Indefinite Delivery and Indefinite Quantity Contracts for Federal-Aid Construction, 67553-67558 [2022-24002]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 87, Number 216 (Wednesday, November 9, 2022)]
[Rules and Regulations]
[Pages 67553-67558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24002]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 630 and 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: Final rule.

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SUMMARY: On November 16, 2020, FHWA published an interim final rule 
(IFR) amending FHWA's regulations to allow States the ability to use 
the Indefinite Delivery and Indefinite Quantity (ID/IQ) method of 
contracting, including job order contracting (JOC), on Federal-aid 
highway projects, under certain circumstances, on a permanent basis. 
This action adopts the IFR with a few minor changes and technical 
amendments. Most provisions from the IFR remain unchanged. This action 
also restores a missing provision inadvertently removed during an 
earlier, unrelated rulemaking.

DATES: This final rule is effective December 9, 2022.

FOR FURTHER INFORMATION CONTACT: Mr. James DeSanto, Office of 
Preconstruction, Construction, and Pavements, [email protected], 
(614) 357-8515, or Mr. Patrick Smith, Office of the Chief Counsel, 
[email protected], (202) 366-1345, Federal Highway 
Administration, 1200 New Jersey Avenue SE, Washington, DC 20590. Office 
hours are from 8 a.m. to 4:30 p.m., EST, Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    This document, as well as the IFR, advance notice of proposed 
rulemaking, supporting materials, and all comments received may be 
viewed online through the Federal eRulemaking portal at: 
www.regulations.gov. An electronic copy of this document may also be 
downloaded from the Office of the Federal Register's home page at: 
www.FederalRegister.gov and the Government Publishing Office's web page 
at: www.GovInfo.gov.

Background

    The ID/IQ method of contracting allows a project owner to procure 
an unknown quantity of supplies or services for a fixed time. As 
described in FHWA's IFR, 85 FR 72919 (Nov. 16, 2020), government 
agencies use this method when they cannot determine, above a specified 
minimum, the precise quantities of supplies or services that they will 
require during the contract period. Contracting agencies use other 
names for these and similar types of contracts, including JOC 
contracts, master contracts, on-call contracts, area-wide contracts, 
continuing contracts, design-build push-button contracts, push-button 
contracts, stand-by contracts, and task order contracts.
    With the publication of FHWA's IFR, FHWA operationalized the ID/IQ 
method of contracting, including JOC, for Federal-aid construction 
projects. Previously, this contracting technique was only authorized on 
an experimental basis under FHWA's Special Experimental Project No. 14 
(SEP-14). Allowing ID/IQ contracting on a permanent basis provides 
benefits to State departments of transportation (State DOT) and other 
contracting agencies, including expediting project delivery, increasing 
administrative efficiency, reducing project costs, and increasing 
flexibility for State DOTs to use Federal-aid funds on certain 
projects. Additional discussion on State DOT and local public agency 
experience with ID/IQ contracting under FHWA's SEP-14 program, as well 
as FHWA's previous steps to operationalize ID/IQ contracting, is 
provided in the IFR.

Interim Final Rule

    On November 16, 2020, FHWA published its IFR in the Federal 
Register at 85 FR 72919, adopting new regulations and soliciting public 
comments on its proposal. Comments were submitted by six State DOTs, 
one metropolitan planning organization, one business, and one 
individual. The comments are available for examination in the docket 
(FHWA-2018-0017) at www.regulations.gov.

Analysis of Interim Final Rule Comments and FHWA Response

    The following discussion summarizes the comments submitted to the 
docket on the IFR, notes where and why FHWA has made changes in the 
final rule, and explains why certain recommendations or suggestions 
have not been incorporated into the final rule.
    In general, most commenters supported the rule. Comments generally

[[Page 67554]]

related to requests for clarification or interpretation of various 
provisions in the regulatory text. Some commenters responded to 
questions about specific issues posed by FHWA in the IFR. FHWA has 
carefully reviewed and analyzed all comments and revises the final rule 
as discussed below.

