffic through the work zone, or diverting 
traffic away from the work space.
    Federal-aid Highway Project means highway construction, maintenance, 
and utility projects funded in whole or in part with Federal-aid funds.
    Motorized Traffic means the motorized traveling public. This term 
does not include motorized construction or maintenance vehicles and 
equipment within the work space.
    Other Traffic Control Measures means all strategies and temporary 
traffic controls other than Positive Protection Devices and Exposure 
Control Measures, but including uniformed law enforcement officers, used 
to reduce the risk of work zone crashes involving motorized traffic.
    Positive Protection Devices means devices that contain and/or 
redirect vehicles and meet the crashworthiness evaluation criteria 
contained in National Cooperative Highway Research Program (NCHRP) 
Report 350, Recommended Procedures for the Safety Performance Evaluation 
of Highway Features, 1993, Transportation Research Board, National 
Research Council. The Director of the Federal Register approves this 
incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. This document is available for inspection and copying at FHWA, 
1200 New Jersey Avenue, SE., Washington, DC 20590, as provided in 49 CFR 
part 7. You may also inspect a copy at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call (202) 741 6030, or go to: http://
www.archives.gov/federal--register/code--of--federal--regulations/ibr--
locations.html.
    Work Zone Safety Management means the entire range of traffic 
management and control and highway safety strategies and devices used to 
avoid crashes in work zones that can lead to worker and road user 
injuries and fatalities, including Positive Protection Devices, Exposure 
Control Measures, and Other Traffic Control Measures.



Sec. 630.1106  Policy and procedures for work zone safety management.

    (a) Each agency's policy and processes, procedures, and/or guidance 
for the systematic consideration and management of work zone impacts, to 
be established in accordance with 23 CFR 630.1006, shall include the 
consideration and management of road user and worker safety on Federal-
aid highway projects. These processes, procedures, and/or guidance, to 
be developed in partnership with the FHWA, shall address the use of 
Positive Protection Devices to prevent the intrusion of motorized 
traffic into the work space and other potentially hazardous areas in

[[Page 164]]

the work zone; Exposure Control Measures to avoid or minimize worker 
exposure to motorized traffic and road user exposure to work activities; 
Other Traffic Control Measures including uniformed law enforcement 
officers to minimize work zone crashes; and the safe entry/exit of work 
vehicles onto/from the travel lanes. Each of these strategies should be 
used to the extent that they are possible, practical, and adequate to 
manage work zone exposure and reduce the risks of crashes resulting in 
fatalities or injuries to workers and road users.
    (b) Agency processes, procedures, and/or guidance should be based on 
consideration of standards and/or guidance contained in the Manual on 
Uniform Traffic Control Devices (MUTCD) and the AASHTO Roadside Design 
Guide, as well as project characteristics and factors. The strategies 
and devices to be used may be determined by a project-specific 
engineering study, or determined from agency guidelines that define 
strategies and approaches to be used based on project and highway 
characteristics and factors. The types of measures and strategies to be 
used are not mutually exclusive, and should be considered in combination 
as appropriate based on characteristics and factors such as those listed 
below:
    (1) Project scope and duration;
    (2) Anticipated traffic speeds through the work zone;
    (3) Anticipated traffic volume;
    (4) Vehicle mix;
    (5) Type of work (as related to worker exposure and crash risks);
    (6) Distance between traffic and workers, and extent of worker 
exposure;
    (7) Escape paths available for workers to avoid a vehicle intrusion 
into the work space;
    (8) Time of day (e.g., night work);
    (9) Work area restrictions (including impact on worker exposure);
    (10) Consequences from/to road users resulting from roadway 
departure;
    (11) Potential hazard to workers and road users presented by device 
itself and during device placement and removal;
    (12) Geometrics that may increase crash risks (e.g., poor sight 
distance, sharp curves);
    (13) Access to/from work space;
    (14) Roadway classification; and
    (15) Impacts on project cost and duration.
    (c) Uniformed Law Enforcement Policy. Each agency, in partnership 
with the FHWA, shall develop a policy addressing the use of uniformed 
law enforcement on Federal-aid highway projects. The policy may consist 
of processes, procedures, and/or guidance. The processes, procedures, 
and/or guidance should address the following:
    (1) Basic interagency agreements between the highway agency and 
appropriate law enforcement agencies to address work zone enforcement 
needs;
    (2) Interaction between highway and law-enforcement agency during 
project planning and development;
    (3) Conditions where law enforcement involvement in work zone 
traffic control may be needed or beneficial, and criteria to determine 
the project-specific need for law enforcement;
    (4) General nature of law enforcement services to be provided, and 
procedures to determine project-specific services;
    (5) Appropriate work zone safety and mobility training for the 
officers, consistent with the training requirements in 23 CFR 
630.1008(d);
    (6) Procedures for interagency and project-level communications 
between highway agency and law enforcement personnel; and
    (7) Reimbursement agreements for law enforcement service.



Sec. 630.1108  Work zone safety management measures and strategies.

    (a) Positive Protection Devices. The need for longitudinal traffic 
barrier and other positive protection devices shall be based on an 
engineering study. The engineering study may be used to develop positive 
protection guidelines for the agency, or to determine the measures to be 
applied on an individual project. The engineering study should be based 
on consideration of the factors and characteristics described in section 
630.1106(b). At a minimum, positive protection devices shall be 
considered in work zone situations that place workers at increased risk 
from motorized traffic, and where positive protection devices offer the 
highest potential for

[[Page 165]]

increased safety for workers and road users, such as:
    (1) Work zones that provide workers no means of escape from 
motorized traffic (e.g., tunnels, bridges, etc.);
    (2) Long duration work zones (e.g., two weeks or more) resulting in 
substantial worker exposure to motorized traffic;
    (3) Projects with high anticipated operating speeds (e.g., 45 mph or 
greater), especially when combined with high traffic volumes;
    (4) Work operations that place workers close to travel lanes open to 
traffic; and
    (5) Roadside hazards, such as drop-offs or unfinished bridge decks, 
that will remain in place overnight or longer.
    (b) Exposure Control Measures. Exposure Control Measures should be 
considered where appropriate to avoid or minimize worker exposure to 
motorized traffic and exposure of road users to work activities, while 
also providing adequate consideration to the potential impacts on 
mobility. A wide range of measures may be appropriate for use on 
individual projects, such as:
    (1) Full road closures;
    (2) Ramp closures;
    (3) Median crossovers;
    (4) Full or partial detours or diversions;
    (5) Protection of work zone setup and removal operations using 
rolling road blocks;
    (6) Performing work at night or during off-peak periods when traffic 
volumes are lower; and
    (7) Accelerated construction techniques.
    (c) Other Traffic Control Measures. Other Traffic Control Measures 
should be given appropriate consideration for use in work zones to 
reduce work zone crashes and risks and consequences of motorized traffic 
intrusion into the work space. These measures, which are not mutually 
exclusive and should be considered in combination as appropriate, 
include a wide range of other traffic control measures such as:
    (1) Effective, credible signing;
    (2) Changeable message signs;
    (3) Arrow panels;
    (4) Warning flags and lights on signs;
    (5) Longitudinal and lateral buffer space;
    (6) Trained flaggers and spotters;
    (7) Enhanced flagger station setups;
    (8) Intrusion alarms;
    (9) Rumble strips;
    (10) Pace or pilot vehicle;
    (11) High quality work zone pavement markings and removal of 
misleading markings;
    (12) Channelizing device spacing reduction;
    (13) Longitudinal channelizing barricades;
    (14) Work zone speed management (including changes to the regulatory 
speed and/or variable speed limits);
    (15) Law enforcement;
    (16) Automated speed enforcement (where permitted by State/local 
laws);
    (17) Drone radar;
    (18) Worker and work vehicle/equipment visibility;
    (19) Worker training;
    (20) Public information and traveler information; and
    (21) Temporary traffic signals.
    (d) Uniformed law enforcement officers. (1) A number of conditions 
may indicate the need for or benefit of uniformed law enforcement in 
work zones. The presence of a uniformed law enforcement officer and 
marked law enforcement vehicle in view of motorized traffic on a highway 
project can affect driver behavior, helping to maintain appropriate 
speeds and improve driver alertness through the work zone. However, such 
law enforcement presence is not a substitute for the temporary traffic 
control devices required by Part 6 of the MUTCD. In general, the need 
for law enforcement is greatest on projects with high traffic speeds and 
volumes, and where the work zone is expected to result in substantial 
disruption to or changes in normal traffic flow patterns. Specific 
project conditions should be examined to determine the need for or 
potential benefit of law enforcement, such as the following:
    (i) Frequent worker presence adjacent to high-speed traffic without 
positive protection devices;
    (ii) Traffic control setup or removal that presents significant 
risks to workers and road users;

[[Page 166]]

    (iii) Complex or very short term changes in traffic patterns with 
significant potential for road user confusion or worker risk from 
traffic exposure;
    (iv) Night work operations that create substantial traffic safety 
risks for workers and road users;
    (v) Existing traffic conditions and crash histories that indicate a 
potential for substantial safety and congestion impacts related to the 
work zone activity, and that may be mitigated by improved driver 
behavior and awareness of the work zone;
    (vi) Work zone operations that require brief stoppage of all traffic 
in one or both directions;
    (vii) High-speed roadways where unexpected or sudden traffic queuing 
is anticipated, especially if the queue forms a considerable distance in 
advance of the work zone or immediately adjacent to the work space; and
    (viii) Other work site conditions where traffic presents a high risk 
for workers and road users, such that the risk may be reduced by 
improving road user behavior and awareness.
    (2) Costs associated with the provision of uniformed law enforcement 
to help protect workers and road users, and to maintain safe and 
efficient travel through highway work zones, are eligible for Federal-
aid participation. Federal-aid eligibility excludes law enforcement 
activities that would normally be expected in and around highway problem 
areas requiring routine or ongoing law enforcement traffic control and 
enforcement activities. Payment for the services of uniformed law 
enforcement in work zones may be included in the construction contract, 
or be provided by direct reimbursement from the highway agency to the 
law enforcement agency. When payment is included through the 
construction contract, the contractor will be responsible for 
reimbursing the law enforcement agency, and in turn will recover those 
costs through contract pay items. Direct interagency reimbursement may 
be made on a project-specific basis, or on a program-wide basis that 
considers the overall level of services to be provided by the law 
enforcement agency. Contract pay items for law enforcement service may 
be either unit price or lump sum items. Unit price items should be 
utilized when the highway agency can estimate and control the quantity 
of law enforcement services required on the project. The use of lump sum 
payment should be limited to situations where the quantity of services 
is directly affected by the contractor's choice of project scheduling 
and chosen manner of staging and performing the work. Innovative payment 
items may also be considered when they offer an advantage to both the 
highway agency and the contractor. When reimbursement to the law 
enforcement agency is made by interagency transfer of funds, the highway 
agency should establish a program-level or project-level budget that is 
adequate to meet anticipated program or project needs, and include 
provisions to address unplanned needs and other contingencies.
    (e) Work Vehicles and Equipment. In addition to addressing risks to 
workers and road users from motorized traffic, the agency processes, 
procedures, and/or guidance established in accordance with 23 CFR 
630.1006 should also address safe means for work vehicles and equipment 
to enter and exit traffic lanes and for delivery of construction 
materials to the work space, based on individual project characteristics 
and factors.
    (f) Payment for traffic control. Consistent with the requirements of 
23 CFR 630.1012, Project-level Procedures, project plans, specifications 
and estimates (PS&Es) shall include appropriate pay item provisions for 
implementing the project Transportation Management Plan (TMP), which 
includes a Temporary Traffic Control (TTC) plan, either through method 
or performance based specifications. Pay item provisions include, but 
are not limited to, the following:
    (1) Payment for work zone traffic control features and operations 
shall not be incidental to the contract, or included in payment for 
other items of work not related to traffic control and safety;
    (2) As a minimum, separate pay items shall be provided for major 
categories of traffic control devices, safety features, and work zone 
safety activities, including but not limited to

[[Page 167]]

positive protection devices, and uniformed law enforcement activities 
when funded through the project;
    (3) For method based specifications, the specifications and other 
PS&E documents should provide sufficient details such that the quantity 
and types of devices and the overall effort required to implement and 
maintain the TMP can be determined;
    (4) For method-based specifications, unit price pay items, lump sum 
pay items, or a combination thereof may be used;
    (5) Lump sum payment should be limited to items for which an 
estimate of the actual quantity required is provided in the PS&E or for 
items where the actual quantity required is dependent upon the 
contractor's choice of work scheduling and methodology;
    (6) For Lump Sum items, a contingency provision should be included 
such that additional payment is provided if the quantity or nature of 
the required work changes, either an increase or decrease, due to 
circumstances beyond the control of the contractor;
    (7) Unit price payment should be provided for those items over which 
the contractor has little or no control over the quantity, and no firm 
estimate of quantities is provided in the PS&Es, but over which the 
highway agency has control of the actual quantity to be required during 
the project;
    (8) Specifications should clearly indicate how placement, movement/
relocation, and maintenance of traffic control devices and safety 
features will be compensated; and
    (9) The specifications should include provisions to require and 
enforce contractor compliance with the contract provisions relative to 
implementation and maintenance of the project TMP and related traffic 
control items. Enforcement provisions may include remedies such as 
liquidated damages, work suspensions, or withholding payment for 
noncompliance.



Sec. 630.1110  Maintenance of temporary traffic control devices.

    To provide for the continued effectiveness of temporary traffic 
control devices, each agency shall develop and implement quality 
guidelines to help maintain the quality and adequacy of the temporary 
traffic control devices for the duration of the project. Agencies may 
choose to adopt existing quality guidelines such as those developed by 
the American Traffic Safety Services Association (ATSSA) or other state 
highway agencies.\1\ A level of inspection necessary to provide ongoing 
compliance with the quality guidelines shall be provided.
---------------------------------------------------------------------------

    \1\ The American Traffic Safety Services Association's (ATSSA) 
Quality Guidelines for Work Zone Traffic Control Devices uses photos and 
written descriptions to help judge when a traffic control device has 
outlived its usefulness. These guidelines are available for purchase 
from ATSSA through the following URL: http://www.atssa.com/store/bc--
item--detail.jsp?productId=1. Similar guidelines are available from 
various State highway agencies. The Illinois Department of 
Transportation ``Quality Standards for Work Zone Traffic Control 
Devices'' is available online at http://dot.state.il.us/workzone/
wztcd2004r.pdf. The Minnesota Department of Transportation ``Quality 
Standards--Methods to determine whether the various traffic control 
devices are Acceptable, Marginal, or Unacceptable'' is available online 
at http://www.dot.state.mn.us/trafficeng/otepubl/fieldmanual2007/FM-
2007-QualityStandards.pdf.
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PART 633_REQUIRED CONTRACT PROVISIONS--Table of Contents




  Subpart A_Federal-Aid Construction Contracts (Other Than Appalachian 
                               Contracts)

Sec.
633.101 Purpose.
633.102 Applicability.
633.103 Regulatory authority.
633.104 Availability.

         Subpart B_Federal-Aid Contracts (Appalachian Contracts)

633.201 Purpose.
633.202 Definitions.
633.203 Applicability of existing laws, regulations, and directives.
633.204 Fiscal allocation and obligations.
633.205 Prefinancing.
633.206 Project agreements.
633.207 Construction labor and materials.
633.208 Maintenance.
633.209 Notices to prospective Federal-aid construction contractors.
633.210 Termination of contract.

[[Page 168]]

633.211 Implementation of the Clean Air Act and the Federal Water 
          Pollution Control Act.

Appendix A to Subpart B of Part 633--Types of Contracts to Which the 
          Civil Rights Act of 1964 Is Applicable
Appendix B to Subpart B of Part 633--Required Contract Provisions, 
          Appalachian Development Highway System and Local Access Roads 
          Construction Contracts
Appendix C to Subpart B of Part 633--Additional Required Contract 
          Provisions, Appalachian Development Highway System and Local 
          Access Roads Contracts Other Than Construction Contracts
Appendix D to Subpart B of Part 633--Federal-Aid Proposal Notices



  Subpart A_Federal-Aid Construction Contracts (Other Than Appalachian 
                               Contracts)

    Authority: 23 U.S.C. 114 and 315; 49 CFR 1.48.

    Source: 52 FR 36920, Oct. 2, 1987, unless otherwise noted.



Sec. 633.101  Purpose.

    To prescribe for Federal-aid highway proposals and construction 
contracts the method for inclusion of required contract provisions of 
existing regulations which cover employment, nonsegregated facilities, 
record of materials and supplies, subletting or assigning the contract, 
safety, false statements concerning highway projects, termination of a 
contract, and implementation of the Clean Air Act and the Federal Water 
Pollution Control Act, and other provisions as shall from time-to-time 
be required by law and regulation as conditions of Federal assistance.



Sec. 633.102  Applicability.

    (a) The required contract provisions and the required proposal 
notices apply to all Federal-aid construction contracts other than 
Appalachian construction contracts.
    (b) Form FHWA-1273, ``Required Contract Provisions, Federal-aid 
Construction Contracts,'' contains required contract provisions and 
required proposal notices that are required by regulations promulgated 
by the FHWA or other Federal agencies. The required contract provisions 
of Form FHWA-1273 shall be physically incorporated in each Federal-aid 
highway construction contract other than Appalachian construction 
contracts (see Sec. 633.104 for availability of form).
    (c) [Reserved]
    (d) The required contract provisions contained in Form FHWA-1273 
shall apply to all work performed on the contract by the contractor's 
own organization and to all work performed on the contract by piecework, 
station work, or by subcontract.
    (e) The contractor shall insert in each subcontract, except as 
excluded by law or regulation, the required contract provisions 
contained in Form FHWA-1273 and further require their inclusion in any 
lower tier subcontract that may in turn be made. The required contract 
provisions of Form FHWA-1273 shall not be incorporated by reference in 
any case. The prime contractor shall be responsible for compliance by 
any subcontractor or lower tier subcontractor with the requirements 
contained in the provisions of Form FHWA-1273.
    (f) The State highway agency (SHA) shall include the notices 
concerning certification of nonsegregated facilities and implementation 
of the Clean Air Act and Federal Water Pollution Control Act, pursuant 
to 40 CFR part 15, in all bidding proposals for Federal-aid highway 
construction projects. As the notices are reproduced in Form FHWA-1273, 
the SHA may include Form FHWA-1273 in its entirety to meet this 
requirement.

[52 FR 36920, Oct. 2, 1987, as amended at 69 FR 7118, Feb. 13, 2004]



Sec. 633.103  Regulatory authority.

    All required contract provisions contained in Form FHWA-1273 are 
requirements of regulations promulgated by the FHWA or other Federal 
agencies. The authority for each provision will be cited in the text of 
Form FHWA-1273.



Sec. 633.104  Availability.

    (a) Form FHWA-1273 will be maintained by the FHWA and as regulatory 
revisions occur, the form will be updated.
    (b) Current copies of Form FHWA-1273, Required Contract Provisions,

[[Page 169]]

will be made available to the SHAs by the FHWA.



         Subpart B_Federal-Aid Contracts (Appalachian Contracts)

    Authority: 40 U.S.C. App. 201, 402; 23 U.S.C. 315; 49 CFR 
1.48(b)(35).

    Source: 39 FR 35146, Sept. 30, 1974, unless otherwise noted.



Sec. 633.201  Purpose.

    The purpose of the regulations in this subpart is to establish 
policies and outline procedures for administering projects and funds for 
the Appalachian Development Highway System and Appalachian local access 
roads.



Sec. 633.202  Definitions.

    (a) The word Commission means the Appalachian Regional Commission 
(ARC) established by the Appalachian Regional Development Act of 1965, 
as amended (Act).
    (b) The term division administrator'' means the chief Federal 
Highway Administration (FHWA) official assigned to conduct FHWA business 
in a particular State.

[39 FR 35156, Sept. 30, 1974, as amended at 40 FR 49084, Oct. 21, 1975; 
41 FR 8769, Mar. 1, 1976]



Sec. 633.203  Applicability of existing laws, regulations, and directives.

    The provisions of title 23 U.S.C., that are applicable to the 
construction and maintenance of Federal-aid primary and secondary 
highways, and which the Secretary of Transportation determines are not 
inconsistent with the Act, shall apply, respectively, to the development 
highway system and the local access roads. In addition, the Regulations 
for the Administration of Federal-aid for Highways (title 23, Code of 
Federal Regulations) and directives implementing applicable provisions 
of title 23 U.S.C., where not inconsistent with the Act, shall be 
applicable to such projects.



Sec. 633.204  Fiscal allocation and obligations.

    (a) Federal assistance to any project under the Act shall be as 
determined by the Commission, but in no event shall such Federal 
assistance exceed 70 per centum of the cost of such a project.
    (b) The division administrator's authorization to proceed with the 
proposed work shall establish obligation of Federal funds with regard to 
a particular project.

[39 FR 35156, Sept. 30, 1974, as amended at 40 FR 49084, Oct. 21, 1975; 
41 FR 8769, Mar. 1, 1976]



Sec. 633.205  Prefinancing.

    (a) Under the provisions of subsection 201(h) of the Act, projects 
located on the Appalachian Development Highway System including 
preliminary engineering, right-of-way, and/or construction may be 
programed and advanced with interim State financing.
    (b) Program approvals, plans, specifications, and estimates (PS&E) 
approval, authorizations to proceed, concurrence in award of contracts, 
and all other notifications to the State of advancement of a project 
shall include the statement, ``There is no commitment or obligation on 
the part of the United States to provide funds for this highway 
improvement. However, this project is eligible for Federal reimbursement 
when sufficient funds are available from the amounts allocated by the 
Appalachian Regional Commission.''



Sec. 633.206  Project agreements.

    (a) Project agreements executed for projects under the Appalachian 
program shall contain the following paragraphs:
    (1) ``For projects constructed under section 201 of the Appalachian 
Regional Development Act of 1965, as amended, the State highway 
department agrees to comply with all applicable provisions of said Act, 
regulations issued thereunder, and policies and procedures promulgated 
by the Appalachian Regional Commission, and the Federal Highway 
Administration. Inasmuch as a primary objective of the Appalachian 
Regional Development Act of 1965 is to provide employment, the State 
highway department further agrees that in addition to the other 
applicable provisions of title 49, Code of Federal Regulations, part 21, 
Sec. 21.5(c)(1), and paragraphs (2)(iii) and (2)(v) of appendix C

[[Page 170]]

thereof, shall be applicable to all employment practices in connection 
with this project, and to the State's employment practices with respect 
to those employees connected with the Appalachian Highway Program.''
    (2) ``For projects constructed on a section of an Appalachian 
development route not already on the Federal-aid Primary System, the 
State highway department agrees to add the section to the Federal-aid 
Primary System prior to, or upon completion of, construction 
accomplished with Appalachian funds.''
    (b) For prefinanced projects, the following additional provision 
shall be incorporated into the project agreement: ``Project for 
Construction on the Appalachian Development Highway System in Advance of 
the Appropriation of Funds. This project, to be constructed pursuant to 
subsection 201(h) of the Appalachian Regional Development Act Amendments 
of 1967, will be constructed in accordance with all procedures and 
requirements and standards applicable to projects on the Appalachian 
Development Highway System financed with the aid of Appalachian funds. 
No obligation of Appalachian funds is created by this agreement, its 
purpose and intent being to provide that, upon application by the State 
highway department, and approval thereof by the Federal Highway 
Administration, any Appalachian development highway funds made available 
to the State by the Appalachian Regional Commission subsequent to the 
date of this agreement may be used to reimburse the State for the 
Federal share of the cost of work done on the project.''



Sec. 633.207  Construction labor and materials.

    (a) Construction and materials shall be in accordance with the State 
highway department standard construction specifications approved for use 
on Federal-aid primary projects and special provisions and supplemental 
specifications amendatory thereto approved for use on the specific 
projects.
    (b) The provisions of 23 U.S.C. 324 and of title VI of the Civil 
Rights Act of 1964 (78 Stat. 252; 42 U.S.C. 2000d-2000d-4) and the 
implementing regulations in 49 CFR part 21, including the provisions of 
Sec. 21.5(c)(1), and paragraphs (2)(iii) and (2)(v) of appendix C 
thereof relative to employment practices, shall be applicable to all 
types of contracts listed in appendix A.
    (c) The ``Required Contract Provisions, Appalachian Development 
Highway System and Local Access Roads Construction Contracts,'' Form PR-
1316 (appendix B), shall be included in all construction contracts 
awarded under the Act.
    (d) The required contract provisions set forth in Form PR-1317 
(appendix C) shall be included in all types of contracts described in 
appendix A, other than construction contracts.
    (e) In the design and construction of highways and roads under the 
Act, the State may give special preference to the use of mineral 
resource materials native to the Appalachian region. The provisions of 
Sec. 635.409 of this chapter shall not apply to projects under the Act 
to the extent such provisions are inconsistent with sections 201(d) and 
(e) of the Act.

[39 FR 35146, Sept. 30, 1974, as amended at 40 FR 49084, Oct. 21, 1975; 
41 FR 36204, Aug. 27, 1976]



Sec. 633.208  Maintenance.

    Maintenance of all highway projects constructed under the Act, 
whether on the development system or local access roads, shall be the 
responsibility of the State. The State may arrange for maintenance of 
such roads or portions thereof, by agreement with a local governmental 
unit.



Sec. 633.209  Notices to prospective Federal-aid construction contractors.

    The State highway department shall include the notices set forth in 
appendix D in all future bidding proposals for Appalachian Development 
System and Appalachian local access roads construction contracts.



Sec. 633.210  Termination of contract.

    All contracts exceeding $2,500 shall contain suitable provisions for 
termination by the State, including the manner in which the termination 
will be effected and the basis for settlement. In addition, such 
contracts shall describe conditions under which the

[[Page 171]]

contract may be terminated for default as well as conditions where the 
contract may be terminated because of circumstances beyond the control 
of the contractor.



Sec. 633.211  Implementation of the Clean Air Act and the Federal Water Pollution Control Act.

    Pursuant to regulations of the Environmental Protection Agency (40 
CFR part 15) implementing requirements with respect to the Clean Air Act 
and the Federal Water Pollution Control Act are included in appendix B 
to this part.

[40 FR 49084, Oct. 21, 1975]



 Sec. Appendix A to Subpart B of Part 633--Types of Contracts to Which 

               the Civil Rights Act of 1964 Is Applicable

    Section 324 of title 23 U.S.C., the Civil Rights Act of 1964, and 
the implementing regulations of the Department of Transportation (49 CFR 
part 21), including the provisions of paragraphs (2)(iii) and (2)(v) of 
appendix C thereof relative to employment practices, are applicable to 
the following types of contracts awarded by State highway departments, 
contractors, and first tier subcontractors, including those who supply 
materials and lease equipment:
    1. Construction.
    2. Planning.
    3. Research.
    4. Highway Safety.
    5. Engineering.
    6. Property Management.
    7. Fee contracts and other commitments with persons for services 
incidental to the acquisition of right-of-way including, but not limited 
to:
    a. Advertising contracts.
    b. Agreements for economic studies.
    c. Contracts for surveys and plats.
    d. Contracts for abstracts of title certificates and title 
insurance.
    e. Contracts for appraisal services and expert witness fees.
    f. Contracts to negotiate for the acquisition of right-of-way.
    g. Contracts for disposal of improvements and property management 
services.
    h. Contracts for employment of fee attorneys for right-of-way 
procurement, or preparation and trial of condemnation cases.
    i. Contracts for escrow and closing services.

[40 FR 49084, Oct. 21, 1975]



Sec. Appendix B to Subpart B of Part 633--Required Contract Provisions, 

     Appalachian Development Highway System and Local Access Roads 
                         Construction Contracts

     I.  Application.
    II.  Employment Preference.
   III.  Equal Opportunity: Employment Practices.
    IV.  Equal Opportunity: Selection of Subcontractors, Procurement of
          Materials, and Leasing of Equipment.
     V.  Nonsegregated Facilities.
    VI.  Payment of Predetermined Minimum Wages.
   VII.  Statements and Payrolls.
  VIII.  Record of Materials, Supplies and Labor.
    IX.  Subletting or Assigning the Contract.
     X.  Safety: Accident Prevention.
    XI.  False Statements Concerning Highway Projects.
   XII.  Implementation of Clean Air Act and Federal Water Pollution
          Control Act.
 

I. Application.
    1. These contract provisions shall apply to all work performed on 
the contract by the contractor with his own organization and with the 
assistance of workmen under his immediate superintendence and to all 
work performed on the contract by piecework, station work, or by 
subcontract.
    2. Except as otherwise provided in sections II, III, and IV hereof, 
the contractor shall insert in each of his subcontracts all of the 
stipulations contained in these Required Contract Provisions and also a 
clause requiring his subcontractors to include these Required Contract 
Provisions in any lower tier subcontracts which they may enter into, 
together with a clause requiring the inclusion of these provisions in 
any further subcontracts that may in turn be made. The Required Contract 
Provisions shall in no instance be incorporated by reference.
    3. A breach of any of the stipulations contained in these Required 
Contract Provisions may be grounds for termination of the contract.
    4. A breach of the following clauses may also be grounds for 
debarment as provided in 29 CFR 5.6(b):
    Section 1, paragraph 2.
    Section VI, paragraphs 1, 2, 3, 5 and 8a.
    Section VII, paragraphs 1, 5a, 5b and 5d.

II. Employment preference.
    1. During the performance of this contract, the contractor 
undertaking to do work which is, or reasonably may be, done as on-site 
work, shall give preference to qualified persons who regularly reside in 
the labor area as designated by the United States Department of Labor 
wherein the contract work is situated, or the subregion, or the 
Appalachian counties of the State wherein the contract work is situated, 
except:
    a. To the extent that qualified persons regularly residing in the 
area are not available.
    b. For the reasonable needs of the contractor to employ supervisory 
or specially

[[Page 172]]

experienced personnel necessary to assure an efficient execution of the 
contract work.
    c. For the obligation of the contractor to offer employment to 
present or former employees as the result of a lawful collective 
bargaining contract, provided that the number of nonresident persons 
employed under this subparagraph 1c shall not exceed 20 percent of the 
total number of employees employed by the contractor on the contract 
work, except as provided in subparagraph 4 below.
    2. The contractor shall place a job order with the State Employment 
Service indicating (a) the classifications of laborers, mechanics and 
other employees he anticipates will be required to perform the contract 
work, (b) the number of employees required in each classification, (c) 
the date on which he estimates such employees will be required, and (d) 
any other pertinent information required by the State Employment Service 
to complete the job order form. The job order may be placed with the 
State Employment Service in writing or by telephone. If during the 
course of the contract work, the information submitted by the contractor 
in the original job order is substantially modified, he shall promptly 
notify the State Employment Service.
    3. The contractor shall give full consideration to all qualified job 
applicants referred to him by the State Employment Service. The 
contractor is not required to grant employment to any job applicants 
who, in his opinion, are not qualified to perform the classification of 
work required.
    4. If, within one week following the placing of a job order by the 
contractor with the State Employment Service, the State Employment 
Service is unable to refer any qualified job applicants to the 
contractor, or less than the number requested, the State Employment 
Service will forward a certificate to the contractor indicating the 
unavailability of applicants. Such certificate shall be made a part of 
the contractor's permanent project records. Upon receipt of this 
certificate, the contractor may employ persons who do not normally 
reside in the labor area to fill the positions covered by the 
certificate, notwithstanding the provisions of subparagraph 1c above.
    5. The contractor shall include the provisions of section II-1 
through II-4 in every subcontract for work which is, or reasonably may 
be, done as on-site work.

III. Equal opportunity: employment practices.

    During the performance of this contract, the contractor agrees as 
follows:
    a. The contractor will not discriminate against any employee or 
applicant for employment because of race, color, religion, sex, or 
national origin. The contractor will take affirmative action to ensure 
that applicants are employed, and that employees are treated during 
employment without regard to their race, color, religion, sex, or 
national origin. Such action shall include, but not be limited to the 
following: Employment, upgrading, demotion or transfer; recruitment or 
recruitment advertising; layoffs or termination; rates of pay or other 
forms of compensation; and selection of training, including 
apprenticeship. The contractor agrees to post in conspicuous places, 
available to employees and applicants for employment, notices to be 
provided by the State highway department setting forth the provisions of 
this nondiscrimination clause.
    b. The contractor will, in all solicitations or advertisements for 
employees placed by or on behalf of the contractor, state that all 
qualified applicants will receive consideration for employment without 
regard to race, color, religion, sex, or national origin.
    c. The contractor will send to each labor union or representative of 
workers with which he has a collective bargaining agreement or other 
contract or understanding, a notice to be provided by the State highway 
department advising the said labor union or workers' representative of 
the contractor's commitments under this section III and shall post 
copies of the notice in conspicuous places available to employees and 
applicants for employment.
    d. The contractor will comply with all provisions of Executive Order 
11246 of September 24, 1965, and of the rules, regulations and relevant 
orders of the Secretary of Labor.
    e. The contractor will furnish all information and reports required 
by Executive Order 11246 of September 24, 1965, and by rules, 
regulations and orders of the Secretary of Labor or pursuant thereto, 
and will permit access to his books, records and accounts by the Federal 
Highway Administration and the Secretary of Labor for purposes of 
investigation to ascertain compliance with such rules, regulations and 
orders.
    f. In the event of the contractor's noncompliance with the 
nondiscrimination clauses of this contract or with any of the said 
rules, regulations or orders, this contract may be canceled, terminated 
or suspended in whole or in part and the contractor may be declared 
ineligible for further Government contracts or federally-assisted 
construction contracts in accordance with procedures authorized in 
Executive Order 11246 of September 24, 1965, and such other sanctions 
may be imposed and remedies invoked as provided in Executive Order 11246 
of September 24, 1965, or by rule, regulation or order of the Secretary 
of Labor, or as otherwise provided by law.
    g. The contractor will include the provisions of this section III in 
every subcontract or purchase order unless exempted by rules, 
regulations or orders of the Secretary of

[[Page 173]]

Labor issued pursuant to section 204 of Executive Order 11246 of 
September 24, 1965, so that such provisions will be binding upon each 
subcontractor or vendor. The contractor will take such action with 
respect to any subcontract or purchase order as the State Highway 
Department or the Federal Highway Administration may direct as a means 
of enforcing such provisions including sanctions for noncompliance: 
Provided, however, That in the event a contractor becomes involved in, 
or is threatened with litigation with a subcontractor or vendor as a 
result of such direction by the Federal Highway Administration, the 
contractor may request the United States to enter into such litigation 
to protect the interests of the United States.

IV. Equal opportunity selection of subcontractors, procurement of 
          materials, and leasing of equipment.

    During the performance of this contract, the contractor, for itself, 
its assignees and successors in interest (hereinafter referred to as the 
contractor), agrees as follows:
    1. Compliance with regulations. The contractor shall comply with the 
provisions of 23 U.S.C. 324 and with the regulations relative to 
nondiscrimination in Federally-assisted programs of the Department of 
Transportation (hereinafter, ``DOT'') title 49, Code of Federal 
Regulations, part 21, as they may be amended from time to time 
(hereinafter referred to as the Regulations), which are herein 
incorporated by reference and made a part of this contract.
    2. Nondiscrimination. The contractor, with regard to the work 
performed by it during the contract, shall not discriminate on the 
grounds of race, color, sex, or national origin in the selection and 
retention of subcontractors, including procurements of materials and 
leases of equipments. The contractor shall not participate either 
directly or indirectly in the discrimination prohibited by section 21.5 
of the Regulations, including employment practices.
    3. Solicitations for subcontracts including procurement of materials 
and equipment. In all solicitations either by competitive bidding or 
negotiation made by the contractor for work to be performed under a 
subcontract, including procurements of materials or leases of equipment, 
each potential subcontractor or supplier, shall be notified by the 
contractor of the contractor's obligations under this contract and the 
Regulations relative to nondiscrimination on the grounds of race, color, 
sex, or national origin.
    4. Information and reports. The contractor shall provide all 
information and reports required by the Regulations, or directives 
issued pursuant thereto, and shall permit access to its books, records, 
accounts, other sources of information, and its facilities as may be 
determined by the State highway department or the Federal Highway 
Administration to be pertinent to ascertain compliance with such 
Regulations, orders and instructions. Where any information required of 
a contractor is in the exclusive possession of another who fails or 
refuses to furnish this information, the contractor shall so certify to 
the State highway department, or the Federal Highway Administration, as 
appropriate, and shall set forth what efforts it has made to obtain the 
information.
    5. Sanctions for noncompliance. In the event of the contractor's 
noncompliance with the nondiscrimination provisions of this contract, 
the State highway department shall impose such contract sanctions as it 
or the Federal Highway Administration may determine to be appropriate, 
including, but not limited to:
    a. Withholding of payments to the contractor under the contract 
until the contractor complies, and/or
    b. Cancellation, termination or suspension of the contract, in whole 
or in part.
    6. Incorporation of provisions. The contractor will include the 
provisions of paragraphs (1) through (6) in every subcontract, including 
procurements of materials and leases of equipment, unless exempt by the 
Regulations, or directives issued pursuant thereto. The contractor shall 
take such action with respect to any subcontract or procurement, as the 
State highway department or the Federal Highway Administration may 
direct as a means of enforcing such provisions including sanctions for 
noncompliance: Provided, however, That, in the event a contractor 
becomes involved in, or is threatened with, litigation with a 
subcontractor or supplier, as a result of such direction, the contractor 
may request the State to enter into such litigation to protect the 
interests of the State, and, in addition, the contractor may request the 
United States to enter into such litigation to protect the interests of 
the United States.

V. Nonsegregated facilities.

    (Applicable to Federal-aid construction contracts and related 
subcontracts exceeding $10,000 which are not exempt from the Equal 
Opportunity clause.)
    By submission of this bid, the execution of this contract or 
subcontract, or the consummation of this material supply agreement, as 
appropriate, the bidder, Federal-aid construction contractor, 
subcontractor, or material supplier, as appropriate, certifies that he 
does not maintain or provide for his employees any segregated facilities 
at any of his establishments, and that he does not permit his employees 
to perform their services at any location, under his control, where 
segregated facilities are maintained. He certifies further that he will 
not maintain or provide for his employees any segregated facilities at 
any of his establishments, and

[[Page 174]]

that he will not permit his employees to perform their services at any 
location, under his control, where segregated facilities are maintained. 
He agrees that a breach of this certification is a violation of the 
Equal Opportunity clause in this contract. As used in this 
certification, the term segregated facilities means any waiting rooms, 
work areas, restrooms and washrooms, restaurants and other eating areas, 
timeclocks, locker rooms and other storage or dressing areas, parking 
lots, drinking fountains, recreation or entertainment areas, 
transportation, and housing facilities provided for employees which are 
segregated by explicit directive or are in fact segregated on the basis 
of race, creed, color, or national origin, because of habit, local 
custom, or otherwise. He agrees that (except where he has obtained 
identical certifications from proposed subcontractors and material 
suppliers for specific time periods), he will obtain identical 
certifications from proposed subcontractors or material suppliers prior 
to the award of subcontracts or the consummation of material supply 
agreements, exceeding $10,000 which are not exempt from the provisions 
of the Equal Opportunity clause, and that he will retain such 
certification in his files.

