§ 112 TITLE 23—HIGHWAYS Page 60

Defense Highways [now Dwight D. Eisenhower System

of Interstate and Defense Highways] to conform to section 111 of this title as amended by subsection (a).

§ 112. Letting of contracts

(a) In all cases where the construction is to be

performed by the State highway department or

under its supervision, a request for submission

of bids shall be made by advertisement unless

some other method is approved by the Secretary. The Secretary shall require such plans

and specifications and such methods of bidding

as shall be effective in securing competition.

(b) BIDDING REQUIREMENTS.—

(1) IN GENERAL.—Subject to paragraph (2),

construction of each project, subject to the

provisions of subsection (a) of this section,

shall be performed by contract awarded by

competitive bidding, unless the State highway

department demonstrates, to the satisfaction

of the Secretary, that some other method is

more cost effective or that an emergency exists. Contracts for the construction of each

project shall be awarded only on the basis of

the lowest responsive bid submitted by a bidder meeting established criteria of responsibility. No requirement or obligation shall be imposed as a condition precedent to the award of

a contract to such bidder for a project, or to

the Secretary’s concurrence in the award of a

contract to such bidder, unless such requirement or obligation is otherwise lawful and is

specifically set forth in the advertised specifications.

(2) CONTRACTING FOR ENGINEERING AND DESIGN

SERVICES.—

(A) GENERAL RULE.—Each contract for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying,

mapping, or architectural related services

with respect to a project subject to the provisions of subsection (a) of this section shall

be awarded in the same manner as a contract for architectural and engineering services is negotiated under title IX of the Federal Property and Administrative Services

Act of 1949 or equivalent State qualifications-based requirements.

(B) APPLICABILITY.—

(i) IN A COMPLYING STATE.—If, on the date

of the enactment of this paragraph, the

services described in subparagraph (A)

may be awarded in a State in the manner

described in subparagraph (A), subparagraph (A) shall apply in such State beginning on such date of enactment, except to

the extent that such State adopts by statute a formal procedure for the procurement of such services.

(ii) IN A NONCOMPLYING STATE.—In the

case of any other State, subparagraph (A)

shall apply in such State beginning on the

earlier of (I) August 1, 1989, or (II) the 10th

day following the close of the 1st regular

session of the legislature of a State which

begins after the date of the enactment of

this paragraph, except to the extent that

such State adopts or has adopted by statute a formal procedure for the procurement of the services described in subparagraph (A).

(C) PERFORMANCE AND AUDITS.—Any contract or subcontract awarded in accordance

with subparagraph (A), whether funded in

whole or in part with Federal-aid highway

funds, shall be performed and audited in

compliance with cost principles contained in

the Federal Acquisition Regulations of part

31 of title 48, Code of Federal Regulations.

(D) INDIRECT COST RATES.—Instead of performing its own audits, a recipient of funds

under a contract or subcontract awarded in

accordance with subparagraph (A) shall accept indirect cost rates established in accordance with the Federal Acquisition Regulations for 1-year applicable accounting periods by a cognizant Federal or State government agency, if such rates are not currently

under dispute.

(E) APPLICATION OF RATES.—Once a firm’s

indirect cost rates are accepted under this

paragraph, the recipient of the funds shall

apply such rates for the purposes of contract

estimation, negotiation, administration, reporting, and contract payment and shall not

be limited by administrative or de facto ceilings of any kind.

(F) PRENOTIFICATION; CONFIDENTIALITY OF

DATA.—A recipient of funds requesting or

using the cost and rate data described in

subparagraph (E) shall notify any affected

firm before such request or use. Such data

shall be confidential and shall not be accessible or provided, in whole or in part, to another firm or to any government agency

which is not part of the group of agencies

sharing cost data under this paragraph, except by written permission of the audited

firm. If prohibited by law, such cost and rate

data shall not be disclosed under any circumstances.

(G) STATE OPTION.—Subparagraphs (C), (D),

(E), and (F) shall take effect 1 year after the

date of the enactment of this subparagraph;

except that if a State, during such 1-year period, adopts by statute an alternative process intended to promote engineering and design quality and ensure maximum competition by professional companies of all sizes

providing engineering and design services,

such subparagraphs shall not apply with respect to the State. If the Secretary determines that the legislature of the State did

not convene and adjourn a full regular session during such 1-year period, the Secretary

may extend such 1-year period until the adjournment of the next regular session of the

legislature.