General

    The San Diego Association of Governments (SANDAG) expressed support 
for the IFR. SANDAG cited its previous experience with ID/IQ 
contracting under the SEP-14 program and stated the method achieved 
quicker project delivery; reduced design, procurement, and construction 
costs; and provided a more efficient and flexible contracting method to 
address changing field conditions. FHWA appreciates these comments and 
finds no substantive response is needed.
    The Delaware Department of Transportation (Delaware DOT) expressed 
overall support for the IFR. It explained that it generally favors less 
Federal requirements with more deference to State and local agencies. 
The Delaware DOT explained that its use of multiple-award ID/IQ 
contracts enables it to deliver relatively small projects very quickly, 
thereby benefitting the public significantly earlier than traditional 
procurement methods. Delaware DOT also cited reduced staff costs and 
efforts related to administration of ID/IQ projects, which also enables 
project costs to be reasonably managed. FHWA appreciates these comments 
and finds no substantive response is needed.
    Gordian, a company in Greenville, South Carolina, expressed its 
support for fully operationalizing ID/IQ contracting, including JOC. In 
addition, Gordian shared its views on industry best practices and was 
responsive to FHWA's questions in the IFR, as discussed in later 
sections of this notice.

Cost and Time Savings

    In the IFR, FHWA asked a series of questions about cost and time 
savings based on the use of the ID/IQ contracting method. FHWA received 
a few responsive comments which generally noted that cost savings would 
be realized, and that ID/IQ contracting may reduce procurement cycle 
time. FHWA received little additional data that was not considered in 
its original analysis. Some of the State DOT commenters explained that 
they did not yet have enough experience and data with this contracting 
to provide answers.
    Among the few responsive comments, Gordian provided examples of 
Federal-aid projects saving between 5 and 20 percent relative to other 
contracting methods. Gordian also maintained that using ID/IQ may 
reduce procurement cycle time for straightforward construction projects 
by as much as 90 percent.
    In addition, the Pennsylvania Department of Transportation 
(PennDOT) explained that it does not have experience with ID/IQ 
contracting to date but anticipates ID/IQ would reduce project or 
construction costs over the life of the contract. It also expects that 
over time the prices associated with ID/IQ contracts may be slightly 
lower than traditional contracts due to the anticipation of consistent 
work for contractors and the ease of assigning unanticipated or 
emergency work.
    FHWA agrees with the responsive comments that ID/IQ contracting is 
likely to reduce project costs and expedite project delivery of certain 
highway projects. FHWA did not receive sufficient new data to warrant 
revising its analysis of cost savings from operationalizing ID/IQ 
contracting on a permanent basis provided under the IFR.

Section-by-Section Analysis

Part 635--Construction and Maintenance

Subpart A--Contract Procedures

Section 635.110--Licensing and Qualification of Contractors
    The Idaho Transportation Department inquired about licensing and 
bonding of ID/IQ projects, specifically whether licensing and bonding 
requirements should consider the value of the ``master agreement'' (ID/
IQ contract) or the value of the work order.
    In general, FHWA's contracting regulations do not specify the 
process or provide requirements for furnishing performance bonds on 
Federal-aid projects. In general, contracting agencies may use their 
own procedures and requirements for bonding, insurance, 
prequalification, qualification, or licensing of contractors on 
Federal-aid projects as long as those procedures do not restrict 
competition (23 CFR 635.110(b)). For example, an agency may choose to 
adjust its requirements to facilitate more small business 
participation. The revision in 23 CFR 635.110(f) in the IFR simply 
clarifies that the general requirement also applies to ID/IQ 
contracting. FHWA has considered the comment and believes no further 
revision to this section is necessary.
Section 635.112--Advertising for Bids and Proposals
    The Michigan Department of Transportation recommended that the 
requirement for FHWA Division Administrator prior approval of addenda 
be delegated to State DOTs. FHWA believes this approval as set forth in 
the IFR is consistent with similar requirements for other contracting 
methods and is subject to the statutory assumption provisions under 23 
U.S.C. 106(c). FHWA has considered this comment and believes FHWA 
divisions and State DOTs may incorporate project-specific approval 
actions related to ID/IQ contracting into their agreements under 23 
U.S.C. 106(c)(3), thus, no further revision to the rule is required.
Section 635.114--Award of Contract and Concurrence in Award
    In the IFR, FHWA added Sec.  635.114(m) requiring ID/IQ contracts 
be awarded in accordance with the solicitation document. FHWA revised 
this section in a manner consistent with other contracting methods, 
recognizing that contracting agencies desire flexibility when 
configuring their ID/IQ solicitations and contracts. While FHWA did not 
receive public comments specifically addressing the amendment to the 
regulation in the IFR at Sec.  635.114(m), and FHWA is not making any 
changes to that section, FHWA recommends that contracting agencies 
ensure their ID/IQ solicitation documents contain adequate provisions, 
where appropriate, to address analyzing bids for unbalancing or extreme 
variations within bids as compared to the engineer's estimate.