VI. Payment of predetermined minimum wages.

    1. General. All mechanics and laborers employed or working upon the 
site of the work will be paid unconditionally and not less than once a 
week, and without subsequent deduction or rebate on any account, except 
such payroll deductions as are permitted by regulations issued by the 
Secretary of Labor under the Copeland Act (29 CFR part 3), the full 
amounts due at time of payment computed at wage rates not less than 
those contained in the wage determination decision of the Secretary of 
Labor which is attached hereto and made a part thereof, regardless of 
any contractual relationship which may be alleged to exist between the 
contractor and such laborers and mechanics; and the wage determination 
decision shall be posted by the contractor at the site of the work in a 
prominent place where it can be easily seen by the workers. For the 
purpose of this clause, contributions made or costs reasonably 
anticipated under section 1(b)(2) of the Davis-Bacon Act on behalf of 
laborers or mechanics are considered wages paid to such laborers or 
mechanics, subject to the provisions of section VI, paragraph 3b, 
hereof. Also for the purpose of this clause, regular contributions made 
or costs incurred for more than a weekly period under plans, funds, or 
programs, but covering the particular weekly period, are deemed to be 
constructively made or incurred during such weekly period.
    2. Classifications--a. The State highway department contracting 
officer shall require that any class of laborers or mechanics which is 
not listed in the wage determination and which is to be employed under 
the contract, shall be classified or reclassified conformably to the 
wage determination, and a report of the action taken shall be sent by 
the State highway department contracting officer to the Secretary of 
Labor.
    b. In the event the interested parties cannot agree on the proper 
classification or reclassification of a particular class of laborers and 
mechanics to be used, the question accompanied by the recommendation of 
the State highway department contracting officer shall be referred to 
the Secretary for final determination.
    3. Payment of fringe benefits--a. The State highway department 
contracting officer shall require, whenever the minimum wage rate 
prescribed in the contract for a class of laborers or mechanics includes 
a fringe benefit which is not expressed as an hourly wage rate and the 
contractor is obligated to pay a cash equivalent of such a fringe 
benefit, an hourly cash equivalent thereof to be established. In the 
event the interested parties cannot agree upon a cash equivalent of the 
fringe benefits, the question, accompanied by the recommendation of the 
contracting officer, shall be referred to the Secretary of Labor for 
determination.
    b. If the contractor does not make payments to a trustee or other 
third person, he may consider as part of the wage of any laborer or 
mechanic the amount of any costs reasonably anticipated in providing 
benefits under a plan or program of a type expressly listed in the wage 
determination decision of the Secretary of Labor which is part of this 
contract: Provided, however, The Secretary of Labor has found, upon the 
written request of the contractor, that the applicable standards of the 
Davis-Bacon Act have been met. The Secretary of Labor may require the 
contractor to set aside in a separate account assets for the meeting of 
obligations under the plan or program.
    4. Payment of excess wages. While the wage rates shown are the 
minimum rates required by the contract to be paid during its life, this 
is not a representation that labor can be obtained at these rates. No 
increase in the contract price shall be allowed or authorized on account 
of the payment of wage rates in excess of those listed herein.
    5. Apprentices and trainees (Programs of Department of Labor). a. 
Apprentices will be permitted to work at less than the predetermined 
rate for the work they performed when they are employed and individually 
registered in a bona fide apprenticeship program registered with the 
U.S. Department of Labor, Manpower Administration, Bureau of 
Apprenticeship and Training, or with a State Apprenticeship Agency 
recognized by the Bureau, or if a person is employed in his first 90 
days of probationary employment as an apprentice in such an 
apprenticeship program,

[[Page 175]]

who is not individually registered in the program, but who has been 
certified by the Bureau of Apprenticeship and Training or a State 
Apprenticeship Agency (where appropriate) to be eligible for 
probationary employment as an apprentice. The allowable ratio of 
apprentices to journeymen in any craft classification shall not be 
greater than the ratio permitted to the contractor as to his entire work 
force under the registered program. Any employee listed on a payroll at 
an apprentice wage rate, who is not a trainee as defined in 29 CFR 
5.2(c)(2) or is not registered or otherwise employed as stated above, 
shall be paid the wage rate determined by the Secretary of Labor for the 
classification of work he actually performed. The contractor or 
subcontractor will be required to furnish to the State highway 
department or to a representative of the Wage-Hour Division of the U.S. 
Department of Labor written evidence of the registration of his program 
and apprentices as well as the appropriate ratios and wage rates 
(expressed in percentages of the journeyman hourly rates), for the area 
of construction prior to using any apprentices on the contract work. The 
wage rate paid apprentices shall be not less than the appropriate 
percentage of the journeyman's rate contained in the applicable wage 
determination.
    b. Trainees, except as provided in 29 CFR 5.15, will not be 
permitted to work at less than the predetermined rate for the work 
performed unless they are employed pursuant to and individually 
registered in a program which has received prior approval, evidenced by 
formal certification, by the U.S. Department of Labor, Manpower 
Administration, Bureau of Apprenticeship and Training. The ratio of 
trainees to journeymen shall not be greater than permitted under the 
plan approved by the Bureau of Apprenticeship and Training. Every 
trainee must be paid at not less than the rate specified in the approved 
program for his level of progress. Any employee listed on the payroll at 
a trainee rate who is not registered and participating in a training 
plan approved by the Bureau of Apprenticeship and Training shall be paid 
not less than the wage rate determined by the Secretary of Labor for the 
classification of work he actually performed. The contractor or 
subcontractor will be required to furnish the State highway department 
or a representative of the Wage-Hour Division of the U.S. Department of 
Labor written evidence of the certification of his program, the 
registration of the trainees, and the ratios and wage rates prescribed 
in that program. In the event the Bureau of Apprenticeship and Training 
withdraws approval of a training program, the contractor will no longer 
be permitted to utilize trainees at less than the applicable 
predetermined rate for the work performed until an acceptable program is 
approved.
    c. The utilization of apprentices, trainees and journeymen shall be 
in conformity with the equal employment opportunity requirements of 
Executive Order 11246, as amended, and 29 CFR part 30.
    6. Apprentices and trainees (Programs of Department of 
Transportation). Apprentices and trainees working under apprenticeship 
and skill training programs which have been certified by the Secretary 
of Transportation as promoting equal opportunity in connection with 
Federal-aid highway construction programs are not subject to the 
requirements of section VI, paragraph 5 above. The straight time hourly 
wage rates for apprentices and trainees under such programs will be 
established by the particular programs.
    7. Withholding for unpaid wages. The State highway department 
contracting officer may withhold or cause to be withheld from the 
contractor so much of the accrued payments or advances as may be 
considered necessary to pay laborers, mechanics, (including apprentices 
and trainees) watchmen, or guards employed by the contractor or any 
subcontractor on the work the full amount of wages required by the 
contract. In the event of failure to pay any laborer, mechanic, 
(including apprentices and trainees) watchman or guard employed or 
working on the site of the work, all or part of the wages required by 
the contract, the State highway department contracting officer may, 
after written notice to the contractor, take such action as may be 
necessary to cause the suspension of any further payment, advance, or 
guarantee of funds until such violations have ceased.
    8. Overtime requirements. a. No contractor or subcontractor 
contracting for any part of the contract work which may require or 
involve the employment of laborers, mechanics, watchmen or guards 
(including apprentices and trainees described in paragraphs 5 and 6 
above) shall require or permit any laborer, mechanic, watchman or guard 
in any workweek in which he is employed on such work, to work in excess 
of eight hours in any calendar day or in excess of forty hours in such 
workweek unless such laborer, mechanic, watchman or guard receives 
compensation at a rate not less than one and one-half times his basic 
rate of pay for all hours worked in excess of eight hours in any 
calendar day or in excess of forty hours in such workweek, as the case 
may be.
    b. In the event of any violation of paragraph 8a, the contractor and 
any subcontractor responsible therefor shall be liable to any affected 
employee for his unpaid wages. In addition, such contractor and 
subcontractor shall be liable to the United States for liquidated 
damages. Such liquidated damages shall be computed with respect to each 
individual laborer, mechanic, watchman or guard employed in violation of 
paragraph 8a, in the sum of $10 for each calendar day on which such 
employee was required or

[[Page 176]]

permitted to work in excess of eight hours or in excess of the standard 
workweek of forty hours without payment of the overtime wages required 
by paragraph 8a.
    c. The State highway department contracting officer may withhold or 
cause to be withheld, from any moneys payable on account of work 
performed by the contractor or subcontractor, such sums as may 
administratively be determined to be necessary to satisfy any 
liabilities of such contractor or subcontractor for liquidated damages 
as provided in paragraph 8b.

VII. Statements and payrolls.

    1. Compliance with Copeland Regulations (29 CFR part 3). The 
contractor shall comply with the Copeland Regulations (29 CFR part 3) of 
the Secretary of Labor which are herein incorporated by reference.
    2. Weekly statement. Each contractor or subcontractor shall furnish 
each week a statement to the State highway department resident engineer 
with respect to the wages paid each of its employees, including 
apprentices and trainees described in section VI, paragraphs 5 and 6, 
and watchmen and guards on work covered by the Copeland Regulations 
during the preceding weekly payroll period. The statement shall be 
executed by the contractor or subcontractor or by an authorized officer 
or employee of the contractor or subcontractor who supervises the 
payment of wages. Contractors and subcontractors must use the 
certification set forth on U.S. Department of Labor Form WH-348, or the 
same certification appearing on the reverse of Optional U.S. Department 
of Labor Form WH-347, or on any form with identical wording.
    3. Final labor summary. The contractor and each subcontractor shall 
furnish, upon the completion of the contract, a summary of all 
employment, indicating for the completed project the total hours worked 
and the total amount earned. This data shall be submitted to the State 
highway department resident engineer on Form PR-47 together with the 
data required in section VIII, hereof, relative to materials and 
supplies.
    4. Final certificate. Upon completion of the contract, the 
contractor shall submit to the State highway department contracting 
officer, for transmission to the Federal Highway Administration with the 
voucher for final payment for any work performed under the contract, a 
certificate concerning wages and classifications for laborers, 
mechanics, watchmen and guards employed on the project, in the following 
form:

                                * * * * *

    The undersigned, contractor on

                              (Project No.)

hereby certifies that all laborers, mechanics, apprentices, trainees, 
watchmen and guards employed by him or by any subcontractor performing 
work under the contract on the project have been paid wages at rates not 
less than those required by the contract provisions, and that the work 
performed by each such laborer, mechanic, apprentice or trainee 
conformed to the classifications set forth in the contract or training 
program provisions applicable to the wage rate paid.

Signature and title_____________________________________________________

                                * * * * *

    5. Payrolls and payroll records--a. Payrolls and basic records 
relating thereto will be maintained during the course of the work and 
preserved for a period of three years thereafter for all laborers, 
mechanics, apprentices, trainees, watchmen and guards working at the 
site of the work.
    b. The payroll records shall contain the name, social security 
number and address of each such employee, his correct classification, 
rates of pay (including rates of contributions or costs anticipated of 
the types described in section 1(b)(2) of the Davis-Bacon Act), daily 
and weekly number of hours worked, deductions made and actual wages 
paid. Whenever the Secretary of Labor, pursuant to section VI, paragraph 
3.b., has found that the wages of any laborer or mechanic include the 
amount of any costs reasonably anticipated in providing benefits under a 
plan or program described in section I(b)(2)(B) of the Davis-Bacon Act, 
the contractor shall maintain records which show that the commitment to 
provide such benefits is enforceable, that the plan or program is 
financially responsible, and that the plan or program has been 
communicated in writing to the laborers or mechanics affected, and 
records which show the costs anticipated or the actual cost incurred in 
providing such benefits.
    c. The payrolls shall contain the following information:
    1. The employee's full name, address and social security number and 
a notation indicating whether the employee does, or does not, normally 
reside in the labor area as defined in section II, paragraph 1.a. (The 
employee's full name and social security number need only appear on the 
first payroll on which his name appears. The employee's address need 
only be shown on the first submitted payroll on which the employee's 
name appears, unless a change of address necessitates a submittal to 
reflect the new address.)
    2. The employee's classification.
    3. Entries indicating the employee's basic hourly wage rate and, 
where applicable, the overtime hourly wage rate. The payroll

[[Page 177]]

should indicate separately the amounts of employee and employer 
contributions to fringe benefits funds and/or programs. Any fringe 
benefits paid to the employee in cash must be indicated. There is no 
prescribed or mandatory form for showing the above information on 
payrolls.
    4. The employee's daily and weekly hours worked in each 
classification, including actual overtime hours worked (not adjusted).
    5. The itemized deductions made and
    6. The net wages paid.
    d. The contractor will submit weekly a copy of all payrolls to the 
State highway department resident engineer. The copy shall be 
accompanied by a statement signed by the employer or his agent 
indicating that the payrolls are correct and complete, that the wage 
rates contained therein are not less than those determined by the 
Secretary of Labor and the classifications set forth for each laborer or 
mechanic conform with the work he performed. Submission of a weekly 
statement which is required under this contract by section VII, 
paragraph 2, and the Copeland Regulations of the Secretary of Labor (29 
CFR part 3) and the filing with the initial payroll or any subsequent 
payroll of a copy of any findings by the Secretary of Labor pursuant to 
section VI, paragraph 3b, shall satisfy this requirement. The prime 
contractor shall be responsible for the submission of copies of payrolls 
of all subcontractors. The contractor will make the records required 
under the labor standards clauses of the contract available for 
inspection by authorized representatives of the State highway 
department, the Federal Highway Administration and the Department of 
Labor, and will permit such representatives to interview employees 
during working hours on the job.
    e. The wages of labor shall be paid in legal tender of the United 
States, except that this condition will be considered satisfied if 
payment is made by negotiable check, on a solvent bank, which may be 
cashed readily by the employee in the local community for the full 
amount, without discount or collection charges of any kind. Where checks 
are used for payment, the contractor shall make all necessary 
arrangements for them to be cashed and shall given information regarding 
such arrangements.
    f. No fee of any kind shall be asked or accepted by the contractor 
or any of his agents from any person as a condition of employment on the 
project.
    g. No laborers shall be charged for any tools used in performing 
their respective duties except for reasonably avoidable loss or damage 
thereto.
    h. Every employee on the work covered by this contract shall be 
permitted to lodge, board and trade where and with whom he elects and 
neither the contractor nor his agents, nor his employees shall, directly 
or indirectly, require as a condition of employment that an employee 
shall lodge, board or trade at a particular place or with a particular 
person.
    i. No charge shall be made for any transportation furnished by the 
contractor, or his agents, to any person employed on the work.
    j. No individual shall be employed as a laborer or mechanic on this 
contract except on a wage basis, but this shall not be construed to 
prohibit the rental of teams, trucks, or other equipment from 
individuals.

VIII. Record of materials, supplies and labor.

    1. The contractor shall maintain a record of the total cost of all 
materials and supplies purchased for and incorporated in the work, and 
also of the quantities of those specific materials and supplies listed 
on Form PR-47 and in the units shown. Upon completion of the contract, 
this record, together with the final labor summary required in section 
VII, paragraph 3, hereof, shall be transmitted to the State highway 
department resident engineer for the project on Form PR-47 in accordance 
with instructions attached thereto, which will be furnished for this 
purpose upon request. The quantities for the listed items shall be 
reported separately for roadway and for structures over 20 feet long as 
measured along the centerline of the roadway.
    2. The contractor shall become familiar with the list of specific 
materials and supplies contained in Form PR-47 prior to the commencement 
of work under this contract. Any additional materials information 
required will be solicited through revisions of Form PR-47 with 
attendant explanations.
    3. Where subcontracts are involved the contractor shall submit 
either a single report covering work both by himself and all his 
subcontractors, or he may submit separate reports for himself and for 
each of his subcontractors.

IX. Subletting or assigning the contract.

    1. The contractor shall perform with his own organization contract 
work amounting to not less than 50 percent of the original total 
contract price, except that any items designated by the State as 
Specialty Items may be performed by subcontract and the amount of any 
such Specialty Items so performed may be deducted from the original 
total contract price before computing the amount of work required to be 
performed by the contractor with his own organization.
    a. His own organization shall be construed to include only workmen 
employed and paid directly by the prime contractor and equipment owned 
or rented by him, with or without operators.
    b. Specialty items shall be construed to be limited to work that 
requires highly specialized knowledge, craftsmanship or equipment not 
ordinarily available in contracting organizations qualified to bid on 
the contract as

[[Page 178]]

a whole and in general are to be limited to minor components of the 
overall contract.
    2. In addition to the 50 percent requirements set forth in paragraph 
1 above, the contractor shall furnish (a) a competent superintendent or 
foreman who is employed by him, who has full authority to direct 
performance of the work in accordance with the contract requirements, 
and who is in charge of all construction operations (regardless of who 
performs the work), and (b) such other of his own organizational 
capability and responsibility (supervision, management, and engineering 
services) as the State highway department contracting officer determines 
is necessary to assure the performance of the contract.
    3. The contract amount upon which the 50 percent requirement set 
forth in paragraph 1 is computed includes the cost of materials and 
manufactured products which are to be purchased or produced by the 
contractor under the contract provisions.
    4. Any items that have been selected as Specialty Items for the 
contract are listed as such in the Special Provisions, bid schedule, or 
elsewhere in the contract documents.
    5. No portion of the contract shall be sublet, assigned or otherwise 
disposed of except with the written consent of the State highway 
department contracting officer, or his authorized representative, and 
such consent when given shall not be construed to relieve the contractor 
of any responsibility for the fulfillment of the contract. Request for 
permission to sublet, assign or otherwise dispose of any portion of the 
contract shall be in writing and accompanied by (a) a showing that the 
organization which will perform the work is particularly experienced and 
equipped for such work, and (b) an assurance by the contractor that the 
labor standards provisions set forth in thiscontract shall apply to 
labor performed on all work encompassed by the request.

X. Safety: Accident prevention.

    In the performance of this contract, the contractor shall comply 
with all applicable Federal, State and local laws governing safety, 
health and sanitation. The contractor shall provide all safeguards, 
safety devices and protective equipment and take any other needed 
actions, on his own responsibility, or as the State highway department 
contracting officer may determine, reasonably necessary to protect the 
life and health of employees on the job and the safety of the public and 
to protect property in connection with the performance of the work 
covered by the contract.
    It is a condition of this contract, and shall be made a condition of 
each subcontract entered into pursuant to this contract, that the 
contractor and any subcontractor shall not require any laborer or 
mechanic employed in performance of the contract to work in surroundings 
or under working conditions which are unsanitary, hazardous, or 
dangerous to his health or safety, as determined under construction 
safety and health standards (title 29, Code of Federal Regulations, part 
1926, formerly part 1518, as revised from time to time), promulgated by 
the United States Secretary of Labor, in accordance with section 107 of 
the Contract Work Hours and Safety Standards Act (83 Stat. 96).

XI. False statements concerning highway projects.

    In order to assure high quality and durable construction in 
conformity with approved plans and specifications and a high degree of 
reliability on statements and representations made by engineers, 
contractors, suppliers, and workers on Federal-aid highway projects, it 
is essential that all persons concerned with the project perform their 
functions as carefully, thoroughly and honestly as possible. Willfull 
falsification, distortion, or misrepresentation with respect to any 
facts related to the project is a violation of Federal law. To prevent 
any misunderstanding regarding the seriousness of these and similar 
acts, the following notice shall be posted on each Federal-aid highway 
project in one or more places where it is readily available to all 
personnel concerned with the project:

                                * * * * *

     Notice to All Personnel Engaged on Federal-Aid Highway Projects

    Title 18 U.S.C., section 1020, reads as follows:
    ``Whoever, being an officer, agent, or employee of the United 
States, or of any State or Territory, or whoever, whether a person, 
association, firm, or corporation, knowingly makes any false statement, 
false representation, or false report as to the character, quality, 
quantity, or cost of the material used or to be used, or the quantity or 
quality of the work performed or to be performed or the costs thereof in 
connection with the submission of plans, maps, specifications, 
contracts, or costs of construction of any highway or related project 
submitted for approval to the Secretary of Transportation; or
    ``Whoever knowingly makes any false statement, false representation, 
false report, or false claim with respect to the character, quality, 
quantity, or cost of any work performed or to be performed, or materials 
furnished or to be furnished, in connection with the construction of any 
highway or related project approved by the Secretary of Transportation; 
or
    ``Whoever knowingly makes any false statement or false 
representation as to a material fact in any statement, certificate, or 
report submitted pursuant to provisions of

[[Page 179]]

the Federal-Aid Road Act approved July 1, 1916 (39 Stat. 355), as 
amended and supplemented;
    ``Shall be fined not more than $10,000 or imprisoned not more than 
five years, or both.''

XII. Implementation of Clean Air Act and Federal Water Pollution Control 
          Act (applicable to contracts and subcontracts which exceed 
          $100,000).

    1. The contractor stipulates that any facility to be utilized in the 
performance of this contract, unless such contract is exempt under the 
Clean Air Act, as amended (42 U.S.C. 1857 et seq., as amended by Pub. L. 
91-604), and under the Federal Water Pollution Control Act, as amended 
(33 U.S.C. 1251 et seq., as amended by Pub. L. 92-500), Executive Order 
11738, and regulations in implementation thereof (40 CFR part 15), is 
listed not on the date of contract award, on the U.S. Environmental 
Protection Agency (EPA) List of Violating Facilities Pursuant to 40 CFR 
part 15.20.
    2. The contractor agrees to comply with all the requirements of 
section 114 of the Clean Air Act and section 308 of the Federal Water 
Pollution Control Act and all regulations and guidelines listed 
thereunder.
    3. The contractor shall promptly notify the State highway department 
of the receipt of any communication from the Director, Office of Federal 
Activities, EPA, indicating that a facility to be utilized for the 
contract is under consideration to be listed on the EPA List of 
Violating Facilities.
    4. The contractor agrees to include or cause to be included the 
requirements of subparagraphs 1 through 4 of this paragraph XII in every 
subcontract which exceeds $100,000, and further agrees to take such 
action as Government may direct as a means of enforcing such 
requirements.

[40 FR 49084, Oct. 21, 1975]



 Sec. Appendix C to Subpart B of Part 633--Additional Required Contract 

  Provisions, Appalachian Development Highway System and Local Access 
            Roads Contracts Other Than Construction Contracts

Equal Opportunity: Employment Practices and Selection of Subcontractors, 
            Suppliers of Materials, and Lessors of Equipment

    During the performance of this contract, the contractor agrees as 
follows:

1. Compliance with regulations.
    The contractor will comply with the provisions of 23 U.S.C. 324 and 
with the Regulations of the Department of Transportation relative to 
nondiscrimination in Federally-assisted programs of the Department of 
Transportation (Title 49, Code of Federal Regulations, part 21, 
hereinafter referred to as the regulations), which are herein 
incorporated by reference and made a part of this contract.

2. Employment practices
    a. The contractor will not discriminate against any employee or 
applicant for employment because of race, color, sex, or national 
origin. The contractor will take affirmative action to ensure that 
applicants are employed, and that employees are treated during 
employment without regard to their race, color, sex, or national origin. 
Such action shall include, but not be limited to the following: 
recruitment or recruitment advertising, hiring, firing, upgrading, 
promotion, demotion, transfer, layoff, termination, rates of pay or 
other forms of compensation or benefits, selection for training or 
apprenticeship, use of facilities and treatment of employees. The 
contractor agrees to post in conspicuous places, available to employees 
and applicants for employment, notices setting forth the provisions of 
this employment practices clause.
    b. The contractor will, in all solicitations or advertisements for 
employees placed by or on behalf of the contractor, state that all 
qualified applicants will receive consideration for employment without 
regard to race, color, sex, or national origin.
    c. The contractor will send to each labor union or representative of 
workers with which he has a collective bargaining agreement or other 
contract or understanding, a notice advising the said labor union or 
workers representative of the contractor's commitments under the 
employment practices provision, and shall post copies of the notice in 
conspicuous places available to employees and applicants for employment.

3. Selection of subcontractors, procurement of materials and leasing of 
          equipment.
    a. The contractor, with regard to the work performed by him after 
award and prior to completion of the contract work, will not 
discriminate on the ground of race, color, sex, or national origin in 
the selection and retention of subcontractors, including procurements of 
materials and leases of equipment. The contractor will not participate 
either directly or indirectly in the discrimination prohibited by 
Section 21.5 of the Regulations.
    b. In all solicitations either by competitive bidding or negotiation 
made by the contractor for work to be performed under a subcontract, 
including procurements of materials or leases of equipment, each 
potential subcontractor, supplier, or lessor shall be notified by the 
contractor of the contractor's obligations under this contract and the 
Regulations relative to nondiscrimination on

[[Page 180]]

the ground of race, color, sex, or national origin.

4. Information and reports.
    The contractor will provide all information and reports required by 
the Regulations, or orders and instructions issued pursuant thereto, and 
will permit access to its books, records, accounts, other sources of 
information, and its facilities as may be determined by the State 
highway department or the Federal Highway Administration to be pertinent 
to ascertain compliance with such Regulations, orders and instructions. 
Where any information required of a contractor is in the exclusive 
possession of another who fails or refuses to furnish this information, 
the contractor shall so certify to the State highway department, or the 
Federal Highway Administration as appropriate, and shall set forth what 
efforts it has made to obtain the information.

5. Incorporation of provisions.
    The contractor will include these additional required contract 
provisions in every subcontract, including procurements of materials and 
leases of equipment, unless exempt by the Regulations or orders, or 
instructions issued pursuant thereto. The contractor will take such 
action with respect to any subcontract, procurement, or lease as the 
State highway department or the Federal Highway Administration may 
direct as a means of enforcing such provisions including sanctions for 
non-compliance: Provided, however, That, in the event a contractor 
becomes involved in, or is threatened with, litigation with a 
subcontractor, supplier, or lessor as a result of such directed action, 
the contractor may request the State to enter into such litigation to 
protect the interest of the State, and, in addition, the contractor may 
request the United States to enter into such litigation to protect the 
interest of the United States.

6. Sanctions for noncompliance.
    In the event of the contractor's noncompliance with sections 1 
through 5 above, the State highway department shall impose such contract 
sanctions as it or the Federal Highway Administration may determine to 
be appropriate, including but not limited to.
    a. Withholding of payments to the contractor under the contract 
until the contractor complies, and/or
    b. Cancellation, termination or suspension of the contract in whole 
or in part.

[40 FR 49088, Oct. 21, 1975]



 Sec. Appendix D to Subpart B of Part 633--Federal-Aid Proposal Notices

       Notices to Prospective Federal-Aid Construction Contractors

I. Certification of nonsegregated facilities.
    (a) A Certification of Nonsegregated Facilities, as required by the 
May 9, 1967, Order of the Secretary of Labor (32 FR 7439, May 19, 1967) 
on Elimination of Segregated Facilities (is included in the proposal and 
must be submitted prior to the award of a Federal-aid highway 
construction contract exceeding $10,000 which is not exempt from the 
provisions of the Equal Opportunity clause).
    (b) Bidders are cautioned as follows: By signing this bid, the 
bidder will be deemed to have signed and agreed to the provisions of the 
``Certification of Nonsegregated Facilities'' in this proposal. This 
certification provides that the bidder does not maintain or provide for 
his employees facilities which are segregated on a basis of race, creed, 
color, or national origin, whether such facilities are segregated by 
directive or on a de facto basis. The certification also provides that 
the bidder will not maintain such segregated facilities.
    (c) Bidders receiving Federal-aid highway construction contract 
awards exceeding $10,000 which are not exempt from the provisions of the 
Equal Opportunity clause, will be required to provide for the forwarding 
of the following notice to prospective subcontractors for construction 
contracts and material suppliers where the subcontracts or material 
supply agreements exceed $10,000 and are not exempt from the provisions 
of the Equal Opportunity clause.

     Notice to Prospective Subcontractors and Material Suppliers of 
        Requirement for Certification of Nonsegregated Facilities

    (a) A Certification of Nonsegregated Facilities is required by the 
May 9, 1967, Order of the Secretary of Labor (32 FR 7431, May 19, 1967) 
on Elimination of Segregated Facilities, which is included in the 
proposal, or attached hereto, must be submitted by each subcontractor 
and material supplier prior to the award of the subcontract or 
consummation of a material supply agreement if such subcontract or 
agreement exceeds $10,000 and is not exempt from the provisions of the 
Equal Opportunity clause.
    (b) Subcontractors and material suppliers are cautioned as follows: 
By signing the subcontract or entering into a material supply agreement, 
the subcontractor or material supplier will be deemed to have signed and 
agreed to the provisions of the ``Certification of Nonsegregated 
Facilities'' in the subcontract or material supply agreement. This 
certification provides that the subcontractor or material supplier does 
not maintain or provide for his employees facilities which are 
segregated on the basis of race, creed, color, or national origin, 
whether such facilities are segregated by directive or on a de facto 
basis. The certification also provides that the subcontractor or 
material supplier will not maintain such segregated facilities.

[[Page 181]]

    (c) Subcontractors or material suppliers receiving subcontract 
awards or material supply agreements exceeding $10,000 which are not 
exempt from the provisions of the Equal Opportunity clause will be 
required to provide for the forwarding of this notice to prospective 
subcontractors for construction contracts and material suppliers where 
the subcontracts or material supply agreements exceed $10,000 and are 
not exempt from the provisions of the Equal Opportunity clause.

II. Implementation of Clean Air Act.
    (a) By signing this bid, the bidder will be deemed to have 
stipulated as follows:
    (1) That any facility to be utilized in the performance of this 
contract, unless such contract is exempt under the Clean Air Act, as 
amended (42 U.S.C. 1857 et seq., as by Pub. L. 91-604), Executive order 
11738, and regulations in implementation thereof (40 CFR part 15, is not 
listed on the U.S. Environmental Protection Agency (EPA) List of 
Violating Facilities pursuant to 40 CFR 15.20.
    (2) That the State highway department shall be promptly notified 
prior to contract award of the receipt by the bidder of any 
communication from the Director, Office of Federal Activities, EPA, 
indicating that a facility to be utilized for the contract is under 
consideration to be listed on the EPA List of Violating Facilities.



PART 634_WORKER VISIBILITY--Table of Contents




Sec.
634.1 Purpose.
634.2 Definitions.
634.3 Rule.
634.4 Compliance date.

    Authority: 23 U.S.C. 101(a), 109(d), 114(a), 315, and 402(a); Sec. 
1402 of Pub. L. 109-59; 23 CFR 1.32; and 49 CFR 1-48(b).

    Source: 71 FR 67800, Nov. 24, 2006, unless otherwise noted.

    Effective Date Note: At 71 FR 67800, Nov. 24, 2006, part 634 was 
added, effective Nov. 24, 2008.



Sec. 634.1  Purpose.

    The purpose of the regulations in this part is to decrease the 
likelihood of worker fatalities or injuries caused by motor vehicles and 
construction vehicles and equipment while working within the right-of-
way on Federal-aid highways.



Sec. 634.2  Definitions.

    Close proximity means within the highway right-of-way on Federal-aid 
highways.
    High-visibility safety apparel means personal protective safety 
clothing that is intended to provide conspicuity during both daytime and 
nighttime usage, and that meets the Performance Class 2 or 3 
requirements of the ANSI/ISEA 107-2004 publication entitled ``American 
National Standard for High-Visibility Safety Apparel and Headwear.'' 
This publication is incorporated by reference in accordance with 5 
U.S.C. 552(a) and 1 CFR Part 51 and is on file at the National Archives 
and Records Administration (NARA). For information on the availability 
of this material at NARA, call (202) 741-6030, or go to http://
www.archives.gov/federal--register/code--of--federal--regulations/ibr--
locations.html. It is available for inspection and copying at the 
Federal Highway Administration, 400 Seventh Street, SW., Room 4232, 
Washington, DC, 20590, as provided in 49 CFR Part 7. This publication is 
available for purchase from the International Safety Equipment 
Association (ISEA) at 1901 N. Moore Street, Suite 808, Arlington, VA 
22209, http://www.safetyequipment.org.
    Workers means people on foot whose duties place them within the 
right-of-way of a Federal-aid highway, such as highway construction and 
maintenance forces, survey crews, utility crews, responders to incidents 
within the highway right-of-way, and law enforcement personnel when 
directing traffic, investigating crashes, and handling lane closures, 
obstructed roadways, and disasters within the right-of-way of a Federal-
aid highway.



Sec. 634.3  Rule.

    All workers within the right-of-way of a Federal-aid highway who are 
exposed either to traffic (vehicles using the highway for purposes of 
travel) or to construction equipment within the work area shall wear 
high-visibility safety apparel.



Sec. 634.4  Compliance date.

    States and other agencies shall comply with the provisions of this 
Part no later than November 24, 2008.

[[Page 182]]



PART 635_CONSTRUCTION AND MAINTENANCE--Table of Contents




                      Subpart A_Contract Procedures

Sec.
635.101 Purpose.
635.102 Definitions.
635.103 Applicability.
635.104 Method of construction.
635.105 Supervising agency.
635.106 Use of publicly owned equipment.
635.107 Participation by disadvantaged business enterprises.
635.108 Health and safety.
635.109 Standardized changed condition clauses.
635.110 Licensing and qualification of contractors.
635.111 Tied bids.
635.112 Advertising for bids and proposals.
635.113 Bid opening and bid tabulations.
635.114 Award of contract and concurrence in award.
635.115 Agreement estimate.
635.116 Subcontracting and contractor responsibilities.
635.117 Labor and employment.
635.118 Payroll and weekly statements.
635.119 False statements.
635.120 Changes and extra work.
635.121 Contract time and contract time extensions.
635.122 Participation in progress payments.
635.123 Determination and documentation of pay quantities.
635.124 Participation in contract claim awards and settlements.
635.125 Termination of contract.
635.126 Record of materials, supplies, and labor.
635.127 Agreement provisions regarding overruns in contract time.

                  Subpart B_Force Account Construction

635.201 Purpose.
635.202 Applicability.
635.203 Definitions.
635.204 Determination of more cost effective method or an emergency.
635.205 Finding of cost effectiveness.

              Subpart C_Physical Construction Authorization

635.301 Purpose.
635.303 Applicability.
635.305 Physical construction.
635.307 Coordination.
635.309 Authorization.

                 Subpart D_General Material Requirements

635.401 Purpose.
635.403 Definitions.
635.405 Applicability.
635.407 Use of materials made available by a public agency.
635.409 Restrictions upon materials.
635.410 Buy America requirements.
635.411 Material or product selection.
635.413 Guaranty and warranty clauses.
635.417 Convict produced materials.

    Authority: Sec. 1503 of Pub. L. 109-59, 119 Stat. 1144; 23 U.S.C. 
101 (note), 109, 112, 113, 114, 116, 119, 128, and 315; 31 U.S.C. 6505; 
42 U.S.C. 3334, 4601 et seq.; Sec. 1041 (a), Pub. L. 102-240, 105 Stat. 
1914; 23 CFR 1.32; 49 CFR 1.48(b).

    Editorial Note: Nomenclature changes to part 635 appear at 67 FR 
75924, Dec. 10, 2002.



                      Subpart A_Contract Procedures

    Source: 56 FR 37004, Aug. 2, 1991, unless otherwise noted.



Sec. 635.101  Purpose.

    To prescribe policies, requirements, and procedures relating to 
Federal-aid highway projects, from the time of authorization to proceed 
to the construction stage, to the time of final acceptance by the 
Federal Highway Administration (FHWA).



Sec. 635.102  Definitions.

    As used in this subpart:
    Administrator means the Federal Highway Administrator.
    Calendar day means each day shown on the calendar but, if another 
definition is set forth in the State contract specifications, that 
definition will apply.
    Contract time means the number of workdays or calendar days 
specified in a contract for completion of the contract work. The term 
includes authorized time extensions.
    Design-build project means a project to be developed using one or 
more design-build contracts.
    Division Administrator means the chief FHWA official assigned to 
conduct business in a particular State. A State is as defined in 23 
U.S.C. 101.
    Force account means a basis of payment for the direct performance of 
highway construction work with payment based on the actual cost of 
labor, equipment, and materials furnished and consideration for overhead 
and profit.

[[Page 183]]

    Formal approval means approval in writing or the electronic 
transmission of such approval.
    Incentive/disincentive for early completion as used in this subpart, 
describes a contract provision which compensates the contractor a 
certain amount of money for each day identified critical work is 
completed ahead of schedule and assesses a deduction for each day the 
contractor overruns the incentive/disincentive time. Its use is 
primarily intended for those critical projects where traffic 
inconvenience and delays are to be held to a minimum. The amounts are 
based upon estimates of such items as traffic safety, traffic 
maintenance, and road user delay costs.
    Liquidated damages means the daily amount set forth in the contract 
to be deducted from the contract price to cover additional costs 
incurred by a State transportation department because of the 
contractor's failure to complete the contract work within the number of 
calendar days or workdays specified. The term may also mean the total of 
all daily amounts deducted under the terms of a particular contract.
    Local public agency means any city, county, township, municipality, 
or other political subdivision that may be empowered to cooperate with 
the State transportation department in highway matters.
    Major change or major extra work means a change which will 
significantly affect the cost of the project to the Federal Government 
or alter the termini, character or scope of the work.
    Materially unbalanced bid means a bid which generates a reasonable 
doubt that award to the bidder submitting a mathematically unbalanced 
bid will result in the lowest ultimate cost to the Federal Government.
    Mathematically unbalanced bid means a bid containing lump sum or 
unit bid items which do not reflect reasonable actual costs plus a 
reasonable proportionate share of the bidder's anticipated profit, 
overhead costs, and other indirect costs.
    Public agency means any organization with administrative or 
functional responsibilities which are directly or indirectly affiliated 
with a governmental body of any nation, State, or local jurisdiction.
    Publicly owned equipment means equipment previously purchased or 
otherwise acquired by the public agency involved primarily for use in 
its own operations.
    Specialty items means work items identified in the contract which 
are not normally associated with highway construction and require highly 
specialized knowledge, abilities or equipment not ordinarily available 
in the type of contracting organizations qualified and expected to bid 
on the contract; in general, these items are to be limited to minor 
components of the overall contract.
    State transportation department (STD) means that department, 
commission, board, or official of any State charged by its laws with the 
responsibility for highway construction. The term ``State'' should be 
considered equivalent to ``State transportation department'' if the 
context so implies.
    Workday means a calendar day during which construction operations 
could proceed for a major part of a shift, normally excluding Saturdays, 
Sundays, and State-recognized legal holidays.

[62 FR 6873, Feb. 14, 1997, as amended at 67 FR 75924, Dec. 10, 2002]



Sec. 635.103  Applicability.

    The policies, requirements, and procedures prescribed in this 
subpart shall apply to all Federal-aid highway projects.

[69 FR 7118, Feb. 13, 2004]



Sec. 635.104  Method of construction.

    (a) Actual construction work shall be performed by contract awarded 
by competitive bidding; unless, as provided in Sec. 635.104(b), the STD 
demonstrates to the satisfaction of the Division Administrator that some 
other method is more cost effective or that an emergency exists. The STD 
shall assure opportunity for free, open, and competitive bidding, 
including adequate publicity of the advertisements or calls for bids. 
The advertising or

[[Page 184]]

calling for bids and the award of contracts shall comply with the 
procedures and requirements set forth in Sec. Sec. 635.112 and 635.114.
    (b) Approval by the Division Administrator for construction by a 
method other than competitive bidding shall be requested by the State in 
accordance with subpart B of part 635 of this chapter. Before such 
finding is made, the STD shall determine that the organization to 
undertake the work is so staffed and equipped as to perform such work 
satisfactorily and cost effectively.
    (c) In the case of a design-build project, the requirements of 23 
CFR part 636 and the appropriate provisions pertaining to design-build 
contracting in this part will apply. However, no justification of cost 
effectiveness is necessary in selecting projects for the design-build 
delivery method.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]



Sec. 635.105  Supervising agency.

