[Federal Register Volume 72, Number 156 (Tuesday, August 14, 2007)]
[Rules and Regulations]
[Pages 45329-45338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3959]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
23 CFR Parts 630, 635, and 636
[FHWA Docket No. FHWA-2006-22477]
RIN 2125-AF12
Design-Build Contracting
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Final rule.
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SUMMARY: The FHWA is amending its regulations for design-build
contracting as mandated by section 1503 of the ``Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users'
(SAFETEA-LU). This rule will allow State transportation departments or
local transportation agencies to issue request-for-proposal documents,
award contracts, and issue notices-to-proceed for preliminary design
work prior to the conclusion of the National Environmental Policy Act
(NEPA) process.
EFFECTIVE DATE: September 13, 2007.
FOR FURTHER INFORMATION CONTACT: For technical information: Mr. Gerald
Yakowenko, Office of Program Administration (HIPA), (202) 366-1562. For
legal information: Mr. Michael Harkins, Office of the Chief Counsel
(HCC-30), (202) 366-4928, Federal Highway Administration, 1200 New
Jersey Avenue, SE., 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:
Electronic Access
This document and all comments received by the DOT Dockets, Room
PL-401, may be viewed through the Docket Management System (DMS) at
http://dms.dot.gov. It is available 24 hours each day, 365 days each
year. Electronic submission and retrieval help and guidelines are
available under the help section of this Web site.
An electronic copy of this document may be downloaded from the
Federal Register's home page at http://www.archives.gov and the
Government Printing Office's Web page at http://www.access.gpo.gov/nara.
Background
Section 1503 of the SAFETEA-LU (Pub. L. 109-59; August 10, 2005,
119 Stat. 1144) revises the definition of a design-build ``qualified
project'' (23 U.S.C. 112(b)(3)). This change removes a previous
monetary threshold for design-build projects, thus eliminating the
requirement to approve Federal-aid design-build projects exceeding
certain dollar thresholds under Special Experimental Project No. 14
(SEP-14).\1\ When appropriate, the FHWA will continue to make SEP-14
available for projects that do not conform to the requirements of 23
CFR part 636.
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\1\ Information concerning Special Experimental Project No. 14
(SEP-14), ``Innovative Contracting Practices,'' is available on
FHWA's home page: http://www.fhwa.dot.gov. Additional information
may be obtained from the FHWA Division Administrator in each State.
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Section 1503 also requires the Secretary of Transportation to make
certain changes to the design-build regulations at 23 CFR part 636.
Generally, section 1503 requires the Secretary to amend the design-
build rule to permit a State transportation department to release
requests for proposals and award design-build contracts prior to the
completion of the NEPA process, but preclude a contractor from
proceeding with final design or construction before NEPA is complete.
Notice of Proposed Rulemaking (NPRM)
The FHWA published a NPRM on May 25, 2006, (71 FR 30100) proposing
certain changes to comply with section 1503 of SAFETEA-LU. All comments
received in response to the NPRM have been considered in drafting this
final rule. We received 36 comments. The commenters include: one
private individual, one Federal agency, the Governor of the State of
Indiana, 18 State departments of transportation (State DOTs), 3 local
public agencies, 8 industry organizations, and 4 firms that provide
engineering and construction services. We classified the American
Association of State Highway and Transportation Officials (AASHTO) as a
State DOT, because it represents State DOT interests. It is noted that
the State DOTs of Idaho, Montana, North Dakota, and South Dakota
submitted a combined comment. It is also noted that these State DOTs,
as well as the Wyoming Department of Transportation, simply commented
that they support the comments submitted by AASHTO. Additionally, an
organization known as the E-470 Public Highway Authority simply
commented that it supports the comments submitted by the Texas
Department of Transportation (TxDOT). Lastly, the FHWA notes that the
Southern California Association of Governments (SCAG) submitted its
comments on the design-build NPRM to the docket for the FHWA's planning
NPRM (Docket No. FHWA-2005-22986). The FHWA considered SCAG's comments
along with all other comments submitted to the rulemaking docket for
the design-build NPRM in developing this final rule.
General
The following discussion summarizes the major comments submitted to
the docket by the commenters on the NPRM, notes where and why changes
have been made to the rule, and, where relevant, states why particular
recommendations or suggestions have
[[Page 45330]]
not been incorporated into the final rule.
Analysis of NPRM Comments and FHWA Response by Section
Section 630.106 Authorization to proceed
The Virginia Department of Transportation (VDOT), Utah Department
of Transportation (UDOT), TxDOT, Associated General Contractors (AGC)
of America, Design-Build Institute of America (DBIA), and Bechtel
Infrastructure Corporation (Bechtel) each commented on the changes
proposed for this section. Bechtel commented that the project agreement
for a design-build project should be executed prior to the completion
of the NEPA process. The FHWA disagrees with this comment to the extent
that Bechtel is requesting that the project agreement cover final
design and physical construction. The execution of the project
agreement for a project constitutes an obligation of Federal funds to
the project, and the FHWA is precluded under 40 CFR 1508.18 and 23 CFR
771.109 and 771.113 from funding final design or physical construction.
