[Federal Register Volume 61, Number 20 (Tuesday, January 30, 1996)]
[Proposed Rules]
[Pages 2973-2981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1156]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 630, 635 and 771

[FHWA Docket No. 96-3]
RIN 2125-AD58


Federal-Aid Project Agreement and Contract Procedures

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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

SUMMARY: The FHWA proposes to amend its regulation on project 
agreements. The Intermodal Surface Transportation Efficiency Act 
(ISTEA) of 1991 modified the requirement that preliminary engineering 
and right-of-way projects must be advanced to the construction stage 
within certain time limits. Changes to the agreement provisions are 
being proposed to reflect these adjustments. Additionally, procedures 
would be added to provide flexibility in the format of the agreement 
document and to permit the development of a single document to serve as 
both the project authorization and project agreement document. Other 
changes would be made to shorten the agreement document and to add 
clarity to the process.

    The FHWA also proposes to amend its regulation on contract 
procedures by incorporating into it provisions regarding overruns in 
contract time that would be removed from the project agreement 
regulation. The FHWA believes this material more appropriately belongs 
under contract procedures.

DATES: Written comments are due on or before April 1, 1996. Comments 
received after that date will be considered to the extent practicable.

ADDRESSES: All written, signed comments should refer to the docket 
number that appears at the top of this document and should be submitted 
to Federal Highway Administration, Office of Chief Counsel, Room 4232, 
HCC-10, 400 Seventh Street, SW., Washington, DC 20590. All comments and 
suggestions received will be available for examination at the above 
address between 8:30 a.m. and 3:30 p.m., e.t., Monday through Friday, 
except Federal holidays. Those desiring notification of receipt of 
comments must include a self-addressed, stamped postcard.

FOR FURTHER INFORMATION CONTACT: Jack Wasley, Office of Engineering, 
202-366-0450, or Wilbert Baccus, Office of the Chief Counsel, 202-366-
0780, FHWA, 400 Seventh Street, SW., Washington, DC 20590. Office hours 
are from 7:45 a.m. to 4:15 p.m. e.t., Monday through Friday except 
Federal holidays.

SUPPLEMENTARY INFORMATION: Under the provisions of 23 U.S.C. 110, a 
formal agreement between the State highway agency and the FHWA is 
required for Federal-aid highway projects. This agreement, referred to 
as the ``project agreement,'' is in essence a written contract between 
the State and the Federal Government defining the extent of the work to 
be undertaken, the State and the Federal shares of a project's cost, 
and commitments concerning maintenance of the project.
    The present regulation, 23 CFR 630, subpart C, provides further 
requirements concerning the project agreement. It includes detailed 
instructions on preparation of the project agreement, a standard form 
for the agreement, and an assemblage of agreement provisions that are 
part of the standard form. This is a longstanding regulation and no 
significant changes have been made to it in several years.
    It is the FHWA's desire to update and modify the existing 
regulation to incorporate needed changes to reflect adjustments made by 
the ISTEA, Pub. L. 102-240, 105 Stat. 1914, to streamline the project 
agreement form and provisions, and to allow more versatility in its 
use. The proposed changes are discussed in the following section-by-
section analysis.

Section-by-Section Analysis

Section 630.301  Purpose

    The statement of purpose would be revised with minor changes for 
clarity.

Section 630.302  Definitions

    It is proposed to remove Sec. 630.302. The terms calendar day, 
contract time, incentives/disincentives for early completion, 
liquidated damages, and workday would be relocated to 23 CFR 635.102. 
The terms bond issue project, 

[[Page 2974]]
Federal-aid highway project, and highway planning and research project 
have such commonly recognized meanings that they would be removed from 
the regulation.
    Since it is proposed to move Sec. 630.305, Agreement provisions 
regarding overrun in contract time, without modification to 23 CFR 
635.127, definitions relevant to Sec. 630.305, i.e., certification 
acceptance project, Division Administrator, and State highway agency, 
would be removed from Sec. 630.302.