    (a) The STD has responsibility for the construction of all Federal-
aid projects, and is not relieved of such responsibility by authorizing 
performance of the work by a local public agency or other Federal 
agency. The STD shall be responsible for insuring that such projects 
receive adequate supervision and inspection to insure that projects are 
completed in conformance with approved plans and specifications.
    (b) Although the STD may employ a consultant to provide construction 
engineering services, such as inspection or survey work on a project, 
the STD shall provide a full-time employed State engineer to be in 
responsible charge of the project.
    (c) When a project is located on a street or highway over which the 
STD does not have legal jurisdiction, or when special conditions 
warrant, the STD, while not relieved of overall project responsibility, 
may arrange for the local public agency having jurisdiction over such 
street or highway to perform the work with its own forces or by 
contract; provided the following conditions are met and the Division 
Administrator approves the arrangements in advance.
    (1) In the case of force account work, there is full compliance with 
subpart B of this part.
    (2) When the work is to be performed under a contract awarded by a 
local public agency, all Federal requirements including those prescribed 
in this subpart shall be met.
    (3) The local public agency is adequately staffed and suitably 
equipped to undertake and satisfactorily complete the work; and
    (4) In those instances where a local public agency elects to use 
consultants for construction engineering services, the local public 
agency shall provide a full-time employee of the agency to be in 
responsible charge of the project.



Sec. 635.106  Use of publicly owned equipment.

    (a) Publicly owned equipment should not normally compete with 
privately owned equipment on a project to be let to contract. There may 
be exceptional cases, however, in which the use of equipment of the 
State or local public agency for highway construction purposes may be 
warranted or justified. A proposal by any STD for the use of publicly 
owned equipment on such a project must be supported by a showing that it 
would clearly be cost effective to do so under the conditions peculiar 
to the individual project or locality.
    (b) Where publicly owned equipment is to be made available in 
connection with construction work to be let to contract, Federal funds 
may participate in the cost of such work provided the following 
conditions are met:
    (1) The proposed use of such equipment is clearly set forth in the 
Plans, Specifications and Estimate (PS&E) submitted to the Division 
Administrator for approval.
    (2) The advertised specifications specify the items of publicly 
owned equipment available for use by the successful bidder, the rates to 
be charged, and the points of availability or delivery of the equipment; 
and
    (3) The advertised specifications include a notification that the 
successful bidder has the option either of renting part or all of such 
equipment from the

[[Page 185]]

State or local public agency or otherwise providing the equipment 
necessary for the performance of the contract work.
    (c) In the rental of publicly owned equipment to contractors, the 
State or local public agency shall not profit at the expense of Federal 
funds.
    (d) Unforeseeable conditions may make it necessary to provide 
publicly owned equipment to the contractor at rental rates agreed to 
between the contractor and the State or local public agency after the 
work has started. Any such arrangement shall not form the basis for any 
increase in the cost of the project on which Federal funds are to 
participate.
    (e) When publicly owned equipment is used on projects constructed on 
a force account basis, costs may be determined by agreed unit prices or 
on an actual cost basis. When agreed unit prices are applied the 
equipment need not be itemized nor rental rates shown in the estimate. 
However, if such work is to be performed on an actual cost basis, the 
STD shall submit to the Division Administrator for approval the scheduie 
of rates proposed to be charged, exclusive of profit, for the publicly 
owned equipment made available for use.



Sec. 635.107  Participation by disadvantaged business enterprises.

    (a) The STD shall schedule contract lettings in a balanced program 
providing contracts of such size and character as to assure an 
opportunity for all sizes of contracting organizations to compete. In 
accordance with Title VI of the Civil Rights Act of 1964, subsequent 
Federal-aid Highway Acts, and 49 CFR part 26, the STD shall ensure equal 
opportunity for disadvantaged business enterprises (DBEs) participating 
in the Federal-aid highway program.
    (b) In the case of a design-build project funded with title 23 
funds, the requirements of 49 CFR part 26 and the State's approved DBE 
plan apply. If DBE goals are set, DBE commitments above the goal must 
not be used as a proposal evaluation factor in determining the 
successful offeror.

[67 FR 75925, Dec. 10, 2002]



Sec. 635.108  Health and safety.

    Contracts for projects shall include provisions designed:
    (a) To insure full compliance with all applicable Federal, State, 
and local laws governing safety, health and sanitation; and
    (b) To require that the contractor shall provide all safeguards, 
safety devices, and protective equipment and shall take any other 
actions reasonably necessary to protect the life and health of persons 
working at the site of the project and the safety of the public and to 
protect property in connection with the performance of the work covered 
by the contract.



Sec. 635.109  Standardized changed condition clauses.

    (a) Except as provided in paragraph (b) of this section, the 
following changed conditions contract clauses shall be made part of, and 
incorporated in, each highway construction project approved under 23 
U.S.C. 106:
    (1) Differing site conditions. (i) During the progress of the work, 
if subsurface or latent physical conditions are encountered at the site 
differing materially from those indicated in the contract or if unknown 
physical conditions of an unusual nature, differing materially from 
those ordinarily encountered and generally recognized as inherent in the 
work provided for in the contract, are encountered at the site, the 
party discovering such conditions shall promptly notify the other party 
in writing of the specific differing conditions before the site is 
disturbed and before the affected work is performed.
    (ii) Upon written notification, the engineer will investigate the 
conditions, and if it is determined that the conditions materially 
differ and cause an increase or decrease in the cost or time required 
for the performance of any work under the contract, an adjustment, 
excluding anticipated profits, will be made and the contract modified in 
writing accordingly. The engineer will notify the contractor of the 
determination whether or not an adjustment of the contract is warranted.
    (iii) No contract adjustment which results in a benefit to the 
contractor will be allowed unless the contractor

[[Page 186]]

has provided the required written notice.
    (iv) No contract adjustment will be allowed under this clause for 
any effects caused on unchanged work. (This provision may be omitted by 
the STD's at their option.)
    (2) Suspensions of work ordered by the engineer. (i) If the 
performance of all or any portion of the work is suspended or delayed by 
the engineer in writing for an unreasonable period of time (not 
originally anticipated, customary, or inherent to the construction 
industry) and the contractor believes that additional compensation and/
or contract time is due as a result of such suspension or delay, the 
contractor shall submit to the engineer in writing a request for 
adjustment within 7 calendar days of receipt of the notice to resume 
work. The request shall set forth the reasons and support for such 
adjustment.
    (ii) Upon receipt, the engineer will evaluate the contractor's 
request. If the engineer agrees that the cost and/or time required for 
the performance of the contract has increased as a result of such 
suspension and the suspension was caused by conditions beyond the 
control of and not the fault of the contractor, its suppliers, or 
subcontractors at any approved tier, and not caused by weather, the 
engineer will make an adjustment (excluding profit) and modify the 
contract in writing accordingly. The contractor will be notified of the 
engineer's determination whether or not an adjustment of the contract is 
warranted.
    (iii) No contract adjustment will be allowed unless the contractor 
has submitted the request for adjustment within the time prescribed.
    (iv) No contract adjustment will be allowed under this clause to the 
extent that performance would have been suspended or delayed by any 
other cause, or for which an adjustment is provided or excluded under 
any other term or condition of this contract.
    (3) Significant changes in the character of work. (i) The engineer 
reserves the right to make, in writing, at any time during the work, 
such changes in quantities and such alterations in the work as are 
necessary to satisfactorily complete the project. Such changes in 
quantities and alterations shall not invalidate the contract nor release 
the surety, and the contractor agrees to perform the work as altered.
    (ii) If the alterations or changes in quantities significantly 
change the character of the work under the contract, whether such 
alterations or changes are in themselves significant changes to the 
character of the work or by affecting other work cause such other work 
to become significantly different in character, an adjustment, excluding 
anticipated profit, will be made to the contract. The basis for the 
adjustment shall be agreed upon prior to the performance of the work. If 
a basis cannot be agreed upon, then an adjustment will be made either 
for or against the contractor in such amount as the engineer may 
determine to be fair and equitable.
    (iii) If the alterations or changes in quantities do not 
significantly change the character of the work to be performed under the 
contract, the altered work will be paid for as provided elsewhere in the 
contract.
    (iv) The term ``significant change'' shall be construed to apply 
only to the following circumstances:
    (A) When the character of the work as altered differs materially in 
kind or nature from that involved or included in the original proposed 
construction; or
    (B) When a major item of work, as defined elsewhere in the contract, 
is increased in excess of 125 percent or decreased below 75 percent of 
the original contract quantity. Any allowance for an increase in 
quantity shall apply only to that portion in excess of 125 percent of 
original contract item quantity, or in case of a decrease below 75 
percent, to the actual amount of work performed.
    (b) The provisions of this section shall be governed by the 
following:
    (1) Where State statute does not permit one or more of the contract 
clauses included in paragraph (a) of this section, the State statute 
shall prevail and such clause or clauses need not be made applicable to 
Federal-aid highway contracts.
    (2) Where the State transportation department has developed and 
implemented one or more of the contract

[[Page 187]]

clauses included in paragraph (a) of this section, such clause or 
clauses, as developed by the State transportation department may be 
included in Federal-aid highway contracts in lieu of the corresponding 
clause or clauses in paragraph (a) of this section. The State's action 
must be pursuant to a specific State statute requiring differing 
contract conditions clauses. Such State developed clause or clauses, 
however, must be in conformance with 23 U.S.C., 23 CFR and other 
applicable Federal statutes and regulations as appropriate and shall be 
subject to the Division Administrator's approval as part of the PS&E.
    (c) In the case of a design-build project, STDs are strongly 
encouraged to use ``suspensions of work ordered by the engineer'' 
clauses, and may consider ``differing site condition'' clauses and 
``significant changes in the character of work'' clauses which are 
appropriate for the risk and responsibilities that are shared with the 
design-builder.

[56 FR 37004, Aug. 2, 1991; 57 FR 10062, Mar. 23, 1992, as amended at 67 
FR 75925, Dec. 10, 2002]



Sec. 635.110  Licensing and qualification of contractors.

    (a) The procedures and requirements a STD proposes to use for 
qualifying and licensing contractors, who may bid for, be awarded, or 
perform Federal-aid highway contracts, shall be submitted to the 
Division Administrator for advance approval. Only those procedures and 
requirements so approved shall be effective with respect to Federal-aid 
highway projects. Any changes in approved procedures and requirements 
shall likewise be subject to approval by the Division Administrator.
    (b) No procedure or requirement for bonding, insurance, 
prequalification, qualification, or licensing of contractors shall be 
approved which, in the judgment of the Division Administrator, may 
operate to restrict competition, to prevent submission of a bid by, or 
to prohibit the consideration of a bid submitted by, any responsible 
contractor, whether resident or nonresident of the State wherein the 
work is to be performed.
    (c) No contractor shall be required by law, regulation, or practice 
to obtain a license before submission of a bid or before the bid may be 
considered for award of a contract. This, however, is not intended to 
preclude requirements for the licensing of a contractor upon or 
subsequent to the award of the contract if such requirements are 
consistent with competitive bidding. Prequalification of contractors may 
be required as a condition for submission of a bid or award of contract 
only if the period between the date of issuing a call for bids and the 
date of opening of bids affords sufficient time to enable a bidder to 
obtain the required prequalification rating.
    (d) Requirements for the prequalification, qualification or 
licensing of contractors, that operate to govern the amount of work that 
may be bid upon by, or may be awarded to, a contractor, shall be 
approved only if based upon a full and appropriate evaluation of the 
contractor's capability to perform the work.
    (e) Contractors who are currently suspended, debarred or voluntarily 
excluded under 49 CFR part 29 or otherwise determined to be ineligible, 
shall be prohibited from participating in the Federal-aid highway 
program.
    (f) In the case of a design-build project, the STDs may use their 
own bonding, insurance, licensing, qualification or prequalification 
procedure for any phase of design-build procurement.
    (1) The STDs may not impose statutory or administrative requirements 
which provide an in-State or local geographical preference in the 
solicitation, licensing, qualification, pre-qualification, short listing 
or selection process. The geographic location of a firm's office may not 
be one of the selection criteria. However, the STDs may require the 
successful design-builder to establish a local office after the award of 
contract.
    (2) If required by State statute, local statute, or administrative 
policy, the STDs may require prequalification for construction 
contractors. The STDs may require offerors to demonstrate the ability of 
their engineering staff to become licensed in that State as a condition 
of responsiveness; however, licensing procedures may not serve as a

[[Page 188]]

barrier for the consideration of otherwise responsive proposals. The 
STDs may require compliance with appropriate State or local licensing 
practices as a condition of contract award.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]



Sec. 635.111  Tied bids.

    (a) The STD may tie or permit the tying of Federal-aid highway 
projects or Federal-aid and State-financed highway projects for bidding 
purposes where it appears that by so doing more favorable bids may be 
received. To avoid discrimination against contractors desiring to bid 
upon a lesser amount of work than that included in the tied 
combinations, provisions should be made to permit bidding separately on 
the individual projects whenever they are of such character as to be 
suitable for bidding independently.
    (b) When Federal-aid and State-financed highway projects are tied or 
permitted to be tied together for bidding purposes, the bid schedule 
shall set forth the quantities separately for the Federal-aid work and 
the State-financed work. All proposals submitted for the tied projects 
must contain separate bid prices for each project individually. Federal 
participation in the cost of the work shall be on the basis of the 
lowest overall responsive bid proposal unless the analysis of bids 
reveals that mathematical unbalancing has caused an unsupported shift of 
cost liability to the Federal-aid work. If such a finding is made, 
Federal participation shall be based on the unit prices represented in 
the proposal by the individual contractor who would be the lowest 
responsive and responsible bidder if only the Federal-aid project were 
considered.
    (c) Federal-aid highway projects and State-financed highway projects 
may be combined in one contract if the conditions of the projects are so 
similar that the unit costs on the Federal-aid projects should not be 
increased by such combinations of projects. In such cases, like 
quantities should be combined in the proposal to avoid the possibility 
of unbalancing of bids in favor of either of the projects in the 
combination.



Sec. 635.112  Advertising for bids and proposals.

    (a) No work shall be undertaken on any Federal-aid project, nor 
shall any project be advertised for bids, prior to authorization by the 
Division Administrator.
    (b) The advertisement and approved plans and specifications shall be 
available to bidders a minimum of 3 weeks prior to opening of bids 
except that shorter periods may be approved by the Division 
Administrator in special cases when justified.
    (c) The STD shall obtain the approval of the Division Administrator 
prior to issuing any addenda which contain a major change to the 
approved plans or specifications during the advertising period. Minor 
addenda need not receive prior approval but should be identified by the 
STD at the time of or prior to requesting FHWA concurrence in award. The 
STD shall provide assurance that all bidders have received all issued 
addenda.
    (d) Nondiscriminatory bidding procedures shall be afforded to all 
qualified bidders regardless of National, State or local boundaries and 
without regard to race, color, religion, sex, national origin, age, or 
handicap. If any provisions of State laws, specifications, regulations, 
or policies may operate in any manner contrary to Federal requirements, 
including title VI of the Civil Rights Act of 1964, to prevent 
submission of a bid, or prohibit consideration of a bid submitted by any 
responsible bidder appropriately qualified in accordance with Sec. 
635.110, such provisions shall not be applicable to Federal-aid 
projects. Where such nonapplicable provisions exist, notices of 
advertising, specifications, special provisions or other governing 
documents shall include a positive statement to advise prospective 
bidders of those provisions that are not applicable.
    (e) No public agency shall be permitted to bid in competition or to 
enter into subcontracts with private contractors.
    (f) The STD shall include a noncollusion provision substantially as 
follows in the bidding documents:


[[Page 189]]


    Each bidder shall file a statement executed by, or on behalf of the 
person, firm, association, or corporation submitting the bid certifying 
that such person, firm, association, or corporation has not, either 
directly or indirectly, entered into any agreement, participated in any 
collusion, or otherwise taken any action, in restraint of free 
competitive bidding in connection with the submitted bid. Failure to 
submit the executed statement as part of the bidding documents will make 
the bid nonresponsive and not eligible for award consideration.

    (1) The required form for the statement will be provided by the 
State to each prospective bidder.
    (2) The statement shall either be in the form of an affidavit 
executed and sworn to by the bidder before a person who is authorized by 
the laws of the State to administer oaths or in the form of an unsworn 
declaration executed under penalty of perjury of the laws of the United 
States.
    (g) The STD shall include the lobbying certification requirement 
pursuant to 49 CFR part 20 and the requirements of 49 CFR part 29 
regarding suspension and debarment certification in the bidding 
documents.
    (h) The STD shall clearly identify in the bidding documents those 
requirements which the bidder must assure are complied with to make the 
bid responsive. Failure to comply with these identified bidding 
requirements shall make the bid nonresponsive and not eligible for award 
consideration.
    (i) In the case of a design-build project, the following 
requirements apply:
    (1) When a Request for Proposals document is issued after the NEPA 
process is complete, the FHWA Division Administrator's approval of the 
Request for Proposals document will constitute the FHWA's project 
authorization and the FHWA's approval of the STD's request to release 
the document. This approval will carry the same significance as plan, 
specification and estimate approval on a design-bid-build Federal-aid 
project.
    (2) Where a Request for Proposals document is issued prior to the 
completion of the NEPA process, the FHWA's approval of the document will 
only constitute the FHWA's approval of the STD's request to release the 
document.
    (3) The STD may decide the appropriate solicitation schedule for all 
design-build requests. This includes all project advertising, the 
release of the Request for Qualifications document, the release of the 
Request for Proposals document and all deadlines for the receipt of 
qualification statements and proposals. Typical advertising periods 
range from six to ten weeks and can be longer for large, complicated 
projects.
    (4) The STD must obtain the approval of the Division Administrator 
prior to issuing addenda which result in major changes to the Request 
for Proposals document. Minor addenda need not receive prior approval 
but may be identified by the STD at the time of or prior to requesting 
the FHWA's concurrence in award. The STD must provide assurance that all 
offerors have received all issued addenda.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002; 72 
FR 45336, Aug. 14, 2007]



Sec. 635.113  Bid opening and bid tabulations.

    (a) All bids received in accordance with the terms of the 
advertisement shall be publicly opened and announced either item by item 
or by total amount. If any bid received is not read aloud, the name of 
the bidder and the reason for not reading the bid aloud shall be 
publicly announced at the letting. Negotiation with contractors, during 
the period following the opening of bids and before the award of the 
contract shall not be permitted.
    (b) The STD shall prepare and forward tabulations of bids to the 
Division Administrator. These tabulations shall be certified by a 
responsible STD official and shall show:
    (1) Bid item details for at least the low three acceptable bids and
    (2) The total amounts of all other acceptable bids.
    (c) In the case of a design-build project, the following 
requirements apply:
    (1) All proposals received must be opened and reviewed in accordance 
with the terms of the solicitation. The STD must use its own procedures 
for the following:

[[Page 190]]

    (i) The process of handling proposals and information;
    (ii) The review and evaluation of proposals;
    (iii) The submission, modification, revision and withdrawal of 
proposals; and
    (iv) The announcement of the successful offeror.
    (2) The STD must submit a post-award tabulation of proposal prices 
to the FHWA Division Administrator. The tabulation of price proposal 
information may include detailed pricing information when available or 
lump sum price information if itemized prices are not used.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]



Sec. 635.114  Award of contract and concurrence in award.

    (a) Federal-aid contracts shall be awarded only on the basis of the 
lowest responsive bid submitted by a bidder meeting the criteria of 
responsibility as may have been established by the STD in accordance 
with Sec. 635.110. Award shall be within the time established by the 
STD and subject to the prior concurrence of the Division Administrator.
    (b) The STD shall formally request concurrence by the Division 
Administrator in the award of all Federal-aid contracts. Concurrence in 
award by the Division Administrator is a prerequisite to Federal 
participation in construction costs and is considered as authority to 
proceed with construction, unless specifically stated otherwise. 
Concurrence in award shall be formally approved and shall only be given 
after receipt and review of the tabulation of bids.
    (c) Following the opening of bids, the STD shall examine the unit 
bid prices of the apparent low bid for reasonable conformance with the 
engineer's estimated prices. A bid with extreme variations from the 
engineer's estimate, or where obvious unbalancing of unit prices has 
occurred, shall be thoroughly evaluated.
    (d) Where obvious unbalanced bid items exist, the STD's decision to 
award or reject a bid shall be supported by written justification. A bid 
found to be mathematically unbalanced, but not found to be materially 
unbalanced, may be awarded.
    (e) When a low bid is determined to be both mathematically and 
materially unbalanced, the Division Administrator will take appropriate 
steps to protect the Federal interest. This action may be concurrence in 
a STD decision not to award the contract. If, however, the STD decides 
to proceed with the award and requests FHWA concurrence, the Division 
Administrator's action may range from nonconcurrence to concurrence with 
contingency conditions limiting Federal participation.
    (f) If the STD determines that the lowest bid is not responsive or 
the bidder is not responsible, it shall so notify and obtain the 
Division Administrator's concurrence before making an award to the next 
lowest bidder.
    (g) If the STD rejects or declines to read or consider a low bid on 
the grounds that it is not responsive because of noncompliance with a 
requirement which was not clearly identified in the bidding documents, 
it shall submit justification for its action. If such justification is 
not considered by the Division Administrator to be sufficient, 
concurrence will not be given to award to another bidder on the contract 
at the same letting.
    (h) Any proposal by the STD to reject all bids received for a 
Federal-aid contract shall be submitted to the Division Administrator 
for concurrence, accompanied by adequate justification.
    (i) In the event the low bidder selected by the STD for contract 
award forfeits the bid guarantee, the STD may dispose of the amounts of 
such forfeited guarantees in accordance with its normal practices.
    (j) A copy of the executed contract between the STD and the 
construction contractor should be furnished to the Division 
Administrator as soon as practicable after execution.
    (k) In the case of a design-build project, the following 
requirements apply: Design-build contracts shall be awarded in 
accordance with the Request for Proposals document. See 23 CFR Part 636, 
Design-build Contracting, for details.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]

[[Page 191]]



Sec. 635.115  Agreement estimate.

    (a) Following the award of contract, an agreement estimate based on 
the contract unit prices and estimated quantities shall be prepared by 
the STD and submitted to the Division Administrator as soon as 
practicable for use in the preparation of the project agreement. The 
agreement estimate shall also include the actual or best estimated costs 
of any other items to be included in the project agreement.
    (b) An agreement estimate shall be submitted by the STD for each 
force account project (see 23 CFR part 635, subpart B) when the plans 
and specifications are submitted to the Division Administrator for 
approval. It shall normally be based on the estimated quantities and the 
unit prices agreed upon in advance between the STD and the Division 
Administrator, whether the work is to be done by the STD or by a local 
public agency. Such agreed unit prices shall constitute a commitment as 
the basis for Federal participation in the cost of the project. The unit 
prices shall be based upon the estimated actual cost of performing the 
work but shall in no case exceed unit prices currently being obtained by 
competitive bidding on comparable highway construction work in the same 
general locality. In special cases involving unusual circumstances, the 
estimate may be based upon the estimated costs for labor, materials, 
equipment rentals, and supervision to complete the work rather than upon 
agreed unit prices. This paragraph shall not be applicable to agreement 
estimates for railroad and utility force account work.



Sec. 635.116  Subcontracting and contractor responsibilities.

    (a) Contracts for projects shall specify the minimum percentage of 
work that a contractor must perform with its own organization. This 
percentage shall be not less than 30 percent of the total original 
contract price excluding any identified specialty items. Specialty items 
may be performed by subcontract and the amount of any such specialty 
items so performed may be deducted from the total original contract 
before computing the amount of work required to be performed by the 
contractor's own organization. The contract amount upon which the above 
requirement is computed includes the cost of materials and manufactured 
products which are to be purchased or produced by the contractor under 
the contract provisions.
    (b) The STD shall not permit any of the contract work to be 
performed under a subcontract, unless such arrangement has been 
authorized by the STD in writing. Prior to authorizing a subcontract, 
the STD shall assure that each subcontract is evidenced in writing and 
that it contains all pertinent provisions and requirements of the prime 
contract. The Division Administrator may permit the STD to satisfy the 
subcontract assurance requirements by concurrence in a STD process which 
requires the contractor to certify that each subcontract arrangement 
will be in the form of a written agreement containing all the 
requirements and pertinent provisions of the prime contract. Prior to 
the Division Administrator's concurrence, the STD must demonstrate that 
it has an acceptable plan for monitoring such certifications.
    (c) To assure that all work (including subcontract work) is 
performed in accordance with the contract requirements, the contractor 
shall be required to furnish:
    (1) A competent superintendent or supervisor who is employed by the 
firm, has full authority to direct performance of the work in accordance 
with the contract requirements, and is in charge of all construction 
operations (regardless of who performs the work), and;
    (2) Such other of its own organizational resources (supervision, 
management, and engineering services) as the STD contracting officer 
determines are necessary to assure the performance of the contract.
    (d) In the case of a design-build project, the following 
requirements apply:
    (1) The provisions of paragraph (a) of this section are not 
applicable to design-build contracts;
    (2) At their discretion, the STDs may establish a minimum percentage 
of work that must be done by the design-builder. For the purpose of this 
section,

[[Page 192]]

the term design-builder may include any firms that are equity 
participants in the design-builder, their sister and parent companies, 
and their wholly owned subsidiaries;
    (3) No procedure, requirement or preference shall be imposed which 
prescribes minimum subcontracting requirements or goals (other than 
those necessary to meet the Disadvantaged Business Enterprise program 
requirements of 49 CFR part 26).

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]



Sec. 635.117  Labor and employment.

    (a) No construction work shall be performed by convict labor at the 
work site or within the limits of any Federal-aid highway construction 
project from the time of award of the contract or the start of work on 
force account until final acceptance of the work by the STD unless it is 
labor performed by convicts who are on parole, supervised release, or 
probation.
    (b) No procedures or requirement shall be imposed by any State which 
will operate to discriminate against the employment of labor from any 
other State, possession or territory of the United States, in the 
construction of a Federal-aid project.
    (c) The selection of labor to be employed by the contractor on any 
Federal-aid project shall be by the contractor without regard to race, 
color, religion, sex, national origin, age, or handicap and in 
accordance with 23 CFR part 230, 41 CFR part 60 and Exec. Order No. 
11246 (Sept. 24, 1965), 3 CFR 339 (1964-1965), as amended.
    (d) Pursuant to 23 U.S.C. 140(d), it is permissible for STD's to 
implement procedures or requirements which will extend preferential 
employment to Indians living on or near a reservation on eligible 
projects as defined in paragraph (e) of this section. Indian preference 
shall be applied without regard to tribal affiliation or place of 
enrollment. In no instance should a contractor be compelled to layoff or 
terminate a permanent core-crew employee to meet a preference goal.
    (e) Projects eligible for Indian employment preference consideration 
are projects located on roads within or providing access to an Indian 
reservation or other Indian lands as defined under the term ``Indian 
Reservation Roads'' in 23 U.S.C. 101 and regulations issued thereunder. 
The terminus of a road ``providing access to'' is that point at which it 
intersects with a road functionally classified as a collector or higher 
classification (outside the reservation boundary) in both urban and 
rural areas. In the case of an Interstate highway, the terminus is the 
first interchange outside the reservation.
    (f) The advertisement or call for bids on any contract for the 
construction of a project located on the Federal-aid system either shall 
include the minimum wage rates determined by the Secretary of Labor to 
be prevailing on the same type of work on similar construction in the 
immediate locality or shall provide that such rates are set out in the 
bidding documents and shall further specify that such rates are a part 
of the contract covering the project.



Sec. 635.118  Payroll and weekly statements.

    For all projects, copies of payrolls and statements of wages paid, 
filed with the State as set forth in the required contract provisions 
for the project, are to be retained by the STD for the time period 
pursuant to 49 CFR part 18 for review as needed by the Federal Highway 
Administration, the Department of Labor, the General Accounting Office, 
or other agencies.



Sec. 635.119  False statements.

    The following notice shall be posted on each Federal-aid highway 
project in one or more places where it is readily available to and 
viewable by all personnel concerned with the project:

     Notice to All Personnel Engaged on Federal-Aid Highway Projects

    United States Code, title 18, section 1020, reads as follows:
    Whoever, being an officer, agent, or employee of the United States, 
or of any State or Territory, or whoever, whether a person, association, 
firm, or corporation, knowingly makes any false statement, false 
representation, or false report as to the character, quality, quantity, 
or cost of the material used or to be used, or the quantity or quality 
of the work performed or to be performed, or

[[Page 193]]

the costs thereof in connection with the submission of plans, maps, 
specifications, contracts, or costs of construction of any highway or 
related project submitted for approval to the Secretary of 
Transportation; or
    Whoever, knowingly makes any false statement, false representation, 
false report, or false claim with respect to the character, quality, 
quantity, or cost of any work performed or to be performed, or materials 
furnished or to be furnished, in connection with the construction of any 
highway or related project approved by the Secretary of Transportation; 
or
    Whoever, knowingly makes any false statement or false representation 
as to a material fact in any statement, certificate, or report submitted 
pursuant to the provisions of the Federal-aid Road Act approved July 11, 
1916 (39 Stat. 355), as amended and supplemented,
    Shall be fined not more than $10,000 or imprisoned not more than 
five years, or both.



Sec. 635.120  Changes and extra work.

    (a) Following authorization to proceed with a project, all major 
changes in the plans and contract provisions and all major extra work 
shall have formal approval by the Division Administrator in advance of 
their effective dates. However, when emergency or unusual conditions 
justify, the Division Administrator may give tentative advance approval 
orally to such changes or extra work and ratify such approval with 
formal approval as soon thereafter as practicable.
    (b) For non-major changes and non-major extra work, formal approval 
is necessary but such approval may be given retroactively at the 
discretion of the Division Administrator. The STD should establish and 
document with the Division Administrator's concurrence specific 
parameters as to what constitutes a non-major change and non-major extra 
work.
    (c) Changes in contract time, as related to contract changes or 
extra work, should be submitted at the same time as the respective work 
change for approval by the Division Administrator.
    (d) In establishing the method of payment for contract changes or 
extra work orders, force account procedures shall only be used when 
strictly necessary, such as when agreement cannot be reached with the 
contractor on the price of a new work item, or when the extent of work 
is unknown or is of such character that a price cannot be determined to 
a reasonable degree of accuracy. The reason or reasons for using force 
account procedures shall be documented.
    (e) The STD shall perform and adequately document a cost analysis of 
each negotiated contract change or negotiated extra work order. The 
method and degree of the cost analysis shall be subject to the approval 
of the Division Administrator.
    (f) Proposed changes and extra work involved in nonparticipating 
operations that may affect the design or participating construction 
features of a project, shall be subject to review and concurrence by the 
Division Administrator.



Sec. 635.121  Contract time and contract time extensions.

    (a) The STD should have adequate written procedures for the 
determination of contract time. These procedures should be submitted for 
approval to the Division Administrator within 6 months of the effective 
date of this Final Rule.
    (b) Contract time extensions granted by a STD shall be subject to 
the concurrence of the Division Administrator and will be considered in 
determining the amount of Federal participation. Contract time 
extensions submitted for approval to the Division Administrator, shall 
be fully justified and adequately documented.



Sec. 635.122  Participation in progress payments.

    (a) Federal funds will participate in the costs to the STD of 
construction accomplished as the work progresses, based on a request for 
reimbursement submitted by State transportation departments. When the 
contract provisions provide for payment for stockpiled materials, the 
amount of the reimbursement request upon which participation is based 
may include the appropriate value of approved specification materials 
delivered by the contractor at the project site or at another designated 
location in the vicinity of such construction, provided that:
    (1) The material conforms with the requirements of the plans and 
specifications.

[[Page 194]]

    (2) The material is supported by a paid invoice or a receipt for 
delivery of materials. If supported by a receipt of delivery of 
materials, the contractor must furnish the paid invoice within a 
reasonable time after receiving payment from the STD; and
    (3) The quantity of a stockpiled material eligible for Federal 
participation in any case shall not exceed the total estimated quantity 
required to complete the project. The value of the stockpiled material 
shall not exceed the appropriate portion of the value of the contract 
item or items in which such materials are to be incorporated.
    (b) The materials may be stockpiled by the contractor at a location 
not in the vicinity of the project, if the STD determines that because 
of required fabrication at an off-site location, it is not feasible or 
practicable to stockpile the materials in the vicinity of the project.
    (c) In the case of a design-build project, the STD must define its 
procedures for making progress payments on lump sum contracts in the 
Request for Proposal document.

[56 FR 37004, Aug. 2, 1991, as amended at 67 FR 75925, Dec. 10, 2002]



Sec. 635.123  Determination and documentation of pay quantities.

    (a) The STD shall have procedures in effect which will provide 
adequate assurance that the quantities of completed work are determined 
accurately and on a uniform basis throughout the State. All such 
determinations and all related source documents upon which payment is 
based shall be made a matter of record.
    (b) Initial source documents pertaining to the determination of pay 
quantities are among those records and documents which must be retained 
pursuant to 49 CFR part 18.



Sec. 635.124  Participation in contract claim awards and settlements.

    (a) The eligibility for and extent of Federal-aid participation up 
to the Federal statutory share in a contract claim award made by a State 
to a Federal-aid contractor on the basis of an arbitration or mediation 
proceeding, administrative board determination, court judgment, 
negotiated settlement, or other contract claim settlement shall be 
determined on a case-by-case basis. Federal funds will participate to 
the extent that any contract adjustments made are supported, and have a 
basis in terms of the contract and applicable State law, as fairly 
construed. Further, the basis for the adjustment and contractor 
compensation shall be in accord with prevailing principles of public 
contract law.
    (b) The FHWA shall be made aware by the STD of the details of the 
claim at an early stage so that coordination of efforts can be 
satisfactorily accomplished. It is expected that STDs will diligently 
pursue the satisfactory resolution of claims within a reasonable period 
of time. Claims arising on exempt non-NHS projects should be processed 
in accordance with the State's approved Stewardship Plan.
    (c) When requesting Federal participation, the STD shall set forth 
in writing the legal and contractual basis for the claim, together with 
the cost data and other facts supporting the award or settlement. 
Federal-aid participation in such instances shall be supported by a STD 
audit of the actual costs incurred by the contractor unless waived by 
the FHWA as unwarranted. Where difficult, complex, or novel legal issues 
appear in the claim, such that evaluation of legal controversies is 
critical to consideration of the award or settlement, the STD shall 
include in its submission a legal opinion from its counsel setting forth 
the basis for determining the extent of the liability under local law, 
with a level of detail commensurate with the magnitude and complexity of 
the issues involved.
    (d) In those cases where the STD receives an adverse decision in an 
amount more than the STD was able to support prior to the decision or 
settles a claim in an amount more than the STD can support, the FHWA 
will participate up to the appropriate Federal matching share, to the 
extent that it involves a Federal-aid participating portion of the 
contract, provided that:
    (1) The FHWA was consulted and concurred in the proposed course of 
action;
    (2) All appropriate courses of action had been considered; and
    (3) The STD pursued the case diligently and in a professional 
manner.

[[Page 195]]

    (e) Federal funds will not participate:
    (1) If it has been determined that STD employees, officers, or 
agents acted with gross negligence, or participated in intentional acts 
or omissions, fraud, or other acts not consistent with usual State 
practices in project design, plan preparation, contract administration, 
or other activities which gave rise to the claim;
    (2) In such cost items as consequential or punitive damages, 
anticipated profit, or any award or payment of attorney's fees paid by a 
State to an opposing party in litigation; and
    (3) In tort, inverse condemnation, or other claims erroneously 
styled as claims ``under a contract.''
    (f) Payment of interest associated with a claim will be eligible for 
participation provided that the payment to the contractor for interest 
is allowable by State statute or specification and the costs are not a 
result of delays caused by dilatory action of the State or the 
contractor. The interest rates must not exceed the rate provided for by 
the State statute or specification.
    (g) In cases where STD's affirmatively recover compensatory damages 
through contract claims, cross-claims, or counter claims from 
contractors, subcontractors, or their agents on projects on which there 
was Federal-aid participation, the Federal share of such recovery shall 
be equivalent to the Federal share of the project or projects involved. 
Such recovery shall be credited to the project or projects from which 
the claim or claims arose.

[56 FR 37004, Aug. 2, 1991, as amended at 62 FR 6873, Feb. 14, 1997; 69 
FR 7118, Feb. 13, 2004]



Sec. 635.125  Termination of contract.

    (a) All contracts exceeding $10,000 shall contain suitable 
provisions for termination by the State, including the manner by which 
the termination will be effected and the basis for settlement. In 
addition, such contracts shall describe conditions under which the 
contract may be terminated for default as well as conditions where the 
contract may be terminated because of circumstances beyond the control 
of the contractor.
    (b) The STD prior to termination of a Federal-aid contract shall 
consult with and receive the concurrence of the Division Administrator. 
The extent of Federal-aid participation in contract termination costs, 
including final settlement, will depend upon the merits of the 
individual case. However, under no circumstances shall Federal funds 
participate in anticipated profit on work not performed.
    (c) Except as provided for in paragraph (e) of this section, normal 
Federal-aid plans, specifications, and estimates, advertising, and award 
procedures are to be followed when a STD awards the contract for 
completion of a terminated Federal-aid contract.
    (d) When a STD awards the contract for completion of a Federal-aid 
contract previously terminated for default, the construction amount 
eligible for Federal participation on the project should not exceed 
whichever amount is the lesser, either:
    (1) The amount representing the payments made under the original 
contract plus payments made under the new contract; or
    (2) The amount representing what the cost would have been if the 
construction had been completed as contemplated by the plans and 
specifications under the original contract.
    (e) If the surety awards a contract for completion of a defaulted 
Federal-aid contract or completes it by some other acceptable means, the 
FHWA will consider the terms of the original contract to be in effect 
and that the work will be completed in accordance with the approved 
plans and specifications included therein. No further FHWA approval or 
concurrence action will therefore be needed in connection with any 
defaulted Federal-aid contract awarded by a surety. Under this 
procedure, the construction amount eligible for Federal participation on 
the project should not exceed the amount representing what the cost 
would have been if the construction had been completed as contemplated 
by the plans and specifications under the original contract.



Sec. 635.126  Record of materials, supplies, and labor.

    (a) The provisions in this section are required to facilitate FHWA's 
efforts to compile data on Federal-aid contracts

[[Page 196]]

for the establishment of highway construction usage factors.
    (b) On all Federal-aid construction contracts of $1 million or more 
for projects on the National Highway System, the STD shall require the 
contractor:
    (1) To become familiar with the list of specific materials and 
supplies including labor-hour and gross earning items contained in Form 
FHWA-47, ``Statement of Materials and Labor Used by Contractors on 
Highway Construction Involving Federal Funds,'' prior to the 
commencement of work under this contract;
    (2) To maintain a record of the total cost of all materials and 
supplies purchased for and incorporated in the work, and also of the 
quantities of those specific materials and supplies listed on Form FHWA-
47, and in the units shown; and
    (3) To furnish, upon the completion of the contract, to the STD on 
Form FHWA-47 both the data required in paragraph (b)(2) of this section 
relative to materials and supplies and a final labor summary for all 
contract work indicating the total hours worked and the gross earnings.
    (c) Upon receipt from the contractor, the STD shall review the Form 
FHWA-47 for reasonableness and promptly transmit the form to the 
Division Administrator in accordance with the instructions printed in 
the form.

[56 FR 37004, Aug. 2, 1991, as amended at 62 FR 6873, Feb. 14, 1997]



Sec. 635.127  Agreement provisions regarding overruns in contract time.