However, the FHWA agrees that project agreements may be executed for
preliminary engineering, preliminary design, and other preconstruction
activities for design-build projects. Accordingly, we have amended the
final regulatory text in section 630.106(a)(3) to clarify that only
project agreements for final design and physical construction must wait
until the conclusion of the NEPA process.
AGC of America commented that there is no definition of preliminary
engineering, while preliminary design is defined in section 636.103.
Preliminary design is defined because the amendments to 23 U.S.C.
112(b)(3) in section 1503 of SAFETEA-LU make a distinction between
preliminary design and final design. Under these amendments, a design-
builder may proceed to conduct preliminary design, but not final
design. There is nothing in the SAFETEA-LU amendments to preclude
preliminary engineering, which generally consists of those activities
necessary for the analysis of a project or project alternatives,
including environmental impacts, as necessary to complete the NEPA
process. As such, preliminary engineering may continue to be authorized
prior to the completion of the NEPA process as it has been prior to the
SAFETEA-LU amendments. Thus, the FHWA does not believe that a separate
definition of preliminary engineering is necessary.
TxDOT, UDOT, and DBIA were each concerned that the language would
preclude authorization for activities which may be carried out prior to
the completion of the NEPA process other than preliminary engineering.
Similarly, VDOT commented that the proposed regulatory change would
preclude authorization for preconstruction activities that may not
necessarily be preliminary engineering. The FHWA agrees with these
comments and has amended the final regulation to include the term
``preliminary design'' as defined in section 636.103. It is not FHWA's
intent to preclude Federal participation in preliminary engineering or
other activities that can be carried out consistent with NEPA.
Section 635.112 Advertising for bids and proposals
Bechtel and the National Council for Public Private Partnerships
(NCPPP) both commented on the proposed changes to this section. In
general, both suggested that the FHWA should extend the FHWA's
concurrence to the selection of the proposer and execute a project
agreement. The FHWA disagrees with these comments. First, the FHWA
cannot commit funds to a project before the NEPA process is complete.
The execution of a project agreement for a design-build project would
result in the obligation of Federal funds for the construction of the
project prior to the completion of the NEPA process. Second, section
1503 of SAFETEA-LU amended 23 U.S.C. 112(b)(3) to expressly require the
Secretary's concurrence prior to issuing a request for proposals (RFP),
awarding a design-build contract, and issuing notices to proceed with
preliminary design. Bechtel and NCPPP's comments would result in the
Secretary only concurring in the RFP.
Section 635.309 Authorization
The FHWA is making a technical, conforming amendment to the
regulation at section 635.309(p)(1). Specifically, the FHWA is deleting
the parenthetical providing that the States' authority to advertise or
release a request for proposals document may not be granted until the
NEPA review process has been concluded. In place of the parenthetical,
the FHWA has inserted the words ``for final design and physical
construction.'' This amendment is necessary to ensure that there is no
confusion in the regulations concerning whether an request for
proposals document may be released, or a design-build contract may be
awarded, in accordance with 23 U.S.C. 112(b)(3)(D). However, this
section would continue to preclude project authorization for final
design and physical construction of a design-build project until after
the NEPA review process is complete.
The substance of this amendment, which is to allow the release of a
request for proposals document prior to the completion of the NEPA
process, was addressed in the NPRM. Specifically, the proposed changes
to sections 635.112 and 636.109 both expressly dealt with the
advertising and release of a request for proposals document for a
design-build project prior to the conclusion of the NEPA process.
Additionally, the decision to prohibit project authorization for the
final design and physical construction of a design-build project were
proposed in sections 630.106 and 636.109 of the NPRM.
Section 635.413 Guaranty and warranty clauses
Bechtel and NCPPP commented on the proposed amendments to this
section. In general, Bechtel and NCPPP commented that this section
should be revised to allow for additional warranties beyond the normal
construction/contractor warranties of 1-2 years. The FHWA disagrees
with these comments. The FHWA's funding authority is generally limited
to participation in construction and preventive maintenance. The FHWA
will authorize the use of Federal funding to procure a warranty, if the
warranty is for a construction or preventative maintenance project. The
proposed regulatory language does not preclude the contracting agency
from procuring warranties for projects other than construction and
preventative maintenance with its own funds.
Section 636.103 What are the definitions of terms used in this part?
We received several comments on the proposed definitions under this
section in the NPRM. These comments are discussed under each respective
definition below.
``Developer''
VDOT, UDOT, TxDOT, AASHTO, and DBIA each commented on the proposed
definition of ``developer.'' These comments generally stated that the
distinction between developer and design-builder is unclear and that
the definition duplicates the language in the proposed definition of
public-private agreement. The FHWA agrees with these comments and has
decided to strike the definition of developer from the final rule.
Since the FHWA has struck the changes to 636.119, as discussed below,
[[Page 45331]]
the term developer no longer has any significance to the regulations.