Subpart C--Physical Construction Authorization

Section 635.309--Authorization
    In FHWA's construction manager/general contractor (CM/GC) final 
rule, published in the Federal Register on December 2, 2016, at 81 FR 
86928, FHWA clarified the provision at Sec.  635.309(p)(1)(vi) 
established requirements for design-build Request for Proposals and CM/
GC initial solicitation documents. Through an administrative error, two 
sections, Sec. Sec.  635.309(p)(1)(vi)(A) and (B) were removed from the 
regulation. FHWA has restored the language that predates the CM/GC 
final rule to correct its inadvertent removal and restore the logical 
meaning and remainder of the provision.
    While these changes were not included in the previous IFR for this 
rulemaking, FHWA has determined that

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prior notice and opportunity for comment are unnecessary under 5 U.S.C. 
553(b)(3)(B) because these provisions constitute a technical correction 
to fix a clear error in the CFR language to restore the missing content 
previously established through rulemaking. Furthermore, prior notice 
and an opportunity for public comment on these provisions is contrary 
to the public interest because it republishes substantive provisions 
which were removed in error. For these reasons, FHWA finds good cause 
to forgo further procedures for notice and opportunity for comment 
under 5 U.S.C. 553(b)(3)(B).

Subpart F--Indefinite Delivery/Indefinite Quantity (ID/IQ) Contracting

Section 635.602--Definitions
    The Oregon Department of Transportation (Oregon DOT) raised 
questions seeking clarification on contractual terms used in the IFR. 
The Oregon DOT asked if FHWA intended the term ``contract'' as used 
throughout the rule, and specifically in Sec.  635.604(a)(6), to mean 
the ID/IQ contract, or the work order. The Oregon DOT argued that an 
ID/IQ contract is a ``master contract'' or an ``agreement-to-agree'' 
and that the work order is an actual contract, thereby clouding the 
understanding of optional contract extensions in Sec. Sec.  
635.604(a)(6)(i) through (iii).
    The IFR provides a definition of the term ID/IQ contract, which 
includes defining it as ``the principal contract between the 
contracting agency and the contractor.'' In addition, the definition of 
ID/IQ contract also contains common names used by agencies around the 
Nation, one of which is ``master contract.'' Also, the IFR provides a 
definition of work order, stating it ``means the contract document 
issued for a definite scope of work under an ID/IQ contract.''
    Throughout the rule, FHWA has attempted to consistently use the 
terms above to clearly convey our meaning. FHWA appreciates the points 
raised and has carefully considered the comments. While FHWA disagrees 
that the definitions of ID/IQ contract and work order are insufficient, 
we acknowledge that the use of the undefined term related to optional 
contract extensions has the potential to cause confusion. As discussed 
below, FHWA has modified Sec. Sec.  635.604(a)(6)(i) and 
635.604(a)(6)(ii) to consistently refer to optional contract 
extensions.
Section 635.604--ID/IQ Requirements
635.604(a)(3)(ii)
    The IFR includes a provision in Sec.  635.604(a)(3)(ii) addressing 
methods to adjust prices when optional contract extensions are included 
in an ID/IQ contract and solicitation. While FHWA did not receive 
public comments to the docket on this topic, we believe additional 
clarification on this point in the preamble may assist contracting 
agencies when developing ID/IQ projects.
    For clarification, as implied by the plain language, FHWA does not 
intend the phrase in Sec.  635.604(a)(3)(ii), ``specify the basis, such 
as a published index'' to exclude alternatives other than a published 
index. FHWA views other methods, such as predetermining and publishing 
a fixed percentage in the solicitation, or requesting bidders supply an 
adjustment percentage with their bid, as transparent and objective 