    (a) Each State transportation department (STD) shall establish 
specific liquidated damages rates applicable to projects in that State. 
The rates may be project-specific or may be in the form of a table or 
schedule developed for a range of project costs and/or project types. 
These rates shall, as a minimum, be established to cover the estimated 
average daily construction engineering (CE) costs associated with the 
type of work encountered on the project. The amounts shall be assessed 
by means of deductions, for each calendar day or workday overrun in 
contract time, from payments otherwise due to the contractor for 
performance in accordance with the contract terms.
    (b) The rates established shall be subject to FHWA approval either 
on a project-by-project basis, in the case of project-specific rates, or 
on a periodic basis after initial approval where a rate table or 
schedule is used. In the latter case, the STD shall periodically review 
its cost data to ascertain if the rate table/schedule closely 
approximates, at a minimum, the actual average daily CE costs associated 
with the type and size of the projects in the State. Where rate 
schedules or other means are already included in the STD specifications 
or standard special provisions, verification by the STD that the amounts 
are adequate shall be submitted to the FHWA for review and approval. 
After initial approval by the FHWA of the rates, the STD shall review 
the rates at least every 2 years and provide updated rates, when 
necessary, for FHWA approval. If updated rates are not warranted, 
justification of this fact is to be sent to the FHWA for review and 
acceptance.
    (c) The STD may, with FHWA concurrence, include additional amounts 
as liquidated damages in each contract to cover other anticipated costs 
of project related delays or inconveniences to the STD or the public. 
Costs resulting from winter shutdowns, retaining detours for an extended 
time, additional demurrage, or similar costs as well as road user delay 
costs may be included.
    (d) In addition to the liquidated damages provisions, the STD may 
also include incentive/disincentive for early completion provisions in 
the contract. The incentive/disincentive amounts shall be shown 
separately from the liquidated damages amounts.
    (e) Where there has been an overrun in contract time, the following 
principles shall apply in determining the cost of a project that is 
eligible for Federal-aid reimbursement:
    (1) A proportional share, as used in this section, is the ratio of 
the final contract construction costs eligible for Federal participation 
to the final total contract construction costs of the project.
    (2) Where CE costs are claimed as a participating item based upon 
actual

[[Page 197]]

expenses incurred or where CE costs are not claimed as a participating 
item, and where the liquidated damages rates cover only CE expenses, the 
total CE costs for the project shall be reduced by the assessed 
liquidated damages amounts prior to figuring any Federal pro rata share 
payable. If the amount of liquidated damages assessed is more than the 
actual CE totals for the project, a proportional share of the excess 
shall be deducted from the federally participating contract construction 
cost before determining the final Federal share.
    (3) Where the STD is being reimbursed for CE costs on the basis of 
an approved percentage of the participating construction cost, the total 
contract construction amount that would be eligible for Federal 
participation shall be reduced by a proportional share of the total 
liquidated damages amounts assessed on the project.
    (4) Where liquidated damages include extra anticipated non-CE costs 
due to contractor caused delays, the amount assessed shall be used to 
pay for the actual non-CE expenses incurred by the STD, and, if a 
Federal participating item(s) is involved, to reduce the Federal share 
payable for that item(s). If the amount assessed is more than the actual 
expenses incurred by the STD, a proportional share of the excess shall 
be deducted from the federally participating contract construction cost 
of the project before the Federal share is figured.
    (f) When provisions for incentive/disincentive for early completion 
are used in the contract, a proportion of the increased project costs 
due to any incentive payments to the contractor shall be added to the 
federally participating contract construction cost before calculating 
the Federal share. When the disincentive provision is applicable, a 
proportion of the amount assessed the contractor shall be deducted from 
the federally participating contract construction cost before the 
Federal share calculation. Proportions are to be calculated in the same 
manner as set forth in paragraph (e)(1) of this section.

[52 FR 31390, Aug. 20, 1987. Redesignated at 62 FR 6872, Feb. 14, 1997]



                  Subpart B_Force Account Construction



Sec. 635.201  Purpose.

    The purpose of this subpart is to prescribe procedures in accordance 
with 23 U.S.C. 112(b) for a State transportation department to request 
approval that highway construction work be performed by some method 
other than contract awarded by competitive bidding.

[48 FR 22912, May 23, 1983]



Sec. 635.202  Applicability.

    This subpart applies to all Federal-aid and other highway 
construction projects financed in whole or in part with Federal funds 
and to be constructed by a State transportation department or a 
subdivision thereof in pursuant of agreements between any other State 
transportation department and the Federal Highway Administration (FHWA).

[69 FR 7119, Feb. 13, 2004]



Sec. 635.203  Definitions.

    The following definitions shall apply for the purpose of this 
subpart:
    (a) A State transportation department is that department, 
commission, board, or official of any State charged by its laws with the 
responsibility for highway construction. The term State should be 
considered equivalent to State transportation department if the context 
so implies.
    (b) Except as provided for as emergency repair work in Sec. 
668.105(i) and in Sec. 635.204(b), the term some other method of 
construction as used in 23 U.S.C. 112(b) shall mean the force account 
method of construction as defined herein. In the unlikely event that 
circumstances are considered to justify a negotiated contract or another 
unusual method of construction, the policies and procedures prescribed 
herein for force account work will apply.
    (c) The term force account shall mean the direct performance of 
highway construction work by a State transportation department, a 
county, a railroad, or a public utility company by use of labor, 
equipment, materials, and supplies furnished by them and used under 
their direct control.

[[Page 198]]

    (d) The term county shall mean any county, township, municipality or 
other political subdivision that may be empowered to cooperate with the 
State transportation department in highway matters.
    (e) The term cost effective shall mean the efficient use of labor, 
equipment, materials and supplies to assure the lowest overall cost.
    (f) For the purpose of this part, an emergency shall be deemed to 
exist when emergency repair work as provided for in Sec. 668.105(i) is 
necessary or when a major element or segment of the highway system has 
failed and the situation is such that competitive bidding is not 
possible or is impractical because immediate action is necessary to:
    (1) Minimize the extent of the damage,
    (2) Protect remaining facilities, or
    (3) Restore essential travel.

This definition of emergency has no applicability to the Emergency 
Relief Program of 23 CFR part 668.

[39 FR 35158, Sept. 30, 1974, as amended at 48 FR 22912, May 23, 1983; 
52 FR 45172, Nov. 25, 1987]



Sec. 635.204  Determination of more cost effective method or an emergency.

    (a) Congress has expressly provided that the contract method based 
on competitive bidding shall be used by a State transportation 
department or county for performance of highway work financed with the 
aid of Federal funds unless the State transportation department 
demonstrates, to the satisfaction of the Secretary, that some other 
method is more cost effective or that an emergency exists.
    (b) When a State transportation department determines it necessary 
due to an emergency to undertake a federally financed highway 
construction project by force account or negotiated contract method, it 
shall submit a request to the Division Administrator identifying and 
describing the project, the kinds of work to be performed, the method to 
be used, the estimated costs, the estimated Federal Funds to be 
provided, and the reason or reasons that an emergency exists.
    (c) Except as provided in paragraph (b) of this section, when a 
State transportation department desires that highway construction work 
financed with the aid of Federal funds, other than the kinds of work 
designated under Sec. 635.205(b), be undertaken by force account, it 
shall submit a request to the Division Administrator identifying and 
describing the project and the kind of work to be performed, the 
estimated costs, the estimated Federal funds to be provided, and the 
reason or reasons that force account for such project is considered cost 
effective.
    (d) The Division Administrator shall notify the State transportation 
department in writing of his/her determination.

[52 FR 45172, Nov. 25, 1987]



Sec. 635.205  Finding of cost effectiveness.

    (a) It may be found cost effective for a State transportation 
department or county to undertake a federally financed highway 
construction project by force account when a situation exists in which 
the rights or resposibilities of the community at large are so affected 
as to require some special course of action, including situations where 
there is a lack of bids or the bids received are unreasonable.
    (b) Pursuant to authority in 23 U.S.C. 112(b), it is hereby 
determined that by reason of the inherent nature of the operations 
involved, it is cost effective to perform by force account the 
adjustment of railroad or utility facilities and similar types of 
facilities owned or operated by a public agency, a railroad, or a 
utility company provided that the organization is qualified to perform 
the work in a satisfactory manner. The installation of new facilities 
shall be undertaken by competitive bidding except as provided in Sec. 
635.204(c). Adjustment of railroad facilities shall include minor work 
on the railroad's operating facilities routinely performed by the 
railroad with its own forces such as the installation of grade crossing 
warning devices, crossing surfaces, and minor track and signal work. 
Adjustment of utility facilities shall include minor work on the 
utility's existing facilities routinely performed by the utility with 
its own forces and includes minor installations of new facilities to 
provide power, minor lighting, telephone, water and similar utility 
service to a

[[Page 199]]

rest area, weigh-station, movable bridge, or other highway appurtenance, 
provided such installation cannot feasibly be done as incidental to a 
major installation project such as an extensive highway lighting system.

[52 FR 45173, Nov. 25, 1987]



              Subpart C_Physical Construction Authorization

    Source: 40 FR 17251, Apr. 18, 1975, unless otherwise noted.



Sec. 635.301  Purpose.

    To prescribe the policies and procedures under which a State 
transportation department may be authorized to advance a Federal-aid 
highway project to the physical construction stage.



Sec. 635.303  Applicability.

    The provisions of this subpart are applicable to all Federal-aid 
highway construction projects.

[69 FR 7119, Feb. 13, 2004]



Sec. 635.305  Physical construction.

    For purposes of this subpart the physical construction of a project 
is considered to consist of the actual construction of the highway 
itself with its appurtenant facilities. It includes any removal, 
adjustment or demolition of buildings or major obstructions, and utility 
or railroad work that is a part of the contract for the physical 
construction.



Sec. 635.307  Coordination.

    (a) The right-of-way clearance, utility, and railroad work are to be 
so coordinated with the physical construction that no unnecessary delay 
or cost for the physical construction will occur.
    (b) All right-of-way clearance, utility, and railroad work performed 
separately from the contract for the physical construction of the 
project are to be accomplished in accordance with provisions of the 
following:
    (1) 23 CFR part 140, subpart I;
    (2) 23 CFR part 646, subpart B;
    (3) 23 CFR 710.403; and
    (4) 23 CFR part 645, subpart A.

[40 FR 17251, Apr. 18, 1975, as amended at 40 FR 25585, June 17, 1975; 
64 FR 71289, Dec. 21, 1999]



Sec. 635.309  Authorization.

    Authorization to advertise the physical construction for bids or to 
proceed with force account construction thereof shall normally be issued 
as soon as, but not until, all of the following conditions have been 
met:
    (a) The plans, specifications, and estimates (PS&E) therefor have 
been approved.
    (b) A statement is received from the State, either separately or 
combined with the information required by Sec. 635.309(c), that either 
all right-of-way clearance, utility, and railroad work has been 
completed or that all necessary arrangements have been made for it to be 
undertaken and completed as required for proper coordination with the 
physical construction schedules. Where it is determined that the 
completion of such work in advance of the highway construction is not 
feasible or practical due to economy, special operational problems and 
the like, there shall be appropriate notification provided in the bid 
proposals identifying the right-of-way clearance, utility, and railroad 
work which is to be underway concurrently with the highway construction.
    (c) A statement is received from the State certifying that all 
individuals and families have been relocated to decent, safe and 
sanitary housing or the State has made available to relocatees adequate 
replacement housing in accordance with the provisions of the current 
Federal Highway Administration (FHWA) directive(s) covering the 
administration of the Highway Relocation Assistance Program and that one 
of the following has application:
    (1) All necessary rights-of-way, including control of access rights 
when pertinent, have been acquired including legal and physical 
possession. Trial or appeal of cases may be pending in court but legal 
possession has been obtained. There may be some improvements remaining 
on the right-of-way but all occupants have vacated the lands and 
improvements and the State has physical possession and the right

[[Page 200]]

to remove, salvage, or demolish these improvements and enter on all 
land.
    (2) Although all necessary rights-of-way have not been fully 
acquired, the right to occupy and to use all rights-of-way required for 
the proper execution of the project has been acquired. Trial or appeal 
of some parcels may be pending in court and on other parcels full legal 
possession has not been obtained but right of entry has been obtained, 
the occupants of all lands and improvements have vacated and the State 
has physical possession and right to remove, salvage, or demolish these 
improvements.
    (3) The acquisition or right of occupancy and use of a few remaining 
parcels is not complete, but all occupants of the residences on such 
parcels have had replacement housing made available to them in 
accordance with 49 CFR 24.204. The State may request authorization on 
this basis only in very unusual circumstances. This exception must never 
become the rule. Under these circumstances, advertisement for bids or 
force-account work may be authorized if FHWA finds that it will be in 
the public interest. The physical construction may then also proceed, 
but the State shall ensure that occupants of residences, businesses, 
farms, or non-profit organizations who have not yet moved from the 
right-of-way are protected against unnecessary inconvenience and 
disproportionate injury or any action coercive in nature. When the State 
requests authorization to advertise for bids and to proceed with 
physical construction where acquisition or right of occupancy and use of 
a few parcels has not been obtained, full explanation and reasons 
therefor including identification of each such parcel will be set forth 
in the State's request along with a realistic date when physical 
occupancy and use is anticipated as well as substantiation that such 
date is realistic. Appropriate notification shall be provided in the bid 
proposals identifying all locations where right of occupancy and use has 
not been obtained.
    (d) The State transportation department in accord with 23 CFR 
771.111(h), has submitted public hearing transcripts, certifications and 
reports pursuant to 23 U.S.C. 128.
    (e) An affirmative finding of cost effectiveness or that an 
emergency exists has been made as required by 23 U.S.C. 112, when 
construction by some method other than contract based on competitive 
bidding is contemplated.
    (f) Minimum wage rates determined by the Department of Labor in 
accordance with the provisions of 23 U.S.C. 113, are in effect and will 
not expire before the end of the period within which it can reasonably 
be expected that the contract will be awarded.
    (g) A statement has been received that right-of-way has been 
acquired or will be acquired in accordance with the current FHWA 
directive(s) covering the acquisition of real property or that 
acquisition of right-of-way is not required.
    (h) A statement has been received that the steps relative to 
relocation advisory assistance and payments as required by the current 
FHWA directive(s) covering the administration of the Highway Relocation 
Assistance Program have been taken, or that they are not required.
    (i) The FHWA Division Administrator has determined that appropriate 
measures have been included in the PS&E in keeping with approved 
guidelines, for minimizing possible soil erosion and water pollution as 
a result of highway construction operations.
    (j) The FHWA Division Administrator has determined that requirements 
of 23 CFR part 771 have been fulfilled and appropriate measures have 
been included in the PS&E to ensure that conditions and commitments made 
in the development of the project to mitigate environmental harm will be 
met.
    (k) Where utility facilities are to use and occupy the right-of-way, 
the State has demonstrated to the satisfaction of the FHWA Division 
Administrator that the provisions of 23 CFR 645.119(b) have been 
fulfilled.
    (l) The FHWA Division Administrator has verified the fact that 
adequate replacement housing is in place and has been made available to 
all affected persons.
    (m) Where applicable, areawide agency review has been accomplished 
as required by 42 U.S.C. 3334 and 4231 through 4233.

[[Page 201]]

    (n) The FHWA Division Administrator has determined that the PS&E 
provide for the erection of only those information signs and traffic 
control devices that conform to the standards developed by the Secretary 
of Transportation or mandates of Federal law and do not include 
promotional or other informational signs regarding such matters as 
identification of public officials, contractors, organizational 
affiliations, and related logos and symbols.
    (o) The FHWA Division Administrator has determined that, where 
applicable, provisions are included in the PS&E that require the 
erection of funding source signs, for the life of the construction 
project, in accordance with section 154 of the Surface Transportation 
and Uniform Relocation Assistance Act of 1987.
    (p) In the case of a design-build project, the following 
certification requirements apply:
    (1) The FHWA's project authorization for final design and physical 
construction will not be issued until the following conditions have been 
met:
    (i) All projects must conform with the statewide and metropolitan 
transportation planning requirements (23 CFR part 450).
    (ii) All projects in air quality nonattainment and maintenance areas 
must meet all transportation conformity requirements (40 CFR parts 51 
and 93).
    (iii) The NEPA review process has been concluded. (See 23 CFR 
636.109).
    (iv) The Request for Proposals document has been approved.
    (v) A statement is received from the STD that either all right-of-
way, utility, and railroad work has been completed or that all necessary 
arrangements will be made for the completion of right of way, utility, 
and railroad work.
    (vi) If the STD elects to include right-of-way, utility, and/or 
railroad services as part of the design-builder's scope of work, then 
the Request for Proposals document must include:
    (A) A statement concerning scope and current status of the required 
services, and
    (B) A statement which requires compliance with the Uniform 
Relocation and Real Property Acquisition Policies Act of 1970, as 
amended, and 23 CFR part 710.
    (2) During a conformity lapse, a design-build project (including 
right-of-way acquisition activities) may continue if, prior to the 
conformity lapse, the NEPA process was completed and the project has not 
changed significantly in design scope, the FHWA authorized the design-
build project and the project met transportation conformity requirements 
(40 CFR parts 51 and 93).
    (3) Changes to the design-build project concept and scope may 
require a modification of the transportation plan and transportation 
improvement program. The project sponsor must comply with the 
metropolitan and statewide transportation planning requirements in 23 
CFR part 450 and the transportation conformity requirements (40 CFR 
parts 51 and 93) in air quality nonattainment and maintenance areas, and 
provide appropriate approval notification to the design-builder for such 
changes.

[40 FR 17251, Apr. 18, 1975; 40 FR 36319, Aug. 20, 1975, as amended at 
47 FR 47239, Oct. 25, 1982; 49 FR 28550, July 13, 1984; 50 FR 34093, 
Aug. 23, 1985; 52 FR 32669, Aug. 28, 1987; 52 FR 45173, Nov. 25, 1987; 
53 FR 1921, Jan. 25, 1988; 54 FR 47075, Nov. 9, 1989; 67 FR 75926, Dec. 
10, 2002; 72 FR 45336, Aug. 14, 2007]



                 Subpart D_General Material Requirements

    Source: 41 FR 36204, Aug. 27, 1976, unless otherwise noted.



Sec. 635.401  Purpose.

    The purpose of this subpart is to prescribe requirements and 
procedures relating to product and material selection and use on 
Federal-aid highway projects.



Sec. 635.403  Definitions.

    As used in this subpart, the following terms have the meanings 
indicated:
    (a) FHWA Division Administrator means the chief Federal Highway 
Administration (FHWA) official assigned to conduct business in a 
particular State;

[[Page 202]]

    (b) Material means any tangible substance incorporated into a 
Federal-aid highway project;
    (c) PS&E means plans, specifications, and estimates;
    (d) Special provisions means additions and revisions to the standard 
and supplemental specifications applicable to an individual project;
    (e) Standard specifications means a compilation in book form of 
specifications approved for general application and repetitive use;
    (f) State has the meaning set forth in 23 U.S.C. 101;
    (g) State transportation department means that department, 
commission, board, or official of any State charged by its laws with the 
responsibility for highway construction;
    (h) Supplemental specifications means approved additions and 
revisions to the standard specifications.



Sec. 635.405  Applicability.

    The requirements and procedures prescribed in this subpart apply to 
all contracts relating to Federal-aid highway projects.

[69 FR 7119, Feb. 13, 2004]



Sec. 635.407  Use of materials made available by a public agency.

    (a) Contracts for highway projects shall require the contractor to 
furnish all materials to be incorporated in the work and shall permit 
the contractor to select the sources from which the materials are to be 
obtained. Exception to this requirement may be made when there is a 
definite finding by the State transportation department and concurred in 
by the FHWA Division Administrator, that it is in the public interest to 
require the contractor to use material furnished by the State 
transportation department or from sources designated by the State 
transportation department. In cases such as this, the FHWA does not 
expect mutual sharing of costs unless the State transportation 
department receives a related credit from another agency or political 
subdivision of the State. Where such a credit does accrue to the State 
transportation department, it shall be applied to the Federal-aid 
project involved. The designation of a mandatory material source may be 
permitted based on environmental considerations, provided the 
environment would be substantially enhanced without excessive cost. 
Otherwise, if a State transportation department proposal to designate a 
material source for mandatory use would result in higher project costs, 
Federal-aid funds shall not participate in the increase even if the 
designation would conserve other public funds.
    (b) The provisions of paragraph (a) of this section will not 
preclude the designation in the plans and specifications of sources of 
local natural materials, such as borrow aggregates, that have been 
investigated by the State transportation department and found to contain 
materials meeting specification requirements. The use of materials from 
such designated sources shall not be mandatory unless there is a finding 
of public interest as stated in paragraph (a) of this section.
    (c) Federal funds may participate in the cost of specifications 
materials made available by a public agency when they have been actually 
incorporated in accepted items of work, or in the cost of such materials 
meeting the criteria and stockpiled at the locations specified in Sec. 
635.114 of this chapter.
    (d) To be eligible for Federal participation in its cost, any 
material, other than local natural materials, to be purchased by the 
State transportation department and furnished to the contractor for 
mandatory use in the project, must have been acquired on the basis of 
competitive bidding, except when there is a finding of public interest 
justifying the use of another method of acquisition. The location and 
unit price at which such material will be available to the contractor 
must be stated in the special provisions for the benefit of all 
prospective bidders. The unit cost eligible for Federation participation 
will be limited to the unit cost of such material to the State 
transportation department.
    (e) When the State transportation department or another public 
agency owns or has control over the source of a local natural material 
the unit price at which such material will be made available to the 
contractor must be

[[Page 203]]

stated in the plans or special provisions. Federal participation will be 
limited to (1) the cost of the material to the State transportation 
department or other public agency; or (2) the fair and reasonable value 
of the material, whichever is less. Special cases may arise that will 
justify Federal participation on a basis other than that set forth 
above. Such cases should be fully documented and receive advance 
approval by the FHWA Division Administrator.
    (f) Costs incurred by the State transportation department or other 
public agency for acquiring a designated source or the right to take 
materials from it will not be eligible for Federal participation if the 
source is not used by the contractor.
    (g) The contract provisions for one or a combination of Federal-aid 
projects shall not specify a mandatory site for the disposal of surplus 
excavated materials unless there is a finding by the State 
transportation department with the concurrence of the FHWA Division 
Administrator that such placement is the most economical except that the 
designation of a mandatory site may be permitted based on environmental 
considerations, provided the environment would be substantially enhanced 
without excessive cost.



Sec. 635.409  Restrictions upon materials.

    No requirement shall be imposed and no procedure shall be enforced 
by any State transportation department in connection with a project 
which may operate:
    (a) To require the use of or provide a price differential in favor 
of articles or materials produced within the State, or otherwise to 
prohibit, restrict or discriminate against the use of articles or 
materials shipped from or prepared, made or produced in any State, 
territory or possession of the United States; or
    (b) To prohibit, restrict or otherwise discriminate against the use 
of articles or materials of foreign origin to any greater extent than is 
permissible under policies of the Department of Transportation as 
evidenced by requirements and procedures prescribed by the FHWA 
Administrator to carry out such policies.



Sec. 635.410  Buy America requirements.

    (a) The provisions of this section shall prevail and be given 
precedence over any requirements of this subpart which are contrary to 
this section. However, nothing in this section shall be construed to be 
contrary to the requirements of Sec. 635.409(a) of this subpart.
    (b) No Federal-aid highway construction project is to be authorized 
for advertisement or otherwise authorized to proceed unless at least one 
of the following requirements is met:
    (1) The project either: (i) Includes no permanently incorporated 
steel or iron materials, or (ii) if steel or iron materials are to be 
used, all manufacturing processes, including application of a coating, 
for these materials must occur in the United States. Coating includes 
all processes which protect or enhance the value of the material to 
which the coating is applied.
    (2) The State has standard contract provisions that require the use 
of domestic materials and products, including steel and iron materials, 
to the same or greater extent as the provisions set forth in this 
section.
    (3) The State elects to include alternate bid provisions for foreign 
and domestic steel and iron materials which comply with the following 
requirements. Any procedure for obtaining alternate bids based on 
furnishing foreign steel and iron materials which is acceptable to the 
Division Administrator may be used. The contract provisions must (i) 
require all bidders to submit a bid based on furnishing domestic steel 
and iron materials, and (ii) clearly state that the contract will be 
awarded to the bidder who submits the lowest total bid based on 
furnishing domestic steel and iron materials unless such total bid 
exceeds the lowest total bid based on furnishing foreign steel and iron 
materials by more than 25 percent.
    (4) When steel and iron materials are used in a project, the 
requirements of this section do not prevent a minimal use of foreign 
steel and iron materials, if the cost of such materials used does not 
exceed one-tenth of one percent (0.1 percent) of the total contract cost 
or $2,500, whichever is greater. For purposes of this paragraph, the 
cost is that

[[Page 204]]

shown to be the value of the steel and iron products as they are 
delivered to the project.
    (c)(1) A State may request a waiver of the provisions of this 
section if;
    (i) The application of those provisions would be inconsistent with 
the public interest; or
    (ii) Steel and iron materials/products are not produced in the 
United States in sufficient and reasonably available quantities which 
are of a satisfactory quality.
    (2) A request for waiver, accompanied by supporting information, 
must be submitted in writing to the Regional Federal Highway 
Administrator (RFHWA) through the FHWA Division Administrator. A request 
must be submitted sufficiently in advance of the need for the waiver in 
order to allow time for proper review and action on the request. The 
RFHWA will have approval authority on the request.
    (3) Requests for waivers may be made for specific projects, or for 
certain materials or products in specific geographic areas, or for 
combinations of both, depending on the circumstances.
    (4) The denial of the request by the RFHWA may be appealed by the 
State to the Federal Highway Administrator (Administrator), whose action 
on the request shall be considered administratively final.
    (5) A request for a waiver which involves nationwide public interest 
or availability issues or more than one FHWA region may be submitted by 
the RFHWA to the Administrator for action.
    (6) A request for waiver and an appeal from a denial of a request 
must include facts and justification to support the granting of the 
waiver. The FHWA response to a request or appeal will be in writing and 
made available to the public upon request. Any request for a nationwide 
waiver and FHWA's action on such a request may be published in the 
Federal Register for public comment.
    (7) In determining whether the waivers described in paragraph (c)(1) 
of this section will be granted, the FHWA will consider all appropriate 
factors including, but not limited to, cost, administrative burden, and 
delay that would be imposed if the provision were not waived.
    (d) Standard State and Federal-aid contract procedures may be used 
to assure compliance with the requirements of this section.

[48 FR 53104, Nov. 25, 1983, as amended at 49 FR 18821, May 3, 1984; 58 
FR 38975, July 21, 1993]



Sec. 635.411  Material or product selection.

    (a) Federal funds shall not participate, directly or indirectly, in 
payment for any premium or royalty on any patented or proprietary 
material, specification, or process specifically set forth in the plans 
and specifications for a project, unless:
    (1) Such patented or proprietary item is purchased or obtained 
through competitive bidding with equally suitable unpatented items; or
    (2) The State transportation department certifies either that such 
patented or proprietary item is essential for synchronization with 
existing highway facilities, or that no equally suitable alternate 
exists; or
    (3) Such patented or proprietary item is used for research or for a 
distinctive type of construction on relatively short sections of road 
for experimental purposes.
    (b) When there is available for purchase more than one nonpatented, 
nonproprietary material, semifinished or finished article or product 
that will fulfill the requirements for an item of work of a project and 
these available materials or products are judged to be of satisfactory 
quality and equally acceptable on the basis of engineering analysis and 
the anticipated prices for the related item(s) of work are estimated to 
be approximately the same, the PS&E for the project shall either contain 
or include by reference the specifications for each such material or 
product that is considered acceptable for incorporation in the work. If 
the State transportation department wishes to substitute some other 
acceptable material or product for the material or product designated by 
the successful bidder or bid as the lowest alternate, and such 
substitution results in an increase in costs, there will not be Federal-
aid participation in any increase in costs.

[[Page 205]]

    (c) A State transportation department may require a specific 
material or product when there are other acceptable materials and 
products, when such specific choice is approved by the Division 
Administrator as being in the public interest. When the Division 
Administrator's approval is not obtained, the item will be 
nonparticipating unless bidding procedures are used that establish the 
unit price of each acceptable alternative. In this case Federal-aid 
participation will be based on the lowest price so established.
    (d) Reference in specifications and on plans to single trade name 
materials will not be approved on Federal-aid contracts.
    (e) In the case of a design-build project, the following 
requirements apply: Federal funds shall not participate, directly or 
indirectly, in payment for any premium or royalty on any patented or 
proprietary material, specification, or process specifically set forth 
in the Request for Proposals document unless the conditions of paragraph 
(a) of this section are applicable.

[41 FR 36204, Aug. 27, 1976, as amended at 67 FR 75926, Dec. 10, 2002; 
71 FR 66454, Nov. 15, 2006]



Sec. 635.413  Guaranty and warranty clauses.

    The STD may include warranty provisions in National Highway System 
(NHS) construction contracts in accordance with the following:
    (a) Warranty provisions shall be for a specific construction product 
or feature. Items of maintenance not eligible for Federal participation 
shall not be covered.
    (b) All warranty requirements and subsequent revisions shall be 
submitted to the Division Administrator for advance approval.
    (c) No warranty requirement shall be approved which, in the judgment 
of the Division Administrator, may place an undue obligation on the 
contractor for items over which the contractor has no control.
    (d) A STD may follow its own procedures regarding the inclusion of 
warranty provisions in non-NHS Federal-aid contracts.
    (e) In the case of a design-build project, the following 
requirements will apply instead of paragraphs (a) through (d) of this 
section.
    (1) General project warranties may be used on NHS projects, 
provided:
    (i) The term of the warranty is short (generally one to two years); 
however, projects developed under a public-private agreement may include 
warranties that are appropriate for the term of the contract or 
agreement.
    (ii) The warranty is not the sole means of acceptance;
    (iii) The warranty must not include items of routine maintenance 
which are not eligible for Federal participation; and,
    (iv) The warranty may include the quality of workmanship, materials 
and other specific tasks identified in the contract.
    (2) Performance warranties for specific products on NHS projects may 
be used at the STD's discretion. If performance warranties are used, 
detailed performance criteria must be provided in the Request for 
Proposal document.
    (3) The STD may follow its own procedures regarding the inclusion of 
warranty provisions on non-NHS Federal-aid design-build contracts.
    (4) For best value selections, the STD may allow proposers to submit 
alternate warranty proposals that improve upon the warranty terms in the 
RFP document. Such alternate warranty proposals must be in addition to 
the base proposal that responds to the RFP requirements.

[60 FR 44274, Aug. 25, 1995, as amended at 67 FR 75926, Dec. 10, 2002; 
72 FR 45336, Aug. 14, 2007]



Sec. 635.417  Convict produced materials.

    (a) Materials produced after July 1, 1991, by convict labor may only 
be incorporated in a Federal-aid highway construction project if such 
materials have been:
    (1) Produced by convicts who are on parole, supervised release, or 
probation from a prison or
    (2) Produced in a qualified prison facility and the cumulative 
annual production amount of such materials for use in Federal-aid 
highway construction does not exceed the amount of

[[Page 206]]

such materials produced in such facility for use in Federal-aid highway 
construction during the 12-month period ending July 1, 1987.
    (b) Qualified prison facility means any prison facility in which 
convicts, during the 12-month period ending July 1, 1987, produced 
materials for use in Federal-aid highway construction projects.

[53 FR 1923, Jan. 25, 1988, as amended at 58 FR 38975, July 21, 1993]



PART 636_DESIGN-BUILD CONTRACTING--Table of Contents




                            Subpart A_General

Sec.
636.101 What does this part do?
636.102 Does this part apply to me?
636.103 What are the definitions of terms used in this part?
636.104 Does this part apply to all Federal-aid design-build projects?
636.105 Is the FHWA requiring the use of design-build?
636.106 [Reserved]
636.107 May contracting agencies use geographic preference in Federal-
          aid design-build or public-private partnership projects?
636.108 [Reserved]
636.109 How does the NEPA process relate to the design-build procurement 
          process?
636.110 What procedures may be used for solicitations and receipt of 
          proposals?
636.111 Can oral presentations be used during the procurement process?
636.112 May stipends be used?
636.113 Is the stipend amount eligible for Federal participation?
636.114 What factors should be considered in risk allocation?
636.115 May I meet with industry to gather information concerning the 
          appropriate risk allocation strategies?
636.116 What organizational conflict of interest requirements apply to 
          design-build projects?
636.117 What conflict of interest standards apply to individuals who 
          serve as selection team members for the owner?
636.118 Is team switching allowed after contract award?
636.119 How does this part apply to a project developed under a public-
          private partnership?

             Subpart B_Selection Procedures, Award Criteria

636.201 What selection procedures and award criteria may be used?
636.202 When are two-phase design-build selection procedures 
          appropriate?
636.203 What are the elements of two-phase selection procedures for 
          competitive proposals?
636.204 What items may be included in a phase-one solicitation?
636.205 Can past performance be used as an evaluation criteria?
636.206 How do I evaluate offerors who do not have a record of relevant 
          past performance?
636.207 Is there a limit on short listed firms?
636.208 May I use my existing prequalification procedures with design-
          build contracts?
636.209 What items must be included in a phase-two solicitation?
636.210 What requirements apply to projects which use the modified 
          design-build procedure?
636.211 When and how should tradeoffs be used?
636.212 To what extent must tradeoff decisions be documented?

                  Subpart C_Proposal Evaluation Factors

636.301 How should proposal evaluation factors be selected?
636.302 Are there any limitations on the selection and use of proposal 
          evaluation factors?
636.303 May pre-qualification standards be used as proposal evaluation 
          criteria in the RFP?
636.304 What process may be used to rate and score proposals?
636.305 Can price information be provided to analysts who are reviewing 
          technical proposals?

                           Subpart D_Exchanges

636.401 What types of information exchange may take place prior to the 
          release of the RFP document?
636.402 What types of information exchange may take place after the 
          release of the RFP document?
636.403 What information may be exchanged with a clarification?
636.404 Can a competitive range be used to limit competition?
636.405 After developing a short list, can I still establish a 
          competitive range?
636.406 Are communications allowed prior to establishing the competitive 
          range?
636.407 Am I limited in holding communications with certain firms?
636.408 Can communications be used to cure proposal deficiencies?
636.409 Can offerors revise their proposals during communications?

[[Page 207]]

     Subpart E_Discussions, Proposal Revisions and Source Selection

636.501 What issues may be addressed in discussions?
636.502 Why should I use discussions?
636.503 Must I notify offerors of my intent to use/not use discussions?
636.504 If the solicitation indicated my intent was to award contract 
          without discussions, but circumstances change, may I still 
          hold discussions?
636.505 Must a contracting agency establish a competitive range if it 
          intends to have discussions with offerors?
636.506 What issues must be covered in discussions?
636.507 What subjects are prohibited in discussions, communications and 
          clarifications with offerors?
636.508 Can price or cost be an issue in discussions?
636.509 Can offerors revise their proposals as a result of discussions?
636.510 Can the competitive range be further defined once discussions 
          have begun?
636.511 Can there be more than one round of discussions?
636.512 What is the basis for the source selection decision?
636.513 Are limited negotiations allowed prior to contract execution?
636.514 How may I provide notifications and debriefings?

    Authority: Sec. 1503 of Pub. L. 109-59, 119 Stat. 1144; Sec. 1307 of 
Pub. L. 105-178, 112 Stat. 107; 23 U.S.C. 101, 109, 112, 113, 114, 115, 
119, 128, and 315; 49 CFR 1.48(b).

    Source: 67 FR 75926, Dec. 10, 2002, unless otherwise noted.



                            Subpart A_General



Sec. 636.101  What does this part do?

    This part describes the FHWA's policies and procedures for approving 
design-build projects financed under title 23, United States Code 
(U.S.C.). This part satisfies the requirement of section 1307(c) of the 
Transportation Equity Act for the 21st Century (TEA-21), enacted on June 
9, 1998. The contracting procedures of this part apply to all design-
build project funded under title 23, U.S.C.



Sec. 636.102  Does this part apply to me?

    (a) This part uses a plain language format to make the rule easier 
for the general public and business community to use. The section 
headings and text, often in the form of questions and answers, must be 
read together.
    (b) Unless otherwise noted, the pronoun ``you'' means the primary 
recipient of Federal-aid highway funds, the State Transportation 
Department (STD). Where the STD has an agreement with a local public 
agency (or other governmental agency) to administer a Federal-aid 
design-build project, the term ``you'' will also apply to that 
contracting agency.



Sec. 636.103  What are the definitions of terms used in this part?

    Unless otherwise specified in this part, the definitions in 23 
U.S.C. 101(a) are applicable to this part. Also, the following 
definitions are used:
    Adjusted low bid means a form of best value selection in which 
qualitative aspects are scored on a 0 to 100 scale expressed as a 
decimal; price is then divided by qualitative score to yield an 
``adjusted bid'' or ``price per quality point.'' Award is made to 
offeror with the lowest adjusted bid.
    Best value selection means any selection process in which proposals 
contain both price and qualitative components and award is based upon a 
combination of price and qualitative considerations.
    Clarifications means a written or oral exchange of information which 
takes place after the receipt of proposals when award without 
discussions is contemplated. The purpose of clarifications is to address 
minor or clerical revisions in a proposal.
    Communications are exchanges, between the contracting agency and 
offerors, after receipt of proposals, which lead to the establishment of 
the competitive range.
    Competitive acquisition means an acquisition process which is 
designed to foster an impartial and comprehensive evaluation of 
offerors' proposals, leading to the selection of the proposal 
representing the best value to the contracting agency.
    Competitive range means a list of the most highly rated proposals 
based on the initial proposal rankings. It is based on the rating of 
each proposal against all evaluation criteria.
    Contracting agency means the public agency awarding and 
administering a design-build contract. The contracting

[[Page 208]]

agency may be the STD or another State or local public agency.
    Deficiency means a material failure of a proposal to meet a 
contracting agency requirement or a combination of significant 
weaknesses in a proposal that increases the risk of unsuccessful 
contract performance to an unacceptable level.
    Design-bid-build means the traditional project delivery method where 
design and construction are sequential steps in the project development 
process.
    Design-build contract means an agreement that provides for design 
and construction of improvements by a contractor or private developer. 
The term encompasses design-build-maintain, design-build-operate, 
design-build-finance and other contracts that include services in 
addition to design and construction. Franchise and concession agreements 
are included in the term if they provide for the franchisee or 
concessionaire to develop the project which is the subject of the 
agreement.
    Design-builder means the entity contractually responsible for 
delivering the project design and construction.
    Discussions mean written or oral exchanges that take place after the 
establishment of the competitive range with the intent of allowing the 
offerors to revise their proposals.
    Final design means any design activities following preliminary 
design and expressly includes the preparation of final construction 
plans and detailed specifications for the performance of construction 
work.
    Fixed price/best design means a form of best value selection in 
which contract price is established by the owner and stated in the 
Request for Proposals document. Design solutions and other qualitative 
factors are evaluated and rated, with award going to the firm offering 
the best qualitative proposal for the established price.
    Intelligent Transportation System (ITS) services means services 
which provide for the acquisition of technologies or systems of 
technologies (e.g., computer hardware or software, traffic control 
devices, communications link, fare payment system, automatic vehicle 
location system, etc.) that provide or contribute to the provision of 
one or more ITS user services as defined in the National ITS 
Architecture.
    Modified design-build means a variation of design-build in which the 
contracting agency furnishes offerors with partially complete plans. The 
design-builders role is generally limited to the completion of the 
design and construction of the project.
    Organizational conflict of interest means that because of other 
activities or relationships with other persons, a person is unable or 
potentially unable to render impartial assistance or advice to the 
owner, or the person's objectivity in performing the contract work is or 
might be otherwise impaired, or a person has an unfair competitive 
advantage.
    Preliminary design defines the general project location and design 
concepts. It includes, but is not limited to, preliminary engineering 
and other activities and analyses, such as environmental assessments, 
topographic surveys, metes and bounds surveys, geotechnical 
investigations, hydrologic analysis, hydraulic analysis, utility 
engineering, traffic studies, financial plans, revenue estimates, 
hazardous materials assessments, general estimates of the types and 
quantities of materials, and other work needed to establish parameters 
for the final design. Prior to completion of the NEPA review process, 
any such preliminary engineering and other activities and analyses must 
not materially affect the objective consideration of alternatives in the 
NEPA review process.
    Prequalification means the contracting agency's process for 
determining whether a firm is fundamentally qualified to compete for a 
certain project or class of projects. The prequalification process may 
be based on financial, management and other types of qualitative data. 
Prequalification should be distinguished from short listing.
    Price proposal means the price submitted by the offeror to provide 
the required design and construction services.
    Price reasonableness means the determination that the price of the 
work for any project or series of projects is not excessive and is a 
fair and reasonable price for the services to be performed.