(c) The Secretary shall require as a condition

precedent to his approval of each contract

awarded by competitive bidding pursuant to

subsection (b) of this section, and subject to the

provisions of this section, a sworn statement,

executed by, or on behalf of, the person, firm,

association, or corporation to whom such contract is to be awarded, certifying that such person, firm, association, or corporation has not,

either directly or indirectly, entered into any

agreement, participated in any collusion, or

otherwise taken any action in restraint of free

competitive bidding in connection with such

contract.
Page 61 TITLE 23—HIGHWAYS § 112

(d) No contract awarded by competitive bidding pursuant to subsection (b) of this section,

and subject to the provisions of this section,

shall be entered into by any State highway department or local subdivision of the State without compliance with the provisions of this section, and without the prior concurrence of the

Secretary in the award thereof.

(e) STANDARDIZED CONTRACT CLAUSE CONCERNING SITE CONDITIONS.—

(1) GENERAL RULE.—The Secretary shall

issue regulations establishing and requiring,

for inclusion in each contract entered into

with respect to any project approved under

section 106 of this title a contract clause, developed in accordance with guidelines established by the Secretary, which equitably addresses each of the following:

(A) Site conditions.

(B) Suspensions of work ordered by the

State (other than a suspension of work

caused by the fault of the contractor or by

weather).

(C) Material changes in the scope of work

specified in the contract.

The guidelines established by the Secretary

shall not require arbitration.

(2) LIMITATION ON APPLICABILITY.—Paragraph

(1) shall apply in a State except to the extent

that such State adopts or has adopted by statute a formal procedure for the development of

a contract clause described in paragraph (1) or

adopts or has adopted a statute which does not

permit inclusion of such a contract clause.

(f) The provisions of this section shall not be

applicable to contracts for projects on the Federal-aid secondary system in those States where

the Secretary has discharged his responsibility

pursuant to section 117 of this title, except

where employees of a political subdivision of a

State are working on a project outside of such

political subdivision.

(Pub. L. 85–767, Aug. 27, 1958, 72 Stat. 895; Pub. L.

90–495, §22(c), Aug. 23, 1968, 82 Stat. 827; Pub. L.

96–470, title I, §112(b)(1), Oct. 19, 1980, 94 Stat.

2239; Pub. L. 97–424, title I, §112, Jan. 6, 1983, 96

Stat. 2106; Pub. L. 100–17, title I, §111, Apr. 2,

1987, 101 Stat. 147; Pub. L. 104–59, title III,

§307(a), Nov. 28, 1995, 109 Stat. 581.)

REFERENCES IN TEXT

The Federal Property and Administrative Services

Act of 1949, referred to in subsec. (b)(2)(A), is act June

30, 1949, ch. 288, 63 Stat. 377, as amended. Title IX of the

Federal Property and Administrative Services Act is

classified generally to subchapter VI (§541 et seq.) of

chapter 10 of Title 40, Public Buildings, Property, and

Works. For complete classification of this Act to the

Code, see Short Title note set out under section 471 of

Title 40 and Tables.

The date of the enactment of this paragraph, referred

to in subsec. (b)(2)(B), is the date of enactment of Pub.

L. 100–17, which was approved Apr. 2, 1987.

The date of the enactment of this subparagraph, referred to in subsec. (b)(2)(G), is the date of enactment

of Pub. L. 104–59, which was approved Nov. 28, 1995.

AMENDMENTS

1995—Subsec. (b)(2)(C) to (G). Pub. L. 104–59 added

subpars. (C) to (G).

1987—Subsec. (b). Pub. L. 100–17, §111(a), (b), (d), inserted subsec. heading, designated existing provisions

as par. (1), inserted par. (1) heading, substituted ‘‘Subject to paragraph (2), construction’’ for ‘‘Construction’’

and inserted ‘‘or that an emergency exists’’, added par.

(2), and realigned margins.

Subsecs. (e), (f). Pub. L. 100–17, §111(c), added subsec.

(e) and redesignated former subsec. (e) as (f).

1983—Subsec. (b). Pub. L. 97–424, §112(1), substituted

‘‘unless the State highway department demonstrates,

to the satisfaction of the Secretary, that some other

method is more cost effective’’ for ‘‘unless the Secretary shall affirmatively find that, under the circumstances relating to such project, some other method is

in the public interest’’ after ‘‘by competitive bidding,’’.

Subsec. (e). Pub. L. 97–424, §112(2), inserted exception

relating to a situation where employees of a political

subdivision of a State are working on a project outside

of such political subdivision.