means of adjusting prices for optional contract extensions, which may 
reasonably be used under this rule. FHWA is not making any revisions to 
the proposed regulatory text as a result of this clarification.
635.604(a)(3)(iii)
    In FHWA's IFR, we asked commenters to address specific questions 
relating to the rule. Two of the questions related to this section of 
the regulation: one question asked about FHWA requiring estimated 
minimum and maximum quantities to be provided in both ID/IQ 
solicitations and contracts or requiring estimates for any other 
reason; another asked if FHWA should require agencies to specify the 
estimated minimum and maximum quantities that may be expected under 
each work order.
    The Delaware DOT responded by opposing the requirement to specify 
estimated minimum and maximum quantities of services for ID/IQ 
contracts. They cited their success in bidding ID/IQ projects using an 
expected or approximate amount of work, while clearly noting in the 
contract document that issuing work orders is not guaranteed.
    Gordian recommended against the requirement to specify estimated 
minimum and maximums, thereby providing flexibility to contracting 
agencies. Gordian explained that in its experience some agencies may 
elect to include this information, but in its opinion it is not 
necessary for successful implementation. Gordian suggested a more 
appropriate approach would be to require an estimated annual dollar 
value of work, on which contractors could base their initial bid.
    The PennDOT commented that it does not recommend requiring 
estimated minimum and maximum quantities in ID/IQ solicitations and 
contracts but does recommend including a requirement for estimating 
minimum and maximum quantities expected in a work order.
    The Vermont Agency of Transportation (VTrans) advised against 
requiring estimated minimum and maximum quantities in ID/IQ 
solicitations and contracts, citing the difficulty to program all 
Federal and State projects that may utilize ID/IQ contracting over a 
period of 5 years. The VTrans described such an exercise as speculative 
and unreliable. They further stated their process of using both line 
items and lump sum bidding on work orders has been efficient and thus 
recommended against requiring an estimate of minimum and maximum 
quantities expected for a work order.
    FHWA appreciates the responses and has carefully considered the 
comments. FHWA agrees it is not necessary to mandate that contracting 
agencies specify the minimum and maximum quantity of services to be 
acquired under an ID/IQ contract. However, a reasonable estimate of 
quantities in the solicitation is necessary to serve as a basis for 
bidders to base their prices as well as serving as a basis for 
analyzing bids. For this reason, FHWA has modified this section 
accordingly to require a reasonable estimate of quantities in the 
solicitation. We also agree with the importance of clearly stating in 
the solicitation, when appropriate, that the estimate of quantities 
does not guarantee work orders will be issued. However, even if a 
minimum award provision is included in the solicitation or contract, 
Sec.  635.604(a)(7), which remains unmodified under the final rule, 
provides that a contracting agency's payment to a contractor to satisfy 
a minimum award provision that is not supported by eligible work is not 
eligible for Federal-aid participation.
635.604(a)(5)
    The IFR included two questions specific to the topic of multiple 
award ID/IQ contracts. One question solicited input on criteria to be 
used when issuing work orders under multiple-award contracts, while 
another question asked commenters to consider if typical cause and 
convenience termination clauses are sufficient to remove deficient 
contractors from consideration in a multiple award pool.
    Several commenters cited contractor availability as a reasonable 
criterion to use when issuing work orders in a

