Indefinite Delivery and Indefinite Quantity Contracts for Federal-Aid Construction, 29713-29716 [2018-13645]
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29713
Proposed Rules
Federal Register
Vol. 83, No. 123
Tuesday, June 26, 2018
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
23 CFR Part 635
[FHWA Docket No. FHWA–2018–0017]
RIN 2125–AF83
Indefinite Delivery and Indefinite
Quantity Contracts for Federal-Aid
Construction
Federal Highway
Administration (FHWA), U.S.
Department of Transportation (DOT).
ACTION: Advance notice of proposed
rulemaking (ANPRM).
AGENCY:
The FHWA has announced
that the Indefinite Delivery and
Indefinite Quantity (ID/IQ) method of
contracting, including job order
contracts, for low-cost construction
contracts will be allowed, without
FHWA approval, under certain
circumstances. This advance notice of
proposed rulemaking seeks comment on
how FHWA may further expand this
contracting method on a permanent
basis.
SUMMARY:
Comments must be received on
or before August 27, 2018. Late
comments will be considered to the
extent practicable.
ADDRESSES: You may submit comments,
identified by the document number at
the top of this document, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 1–202–493–2251.
• Mail: Docket Management Facility,
U.S. Department of Transportation, 1200
New Jersey Ave. SE, West Building
Ground Floor, Room W12–140,
Washington, DC 20590.
• Hand Delivery/Courier: West
Building Ground Floor, Room W12–140,
1200 New Jersey Ave. SE, between 9:00
a.m. and 5:00 p.m., Monday through
Friday, except Federal holidays. The
telephone number is (202) 366–9329.
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DATES:
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Instructions: All submissions received
must include the agency name and
docket number for this rulemaking. All
comments received will be posted
without change to www.regulations.gov,
including any personal information
provided.
Docket: For access to the docket to
read background documents or
comments received, go to
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For
questions about this ANPRM, please
contact Mr. John Huyer, FHWA Office of
Program Administration, (651) 291–
6111, or via email at John.Huyer@
dot.gov. For legal questions, please
contact Mr. Jomar Maldonado, FHWA
Office of the Chief Counsel, 202–366–
1373, or via email at Jomar.Maldonado@
dot.gov. Office hours for the FHWA are
from 8:00 a.m. to 4:30 p.m., ET, Monday
through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION: On May 2,
2018,1 FHWA announced that
contracting agencies no longer need to
submit individual requests and work
plans pursuant to Special Experimental
Project No. 14 (SEP–14) for low-cost ID/
IQ contracts that are awarded to the
lowest responsive bidder based on an
invitation for bids. The FHWA
considers ‘‘low-cost contracts’’ to be 1or 2-year contracts awarded to the
lowest responsive bidder for
construction of projects that qualify for
FHWA categorical exclusions under the
National Environmental Policy Act of
1969 (23 CFR 771.117) and where the
total value of task or work orders does
not exceed $2,000,000 per year.
However, the ID/IQ contracting
technique continues to be authorized on
an experimental basis while FHWA
explores rulemaking to revise FHWA’s
regulations to accommodate this
contracting technique. This ANPRM
seeks comment on how FHWA may
operationalize this contracting
technique on a permanent basis.
Background
The ID/IQ contracts are a method of
contracting that allows an indefinite
quantity of services for a fixed time.
They are used in the Federal
Government when agencies cannot
determine, above a specified minimum,
the precise quantities of supplies or
services that the Government will
1 83
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FR 19393, May 2, 2018.
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require during the contract period. For
construction ID/IQ contracts,
contractors bid unit prices for estimated
quantities of standard work items, and
task orders are used to define the
location and quantities for specific
work. The ID/IQ contracts may be
awarded to the lowest responsive bidder
based on an invitation for bids or the
best-value proposer based on responses
to Requests for Proposals. Contracting
agencies use other names for these types
of contracts, including on-call contracts,
area-wide contracts, continuing
contracts, push-button contracts, and
task order contracts. Job Order Contracts
(JOCs) are a form of ID/IQ contracts that
utilize a construction task catalogue
with pre-priced work item descriptions
and where contractors bid ‘‘mark-up
rates.’’ The contract is awarded to the
lowest responsive bidder determined by
their rates.
Although ID/IQ contracts have been
specifically authorized in the Federal
procurement process (48 CFR 16.5) and
for the contracting of architecture and
engineering (A/E) services in the
Federal-aid highway program (FAHP)
(23 CFR part 172), the FAHP
authorization and procurement laws for
construction do not address the possible
use of ID/IQ contracts. The FAHP
construction procurement statute, 23
U.S.C. 112(b)(1), requires contracts to be
awarded by a competitive bidding
process to the lowest responsive bidder
(traditional design-bid-build project
delivery method based upon the
premise of a 100 percent-complete
design and a well-defined scope of
work). The ID/IQ contracts are awarded
based upon a general, but not
completely defined, scope of work for a
geographic area and limited time period
(but not specific locations, designs, or
quantities) and are often awarded based
upon specific evaluation criteria.