[[Page 209]]

    Proposal modification means a change made to a proposal before the 
solicitation closing date and time, or made in response to an amendment, 
or made to correct a mistake at any time before award.
    Proposal revision means a change to a proposal made after the 
solicitation closing date, at the request of or as allowed by a 
contracting officer, as the result of negotiations.
    Public-private agreement means an agreement between a public agency 
and a private party involving design and construction of transportation 
improvements by the private party to be paid for in whole or in part by 
Federal-aid highway funds. The agreement may also provide for project 
financing, at-risk equity investment, operations, or maintenance of the 
project.
    Qualified project means any design-build project (including 
intermodal projects) funded under Title 23, United States Code, which 
meets the requirements of this part and for which the contracting agency 
deems to be appropriate on the basis of project delivery time, cost, 
construction schedule, or quality.
    Request for Proposals (RFP) means the document that describes the 
procurement process, forms the basis for the final proposals and may 
potentially become an element in the contract.
    Request for Qualification (RFQ) means the document issued by the 
owner in Phase I of the two-phased selection process. It typically 
describes the project in enough detail to let potential offerors 
determine if they wish to compete and forms the basis for requesting 
qualifications submissions from which the most highly qualified offerors 
can be identified.
    Short listing means the narrowing of the field of offerors through 
the selection of the most qualified offerors who have responded to an 
RFQ.
    Single-phase selection process means a procurement process where 
price and/or technical proposals are submitted in response to an RFP. 
Short listing is not used.
    Solicitation means a public notification of an owner's need for 
information, qualifications, or proposals related to identified 
services.
    Stipend means a monetary amount sometimes paid to unsuccessful 
offerors.
    Technical proposal means that portion of a design-build proposal 
which contains design solutions and other qualitative factors that are 
provided in response to the RFP document.
    Tradeoff means an analysis technique involving a comparison of price 
and non-price factors to determine the best value when considering the 
selection of other than the lowest priced proposal.
    Two-phase selection process means a procurement process in which the 
first phase consists of short listing (based on qualifications submitted 
in response to an RFQ) and the second phase consists of the submission 
of price and technical proposals in response to an RFP.
    Weakness means a flaw in the proposal that increases the risk of 
unsuccessful contract performance. A significant weakness in the 
proposal is a flaw that appreciably increases the risk of unsuccessful 
contract performance.
    Weighted criteria process means a form of best value selection in 
which maximum point values are pre-established for qualitative and price 
components, and award is based upon high total points earned by the 
offerors.

[67 FR 75926, Dec. 10, 2002, as amended at 72 FR 45336, Aug. 14, 2007]



Sec. 636.104  Does this part apply to all Federal-aid design-build projects?

    The provisions of this part apply to all Federal-aid design-build 
projects within the highway right-of-way or linked to a Federal-aid 
highway project (i.e., the project would not exist without another 
Federal-aid highway project). Projects that are not located within the 
highway right-of-way, and not linked to a Federal-aid highway project 
may utilize State-approved procedures.



Sec. 636.105  Is the FHWA requiring the use of design-build?

    No, the FHWA is neither requiring nor promoting the use of the 
design-build contracting method. The design-build contracting technique 
is optional.

[[Page 210]]



Sec. 636.106  [Reserved]



Sec. 636.107  May contracting agencies use geographic preference in Federal-aid design-build or public-private partnership projects?

    No. Contracting agencies must not use geographic preferences 
(including contractual provisions, preferences or incentives for hiring, 
contracting, proposing, or bidding) on Federal-aid highway projects, 
even though the contracting agency may be subject to statutorily or 
administratively imposed in-State or local geographical preferences in 
the evaluation and award of such projects.

[72 FR 45336, Aug. 14, 2007]



Sec. 636.108  [Reserved]



Sec. 636.109  How does the NEPA process relate to the design-build procurement process?

    The purpose of this section is to ensure that there is an objective 
NEPA process, that public officials and citizens have the necessary 
environmental impact information for federally funded actions before 
actions are taken, and that design-build proposers do not assume an 
unnecessary amount of risk in the event the NEPA process results in a 
significant change in the proposal, and that the amount payable by the 
contracting agency to the design-builder does not include significant 
contingency as the result of risk placed on the design-builder 
associated with significant changes in the project definition arising 
out of the NEPA process. Therefore, with respect to the design-build 
procurement process:
    (a) The contracting agency may:
    (1) Issue an RFQ prior to the conclusion of the NEPA process as long 
as the RFQ informs proposers of the general status of NEPA review;
    (2) Issue an RFP after the conclusion of the NEPA process;
    (3) Issue an RFP prior to the conclusion of the NEPA process as long 
as the RFP informs proposers of the general status of the NEPA process 
and that no commitment will be made as to any alternative under 
evaluation in the NEPA process, including the no-build alternative;
    (4) Proceed with the award of a design-build contract prior to the 
conclusion of the NEPA process;
    (5) Issue notice to proceed with preliminary design pursuant to a 
design-build contract that has been awarded prior to the completion of 
the NEPA process; and
    (6) Allow a design-builder to proceed with final design and 
construction for any projects, or portions thereof, for which the NEPA 
process has been completed.
    (b) If the contracting agency proceeds to award a design-build 
contract prior to the conclusion of the NEPA process, then:
    (1) The contracting agency may permit the design-builder to proceed 
with preliminary design;
    (2) The contracting agency may permit any design and engineering 
activities to be undertaken for the purposes of defining the project 
alternatives and completing the NEPA alternatives analysis and review 
process; complying with other related environmental laws and 
regulations; supporting agency coordination, public involvement, permit 
applications, or development of mitigation plans; or developing the 
design of the preferred alternative to a higher level of detail when the 
lead agencies agree that it is warranted in accordance with 23 U.S.C. 
139(f)(4)(D);
    (3) The design-build contract must include appropriate provisions 
preventing the design-builder from proceeding with final design 
activities and physical construction prior to the completion of the NEPA 
process (contract hold points or another method of issuing multi-step 
approvals must be used);
    (4) The design-build contract must include appropriate provisions 
ensuring that no commitments are made to any alternative being evaluated 
in the NEPA process and that the comparative merits of all alternatives 
presented in the NEPA document, including the no-build alternative, will 
be evaluated and fairly considered;
    (5) The design-build contract must include appropriate provisions 
ensuring that all environmental and mitigation measures identified in 
the NEPA document will be implemented;

[[Page 211]]

    (6) The design-builder must not prepare the NEPA document or have 
any decisionmaking responsibility with respect to the NEPA process;
    (7) Any consultants who prepare the NEPA document must be selected 
by and subject to the exclusive direction and control of the contracting 
agency;
    (8) The design-builder may be requested to provide information about 
the project and possible mitigation actions, and its work product may be 
considered in the NEPA analysis and included in the record; and
    (9) The design-build contract must include termination provisions in 
the event that the no-build alternative is selected.
    (c) The contracting agency must receive prior FHWA concurrence 
before issuing the RFP, awarding a design-build contract and proceeding 
with preliminary design work under the design-build contract. Should the 
contracting agency proceed with any of the activities specified in this 
section before the completion of the NEPA process (with the exception of 
preliminary design, as provided in paragraph (d) of this section), the 
FHWA's concurrence merely constitutes the FHWA approval that any such 
activities complies with Federal requirements and does not constitute 
project authorization or obligate Federal funds.
    (d) The FHWA's authorization and obligation of preliminary 
engineering and other preconstruction funds prior to the completion of 
the NEPA process is limited to preliminary design and such additional 
activities as may be necessary to complete the NEPA process. After the 
completion of the NEPA process, the FHWA may issue an authorization to 
proceed with final design and construction and obligate Federal funds 
for such purposes.

[72 FR 45337, Aug. 14, 2007]



Sec. 636.110  What procedures may be used for solicitations and receipt of proposals?

    You may use your own procedures for the solicitation and receipt of 
proposals and information including the following:
    (a) Exchanges with industry before receipt of proposals;
    (b) RFQ, RFP and contract format;
    (c) Solicitation schedules;
    (d) Lists of forms, documents, exhibits, and other attachments;
    (e) Representations and instructions;
    (f) Advertisement and amendments;
    (g) Handling proposals and information; and
    (h) Submission, modification, revisions and withdrawal of proposals.



Sec. 636.111  Can oral presentations be used during the procurement process?

    (a) Yes, the use of oral presentations as a substitute for portions 
of a written proposal can be effective in streamlining the source 
selection process. Oral presentations may occur at any time in the 
acquisition process, however, you must comply with the appropriate State 
procurement integrity standards.
    (b) Oral presentations may substitute for, or augment, written 
information. You must maintain a record of oral presentations to 
document what information you relied upon in making the source selection 
decision. You may decide the appropriate method and level of detail for 
the record (e.g., videotaping, audio tape recording, written record, 
contracting agency notes, copies of offeror briefing slides or 
presentation notes). A copy of the record should be placed in the 
contract file and may be provided to offerors upon request.



Sec. 636.112  May stipends be used?

    At your discretion, you may elect to pay a stipend to unsuccessful 
offerors who have submitted responsive proposals. The decision to do so 
should be based on your analysis of the estimated proposal development 
costs and the anticipated degree of competition during the procurement 
process.



Sec. 636.113  Is the stipend amount eligible for Federal participation?

    (a) Yes, stipends are eligible for Federal-aid participation. 
Stipends are recommended on large projects where there is substantial 
opportunity for innovation and the cost of submitting a proposal is 
significant. On such projects, stipends are used to:
    (1) Encourage competition;

[[Page 212]]

    (2) Compensate unsuccessful offerors for a portion of their costs 
(usually one-third to one-half of the estimated proposal development 
cost); and
    (3) Ensure that smaller companies are not put at a competitive 
disadvantage.
    (b) Unless prohibited by State law, you may retain the right to use 
ideas from unsuccessful offerors if they accept stipends. If stipends 
are used, the RFP should describe the process for distributing the 
stipend to qualifying offerors.



Sec. 636.114  What factors should be considered in risk allocation?

    (a) You may consider, identify, and allocate the risks in the RFP 
document and define these risks in the contract. Risk should be 
allocated with consideration given to the party who is in the best 
position to manage and control a given risk or the impact of a given 
risk.
    (b) Risk allocation will vary according to the type of project and 
location, however, the following factors should be considered:
    (1) Governmental risks, including the potential for delays, 
modifications, withdrawal, scope changes, or additions that result from 
multi-level Federal, State, and local participation and sponsorship;
    (2) Regulatory compliance risks, including environmental and third-
party issues, such as permitting, railroad, and utility company risks;
    (3) Construction phase risks, including differing site conditions, 
traffic control, interim drainage, public access, weather issues, and 
schedule;
    (4) Post-construction risks, including public liability and meeting 
stipulated performance standards; and
    (5) Right-of-way risks including acquisition costs, appraisals, 
relocation delays, condemnation proceedings, including court costs and 
others.



Sec. 636.115  May I meet with industry to gather information concerning the appropriate risk allocation strategies?

    (a) Yes, information exchange at an early project stage is 
encouraged if it facilitates your understanding of the capabilities of 
potential offerors. However, any exchange of information must be 
consistent with State procurement integrity requirements. Interested 
parties include potential offerors, end users, acquisition and 
supporting personnel, and others involved in the conduct or outcome of 
the acquisition.
    (b) The purpose of exchanging information is to improve the 
understanding of your requirements and industry capabilities, thereby 
allowing potential offerors to judge whether or how they can satisfy 
your requirements, and enhancing your ability to obtain quality supplies 
and services, including construction, at reasonable prices, and increase 
efficiency in proposal preparation, proposal evaluation, negotiation, 
and contract award.
    (c) An early exchange of information can identify and resolve 
concerns regarding the acquisition strategy, including proposed contract 
type, terms and conditions, and acquisition planning schedules. This 
also includes the feasibility of the requirement, including performance 
requirements, statements of work, and data requirements; the suitability 
of the proposal instructions and evaluation criteria, including the 
approach for assessing past performance information; the availability of 
reference documents; and any other industry concerns or questions. Some 
techniques to promote early exchanges of information are as follows:
    (1) Industry or small business conferences;
    (2) Public hearings;
    (3) Market research;
    (4) One-on-one meetings with potential offerors (any meetings that 
are substantially involved with potential contract terms and conditions 
should include the contracting officer; also see paragraph (e) of this 
section regarding restrictions on disclosure of information);
    (5) Presolicitation notices;
    (6) Draft RFPs;
    (7) Request for Information (RFI) ;
    (8) Presolicitation or preproposal conferences; and
    (9) Site visits.
    (d) RFIs may be used when you do not intend to award a contract, but 
want to obtain price, delivery, other market information, or 
capabilities for planning purposes. Responses to these

[[Page 213]]

notices are not offers and cannot be accepted to form a binding 
contract. There is no required format for an RFI.
    (e) When specific information about a proposed acquisition that 
would be necessary for the preparation of proposals is disclosed to one 
or more potential offerors, that information shall be made available to 
all potential offerors as soon as practicable, but no later than the 
next general release of information, in order to avoid creating an 
unfair competitive advantage. Information provided to a particular 
offeror in response to that offeror's request must not be disclosed if 
doing so would reveal the potential offeror's confidential business 
strategy. When a presolicitation or preproposal conference is conducted, 
materials distributed at the conference should be made available to all 
potential offerors, upon request.



Sec. 636.116  What organizational conflict of interest requirements apply to design-build projects?

    (a) State statutes or policies concerning organizational conflict of 
interest should be specified or referenced in the design-build RFQ or 
RFP document as well as any contract for engineering services, 
inspection or technical support in the administration of the design-
build contract. All design-build solicitations should address the 
following situations as appropriate:
    (1) Consultants and/or sub-consultants who assist the owner in the 
preparation of a RFP document will not be allowed to participate as an 
offeror or join a team submitting a proposal in response to the RFP. 
However, a contracting agency may determine there is not an 
organizational conflict of interest for a consultant or sub-consultant 
where:
    (i) The role of the consultant or sub-consultant was limited to 
provision of preliminary design, reports, or similar ``low-level'' 
documents that will be incorporated into the RFP, and did not include 
assistance in development of instructions to offerors or evaluation 
criteria, or
    (ii) Where all documents and reports delivered to the agency by the 
consultant or sub-consultant are made available to all offerors.
    (2) All solicitations for design-build contracts, including related 
contracts for inspection, administration or auditing services, must 
include a provision which:
    (i) Directs offerors attention to this subpart;
    (ii) States the nature of the potential conflict as seen by the 
owner;
    (iii) States the nature of the proposed restraint or restrictions 
(and duration) upon future contracting activities, if appropriate;
    (iv) Depending on the nature of the acquisition, states whether or 
not the terms of any proposed clause and the application of this subpart 
to the contract are subject to negotiation; and
    (v) Requires offerors to provide information concerning potential 
organizational conflicts of interest in their proposals. The apparent 
successful offerors must disclose all relevant facts concerning any 
past, present or currently planned interests which may present an 
organizational conflict of interest. Such firms must state how their 
interests, or those of their chief executives, directors, key project 
personnel, or any proposed consultant, contractor or subcontractor may 
result, or could be viewed as, an organizational conflict of interest. 
The information may be in the form of a disclosure statement or a 
certification.
    (3) Based upon a review of the information submitted, the owner 
should make a written determination of whether the offeror's interests 
create an actual or potential organizational conflict of interest and 
identify any actions that must be taken to avoid, neutralize, or 
mitigate such conflict. The owner should award the contract to the 
apparent successful offeror unless an organizational conflict of 
interest is determined to exist that cannot be avoided, neutralized, or 
mitigated.
    (b) The organizational conflict of interest provisions in this 
subpart provide minimum standards for STDs to identify, mitigate or 
eliminate apparent or actual organizational conflicts of interest. To 
the extent that State-developed organizational conflict of interest 
standards are more stringent than that contained in this subpart, the 
State standards prevail.

[[Page 214]]

    (c) If the NEPA process has been completed prior to issuing the RFP, 
the contracting agency may allow a consultant or subconsultant who 
prepared the NEPA document to submit a proposal in response to the RFP.
    (d) If the NEPA process has not been completed prior to issuing the 
RFP, the contracting agency may allow a subconsultant to the preparer of 
the NEPA document to participate as an offeror or join a team submitting 
a proposal in response to the RFP only if the contracting agency 
releases such subconsultant from further responsibilities with respect 
to the preparation of the NEPA document.

[67 FR 75926, Dec. 10, 2002, as amended at 72 FR 45337, Aug. 14, 2007]



Sec. 636.117  What conflict of interest standards apply to individuals who serve as selection team members for the owner?

    State laws and procedures governing improper business practices and 
personal conflicts of interest will apply to the owner's selection team 
members. In the absence of such State provisions, the requirements of 48 
CFR Part 3, Improper Business Practices and Personal Conflicts of 
Interest, will apply to selection team members.



Sec. 636.118  Is team switching allowed after contract award?

    Where the offeror's qualifications are a major factor in the 
selection of the successful design-builder, team member switching 
(adding or switching team members) is discouraged after contract award. 
However, the owner may use its discretion in reviewing team changes or 
team enhancement requests on a case-by-case basis. Specific project 
rules related to changes in team members or changes in personnel within 
teams should be explicitly stated by the STD in all project 
solicitations.



Sec. 636.119  How does this part apply to a project developed under a public-private partnership?

    (a) In order for a project being developed under a public-private 
agreement to be eligible for Federal-aid funding (including traditional 
Federal-aid funds, direct loans, loan guarantees, lines of credit, or 
some other form of credit assistance), the contracting agency must have 
awarded the contract to the public-private entity through a competitive 
process that complies with applicable State and local laws.
    (b) If a contracting agency wishes to utilize traditional Federal-
aid funds in a project under a public-private agreement, the 
applicability of Federal-aid procurement procedures will depend on the 
nature of the public-private agreement.
    (1) If the public-private agreement establishes price, then all 
subsequent contracts executed by the developer are considered to be 
subcontracts and are not subject to Federal-aid procurement 
requirements.
    (2) If the public-private agreement does not establish price, the 
developer is considered to be an agent of the owner, and the developer 
must follow the appropriate Federal-aid procurement requirements (23 CFR 
part 172 for engineering service contracts, 23 CFR part 635 for 
construction contracts and the requirements of this part for design-
build contracts) for all prime contracts (not subcontracts).
    (c) The STD must ensure such public-private projects comply with all 
non-procurement requirements of 23 U. S. Code, regardless of the form of 
the FHWA funding (traditional Federal-aid funding or credit assistance). 
This includes compliance with all FHWA policies such as environmental 
and right-of-way requirements and compliance with such construction 
contracting requirements as Buy America, Davis-Bacon minimum wage rate 
requirements, for federally funded construction or design-build 
contracts under the public-private agreement.

[67 FR 75926, Dec. 10, 2002, as amended at 72 FR 45337, Aug. 14, 2007]



             Subpart B_Selection Procedures, Award Criteria



Sec. 636.201  What selection procedures and award criteria may be used?

    You should consider using two-phase selection procedures for all 
design-build projects. However, if you do not believe two-phase 
selection procedures are appropriate for your project (based

[[Page 215]]

on the criteria in Sec. 636.202), you may use a single phase selection 
procedure or the modified-design-build contracting method. The following 
procedures are available:

------------------------------------------------------------------------
                                  Criteria for using
       Selection procedure            a selection       Award criteria
                                       procedure            options
------------------------------------------------------------------------
(a) Two-Phase Selection           Sec.  636.202....  Lowest price,
 Procedures (RFQ followed by                           Adjusted low-bid
 RFP).                                                 (price per
                                                       quality point),
                                                       meets criteria/
                                                       low bid, weighted
                                                       criteria process,
                                                       fixed price/best
                                                       design, best
                                                       value.
(b) Single Phase (RFP)..........  Project not         All of the award
                                   meeting the         criteria in item
                                   criteria in Sec.   (a) of this
                                    636.202.           table.
(c) Modified Design-Build (may    Any project.......  Lowest price
 be one or two phases).                                technically
                                                       acceptable.
------------------------------------------------------------------------



Sec. 636.202  When are two-phase design-build selection procedures appropriate?

    You may consider the following criteria in deciding whether two-
phase selection procedures are appropriate. A negative response may 
indicate that two-phase selection procedures are not appropriate.
    (a) Are three or more offers anticipated?
    (b) Will offerors be expected to perform substantial design work 
before developing price proposals?
    (c) Will offerors incur a substantial expense in preparing 
proposals?
    (d) Have you identified and analyzed other contributing factors, 
including:
    (1) The extent to which you have defined the project requirements?
    (2) The time constraints for delivery of the project?
    (3) The capability and experience of potential contractors?
    (4) Your capability to manage the two-phase selection process?
    (5) Other criteria that you may consider appropriate?



Sec. 636.203  What are the elements of two-phase selection procedures for competitive proposals?

    The first phase consists of short listing based on a RFQ. The second 
phase consists of the receipt and evaluation of price and technical 
proposals in response to a RFP.



Sec. 636.204  What items may be included in a phase-one solicitation?

    You may consider including the following items in any phase-one 
solicitation:
    (a) The scope of work;
    (b) The phase-one evaluation factors and their relative weights, 
including:
    (1) Technical approach (but not detailed design or technical 
information);
    (2) Technical qualifications, such as--
    (i) Specialized experience and technical competence;
    (ii) Capability to perform (including key personnel); and
    (iii) Past performance of the members of the offeror's team 
(including the architect-engineer and construction members);
    (3) Other appropriate factors (excluding cost or price related 
factors, which are not permitted in phase-one);
    (c) Phase-two evaluation factors; and
    (d) A statement of the maximum number of offerors that will be short 
listed to submit phase-two proposals.



Sec. 636.205  Can past performance be used as an evaluation criteria?

    (a) Yes, past performance information is one indicator of an 
offeror's ability to perform the contract successfully. Past performance 
information may be used as an evaluation criteria in either phase-one or 
phase-two solicitations. If you elect to use past performance criteria, 
the currency and relevance of the information, source of the 
information, context of the data, and general trends in contractor's 
performance may be considered.
    (b) Describe your approach for evaluating past performance in the 
solicitation, including your policy for evaluating offerors with no 
relevant performance history. You should provide offerors an opportunity 
to identify past or current contracts (including Federal, State, and 
local government and private) for efforts similar to the current 
solicitation.
    (c) If you elect to request past performance information, the 
solicitation should also authorize offerors to provide information on 
problems encountered on the identified contracts and the offeror's 
corrective actions. You may consider this information, as well as 
information obtained from any

[[Page 216]]

other sources, when evaluating the offeror's past performance. You may 
use your discretion in determining the relevance of similar past 
performance information.
    (d) The evaluation should take into account past performance 
information regarding predecessor companies, key personnel who have 
relevant experience, or subcontractors that will perform major or 
critical aspects of the requirement when such information is relevant to 
the current acquisition.



Sec. 636.206  How do I evaluate offerors who do not have a record of relevant past performance?

    In the case of an offeror without a record of relevant past 
performance or for whom information on past performance is not 
available, the offeror may not be evaluated favorably or unfavorably on 
past performance.



Sec. 636.207  Is there a limit on short listed firms?

    Normally, three to five firms are short listed, however, the maximum 
number specified shall not exceed five unless you determine, for that 
particular solicitation, that a number greater than five is in your 
interest and is consistent with the purposes and objectives of two-phase 
design-build contracting.



Sec. 636.208  May I use my existing prequalification procedures with design-build contracts?

    Yes, you may use your existing prequalification procedures for 
either construction or engineering design firms as a supplement to the 
procedures in this part.



Sec. 636.209  What items must be included in a phase-two solicitation?

    (a) You must include the requirements for technical proposals and 
price proposals in the phase-two solicitation. All factors and 
significant subfactors that will affect contract award and their 
relative importance must be stated clearly in the solicitation. Use your 
own procedures for the solicitation as long as it complies the 
requirements of this part.
    (b) At your discretion, you may allow proposers to submit alternate 
technical concepts in their proposals as long as these alternate 
concepts do not conflict with criteria agreed upon in the environmental 
decision making process. Alternate technical concept proposals may 
supplement, but not substitute for base proposals that respond to the 
RFP requirements.



Sec. 636.210  What requirements apply to projects which use the modified design-build procedure?

    (a) Modified design-build selection procedures (lowest price 
technically acceptable source selection process) may be used for any 
project.
    (b) The solicitation must clearly state the following:
    (1) The identification of evaluation factors and significant 
subfactors that establish the requirements of acceptability.
    (2) That award will be made on the basis of the lowest evaluated 
price of proposals meeting or exceeding the acceptability standards for 
non-cost factors.
    (c) The contracting agency may forgo a short listing process and 
advertise for the receipt of proposals from all responsible offerors. 
The contract is then awarded to the lowest responsive bidder.
    (d) Tradeoffs are not permitted, however, you may incorporate cost-
plus-time bidding procedures (A+B bidding), lane rental, or other cost-
based provisions in such contracts.
    (e) Proposals are evaluated for acceptability but not ranked using 
the non-cost/price factors.
    (f) Exchanges may occur (see subpart D of this part).



Sec. 636.211  When and how should tradeoffs be used?

    (a) At your discretion, you may consider the tradeoff technique when 
it is desirable to award to other than the lowest priced offeror or 
other than the highest technically rated offeror.
    (b) If you use a tradeoff technique, the following apply:
    (1) All evaluation factors and significant subfactors that will 
affect contract award and their relative importance must be clearly 
stated in the solicitation; and

[[Page 217]]

    (2) The solicitation must also state, at a minimum, whether all 
evaluation factors other than cost or price, when combined, are--
    (i) Significantly more important than cost or price; or
    (ii) Approximately equal to cost or price; or
    (iii) Significantly less important than cost or price.

[67 FR 75926, Dec. 10, 2002; 68 FR 7922, Feb. 19, 2003]



Sec. 636.212  To what extent must tradeoff decisions be documented?

    When tradeoffs are performed, the source selection records must 
include the following:
    (a) An assessment of each offeror's ability to accomplish the 
technical requirements; and
    (b) A summary, matrix, or quantitative ranking, along with 
appropriate supporting narrative, of each technical proposal using the 
evaluation factors.



                  Subpart C_Proposal Evaluation Factors



Sec. 636.301  How should proposal evaluation factors be selected?

    (a) The proposal evaluation factors and significant subfactors 
should be tailored to the acquisition.
    (b) Evaluation factors and significant subfactors should:
    (1) Represent the key areas of importance and emphasis to be 
considered in the source selection decision; and
    (2) Support meaningful comparison and discrimination between and 
among competing proposals.



Sec. 636.302  Are there any limitations on the selection and use of proposal evaluation factors?

    (a) The selection of the evaluation factors, significant subfactors 
and their relative importance are within your broad discretion subject 
to the following requirements:
    (1) You must evaluate price in every source selection where 
construction is a significant component of the scope of work. However, 
where the contracting agency elects to release the final RFP and award 
the design-build contract before the conclusion of the NEPA process (see 
Sec. 636.109), then the following requirements apply:
    (i) It is not necessary to evaluate the total contract price;
    (ii) Price must be considered to the extent the contract requires 
the contracting agency to make any payments to the design-builder for 
any work performed prior to the completion of the NEPA process and the 
contracting agency wishes to use Federal-aid highway funds for those 
activities;
    (iii) The evaluation of proposals and award of the contract may be 
based on qualitative considerations;
    (iv) If the contracting agency wishes to use Federal-aid highway 
funds for final design and construction, the subsequent approval of 
final design and construction activities will be contingent upon a 
finding of price reasonableness by the contracting agency;
    (v) The determination of price reasonableness for any design-build 
project funded with Federal-aid highway funds shall be based on at least 
one of the following methods:
    (A) Compliance with the applicable procurement requirements for part 
172, 635, or 636, where the contractor providing the final design or 
construction services, or both, is a person or entity other than the 
design-builder;
    (B) A negotiated price determined on an open-book basis by both the 
design-builder and contracting agency; or
    (C) An independent estimate by the contracting agency based on the 
price of similar work;
    (vi) The contracting agency's finding of price reasonableness is 
subject to FHWA concurrence.
    (2) You must evaluate the quality of the product or service through 
consideration of one or more non-price evaluation factors. These factors 
may include (but are not limited to) such criteria as:
    (i) Compliance with solicitation requirements;
    (ii) Completion schedule (contractual incentives and disincentives 
for early completion may be used where appropriate); or
    (iii) Technical solutions.
    (3) At your discretion, you may evaluate past performance, technical 
experience and management experience (subject to Sec. 636.303(b)).

[[Page 218]]

    (b) All factors and significant subfactors that will affect contract 
award and their relative importance must be stated clearly in the 
solicitation.

[67 FR 75926, Dec. 10, 2002, as amended at 72 FR 45338, Aug. 14, 2007]



Sec. 636.303  May pre-qualification standards be used as proposal evaluation criteria in the RFP?

    (a) If you use a prequalification procedure or a two-phase selection 
procedure to develop a short list of qualified offerors, then pre-
qualification criteria should not be included as proposal evaluation 
criteria.
    (b) The proposal evaluation criteria should be limited to the 
quality, quantity, value and timeliness of the product or service being 
proposed. However, there may be circumstances where it is appropriate to 
include prequalification standards as proposal evaluation criteria. Such 
instances include situations where:
    (1) The scope of work involves very specialized technical expertise 
or specialized financial qualifications; or
    (2) Where prequalification procedures or two-phase selection 
procedures are not used (short listing is not performed).



Sec. 636.304  What process may be used to rate and score proposals?

    (a) Proposal evaluation is an assessment of the offeror's proposal 
and ability to perform the prospective contract successfully. You must 
evaluate proposals solely on the factors and subfactors specified in the 
solicitation.
    (b) You may conduct evaluations using any rating method or 
combination of methods including color or adjectival ratings, numerical 
weights, and ordinal rankings. The relative strengths, deficiencies, 
significant weaknesses, and risks supporting proposal evaluation must be 
documented in the contract file.



Sec. 636.305  Can price information be provided to analysts who are reviewing technical proposals?

    Normally, technical and price proposals are reviewed independently 
by separate evaluation teams. However, there may be occasions where the 
same experts needed to review the technical proposals are also needed in 
the review of the price proposals. This may occur where a limited amount 
of technical expertise is available to review proposals. Price 
information may be provided to such technical experts in accordance with 
your procedures.



                           Subpart D_Exchanges



Sec. 636.401  What types of information exchange may take place prior to the release of the RFP document?

    Verbal or written information exchanges (such as in the first-phase 
of a two-phase selection procedure) must be consistent with State and/or 
local procurement integrity requirements. See Sec. 636.115(a) for 
additional details.



Sec. 636.402  What types of information exchange may take place after the release of the RFP document?

    Certain types of information exchange may be desirable at different 
points after the release of the RFP document. The following table 
summarizes the types of communications that will be discussed in this 
subpart. These communication methods are optional.

----------------------------------------------------------------------------------------------------------------
     Type of information exchange                When                   Purpose              Parties involved
----------------------------------------------------------------------------------------------------------------
(a) Clarifications...................  After receipt of         Used when award without  Any offeror whose
                                        proposals.               discussions is           proposal is not clear
                                                                 contemplated. Used to    to the contracting
                                                                 clarify certain          agency.
                                                                 aspects of a proposal
                                                                 (resolve minor errors,
                                                                 clerical errors,
                                                                 obtain additional past
                                                                 performance
                                                                 information, etc.).

[[Page 219]]

 
(b) Communications...................  After receipt of         Used to address issues   Only those offerors
                                        proposals, prior to      which might prevent a    whose exclusion from,
                                        the establishment of     proposal from being      or inclusion in, the
                                        the competitive range.   placed in the            competitive range is
                                                                 competitive range.       uncertain. All
                                                                                          offerors whose past
                                                                                          performance
                                                                                          information is the
                                                                                          determining factor
                                                                                          preventing them from
                                                                                          being placed in the
                                                                                          competitive range.
(c) Discussions (see Subpart E of      After receipt of         Enhance contracting      Must be held with all
 this part).                            proposals and after      agency understanding     offerors in the
                                        the determination of     of proposals and         competitive range.
                                        the competitive range.   offerors understanding
                                                                 of scope of work.
                                                                 Facilitate the
                                                                 evaluation process.
----------------------------------------------------------------------------------------------------------------



Sec. 636.403  What information may be exchanged with a clarification?

    (a) You may wish to clarify any aspect of proposals which would 
enhance your understanding of an offeror's proposal. This includes such 
information as an offeror's past performance or information regarding 
adverse past performance to which the offeror has not previously had an 
opportunity to respond. Clarification exchanges are discretionary. They 
do not have to be held with any specific number of offerors and do not 
have to address specific issues.
    (b) You may wish to clarify and revise the RFP document through an 
addenda process in response to questions from potential offerors.



Sec. 636.404  Can a competitive range be used to limit competition?

    If the solicitation notifies offerors that the competitive range can 
be limited for purposes of efficiency, you may limit the number of 
proposals to the greatest number that will permit an efficient 
competition. However, you must provide written notice to any offeror 
whose proposal is no longer considered to be included in the competitive 
range. Offerors excluded or otherwise eliminated from the competitive 
range may request a debriefing. Debriefings may be conducted in 
accordance with your procedures as long as you comply with Sec. 
636.514.



Sec. 636.405  After developing a short list, can I still establish a competitive range?

    Yes, if you have developed a short list of firms, you may still 
establish a competitive range. The short list is based on qualifications 
criteria. The competitive range is based on the rating of technical and 
price proposals.



Sec. 636.406  Are communications allowed prior to establishing the competitive range?

    Yes, prior to establishing the competitive range, you may conduct 
communications to:
    (a) Enhance your understanding of proposals;
    (b) Allow reasonable interpretation of the proposal; or
    (c) Facilitate your evaluation process.



Sec. 636.407  Am I limited in holding communications with certain firms?

    Yes, if you establish a competitive range, you must do the 
following:
    (a) Hold communications with offerors whose past performance 
information is the determining factor preventing them from being placed 
within the competitive range;
    (b) Address adverse past performance information to which an offeror 
has not had a prior opportunity to respond; and
    (c) Hold communications only with those offerors whose exclusion 
from, or inclusion in, the competitive range is uncertain.



Sec. 636.408  Can communications be used to cure proposal deficiencies?

    (a) No, communications must not be used to:
    (1) Cure proposal deficiencies or material omissions;
    (2) Materially alter the technical or cost elements of the proposal; 
and/or
    (3) Otherwise revise the proposal.

[[Page 220]]

    (b) Communications may be considered in rating proposals for the 
purpose of establishing the competitive range.



Sec. 636.409  Can offerors revise their proposals during communications?

    (a) No, communications shall not provide an opportunity for an 
offeror to revise its proposal, but may address the following:
    (1) Ambiguities in the proposal or other concerns (e.g., perceived 
deficiencies, weaknesses, errors, omissions, or mistakes); and
    (2) Information relating to relevant past performance.
    (b) Communications must address adverse past performance information 
to which the offeror has not previously had an opportunity to comment.



     Subpart E_Discussions, Proposal Revisions and Source Selection



Sec. 636.501  What issues may be addressed in discussions?

    In a competitive acquisition, discussions may include bargaining. 
The term bargaining may include: persuasion, alteration of assumptions 
and positions, give-and-take, and may apply to price, schedule, 
technical requirements, type of contract, or other terms of a proposed 
contract.



Sec. 636.502  Why should I use discussions?

    You should use discussions to maximize your ability to obtain the 
best value, based on the requirements and the evaluation factors set 
forth in the solicitation.



Sec. 636.503  Must I notify offerors of my intent to use/not use discussions?

    Yes, in competitive acquisitions, the solicitation must notify 
offerors of your intent. You should either:
    (a) Notify offerors that discussions may or may not be held 
depending on the quality of the proposals received (except 
clarifications may be used as described in Sec. 636.401). Therefore, 
the offeror's initial proposal should contain the offeror's best terms 
from a cost or price and technical standpoint; or
    (b) Notify offerors of your intent to establish a competitive range 
and hold discussions.



Sec. 636.504  If the solicitation indicated my intent was to award contract without discussions, but circumstances change, may I still hold discussions?

    Yes, you may still elect to hold discussions when circumstances 
dictate, as long as the rationale for doing so is documented in the 
contract file. Such circumstances might include situations where all 
proposals received have deficiencies, when fair and reasonable prices 
are not offered, or when the cost or price offered is not affordable.



Sec. 636.505  Must a contracting agency establish a competitive range if it intends to have discussions with offerors?

    Yes, if discussions are held, they must be conducted with all 
offerors in the competitive range. If you wish to hold discussions and 
do not formally establish a competitive range, then you must hold 
discussions with all responsive offerors.



Sec. 636.506  What issues must be covered in discussions?

    (a) Discussions should be tailored to each offeror's proposal. 
Discussions must cover significant weaknesses, deficiencies, and other 
aspects of a proposal (such as cost or price, technical approach, past 
performance, and terms and conditions) that could be altered or 
explained to enhance materially the proposal's potential for award. You 
may use your judgment in setting limits for the scope and extent of 
discussions.
    (b) In situations where the solicitation stated that evaluation 
credit would be given for technical solutions exceeding any mandatory 
minimums, you may hold discussions regarding increased performance 
beyond any mandatory minimums, and you may suggest to offerors that have 
exceeded any mandatory minimums (in ways that are not integral to the 
design), that their proposals would be more competitive if the excesses 
were removed and the offered price decreased.

[[Page 221]]



Sec. 636.507  What subjects are prohibited in discussions, communications and clarifications with offerors?

    You may not engage in conduct that:
    (a) Favors one offeror over another;
    (b) Reveals an offeror's technical solution, including unique 
technology, innovative and unique uses of commercial items, or any 
information that would compromise an offeror's intellectual property to 
another offeror;
    (c) Reveals an offerors price without that offeror's permission;
    (d) Reveals the names of individuals providing reference information 
about an offeror's past performance; or
    (e) Knowingly furnish source selection information which could be in 
violation of State procurement integrity standards.



Sec. 636.508  Can price or cost be an issue in discussions?

    You may inform an offeror that its price is considered to be too 
high, or too low, and reveal the results of the analysis supporting that 
conclusion. At your discretion, you may indicate to all offerors your 
estimated cost for the project.



Sec. 636.509  Can offerors revise their proposals as a result of discussions?

    (a) Yes, you may request or allow proposal revisions to clarify and 
document understandings reached during discussions. At the conclusion of 
discussions, each offeror shall be given an opportunity to submit a 
final proposal revision.
    (b) You must establish a common cut-off date only for receipt of 
final proposal revisions. Requests for final proposal revisions shall 
advise offerors that the final proposal revisions shall be in writing 
and that the contracting agency intends to make award without obtaining 
further revisions.