``Final Design''
TxDOT, UDOT, Maryland State Highway Administration (MdSHA),
Pennsylvania Department of Transportation (PennDOT), Missouri
Department of Transportation (MoDOT), New Jersey Department of
Transportation (NJDOT), Louisiana Department of Transportation and
Development (LDOTD), Indiana Governor Mitch Daniels, AASHTO, AGC of
America, DBIA, Jacobs Civil, Inc. (JCI), and the Nossaman, Guthner,
Knox, and Elliott LLP law firm/The Ferguson Group LLC (Nossaman) each
commented on this proposed definition. In general, the comments stated
that the definition is too restrictive and that the definition should
be limited to work directly associated with the preparation of final
construction plans and detailed technical specifications. The comments
arguing that the definition is too restrictive are based on the
comments to the proposed definition of preliminary design, which are
discussed below. As explained below, the proposed definition of
preliminary design has been broadened in the final rule. Thus, the
language in the definition of final design stating that final design
includes any design activities following preliminary design has been
retained and the language concerning any design activities not
necessary to complete the NEPA process has been stricken. Moreover,
since a number of commenters stated that final design includes work
directly related to the preparation of final construction plans and
detailed specifications, these activities have been expressly included
in the definition of final design.
``Preliminary Design''
All of the commenters substantially commented on the proposed
definition of ``preliminary design.'' Specifically, LDOTD, Georgia
Department of Transportation (GDOT), Indiana Governor Mitch Daniels,
NJDOT, MoDOT, PennDOT, Knik Arm Bridge and Toll Authority (KABATA),
California Department of Transportation (Caltrans), VDOT, Ohio
Department of Transportation (OhDOT), Oregon Department of
Transportation (OrDOT), UDOT, Minnesota Department of Transportation
(Mn/DOT), Florida Department of Transportation (FDOT), MdSHA, TxDOT,
AASHTO, AGC of America, American Council of Engineering Companies
(ACEC), NCPPP, Nossaman, Bechtel, Washington Group International (WGI),
JCI, Michael T. McGuire, Professional Engineers in California
Government, and SCAG all commented on this proposed definition.
Michael T. McGuire commented that allowing a design-builder to
proceed with preliminary design prior to NEPA is a conflict of
interest. The FHWA disagrees with this comment. So long as the design-
builder does not prepare the NEPA documents, the conflict of interest
provision in the Council on Environmental Quality (CEQ) regulation, 40
CFR 1506.5(c), is met.
The Professional Engineers in California Government commented that
they agreed with the proposed definition of ``preliminary design.'' All
other commenters felt that the proposed definition is too narrow. In
general, these commenters were concerned that the definition would
exclude activities needed to comply with other environmental laws and
omit activities that have been traditionally considered preliminary
engineering, that do not materially affect the consideration of
alternatives in the NEPA analysis, and that work to advance the design
of the preferred alternative as permitted in 23 U.S.C. 139(f)(4)(D),
which was added by section 6002 of SAFETEA-LU. Several commenters also
listed specific activities that have traditionally been allowed to
proceed during the NEPA review process. After considering these
comments, the FHWA agrees that the proposed definition is too narrow.
It is not the FHWA's intent to preclude the States from conducting
preliminary engineering and other pre-decisional project-related
activities consistent with NEPA when a request for proposals is issued
or design-build contract is awarded, prior to the completion of the
NEPA process. Accordingly, the FHWA has revised the definition of
preliminary design to mean activities undertaken to define the general
project location and design concepts. The FHWA has also specified some
general activities that may be conducted as preliminary design that
typically do not compromise the objectivity of the NEPA process. These
activities were specifically identified by VDOT, OhDOT, MdSHA, TxDOT,
UDOT, AASHTO, DBIA, and Nossaman. The activities specified in this
definition are not intended to be an exhaustive list of activities that
may be considered preliminary design. However, any activity, regardless
of its inclusion in the definition of preliminary design, must not
materially affect the object consideration of alternatives in the NEPA
review process.
``Public-Private Agreement''
UDOT, TxDOT, AASHTO, and DBIA each submitted comments on the
proposed definition of ``public-private agreement.'' In general, these
comments stated that the definition is overly broad and makes the
distinction between design-build contracts and public-private
agreements unclear. The FHWA agrees with these comments and has adopted
a modified version of the language suggested by UDOT, TxDOT, and DBIA
to the definition of public-private agreement in the final rule.
``Qualified Project''
The AGC of Texas, NJDOT, and GDOT each commented on the proposed
definition of ``qualified project.'' GDOT commented that it agrees with
the definition. NJDOT asked whether FHWA approval is needed to award
any design-build contract, even if it has limited scope and low total
project cost. Pursuant to 23 CFR 636.109(c), FHWA approval is needed
before awarding any design-build contract funded under title 23, United
States Code. AGC of Texas commented that the regulation should retain
the $50 million general project and $5 million Intelligent
Transportation System (ITS) project thresholds in the final rule. Since
Congress specifically amended 23 U.S.C. 112(b)(3)(C) in section 1503 of
SAFETEA-LU to abolish these monetary thresholds, the FHWA does not
believe that retaining them in the final rule is appropriate.
Section 636.106 Is the FHWA's Special Experimental Project No. 14--
``Innovative Contracting'' (SEP-14) approval necessary for a design-
build project?
MoDOT, PennDOT, and Mn/DOT each commented on the changes proposed
for this section. MoDOT pointed out that the preamble to the NPRM
mentioned a monetary threshold while the proposed regulation did not.