A. Experience Under Special
Experimental Project Number 14 (SEP–
14)
The FHWA has used its authority in
23 U.S.C. 502(b)(1) to test the use of ID/
IQ contracts for the construction of
FAHP projects through the SEP–14
Program for innovative contracting
techniques. Under the SEP–14 Program,
contracting agencies interested in
testing an innovative contracting
technique submit project-specific (or
programmatic) work plans to FHWA for
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their implementation. The FHWA
Division Office evaluates the work plan,
coordinates with FHWA Headquarters,
and, if it finds the work plan to be
acceptable, FHWA approves the use of
the technique on a temporary basis for
a project or group of pilot projects. Over
time, FHWA Headquarters staff assess
the initiative to determine if it is a
technique that should be
operationalized for the FAHP on a
permanent basis without the need for
individual requests, work plans, and
evaluation reports. Operationalizing
SEP–14 experiments has taken different
paths in the past based on the source of
the policy warranting innovation and
FHWA’s risk assessment, such as
FHWA-initiated memoranda (for
example, cost plus time bidding and
lane rental), FHWA-initiated rulemaking
(for example, warranty clauses at 23
CFR 635.413), and congressionally
initiated statutory amendments (for
example, design-build and contractor
manager/general contractor under 23
U.S.C. 112(b)(3)–(4)). More information
on SEP–14 can be found at https://
www.fhwa.dot.gov/construction/cqit/
sep14.cfm.
From 2007 to the present, FHWA,
State departments of transportation
(State DOTs), and Local Public Agencies
(LPAs) through the State DOTs have
experimented with the use of ID/IQ
contracts and JOCs for construction. The
FHWA has approved the use of this
contracting method under SEP–14 for 16
different State DOTs and 6 LPAs.
Evaluation reports indicate that JOCs
and ID/IQ contracts allow for costeffective contracting for small value
contracts and preventive maintenance
programs. Specifically, the reports
indicate that these contracts eliminate
the need for contracting agencies to
advertise and award numerous small
contracts and provide contracting
agencies with wide flexibility in
programming and addressing preventive
maintenance needs.
Having evaluated the use of JOCs and
ID/IQ contracts for construction in the
FAHP for over a decade, FHWA has
now determined that they are suitable
for operationalization. This is consistent
with Senate report language
accompanying fiscal years 2017 and
2018 appropriations to operationalize
JOCs. S. Rept. No. 114–243, 43 (April
21, 2016); S. Rept. No. 115–138, 52 (July
27, 2017). The approach is also
consistent with the Department of
Justice’s Office of Legal Counsel (OLC)
opinion regarding competition and
contracting requirements. See
Competitive Bidding Requirements
Under the Federal-Aid Highway
Program, 23 U.S.C. 112 (Aug. 23, 2013).
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B. Steps for Operationalizing ID/IQs and
JOCs for Construction in the FAHP
The FHWA is proceeding with two
phases to operationalize ID/IQ contracts
and JOCs for construction in the FAHP.
The first phase is the issuance of an
FHWA Notice on how FHWA will allow
ID/IQ contracts and JOCs for
construction without the need for
project-specific work plans from
contracting agencies. The FHWA
published a Federal Register Notice
requesting public comment on allowing
contracting agencies to establish ID/IQ
and JOCs for low-cost construction
contracts at 83 FR 19393 (May 2, 2018).
Please refer to that notice for details on
the proposed implementation of phase
one. The second phase is the initiation
of this rulemaking.
Amendments to the construction and
approval regulations are necessary in
order to allow the contracting technique
on a permanent basis. To assist the
Agency in this effort, FHWA seeks
public comments on the following
questions:
1. Would it be appropriate to allow
notice and award of the base ID/IQ
contract or JOC prior to approval of
plans, specifications and estimates,
environmental review, and right-of-way
clearances, but require these prior to the
issuance of individual tasks?
2. Would the allowance of time
extensions be appropriate? What should
be the minimum time extension length?
What should be the maximum time
extension length?
3. Is the $2,000,000 per year
limitation appropriate? Should this
figure be indexed? If so, how?
4. Should FHWA consider allowing
ID/IQ contracts using best value
considerations? What criteria (for
example, past performance, quality,
timeliness) should be considered for
best value determinations?
5. Should multiple award ID/IQ
contracts be allowed? If so, what
conditions or criteria should be used for
awarding work orders?
6. What contract term/extension
limits should be allowed? Should ‘‘onramp’’ procedures be used to allow new
contractors to be considered for the
award pool after the initial award and
‘‘off-ramp’’ procedures be used to
discontinue the use of contractors who
are not performing satisfactorily?
7. What procedures should be in place
to ensure fairness and transparency in
the selection and implementation of
multiple-award ID/IQ contracts?