Section 630.303  Policy

    Section 630.303 would be combined with Sec. 630.304 to create a new 
Sec. 630.303, Preparation of agreement. A State would continue to be 
required to prepare a project agreement for each Federal-aid highway 
and FHWA planning and research project. However, it is proposed to 
eliminate Form PR-2 (Federal-Aid Project Agreement) and the 
instructions on its preparation. Instead, a State would develop its own 
form for the project agreement, provided it contains information 
identified as necessary by the regulation.
    Additionally, the current practice of allowing the project 
agreement and project authorization (as required under 23 CFR 630, 
subpart A) to be combined into one document would be incorporated into 
the regulation. This section also would allow the use of electronic 
forms and signatures as developed and implemented by the FHWA.
    Although the Form PR-2 would be eliminated from the regulation, it 
is anticipated a sample project agreement form would be added as 
nonregulatory guidance in the Federal-Aid Policy Guide. For 
illustrative purposes only, a copy of a sample project agreement is 
shown in Figure 1.

Section 630.304  Preparation of Agreement

    This section would be eliminated because of the proposal to combine 
Sec. 630.304 with Sec. 630.303 to create a new Sec. 630.303 with the 
section heading, Preparation of agreement. As discussed, the regulation 
would no longer provide for use of a specific form. Instead, a State 
would be allowed the flexibility to use whatever format is suitable to 
provide the information required for a project agreement document.

Section 630.305  Agreement Provisions Regarding Overruns in Contract 
Time

    This section, which covers provisions regarding overruns in 
contract time, would be relocated to 23 CFR 635.127, without 
modification. Because these provisions deal with aspects of contract 
administration, they would more appropriately be included in FHWA's 
regulation on contract procedures, 23 CFR 635, subpart A.

Section 630.306  Modification of Original Agreement

    It is proposed to revise this section and redesignate it as new 
Sec. 630.305 with retention of the same section heading. A State would 
continue to be required to prepare a modification to a project 
agreement as changes occur. However, it is proposed to eliminate the 
specified Form PR-2A (Modification of Federal-Aid Project Agreement). 
Instead, a State could develop its own form for modification of project 
agreement, provided it contains necessary information as identified by 
the regulation.
    Although the Form PR-2A would be eliminated from the regulation, it 
is anticipated that a sample form for a modification of project 
agreement would be added as nonregulatory guidance in FHWA's Federal-
Aid Policy Guide (available for copying and inspection as prescribed at 
49 CFR Part 7, appendix D). For illustrative purposes only, a copy of a 
sample modification of project agreement is shown in Figure 2.

Section 630.307  Agreement Provisions

    A new section would be added identifying the provisions that must 
be a part of each agreement. Currently, the Form PR-2 contains 20 
boilerplate provisions. These provisions take up three pages and add 
considerably to the bulk of the form. In addition, many provisions just 
restate requirements of law that apply to Federal-aid projects in 
general.
    It is FHWA's desire to simplify the project agreement by 
eliminating all the boilerplate provisions from the agreement itself. 
The provisions that are necessary would be included in this section of 
the regulation. The simplified project agreement would then, by 
reference to this section, incorporate the provisions into each 
agreement. The following discussion covers each of the existing 20 
boilerplate provisions and describes what deletions or revisions are 
being proposed.
    Provision 1, Responsibility for Work, would be eliminated and 
replaced with the general provision that now appears on the top front 
of the sample project agreement form. (This would appear as 
Sec. 630.307(a) in the proposed regulation.) Under this general 
provision, the State agrees to comply with title 23, United States Code 
(U.S.C.), the regulations implementing title 23, and the policies and 
procedures established by the FHWA. In addition, language has been 
added reflecting that States must also comply with all other applicable 
Federal laws and regulations. This general provision is broad in scope 
and there is little need for other provisions, such as, Provision 1 
which covers only a limited feature of title 23, U.S.C.
    Provision 2, Highway Planning and Research Project, would be 
eliminated. Requirements concerning planning, research funding, and 
projects are set forth in 23 CFR 420. In light of proposed new 
Provision 1 and its broad scope, there is no need for Provision 2.
    Provision 3, Project for Acquisition of Rights-of-Way, would be 
retained (proposed Sec. 630.307(c)(1)) because it corresponds to a 
requirement in 23 U.S.C. 108(a) that the agreement between the State 
and the FHWA shall include a provision that construction shall begin 
within a specified period of time. However, Provision 3 would be 
modified to change the specified time period from 10 years to 20 years. 
This reflects an amendment to 23 U.S.C. 108(a) resulting from passage 
of section 1017(a) of the ISTEA.
    Provision 4, Preliminary Engineering Projects, would be retained 
(proposed Sec. 630.307(c)(2)) but modified. Prior to passage of the 
ISTEA, this provision represented an administrative decision by the 
FHWA to require repayment of Federal-aid highway funds authorized for 
preliminary engineering if right-of-way acquisition or actual 
construction had not begun within 5 years after authorization of the 
preliminary engineering. The general concept of this provision is now 
found in the statute; section 1016(a) of the ISTEA incorporated this 
provision into 23 U.S.C. 102(b). One significant difference between the 
statutory provision and the existing FHWA practice is that 10 years 
instead of 5 years must pass before payback is required. Provision 4 
would be modified to reflect the 10-year payback period.
    Provision 5, Interstate System Project, would be eliminated. 
Requirements for agreements relating to use of and access to rights-of-
way on the Interstate system are contained in 23 U.S.C. 111. In light 
of proposed new Provision 1 and its broad scope, there is no need for 
Provision 5.
    Provision 6, Project for Construction in Advance of Apportionment, 
would be eliminated. The requirement in Provision 6(a) is adequately 
covered in 23 U.S.C. 115. Provision 6(b) is considered superfluous.
    Provision 7, Stage Construction, would be eliminated. This is dated 
policy that is no longer appropriate in many cases. 