To clarify this apparent inconsistency, the proposed regulation was
intended to abolish the monetary threshold for SEP-14 approval. Since
Congress amended 23 U.S.C.112 to eliminate the design-build contracting
monetary thresholds, SEP-14 approval is no longer needed for design-
build projects below a certain monetary threshold. After considering
this comment, the FHWA has decided that it is not necessary to
expressly include SEP-14 as part of the final regulations, since it
appears that SEP-14 is no longer needed. However, SEP-14 will continue
to be available on a case-by-case basis as new innovative approaches to
delivering design-build projects are proposed.
PennDOT requested clarification that the reporting requirements are
no longer necessary. To answer this question,
[[Page 45332]]
there are no reporting requirements contained in this final rule. Mn/
DOT asked whether this rule replaces the SEP-15 program. The answer to
the question is ``no.'' SEP-15 continues to be available on a case-by-
case basis consistent with the parameters of the program. (For more
information, see 69 FR 59983, October 6, 2004.)
Section 636.107 May contracting agencies use geographic preference in
Federal-aid design-build or public-private partnership projects?
TxDOT, UDOT, MoDOT, DBIA, and AGC of America each commented on the
proposed changes to this section. AGC of America supports the
prohibition on geographic preferences. MoDOT suggested deleting the
parenthetical contained in the proposed language in order to avoid
future misinterpretation that would exclude non-geographic based
incentives. This section only applies to geographic preferences and the
parenthetical is merely intended to clarify that all means of such
preferences are prohibited. Thus, the FHWA has retained the
parenthetical in the final language.
TxDOT, UDOT, and DBIA suggested eliminating the word ``prohibit''
and making other minor revisions because they felt that this language
implies that the contract documents must affirmatively address these
issues. The FHWA agrees with these comments and has revised the final
rule to incorporate the suggested language.
Section 636.109 How does the NEPA process relate to the design-build
procurement process?
There were several comments on the changes to this proposed section
in the NPRM. These comments are discussed under each respective
subsection below.
Section 636.109(a)
PennDOT, UDOT, TxDOT, DBIA, and WGI each commented on the proposed
changes to section 636.109(a). WGI commented that it supports these
changes. PennDOT commented that it needs clarification that the FHWA
will grant concurrence to proceed with the activities outlined in
section 636.109(a), so long as the conditions outlined in the proposed
rule are met. The FHWA assumes that PennDOT's comments are based on the
preamble to the NPRM, where the FHWA stated that contracting agencies
need FHWA concurrence prior to proceeding with any of the activities
specified in the proposed subsection. To clarify this issue, a
contracting agency does not need FHWA concurrence to issue a request
for qualifications at any point in the process. However, FHWA
concurrence for the other activities specified in this subsection is
required. FHWA intends to concur with the activities outlined in
section 636.109(a), (such as issuing an RFP, awarding a contract,
proceeding with preliminary design, etc.), provided all applicable
Federal requirements are met.
UDOT, TxDOT, and DBIA stated that some minor changes are needed in
order to clarify the intent in the first paragraph under section
636.109 as well as section 636.109(a)(1). The FHWA agrees to add the
language suggested by UDOT, TxDOT, and DBIA in section 636.109(a)(1)
concerning the protection of contracting agencies in the first
paragraph of section 636.109, but does not agree to strike the language
concerning the protection of design-build proposers in the first
paragraph. The FHWA believes that this section protects the interests
of both contracting agencies and design-build proposers. Additionally,
UDOT, TxDOT, and DBIA requested that language be added to clarify that
a design-builder can proceed with final design and construction for
projects that have already obtained final NEPA approval. An example to
amplify these comments would be a project that is being conducted under
a tiered NEPA analysis. At any given point, tier 2 NEPA approvals could
be given at different times for any portions with independent utility
and logical termini within the tier 1 NEPA document. The FHWA agrees
with these comments and has added a new paragraph (6) to section
636.109(a) to clarify this issue.
Section 636.109(b)
MdSHA, FDOT, Mn/DOT, UDOT, VDOT, TxDOT, Caltrans, MoDOT, Indiana
Governor Mitch Daniels, AASHTO, DBIA, ACEC, NCPPP, Bechtel, Wilbur
Smith Associates, Nossaman, and the Environmental Protection Agency
(EPA) each commented on proposed 636.109(b). First, UDOT, TxDOT, and
DBIA commented that the language should be clarified to ensure that a
design-builder can proceed with final design and construction on
projects that have already obtained NEPA approval. The FHWA agrees that
a design-builder should be allowed to proceed with such work on
projects for which NEPA approval has been obtained and intends that
design-builders be allowed to do so under these regulations. However,
the FHWA does not believe that additional language is needed to clarify
this intent.
Second, MdSHA, FDOT, Mn/DOT, UDOT, Indiana Governor Mitch Daniels,
AASHTO, ACEC, NCPPP, and Nossaman each commented that the contracting
agencies and design-builders should be allowed to proceed with final
design activities at risk. In general, States can proceed with final
design activities under the design-bid-build method of contracting so
long as those activities include no Federal funding and the State
understands that its preferred alternative could ultimately be rejected
by the FHWA. See, e.g., Burkholder v. Wykle, 268 F. Supp. 2d 835 (N.D.