8. What change conditions clause
would be appropriate for ID/IQ
contracts and JOCs? What would be an
appropriate clause for significant
changes in the character of work?
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9. How should the contracting
agencies address the estimates required
under 23 CFR 635.115? Would the
estimate quantities be the minimum
value provided under the contract, the
estimate for the base contract, or the
estimated maximum value under the
contract including contract extensions?
10. How would the 30 percent selfperformance requirement in 23 CFR
635.116(a) apply to ID/IQ contracts and
JOCs? How would it be enforced given
the nature of the task orders?
11. How should authorizations to
proceed with work be given for
individual task orders?
12. What costs, benefits, and costsavings would result from allowing this
contracting technique on a permanent
basis? Please submit data that would
help FHWA quantify cost-effectiveness,
as well as quantifiable cost-savings
associated with advertising and
awarding small contracts and increasing
flexibility in programming, and any
other efficiencies that may result from
the operationalization of this
contracting method.
13. Are there any other aspects related
to the use of ID/IQ contracts or JOC for
construction in the FAHP that FHWA
should consider?
The FHWA will consider all
responses and comments and take them
into account in the development of a
notice of proposed rulemaking (NPRM)
on this subject.
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. In addition to late
comments, FHWA also will continue to
file relevant information in the docket
as it becomes available after the
comment period closing date, and
interested persons should continue to
examine the docket for new material.
An NPRM may be published at any time
after close of the comment period.
Executive Order 13771 (Reducing
Regulations and Controlling Regulatory
Costs), Executive Order 12866
(Regulatory Planning and Review),
Executive Order 13563 (Improving
Regulation and Regulatory Review),
and DOT Regulatory Policies and
Procedures
The FHWA has preliminarily
determined that this action would not
be a significant regulatory action within
the meaning of Executive Order (E.O.)
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12866 and within the meaning of the
DOT regulatory policies and procedures.
This action complies with E.O.s 12866,
13563, and 13771 to improve regulation.
The FHWA anticipates that this
rulemaking would be a deregulatory
action and result in cost-savings because
it proposes to remove the traditional
procurement requirements for Federalaid highway construction work for small
construction work that would result in
expeditious project delivery of low-cost
and/or repetitive work. The FHWA
seeks data on the costs, benefits, and
cost-savings associated with this action.
Based upon the information received
in response to this ANPRM, FHWA
intends to carefully consider the costs
and benefits associated with this
rulemaking. Accordingly, comments,
information, and data are solicited on
the economic impact of any proposed
recommendation.
This ANPRM is not a regulatory
action under Executive Order 13771.
Regulatory Flexibility Act
In compliance with the Regulatory
Flexibility Act (Pub. L. 96–354, 5 U.S.C.
601–612), and based upon the
information received in response to this
ANPRM, FHWA will evaluate the effects
of any action proposed on small entities.
This action merely seeks information
regarding the use of the ID/IQ method
of contracting, including JOCs, for lowcost construction contracts. Therefore,
FHWA is unable to certify at this time
whether or not it will have a significant
impact on a substantial number of small
entities.
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Unfunded Mandates Reform Act of
1995
Because of the preliminary nature of
this document and lack of necessary
information on costs, FHWA is unable
to evaluate the effects of the potential
regulatory changes in regard to
imposing a Federal mandate involving
expenditure by State, local, and Indian
Tribal governments, in the aggregate, or
by the private sector, of $151.1 million
or more in any one year (2 U.S.C. 1532).
Nevertheless, FHWA will evaluate any
regulatory action that might be proposed
in subsequent stages of this rulemaking
to assess the effects on State, local, and
Indian Tribal governments and the
private sector.
Executive Order 12988 (Civil Justice
Reform)
The FHWA will evaluate any rule that
may be proposed in response to
comments received to ensure that such
action meets applicable standards in
section 3(a) and 3(b)(2) of E.O. 12988,
Civil Justice Reform, to minimize
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litigation, eliminate ambiguity, and
reduce burden.
Executive Order 13045 (Protection of
Children)
The FHWA will evaluate any rule that
may be proposed in response to
comments received to ensure that such
action meets the requirements of E.O.
13045, Protection of Children from
Environmental Health Risks and Safety
Risks. The Agency does not, however,
anticipate that any such rule would be
economically significant or would
present an environmental risk to health
or safety that may disproportionately
affect children.
Executive Order 12630 (Taking of
Private Property)
The FHWA will evaluate any rule that
may be proposed in response to
comments received to ensure that any
such rule will not affect a taking of
private property or otherwise have
taking implications under E.O. 12630,
Governmental Actions and Interference
with Constitutionally Protected Property
Rights.
Executive Order 13132 (Federalism)
The FHWA will analyze any action
that might be proposed in accordance
with the principles and criteria
contained in E.O. 13132, and FHWA
anticipates that any action contemplated
will not have sufficient federalism
implications to warrant the preparation
of a federalism assessment. The FHWA
also anticipates that any action taken
will not preempt any State law or State
regulation or affect the States’ ability to
discharge traditional State governmental
functions. We encourage commenters to
consider these issues.