Sec. 636.510  Can the competitive range be further defined once discussions have begun?

    Yes, you may further narrow the competitive range if an offeror 
originally in the competitive range is no longer considered to be among 
the most highly rated offerors being considered for award. That offeror 
may be eliminated from the competitive range whether or not all material 
aspects of the proposal have been discussed, or whether or not the 
offeror has been afforded an opportunity to submit a proposal revision. 
You must provide an offeror excluded from the competitive range with a 
written determination and notice that proposal revisions will not be 
considered.



Sec. 636.511  Can there be more than one round of discussions?

    Yes, but only at the conclusion of discussions will the offerors be 
requested to submit a final proposal revision, also called best and 
final offer (BAFO). Thus, regardless of the length or number of 
discussions, there will be only one request for a revised proposal 
(i.e., only one BAFO).



Sec. 636.512  What is the basis for the source selection decision?

    (a) You must base the source selection decision on a comparative 
assessment of proposals against all selection criteria in the 
solicitation. While you may use reports and analyses prepared by others, 
the source selection decision shall represent your independent judgment.
    (b) The source selection decision shall be documented, and the 
documentation shall include the rationale for any business judgments and 
tradeoffs made or relied on, including benefits associated with 
additional costs. Although the rationale for the selection decision must 
be documented, that documentation need not quantify the tradeoffs that 
led to the decision.



Sec. 636.513  Are limited negotiations allowed prior to contract execution?

    Yes, after the source selection but prior to contract execution, you 
may conduct limited negotiations with the selected design-builder to 
clarify any remaining issues regarding scope, schedule, financing or any 
other information provided by that offeror. You must comply with the 
provisions of Sec. 636.507 in the exchange of this information.



Sec. 636.514  How may I provide notifications and debriefings?

    You may provide pre-award or post-award notifications in accordance 
with

[[Page 222]]

State approved procedures. If an offeror requests a debriefing, you may 
provide pre-award or post-award debriefings in accordance with State 
approved procedures.



PART 637_CONSTRUCTION INSPECTION AND APPROVAL--Table of Contents




Subpart A [Reserved]

         Subpart B_Quality Assurance Procedures for Construction

Sec.
637.201 Purpose.
637.203 Definitions.
637.205 Policy.
637.207 Quality assurance program.
637.209 Laboratory and sampling and testing personnel qualifications.

Appendix A to Subpart B of Part 637--Guide Letter of Certification by 
          State Engineer

    Authority: Sec. 1307, Pub. L. 105-178, 112 Stat. 107; 23 U.S.C. 109, 
114, and 315; 49 CFR 1.48(b).

    Source: 60 FR 33717, June 29, 1995, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 637 appear at 67 FR 
75934, Dec. 10, 2002.

Subpart A [Reserved]



         Subpart B_Quality Assurance Procedures for Construction



Sec. 637.201  Purpose.

    To prescribe policies, procedures, and guidelines to assure the 
quality of materials and construction in all Federal-aid highway 
projects on the National Highway System.



Sec. 637.203  Definitions.

    Acceptance program. All factors that comprise the State 
transportation department's (STD) determination of the quality of the 
product as specified in the contract requirements. These factors include 
verification sampling, testing, and inspection and may include results 
of quality control sampling and testing.
    Independent assurance program. Activities that are an unbiased and 
independent evaluation of all the sampling and testing procedures used 
in the acceptance program. Test procedures used in the acceptance 
program which are performed in the STD's central laboratory would not be 
covered by an independent assurance program.
    Proficiency samples. Homogeneous samples that are distributed and 
tested by two or more laboratories. The test results are compared to 
assure that the laboratories are obtaining the same results.
    Qualified laboratories. Laboratories that are capable as defined by 
appropriate programs established by each STD. As a minimum, the 
qualification program shall include provisions for checking test 
equipment and the laboratory shall keep records of calibration checks.
    Qualified sampling and testing personnel. Personnel who are capable 
as defined by appropriate programs established by each STD.
    Quality assurance. All those planned and systematic actions 
necessary to provide confidence that a product or service will satisfy 
given requirements for quality.
    Quality control. All contractor/vendor operational techniques and 
activities that are performed or conducted to fulfill the contract 
requirements.
    Random sample. A sample drawn from a lot in which each increment in 
the lot has an equal probability of being chosen.
    Vendor. A supplier of project-produced material that is not the 
contractor.
    Verification sampling and testing. Sampling and testing performed to 
validate the quality of the product.



Sec. 637.205  Policy.

    (a) Quality assurance program. Each STD shall develop a quality 
assurance program which will assure that the materials and workmanship 
incorporated into each Federal-aid highway construction project on the 
NHS are in conformity with the requirements of the approved plans and 
specifications, including approved changes. The program must meet the 
criteria in Sec. 637.207 and be approved by the FHWA.
    (b) STD capabilities. The STD shall maintain an adequate, qualified 
staff to administer its quality assurance program. The State shall also 
maintain

[[Page 223]]

a central laboratory. The State's central laboratory shall meet the 
requirements in Sec. 637.209(a)(2).
    (c) Independent assurance program. Independent assurance samples and 
tests or other procedures shall be performed by qualified sampling and 
testing personnel employed by the STD or its designated agent.
    (d) Verification sampling and testing. The verification sampling and 
testing are to be performed by qualified testing personnel employed by 
the STD or its designated agent, excluding the contractor and vendor.
    (e) Random samples. All samples used for quality control and 
verification sampling and testing shall be random samples.



Sec. 637.207  Quality assurance program.

    (a) Each STD's quality assurance program shall provide for an 
acceptance program and an independent assurance (IA) program consisting 
of the following:
    (1) Acceptance program.
    (i) Each STD's acceptance program shall consist of the following:
    (A) Frequency guide schedules for verification sampling and testing 
which will give general guidance to personnel responsible for the 
program and allow adaptation to specific project conditions and needs.
    (B) Identification of the specific location in the construction or 
production operation at which verification sampling and testing is to be 
accomplished.
    (C) Identification of the specific attributes to be inspected which 
reflect the quality of the finished product.
    (ii) Quality control sampling and testing results may be used as 
part of the acceptance decision provided that:
    (A) The sampling and testing has been performed by qualified 
laboratories and qualified sampling and testing personnel.
    (B) The quality of the material has been validated by the 
verification sampling and testing. The verification testing shall be 
performed on samples that are taken independently of the quality control 
samples.
    (C) The quality control sampling and testing is evaluated by an IA 
program.
    (iii) If the results from the quality control sampling and testing 
are used in the acceptance program, the STD shall establish a dispute 
resolution system. The dispute resolution system shall address the 
resolution of discrepancies occurring between the verification sampling 
and testing and the quality control sampling and testing. The dispute 
resolution system may be administered entirely within the STD.
    (iv) In the case of a design-build project on the National Highway 
System, warranties may be used where appropriate. See 23 CFR 635.413(e) 
for specific requirements.
    (2) The IA program shall evaluate the qualified sampling and testing 
personnel and the testing equipment. The program shall cover sampling 
procedures, testing procedures, and testing equipment. Each IA program 
shall include a schedule of frequency for IA evaluation. The schedule 
may be established based on either a project basis or a system basis. 
The frequency can be based on either a unit of production or on a unit 
of time.
    (i) The testing equipment shall be evaluated by using one or more of 
the following: Calibration checks, split samples, or proficiency 
samples.
    (ii) Testing personnel shall be evaluated by observations and split 
samples or proficiency samples.
    (iii) A prompt comparison and documentation shall be made of test 
results obtained by the tester being evaluated and the IA tester. The 
STD shall develop guidelines including tolerance limits for the 
comparison of test results.
    (iv) If the STD uses the system approach to the IA program, the STD 
shall provide an annual report to the FHWA summarizing the results of 
the IA program.
    (3) The preparation of a materials certification, conforming in 
substance to Appendix A of this subpart, shall be submitted to the FHWA 
Division Administrator for each construction project which is subject to 
FHWA construction oversight activities.
    (b) In the case of a design-build project funded under title 23, 
U.S. Code, the STD's quality assurance program should consider the 
specific contractual needs of the design-build project. All provisions 
of paragraph (a)

[[Page 224]]

of this section are applicable to design-build projects. In addition, 
the quality assurance program may include the following:
    (1) Reliance on a combination of contractual provisions and 
acceptance methods;
    (2) Reliance on quality control sampling and testing as part of the 
acceptance decision, provided that adequate verification of the design-
builder's quality control sampling and testing is performed to ensure 
that the design-builder is providing the quality of materials and 
construction required by the contract documents.
    (3) Contractual provisions which require the operation of the 
completed facility for a specific time period.

[60 FR 33717, June 29, 1995, as amended at 67 FR 75934, Dec. 10, 2002]



Sec. 637.209  Laboratory and sampling and testing personnel qualifications.

    (a) Laboratories.
    (1) After June 29, 2000, all contractor, vendor, and STD testing 
used in the acceptance decision shall be performed by qualified 
laboratories.
    (2) After June 30, 1997, each STD shall have its central laboratory 
accredited by the AASHTO Accreditation Program or a comparable 
laboratory accreditation program approved by the FHWA.
    (3) After June 29, 2000, any non-STD designated laboratory which 
performs IA sampling and testing shall be accredited in the testing to 
be performed by the AASHTO Accreditation Program or a comparable 
laboratory accreditation program approved by the FHWA.
    (4) After June 29, 2000, any non-STD laboratory that is used in 
dispute resolution sampling and testing shall be accredited in the 
testing to be performed by the AASHTO Accreditation Program or a 
comparable laboratory accreditation program approved by the FHWA.
    (5) After September 24, 2009, laboratories that perform crash 
testing for acceptance of roadside hardware by the FHWA shall be 
accredited by a laboratory accreditation body that is recognized by the 
National Cooperation for Laboratory Accreditation (NACLA), is a 
signatory to the Asia Pacific Laboratory Accreditation Cooperation 
(APLAC) Mutual Recognition Arrangement (MRA), is a signatory to the 
International Laboratory Accreditation Cooperation (ILAC) Mutual 
Recognition Arrangement (MRA), or another accreditation body acceptable 
to FHWA.
    (b) Sampling and testing personnel. After June 29, 2000, all 
sampling and testing data to be used in the acceptance decision or the 
IA program shall be executed by qualified sampling and testing 
personnel.
    (c) Conflict of interest. In order to avoid an appearance of a 
conflict of interest, any qualified non-STD laboratory shall perform 
only one of the following types of testing on the same project: 
Verification testing, quality control testing, IA testing, or dispute 
resolution testing.

[60 FR 33717, June 29, 1995, as amended at 72 FR 54212, Sept. 24, 2007]



Sec. Appendix A to Subpart B of Part 637--Guide Letter of Certification 
                            by State Engineer

Date____________________________________________________________________
Project No._____________________________________________________________
    This is to certify that:
    The results of the tests used in the acceptance program indicate 
that the materials incorporated in the construction work, and the 
construction operations controlled by sampling and testing, were in 
conformity with the approved plans and specifications. (The following 
sentence should be added if the IA testing frequencies are based on 
project quantities. All independent assurance samples and tests are 
within tolerance limits of the samples and tests that are used in the 
acceptance program.)
    Exceptions to the plans and specifications are explained on the back 
hereof (or on attached sheet).
________________________________________________________________________
Director of STD Laboratory or other appropriate STD Official.



PART 645_UTILITIES--Table of Contents




      Subpart A_Utility Relocations, Adjustments, and Reimbursement

Sec.
645.101 Purpose.
645.103 Applicability.
645.105 Definitions.
645.107 Eligibility.
645.109 Preliminary engineering.
645.111 Right-of-way.

[[Page 225]]

645.113 Agreements and authorizations.
645.115 Construction.
645.117 Cost development and reimbursement.
645.119 Alternate procedure.

                  Subpart B_Accommodation of Utilities

645.201 Purpose.
645.203 Applicability.
645.205 Policy.
645.207 Definitions.
645.209 General requirements.
645.211 State transportation department accommodation policies.
645.213 Use and occupancy agreements (permits).
645.215 Approvals.

    Authority: 23 U.S.C. 101, 109, 111, 116, 123, and 315; 23 CFR 1.23 
and 1.27; 49 CFR 1.48(b); and E.O. 11990, 42 26961 (May 24, 1977).

    Editorial Note: Nomenclature changes to part 645 appear at 65 FR 
70311, Nov. 22, 2000.



      Subpart A_Utility Relocations, Adjustments, and Reimbursement

    Source: 50 FR 20345, May 15, 1985, unless otherwise noted.



Sec. 645.101  Purpose.

    To prescribe the policies, procedures, and reimbursement provisions 
for the adjustment and relocation of utility facilities on Federal-aid 
and direct Federal projects.



Sec. 645.103  Applicability.

    (a) The provisions of this regulation apply to reimbursement claimed 
by a State transportation department (STD) for costs incurred under an 
approved and properly executed transportation department (TD)/utility 
agreement and for payment of costs incurred under all Federal Highway 
Administration (FHWA)/utility agreements.
    (b) Procedures on the accommodation of utilities are set forth in 23 
CFR part 645, subpart B, Accommodation of Utilities.
    (c) When the lines or facilities to be relocated or adjusted due to 
highway construction are privately owned, located on the owner's land, 
devoted exclusively to private use and not directly or indirectly 
serving the public, the provisions of the FHWA's right-of-way procedures 
in 23 CFR 710.203, apply. When applicable, under the foregoing 
conditions, the provisions of this regulation may be used as a guide to 
establish a cost-to-cure.
    (d) The FHWA's reimbursement to the STD will be governed by State 
law (or State regulation) or the provisions of this regulation, 
whichever is more restrictive. When State law or regulation differs from 
this regulation, a determination shall be made by the STD subject to the 
concurrence of the FHWA as to which standards will govern, and the 
record documented accordingly, for each relocation encountered.
    (e) For direct Federal projects, all references herein to the STD or 
TD are inapplicable, and it is intended that the FHWA be considered in 
the relative position of the STD or TD.

[50 FR 20345, May 15, 1985, as amended at 64 FR 71289, Dec. 21, 1999]



Sec. 645.105  Definitions.

    For the purposes of this regulation, the following definitions shall 
apply:
    Authorization--for Federal-aid projects authorization to the STD by 
the FHWA, or for direct Federal projects authorization to the utility by 
the FHWA, to proceed with any phase of a project. The date of 
authorization establishes the date of eligibility for Federal funds to 
participate in the costs incurred on that phase of work.
    Betterment--any upgrading of the facility being relocated that is 
not attributable to the highway construction and is made solely for the 
benefit of and at the election of the utility.
    Cost of relocation--the entire amount paid by or on behalf of the 
utility properly attributable to the relocation after deducting from 
that amount any increase in value of the new facility, and any salvage 
derived from the old facility.
    Cost of Removal--the amount expended to remove utility property 
including the cost of demolishing, dismantling, removing, transporting, 
or otherwise disposing of utility property and of cleaning up to leave 
the site in a neat and presentable condition.
    Cost of salvage--the amount expended to restore salvaged utility 
property to usable condition after its removal.
    Direct Federal projects--highway projects such as projects under the 
Federal Lands Highways Program

[[Page 226]]

which are under the direct administration of the FHWA.
    Indirect or overhead costs--those costs which are not readily 
identifiable with one specific task, job, or work order. Such costs may 
include indirect labor, social security taxes, insurance, stores 
expense, and general office expenses. Costs of this nature generally are 
distributed or allocated to the applicable job or work orders, other 
accounts and other functions to which they relate. Distribution and 
allocation is made on a uniform basis which is reasonable, equitable, 
and in accordance with generally accepted cost accounting practices.
    Relocation--the adjustment of utility facilities required by the 
highway project. It includes removing and reinstalling the facility, 
including necessary temporary facilities, acquiring necessary right-of-
way on the new location, moving, rearranging or changing the type of 
existing facilities and taking any necessary safety and protective 
measures. It shall also mean constructing a replacement facility that is 
both functionally equivalent to the existing facility and necessary for 
continuous operation of the utility service, the project economy, or 
sequence of highway construction.
    Salvage value--the amount received from the sale of utility property 
that has been removed or the amount at which the recovered material is 
charged to the utility's accounts, if retained for reuse.
    State transportation department--the transportation department of 
one of the 50 States, the District of Columbia, or Puerto Rico.
    Transportation department(TD)--that department, commission, board, 
or official of any State or political subdivison thereof, charged by its 
law with the responsibility for highway administration.
    Use and occupancy agreement--the document (written agreement or 
permit) by which the TD approves the use and occupancy of highway right-
of-way by utility facilities or private lines.
    Utility--a privately, publicly, or cooperatively owned line, 
facility or system for producing, transmitting, or distributing 
communications, cable television, power, electricity, light, heat, gas, 
oil, crude products, water, steam, waste, storm water not connected with 
highway drainage, or any other similar commodity, including any fire or 
police signal system or street lighting system, which directly or 
indirectly serves the public. The term utility shall also mean the 
utility company inclusive of any wholly owned or controlled subsidiary.
    Work order system--a procedure for accumulating and recording into 
separate accounts of a utility all costs to the utility in connection 
with any change in its system or plant.

[50 FR 20345, May 15, 1985, as amended at 65 FR 70311, Nov. 22, 2000]



Sec. 645.107  Eligibility.

    (a) When requested by the STD, Federal funds may participate, 
subject to the provisions of Sec. 645.103(d) of this part and at the 
pro rata share applicable, in an amount actually paid by an TD for the 
costs of utility relocations. Federal funds may participate in safety 
corrective measures made under the provisions of Sec. 645.107(k) of 
this part. Federal funds may also participate for relocations 
necessitated by the actual construction of highway project made under 
one or more of the following conditions when:
    (1) The STD certifies that the utility has the right of occupancy in 
its existing location because it holds the fee, an easement, or other 
real property interest, the damaging or taking of which is compensable 
in eminent domain,
    (2) The utility occupies privately or publicly owned land, including 
public road or street right-of-way, and the STD certifies that the 
payment by the TD is made pursuant to a law authorizing such payment in 
conformance with the provisions of 23 U.S.C. 123, and/or
    (3) The utility occupies publicy owned land, including public road 
and street right-of-way, and is owned by a public agency or political 
subdivision of the State, and is not required by law or agreement to 
move at its own expense, and the STD certifies that the TD has the legal 
authority or obligation to make such payments.
    (b) On projects which the STD has the authority to participate in 
project

[[Page 227]]

costs, Federal funds may not participate in payments made by a political 
subdivision for relocation of utility facilities, other than those 
proposed under the provisions of Sec. 645.107(k) of this part, when 
State law prohibits the STD from making payment for relocation of 
utility facilities.
    (c) On projects which the STD does not have the authority to 
participate in project costs, Federal funds may participate in payments 
made by a political subdivision for relocation of utility facilities 
necessitated by the actual construction of a highway project when the 
STD certifies that such payment is based upon the provisions of Sec. 
645.107(a) of this part and does not violate the terms of a use and 
occupancy agreement, or legal contract, between the utility and the TD 
or for utility safety corrective measures under the provisions of Sec. 
645.107(k) of this part.
    (d) Federal funds are not eligible to participate in any costs for 
which the utility contributes or repays the TD, except for utilities 
owned by the political subdivision on projects which qualify under the 
provisions of Sec. 645.107(c) of this part in which case the costs of 
the utility are considered to be costs of the TD.
    (e) The FHWA may deny Federal fund participation in any payments 
made by a TD for the relocation of utility facilities when such payments 
do not constitute a suitable basis for Federal fund participation under 
the provisions of title 23 U.S.C.
    (f) The rights of any public agency or political subdivision of a 
State under contract, franchise, or other instrument or agreement with 
the utility, pertaining to the utility's use and occupancy of publicly 
owned land, including public road and street right-of-way, shall be 
considered the rights of the STD in the absence of State law to the 
contrary.
    (g) In lieu of the individual certifications required by Sec. 
645.107(a) and (c), the STD may file a statement with the FHWA setting 
forth the conditions under which the STD will make payments for the 
relocation of utility facilities. The FHWA may approve Federal fund 
participation in utility relocations proposed by the STD under the 
conditions of the statement when the FHWA has made an affirmative 
finding that such statement and conditions form a suitable basis for 
Federal fund participation under the provisions of 23 U.S.C. 123.
    (h) Federal funds may not participate in the cost of relocations of 
utility facilities made solely for the benefit or convenience of a 
utility, its contractor, or a highway contractor.
    (i) When the advance installation of new utility facilities crossing 
or otherwise occupying the proposed right-of-way of a planned highway 
project is underway, or scheduled to be underway, prior to the time such 
right-of-way is purchased by or under control of the TD, arrangements 
should be made for such facilities to be installed in a manner that will 
meet the requirements of the planned highway project. Federal funds are 
eligible to participate in the additional cost incurred by the utility 
that are attributable to, and in accommodation of, the highway project 
provided such costs are incurred subsequent to authorization of the work 
by the FHWA. Subject to the other provisions of this regulation, Federal 
participation may be approved under the foregoing circumstances when it 
is demonstrated that the action taken is necessary to protect the public 
interest and the adjustment of the facility is necessary by reason of 
the actual construction of the highway project.
    (j) Federal funds are eligible to participate in the costs of 
preliminary engineering and allied services for utilities, the 
acquisition of replacement right-of-way for utilities, and the physical 
construction work associated with utility relocations. Such costs must 
be incurred by or on behalf of a utility after the date the work is 
included in an approved program and after the FHWA has authorized the 
STD to proceed in accordance with 23 CFR part 630, subpart A, Federal-
Aid Programs Approval and Project Authorization.
    (k) Federal funds may participate in projects solely for the purpose 
of implementing safety corrective measures

[[Page 228]]

to reduce the roadside hazards of utility facilities to the highway 
user. Safety corrective measures should be developed in accordance with 
the provisions of 23 CFR 645.209(k).

(Information collection requirements in paragraph (g) were approved by 
the Office of Management and Budget under control number 2125-0515)

[50 FR 20345, May 15, 1985, as amended at 53 FR 24932, July 1, 1988]



Sec. 645.109  Preliminary engineering.

    (a) As mutually agreed to by the TD and utility, and subject to the 
provisions of paragraph (b) of this section, preliminary engineering 
activities associated with utility relocation work may be done by:
    (1) The TD's or utility's engineering forces;
    (2) An engineering consultant selected by the TD, after consultation 
with the utility, the contract to be administered by the TD; or,
    (3) An engineering consultant selected by the utility, with the 
approval of the TD, the contract to be administered by the utility.
    (b) When a utility is not adequately staffed to pursue the necessary 
preliminary engineering and related work for the utility relocation, 
Federal funds may participate in the amount paid to engineers, 
architects, and others for required engineering and allied services 
provided such amounts are not based on a percentage of the cost of 
relocation. When Federal participation is requested by the STD in the 
cost of such services, the utility and its consultant shall agree in 
writing as to the services to be provided and the fees and arrangements 
for the services. Federal funds may participate in the cost of such 
services performed under existing written continuing contracts when it 
is demonstrated that such work is performed regularly for the utility in 
its own work and that the costs are reasonable.
    (c) The procedures in 23 CFR part 172, Administration of Engineering 
and Design Related Service Contracts, may be used as a guide for 
reviewing proposed consultant contracts.

[50 FR 20345, May 15, 1985, as amended at 60 FR 34850, July 5, 1995; 65 
FR 70311, Nov. 22, 2000]



Sec. 645.111  Right-of-way.

    (a) Federal participation may be approved for the cost of 
replacement right-of-way provided:
    (1) The utility has the right of occupancy in its existing location 
beause it holds the fee, an easement, or another real property interest, 
the damaging or taking of which is compensable in eminent domain, or the 
acquisition is made in the interest of project economy or is necessary 
to meet the requirements of the highway project, and
    (2) There will be no charge to the project for that portion of the 
utility's existing right-of-way being transferred to the TD for highway 
purposes.
    (b) The utility shall determine and make a written valuation of the 
replacement right-of-way that it acquires in order to justify amounts 
paid for such right-of-way. This written valuation shall be accomplished 
prior to negotiation for acquisition.
    (c) Acquisition of replacement right-of-way by the TD on behalf of a 
utility or acquisition of nonoperating real property from a utility 
shall be in accordance with the Uniform Relocation Assistance and Real 
Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.) and 
applicable right-of-way procedures in 23 CFR 710.203.
    (d) When the utility has the right-of-occupancy in its existing 
location because it holds the fee, an easement, or another real property 
interest, and it is not necessary by reason of the highway construction 
to adjust or replace the facilities located thereon, the taking of and 
damage to the utility's real property, including the disposal or removal 
of such facilities, may be considered a right-of-way transaction in 
accordance with provisions of the applicable right-of-way procedures in 
23 CFR 710.203.

[50 FR 20345, May 15, 1985, as amended at 64 FR 71289, Dec. 21, 1999]



Sec. 645.113  Agreements and authorizations.

    (a) On Federal-aid and direct Federal projects involving utility 
relocations, the utility and the TD shall agree in writing on their 
separate responsibilities for financing and accomplishing the relocation 
work. When Federal participation is requested, the agreement

[[Page 229]]

shall incorporate this regulation by reference and designate the method 
to be used for performing the work (by contract or force account) and 
for developing relocation costs. The method proposed by the utility for 
developing relocation costs must be acceptable to both the TD and the 
FHWA. The preferred method for the development of relocation costs by a 
utility is on the basis of actual direct and related indirect costs 
accumulated in accordance with a work order accounting procedure 
prescribed by the applicable Federal or State regulatory body.
    (b) When applicable, the written agreement shall specify the terms 
and amounts of any contribution or repayments made or to be made by the 
utility to the TD in connection with payments by the TD to the utility 
under the provisions of Sec. 645.107 of this regulation.
    (c) The agreement shall be supported by plans, specifications when 
required, and itemized cost estimates of the work agreed upon, including 
appropriate credits to the project, and shall be sufficiently 
informative and complete to provide the TD and the FHWA with a clear 
description of the work required.
    (d) When the relocation involves both work to be done at the TD's 
expense and work to be done at the expense of the utility, the written 
agreement shall state the share to be borne by each party.
    (e) In the event there are changes in the scope of work, extra work 
or major changes in the planned work covered by the approved agreement, 
plans, and estimates, Federal participation shall be limited to costs 
covered by a modification of the agreement, a written change, or extra 
work order approved by the TD and the FHWA.
    (f) When proposed utility relocation and adjustment work on a 
project for a specific utility company can be clearly defined and the 
cost can be accurately estimated, the FHWA may approve an agreement 
between the TD and the utility company for a lump-sum payment without 
later confirmation by audit of actual costs.
    (g) Except as otherwise provided by Sec. 645.113(h), authorization 
by the FHWA to the STD to proceed with the physical relocation of a 
utility's facilities may be given after:
    (1) The utility relocation work, or the right-of-way, or physical 
construction phase of the highway construction work is included in an 
approved Statewide transportation improvement program,
    (2) The appropriate environmental evaluation and public hearing 
procedures required by 23 CFR part 771, Environmental Impact and Related 
Procedures, have been satisfied.
    (3) The FHWA has reviewed and approved the plans, estimates, and 
proposed or executed agreements for the utility work and is furnished a 
schedule for accomplishing the work.
    (h) The FHWA may authorize the physical relocation of utility 
facilities before the requirements of Sec. 645.113(g)(2) are satisfied 
when the relocation or adjustment of utility facilities meets the 
requirements of Sec. 645.107(i) of this regulation.
    (i) Whenever the FHWA has authorized right-of-way acquisition under 
the hardship and protective buying provisions of 23 CFR 710.503, the 
FHWA may authorize the physical relocation of utility facilities located 
in whole or in part on such right-of-way.
    (j) When all efforts by the TD and utility fail to bring about 
written agreement of their separate responsibilities under the 
provisions of this regulation, the STD shall submit its proposal and a 
full report of the circumstances to the FHWA. Conditional authorizations 
for the relocation work to proceed may be given by the FHWA to the STD 
with the understanding that Federal funds will not be paid for work done 
by the utility until the STD proposal has been approved by the FHWA.
    (k) The FHWA will consider for approval any special procedure under 
State law, or appropriate administrative or judicial order, or under 
blanket master agreements with the utilities, that will fully accomplish 
all of the foregoing objectives and accelerate the advancement of the 
construction and completion of projects.

[50 FR 20345, May 15, 1985, as amended at 60 FR 34850, July 5, 1995; 64 
FR 71289, Dec. 21, 1999; 65 FR 70311, Nov. 22, 2000]

[[Page 230]]



Sec. 645.115  Construction.

    (a) Part 635, subpart B, of this title, Force Account Construction 
(justification required for force account work), states that it is cost-
effective for certain utility adjustments to be performed by a utility 
with its own forces and equipment, provided the utility is qualified to 
perform the work in a satisfactory manner. This cost-effectiveness 
finding covers minor work on the utility's existing facilities routinely 
performed by the utility with its own forces. When the utility is not 
adequately staffed and equipped to perform such work with its own forces 
and equipment at a time convenient to and in coordination with the 
associated highway construction, such work may be done by:
    (1) A contract awarded by the TD or utility to the lowest qualified 
bidder based on appropriate solicitation,
    (2) Inclusion as part of the TD's highway construction contract let 
by the TD as agreed to by the utility,
    (3) An existing continuing contract, provided the costs are 
reasonable, or
    (4) A contract for low-cost incidental work, such as tree trimming 
and the like, awarded by the TD or utility without competitive bidding, 
provided the costs are reasonable.
    (b) When it has been determined under part 635, subpart B, that the 
force account method is not the most cost-effective means for 
accomplishing the utility adjustment, such work is to be done under 
competitive bid contracts as described in Sec. 645.115(a) (1) and (2) 
or under an existing continuing contract provided it can be demonstrated 
this is the most cost-effective method.
    (c) Costs for labor, materials, equipment, and other services 
furnished by the utility shall be billed by the utility directly to the 
TD. The special provisions of contracts let by the utility or the TD 
shall be explicit in this respect. The costs of force account work 
performed for the utility by the TD and of contract work performed for 
the utility under a contract let by the TD shall be reported separately 
from the costs of other force account and contract items on the highway 
project.



Sec. 645.117  Cost development and reimbursement.

    (a) Developing and recording costs. (1) All utility relocation costs 
shall be recorded by means of work orders in accordance with an approved 
work order system except when another method of developing and recording 
costs, such as lump-sum agreement, has been approved by the TD and the 
FHWA. Except for work done under contracts, the individual and total 
costs properly reported and recorded in the utility's accounts in 
accordance with the approved method for developing such costs, or the 
lump-sum agreement, shall constitute the maximum amount on which Federal 
participation may be based.
    (2) Each utility shall keep its work order system or other approved 
accounting procedure in such a manner as to show the nature of each 
addition to or retirement from a facility, the total costs thereof, and 
the source or sources of cost. Separate work orders may be issued for 
additions and retirements. Retirements, however, may be included with 
the construction work order provided that all items relating to 
retirements shall be kept separately from those relating to 
construction.
    (3) The STD may develop, or work in concert with utility companies 
to develop, other acceptable costing methods, such as unit costs, to 
estimate and reimburse utility relocation expenditures. Such other 
methods shall be founded in generally accepted industry practices and be 
reasonably supported by recent actual expenditures. Unit costs should be 
developed periodically and supported annually by a maintained data base 
of relocation expenses. Development of any alternate costing method 
should consider the factors listed in paragraphs (b) through (g) of this 
section. Streamlining of the cost development and reimbursement 
procedures is encouraged so long as adequate accountability for Federal 
expenditures is maintained. Concurrence by the FHWA is required for any 
costing method used other than actual cost.
    (b) Direct labor costs. (1) Salaries and wages, at actual or average 
rates, and related expenses paid by the utility to individuals for the 
time worked on the

[[Page 231]]

project are reimbursable when supported by adequate records. This 
includes labor associated with preliminary engineering, construction 
engineering, right-of-way, and force account construction.
    (2) Salaries and expenses paid to individuals who are normally part 
of the overhead organization of the utility may be reimbursed for the 
time worked directly on the project when supported by adequate records 
and when the work performed by such individuals is essential to the 
project and could not have been accomplished as economically by 
employees outside the overhead organization.
    (3) Amounts paid to engineers, architects and others for services 
directly related to projects may be reimbursed.
    (c) Labor surcharges. (1) Labor surcharges include worker 
compensation insurance, public liability and property damage insurance, 
and such fringe benefits as the utility has established for the benefit 
of its employees. The cost of labor surcharges will be reimbursed at 
actual cost to the utility, or, at the option of the utility, average 
rates which are representative of actual costs may be used in lieu of 
actual costs if approved by the STD and the FHWA. These average rates 
should be adjusted at least once annually to take into account known 
anticipated changes and correction for any over or under applied costs 
for the preceding period.
    (2) When the utility is a self-insurer, there may be reimbursement 
at experience rates properly developed from actual costs. The rates 
cannot exceed the rates of a regular insurance company for the class of 
employment covered.
    (d) Overhead and indirect construction costs. (1) Overhead and 
indirect construction costs not charged directly to work order or 
construction accounts may be allocated to the relocation provided the 
allocation is made on an equitable basis. All costs included in the 
allocation shall be eligible for Federal reimbursement, reasonable, 
actually incurred by the utility, and consistent with the provisions of 
48 CFR part 31.
    (2) Costs not eligible for Federal reimbursement include, but are 
not limited to, the costs associated with advertising, sales promotion, 
interest on borrowings, the issuance of stock, bad debts, uncollectible 
accounts receivable, contributions, donations, entertainment, fines, 
penalties, lobbying, and research programs.
    (3) The records supporting the entries for overhead and indirect 
construction costs shall show the total amount, rate, and allocation 
basis for each additive, and are subject to audit by representatives of 
the State and Federal Government.
    (e) Material and supply costs. (1) Materials and supplies, if 
available, are to be furnished from company stock except that they may 
be obtained from other sources near the project site when available at a 
lower cost. When not available from company stock, they may be purchased 
either under competitive bids or existing continuing contracts under 
which the lowest available prices are developed. Minor quantities of 
materials and supplies and proprietary products routinely used in the 
utility's operation and essential for the maintenance of system 
compatibility may be excluded from these requirements. The utility shall 
not be required to change its existing standards for materials used in 
permanent changes to its facilities. Costs shall be determined as 
follows:
    (i) Materials and supplies furnished from company stock shall be 
billed at the current stock prices for such new or used materials at 
time of issue.
    (ii) Materials and supplies not furnished from company stock shall 
be billed at actual costs to the utility delivered to the project site.
    (iii) A reasonable cost for plant inspection and testing may be 
included in the costs of materials and supplies when such expense has 
been incurred. The computation of actual costs of materials and supplies 
shall include the deduction of all offered discounts, rebates, and 
allowances.
    (iv) The cost of rehabilitating rather than replacing existing 
utility facilities to meet the requirements of a project is 
reimbursable, provided this cost does not exceed replacement costs.
    (2) Materials recovered from temporary use and accepted for reuse by 
the utility shall be credited to the project at prices charged to the 
job, less a considertion for loss in service

[[Page 232]]

life at 10 percent. Materials recovered from the permanent facility of 
the utility that are accepted by the utility for return to stock shall 
be credited to the project at the current stock prices of such used 
materials. Materials recovered and not accepted for reuse by the 
utility, if determined to have a net sale value, shall be sold to the 
highest bidder by the TD or utility following an opportunity for TD 
inspection and appropriate solicitation for bids. If the utility 
practices a system of periodic disposal by sale, credit to the project 
shall be at the going prices supported by records of the utility.
    (3) Federal participation may be approved for the total cost of 
removal when either such removal is required by the highway construction 
or the existing facilities cannot be abandoned in place for aesthetic or 
safety reasons. When the utility facilities can be abandoned in place 
but the utility or highway constructor elects to remove and recover the 
materials, Federal funds shall not participate in removal costs which 
exceed the value of the materials recovered.
    (4) The actual and direct costs of handling and loading materials 
and supplies at company stores or material yards, and of unloading and 
handling recovered materials accepted by the utility at its stores or 
material yards are reimbursable. In lieu of actual costs, average rates 
which are representative of actual costs may be used if approved by the 
STD and the FHWA. These average rates should be adjusted at least once 
annually to take into account known anticipated changes and correction 
for any over or under applied costs for the preceding period. At the 
option of the utility, 5 percent of the amounts billed for the materials 
and supplies issued from company stores and material yards or the value 
of recovered materials will be reimbursed in lieu of actual or average 
costs for handling.
    (f) Equipment costs. The average or actual costs of operation, minor 
maintenance, and depreciation of utility-owned equipment may be 
reimbursed. Reimbursement for utility-owned vehicles may be made at 
average or actual costs. When utility-owned equipment is not available, 
reimbursement will be limited to the amount of rental paid (1) to the 
lowest qualified bidder, (2) under existing continuing contracts at 
reasonable costs, or (3) as an exception by negotiation when paragraph 
(f) (1) and (2) of this section are impractical due to project location 
or schedule.
    (g) Transportation costs. (1) The utility's cost, consistent with 
its overall policy, of necessary employee transportation and subsistence 
directly attributable to the project is reimbursable.
    (2) Reasonable cost for the movement of materials, supplies, and 
equipment to the project and necessary return to storage including the 
associated cost of loading and unloading equipment is reimbursable.
    (h) Credits. (1) Credit to the highway project will be required for 
the cost of any betterments to the facility being replaced or adjusted, 
and for the salvage value of the materials removed.
    (2) Credit to the highway project will be required for the accrued 
depreciation of a utility facility being replaced, such as a building, 
pumping station, filtration plant, power plant, substation, or any other 
similar operational unit. Such accrued depreciation is that amount based 
on the ratio between the period of actual length of service and total 
life expectancy applied to the original cost. Credit for accrued 
depreciation shall not be required for a segment of the utility's 
service, distribution, or transmission lines.
    (3) No betterment credit is required for additions or improvements 
which are:
    (i) Required by the highway project,
    (ii) Replacement devices or materials that are of equivalent 
standards although not identical,
    (iii) Replacement of devices or materials no longer regularly 
manufactured with next highest grade or size,
    (iv) Required by law under governmental and appropriate regulatory 
commission code, or
    (v) Required by current design practices regularly followed by the 
company in its own work, and there is a direct benefit to the highway 
project.
    (4) When the facilities, including equipment and operating 
facilities, described in Sec. 645.117(h)(2) are not being replaced, but 
are being rehabilitated

[[Page 233]]

and/or moved, as necessitated by the highway project, no credit for 
accrued depreciation is needed.
    (5) In no event will the total of all credits required under the 
provisions of this regulation exceed the total costs of adjustment 
exclusive of the cost of additions or improvements necessitated by the 
highway construction.
    (i) Billings. (1) After the executed TD/utility agreement has been 
approved by the FHWA, the utility may be reimbursed through the STD by 
progress billings for costs incurred. Cost for materials stockpiled at 
the project site or specifically purchased and delivered to the utility 
for use on the project may also be reimbursed on progress billings 
following approval of the executed TD/utility agreement.
    (2) The utility shall provide one final and complete billing of all 
costs incurred, or of the agreed-to lump-sum, within one year following 
completion of the utility relocation work, otherwise previous payments 
to the utility may be considered final, except as agreed to between the 
STD and the utility. Billings received from utilities more than one year 
following completion of the utility relocation work may be paid if the 
STD so desires, and Federal-aid highway funds may participate in these 
payments.
    (3) All utility cost records and accounts relating to the project 
are subject to audit by representatives of the State and Federal 
Government for a period of 3 years from the date final payment has been 
received by the utility.