Ohio 2002). However, the amendment to 23 U.S.C. 112(b)(3)(D)(iii) in
section 1503 of SAFETEA-LU expressly requires the design-build
regulations to ``preclude the design-build contractor from proceeding
with final design or construction of any permanent improvement prior to
the completion of the process of such section 102.'' In other words,
Congress has directed that the regulations must preclude the design-
build contractor from proceeding with either final design or
construction. Therefore, the FHWA is unable to permit the design-
builder to proceed with final design, regardless of whether these
activities are funded by the FHWA, the State, or the contractor itself.
Third, FDOT, UDOT, TxDOT, VDOT, Caltrans, Indiana Governor Mitch
Daniels, AASHTO, DBIA, and ACEC each commented on whether the design-
builder is precluded from preparing the NEPA decision document or any
NEPA document. In general, these comments pointed out an inconsistency
between the preamble to the NPRM, which refers to NEPA documents, and
the proposed regulatory text in sections 636.109(b)(4) and (5), which
uses the term ``NEPA decision document.'' To clarify this issue, the
FHWA intends for the regulations to preclude a design-builder from
preparing not only the NEPA decision documents (i.e. Categorical
Exclusion (CE), Finding of No Significant Impact (FONSI), and Record of
Decision (ROD)), but also the NEPA analysis documents (i.e.
Environmental Assessment (EA) and Environmental Impact Statement
(EIS)). The CEQ conflict of interest regulation at 40 CFR 1506.5(c)
expressly prohibits a contractor, who has an interest in the outcome of
the NEPA process, from preparing an EIS. Additionally, this regulation
has also been applied to EAs. See, e.g., Burkholder v. Peters, 58 Fed.
Appx. 94 (6th Cir. 2003). Thus, the final regulations at section
636.109(b)(6) and (7) have been amended to clarify that the design-
builder is precluded from preparing all NEPA documents, rather than
just the NEPA decision documents. However, while the design-builder
cannot prepare the NEPA documents, the FHWA notes that there is nothing
in
[[Page 45333]]
the final regulations that would prohibit a design-builder from
financing the preparation of the NEPA documents, so long as the
criteria in section 636.109(b)(7) are met.
Fourth, UDOT, TxDOT, and DBIA suggested some minor clarifications
to proposed section 636.109(b)(6) to ensure that the States can
consider any work provided by the design-builder in the NEPA analysis.
The FHWA agrees with these comments and has revised section
636.109(b)(8) to incorporate UDOT, TxDOT, and DBIA's suggested
language.
Fifth, Wilbur Smith Associates commented that barring consultants
who are participating in the preparation of the NEPA documents from
joining a design-build team will result in less economical projects.
Although the FHWA appreciates eliminating unnecessary costs, FHWA notes
that the CEQ regulations at 40 CFR 1506.5(c) prohibit such consultants
from having a financial or other interest in the outcome of the project
to avoid either the reality or the appearance of a conflict, thereby
maintaining the credibility of the environmental review process. Sixth,
the EPA had several general comments on section 636.109(b). The EPA
states that it is supportive of the provisions in the proposed rule
intended to ensure an adequate review process and supports the
prohibition on the design-builder from having any decisionmaking
responsibility on the NEPA process. The EPA further commented that
avoiding conflicts of interest and premature commitments to a
particular alternative are difficult to ensure in practice. As such,
the EPA suggested that the FHWA provide examples of appropriate
contract provisions that would ensure that the merits of all
alternatives are evaluated. An example of one such provision would be
one precluding the commitment of significant financial resources to any
particular alternative. Another example would be a provision that
clearly allows the State to decide not to move forward with the project
in the event the no-build alternative is selected, while allowing the
design-build contractor to receive a reasonable reimbursement of
certain costs the contractor may have incurred in advancing the
project. The FHWA is committed to work with the States to develop any
such provisions to also ensure the integrity of the NEPA process is
maintained.
The EPA also expressed a concern about using financial incentives
linked to milestones that could result in contractor reluctance to
revise the NEPA analysis when appropriate. While the FHWA is not aware
of any specific problems in this area, the FHWA shares the EPA's
concern and will discourage the use of any timeline-based incentives
that may have an undue influence on the NEPA process. Additionally, the
EPA commented on how appropriate oversight will be maintained under the
surface transportation project delivery pilot program at 23 U.S.C. 327.
Since this pilot program is limited only to the States' assumption of
the Secretary's environmental responsibilities, the FHWA will retain
full oversight over the contracting process. Moreover, the pilot
program requires a memorandum of understanding to be executed between
the State and the FHWA whenever a State assumes any of the Secretary's
responsibilities under the pilot program. Appropriate oversight
provisions will be specified in these MOUs.
Lastly, the FHWA is adding two new provisions at sections
636.109(b)(1) and (2). Section 636.109(b)(1) is intended to clarify
that the design-builder may proceed with preliminary design under a
design-build contract. Section 636.109(b)(2) is intended to clarify
that the States 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). As previously discussed, several comments on the proposed
definition of preliminary design expressed the concern that the States
would not be able to conduct activities needed to comply with other
related environmental laws or advance the design of the preferred
alternative as permitted in 23 U.S.C. 139(f)(4)(D). The addition of
section 636.109(b)(2) clarifies that the States may conduct these types
of activities.