Executive Order 13175 (Tribal
Consultation)
The FHWA will analyze any proposal
under E.O. 13175, dated November 6,
2000. The FHWA preliminarily believes
that any proposal 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 law. Therefore, a Tribal
summary impact statement may not be
required.
Executive Order 12372
(Intergovernmental Review)
Catalog of Federal Domestic
Assistance Program Number 20.205,
Highway Planning and Construction.
The regulations implementing E.O.
12372 regarding intergovernmental
consultation on Federal programs and
activities apply to this program.
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29715
Paperwork Reduction Act of 1995
Under the Paperwork Reduction Act
of 1995 (PRA) (44 U.S.C. 3501), Federal
agencies must obtain approval from the
Office of Management and Budget
(OMB) for each collection of
information they conduct, sponsor, or
require through regulations. Any action
that might be contemplated in
subsequent phases of this proceeding
will be analyzed for the purpose of the
PRA for its impact upon information
collection. The FHWA would be
required to submit any proposed
collections of information to OMB for
review and approval at the time the
NPRM is issued, and, accordingly, seeks
public comments. Interested parties are
invited to send comments regarding any
aspect of any proposed information
collection requirements, including, but
not limited to: (1) Whether the
collection of information would be
necessary for the performance of the
functions of FHWA, including whether
the information would have practical
utility; (2) the accuracy of the estimated
burden; (3) ways to enhance the quality,
utility, and clarity of the collection of
information; and (4) ways to minimize
the collection burden without reducing
the quality of the information collected.
National Environmental Policy Act
The FHWA will analyze any action
that might be proposed for the purposes
of the National Environmental Policy
Act of 1969, as amended (42 U.S.C.
4321–4347) to assess whether there
would be any effect on the quality of the
environment.
Executive Order 13211 (Energy Effects)
The FHWA will analyze any proposed
action under E.O. 13211, Actions
Concerning Regulations that
Significantly Affect Energy Supply,
Distribution, or Use, to assess whether
there would be any adverse effect on the
supply, distribution, or use of energy.
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 section with
the Unified Agenda.
List of Subjects in 23 CFR Part 635
Grant programs—transportation,
Highways and roads, Reporting and
recordkeeping requirements.
Authority: 23 U.S.C. 112 and 502; 23 CFR
635.
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Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Proposed Rules
Issued on June 20, 2018 under authority
delegated in 49 CFR 1.85.
Brandye L. Hendrickson,
Acting Administrator, Federal Highway
Administration.
[FR Doc. 2018–13645 Filed 6–25–18; 8:45 am]
BILLING CODE 4910–22–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[REG–132434–17]
RIN 1545–BO12
Certain Non-Government Attorneys
Not Authorized To Participate in
Examinations of Books and Witnesses
as a Section 6103(n) Contractor;
Hearing
Internal Revenue Service (IRS),
Treasury.
ACTION: Notification of a public hearing
on notice of proposed rulemaking.
AGENCY:
This document provides a
notification of public hearing on
proposed regulations relating to section
7602(a) of the Internal Revenue Code
relating to administrative proceedings.
DATES: The public hearing is being held
on Tuesday, July 31, 2018, at 10:00 a.m.
The IRS must receive outlines of the
topics to be discussed at the public
hearing by Thursday, July 19, 2018.
ADDRESSES: The public hearing is being
held in the IRS Auditorium, Internal
Revenue Service Building, 1111
Constitution Avenue NW, Washington,
DC 20224. Due to building security
procedures, visitors must enter at the
Constitution Avenue entrance. In
addition, all visitors must present a
valid photo identification to enter the
building.
Send Submissions to CC:PA:LPD:PR
(REG–132434–17), Room 5205, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC
20044. Submissions may be handdelivered Monday through Friday to
CC:PA:LPD:PR (REG–132434–17),
Couriers Desk, Internal Revenue
Service, 1111 Constitution Avenue NW,
Washington, DC 20224 or sent
electronically via the Federal
eRulemaking Portal at
www.regulations.gov (IRS REG–132434–
17).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
William V. Spatz (202) 317–5461;
concerning submissions of comments,
the hearing and/or to be placed on the
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building access list to attend the hearing
Regina Johnson at (202) 317–6901 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION: The
subject of the public hearing is the
notice of proposed rulemaking (REG–
132434–17) that was published in the
Federal Register on Wednesday, March
28, 2018 (83 FR 13206).
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
that submitted written comments by
June 26, 2018, must submit an outline
of the topics to be addressed and the
amount of time to be devoted to each
topic by Thursday, July 19, 2018.