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multiple award ID/IQ contract. The Delaware DOT recommended a process 
where the low-cost contractor is first offered a work order, and if it 
declines or is unavailable to start, the contracting agency will then 
offer the work order opportunity to the next low-cost contractor. The 
Delaware DOT also commented that if the low-cost contractor is in 
liquidated damages on the project or other active projects, that 
contractor would not be eligible to be issued additional work orders. 
In response, FHWA believes fair and competitive procedures, set forth 
in the solicitation and ID/IQ contract as required in Sec.  
635.604(a)(3)(v), may account for contractor availability or liquidated 
damages status. However, awardees of multiple award ID/IQ contracts 
must have a fair opportunity to be considered for each work order, as 
stated in this section. Therefore, no revisions are made to the 
regulatory text to address this comment.
    The Delaware DOT also suggested a scenario where a contracting 
agency could bypass the low-cost contractor ``if the second-lowest-cost 
contractor is within a close percentage of the low-cost contractor'' 
and the agency believes doing so would be in the agency's and public's 
interest. In addition, Gordian recommended allowing work orders issued 
on multiple award ID/IQ contracts using the JOC method be issued on a 
rotating basis ``so that the dollar value of assigned work is 
approximately equal.'' The Oregon DOT asked if FHWA would accept a 
result where ``the same few master contract holders being awarded all 
of the work orders, with some firms receiving few to no work orders 
over the life of the contract.'' The PennDOT and Oregon DOT recommended 
competitive methods be used to issue work orders.
    In response to these comments, FHWA believes non-competitive 
methods of issuing work orders on multiple award ID/IQ contracts 
(including JOC contracts), such as on a rotating basis, or using other 
factors not related to competition or contractor disqualification, are 
contrary to the statutory competitive bidding requirement set forth in 
23 U.S.C. 112. FHWA acknowledges that low bidders may be successful in 
being offered and awarded most, if not all, work orders in a multiple 
award ID/IQ contract based upon analyses of bid prices and actual work 
order quantities. Consistent with statutory requirements, FHWA is 
maintaining the regulatory prohibition against rotating or other non-
competitive issuance of work orders.
    The Delaware DOT commented that typical cause and convenience 
termination clauses are sufficient to remove contractors from the pool 
of those to be considered when issuing work orders when those 
contractors are not meeting the terms of the contract. The Delaware DOT 
recommended this issue be deferred to State or local procedures. 
Gordian also supported providing flexibility to contracting agencies to 
use their own procedures and be able to suspend assigning work to a 
particular contractor for cause. The VTrans cited their process of 
providing contractors with post-construction evaluations and written 
warning of any significant issue that may lead to ``off-ramping'' a 
contractor, providing that contractor an opportunity to address 
deficiencies. FHWA acknowledges these comments and does not believe the 
regulatory text requires further revision.
635.604(a)(6)
    The Oregon DOT made several comments requesting clarification on 
FHWA's contractual terms, including as they are used in Sec.  
635.604(a)(6)(ii) related to wage determinations in ID/IQ contracts. 
The Oregon DOT commented that while the IFR provides requirements for 
updating prevailing wage rates when optional contract extensions are 
executed, FHWA did not address requirements for prevailing wages 
applicable to the original term of an ID/IQ contract or ``master 
contract.'' FHWA has considered this comment and believes the issue is 
sufficiently addressed in the existing regulation at 23 CFR 635.117(f). 
Under that regulation, the appropriate wage rates are to be identified 
in the bidding documents, which must specify ``that such rates are a 
part of the contract covering the project.'' FHWA believes this applies 
to ID/IQ contracts just as it would be to other competitive 
procurements, subject to the requirements of 29 CFR 1.6, where a 
correct wage determination remains in effect for the term of a 
contract. In this context, the contract is the ID/IQ contract, not the 
individual work orders falling under the ID/IQ contract. FHWA does not 
believe the regulatory text requires further revision.
    The Oregon DOT asked if wage rates ``in effect on the date of the 
execution of a two-year contract extension of the master contract would 
apply to all work orders issued at any time during the two-year 
extension.'' In the IFR, FHWA intended Sec.  635.604(a)(6)(ii) to 
address this issue and agrees the prevailing wage determination cited 
in Oregon DOT's example would be in effect for all work orders issued 
during the term of the extension, unless and until a new optional 
contract extension is executed. As discussed above and further 
discussed in the Definitions section at 635.602, FHWA is further 
revising Sec. Sec.  635.604(a)(6)(i) and 635.604(a)(6)(ii) to 
consistently refer to optional contract extensions.
Section 635.605--Approvals and Authorizations
    In the IFR, FHWA requested comments about procedures that could be 
implemented to efficiently review and approve small preventative 
maintenance projects with limited scope in numerous locations. Several 
commenters shared best practices and suggestions. FHWA appreciates 
these responses, which are best suited for incorporation into future 
ID/IQ contracting guidance, summaries of peer exchanges, or technical 
assistance provided by FHWA. FHWA is not making changes to the 
regulation based on these comments.
Section 635.606--ID/IQ Procedures
    The Delaware DOT commented about the number of FHWA approvals 
included in the IFR. In its opinion the number seems more than 
necessary. The Delaware DOT proposed FHWA Division Administrators 
approve a set of ID/IQ procedures, after which project-specific 
approvals would not be required. In response, FHWA believes the 
approvals set forth in the IFR are consistent with similar requirements 
in other contracting methods, and most are subject to the statutory 
assumption provisions under 23 U.S.C. 106(c). Notable exceptions to 
these assumption provisions include the approval of proposed ID/IQ 
procurement procedures under Sec.  635.605(a) and the execution of 
formal project agreements under Sec.  630.106. FHWA has considered the 
comment and believes FHWA division offices and State DOTs may 
incorporate project-specific approval actions related to ID/IQ 
contracting into their agreements under 23 U.S.C. 106(c)(3), similar to 
the approach with other contracting methods, and that no further 
revision to the rule is required.
    In the IFR, FHWA asked the public to consider procedures that 
should be in place when using ID/IQ procedures within a design-build 
contract to ensure compliance with this subpart as well as 23 CFR part 
636 and related requirements. FHWA received few responses to this 
question, with commenters indicating they did not have experience with 
combining the design-build method with ID/IQ contracting. Gordian 
recommended FHWA not mandate specific procedures. FHWA appreciates the 
responses and