[[Page 2975]]

    Provision 8, Bond Issue Projects, would be eliminated. Requirements 
concerning bond projects are found in 23 U.S.C. 122 and the 
implementing regulation 23 CFR 630, subpart G. In light of proposed new 
Provision 1 and its broad scope, there would be no need for Provision 
8.
    Provision 9, Special Highway and Planning Research Project, would 
be eliminated. Requirements on planning and research projects are set 
forth in 23 CFR 420. In light of proposed new Provision 1 and its broad 
scope, there would be no need for Provision 9.
    Provision 10, Parking Regulation and Traffic Control, would be 
eliminated. The State is ultimately responsible for any project 
undertaken with the cooperation of another government agency (23 CFR 
1.3) and for maintenance of the project (23 U.S.C. 116 and 23 CFR 
1.27). Adequately maintaining a project includes the issue of parking 
regulations and traffic control. In light of proposed new Provision 1 
and its broad scope, there would be no need for Provision 10.
    Provision 11, Signing and Marking, would be eliminated. The FHWA 
believes that 23 U.S.C. 109(d) and the implementing regulations in 23 
CFR 655 adequately address this issue. In light of proposed new 
Provision 1 and its broad scope, there would be no need for Provision 
11.
    Provision 12, Maintenance, would be eliminated. Maintenance 
requirements for Federal-aid highway projects are found in 23 U.S.C. 
116. In light of proposed new Provision 1 and its broad scope, there 
would be no need for Provision 12.
    Provision 13, Liquidated Damages, would be eliminated. Requirements 
concerning liquidated damages are contained in FHWA regulations 
(presently in 23 CFR 630, subpart C, although this proposed rulemaking 
would transfer these requirements to 23 CFR 635, subpart A). In light 
of proposed new Provision 1 and its broad scope, there would be no need 
for Provision 13.
    Provision 14, Implementation of Clear Air Act and Federal Water 
Pollution Control Act, would be eliminated. These are requirements of 
Federal law and they apply to Federal-aid projects in general. The 
existing reference in the project agreement to these other Federal laws 
serves no legal purpose and is considered extraneous information that 
could be removed from the form.
    Provisions 15, 16 and 17, covering Equal Opportunity, 
Nondiscrimination, and Minority Business Enterprises, would be 
eliminated. These same requirements are expressed in 23 CFR 200, 230, 
and 633 subpart A. The three provisions have been updated and 
incorporated into the Form FHWA-1273, ``Required Contract Provisions, 
Federal-Aid Construction Contracts.'' Subpart A of part 633 contains 
the regulatory requirements for Form FHWA-1273. In light of proposed 
new Provision 1 and its broad scope, there would be no need for 
Provisions 15, 16 and 17.
    Provision 18, Bicycle Transportation and Pedestrian Walkways, would 
be eliminated. The requirements of this provision are found in 23 
U.S.C. 217 and 23 CFR 652. In light of proposed new Provision 1 and its 
broad scope, there would be no need for Provision 18.
    Provision 19, Modified or Terminated Highway Projects, would be 
eliminated. This provision merely highlights exceptions to the payback 
requirements that are found in other existing regulations. In light of 
proposed new Provision 1 and its broad scope, there would not be a need 
for Provision 19.
    Provision 20, Environmental Impact Mitigation Features, would be 
removed from 23 CFR Part 630 and moved to 23 CFR Part 771. The 
requirements of this provision ensure that State Highway agencies 
comply with Federal mitigation standards as directed by the Council on 
Environmental Quality (CEQ) regulations for implementing National 
Environmental Policy Act (NEPA)(40 CFR 1505.3). The State Highway 
agencies would then be required to comply with 23 CFR 771 through the 
broad scope of proposed new Provision 1.
    New provisions would be added to require that certain 
certifications be given to the FHWA. These certifications would be: 
Sec. 630.307(c)(3) for drug-free workplace certification required by 49 
CFR 29.630, Sec. 630.307 (c)(4) for suspension/debarment certification 
required by 49 CFR 29.510, and Sec. 630.307(c)(5) for lobbying 
certification required by 49 CFR 20.110. States must provide these 
certifications for each project. Placing language in the project 
agreement as part of the general provisions is considered an effective 
solution to providing a separate certification action for every 
project.
    The FHWA is considering whether specific requirements of applicable 
Federal laws and regulations should be expressly covered in the 
proposed regulation. Proposed Sec. 630.307(a) provides that the States 
generally agree, in the project agreement process, to comply with all 
other applicable Federal laws and regulations. This general provision 
would include laws such as title VI of the 1964 Civil Rights Act. The 
FHWA is considering whether reference should be made to specific laws, 
such as title VI. One possible option, for example, would be to have 
the regulation require certification to the FHWA by the State that it 
has met the Standard DOT title VI Assurance requirements, just as the 
proposed rule would require certification for a drug-free work-place or 
lobbying. Another option would be to list on the revised project 
agreement certain Federal laws, such as title VI, with which the State 
agrees to comply by signing the agreement itself. Comment is solicited 
on the need to specifically refer to other non-title 23 Federal laws 
and regulations with which the States must comply, such as through a 
statement incorporating those laws and regulations by reference or 
listing them directly on the project agreement form.