A period of 10 minutes is allotted to
each person for presenting oral
comments. After the deadline for
receiving outlines has passed, the IRS
will prepare an agenda containing the
schedule of speakers. Copies of the
agenda will be made available, free of
charge, at the hearing or by contacting
the Publications and Regulations Branch
at (202) 317–6901 (not a toll-free
number).
Because of access restrictions, the IRS
will not admit visitors beyond the
immediate entrance area more than 30
minutes before the hearing starts. For
information about having your name
placed on the building access list to
attend the hearing, see the FOR FURTHER
INFORMATION CONTACT section of this
document.
Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel, (Procedure and Administration).
[FR Doc. 2018–13695 Filed 6–25–18; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF LABOR
Mine Safety and Health Administration
30 CFR Parts 56 and 75
[Docket No. MSHA–2018–0016]
RIN 1219–AB91
Safety Improvement Technologies for
Mobile Equipment at Surface Mines,
and for Belt Conveyors at Surface and
Underground Mines
Mine Safety and Health
Administration, Labor.
ACTION: Request for information.
AGENCY:
Mining safety could be
substantially improved by preventing
accidents that involve mobile
equipment at surface coal mines and
metal and nonmetal mines and belt
SUMMARY:
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conveyors at surface and underground
mines. The Mine Safety and Health
Administration (MSHA) is taking a
number of actions related to mobile
equipment and belt conveyors to
improve miners’ safety, including
providing technical assistance,
conducting awareness campaigns, and
developing best practices and training
materials. MSHA is also considering the
role of engineering controls that would
increase the use of seatbelts, enhance
equipment operators’ ability to see all
areas near the machine, warn equipment
operators of potential collision hazards,
prevent equipment operators from
driving over a highwall or dump point,
and help prevent entanglement hazards
related to working near moving or reenergized belt conveyors. MSHA is
seeking information and data on
engineering controls that could reduce
the risk of accidents and improve miner
safety. MSHA is also seeking
suggestions from stakeholders on: Best
practices, training materials, policies
and procedures, innovative
technologies, and any other information
they may have to improve safety in and
around mobile equipment, and working
near and around belt conveyors.
MSHA will hold stakeholder meetings
to provide the mining community an
opportunity to discuss and share
information about the issues raised in
this notice. A separate notice
announcing stakeholder meetings will
be published in the Federal Register at
a later date.
DATES: Comments must be received or
postmarked by midnight Eastern
Daylight Time on December 24, 2018.
ADDRESSES: Comments must be
identified with ‘‘RIN 1219–AB91’’ and
may be sent to MSHA by any of the
following methods:
• Federal E-Rulemaking Portal:
https://www.regulations.gov. Follow the
on-line instructions for submitting
comments.
• Email: zzMSHA-comments@
dol.gov.
• Mail: MSHA, Office of Standards,
Regulations, and Variances, 201 12th
Street South, Suite 4E401, Arlington,
Virginia 22202–5452.
• Hand Delivery or Courier: 201 12th
Street South, Suite 4E401, Arlington,
Virginia, between 9:00 a.m. and 5:00
p.m. Monday through Friday, except
Federal holidays. Sign in at the
receptionist’s desk on the 4th Floor East,
Suite 4E401.
• Fax: 202–693–9441.
Instructions: All submissions must
include ‘‘RIN 1219–AB91’’ or ‘‘Docket
No. MSHA 2018–0016.’’ Do not include
personal information that you do not
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]]>Agencies
[Federal Register Volume 83, Number 123 (Tuesday, June 26, 2018)]
[Proposed Rules]
[Pages 29713-29716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13645]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 /
Proposed Rules
[[Page 29713]]
DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
23 CFR Part 635
[FHWA Docket No. FHWA-2018-0017]
RIN 2125-AF83
Indefinite Delivery and Indefinite Quantity Contracts for
Federal-Aid Construction
AGENCY: Federal Highway Administration (FHWA), U.S. Department of
Transportation (DOT).
ACTION: Advance notice of proposed rulemaking (ANPRM).
-----------------------------------------------------------------------
SUMMARY: The FHWA has announced that the Indefinite Delivery and
Indefinite Quantity (ID/IQ) method of contracting, including job order
contracts, for low-cost construction contracts will be allowed, without
FHWA approval, under certain circumstances. This advance notice of
proposed rulemaking seeks comment on how FHWA may further expand this
contracting method on a permanent basis.
DATES: Comments must be received on or before August 27, 2018. Late
comments will be considered to the extent practicable.
ADDRESSES: You may submit comments, identified by the document number
at the top of this document, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Fax: 1-202-493-2251.
Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Ave. SE, West Building Ground Floor,
Room W12-140, Washington, DC 20590.
Hand Delivery/Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Ave. SE, between 9:00 a.m. and 5:00 p.m.,
Monday through Friday, except Federal holidays. The telephone number is
(202) 366-9329.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to www.regulations.gov, including any personal
information provided.