(Information collection requirements in paragraph (i) were approved by 
the Office of Management and Budget under control number 2125-0159)

[50 FR 20345, May 15, 1985, as amended at 60 FR 34850, July 5, 1995; 65 
FR 70311, Nov. 22, 2000]



Sec. 645.119  Alternate procedure.

    (a) This alternate procedure is provided to simplify the processing 
of utility relocations or adjustments under the provisions of this 
regulation. Under this procedure, except as otherwise provided in 
paragraph (b) of this section, the STD is to act in the relative 
position of the FHWA for reviewing and approving the arrangements, fees, 
estimates, plans, agreements, and other related matters required by this 
regulation as prerequisites for authorizing the utility to proceed with 
and complete the work.
    (b) The scope of the STD's approval authority under the alternate 
procedure includes all actions necessary to advance and complete all 
types of utility work under the provisions of this regulation except in 
the following instances:
    (1) Utility relocations and adjustments involving major transfer, 
production, and storage facilities such as generating plants, power feed 
stations, pumping stations and reservoirs.
    (2) Utility relocations falling within the scope of Sec. 645.113 
(h), (i), and (j), and Sec. 645.107(i) of this regulation.
    (c) To adopt the alternate procedure, the STD must file a formal 
application for approval by the FHWA. The application must include the 
following:
    (1) The STD's written policies and procedures for administering and 
processing Federal-aid utility adjustments. Those policies and 
procedures must make adequate provisions with respect to the following:
    (i) Compliance with the requirements of this regulation, except as 
otherwise provided by Sec. 645.119(b), and the provisions of 23 CFR 
part 645, subpart B, Accommodation of Utilities.
    (ii) Advance utility liaison, planning, and coordination measures 
for providing adequate lead time and early scheduling of utility 
relocation to minimize interference with the planned highway 
construction.
    (iii) Appropriate administrative, legal, and engineering review and 
coordination procedures as needed to establish the legal basis of the 
TD's payment; the extent of eligibility of the work under State and 
Federal laws and regulations; the more restrictive payment standards 
under Sec. 645.103(d) of this regulation; the necessity of the proposed 
utility work and its compatibility with proposed highway improvements; 
and the uniform treatment of all utility matters and actions, consistent 
with sound management practices.
    (iv) Documentation of actions taken in compliance with STD policies 
and

[[Page 234]]

the provisions of this regulation, shall be retained by the STD.
    (2) A statement signed by the chief administrative officer of the 
STD certifying that:
    (i) Federal-aid utility relocations will be processed in accordance 
with the applicable provisions of this regulation, and the STD's utility 
policies and procedures submitted under Sec. 645.119(c)(1).
    (ii) Reimbursement will be requested only for those costs properly 
attributable to the proposed highway construction and eligible for 
participation under the provisions of this regulation.
    (d) The STD's application and any changes to it will be submitted to 
the FHWA for review and approval.
    (e) After the alternate procedure has been approved, the FHWA may 
authorize the STD to proceed with utility relocation on a project in 
accordance with the certification, subject to the following conditions:
    (1) The utility work must be included in an approved program.
    (2) The STD must submit a request in writing for such authorization. 
The request shall include a list of the utility relocations to be 
processed under the alternate procedure, along with the best available 
estimate of the total costs involved.
    (f) The FHWA may suspend approval of the alternate procedure when 
any FHWA review discloses noncompliance with the certification. Federal 
funds will not participate in relocation costs incurred that do not 
comply with the requirements under Sec. 645.119(c)(1).

(Information collection requirements in paragraph (c) were approved by 
the Office of Management and Budget under control number 2125-0533)

[50 FR 20345, May 15, 1985, as amended at 65 FR 70311, Nov. 22, 2000]



                  Subpart B_Accommodation of Utilities

    Source: 50 FR 20354, May 15, 1985, unless otherwise noted.



Sec. 645.201  Purpose.

    To prescribe policies and procedures for accommodating utility 
facilities and private lines on the right-of-way of Federal-aid or 
direct Federal highway projects.



Sec. 645.203  Applicability.

    This subpart applies to:
    (a) New utility installations within the right-of-way of Federal-aid 
or direct Federal highway projects,
    (b) Existing utility facilities which are to be retained, relocated, 
or adjusted within the right-of-way of active projects under development 
or construction when Federal-aid or direct Federal highway funds are 
either being or have been used on the involved highway facility. When 
existing utility installations are to remain in place without 
adjustments on such projects the transportation department and utility 
are to enter into an appropriate agreement as discussed in Sec. 645.213 
of this part,
    (c) Existing utility facilities which are to be adjusted or 
relocated under the provisions of Sec. 645.209(k), and
    (d) Private lines which may be permitted to cross the right-of-way 
of a Federal-aid or direct Federal highway project pursuant to State law 
and regulations and the provisions of this subpart. Longitudinal use of 
such right-of-way by private lines is to be handled under the provisions 
of 23 CFR 1.23(c).



Sec. 645.205  Policy.

    (a) Pursuant to the provisions of 23 CFR 1.23, it is in the public 
interest for utility facilities to be accommodated on the right-of-way 
of a Federal-aid or direct Federal highway project when such use and 
occupancy of the highway right-of-way do not adversely affect highway or 
traffic safety, or otherwise impair the highway or its aesthetic 
quality, and do not conflict with the provisions of Federal, State or 
local laws or regulations.
    (b) Since by tradition and practice highway and utility facilities 
frequently coexist within common right-of-way or along the same 
transportation corridors, it is essential in such situations that these 
public service facilities be compatibly designed and operated. In the 
design of new highway facilities consideration should be given to 
utility service needs of the area traversed if such service is to be 
provided from utility facilities on or near the

[[Page 235]]

highway. Similarly the potential impact on the highway and its users 
should be considered in the design and location of utility facilities on 
or along highway right-of-way. Efficient, effective and safe joint 
highway and utility development of transportation corridors is important 
along high speed and high volume roads, such as major arterials and 
freeways, particularly those approaching metropolitan areas where space 
is increasingly limited. Joint highway and utility planning and 
development efforts are encouraged on Federal-aid highway projects.
    (c) The manner is which utilities cross or otherwise occupy the 
right-of-way of a direct Federal or Federal-aid highway project can 
materially affect the highway, its safe operation, aesthetic quality, 
and maintenance. Therefore, it is necessary that such use and occupancy, 
where authorized, be regulated by transportation departments in a manner 
which preserves the operational safety and the functional and aesthetic 
quality of the highway facility. This subpart shall not be construed to 
alter the basic legal authority of utilities to install their facilities 
on public highways pursuant to law or franchise and reasonable 
regulation by transportation departments with respect to location and 
manner of installation.
    (d) When utilities cross or otherwise occupy the right-of-way of a 
direct Federal or Federal-aid highway project on Federal lands, and when 
the right-of-way grant is for highway purposes only, the utility must 
also obtain and comply with the terms of a right-of-way or other 
occupancy permit for the Federal agency having jurisdiction over the 
underlying land.

[50 FR 20354, May 15, 1985, as amended at 53 FR 2833, Feb. 2, 1988]



Sec. 645.207  Definitions.

    For the purpose of this regulation, the following definitions shall 
apply:
    Aesthetic quality--those desirable characteristics in the appearance 
of the highway and its environment, such as harmony between or blending 
of natural and manufactured objects in the environment, continuity of 
visual form without distracting interruptions, and simplicity of designs 
which are desirably functional in shape but without clutter.
    Border area--the area between the traveled way and the right-of-way 
line.
    Clear roadside policy--that policy employed by a transportation 
department to provide a clear zone in order to increase safety, improve 
traffic operations, and enhance the aesthetic quality of highways by 
designing, constructing and maintaining highway roadsides as wide, flat, 
and rounded as practical and as free as practical from natural or 
manufactured hazards such as trees, drainage structures, nonyielding 
sign supports, highway lighting supports, and utility poles and other 
ground-mounted structures. The policy should address the removal of 
roadside obstacles which are likely to be associated with accident or 
injury to the highway user, or when such obstacles are essential, the 
policy should provide for appropriate countermeasures to reduce hazards. 
Countermeasures include placing utility facilities at locations which 
protect out-of-control vehicles, using breakaway features, using impact 
attenuation devices, or shielding. In all cases full consideration shall 
be given to sound engineering principles and economic factors.
    Clear zone--the total roadside border area starting at the edge of 
the traveled way, available for safe use by errant vehicles. This area 
may consist of a shoulder, a recoverable slope, a non-recoverable slope, 
and/or the area at the toe of a non-recoverable slope available for safe 
use by an errant vehicle. The desired width is dependent upon the 
traffic volumes and speeds, and on the roadside geometry. The current 
edition of the AASHTO ``Roadside Design Guide'' should be used as a 
guide for establishing clear zones for various types of highways and 
operating conditions. This publication is available for inspection and 
copying from the FHWA Washington Headquarters and all FHWA Division 
Offices as prescribed in 49 CFR part 7. Copies of current AASHTO 
publications are available for purchase from the American Association of 
State Highway and Transportation Officials, Suite 225, 444

[[Page 236]]

North Capitol Street, NW., Washington, D.C. 20001, or electronically at 
http://www.aashto.org.
    Direct Federal highway projects--those active or completed highway 
projects such as projects under the Federal Lands Highways Program which 
are under the direct administration of the Federal Highway 
Administration (FHWA)
    Federal-aid highway projects--those active or completed highway 
projects administered by or through a State transportation department 
which involve or have involved the use of Federal-aid highway funds for 
the development, acquisition of right-of-way, construction or 
improvement of the highway or related facilities, including highway 
beautification projects under 23 U.S.C. 319, Landscaping and Scenic 
Enhancement.
    Freeway--a divided arterial highway with full control of access.
    Highway--any public way for vehicular travel, including the entire 
area within the right-of-way and related facilities constructed or 
improved in whole or in part with Federal-aid or direct Federal highway 
funds.
    Transportation department--that department, agency, commission, 
board, or official of any State or political subdivision thereof, 
charged by its law with the responsibility for highway administration.
    Private lines--privately owned facilities which convey or transmit 
the commodities outlined in the definition of utility facility of this 
section, but devoted exclusively to private use.
    Right-of-way--real property, or interests therein, acquired, 
dedicated or reserved for the construction, operation, and maintenance 
of a highway in which Federal-aid or direct Federal highway funds are or 
have been involved in any stage of development. Lands acquired under 23 
U.S.C. 319 shall be considered to be highway right-of-way.
    State transportation department--the transportation department of 
one of the 50 States, the District of Columbia, or Puerto Rico.
    Use and occupancy agreement--the document (written agreement or 
permit) by which the transportation department approves the use and 
occupancy of highway right-of-way by utility facilities or private 
lines.
    Utility facility--privately, publicly or cooperatively owned line, 
facility, or system for producing, transmitting, or distributing 
communications, cable television, power, electricity, light, heat, gas, 
oil, crude products, water, steam, waste, storm water not connected with 
highway drainage, or any other similar commodity, including any fire or 
police signal system or street lighting system, which directly or 
indirectly serves the public. The term utility shall also mean the 
utility company inclusive of any substantially owned or controlled 
subsidiary. For the purposes of this part, the term includes those 
utility-type facilities which are owned or leased by a government agency 
for its own use, or otherwise dedicated solely to governmental use. The 
term utility includes those facilities used solely by the utility which 
are a part of its operating plant.

[50 FR 20345, May 15, 1985, as amended at 51 FR 16834, May 7, 1986; 53 
FR 2833, Feb. 2, 1988; 55 FR 25828, June 25, 1990; 60 FR 34850, July 5, 
1995; 61 FR 12022, Mar. 25, 1996; 65 FR 70311, Nov. 22, 2000]



Sec. 645.209  General requirements.

    (a) Safety. Highway safety and traffic safety are of paramount, but 
not of sole, importance when accommodating utility facilities within 
highway right-of-way. Utilities provide an essential public service to 
the general public. Traditionally, as a matter of sound economic public 
policy and law, utilities have used public road right-of-way for 
transmitting and distributing their services. The lack of sufficient 
right-of-way width to accommodate utilities outside the desirable clear 
zone, in and of itself, is not a valid reason to preclude utilities from 
occupying the highway right-of-way. However, due to the nature and 
volume of highway traffic, the effect of such joint use on the traveling 
public must be carefully considered by transportation departments before 
approval of utility use of the right-of-way of Federal-aid or direct 
Federal highway projects is given. Adjustments in the operating 
characteristics of the utility or the highway or other special efforts 
may be necessary

[[Page 237]]

to increase the compatibility of utility-highway joint use. The 
possibility of this joint use should be a consideration in establishing 
right-of-way requirements for highway projects. In any event, the 
design, location, and manner in which utilities use and occupy the 
right-of-way of Federal-aid or direct Federal highway projects must 
conform to the clear roadside policies for the highway involved and 
otherwise provide for a safe traveling environment as required by 23 
U.S.C. 109(l)(1).
    (b) New above ground installations. On Federal-aid or direct Federal 
highway projects, new above ground utility installations, where 
permitted, shall be located as far from the traveled way as possible, 
preferably along the right-of-way line. No new above ground utility 
installations are to be allowed within the established clear zone of the 
highway unless a determination has been made by the transportation 
department that placement underground is not technically feasible or is 
unreasonably costly and there are no feasible alternate locations. In 
exceptional situations when it is essential to locate such above ground 
utility facilities within the established clear zone of the highway, 
appropriate countermeasures to reduce hazards shall be used. 
Countermeasures include placing utility facilities at locations which 
protect or minimize exposure to out-of-control vehicles, using breakaway 
features, using impact attenuation devices, using delineation, or 
shielding.
    (c) Installations within freeways. (1) Each State transportation 
department shall submit an accommodation plan in accordance with 
Sec. Sec. 645.211 and 645.215 which addresses how the State 
transportation department will consider applications for longitudinal 
utility installations within the access control lines of a freeway. This 
includes utility installations within interchange areas which must be 
constructed or serviced by direct access from the main lanes or ramps. 
If a State transportation department elects to permit such use, the plan 
must address how the State transportation department will oversee such 
use consistent with this subpart, Title 23 U.S.C., and the safe and 
efficient use of the highways.
    (2) Any accommodation plan shall assure that installations satisfy 
the following criteria:
    (i) The effects utility installations will have on highway and 
traffic safety will be ascertained, since in no case shall any use be 
permitted which would adversely affect safety.
    (ii) The direct and indirect environmental and economic effects of 
any loss of productive agricultural land or any productivity of any 
agricultural land which would result from the disapproval of the use of 
such right-of-way for accommodation of such utility facility will be 
evaluated.
    (iii) These environmental and economic effects together with any 
interference with or impairment of the use of the highway in such right-
of-way which would result from the use of such right-of-way for the 
accommodation of such utility facility will be considered.
    (iv) [Reserved]
    (v) A utility strip will be established along the outer edge of the 
right-of-way by locating a utility access control line between the 
proposed utility installation and the through roadway and ramps. 
Existing fences should be retained and, except along sections of 
freeways having frontage roads, planned fences should be located at the 
freeway right-of-way line. The State or political subdivision is to 
retain control of the utility strip right-of-way including its use by 
utility facilities. Service connections to adjacent properties shall not 
be permitted from within the utility strip.
    (3) Nothing in this part shall be construed as prohibiting a 
transportation department from adopting a more restrictive policy than 
that contained herein with regard to longitudinal utility installations 
along freeway right-of-way and access for constructing and/or for 
servicing such installations.
    (d) Uniform policies and procedures. For a transportation department 
to fulfill its responsibilities to control utility use of Federal-aid 
highway right-of-way within the State and its political subdivisions, it 
must exercise or cause to be exercised, adequate regulation over such 
use and occupancy through the establishment and enforcement of 
reasonably uniform policies

[[Page 238]]

and procedures for utility accommodation.
    (e) Private lines. Because there are circumstances when private 
lines may be allowed to cross or otherwise occupy the right-of-way of 
Federal-aid projects, transportation departments shall establish uniform 
policies for properly controlling such permitted use. When permitted, 
private lines must conform to the provisions of this part and the 
provisions of 23 CFR 1.23(c) for longitudinal installations.
    (f) Direct Federal highway projects. On direct Federal highway 
projects, the FHWA will apply, or cause to be applied, utility and 
private line accommodation policies similar to those required on 
Federal-aid highway projects. When appropriate, agreements will be 
entered into between the FHWA and the transportation department or other 
government agencies to ensure adequate control and regulation of use by 
utilities and private lines of the right-of-way on direct Federal 
highway projects.
    (g) Projects where state lacks authority. On Federal-aid highway 
projects where the State transportation department does not have legal 
authority to regulate highway use by utilities and private lines, the 
State transportation department must enter into formal agreements with 
those local officials who have such authority. The agreements must 
provide for a degree of protection to the highway at least equal to the 
protection provided by the State transportation department's utility 
accommodation policy approved under the provisions of Sec. 645.215(b) 
of this part. The project agreement between the State transportation 
department and the FHWA on all such Federal-aid highway projects shall 
contain a special provision incorporating the formal agreements with the 
responsible local officials.
    (h) Scenic areas. New utility installations, including those needed 
for highway purposes, such as for highway lighting or to serve a weigh 
station, rest area or recreation area, are not permitted on highway 
right-of-way or other lands which are acquired or improved with Federal-
aid or direct Federal highway funds and are located within or adjacent 
to areas of scenic enhancement and natural beauty. Such areas include 
public park and recreational lands, wildlife and waterfowl refuges, 
historic sites as described in 23 U.S.C. 138, scenic strips, overlooks, 
rest areas and landscaped areas. The State transportation department may 
permit exceptions provided the following conditions are met:
    (1) New underground or aerial installations may be permitted only 
when they do not require extensive removal or alteration of trees or 
terrain features visible to the highway user or impair the aesthetic 
quality of the lands being traversed.
    (2) Aerial installations may be permitted only when:
    (i) Other locations are not available or are unusually difficult and 
costly, or are less desirable from the standpoint of aesthetic quality,
    (ii) Placement underground is not technically feasible or is 
unreasonably costly, and
    (iii) The proposed installation will be made at a location, and will 
employ suitable designs and materials, which give the greatest weight to 
the aesthetic qualities of the area being traversed. Suitable designs 
include, but are not limited to, self-supporting armless, single-pole 
construction with vertical configuration of conductors and cable.
    (3) For new utility installations within freeways, the provisions of 
paragraph (c) of this section must also be satisfied.
    (i) Joint use agreements. When the utility has a compensable 
interest in the land occupied by its facilities and such land is to be 
jointly occupied and used for highway and utility purposes, the 
transportation department and utility shall agree in writing as to the 
obligations and responsibilities of each party. Such joint-use 
agreements shall incorporate the conditions of occupancy for each party, 
including the rights vested in the transportation department and the 
rights and privileges retained by the utility. In any event, the 
interest to be acquired by or vested in the transportation department in 
any portion of the right-of-way of a Federal-aid or direct Federal 
highway project to be vacated, used or occupied by utilities or private 
lines, shall be

[[Page 239]]

adequate for the construction, safe operation, and maintenance of the 
highway project.
    (j) Traffic control plan. Whenever a utility installation, 
adjustment or maintenance activity will affect the movement of traffic 
or traffic safety, the utility shall implement a traffic control plan 
and utilize traffic control devices as necessary to ensure the safe and 
expeditious movement of traffic around the work site and the safety of 
the utility work force in accordance with procedures established by the 
transportation department. The traffic control plan and the application 
of traffic control devices shall conform to the standards set forth in 
the current edition of the ``Manual on Uniform Traffic Control Devices'' 
(MUTCD) and 23 CFR part 630, subpart J. This publication is available 
for inspection and copying from the FHWA Washington Headquarters and all 
FHWA Division Offices as prescribed in 49 CFR part 7.
    (k) Corrective measures. When the transportation department 
determines that existing utility facilities are likely to be associated 
with injury or accident to the highway user, as indicated by accident 
history or safety studies, the transportation department shall initiate 
or cause to be initiated in consultation with the affected utilities, 
corrective measures to provide for a safer traffic environment. The 
corrective measures may include changes to utility or highway facilities 
and should be prioritized to maximum safety benefits in the most cost-
effective manner. The scheduling of utility safety improvements should 
take into consideration planned utility replacement or upgrading 
schedules, accident potential, and the availability of resources. It is 
expected that the requirements of this paragraph will result in an 
orderly and positive process to address the identified utility hazard 
problems in a timely and reasonable manner with due regard to the effect 
of the corrective measures on both the utility consumer and the road 
user. The type of corrective measures are not prescribed. Any requests 
received involving Federal participation in the cost of adjusting or 
relocating utility facilities pursuant to this paragrpah shall be 
subject to the provisions of 23 CFR part 645, subpart A, Utility 
Relocations, Adjustments and Reimbursement, and 23 CFR part 924, Highway 
Safety Improvement Program.
    (l) Wetlands. The installation of privately owned lines or conduits 
on the right-of-way of Federal-aid or direct Federal highway projects 
for the purpose of draining adjacent wetlands onto the highway right-of-
way is considered to be inconsistent with Executive Order 11990, 
Protection of Wetlands, dated May 24, 1977, and shall be prohibited.
    (m) Utility determination. In determining whether a proposed 
installation is a utility or not, the most important consideration is 
how the STD views it under its own State laws and/or regulations.

[50 FR 20354, May 15, 1985, as amended at 53 FR 2833, Feb. 2, 1988; 60 
FR 34851, July 5, 1995; 65 FR 70311, Nov. 22, 2000]



Sec. 645.211  State transportation department accommodation policies.

    The FHWA should use the current editions of the AASHTO publications, 
``A Guide for Accommodating Utilities Within Highway Right-of-Way'' and 
``Roadside Design Guide'' to assist in the evaluation of adequacy of STD 
utility accommodation policies. These publications are available for 
inspection from the FHWA Washington Headquarters and all FHWA Division 
Offices as prescribed in 49 CFR part 7. Copies of current AASHTO 
publications are available for purchase from the American Association of 
State Highway and Transportation Officials, Suite 225, 444 North Capitol 
Street NW., Washington, DC 20001, or electronically at http://
www.aashto.org. At a minimum, such policies shall make adequate 
provisions with respect to the following:
    (a) Utilities must be accommodated and maintained in a manner which 
will not impair the highway or adversely affect highway or traffic 
safety. Uniform procedures controlling the manner, nature and extent of 
such utility use shall be established.
    (b) Consideration shall be given to the effect of utility 
installations in regard to safety, aesthetic quality, and the costs or 
difficulty of highway and utility construction and maintenance.

[[Page 240]]

    (c) The State transportation department's standards for regulating 
the use and occupancy of highway right-of-way by utilities must include, 
but are not limited to, the following:
    (1) The horizontal and vertical location requirements and clearances 
for the various types of utilities must be clearly stated. These must be 
adequate to ensure compliance with the clear roadside policies for the 
particular highway involved.
    (2) The applicable provisions of government or industry codes 
required by law or regulation must be set forth or appropriately 
referenced, including highway design standards or other measures which 
the State transportation department deems necessary to provide adequate 
protection to the highway, its safe operation, aesthetic quality, and 
maintenance.
    (3) Specifications for and methods of installation; requirements for 
preservation and restoration of highway facilities, appurtenances, and 
natural features and vegetation on the right-of-way; and limitations on 
the utility's activities within the right-of-way including installation 
within areas set forth by Sec. 645.209(h) of this part should be 
prescribed as necessary to protect highway interests.
    (4) Measures necessary to protect traffic and its safe operation 
during and after installation of facilities, including control-of-access 
restrictions, provisions for rerouting or detouring traffic, traffic 
control measures to be employed, procedures for utility traffic control 
plans, limitations on vehicle parking and materials storage, protection 
of open excavations, and the like must be provided.
    (5) A State transportation department may deny a utility's request 
to occupy highway right-of-way based on State law, regulation, or 
ordinances or the State transportation department's policy. However, in 
any case where the provisions of this part are to be cited as the basis 
for disapproving a utility's request to use and occupy highway right-of-
way, measures must be provided to evaluate the direct and indirect 
environmental and economic effects of any loss of productive 
agricultural land or any impairment of the productivity of any 
agricultural land that would result from the disapproval. The 
environmental and economic effects on productive agricultural land 
together with the possible interference with or impairment of the use of 
the highway and the effect on highway safety must be considered in the 
decision to disapprove any proposal by a utility to use such highway 
right-of-way.
    (d) Compliance with applicable State laws and approved State 
transportation department utility accommodation policies must be 
assured. The responsible State transportation department's file must 
contain evidence of the written arrangements which set forth the terms 
under which utility facilities are to cross or otherwise occupy highway 
right-of-way. All utility installations made on highway right-of-way 
shall be subject to written approval by the State transportation 
department. However, such approval will not be required where so 
provided in the use and occupancy agreement for such matters as utility 
facility maintenance, installation of service connections on highways 
other than freeways, or emergency operations.
    (e) The State transportation department shall set forth in its 
utility accommodation plan detailed procedures, criteria, and standards 
it will use to evaluate and approve individual applications of utilities 
on freeways under the provisions of Sec. 645.209(c) of this part. The 
State transportation department also may develop such procedures, 
criteria and standards by class of utility. In defining utility classes, 
consideration may be given to distinguishing utility services by type, 
nature or function and their potential impact on the highway and its 
user.
    (f) The means and authority for enforcing the control of access 
restrictions applicable to utility use of controlled access highway 
facilities should be clearly set forth in the State transportation 
department plan.

(Information collection requirements in paragraphs (a), (b) and (c) were 
approved under control number 2125-0522, and paragraph (d) under control 
number 2125-0514)

[50 FR 20354, May 15, 1985, as amended at 53 FR 2834, Feb. 2, 1988; 55 
FR 25828, June 25, 1990; 65 FR 70312, Nov. 22, 2000]

[[Page 241]]



Sec. 645.213  Use and occupancy agreements (permits).

    The written arrangements, generally in the form of use and occupancy 
agreements setting forth the terms under which the utility is to cross 
or otherwise occupy the highway right-of-way, must include or 
incorporate by reference:
    (a) The transportation department standards for accommodating 
utilities. Since all of the standards will not be applicable to each 
individual utility installation, the use and occupancy agreement must, 
as a minimum, describe the requirements for location, construction, 
protection of traffic, maintenance, access restriction, and any special 
conditions applicable to each installation.
    (b) A general description of the size, type, nature, and extent of 
the utility facilities being located within the highway right-of-way.
    (c) Adequate drawings or sketches showing the existing and/or 
proposed location of the utility facilities within the highway right-of-
way with respect to the existing and/or planned highway improvements, 
the traveled way, the right-of-way lines and, where applicable, the 
control of access lines and approved access points.
    (d) The extent of liability and responsibilities associated with 
future adjustment of the utilities to accommodate highway improvements.
    (e) The action to be taken in case of noncompliance with the 
transportation department's requirements.
    (f) Other provisions as deemed necessary to comply with laws and 
regulations.

(Approved by the Office of Management and Budget under control number 
2125-0522)



Sec. 645.215  Approvals.

    (a) Each State transportation department shall submit a statement to 
the FHWA on the authority of utilities to use and occupy the right-of-
way of State highways, the State transportation department's power to 
regulate such use, and the policies the State transportation department 
employs or proposes to employ for accommodating utilities within the 
right-of-way Federal-aid highways under its jurisdiction. Statements 
previously submitted and approved by the FHWA need not be resubmitted 
provided the statement adequately addresses the requirements of this 
part. When revisions are deemed necessary the changes to the previously 
approved statement may be submitted separately to the FHWA for approval. 
The State transportation department shall include similar information on 
the use and occupancy of such highways by private lines where permitted. 
The State shall identify those areas, if any, of Federal-aid highways 
within its borders where the State transportation department is without 
legal authority to regulate use by utilities. The statement shall 
address the nature of the formal agreements with local officials 
required by Sec. 645.209(g) of this part. It is expected that the 
statements required by this part or necessary revisions to previously 
submitted and approved statements will be submitted to FHWA within 1 
year of the effective date of this regulation.
    (b) Upon determination by the FHWA that a State transportation 
department's policies satisfy the provisions of 23 U.S.C. 109, 111, and 
116, and 23 CFR 1.23 and 1.27, and meet the requirements of this 
regulation, the FHWA will approve their use on Federal-aid highway 
projects in that State
    (c) Any changes, additions or deletions the State transportation 
department proposes to the approved policies are subject to FHWA 
approval.
    (d) When a utility files a notice or makes an individual application 
or request to a STD to use or occupy the right-of-way of a Federal-aid 
highway project, the STD is not required to submit the matter to the 
FHWA for prior concurrence, except when the proposed installation is not 
in accordance with this regulation or with the STD's utility 
accommodation policy approved by the FHWA for use on Federal-aid highway 
projects.
    (e) The State transportation department's practices under the 
policies or agreements approved under Sec. 645.215(b)

[[Page 242]]

of this part shall be periodically reviewed by the FHWA.

(Information collection requirements in paragraph (a) were approved by 
the Office of Management and Budget under control number 2125-0514)

[50 FR 20354, May 15, 1985, as amended at 53 FR 2834, Feb. 2, 1988; 60 
FR 34851, July 5, 1995; 65 FR 70312, Nov. 22, 2000]



PART 646_RAILROADS--Table of Contents




             Subpart A_Railroad-Highway Insurance Protection

Sec.
646.101 Purpose.
646.103 Application.
646.105 Contractor's public liability and property damage insurance.
646.107 Railroad protective insurance.
646.109 Types of coverage.
646.111 Amount of coverage.

                   Subpart B_Railroad-Highway Projects

646.200 Purpose and applicability.
646.202 [Reserved]
646.204 Definitions.
646.206 Types of projects.
646.208 Funding.
646.210 Classification of projects and railroad share of the cost.
646.212 Federal share.
646.214 Design.
646.216 General procedures.
646.218 Simplified procedure for accelerating grade crossing 
          improvements.
646.220 Alternate Federal-State procedure.

Appendix to Subpart B of Part 646--Horizontal and Vertical Clearance 
          Provisions for Overpass and Underpass Structures

    Authority: 23 U.S.C. 109(e), 120(c), 130, 133(d)(1), and 315; 49 CFR 
1.48(b).



             Subpart A_Railroad-Highway Insurance Protection

    Source: 39 FR 36474, Oct. 10, 1974, unless otherwise noted.



Sec. 646.101  Purpose.

    The purpose of this part is to prescribe provisions under which 
Federal funds may be applied to the costs of public liability and 
property damage insurance obtained by contractors (a) for their own 
operations, and (b) on behalf of railroads on or about whose right-of-
way the contractors are required to work in the construction of highway 
projects financed in whole or in part with Federal funds.



Sec. 646.103  Application.

    (a) This part applies:
    (1) To a contractors' legal liability for bodily injury to, or death 
of, persons and for injury to, or destruction of, property.
    (2) To the liability which may attach to railroads for bodily injury 
to, or death of, persons and for injury to, or destruction of, property.
    (3) To damage to property owned by or in the care, custody or 
control of the railroads, both as such liability or damage may arise out 
of the contractor's operations, or may result from work performed by 
railroads at or about railroad rights-of-way in connection with projects 
financed in whole or in part with Federal funds.
    (b) Where the highway construction is under the direct supervision 
of the Federal Highway Administration (FHWA), all references herein to 
the State shall be considered as references to the FHWA.



Sec. 646.105  Contractor's public liability and property damage insurance.

    (a) Contractors may be subject to liability with respect to bodily 
injury to or death of persons, and injury to, or destruction of 
property, which may be suffered by persons other than their own 
employees as a result of their operations in connection with 
construction of highway projects located in whole or in part within 
railroad right-of-way and financed in whole or in part with Federal 
funds. Protection to cover such liability of contractors shall be 
furnished under regular contractors' public liability and property 
damage insurance policies issued in the names of the contractors. Such 
policies shall be so written as to furnish protection to contractors 
respecting their operations in performing work covered by their 
contract.
    (b) Where a contractor sublets a part of the work on any project to 
a subcontractor, the contractor shall be required to secure insurance 
protection in his own behalf under contractor's public liability and 
property damage insurance policies to cover any liability imposed on him 
by law for damages

[[Page 243]]

because of bodily injury to, or death of, persons and injury to, or 
destruction of, property as a result of work undertaken by such 
subcontractors. In addition, the contractor shall provide for and on 
behalf of any such subcontractors protection to cover like liability 
imposed upon the latter as a result of their operations by means of 
separate and individual contractor's public liability and property 
damage policies; or, in the alternative, each subcontractor shall 
provide satisfactory insurance on his own behalf to cover his individual 
operations.
    (c) The contractor shall furnish to the State highway department 
evidence satisfactory to such department and to the FHWA that the 
insurance coverages required herein have been provided. The contractor 
shall also furnish a copy of such evidence to the railroad or railroads 
involved. The insurance specified shall be kept in force until all work 
required to be performed shall have been satisfactorily completed and 
accepted in accordance with the contract under which the construction 
work is undertaken.



Sec. 646.107  Railroad protective insurance.

    In connection with highway projects for the elimination of hazards 
of railroad-highway crossings and other highway construction projects 
located in whole or in part within railroad right-of-way, railroad 
protective liability insurance shall be purchased on behalf of the 
railroad by the contractor. The standards for railroad protective 
insurance established by Sec. Sec. 646.109 through 646.111 shall be 
adhered to insofar as the insurance laws of the State will permit.

[39 FR 36474, Oct. 10, 1974, as amended at 47 FR 33955, Aug. 5, 1982]



Sec. 646.109  Types of coverage.

    (a) Coverage shall be limited to damage suffered by the railroad on 
account of occurrences arising out of the work of the contractor on or 
about the railroad right-of-way, independent of the railroad's general 
supervision or control, except as noted in Sec. 646.109(b) (4).
    (b) Coverage shall include:
    (1) Death of or bodily injury to passengers of the railroad and 
employees of the railroad not covered by State workmen's compensation 
laws;
    (2) Personal property owned by or in the care, custody or control of 
the railroads;
    (3) The contractor, or any of his agents or employees who suffer 
bodily injury or death as the result of acts of the railroad or its 
agents, regardless of the negligence of the railroad;
    (4) Negligence of only the following classes of railroad employees:
    (i) Any supervisory employee of the railroad at the job site;
    (ii) Any employee of the railroad while operating, attached to, or 
engaged on, work trains or other railroad equipment at the job site 
which are assigned exclusively to the contractor; or
    (iii) Any employee of the railroad not within (b)(4) (i) or (ii) who 
is specifically loaned or assigned to the work of the contractor for 
prevention of accidents or protection of property, the cost of whose 
services is borne specifically by the contractor or governmental 
authority.



Sec. 646.111  Amount of coverage.

    (a) The maximum dollar amounts of coverage to be reimbursed from 
Federal funds with respect to bodily injury, death and property damage 
is limited to a combined amount of $2 million per occurrence with an 
aggregate of $6 million applying separately to each annual period except 
as provided in paragraph (b) of this section.
    (b) In cases involving real and demonstrable danger of appreciably 
higher risks, higher dollar amounts of coverage for which premiums will 
be reimbursable from Federal funds shall be allowed. These larger 
amounts will depend on circumstances and shall be written for the 
individual project in accordance with standard underwriting practices 
upon approval of the FHWA.

[39 FR 36474, Oct. 10, 1974, as amended at 47 FR 33955, Aug. 5, 1982]



                   Subpart B_Railroad-Highway Projects

    Source: 40 FR 16059, Apr. 9, 1975, unless otherwise noted.

[[Page 244]]



Sec. 646.200  Purpose and applicability.

    (a) The purpose of this subpart is to prescribe policies and 
procedures for advancing Federal-aid projects involving railroad 
facilities.
    (b) This subpart, and all references hereinafter made to projects, 
applies to Federal-aid projects involving railroad facilities, including 
projects for the elimination of hazards of railroad-highway crossings, 
and other projects which use railroad properties or which involve 
adjustments required by highway construction to either railroad 
facilities or facilities that are jointly owned or used by railroad and 
utility companies.
    (c) Additional instructions for projects involving the elimination 
of hazards of railroad/highway grade crossings pursuant to 23 U.S.C. 130 
are set forth in 23 CFR part 924.
    (d) Procedures on reimbursement for projects undertaken pursuant to 
this subpart are set forth in 23 CFR part 140, subpart I.
    (e) Procedures on insurance required of contractors working on or 
about railroad right-of-way are set forth in 23 CFR part 646, subpart A.

[40 FR 16059, Apr. 9, 1975, as amended at 45 FR 20795, Mar. 31, 1980; 62 
FR 45328, Aug. 27, 1997]



Sec. 646.202  [Reserved]



Sec. 646.204  Definitions.

    For the purposes of this subpart, the following definitions apply:
    Active warning devices means those traffic control devices activated 
by the approach or presence of a train, such as flashing light signals, 
automatic gates and similar devices, as well as manually operated 
devices and crossing watchmen, all of which display to motorists 
positive warning of the approach or presence of a train.
    Company shall mean any railroad or utility company including any 
wholly owned or controlled subsidiary thereof.
    Construction shall mean the actual physical construction to improve 
or eliminate a railroad-highway grade crossing or accomplish other 
railroad involved work.
    A diagnostic team means a group of knowledgeable representatives of 
the parties of interest in a railroad-highway crossing or a group of 
crossings.
    Main line railroad track means a track of a principal line of a 
railroad, including extensions through yards, upon which trains are 
operated by timetable or train order or both, or the use of which is 
governed by block signals or by centralized traffic control.
    Passive warning devices means those types of traffic control 
devices, including signs, markings and other devices, located at or in 
advance of grade crossings to indicate the presence of a crossing but 
which do not change aspect upon the approach or presence of a train.
    Preliminary engineering shall mean the work necessary to produce 
construction plans, specifications, and estimates to the degree of 
completeness required for undertaking construction thereunder, including 
locating, surveying, designing, and related work.
    Railroad shall mean all rail carriers, publicly-owned, private, and 
common carriers, including line haul freight and passenger railroads, 
switching and terminal railroads and passenger carrying railroads such 
as rapid transit, commuter and street railroads.
    Utility shall mean the lines and facilities for producing, 
transmitting or distributing communications, power, electricity, light, 
heat, gas, oil, water, steam, sewer and similar commodities.

[40 FR 16059, Apr. 9, 1975, as amended at 62 FR 45328, Aug. 27, 1997]



Sec. 646.206  Types of projects.

    (a) Projects for the elimination of hazards, to both vehicles and 
pedestrians, of railroad-highway crossings may include but are not 
limited to:
    (1) Grade crossing elimination;
    (2) Reconstruction of existing grade separations; and
    (3) Grade crossing improvements.
    (b) Other railroad-highway projects are those which use railroad 
properties or involve adjustments to railroad facilities required by 
highway construction but do not involve the elimination of hazards of 
railroad-highway crossings. Also included are adjustments to facilities 
that are jointly owned or used by railroad and utility companies.

[[Page 245]]



Sec. 646.208  Funding.

    (a) Railroad/highway crossing projects may be funded through the 
Federal-aid funding source appropriate for the involved project.
    (b) Projects for the elimination of hazards at railroad/highway 
crossings may, at the option of the State, be funded with the funds 
provided by 23 U.S.C. 133(d)(1).

[62 FR 45328, Aug. 27, 1997]



Sec. 646.210  Classification of projects and railroad share of the cost.