Section 636.109(c) and (d)
UDOT, TxDOT, MdSHA, DBIA, Association of Engineering Employees of
Oregon, and Profession Engineers in California Government each
commented on the proposed changes in section 636.109(c) and (d). The
Association of Engineering Employees of Oregon and Professional
Engineers in California Government commented that section 639.109(c)
does not go far enough in protecting the integrity of the NEPA process.
Section 636.109(c) would require certain FHWA approvals during the
project development process and would clarify that any such approval is
not a commitment of Federal funds. The FHWA believes that not
committing any Federal funds until after the NEPA process is complete,
in conjunction with the various FHWA approvals during the project
development process as well as the requirements in section 636.109(b),
adequately protect the integrity of the NEPA process.
UDOT, TxDOT, MdSHA, and DBIA questioned why the FHWA is requiring
concurrence in the issuance of a notice to proceed with preliminary
design. Section 1503 of SAFETEA-LU amended 23 U.S.C. 112(b)(3)(D)(ii)
to require the States to receive concurrence from the Secretary prior
to carrying-out any activity specified in 23 U.S.C. (b)(3)(D)(i), which
includes the issuance of notices to proceed with preliminary design
work. Thus, the States must receive FHWA concurrence prior to issuing a
notice to proceed with preliminary design work.
Section 636.116 What organizational conflict of interest requirements
apply to design-build projects?
TxDOT, UDOT, VDOT, PennDOT, DBIA, ACEC each commented on the
proposed changes to section 636.116. ACEC supports the proposed changes
to section 636.116, because it believes that firms have been unfairly
eliminated from competing for design-build contracts merely by virtue
of providing some technical work on a NEPA document. ACEC further
suggests that the language be revised to preclude the States from
disallowing such firms to compete for design-build contracts. In
contrast to ACEC's comments, PennDOT commented that it is concerned
about the conflict of interest that may arise if the State subsequently
needs the firm to provide additional input or work on the NEPA analysis
for the project. The FHWA agrees with both ACEC and PennDOT. The FHWA
has accommodated ACEC's concern in the final rule by giving the States
the flexibility to allow such firms to compete for design-build
contracts. The FHWA has also accommodated PennDOT's concern by making
the changes discretionary on the part of the States rather than
mandatory as requested by ACEC.
VDOT, TxDOT, UDOT, and DBIA all supported the proposed changes to
section 636.116. However, TxDOT, UDOT, and DBIA further commented that
the contracting agency should have the flexibility to release a
subconsultant to the consultant responsible for preparing the NEPA
documents from further NEPA responsibilities and allow
[[Page 45334]]
such firm to compete for a design-build contract. The FHWA supports
giving the States this flexibility and has added a new subsection (d)
to section 636.116 in the final rule.
Section 636.119 How does this Part apply to public-private agreements?
TxDOT, FDOT, UDOT, MdSHA, Indiana Governor Mitch Daniels, AGC of
America, NCPPP, WGI, and Bechtel each commented on this proposed
section. WGI commented that it supports making public-private agreement
procurements subject to State law. SCAG, Bechtel, and NCPPP were
concerned that the numerous approvals required under this proposed
section would add time and cost to the project delivery process. AGC of
America commented that it supports the oversight provisions in the
proposed section. TxDOT, UDOT, Indiana Governor Mitch Daniels, and SCAG
commented that it is inappropriate for the FHWA to assert approval
rights over State procedures. TxDOT, UDOT, and MdSHA commented that it
is unnecessary for the FHWA to concur in requests for qualifications.
TxDOT and UDOT further commented that some provisions of this proposed
section were unclear, and FDOT commented that public-private agreement
requirements should be an entirely separate part in the Code of Federal
Regulations.
After considering these comments, the FHWA agrees that some further
revisions may be necessary and that it is more appropriate for these
requirements to be contained in a separate part in the Code of Federal
Regulations. Accordingly, the FHWA has struck the proposed changes to
section 636.119 and will consider whether a future rulemaking for these
requirements is necessary. Minor revisions have been made to section
636.119(b) to define the FHWA's requirements for preserving Federal-aid
eligibility in any procurement actions under a public-private
partnership.
Section 636.302 Are there any limitations on the selection and use of
proposal evaluation factors?
TxDOT, UDOT, PennDOT, DBIA, Professional Engineers in California
Government, and Association of Engineering Employees of Oregon each
commented on the proposed changes to section 636.302. Professional
Engineers in California Government and Association of Engineering
Employees of Oregon commented that the price evaluation requirements
should continue. The FHWA shares the concern about eliminating the
price evaluation requirement. After considering these comments and
taking a closer look at the proposed regulation, the FHWA has decided
to add a new subparagraph to section 636.302(a)(1)(ii) to require that
price be considered to the extent that the contract requires payment
from the contracting agency utilizing Federal-aid highway funds to the
design-builder for any services to be provided prior to final design or
construction. The FHWA is adding this requirement, because the FHWA
believes that the consideration of price will ensure that a project
does not incur unreasonable costs. This provision will ensure that, to
the extent the State must make any payments to the design-builder, the
price to be paid for these services is one of the factors that States
must consider.