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finds no further revision to the rule is required.

Regulatory Analyses and Notices

Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures

    FHWA has considered the impacts of this rule under E.O. 12866 (58 
FR 51735, Oct. 4, 1993), Regulatory Planning and Review, as 
supplemented by E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving 
Regulation and Regulatory Review, and DOT's regulatory policies and 
procedures. The Office of Information and Regulatory Affairs within the 
Office of Management and Budget (OMB) has determined that this 
rulemaking is not a significant regulatory action under section 3(f) of 
E.O. 12866. Accordingly, OMB has not reviewed it under that E.O.
    As described above, this rule adopts the IFR published by FHWA on 
November 16, 2020, with a few minor changes and technical amendments. 
Most provisions from the IFR remain unchanged. The IFR amended FHWA's 
regulations to allow States the ability to use the ID/IQ method of 
contracting, including JOC, on Federal-aid highway projects, under 
certain circumstances, on a permanent basis. This action also restores 
a minor provision in 23 CFR part 635 inadvertently removed during an 
earlier, unrelated rulemaking. As with the IFR, FHWA believes that the 
rule will provide cost savings for, and expedite project delivery of, 
certain highway projects.
    FHWA did not receive many comments in response to questions about 
cost and time savings based on the use of the ID/IQ contracting method. 
Commenters generally believed that cost savings would be realized, and 
that procurement time would be reduced for certain projects but, 
provided little additional data that was not considered in FHWA's 
original analysis under the IFR. FHWA agrees with the responsive 
comments that ID/IQ contracting is likely to reduce project costs and 
expedite project delivery but did not receive sufficient new data to 
warrant revising its earlier analysis under the interim final rule 
where it anticipated a cost savings, measured in 2019 dollars, of $3.4 
million per year at a 7 percent discount rate.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801, et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

Regulatory Flexibility Act (Small Entities)

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), FHWA has evaluated the effects of this action on 
small entities and has determined that the action is not anticipated to 
have a significant economic impact on a substantial number of small 
entities. The amendment addresses 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, FHWA certifies that the action will not have a 
significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    This rule would not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48, 
March 22, 1995) as it will not result in the expenditure by State, 
local, Tribal governments, in the aggregate, or by the private sector, 
of $155 million or more in any 1 year (2 U.S.C. 1532 et seq.). In 
addition, 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 action has been analyzed in accordance with the principles and 
criteria contained in E.O. 13132 dated August 4, 1999, and FHWA has 
determined that this action would not have a substantial direct effect 
or sufficient federalism implications on the States. FHWA has also 
determined that this action would 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 E.O. 
12372 regarding intergovernmental consultation on Federal programs and 
activities apply to this program. Local entities should refer to the 
Catalog of Federal Domestic Assistance Program Number 20.205, Highway 
Planning and Construction, for further information.