    (a) State laws requiring railroads to share in the cost of work for 
the elimination of hazards at railroad-highway crossings shall not apply 
to Federal-aid projects.
    (b) Pursuant to 23 U.S.C. 130(b), and 49 CFR 1.48:
    (1) Projects for grade crossing improvements are deemed to be of no 
ascertainable net benefit to the railroads and there shall be no 
required railroad share of the costs.
    (2) Projects for the reconstruction of existing grade separations 
are deemed to generally be of no ascertainable net benefit to the 
railroad and there shall be no required railroad share of the costs, 
unless the railroad has a specific contractual obligation with the State 
or its political subdivision to share in the costs.
    (3) On projects for the elimination of existing grade crossings at 
which active warning devices are in place or ordered to be installed by 
a State regulatory agency, the railroad share of the project costs shall 
be 5 percent.
    (4) On projects for the elimination of existing grade crossings at 
which active warning devices are not in place and have not been ordered 
installed by a State regulatory agency, or on projects which do not 
eliminate an existing crossing, there shall be no required railroad 
share of the project cost.
    (c) The required railroad share of the cost under Sec. 646.210(b) 
(3) shall be based on the costs for preliminary engineering, right-of-
way and construction within the limits described below:
    (1) Where a grade crossing is eliminated by grade separation, the 
structure and approaches required to transition to a theoretical highway 
profile which would have been constructed if there were no railroad 
present, for the number of lanes on the existing highway and in 
accordance with the current design standards of the State highway 
agency.
    (2) Where another facility, such as a highway or waterway, requiring 
a bridge structure is located within the limits of a grade separation 
project, the estimated cost of a theoretical structure and approaches as 
described in Sec. 646.210(c) (1) to eliminate the railroad-highway 
grade crossing without considering the presence of the waterway or other 
highway.
    (3) Where a grade crossing is eliminated by railroad or highway 
relocation, the actual cost of the relocation project, the estimated 
cost of the relocation project, or the estimated cost of a structure and 
approaches as described in Sec. 646.210(c)(1), whichever is less.
    (d) Railroads may voluntarily contribute a greater share of project 
costs than is required. Also, other parties may voluntarily assume the 
railroad's share.



Sec. 646.212  Federal share.

    (a) General. (1) Federal funds are not eligible to participate in 
costs incurred solely for the benefit of the railroad.
    (2) At grade separations Federal funds are eligible to participate 
in costs to provide space for more tracks than are in place when the 
railroad establishes to the satisfaction of the State highway agency and 
FHWA that it has a definite demand and plans for installation of the 
additional tracks within a reasonable time.
    (3) The Federal share of the cost of a grade separation project 
shall be based on the cost to provide horizontal and/or vertical 
clearances used by the railroad in its normal practice subject to 
limitations as shown in the appendix or as required by a State 
regulatory agency.
    (b) The Federal share of railroad/highway crossing projects may be:
    (1) Regular pro rata sharing as provided by 23 U.S.C. 120(a) and 
120(b).
    (2) One hundred percent Federal share, as provided by 23 U.S.C. 
120(c).

[[Page 246]]

    (3) Ninety percent Federal share for funds made available through 23 
U.S.C. 133(d)(1).

[40 FR 16059, Apr. 9, 1975, as amended at 47 FR 33955, Aug. 5, 1982; 53 
FR 32218, Aug. 24, 1988; 62 FR 45328, Aug. 27, 1997]



Sec. 646.214  Design.

    (a) General. (1) Facilities that are the responsibility of the 
railroad for maintenance and operation shall conform to the 
specifications and design standards used by the railroad in its normal 
practice, subject to approval by the State highway agency and FHWA.
    (2) Facilities that are the responsibility of the highway agency for 
maintenance and operation shall conform to the specifications and design 
standards and guides used by the highway agency in its normal practice 
for Federal-aid projects.
    (b) Grade crossing improvements. (1) All traffic control devices 
proposed shall comply with the latest edition of the Manual on Uniform 
Traffic Control Devices for Streets and Highways supplemented to the 
extent applicable by State standards.
    (2) Pursuant to 23 U.S.C. 109(e), where a railroad-highway grade 
crossing is located within the limits of or near the terminus of a 
Federal-aid highway project for construction of a new highway or 
improvement of the existing roadway, the crossing shall not be opened 
for unrestricted use by traffic or the project accepted by FHWA until 
adequate warning devices for the crossing are installed and functioning 
properly.
    (3)(i) Adequate warning devices, under Sec. 646.214(b) (2) or on 
any project where Federal-aid funds participate in the installation of 
the devices are to include automatic gates with flashing light signals 
when one or more of the following conditions exist:
    (A) Multiple main line railroad tracks.
    (B) Multiple tracks at or in the vicinity of the crossing which may 
be occupied by a train or locomotive so as to obscure the movement of 
another train approaching the crossing.
    (C) High Speed train operation combined with limited sight distance 
at either single or multiple track crossings.
    (D) A combination of high speeds and moderately high volumes of 
highway and railroad traffic.
    (E) Either a high volume of vehicular traffic, high number of train 
movements, substantial numbers of schoolbuses or trucks carrying 
hazardous materials, unusually restricted sight distance, continuing 
accident occurrences, or any combination of these conditions.
    (F) A diagnostic team recommends them.
    (ii) In individual cases where a diagnostic team justifies that 
gates are not appropriate, FHWA may find that the above requirements are 
not applicable.
    (4) For crossings where the requirements of Sec. 646.214(b) (3) are 
not applicable, the type of warning device to be installed, whether the 
determination is made by a State regulatory agency, State highway 
agency, and/or the railroad, is subject to the approval of FHWA.
    (c) Grade crossing elimination. All crossings of railroads and 
highways at grade shall be eliminated where there is full control of 
access on the highway (a freeway) regardless of the volume of railroad 
or highway traffic.

[40 FR 16059, Apr. 9, 1975, as amended at 47 FR 33955, Aug. 5, 1982; 62 
FR 45328, Aug. 27, 1997]



Sec. 646.216  General procedures.

    (a) General. Unless specifically modified herein, applicable 
Federal-aid procedures govern projects undertaken pursuant to this 
subpart.
    (b) Preliminary engineering and engineering services. (1) As 
mutually agreed to by the State highway agency and railroad, and subject 
to the provisions of Sec. 646.216(b) (2), preliminary engineering work 
on railroad-highway projects may be accomplished by one of the following 
methods:
    (i) The State or railroad's engineering forces;
    (ii) An engineering consultant selected by the State after 
consultation with the railroad, and with the State administering the 
contract; or
    (iii) An engineering consultant selected by the railroad, with the 
approval of the State and with the railroad administering the contract.

[[Page 247]]

    (2) Where a railroad is not adequately staffed, Federal-aid funds 
may participate in the amounts paid to engineering consultants and 
others for required services, provided such amounts are not based on a 
percentage of the cost of construction, either under contracts for 
individual projects or under existing written continuing contracts where 
such work is regularly performed for the railroad in its own work under 
such contracts at reasonable costs.
    (c) Rights-of-way. (1) Acquisition of right-of-way by a State 
highway agency on behalf of a railroad or acquisition of nonoperating 
real property from a railroad shall be in accordance with the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 1970 
(42 U.S.C. 4601 et seq.) and applicable FHWA right-of-way procedures in 
23 CFR, chapter I, subchapter H. On projects for the elimination of 
hazards of railroad-highway crossings by the relocation of railroads, 
acquisition or replacement right-of-way by a railroad shall be in 
accordance with 42 U.S.C. 4601 et seq.
    (2) Where buildings and other depreciable structures of the railroad 
(such as signal towers, passenger stations, depots, and other buildings, 
and equipment housings) which are integral to operation of railroad 
traffic are wholly or partly affected by a highway project, the costs of 
work necessary to functionally restore such facilities are eligible for 
participation. However, when replacement of such facilities is 
necessary, credits shall be made to the cost of the project for:
    (i) Accrued depreciation, which is that amount based on the ratio 
between the period of actual length of service and total life expectancy 
applied to the original cost.
    (ii) Additions or improvements which provide higher quality or 
increased service capability of the facility and which are provided 
solely for the benefit of the railroad.
    (iii) Actual salvage value of the material recovered from the 
facility being replaced. Total credits to a project shall not be 
required in excess of the replacement cost of the facility.
    (3) Where Federal funds participate in the cost of replacement 
right-of-way, there will be no charge to the project for the railroad's 
existing right-of-way being transferred to the State highway agency 
except when the value of the right-of-way being taken exceeds the value 
of the replacement right-of-way.
    (d) State-railroad agreements. (1) Where construction of a Federal-
aid project requires use of railroad properties or adjustments to 
railroad facilities, there shall be an agreement in writing between the 
State highway agency and the railroad company.
    (2) The written agreement between the State and the railroad shall, 
as a minimum include the following, where applicable:
    (i) The provisions of this subpart and of 23 CFR part 140, subpart 
I, incorporated by reference.
    (ii) A detailed statement of the work to be performed by each party.
    (iii) Method of payment (either actual cost or lump sum),
    (iv) For projects which are not for the elimination of hazards of 
railroad-highway crossings, the extent to which the railroad is 
obligated to move or adjust its facilities at its own expense,
    (v) The railroad's share of the project cost,
    (vi) An itemized estimate of the cost of the work to be performed by 
the railroad,
    (vii) Method to be used for performing the work, either by railroad 
forces or by contract,
    (viii) Maintenance responsibility,
    (ix) Form, duration, and amounts of any needed insurance,
    (x) Appropriate reference to or identification of plans and 
specifications,
    (xi) Statements defining the conditions under which the railroad 
will provide or require protective services during performance of the 
work, the type of protective services and the method of reimbursement to 
the railroad, and
    (xii) Provisions regarding inspection of any recovered materials.
    (3) On work to be performed by the railroad with its own forces and 
where the State highway agency and railroad agree, subject to approval 
by FHWA, an agreement providing for a lump sum payment in lieu of later 
determination of actual costs may be used for any of the following:

[[Page 248]]

    (i) Installation or improvement of grade crossing warning devices 
and/or grade crossing surfaces, regardless of cost, or
    (ii) Any other eligible work where the estimated cost to the State 
of the proposed railroad work does not exceed $100,000 or
    (iii) Where FHWA finds that the circumstances are such that this 
method of developing costs would be in the best interest of the public.
    (4) Where the lump sum method of payment is used, periodic reviews 
and analyses of the railroad's methods and cost data used to develop 
lump sum estimates will be made.
    (5) Master agreements between a State and a railroad on an areawide 
or statewide basis may be used. These agreements would contain the 
specifications, regulations, and provisions required in conjunction with 
work performed on all projects. Supporting data for each project or 
group of projects must, when combined with the master agreement by 
reference, satisfy the provisions of Sec. 646.216(d)(2).
    (6) Official orders issued by regulatory agencies will be accepted 
in lieu of State-railroad agreements only where, together with 
supplementary written understandings between the State and the railroad, 
they include the items required by Sec. 646.216(d) (2).
    (7) In extraordinary cases where FHWA finds that the circumstances 
are such that requiring such agreement or order would not be in the best 
interest of the public, projects may be approved for construction with 
the aid of Federal funds, provided satisfactory commitments have been 
made with respect to construction, maintenance and the railroad share of 
project costs.
    (e) Authorizations. (1) The costs of preliminary engineering, right-
of-way acquisition, and construction incurred after the date each phase 
of the work is included in an approved statewide transportation 
improvement program and authorized by the FHWA are eligible for Federal-
aid participation. Preliminary engineering and right-of-way acquisition 
costs which are otherwise eligible, but incurred by a railroad prior to 
authorization by the FHWA, although not reimbursable, may be included as 
part of the railroad share of project cost where such a share is 
required.
    (2) Prior to issuance of authorization by FHWA either to advertise 
the physical construction for bids or to proceed with force account 
construction for railroad work or for other construction affected by 
railroad work, the following must be accomplished:
    (i) The plans, specifications and estimates must be approved by 
FHWA.
    (ii) A proposed agreement between the State and railroad must be 
found satisfactory by FHWA. Before Federal funds may be used to 
reimburse the State for railroad costs the executed agreement must be 
approved by FHWA. However, cost for materials stockpiled at the project 
site or specifically purchased and delivered to the company for use on 
the project may be reimbursed on progress billings prior to the approval 
of the executed State-Railroad Agreement in accordance with 23 CFR 
140.922(a) and Sec. 646.218 of this part.
    (iii) Adequate provisions must be made for any needed easements, 
right-of-way, temporary crossings for construction purposes or other 
property interests.
    (iv) The pertinent portions of the State-railroad agreement 
applicable to any protective services required during performance of the 
work must be included in the project specifications and special 
provisions for any construction contract.
    (3) In unusual cases, pending compliance with Sec. 646.216(e) (2) 
(ii), (iii) and (iv), authorization may be given by FHWA to advertise 
for bids for highway construction under conditions where a railroad 
grants a right-of-entry to its property as necessary to prosecute the 
physical construction.
    (f) Construction. (1) Construction may be accomplished by:
    (i) Railroad force account,
    (ii) Contracting with the lowest qualified bidder based on 
appropriate solicitation,
    (iii) Existing continuing contracts at reasonable costs, or
    (iv) Contract without competitive bidding, for minor work, at 
reasonable costs.
    (2) Reimbursement will not be made for any increased costs due to 
changes in plans:

[[Page 249]]

    (i) For the convenience of the contractor, or
    (ii) Not approved by the State and FHWA.
    (3) The State and FHWA shall be afforded a reasonable opportunity to 
inspect materials recovered by the railroad prior to disposal by sale or 
scrap. This requirement will be satisfied by the railroad giving written 
notice, or oral notice with prompt written confirmation, to the State of 
the time and place where the materials will be available for inspection. 
The giving of notice is the responsibility of the railroad, and it may 
be held accountable for full value of materials disposed of without 
notice.
    (4) In addition to normal construction costs, the following 
construction costs are eligible for participation with Federal-aid funds 
when approved by the State and FHWA:
    (i) The cost of maintaining temporary facilities of a railroad 
company required by and during the highway construction to the extent 
that such costs exceed the documented normal cost of maintaining the 
permanent facilities.
    (ii) The cost of stage or extended construction involving grade 
corrections and/or slope stabilization for permanent tracks of a 
railroad which are required to be relocated on new grade by the highway 
construction. Stage or extended construction will be approved by FHWA 
only when documentation submitted by the State establishes the proposed 
method of construction to be the only practical method and that the cost 
of the extended construction within the period specified is estimated to 
be less than the cost of any practicable alternate procedure.
    (iii) The cost of restoring the company's service by adustments of 
existing facilities away from the project site, in lieu of and not to 
exceed the cost of replacing, adjusting or relocating facilities at the 
project site.
    (iv) The cost of an addition or improvement to an existing railroad 
facility which is required by the highway construction.

[40 FR 16059, Apr. 9, 1975, as amended at 40 FR 29712, July 15, 1975; 47 
FR 33956, Aug. 5, 1982; 62 FR 45328, Aug. 27, 1997]



Sec. 646.218  Simplified procedure for accelerating grade crossing improvements.

    (a) The procedure set forth in this section is encouraged for use in 
simplifying and accelerating the processing of single or multiple grade 
crossing improvements.
    (b) Eligible preliminary engineering costs may include those 
incurred in selecting crossings to be improved, determining the type of 
improvement for each crossing, estimating the cost and preparing the 
required agreement.
    (c) The written agreement between a State and a railroad shall 
contain as a minimum:
    (1) Identification of each crossing location.
    (2) Description of improvement and estimate of cost for each 
crossing location.
    (3) Estimated schedule for completion of work at each location.
    (d) Following programming, authorization and approval of the 
agreement under Sec. 646.218(c), FHWA may authorize construction, 
including acquisition of warning device materials, with the condition 
that work at any particular location will not be undertaken until the 
proposed or executed State-railroad agreement under Sec. 646.216(d) (2) 
is found satisfactory by FHWA and the final plans, specifications, and 
estimates are approved and with the condition that only material 
actually incorporated into the project will be eligible for Federal 
participation.
    (e) Work programmed and authorized under this simplified procedure 
should include only that which can reasonably be expected to reach the 
construction stage within one year and be completed within two years 
after the initial authorization date.



Sec. 646.220  Alternate Federal-State procedure.

    (a) On other than Interstate projects, an alternate procedure may be 
used, at the election of the State, for processing certain types of 
railroad-highway work. Under this procedure, the State highway agency 
will act in the relative position of FHWA for reviewing and approving 
projects.

[[Page 250]]

    (b) The scope of the State's approval authority under the alternate 
procedure includes all actions necessary to advance and complete the 
following types of railroad-highway work:
    (1) All types of grade crossing improvements under Sec. 646.206(a) 
(3).
    (2) Minor adjustments to railroad facilities under Sec. 646.206(b).
    (c) The following types of work are to be reviewed and approved in 
the normal manner, as prescribed elsewhere in this subpart.
    (1) All projects under Sec. 646.206(a) (1) and (2).
    (2) Major adjustments to railroad facilities under Sec. 646.206(b).
    (d) Any State wishing to adopt the alternate procedure may file a 
formal application for approval by FHWA. The application must include 
the following:
    (1) The State's written policies and procedures for administering 
and processing Federal-aid railroad-highway work, which make adequate 
provisions with respect to all of the following:
    (i) Compliance with the provisions of title 23 U.S.C., title 23 CFR, 
and other applicable Federal laws and Executive Orders.
    (ii) Compliance with this subpart and 23 CFR part 140, subpart I and 
23 CFR part 172.
    (iii) For grade crossing safety improvements, compliance with the 
requirements of 23 CFR part 924.
    (2) A statement signed by the Chief Administrative Officer of the 
State highway agency certifying that:
    (i) The work will be done in accordance with the applicable 
provisions of the State's policies and procedures submitted under Sec. 
646.220(d)(1), and
    (ii) Reimbursement will be requested in only those costs properly 
attributable to the highway construction and eligible for Federal fund 
participation.
    (e) When FHWA has approved the alternate procedure, it may authorize 
the State to proceed in accordance with the State's certification, 
subject to the following conditions:
    (1) The work has been programmed.
    (2) The State submits in writing a request for such authorization 
which shall include a list of the improvements or adjustments to be 
processed under the alternate procedure, along with the best available 
estimate of cost.
    (f) The FHWA Regional Administrator may suspend approval of the 
certified procedure, where FHWA reviews disclose noncompliance with the 
certification. Federal-aid funds will not be eligible to participate in 
costs that do not qualify under Sec. 646.220(d)(1).

[40 FR 16059, Apr. 9, 1975; 40 FR 29712, July 15, 1975; 40 FR 31211, 
July 25, 1975; 42 FR 30835, June 17, 1977, as amended at 45 FR 20795, 
Mar. 31, 1980]



    Sec. Appendix to Subpart B of Part 646--Horizontal and Vertical 

       Clearance Provisions for Overpass and Underpass Structures

    The following implements provisions of 23 CFR 646.212(a)(3).
a. Lateral Geometrics
    A cross section with a horizontal distance of 6.1 meters, measured 
at right angles from the centerline of track at the top of rails, to the 
face of the embankment slope, may be approved. The 6.1-meters distance 
may be increased at individual structure locations as appropriate to 
provide for drainage if justified by a hydraulic analysis or to allow 
adequate room to accommodate special conditions, such as where heavy and 
drifting snow is a problem. The railroad must demonstrate that this is 
its normal practice to address these special conditions in the manner 
proposed. Additionally, this distance may also be increased up to 2.5 
meters as may be necessary for off-track maintenance equipment, provided 
adequate horizontal clearance is not available in adjacent spans and 
where justified by the presence of an existing maintenance road or by 
evidence of future need for such equipment. All piers should be placed 
at least 2.8 meters horizontally from the centerline of the track and 
preferably beyond the drainage ditch. For multiple track facilities, all 
dimensions apply to the centerline of the outside track.
    Any increase above the 6.1-meters horizontal clearance distance must 
be required by specific site conditions and be justified by the railroad 
to the satisfaction of the State highway agency (SHA) and the FHWA.
b. Vertical Clearance
    A vertical clearance of 7.1 meters above the top of rails, which 
includes an allowance for future ballasting of the railroad tracks, may 
be approved. Vertical clearance greater than 7.1 meters may be approved 
when the State regulatory agency having jurisdiction over such matters 
requires a vertical clearance in excess of 7.1 meters or on a site by 
site basis where justified by the railroad to the satisfaction of the 
SHA and the FHWA. A railroad's justification for increased vertical

[[Page 251]]

clearance should be based on an analysis of engineering, operational 
and/or economic conditions at a specific structure location.
    Federal-aid highway funds are also eligible to participate in the 
cost of providing vertical clearance greater than 7.1 meters where a 
railroad establishes to the satisfaction of a SHA and the FHWA that it 
has a definite formal plan for electrification of its rail system where 
the proposed grade separation project is located. The plan must cover a 
logical independent segment of the rail system and be approved by the 
railroad's corporate headquarters. For 25 kv line, a vertical clearance 
of 7.4 meters may be approved. For 50 kv line, a vertical clearance of 
8.0 meters may be approved.
    A railroad's justification to support its plan for electrification 
shall include maps and plans or drawings showing those lines to be 
electrified; actions taken by its corporate headquarters committing it 
to electrification including a proposed schedule; and actions initiated 
or completed to date implementing its electrification plan such as a 
showing of the amounts of funds and identification of structures, if 
any, where the railroad has expended its own funds to provide added 
clearance for the proposed electrification. If available, the railroad's 
justification should include information on its contemplated treatment 
of existing grade separations along the section of its rail system 
proposed for electrification.
    The cost of reconstructing or modifying any existing railroad-
highway grade separation structures solely to accommodate 
electrification will not be eligible for Federal-aid highway fund 
participation.
c. Railroad Structure Width
    Two and eight tenths meters of structure width outside of the 
centerline of the outside tracks may be approved for a structure 
carrying railroad tracks. Greater structure width may be approved when 
in accordance with standards established and used by the affected 
railroad in its normal practice.
    In order to maintain continuity of off-track equipment roadways at 
structures carrying tracks over limited access highways, consideration 
should be given at the preliminary design stage to the feasibility of 
using public road crossings for this purpose. Where not feasible, an 
additional structure width of 2.5 meters may be approved if designed for 
off-track equipment only.

[53 FR 32218, Aug. 24, 1988, as amended at 62 FR 45328, Aug. 27, 1997]



PART 650_BRIDGES, STRUCTURES, AND HYDRAULICS--Table of Contents




Subpart A_Location and Hydraulic Design of Encroachments on Flood Plains

Sec.
650.101 Purpose.
650.103 Policy.
650.105 Definitions.
650.107 Applicability.
650.109 Public involvement.
650.111 Location hydraulic studies.
650.113 Only practicable alternative finding.
650.115 Design standards.
650.117 Content of design studies.

 Subpart B_Erosion and Sediment Control on Highway Construction Projects

650.201 Purpose.
650.203 Policy.
650.205 Definitions.
650.207 Plans, specifications, and estimates.
650.209 Construction.
650.211 Guidelines.

             Subpart C_National Bridge Inspection Standards

650.301 Purpose.
650.303 Applicability.
650.305 Definitions.
650.307 Bridge inspection organization.
650.309 Qualifications of personnel.
650.311 Inspection frequency.
650.313 Inspection procedures.
650.315 Inventory.
650.317 Reference manuals.

     Subpart D_Highway Bridge Replacement and Rehabilitation Program

650.401 Purpose.
650.403 Definition of terms.
650.405 Eligible projects.
650.407 Application for bridge replacement or rehabilitation.
650.409 Evaluation of bridge inventory.
650.411 Procedures for bridge replacement and rehabilitation projects.
650.413 Funding.
650.415 Reports.

Subparts E-F [Reserved]

         Subpart G_Discretionary Bridge Candidate Rating Factor

650.701 Purpose.
650.703 Eligible projects.
650.705 Application for discretionary bridge funds.
650.707 Rating factor.
650.709 Special considerations.

[[Page 252]]

              Subpart H_Navigational Clearances for Bridges

650.801 Purpose.
650.803 Policy.
650.805 Bridges not requiring a USCG permit.
650.807 Bridges requiring a USCG permit.
650.809 Movable span bridges.

    Authority: 23 U.S.C. 109(a) and (h), 144, 151, 315, and 319; 33 
U.S.C. 401, 491 et seq.; 511 et seq.; sec. 4(b) of Pub. L. 97-134, 95 
Stat. 1699 (1981); sec. 161 of Pub. L. 97-424, 96 Stat. 2097, at 3135 
(1983); sec. 1311 of Pub. L. 105-178, as added by Pub. L. 105-206, 112 
Stat. 842 (1998); 23 CFR 1.32; 49 CFR 1.48(b); E.O. 11988 (3 CFR, 1977 
Comp., p. 117); Department of Transportation Order 5650.2, dated April 
23, 1979 (44 FR 24678).



Subpart A_Location and Hydraulic Design of Encroachments on Flood Plains

    Source: 44 FR 67580, Nov. 26, 1979, unless otherwise noted.



Sec. 650.101  Purpose.

    To prescribe Federal Highway Administration (FHWA) policies and 
procedures for the location and hydraulic design of highway 
encroachments on flood plains, including direct Federal highway projects 
administered by the FHWA.



Sec. 650.103  Policy.

    It is the policy of the FHWA:
    (a) To encourage a broad and unified effort to prevent uneconomic, 
hazardous or incompatible use and development of the Nation's flood 
plains,
    (b) To avoid longitudinal encroachments, where practicable,
    (c) To avoid significant encroachments, where practicable,
    (d) To minimize impacts of highway agency actions which adversely 
affect base flood plains,
    (e) To restore and preserve the natural and beneficial flood-plain 
values that are adversely impacted by highway agency actions,
    (f) To avoid support of incompatible flood-plain development,
    (g) To be consistent with the intent of the Standards and Criteria 
of the National Flood Insurance Program, where appropriate, and
    (h) To incorporate ``A Unified National Program for Floodplain 
Management'' of the Water Resources Council into FHWA procedures.



Sec. 650.105  Definitions.

    (a) Action shall mean any highway construction, reconstruction, 
rehabilitation, repair, or improvement undertaken with Federal or 
Federal-aid highway funds or FHWA approval.
    (b) Base flood shall mean the flood or tide having a 1-percent 
chance of being exceeded in any given year.
    (c) Base flood plain shall mean the area subject to flooding by the 
base flood.
    (d) Design Flood shall mean the peak discharge, volume if 
appropriate, stage or wave crest elevation of the flood associated with 
the probability of exceedance selected for the design of a highway 
encroachment. By definition, the highway will not be inundated from the 
stage of the design flood.
    (e) Encroachment shall mean an action within the limits of the base 
flood plain.
    (f) Floodproof shall mean to design and construct individual 
buildings, facilities, and their sites to protect against structural 
failure, to keep water out or to reduce the effects of water entry.
    (g) Freeboard shall mean the vertical clearance of the lowest 
structural member of the bridge superstructure above the water surface 
elevation of the overtopping flood.
    (h) Minimize shall mean to reduce to the smallest practicable amount 
or degree.
    (i) Natural and beneficial flood-plain values shall include but are 
not limited to fish, wildlife, plants, open space, natural beauty, 
scientific study, outdoor recreation, agriculture, aquaculture, 
forestry, natural moderation of floods, water quality maintenance, and 
groundwater recharge.
    (j) Overtopping flood shall mean the flood described by the 
probability of exceedance and water surface elevation at which flow 
occurs over the highway, over the watershed divide, or through 
structure(s) provided for emergency relief.

[[Page 253]]

    (k) Practicable shall mean capable of being done within reasonable 
natural, social, or economic constraints.
    (l) Preserve shall mean to avoid modification to the functions of 
the natural flood-plain environment or to maintain it as closely as 
practicable in its natural state.
    (m) Regulatory floodway shall mean the flood-plain area that is 
reserved in an open manner by Federal, State or local requirements, 
i.e., unconfined or unobstructed either horizontally or vertically, to 
provide for the discharge of the base flood so that the cumulative 
increase in water surface elevation is no more than a designated amount 
(not to exceed 1 foot as established by the Federal Emergency Management 
Agency (FEMA) for administering the National Flood Insurance Program).
    (n) Restore shall mean to reestablish a setting or environment in 
which the functions of the natural and beneficial flood-plain values 
adversely impacted by the highway agency action can again operate.
    (o) Risk shall mean the consequences associated with the probability 
of flooding attributable to an encroachment. It shall include the 
potential for property loss and hazard to life during the service life 
of the highway.
    (p) Risk analysis shall mean an economic comparison of design 
alternatives using expected total costs (construction costs plus risk 
costs) to determine the alternative with the least total expected cost 
to the public. It shall include probable flood-related costs during the 
service life of the facility for highway operation, maintenance, and 
repair, for highway-aggravated flood damage to other property, and for 
additional or interrupted highway travel.
    (q) Significant encroachment shall mean a highway encroachment and 
any direct support of likely base flood-plain development that would 
involve one or more of the following construction-or flood-related 
impacts:
    (1) A significant potential for interruption or termination of a 
transportation facility which is needed for emergency vehicles or 
provides a community's only evacuation route.
    (2) A significant risk, or
    (3) A significant adverse impact on natural and beneficial flood-
plain values.
    (r) Support base flood-plain development shall mean to encourage, 
allow, serve, or otherwise facilitate additional base flood-plain 
development. Direct support results from an encroachment, while indirect 
support results from an action out of the base flood plain.



Sec. 650.107  Applicability.

    (a) The provisions of this regulation shall apply to all 
encroachments and to all actions which affect base flood plains, except 
for repairs made with emergency funds (23 CFR part 668) during or 
immediately following a disaster.
    (b) The provisions of this regulation shall not apply to or alter 
approvals or authorizations which were given by FHWA pursuant to 
regulations or directives in effect before the effective date of this 
regulation.



Sec. 650.109  Public involvement.

    Procedures which have been established to meet the public 
involvement requirements of 23 CFR part 771 shall be used to provide 
opportunity for early public review and comment on alternatives which 
contain encroachments.

[53 FR 11065, Apr. 5, 1988]



Sec. 650.111  Location hydraulic studies.

    (a) National Flood Insurance Program (NFIP) maps or information 
developed by the highway agency, if NFIP maps are not available, shall 
be used to determine whether a highway location alternative will include 
an encroachment.
    (b) Location studies shall include evaluation and discussion of the 
practicability of alternatives to any longitudinal encroachments.
    (c) Location studies shall include discussion of the following 
items, commensurate with the significance of the risk or environmental 
impact, for all alternatives containing encroachments and for those 
actions which would support base flood-plain development:
    (1) The risks associated with implementation of the action,

[[Page 254]]

    (2) The impacts on natural and beneficial flood-plain values,
    (3) The support of probable incompatible flood-plain development,
    (4) The measures to minimize flood-plain impacts associated with the 
action, and
    (5) The measures to restore and preserve the natural and beneficial 
flood-plain values impacted by the action.
    (d) Location studies shall include evaluation and discussion of the 
practicability of alternatives to any significant encroachments or any 
support of incompatible flood-plain development.
    (e) The studies required by Sec. 650.111 (c) and (d) shall be 
summarized in environmental review documents prepared pursuant to 23 CFR 
part 771.
    (f) Local, State, and Federal water resources and flood-plain 
management agencies should be consulted to determine if the proposed 
highway action is consistent with existing watershed and flood-plain 
management programs and to obtain current information on development and 
proposed actions in the affected watersheds.



Sec. 650.113  Only practicable alternative finding.

    (a) A proposed action which includes a significant encroachment 
shall not be approved unless the FHWA finds that the proposed 
significant encroachment is the only practicable alternative. This 
finding shall be included in the final environmental document (final 
environmental impact statement or finding of no significant impact) and 
shall be supported by the following information:
    (1) The reasons why the proposed action must be located in the flood 
plain,
    (2) The alternatives considered and why they were not practicable, 
and
    (3) A statement indicating whether the action conforms to applicable 
State or local flood-plain protection standards.
    (b) [Reserved]

[44 FR 67580, Nov. 26, 1979, as amended at 48 FR 29274, June 24, 1983]



Sec. 650.115  Design standards.

    (a) The design selected for an encroachment shall be supported by 
analyses of design alternatives with consideration given to capital 
costs and risks, and to other economic, engineering, social and 
environmental concerns.
    (1) Consideration of capital costs and risks shall include, as 
appropriate, a risk analysis or assessment which includes:
    (i) The overtopping flood or the base flood, whichever is greater, 
or
    (ii) The greatest flood which must flow through the highway drainage 
structure(s), where overtopping is not practicable. The greatest flood 
used in the analysis is subject to state-of-the-art capability to 
estimate the exceedance probability.
    (2) The design flood for encroachments by through lanes of 
Interstate highways shall not be less than the flood with a 2-percent 
chance of being exceeded in any given year. No minimum design flood is 
specified for Interstate highway ramps and frontage roads or for other 
highways.
    (3) Freeboard shall be provided, where practicable, to protect 
bridge structures from debris- and scour-related failure.
    (4) The effect of existing flood control channels, levees, and 
reservoirs shall be considered in estimating the peak discharge and 
stage for all floods considered in the design.
    (5) The design of encroachments shall be consistent with standards 
established by the FEMA, State, and local governmental agencies for the 
administration of the National Flood Insurance Program for:
    (i) All direct Federal highway actions, unless the standards are 
demonstrably inappropriate, and
    (ii) Federal-aid highway actions where a regulatory floodway has 
been designated or where studies are underway to establish a regulatory 
floodway.
    (b) Rest area buildings and related water supply and waste treatment 
facilities shall be located outside the base flood plain, where 
practicable. Rest area buildings which are located on the base flood 
plain shall be floodproofed against damage from the base flood.
    (c) Where highway fills are to be used as dams to permanently 
impound water more than 50 acre-feet (6.17x10\4\ cubic metres) in volume 
or 25 feet (7.6

[[Page 255]]

metres) deep, the hydrologic, hydraulic, and structural design of the 
fill and appurtenant spillways shall have the approval of the State or 
Federal agency responsible for the safety of dams or like structures 
within the State, prior to authorization by the Division Administrator 
to advertise for bids for construction.



Sec. 650.117  Content of design studies.

    (a) The detail of studies shall be commensurate with the risk 
associated with the encroachment and with other economic, engineering, 
social or environmental concerns.
    (b) Studies by highway agencies shall contain:
    (1) The hydrologic and hydraulic data and design computations,
    (2) The analysis required by Sec. 650.115(a), and
    (3) For proposed direct Federal highway actions, the reasons, when 
applicable, why FEMA criteria (44 CFR 60.3, formerly 24 CFR 1910.3) are 
demonstrably inappropriate.
    (c) For encroachment locations, project plans shall show:
    (1) The magnitude, approximate probability of exceedance and, at 
appropriate locations, the water surface elevations associated with the 
overtopping flood or the flood of Sec. 650.115(a)(1)(ii), and
    (2) The magnitude and water surface elevation of the base flood, if 
larger than the overtopping flood.



 Subpart B_Erosion and Sediment Control on Highway Construction Projects

    Source: 59 FR 37939, July 26, 1994, unless otherwise noted.



Sec. 650.201  Purpose.

    The purpose of this subpart is to prescribe policies and procedures 
for the control of erosion, abatement of water pollution, and prevention 
of damage by sediment deposition from all construction projects funded 
under title 23, United States Code.



Sec. 650.203  Policy.

    It is the policy of the Federal Highway Administration (FHWA) that 
all highways funded in whole or in part under title 23, United States 
Code, shall be located, designed, constructed and operated according to 
standards that will minimize erosion and sediment damage to the highway 
and adjacent properties and abate pollution of surface and ground water 
resources. Guidance for the development of standards used to minimize 
erosion and sediment damage is referenced in Sec. 650.211 of this part.



Sec. 650.205  Definitions.

    Erosion control measures and practices are actions that are taken to 
inhibit the dislodging and transporting of soil particles by water or 
wind, including actions that limit the area of exposed soil and minimize 
the time the soil is exposed.
    Permanent erosion and sediment control measures and practices are 
installations and design features of a construction project which remain 
in place and in service after completion of the project.
    Pollutants are substances, including sediment, which cause 
deterioration of water quality when added to surface or ground waters in 
sufficient quantity.
    Sediment control measures and practices are actions taken to control 
the deposition of sediments resulting from surface runoff.
    Temporary erosion and sediment control measures and practices are 
actions taken on an interim basis during construction to minimize the 
disturbance, transportation, and unwanted deposition of sediment.



Sec. 650.207  Plans, specifications and estimates.

    (a) Emphasis shall be placed on erosion control in the preparation 
of plans, specifications and estimates.
    (b) All reasonable steps shall be taken to insure that highway 
project designs for the control of erosion and sedimentation and the 
protection of water quality comply with applicable standards and 
regulations of other agencies.

[39 FR 36332, Oct. 9, 1974]



Sec. 650.209  Construction.

    (a) Permanent erosion and sediment control measures and practices 
shall be established and implemented at the

[[Page 256]]

earliest practicable time consistent with good construction and 
management practices.
    (b) Implementation of temporary erosion and sediment control 
measures and practices shall be coordinated with permanent measures to 
assure economical, effective, and continuous control throughout 
construction.
    (c) Erosion and sediment control measures and practices shall be 
monitored and maintained or revised to insure that they are fulfilling 
their intended function during the construction of the project.
    (d) Federal-aid funds shall not be used in erosion and sediment 
control actions made necessary because of contractor oversight, 
carelessness, or failure to implement sufficient control measures.
    (e) Pollutants used during highway construction or operation and 
material from sediment traps shall not be stockpiled or disposed of in a 
manner which makes them susceptible to being washed into any watercourse 
by runoff or high water. No pollutants shall be deposited or disposed of 
in watercourses.



Sec. 650.211  Guidelines.

    (a) The FHWA adopts the AASHTO Highway Drainage Guidelines, Volume 
III, ``Erosion and Sediment Control in Highway Construction,'' 1992,\1\ 
as guidelines to be followed on all construction projects funded under 
title 23, United States Code. These guidelines are not intended to 
preempt any requirements made by or under State law if such requirements 
are more stringent.
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    \1\ This document is available for inspection from the FHWA 
headquarters and field offices as prescribed by 49 CFR part 7, appendix 
D. It may be purchased from the American Association of State Highway 
and Transportation Officials offices at Suite 225, 444 North Capitol 
Street, NW., Washington, DC 20001.
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    (b) Each State highway agency should apply the guidelines referenced 
in paragraph (a) of this section or apply its own guidelines, if these 
guidelines are more stringent, to develop standards and practices for 
the control of erosion and sediment on Federal-aid construction 
projects. These specific standards and practices may reference available 
resources, such as the procedures presented in the AASHTO ``Model 
Drainage Manual,'' 1991.\2\
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    \2\ This document is available for inspection from the FHWA 
headquarters and field offices as prescribed by 49 CFR part 7, appendix 
D. It may be purchased from the American Association of State Highway 
and Transportation Officials offices at Suite 225, 444 North Capitol 
Street, NW., Washington, DC 20001.
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    (c) Consistent with the requirements of section 6217(g) of the 
Coastal Zone Act Reauthorization Amendments of 1990 (Pub. L. 101-508, 
104 Stat. 1388-299), highway construction projects funded under title 
23, United States Code, and located in the coastal zone management areas 
of States with coastal zone management programs approved by the United 
States Department of Commerce, National Oceanic and Atmospheric 
Administration, should utilize ``Guidance Specifying Management Measures 
for Sources of Nonpoint Source Pollution in Coastal Waters,'' 84-B-92-
002, U.S. EPA, January 1993.\3\ State highway agencies should refer to 
this Environmental Protection Agency guidance document for the design of 
projects within coastal zone management areas.
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    \3\ This document is available for inspection and copying as 
prescribed by 49 CFR part 7, appendix D.
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