Docket: For access to the docket to read background documents or
comments received, go to www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For questions about this ANPRM, please
contact Mr. John Huyer, FHWA Office of Program Administration, (651)
291-6111, or via email at [email protected]. For legal questions,
please contact Mr. Jomar Maldonado, FHWA Office of the Chief Counsel,
202-366-1373, or via email at [email protected]. Office hours for
the FHWA are from 8:00 a.m. to 4:30 p.m., ET, Monday through Friday,
except Federal holidays.
SUPPLEMENTARY INFORMATION: On May 2, 2018,\1\ FHWA announced that
contracting agencies no longer need to submit individual requests and
work plans pursuant to Special Experimental Project No. 14 (SEP-14) for
low-cost ID/IQ contracts that are awarded to the lowest responsive
bidder based on an invitation for bids. The FHWA considers ``low-cost
contracts'' to be 1- or 2-year contracts awarded to the lowest
responsive bidder for construction of projects that qualify for FHWA
categorical exclusions under the National Environmental Policy Act of
1969 (23 CFR 771.117) and where the total value of task or work orders
does not exceed $2,000,000 per year. However, the ID/IQ contracting
technique continues to be authorized on an experimental basis while
FHWA explores rulemaking to revise FHWA's regulations to accommodate
this contracting technique. This ANPRM seeks comment on how FHWA may
operationalize this contracting technique on a permanent basis.
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\1\ 83 FR 19393, May 2, 2018.
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Background
The ID/IQ contracts are a method of contracting that allows an
indefinite quantity of services for a fixed time. They are used in the
Federal Government when agencies cannot determine, above a specified
minimum, the precise quantities of supplies or services that the
Government will require during the contract period. For construction
ID/IQ contracts, contractors bid unit prices for estimated quantities
of standard work items, and task orders are used to define the location
and quantities for specific work. The ID/IQ contracts may be awarded to
the lowest responsive bidder based on an invitation for bids or the
best-value proposer based on responses to Requests for Proposals.
Contracting agencies use other names for these types of contracts,
including on-call contracts, area-wide contracts, continuing contracts,
push-button contracts, and task order contracts. Job Order Contracts
(JOCs) are a form of ID/IQ contracts that utilize a construction task
catalogue with pre-priced work item descriptions and where contractors
bid ``mark-up rates.'' The contract is awarded to the lowest responsive
bidder determined by their rates.
Although ID/IQ contracts have been specifically authorized in the
Federal procurement process (48 CFR 16.5) and for the contracting of
architecture and engineering (A/E) services in the Federal-aid highway
program (FAHP) (23 CFR part 172), the FAHP authorization and
procurement laws for construction do not address the possible use of
ID/IQ contracts. The FAHP construction procurement statute, 23 U.S.C.
112(b)(1), requires contracts to be awarded by a competitive bidding
process to the lowest responsive bidder (traditional design-bid-build
project delivery method based upon the premise of a 100 percent-
complete design and a well-defined scope of work). The ID/IQ contracts
are awarded based upon a general, but not completely defined, scope of
work for a geographic area and limited time period (but not specific
locations, designs, or quantities) and are often awarded based upon
specific evaluation criteria.
A. Experience Under Special Experimental Project Number 14 (SEP-14)
The FHWA has used its authority in 23 U.S.C. 502(b)(1) to test the
use of ID/IQ contracts for the construction of FAHP projects through
the SEP-14 Program for innovative contracting techniques. Under the
SEP-14 Program, contracting agencies interested in testing an
innovative contracting technique submit project-specific (or
programmatic) work plans to FHWA for
[[Page 29714]]
their implementation. The FHWA Division Office evaluates the work plan,
coordinates with FHWA Headquarters, and, if it finds the work plan to
be acceptable, FHWA approves the use of the technique on a temporary
basis for a project or group of pilot projects. Over time, FHWA
Headquarters staff assess the initiative to determine if it is a
technique that should be operationalized for the FAHP on a permanent
basis without the need for individual requests, work plans, and
evaluation reports. Operationalizing SEP-14 experiments has taken
different paths in the past based on the source of the policy
warranting innovation and FHWA's risk assessment, such as FHWA-
initiated memoranda (for example, cost plus time bidding and lane
rental), FHWA-initiated rulemaking (for example, warranty clauses at 23
CFR 635.413), and congressionally initiated statutory amendments (for
example, design-build and contractor manager/general contractor under
23 U.S.C. 112(b)(3)-(4)). More information on SEP-14 can be found at
https://www.fhwa.dot.gov/construction/cqit/sep14.cfm.
From 2007 to the present, FHWA, State departments of transportation
(State DOTs), and Local Public Agencies (LPAs) through the State DOTs
have experimented with the use of ID/IQ contracts and JOCs for
construction. The FHWA has approved the use of this contracting method
under SEP-14 for 16 different State DOTs and 6 LPAs. Evaluation reports
indicate that JOCs and ID/IQ contracts allow for cost-effective
contracting for small value contracts and preventive maintenance
programs. Specifically, the reports indicate that these contracts
eliminate the need for contracting agencies to advertise and award
numerous small contracts and provide contracting agencies with wide
flexibility in programming and addressing preventive maintenance needs.