The FHWA has also added language to section 636.302(a)(1)(iv) to
clarify that the price reasonableness requirement only applies to the
extent that the contracting agency wishes to use Federal funds for
final design or construction. These provisions also respond to the
comments made by TxDOT, UDOT, and DBIA who were concerned that some
public-private agreements may not require any payment to be made to the
design-builder. However, whenever a contract is awarded prior to the
completion of the NEPA process, it is impossible to consider the price
of the total contract because an alternative has not yet been selected
and final design has not yet been completed. Thus, a contracting agency
will be able to consider price only to a certain extent.
PennDOT commented that the proposed procedures in section
636.302(a)(1) would be very complex and hard to implement. Since the
statute now permits States to award contracts prior to the conclusion
of the NEPA process, which will require the costs for final design and
construction to be negotiated later, the States and FHWA must find a
way to control the costs under the contract and ensure that the public
gets a fair price for these services. Thus, the State will need to
develop methodologies through which the State can determine whether the
final fixed price for the project is reasonable. An open-book
negotiation method through which both the contractor and the State
share supporting data on the prices of the items being negotiated can
be an effective way to make this determination. While the FHWA
recognizes the difficulties in ensuring that the public gets the best
price whenever a design-build contract is awarded prior to the
conclusion of the NEPA process, we believe that a price reasonableness
standard for these costs will be the most effective approach. The FHWA
will provide appropriate guidance and support to the States in
implementing this standard.
Finally, TxDOT, UDOT, and DBIA each commented that the FHWA should
not concur in the States' price reasonableness determination, but
rather only the methodologies the States use to make that
determination. The FHWA disagrees with this comment. The FHWA is the
steward of all Federal funds that are used in highway projects. Since
total contract price cannot be considered during the competition to
award a contract prior to the conclusion of the NEPA process, the FHWA
must have some mechanism to ensure that price for the project for which
Federal funds proposed to be used is reasonable.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
The FHWA has determined that this rule is a significant regulatory
action within the meaning of Executive Order 12866, and within the
meaning of the U.S. Department of Transportation's regulatory policies
and procedures. The Office of Management and Budget (OMB) has reviewed
this document under E.O. 12866. This rule is significant, because of
the substantial State, environmental, and industry interest in the
design-build contracting technique.
The economic impact of this rulemaking will be minimal and it will
not adversely affect, in a material way, any sector of the economy.
This rulemaking merely revises the FHWA's policies concerning the
design-build contracting technique. The final rule will not affect the
total Federal funding available to the State DOTs under the Federal-aid
highway program. Therefore, an increased use of design-build delivery
method will not yield significant economic impacts to the Federal-aid
highway program. Additionally, this rule will not interfere with any
action taken or planned by another agency and will not materially alter
the budgetary impact of any entitlements, grants, user fees, or loan
programs. Consequently, a full regulatory evaluation is not required.
The FHWA does not have sufficient data to quantify the economic
impacts of this rule. However, the FHWA believes that increased use of
the design-build contracting method may result in certain efficiencies
in the cost and time it normally takes to deliver a transportation
project. We also believe that States will not use the design-build
[[Page 45335]]
contracting technique if using such a technique will increase the cost
of a project.
The design-build contracting technique is important to increasing
the involvement of the private sector in the delivery of transportation
projects. Insofar as this rule will increase the uses of the design-
build contracting technique, it may result in increased private sector
financial investment in transportation. The FHWA did not receive any
comments on the economic impacts analysis in the NPRM.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), we have evaluated the effects of this action on small entities
and have determined that the action will not have a significant
economic impact on a substantial number of small entities. The rule
addresses the obligation of Federal funds to States for Federal-aid
highway projects. As such, it affects only States and States are not
included in the definition of small entity set forth in 5 U.S.C. 601.
Therefore, the Regulatory Flexibility Act does not apply, and the FHWA
certifies that the rule will not have a significant economic impact on
a substantial number of small entities.
Unfunded Mandates Reform Act of 1995
This rule will not impose unfunded mandates as defined by the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48,
March 22, 1995), because it will not result in the expenditure by
State, local, tribal governments, or by the private sector, of $128.1
million or more in any 1 year (2 U.S.C. 1532 et seq.). This rule merely
updates the design-build regulation to reflect the changes made by
SAFETEA-LU. The design-build regulation allows, but does not require,
States to use the design-build technique for the delivery of Federal-
aid projects. States use the design-build contracting technique
because, in some instances, it may reduce the time and cost of
delivering a project.
Further, the definition of ``Federal Mandate'' in the Unfunded
Mandates Reform Act excludes financial assistance of the type in which
State, local, or tribal governments have authority to adjust their
participation in the program in accordance with changes made in the
program by the Federal Government. The Federal-aid highway program
permits this type of flexibility.
Executive Order 13132 (Federalism)
This rule has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132 dated August 4, 1999, and
the FHWA has determined that this rule will not have a substantial
direct effect or sufficient federalism implications on the States. The
FHWA has also determined that this final rule will not preempt any
State law or regulation or affect the States' ability to discharge
traditional State governmental functions.
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. The FHWA did not
receive any comments on the intergovernmental review analysis.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et
seq.), the FHWA must obtain approval from the OMB for each collection
of information we conduct, sponsor, or require through regulations. The
FHWA has determined that this rule does not contain a collection of
information requirement for purposes of the PRA.