Appendix A--Federal-Aid Project Agreement, Form PR-2

    The existing Form PR-2 would be eliminated. No specific form for 
the project agreement would be specified. Instead, a State would have 
the flexibility to develop its own form provided it includes the 
appropriate information. For illustrative purposes only, a copy of a 
sample project agreement is shown in Figure 1.

Appendix B--Modification of Federal-Aid Project Agreement, Form PR-2A

    The existing Form PR-2A would be eliminated. No specific form for 
the modification of project agreement would be specified. Instead, a 
State would have the flexibility to develop its own form provided it 
includes the appropriate information. For illustrative purposes only, a 
copy of a sample modification of project agreement is shown in Figure 
2.

Appendix C--Federal-Aid Project Agreement (National Cooperative Highway 
Research Program), Form PR-2.1

    This form would be eliminated. It is no longer needed because the 
greater flexibility for the project agreement process would allow for 
planning and research project requirements.

Section 635.102  Definitions

    This section would incorporate the definitions contained in 
Sec. 630.302(b), (d), (h), (i), and (k). These definitions apply to 
Sec. 630.305, Agreement provisions regarding overrun in contract time. 
Due to the proposal to move Sec. 630.305 to Sec. 635.127, the 
definitions contained in Sec. 630.302(b), (d), (h), (i), and (k) would 
be moved and inserted in alphabetical order into the definitions 

[[Page 2976]]
currently in this section. The term Secondary Road Plan would be 
removed as this plan no longer exists.