1980—Subsec. (b). Pub. L. 96–470 struck out provision

that all findings by the Secretary that a method other

than competitive bidding is in the public interest be reported in writing to the Committees on Public Works

of the Senate and the House of Representatives.

1968—Subsec. (b). Pub. L. 90–495 required that contracts for the construction of each project be awarded

only on the basis of the lowest responsive bid by a bidder meeting established criteria of responsibility and

required that, to be imposed as a condition precedent,

requirements and obligations have been specifically set

forth in the advertised specifications.

EFFECTIVE DATE OF 1968 AMENDMENT

Amendment by Pub. L. 90–495 effective Aug. 23, 1968,

see section 37 of Pub. L. 90–495, set out as a note under

section 101 of this title.

PRIVATE SECTOR INVOLVEMENT PROGRAM

Pub. L. 102–240, title I, §1060, Dec. 18, 1991, 105 Stat.

2003, provided that:

‘‘(a) ESTABLISHMENT.—The Secretary shall establish a

private sector involvement program to encourage

States to contract with private firms for engineering

and design services in carrying out Federal-aid highway projects when it would be cost effective.

‘‘(b) GRANTS TO STATES.—

‘‘(1) IN GENERAL.—In conducting the program under

this section, the Secretary may make grants in each

of fiscal years 1992, 1993, 1994, 1995, 1996, and 1997 to

not less than 3 States which the Secretary determines have implemented in the fiscal year preceding

the fiscal year of the grant the most effective programs for increasing the percentage of funds expended for contracting with private firms (including

small business concerns and small business concerns

owned and controlled by socially and economically

disadvantaged individuals) for engineering and design

services in carrying out Federal-aid highway

projects.

‘‘(2) USE OF GRANTS.—A grant received by a State

under this subsection may be used by the State only

for awarding contracts for engineering and design

services to carry out projects and activities for which

Federal funds may be obligated under title 23, United

States Code.

‘‘(3) FUNDING.—There are authorized to be appropriated to carry out this section $5,000,000 for each of

fiscal years 1992 through 1997. Such sums shall remain

available until expended.

‘‘(c) REPORT BY FHWA.—Not later than 120 days after

the date of the enactment of this Act [Dec. 18, 1991], the

Administrator of the Federal Highway Administration

shall submit to the Secretary a report on the amount

of funds expended by each State in fiscal years 1980

through 1990 on contracts with private sector engineering and design firms in carrying out Federal-aid highway projects. The Secretary shall use information in

the report to evaluate State engineering and design

programs for the purpose of awarding grants under subsection (b).

‘‘(d) REPORT TO CONGRESS.—Not later than 2 years

after the date of the enactment of this Act [Dec. 18,
§ 113 TITLE 23—HIGHWAYS Page 62

1991], the Secretary shall transmit to Congress a report

on implementation of the program established under

this section.

‘‘(e) ENGINEERING AND DESIGN SERVICES DEFINED.—

The term ‘engineering and design services’ means any

category of service described in section 112(b) of title

23, United States Code.

‘‘(f) REGULATIONS.—Not later than 180 days after the

date of the enactment of this Act [Dec. 18, 1991], the

Secretary shall issue regulations to carry out this section.’’

PILOT PROGRAM FOR UNIFORM AUDIT PROCEDURES

Pub. L. 102–240, title I, §1092, Dec. 18, 1991, 105 Stat.

2024, directed Secretary to establish pilot program to

include no more than 10 States under which any contract or subcontract awarded in accordance with subsec. (b)(2)(A) of this section was to be performed and

audited in compliance with cost principles contained in

Federal acquisition regulations of part 41 of title 48 of

Code of Federal Regulations, provided for indirect cost

rates in lieu of performing audits, and required each

State participating in pilot program to report to Secretary not later than 3 years after Dec. 18, 1991, on results of program, prior to repeal by Pub. L. 104–59, title

III, §307(b), Nov. 28, 1995, 109 Stat. 582. See subsec.

(b)(2)(C) to (F) of this section.

EVALUATION OF STATE PROCUREMENT PRACTICES

Pub. L. 102–240, title VI, §6014, Dec. 18, 1991, 105 Stat.

2181, directed Secretary to conduct a study to evaluate

whether or not current procurement practices of State

departments and agencies were adequate to ensure that

highway and transit systems were designed, constructed, and maintained so as to achieve a high quality for such systems at the lowest overall cost and, not

later than 2 years after Dec. 18, 1991, to transmit to

Congress a report on the results of the study, together

with an assessment of the need for establishing a national policy on transportation quality assurance and

recommendations for appropriate legislative and administrative actions.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 210 of this title.