National Environmental Policy Act
The FHWA has analyzed this rule for the purpose of the National
Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.),
and has determined that this rule will not have any effect on the
quality of the environment. The promulgation of regulations has been
identified as a categorical exclusion under 23 CFR 771.117(c)(20).
However, Federal-aid highway projects on which design-build is used,
must still comply with the National Environmental Policy Act of 1969,
as amended.
Executive Order 12630 (Taking of Private Property)
The FHWA has analyzed this rule under Executive Order 12630,
Governmental Actions and Interface with Constitutionally Protected
Property Rights. This rule will not affect a taking of private property
or otherwise have taking implications under Executive Order 12630.
Executive Order 12988 (Civil Justice Reform)
This action meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.
Executive Order 13045 (Protection of Children)
We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. The FHWA
certifies that this rule will not cause an environmental risk to health
or safety that might disproportionately affect children.
Executive Order 13175 (Tribal Consultation)
The FHWA has analyzed this rule under Executive Order 13175, dated
November 6, 2000, and believes that the rule will not have substantial
direct effects on one or more Indian tribes; will not impose
substantial direct compliance costs on Indian tribal governments; and
will not preempt tribal laws. The rule addresses obligations of Federal
funds to States for Federal-aid highway projects and will not impose
any direct compliance requirements on Indian tribal governments.
Therefore, a tribal summary impact statement is not required.
Executive Order 13211 (Energy Effects)
The FHWA has analyzed this action under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use dated May 18, 2001. We have determined that it is
not a significant energy action under that order, because, although it
is a significant regulatory action under Executive Order 12866, it will
not have a significant adverse effect on the supply, distribution, or
use of energy. Therefore, a Statement of Energy Effects is not
required.
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 number contained in the
heading of this document can be used to cross-reference this action
with the Unified Agenda.
[[Page 45336]]
List of Subjects
23 CFR Part 630
Bonds, Government contracts, Grant programs--transportation,
Highways and roads, Reporting and recordkeeping requirements.
23 CFR Part 635
Construction and maintenance, Grant programs--transportation,
Highways and roads, Reporting and recordkeeping requirements.
23 CFR Part 636
Design-build, Grant programs--transportation, Highways and roads.
Issued on: August 7, 2007.
J. Richard Capka,
FHWA Administrator.
0
In consideration of the foregoing, the FHWA amends parts 630, 635, and
636 of title 23, Code of Federal Regulations, as follows:
PART 630--PRECONSTRUCTION PROCEDURES
0
1. Revise the authority citation for part 630 to read as follows:
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).
0
2. Amend Sec. 630.106 by revising the section heading and adding
paragraph (a)(7) to read as follows:
Sec. 630.106 Authorization to proceed.
(a) * * *
(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.
* * * * *
PART 635--CONSTRUCTION AND MAINTENANCE
0
3. Revise the authority citation for part 635 to read as follows:
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).
0
4. Amend Sec. 635.112 by revising paragraph (i)(1); by redesignating
paragraphs (i)(2) and (i)(3) as (i)(3) and (i)(4), respectively; and by
adding a new paragraph (i)(2) to read as follows:
Sec. 635.112 Advertising for bids and proposals.
* * * * *
(i) * * *
(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.
* * * * *
0
5. Revise Sec. 635.309(p)(1) introductory text to read as follows:
Sec. 635.309 Authorization.
* * * * *
(p) * * *
(1) The FHWA's project authorization for final design and physical
construction will not be issued until the following conditions have
been met:
* * * * *
0
6. Revise Sec. 635.413(e)(1)(i) to read as follows:
Sec. 635.413 Guaranty and warranty clauses.
* * * * *
(e) * * *
(1) * * *
(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.
* * * * *
PART 636--DESIGN-BUILD CONTRACTING
0
7. Revise the authority citation for part 636 to read as follows:
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).
Subpart A--General
0
8. Amend Sec. 636.103 by adding in alphabetical order the definitions
of ``final design,'' ``preliminary design,'' ``price reasonableness,''
and ``public-private agreement,'' and by revising the definition of a
``qualified project'' as follows:
Sec. 636.103 What are the definitions of terms used in this Part?
* * * * *
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.
* * * * *
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.
* * * * *
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.
* * * * *
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.
* * * * *
Sec. 636.106 [Removed]
0
9. Remove and reserve Sec. 636.106.
0
10. Revise Sec. 636.107 to read as follows:
[[Page 45337]]
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.
Sec. 636.108 [Removed]
0
11. Remove and reserve Sec. 636.108.
0
12. Revise Sec. 636.109 to read as follows:
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;
(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.
0
13. Amend Sec. 636.116 by adding paragraphs (c) and (d) to read as
follows:
Sec. 636.116 What organizational conflict of interest requirements
apply to design-build projects?
* * * * *
(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.
0
14. Revise Sec. 636.119(b)(1) and (2) to read as follows:
Sec. 636.119 How does this part apply to a project developed under a
public-private partnership?
* * * * *
(b) * * *
(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
[[Page 45338]]
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).
* * * * *
0
15. Revise Sec. 636.302(a)(1) to read as follows:
Sec. 636.302 Are there any limitations on the selection and use of
proposal evaluation factors?
(a) * * *
(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.
* * * * *
[FR Doc. 07-3959 Filed 8-9-07; 3:55 pm]
BILLING CODE 4910-22-P