Section 635.127  Agreement Provisions Regarding Overruns in Contract 
Time

    It is proposed to redesignate Sec. 630.305 as Sec. 635.127. The 
text of the section would remain unchanged.
    The following table is provided to assist the user in locating 
regulatory paragraph changes proposed by this rulemaking:

------------------------------------------------------------------------
                Old section                          New section        
------------------------------------------------------------------------
630.301...................................  630.301.                    
630.302...................................  Removed (except (b), (d),   
                                             (h), (i), and (k).         
630.302(b)................................  635.102.                    
630.302(d)................................  635.102.                    
630.302(h)................................  635.102.                    
630.302(i)................................  635.102.                    
630.302(k)................................  635.102.                    
630.303...................................  630.303.                    
630.304...................................  630.303.                    
630.305...................................  635.127.                    
630.306...................................  630.305.                    
Appendix A................................  Removed.                    
Prov. 1...................................  Removed.                    
Prov. 2...................................  Removed.                    
Prov. 3...................................  630.307(c)(1).              
Prov. 4...................................  630.307(c)(2).              
Prov. 5 through 19........................  Removed.                    
Prov. 20..................................  771.109(d).                 
Appendix B................................  Removed.                    
Appendix C................................  Removed.                    
------------------------------------------------------------------------


BILLING CODE 4910-22-P
      

[[Page 2977]]
    [GRAPHIC][TIFF OMITTED]TP30JA96.004
    


[[Page 2978]]
    [GRAPHIC][TIFF OMITTED]TP30JA96.005
    


BILLING CODE 4910-22-C

[[Page 2979]]


Rulemaking Analyses and Notices

    All comments received before the close of business on the comment 
closing date indicated above will be considered and will be available 
for examination in the docket at the above address. Comments received 
after the comment closing date will be filed in the docket and will be 
considered to the extent practicable, but the FHWA may issue a final 
rule at any time after the close of the comment period. In addition to 
late comments, the FHWA will also continue to file relevant information 
in the docket as it becomes available after the comment closing date, 
and interested persons should continue to examine the docket for new 
material.

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    The FHWA has determined that this action is not a significant 
regulatory action within the meaning of Executive Order 12866 or 
significant within the meaning of Department of Transportation 
regulatory policies and procedures. The proposed amendments would 
update the Federal-aid project agreement regulation to conform to 
recent laws, regulations, or guidance and to clarify existing policies. 
It is anticipated that the economic impact of this rulemaking will be 
minimal; therefore, a full regulatory evaluation is not required.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the FHWA has evaluated the effects of this rule on small 
entities. Based on the evaluation, the FHWA certifies that this action 
will not have a significant economic impact on a substantial number of 
small entities. The proposed amendments would clarify or simplify 
procedures used by State highway agencies in accordance with existing 
laws, regulations, or guidance.

Executive Order 12612 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that this action does not have sufficient federalism implications to 
warrant the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number 20.205, 
Highway Planning and Construction. The regulations implementing 
Executive Order 12372 regarding intergovernmental consultation on 
Federal programs and activities apply to this program.

Paperwork Reduction Act

    The information collection requirements associated with this 
rulemaking in Sec. 630.303 have been approved by the Office of 
Management and Budget under control number OMB 2125-0529 and expire 
June 30, 1997. The information collection requirements associated with 
this rulemaking would update and modify existing requirements to 
reflect statutory changes to the project agreement process enacted by 
the ISTEA, streamline the project agreement form and provisions, and 
allow more versatility in its use.

National Environmental Policy Act

    The agency has analyzed this action for the purpose of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has 
determined that this action would not have any effect on the quality of 
the environment.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects in 23 CFR Parts 630, 635, and 771

    Government contracts, Grant programs--Transportation, Highways and 
roads, Project agreement procedures.
    In consideration of the foregoing, the FHWA proposes to amend Title 
23, Code of Federal Regulations, by revising Parts 630, 635, and 771 as 
set forth below.

    Issued on: January 12, 1996.
Rodney E. Slater,
Federal Highway Administrator.

PART 630--PRECONSTRUCTION PROCEDURES

    1. The authority citation for part 630 is revised to read as 
follows and all other authority citations which appear throughout part 
630 are removed:

    Authority: 23 U.S.C. 105, 106, 109, 110, 115, 315, 320, and 
402(a); 23 CFR 1.32; 49 CFR 1.48(b).

PART 635--[AMENDED]

    2. The authority citation for part 635 is revised to read as 
follows:

    Authority: 23 U.S.C. 101(note), 109, 112, 113, 114, 116, 117, 
119, 128, and 315; 31 U.S.C. 6506; 42 U.S.C. 3334, 4601 et seq.; 23 
CFR 1.32; 49 CFR 1.48(b); sec. 1041(a), Pub. L. 102-240, 105 Stat. 
1914.