Having evaluated the use of JOCs and ID/IQ contracts for
construction in the FAHP for over a decade, FHWA has now determined
that they are suitable for operationalization. This is consistent with
Senate report language accompanying fiscal years 2017 and 2018
appropriations to operationalize JOCs. S. Rept. No. 114-243, 43 (April
21, 2016); S. Rept. No. 115-138, 52 (July 27, 2017). The approach is
also consistent with the Department of Justice's Office of Legal
Counsel (OLC) opinion regarding competition and contracting
requirements. See Competitive Bidding Requirements Under the Federal-
Aid Highway Program, 23 U.S.C. 112 (Aug. 23, 2013).
B. Steps for Operationalizing ID/IQs and JOCs for Construction in the
FAHP
The FHWA is proceeding with two phases to operationalize ID/IQ
contracts and JOCs for construction in the FAHP. The first phase is the
issuance of an FHWA Notice on how FHWA will allow ID/IQ contracts and
JOCs for construction without the need for project-specific work plans
from contracting agencies. The FHWA published a Federal Register Notice
requesting public comment on allowing contracting agencies to establish
ID/IQ and JOCs for low-cost construction contracts at 83 FR 19393 (May
2, 2018). Please refer to that notice for details on the proposed
implementation of phase one. The second phase is the initiation of this
rulemaking.
Amendments to the construction and approval regulations are
necessary in order to allow the contracting technique on a permanent
basis. To assist the Agency in this effort, FHWA seeks public comments
on the following questions:
1. Would it be appropriate to allow notice and award of the base
ID/IQ contract or JOC prior to approval of plans, specifications and
estimates, environmental review, and right-of-way clearances, but
require these prior to the issuance of individual tasks?
2. Would the allowance of time extensions be appropriate? What
should be the minimum time extension length? What should be the maximum
time extension length?
3. Is the $2,000,000 per year limitation appropriate? Should this
figure be indexed? If so, how?
4. Should FHWA consider allowing ID/IQ contracts using best value
considerations? What criteria (for example, past performance, quality,
timeliness) should be considered for best value determinations?
5. Should multiple award ID/IQ contracts be allowed? If so, what
conditions or criteria should be used for awarding work orders?
6. What contract term/extension limits should be allowed? Should
``on-ramp'' procedures be used to allow new contractors to be
considered for the award pool after the initial award and ``off-ramp''
procedures be used to discontinue the use of contractors who are not
performing satisfactorily?
7. What procedures should be in place to ensure fairness and
transparency in the selection and implementation of multiple-award ID/
IQ contracts?
8. What change conditions clause would be appropriate for ID/IQ
contracts and JOCs? What would be an appropriate clause for significant
changes in the character of work?
9. How should the contracting agencies address the estimates
required under 23 CFR 635.115? Would the estimate quantities be the
minimum value provided under the contract, the estimate for the base
contract, or the estimated maximum value under the contract including
contract extensions?
10. How would the 30 percent self-performance requirement in 23 CFR
635.116(a) apply to ID/IQ contracts and JOCs? How would it be enforced
given the nature of the task orders?
11. How should authorizations to proceed with work be given for
individual task orders?
12. What costs, benefits, and cost-savings would result from
allowing this contracting technique on a permanent basis? Please submit
data that would help FHWA quantify cost-effectiveness, as well as
quantifiable cost-savings associated with advertising and awarding
small contracts and increasing flexibility in programming, and any
other efficiencies that may result from the operationalization of this
contracting method.
13. Are there any other aspects related to the use of ID/IQ
contracts or JOC for construction in the FAHP that FHWA should
consider?
The FHWA will consider all responses and comments and take them
into account in the development of a notice of proposed rulemaking
(NPRM) on this subject.
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. In addition to late comments,
FHWA also will continue to file relevant information in the docket as
it becomes available after the comment period closing date, and
interested persons should continue to examine the docket for new
material. An NPRM may be published at any time after close of the
comment period.
Executive Order 13771 (Reducing Regulations and Controlling Regulatory
Costs), Executive Order 12866 (Regulatory Planning and Review),
Executive Order 13563 (Improving Regulation and Regulatory Review), and
DOT Regulatory Policies and Procedures
The FHWA has preliminarily determined that this action would not be
a significant regulatory action within the meaning of Executive Order
(E.O.)
[[Page 29715]]
12866 and within the meaning of the DOT regulatory policies and
procedures. This action complies with E.O.s 12866, 13563, and 13771 to
improve regulation. The FHWA anticipates that this rulemaking would be
a deregulatory action and result in cost-savings because it proposes to
remove the traditional procurement requirements for Federal-aid highway
construction work for small construction work that would result in
expeditious project delivery of low-cost and/or repetitive work. The
FHWA seeks data on the costs, benefits, and cost-savings associated
with this action.
