[Federal Register Volume 87, Number 29 (Friday, February 11, 2022)]
[Notices]
[Pages 8081-8082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02974]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Enhancing Highway Workforce Development Opportunities Contracting 
Initiative

AGENCY: Federal Highway Administration (FHWA), U.S. Department of 
Transportation (DOT).

ACTION: Notice.

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SUMMARY: The recently enacted Bipartisan Infrastructure Law (BIL), 
enacted as the Infrastructure Investment and Jobs Act, authorizes a 
recipient or subrecipient of a grant provided by the DOT Secretary 
under Title 23 or 49, United States Code, to implement a local or other 
geographical or economic hiring preference relating to the use of labor 
for construction of a project funded by the grant subject to any 
applicable State and local laws, policies, and procedures. Based on 
this statutory authorization, FHWA is announcing a transition from its 
initiative announced in May 2021, which permitted, on an experimental 
basis, recipients and subrecipients of Federal funds for Federal-aid 
highway projects to utilize geographic, economic, or other hiring 
preferences or innovative contracting approaches not otherwise 
authorized by law. The May 2021 initiative was carried out as a pilot 
program under FHWA's existing experimental contracting authority and 
the legal authority in the Section 199B of the Consolidated 
Appropriations Act, 2021, authorizing such hiring preferences ``not 
otherwise authorized by law.'' Now that BIL creates the legal authority 
for local or other geographical or economic hiring preferences, an 
experimental pilot program for such hiring preferences is no longer 
needed. In Addition, the use of such preferences going forward are 
subject to Section 25019 of the BIL, not Section 199B of the 
Consolidated Appropriations Act, 2021.

DATES: This action is applicable immediately.

FOR FURTHER INFORMATION CONTACT: For technical information: Mr. James 
DeSanto, Office of Preconstruction, Construction and Pavements, (614) 
357-8515, [email protected], or Mr. Patrick Smith, Office of Chief 
Counsel, (202) 366-1345, [email protected], Federal Highway 
Administration, 1200 New Jersey Avenue SE, Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded from the 
Office of the Federal Register's website at www.FederalRegister.gov and 
the Government Publishing Office's website at www.GovInfo.gov.

Bipartisan Infrastructure Law

    The BIL, enacted as the Infrastructure Investment and Jobs Act, 
Public Law 117-58 (Nov. 15, 2021), authorizes a recipient or 
subrecipient of a grant provided by the DOT Secretary under Title 23 or 
49, United States Code (U.S.C.), to implement a local or other 
geographical or economic hiring preference relating to the use of labor 
for construction of a project funded by the grant, including prehire 
agreements, subject to any applicable State and local laws, policies, 
and procedures. BIL, Sec.  25019(a)(1). The BIL also provides that the 
use of a local or other geographical or economic hiring preference 
authorized by Section 25019(a)(1) in any bid for a contract for the 
construction of a project funded by a grant described in Section 
25019(a)(1) shall not be considered to unduly limit competition. BIL, 
Sec.  25019(a)(2).

Enhancing Highway Workforce Development Opportunities Contracting 
Initiative

    On May 21, 2021, at 86 FR 27667, FHWA announced an initiative to 
permit and evaluate geographic, economic, or other hiring preferences 
or innovative contracting approaches not otherwise authorized by law 
that have the potential to enhance workforce development opportunities 
in the transportation construction industry, including for low-income 
communities. As discussed in the Federal Register notice for that 
initiative, FHWA historically disallowed such requirements out of 
concern for their potential impact on competition.

[[Page 8082]]

Generally, Federal law requires Federal-aid highway and roadway 
projects (apart from a few exceptions) to be awarded on the basis of 
competitive bidding.
    The initiative announced in May 2021 was authorized under Section 
199B of the Consolidated Appropriations Act, 2021, Public Law 116-260, 
Dec. 27, 2020, 134 Stat 1182, which allowed DOT-assisted contracts 
under Titles 49 and 23 of the U.S.C. to use geographic, economic, or 
any other hiring preference not otherwise authorized by law, with 
certain limitations including required certifications. The initiative 
was also based on FHWA's Special Experimental Project No. 14 (SEP-14) 
authority for special experimental projects set forth at 23 U.S.C. 
502(b)(2) to allow FHWA to continue to gather data and evaluate 
experimental contracting practices.
    Under the May 2021 initiative FHWA required State and local 
recipients and subrecipients to request prior approval from FHWA to use 
a specific contracting requirement under SEP-14 by submitting work 
plans to the appropriate FHWA Division Office.

Transition From Pilot Program

    Based on the statutory authority for local or other geographical or 
economic hiring preferences in Section 25019(a) of the BIL, FHWA is 
transitioning from its initiative announced in May 2021. Since Section 
25019 authorizes the use of certain hiring preferences, the use of such 
preferences going forward are subject to Section 25019 of the BIL, not 
Section 199B of the Consolidated Appropriations Act, 2021. Also, while 
local hiring preferences have traditionally been disallowed in 
accordance with 23 CFR 635.117(b) and 636.107, given the statutory 
authority for local or other geographical or economic hiring 
preferences under the BIL, an experimental pilot program is no longer 
needed for labor hiring preferences that fall within the legislatively 
authorized parameters. Innovative contracting approaches or 
requirements, including those related to workforce development, falling 
outside of the parameters authorized by Section 25019(a) of the BIL may 
still be considered by FHWA under its experimental SEP-14 authority on 
a case-by-case basis.
    Upon publication of this notice, and based on Section 25019(a) of 
the BIL, FHWA approval is no longer needed for authorized labor hiring 
preferences. As discussed in the Federal Register notice announcing the 
May 2021 initiative, DOT generally exercises discretion under 23 U.S.C. 
112 to evaluate whether a State or local law or policy is compatible 
with the competitive bidding requirement under the statute. The DOT has 
historically disallowed certain hiring preferences out of concern for 
their potential impact on competition. Based on the clear direction in 
Section 25019(a)(2) of the BIL that the use of a local or other 
geographical or economic hiring preference authorized by Section 
25019(a)(1) shall not be considered to unduly limit competition, DOT 
will not engage in or have a role in evaluating the effects on 
competition, if any, of labor hiring preferences expressly authorized 
under the BIL. Although DOT evaluation is no longer required, State and 
local recipients and subrecipients remain responsible for ensuring that 
the establishment and implementation of a hiring preference is 
otherwise consistent with applicable Federal, State, and local laws as 
provided in Section 25019(a)(1).
    State and local recipients and subrecipients may continue to 
administer any contracts authorized under the May 2021 initiative for 
the duration of these contracts per the requirements of their approved 
workplans. The FHWA may continue to use SEP-14 to authorize and 
evaluate contracting methods that are outside the scope of Section 
25019(a) of the BIL.
    Authority: Section 25019 of Pub. L. 117-58; 23 U.S.C. 502(b); 
Section 199B of the Consolidated Appropriation Act, 2021.

Stephanie Pollack,
Deputy Administrator, Federal Highway Administration.
[FR Doc. 2022-02974 Filed 2-10-22; 8:45 am]
BILLING CODE 4910-22-P