Sec. 630.305  [Redesignated as Sec. 635.127]

    3. Section 630.305 is redesignated as Sec. 635.127.
    4. Part 630, subpart C is revised to read as follows:

Subpart C--Project Agreements

Sec.
630.301  Purpose.
630.303  Preparation of agreement.
630.305  Modification of original agreement.
630.307  Agreement provisions.


Sec. 630.301  Purpose.

    The purpose of this subpart is to prescribe the procedures for the 
execution of the project agreement required by 23 U.S.C. 110(a) for 
Federal-aid projects, except for forest highway projects pursuant to 23 
U.S.C. 204, and for non-highway public mass transit projects 
administered by the Federal Transit Administration.


Sec. 630.303  Preparation of agreement.

    (a) The State highway agency (SHA) shall prepare a project 
agreement for each Federal-aid highway and FHWA planning and research 
project eligible for Federal-aid funding.
    (b) The SHA may develop the project agreement in a format 
acceptable to both the SHA and the FHWA provided the following are 
included:
    (1) A description of the project location including State and 
project termini;
    (2) The Federal-aid project number;
    (3) The phases of work covered by the agreement along with the 
effective date of authorization for each phase;
    (4) The total project cost and amount of Federal funds under 
agreement;
    (5) The Federal share expressed as either a pro rata percentage or 
a lump sum;
    (6) A statement that the State accepts and will comply with the 
agreement provisions set forth in 23 CFR 630.307; and
    (7) Signatures of officials from both the State and the FHWA and 
date executed.
    (c) The project agreement may be combined with the project 
authorization required under 23 CFR 630, Subpart A.
    (d) The SHA may use an electronic version of the agreement as 
provided by the FHWA.


[[Page 2980]]

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


Sec. 630.305  Modification of original agreement.

    (a) When changes are needed to the original project agreement, a 
modification of agreement shall be prepared.
    (b) The SHA may develop the modification of project agreement in a 
format acceptable to both the SHA 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 SHA may use an electronic version of the modification of 
project agreement as provided by the FHWA.


Sec. 630.307  Agreement provisions.

    (a) The State, through its highway agency, accepts and agrees to 
comply with the applicable terms and conditions set forth in Title 23, 
United States Code, Highways, the regulations issued pursuant thereto, 
the policies and procedures promulgated by the FHWA relative to the 
designated project in which the FHWA authorized certain work to 
proceed, 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 
FHWA authorization to proceed with the project involving such costs.
    (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 SHA will repay to the FHWA the sum 
or sums of Federal funds paid to the highway agency under the terms of 
the agreement.
    (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 SHA will repay to the FHWA the sum or sums of Federal 
funds paid to the highway agency under the terms of the agreement.
    (3) Drug-free workplace certification. The SHA agrees that it will 
provide a drug-free workplace by:
    (i) Publishing a statement notifying its employees that the 
unlawful manufacture, distribution, dispensing, possession, or use of a 
controlled substance is prohibited in the SHA's workplace and 
specifying the actions that will be taken against employees for 
violation of such prohibition;
    (ii) Establishing an ongoing drug-free awareness program to inform 
its employees about--
    (A) The dangers of drug abuse in the workplace;
    (B) The SHA's policy of maintaining a drug-free workplace;
    (C) Any available drug counseling, rehabilitation, and employment 
assistance programs; and
    (D) The penalties that may be imposed upon employees for drug abuse 
violations occurring at the workplace;
    (iii) Making it a requirement that each of its employees engaged in 
the performance of the work covered by the project agreement be given a 
copy of the statement required by paragraph (c)(3)(i) of this section;
    (iv) Notifying its employees in the statement required by paragraph 
(c)(3)(i) of this section that, as a condition of employment on work 
covered by the project agreement, the employee will--
    (A) Abide by the terms of the statement; and
    (B) Notify the employer in writing of his/her conviction for a 
violation of a criminal drug statute occurring in the workplace no 
later than 5 calendar days after such conviction;
    (v) Notifying the FHWA Division Administrator in writing, within 10 
calendar days after receiving notice under paragraph (c)(3)(iv)(B) of 
this section from an employee or otherwise receiving actual notice of 
such conviction. Such notification shall include the employee's 
position title and the identification number(s) of the project(s) 
employed on;
    (vi) Taking one of the following actions, within 30 calendar days 
of receiving notice under paragraph (c)(3)(iv)(B), with respect to any 
of its employees so convicted--
    (A) Taking appropriate personnel action against such an employee, 
up to and including termination, consistent with the requirements of 
the Rehabilitation Act of 1973, Public Law 93-112, 87 Stat. 355, as 
amended; or
    (B) Requiring such employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for such purpose by 
a Federal, State, or local health, law enforcement, or other 
appropriate agency;
    (vii) Making a good faith effort to continue to maintain a drug-
free workplace through implementation of paragraphs (c)(1) through 
(c)(5) of this section.
    (4) Suspension and debarment certification. The SHA agrees that its 
principals engaged in the performance of the work covered by the 
project agreement:
    (i) Are not presently debarred, suspended, proposed for debarment, 
declared ineligible, or voluntarily excluded by any Federal Department 
or Agency;
    (ii) Have not within a 3-year period preceding the agreement been 
convicted of or had a civil judgment rendered against them for 
commission of fraud or a criminal offense in connection with obtaining, 
attempting to obtain, or performing a public (Federal, State or local) 
transaction or contract under a public transaction; violation of 
Federal or State antitrust statutes or commission of embezzlement, 
theft, forgery, bribery, falsification or destruction of records, 
making false statements, or receiving stolen property;
    (iii) Are not presently indicted for or otherwise criminally or 
civilly charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses enumerated in paragraph (c)(4)(ii) of 
this section; and
    (iv) Have not within a 3-year period preceding the agreement had 
one or more public transactions (Federal, State or local) terminated 
for cause or default.
    (5) Lobbying certification. The SHA agrees that:
    (i) No Federal appropriated funds have been paid or will be paid, 
by or on behalf of the SHA, to any person for influencing or attempting 
to influence an officer or employee of a Federal agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a 
Member of Congress in connection with the awarding of any contract, or 
modification of any contract covered by the project agreement; 