Paperwork Reduction Act (Collection of Information)

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from OMB for each 
collection of information they conduct, sponsor, or require through 
regulations. FHWA has determined that the rule does not contain 
collection of information requirements for the purposes of the PRA.

National Environmental Policy Act

    FHWA has analyzed this action 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 action would not have any effect on the 
quality of the environment and meets the criteria for the categorical 
exclusion at 23 CFR 771.117(c)(20).

Executive Order 13175 (Tribal Consultation)

    FHWA has analyzed this action under E.O. 13175, dated November 6, 
2000, and believes that the action would not impose substantial direct 
compliance costs on Indian Tribal governments; and would not preempt 
Tribal laws. The rulemaking addresses obligations of Federal funds to 
States for Federal-aid highway projects and would not impose any direct 
compliance requirements on Indian Tribal governments. To the extent 
that Tribes utilize these regulations, they would be expected to derive 
the same benefits identified above. Therefore, a Tribal summary impact 
statement is not required.

Executive Order 12898 (Environmental Justice)

    E.O. 12898 requires that each Federal agency make achieving 
environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects of its programs, policies, and 
activities on minorities and low-income populations. FHWA has 
determined that this final rule does not raise any environmental 
justice issues.

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

[[Page 67558]]

contained in the heading of this document can be used to cross-
reference this action with the Unified Agenda.

List of Subjects

23 CFR Part 630

    Government contracts, Grant programs--transportation, Highway 
safety, Highways and roads, Reporting and recordkeeping requirements, 
Traffic regulations.

23 CFR Part 635

    Grant programs--transportation, Highways and roads, Reporting and 
recordkeeping requirements.

Stephanie Pollack,
Deputy Administrator, Federal Highway Administration.

    For the reasons set out above, the interim final rule amending 
title 23 Code of Federal Regulations, parts 630 and 635, which was 
published at 85 FR 72919 on November 16, 2020, is adopted as final with 
the following changes:

PART 635--CONSTRUCTION AND MAINTENANCE

Subpart C--Physical Construction Authorization

0
1. The authority for part 635 continues to read as follows:

    Authority:  Sections 1525 and 1303 of Pub. L. 112-141, 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 1.85(a)(1).


0
2. Amend Sec.  635.309 by adding paragraphs (p)(1)(vi)(A) and (B) to 
read as follows:


Sec.  635.309   Authorization.

* * * * *
    (p) * * *
    (1) * * *
    (vi) * * *
    (A) A statement concerning scope and current status of the required 
services; and
    (B) A statement which requires compliance with the Uniform 
Relocation and Real Property Acquisition Policies Act of 1970, as 
amended, and 23 CFR part 710.
* * * * *

Subpart F--Indefinite Delivery/Indefinite Quantity (ID/IQ) 
Contracting

0
3. Amend Sec.  635.604 by revising paragraphs (a)(3)(iii), (a)(6)(i) 
and (ii) to read as follows:


Sec.  635.604   ID/IQ requirements.

    (a) * * *
    (3) * * *
    (iii) Specify the estimated quantity or value of services the 
contracting agency anticipates it may acquire under the contract, 
either on an annual basis or over the entire initial term of the ID/IQ 
contract.
* * * * *
    (6) * * *
    (i) Prior to granting an optional contract extension of the ID/IQ 
contract, the contracting agency must receive concurrence from the 
Division Administrator.
    (ii) For ID/IQ contracts where prevailing wages apply under 23 
U.S.C. 113, the current prevailing wage rate determination as 
determined by the U.S. Department of Labor in effect on the date of the 
execution of the optional contract extension of the ID/IQ contract 
shall apply to work covered under the optional contract extension.
* * * * *
[FR Doc. 2022-24002 Filed 11-8-22; 8:45 am]
BILLING CODE 4910-22-P