Based upon the information received in response to this ANPRM, FHWA
intends to carefully consider the costs and benefits associated with
this rulemaking. Accordingly, comments, information, and data are
solicited on the economic impact of any proposed recommendation.
This ANPRM is not a regulatory action under Executive Order 13771.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,
5 U.S.C. 601-612), and based upon the information received in response
to this ANPRM, FHWA will evaluate the effects of any action proposed on
small entities. This action merely seeks information regarding the use
of the ID/IQ method of contracting, including JOCs, for low-cost
construction contracts. Therefore, FHWA is unable to certify at this
time whether or not it will have a significant impact on a substantial
number of small entities.
Unfunded Mandates Reform Act of 1995
Because of the preliminary nature of this document and lack of
necessary information on costs, FHWA is unable to evaluate the effects
of the potential regulatory changes in regard to imposing a Federal
mandate involving expenditure by State, local, and Indian Tribal
governments, in the aggregate, or by the private sector, of $151.1
million or more in any one year (2 U.S.C. 1532). Nevertheless, FHWA
will evaluate any regulatory action that might be proposed in
subsequent stages of this rulemaking to assess the effects on State,
local, and Indian Tribal governments and the private sector.
Executive Order 12988 (Civil Justice Reform)
The FHWA will evaluate any rule that may be proposed in response to
comments received to ensure that such action meets applicable standards
in section 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to
minimize litigation, eliminate ambiguity, and reduce burden.
Executive Order 13045 (Protection of Children)
The FHWA will evaluate any rule that may be proposed in response to
comments received to ensure that such action meets the requirements of
E.O. 13045, Protection of Children from Environmental Health Risks and
Safety Risks. The Agency does not, however, anticipate that any such
rule would be economically significant or would present an
environmental risk to health or safety that may disproportionately
affect children.
Executive Order 12630 (Taking of Private Property)
The FHWA will evaluate any rule that may be proposed in response to
comments received to ensure that any such rule will not affect a taking
of private property or otherwise have taking implications under E.O.
12630, Governmental Actions and Interference with Constitutionally
Protected Property Rights.
Executive Order 13132 (Federalism)
The FHWA will analyze any action that might be proposed in
accordance with the principles and criteria contained in E.O. 13132,
and FHWA anticipates that any action contemplated will not have
sufficient federalism implications to warrant the preparation of a
federalism assessment. The FHWA also anticipates that any action taken
will not preempt any State law or State regulation or affect the
States' ability to discharge traditional State governmental functions.
We encourage commenters to consider these issues.
Executive Order 13175 (Tribal Consultation)
The FHWA will analyze any proposal under E.O. 13175, dated November
6, 2000. The FHWA preliminarily believes that any proposal 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 law. Therefore, a Tribal
summary impact statement may not be required.
Executive Order 12372 (Intergovernmental Review)
Catalog of Federal Domestic Assistance Program Number 20.205,
Highway Planning and Construction. The regulations implementing E.O.
12372 regarding intergovernmental consultation on Federal programs and
activities apply to this program.
Paperwork Reduction Act of 1995
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501),
Federal agencies must obtain approval from the Office of Management and
Budget (OMB) for each collection of information they conduct, sponsor,
or require through regulations. Any action that might be contemplated
in subsequent phases of this proceeding will be analyzed for the
purpose of the PRA for its impact upon information collection. The FHWA
would be required to submit any proposed collections of information to
OMB for review and approval at the time the NPRM is issued, and,
accordingly, seeks public comments. Interested parties are invited to
send comments regarding any aspect of any proposed information
collection requirements, including, but not limited to: (1) Whether the
collection of information would be necessary for the performance of the
functions of FHWA, including whether the information would have
practical utility; (2) the accuracy of the estimated burden; (3) ways
to enhance the quality, utility, and clarity of the collection of
information; and (4) ways to minimize the collection burden without
reducing the quality of the information collected.
National Environmental Policy Act
The FHWA will analyze any action that might be proposed for the
purposes of the National Environmental Policy Act of 1969, as amended
(42 U.S.C. 4321-4347) to assess whether there would be any effect on
the quality of the environment.
Executive Order 13211 (Energy Effects)
The FHWA will analyze any proposed action under E.O. 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use, to assess whether there would be any adverse
effect on the supply, distribution, or use of energy.
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 section with the
Unified Agenda.
List of Subjects in 23 CFR Part 635
Grant programs--transportation, Highways and roads, Reporting and
recordkeeping requirements.
Authority: 23 U.S.C. 112 and 502; 23 CFR 635.
[[Page 29716]]
Issued on June 20, 2018 under authority delegated in 49 CFR
1.85.
Brandye L. Hendrickson,
Acting Administrator, Federal Highway Administration.
[FR Doc. 2018-13645 Filed 6-25-18; 8:45 am]
BILLING CODE 4910-22-P