§ 113. Prevailing rate of wage

(a) The Secretary shall take such action as

may be necessary to insure that all laborers and

mechanics employed by contractors or subcontractors on the construction work performed

on highway projects on the Federal-aid highways authorized under the highway laws providing for the expenditure of Federal funds upon

the Federal-aid systems, shall be paid wages at

rates not less than those prevailing on the same

type of work on similar construction in the immediate locality as determined by the Secretary

of Labor in accordance with the Act of March 3,

1931, known as the Davis-Bacon Act (40 U.S.C.

276a).

(b) In carrying out the duties of subsection (a)

of this section, the Secretary of Labor shall consult with the highway department of the State

in which a project on any of the Federal-aid systems is to be performed. After giving due regard

to the information thus obtained, he shall make

a predetermination of the minimum wages to be

paid laborers and mechanics in accordance with

the provisions of subsection (a) of this section

which shall be set out in each project advertisement for bids and in each bid proposal form and

shall be made a part of the contract covering

the project.

(c) The provisions of the section shall not be

applicable to employment pursuant to apprenticeship and skill training programs which have

been certified by the Secretary of Transportation as promoting equal employment opportunity in connection with Federal-aid highway

construction programs.

(Pub. L. 85–767, Aug. 27, 1958, 72 Stat. 895; Pub. L.

90–495, §12(a), Aug. 23, 1968, 82 Stat. 821; Pub. L.

97–424, title I, §149, Jan. 6, 1983, 96 Stat. 2131;

Pub. L. 100–17, title I, §133(b)(5), Apr. 2, 1987, 101

Stat. 171; Pub. L. 102–240, title I, §1006(g)(2), Dec.

18, 1991, 105 Stat. 1927.)

REFERENCES IN TEXT

Act of March 3, 1931, known as the Davis-Bacon Act

(40 U.S.C. 276a), referred to in subsec. (a), is act Mar. 3,

1931, ch. 411, 46 Stat. 1494, as amended, which is classified generally to sections 276a to 276a–5 of Title 40, Public Buildings, Property, and Works. For complete classification of this Act to the Code, see Short Title note

set out under section 276a of Title 40 and Tables.

AMENDMENTS

1991—Subsec. (a). Pub. L. 102–240, which directed substitution of ‘‘highways’’ for ‘‘systems, the primary and

secondary, as well as their extension in urban areas,

and the Interstate system,’’ was executed by making

the substitution for the quoted words which in the

original contained the word ‘‘extensions’’ rather than

‘‘extension’’, to reflect the probable intent of Congress.

1987—Subsec. (a). Pub. L. 100–17 substituted ‘‘March 3,

1931’’ for ‘‘August 30, 1935’’ and ‘‘276a’’ for ‘‘267a’’.

1983—Subsec. (a). Pub. L. 97–424 struck out ‘‘initial’’

after ‘‘subcontractors on the’’.

1968—Subsec. (a). Pub. L. 90–495 extended wage rate

provisions to the construction of all Federal-aid highway projects by amending provisions limiting them

only to the Interstate System.

Subsec. (b). Pub. L. 90–495 substituted ‘‘any of the

Federal-aid systems’’ for ‘‘the Interstate System’’.

Subsec. (c). Pub. L. 90–495 added subsec. (c).

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102–240 effective Dec. 18, 1991,

and applicable to funds authorized to be appropriated

or made available after Sept. 30, 1991, and, with certain

exceptions, not applicable to funds appropriated or

made available on or before Sept. 30, 1991, see section

1100 of Pub. L. 102–240, set out as a note under section

104 of this title.

EFFECTIVE DATE OF 1968 AMENDMENT

Amendment by Pub. L. 90–495 effective Aug. 23, 1968,

see section 37 of Pub. L. 90–495, set out as a note under

section 101 of this title.

§ 114. Construction

(a) CONSTRUCTION WORK IN GENERAL.—The construction of any highways or portions of highways located on a Federal-aid system shall be

undertaken by the respective State highway departments or under their direct supervision. Except as provided in section 117 of this title, such

construction shall be subject to the inspection

and approval of the Secretary. The construction

work and labor in each State shall be performed

under the direct supervision of the State highway department and in accordance with the laws

of that State and applicable Federal laws. Construction may be begun as soon as funds are

available for expenditure pursuant to subsection

(a) of section 118 of this title. After July 1, 1973,

the State highway department shall not erect on

any project where actual construction is in

progress and visible to highway users any infor-