[[Page 2981]]

    (ii) If any funds, other than Federal appropriated funds, have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any Federal agency, a Member of 
Congress, or an employee of a Member of Congress in connection with 
work covered by the project agreement, the SHA shall complete and 
submit to the FHWA Division Administrator Standard Form- LLL,1 
Disclosure Form to Report Lobbying, in accordance with its 
instructions;

     1The FHWA Division Office can provide the latest 
information on the availability of this form.
---------------------------------------------------------------------------

    (iii) The language of this certification shall be included in the 
award documents for all contracts and subcontracts, covered by the 
project agreement, which exceed $100,000 and all recipients of such 
contracts and subcontracts shall be required to certify and disclose 
accordingly.

PART 635--CONSTRUCTION AND MAINTENANCE [AMENDED]

    5. Subpart A of part 635 is amended by revising Sec. 635.102 to 
read as follows:


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.
    Certification acceptance means the alternative procedure which may 
be used for administering certain highway projects involving Federal 
funds pursuant to 23 U.S.C. 117.
    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.
    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.
    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 highway agency 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 highway agency 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 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'' 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.

PART 771--ENVIRONMENTAL IMPACT AND RELATED PROCEDURES

    6. The authority citation for part 771 is revised to read as 
follows and all other authority citations which appear throughout part 
771 are removed:

    Authority: 42 U.S.C. 4321 et seq.; 23 U.S.C. 109, 110, 128, 138 
and 315; 49 U.S.C. 303(c), 5301(e), 5323, and 5324; 40 CFR part 1500 
et seq.; 49 CFR 1.48(b) and 1.51.


Sec. 771.109  [Amended]

    7. Section 771.109 is amended by adding paragraph (d) to read as 
follows:
* * * * *
    (d) When entering into Federal-aid project agreements pursuant to 
23 U.S.C. 110, it shall be the responsibility of the State highway 
agency to ensure that the project is constructed in accordance with and 
incorporates all committed environmental impact mitigation measures 
listed in approved environmental documents unless the State requests 
and receives written Federal Highway Administration approval to modify 
or delete such mitigation features.

[FR Doc. 96-1156 Filed 1-29-96; 8:45 am]
BILLING CODE 4910-22-P