6866 Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations

Issued in Jamaica, New York on February

6, 1997.

James K. Buckles,

Acting Manager, Air Traffic Division, Eastern

Region.

[FR Doc. 97–3753 Filed 2–13–97; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 341

Cold, Cough, Allergy, Bronchodilator,

and Antiasthmatic Drug Products for

Over–the–Counter Human Use

CFR Correction

In title 21 of the Code of Federal

Regulations, parts 300 to 499, revised as

of April 1, 1996, on page 247, in

§ 341.12, paragraph (h) should read:

§ 341.12 Antihistamine active ingredients.

* * * * *

(h) Doxylamine succinate.

* * * * *

[FR Doc. 97–55501 Filed 2-13-97; 8:45 am]

BILLING CODE 1505-01-D

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 627

[FHWA Docket No. 94–12]

RIN 2125–AD33

Value Engineering

AGENCY: Federal Highway

Administration (FHWA), DOT.

ACTION: Final rule.

SUMMARY: The FHWA is establishing a

program requiring the application of a

value engineering (VE) analysis for all

Federal-aid highway projects on the

National Highway System (NHS) with

an estimated cost of $25 million or

more. The regulation also provides State

highway agencies (SHA) with

information and guidance on

performing VE reviews. This final rule

also implements the VE provisions of

section 303(b) of the National Highway

System Designation Act of 1995.

EFFECTIVE DATE: March 17, 1997.

FOR FURTHER INFORMATION CONTACT:

Keith Borkenhagen, Office of

Engineering, 202–366–4630, or David

Sett, Office of Chief Counsel, 202–366–

0780, Federal Highway Administration,

400 Seventh Street, SW., Washington,

DC 20590. Office hours are from 7:45

a.m. to 4:15 p.m., e.t., Monday through

Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: The

FHWA recognizes that VE, when

applied in the development of highway

projects, is an effective and proven

technique for improving quality,

fostering innovation, reducing project

costs, and eliminating unnecessary and

costly design elements. An FHWA study

has confirmed the effectiveness of VE in

States with active VE programs and

concluded that a significant

improvement in program effectiveness

would result if all States had active

programs. As a result of this study, the

FHWA published a notice of proposed

rulemaking (NPRM) on November 16,

1994, seeking comments on a proposal

to require all States to apply VE to

selected Federal-aid highway projects.

In the NPRM, the FHWA proposed to

require States to establish, administer,

and monitor VE programs; develop

written procedures for implementing VE

programs; and provide a trained staff or

hire a qualified consultant to conduct

studies on projects representing 50

percent of the dollar value of their

Federal-aid highway program. In

addition, the FHWA proposed to allow

States to exempt certain categories of

projects from reviews and be required to

report the yearly results achieved

through the application of VE to projects

financed with Federal-aid highway

funds.

Comments were received from 39

SHAs, 22 consultant/contractor firms, 8

associations/agencies, 14 individuals,

and the American Association of State

Highway and Transportation Officials’’

VE task force. The following discussion

summarizes the major comments.

Eighteen States and thirty-eight

organizations, firms, and/or individuals

provided comments supporting VE.

Sixteen States and two organizations

provided comments opposing a Federal

VE mandate. Three firms/individuals

suggested that FHWA’s projected

additional VE savings under the

proposed rule of $100 million could

approach $500 million. Twenty-one

States requested clarification of the type

and amounts of Federal-aid highway

funds involved in determining the 50

percent dollar value while fourteen

States, five organizations and four

individuals suggested replacing this

requirement with a dollar threshold or

lower percentage. Two firms thought the

50 percent value was excellent because

it gave States great flexibility in

selecting projects while four individuals

suggested that all projects should

receive a VE analysis. Six States

suggested that additional staff might be

required to conduct all of the studies

necessary to represent 50 percent of

their Federal-aid program. Six States

requested that VE change proposals and

VE studies of standards be used to help

meet the 50 percent dollar value, and

five States requested that they be

allowed to deduct the dollar value of

exempted programs from the 50 percent

requirement. Each of these comments

concerns the threshold for application

of Federal VE requirements. Because the

National Highway System (NHS)

Designation Act mandates a threshold of

$25 million for projects on the NHS, the

agency has virtually no discretion in the

area.

Eight comments suggested various

changes to the training guidelines to

require specific VE certification of team

leaders and training workshops. All

training requirements have been

eliminated from the rule text.

One firm suggested that a VE team

leader be a Certified Value Specialist

(CVS), as approved by the Society of

American Value Engineers and a

Professional Engineer (PE) while

another firm suggested that a team

leader be a CVS when leading studies of

projects larger than a specific dollar

threshold. The FHWA did not include

these suggested requirements into the

final rule because the States have the

responsibility for establishing any

certification and training requirements

(e.g., CVS, PE) for their VE personnel.

While the FHWA was in the process

of analyzing these comments, the

National Highway System Designation

Act of 1995 (NHS Act) (Pub. L. 104–59,

109 Stat. 568) was enacted on November

28, 1995. Section 303(b) of the NHS Act

directs the Secretary of Transportation

to establish a program to require States

to carry out a VE analysis for all projects

on the NHS with an estimated total cost

of $25 million or more. The Conference

Report accompanying the NHS Act

explains that this provision prohibits

the Secretary from requiring VE on other

projects, though ‘‘[a] State remains free

to choose to undertake such analyses on

additional projects at a State’s

discretion.’’ The report also prohibits

DOT from being prescriptive as to the

form of VE analysis a State must

undertake to satisfy the requirement.

H.R. Conf. Rep. No. 345, 104th Cong.,

1st Sess. 80 (1995).

Based on this mandate, as well as the

public comments made as part of the

rulemaking process, the final rule has

been revised substantially from the

NPRM. The threshold for application of

the VE requirement has been modified

to be consistent with the statute. The
Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations 6867

rule has also been significantly

shortened, focusing on minimum

programmatic needs to ensure proper

VE studies are conducted and utilized

by the States on qualifying projects.

Beyond these minimum needs, the goal

is to provide maximum flexibility to the

States to conduct VE programs

consistent with the rest of their

transportation programs.

Specific provisions that were

included in the NPRM, but have been

eliminated from the final rule due to the

NHS Act requirement and in response to

the comments received on the NPRM,

include: The State reporting

requirement; specific language

describing the VE process; written

procedural requirements; suggested

project selection criteria; VE change

proposal requirements; and VE training

requirements. All of these changes give

States greater authority to determine

their own program requirements.

Consistent with the Conference

Report language, the rule text no longer

contains any prescription regarding the

form of VE a State must undertake on

a specific qualifying project. The final

rule does not provide for FHWA

oversight of each VE study, instead

focusing FHWA’s efforts on State

implementation of VE programs.

Because the method of conducting a VE

study has become standardized and

widely recognized in the field, study-bystudy review is unnecessary. Instead,

the final rule makes reference to the

widely recognized process of VE

studies.

The statutory definition of VE is

clarified. The end product of the study

is described in greater detail in the

rule’s definition of value engineering

and, in § 627.5(a)(2), examples of the

components of a multi-disciplined team

are provided. Both of these additions are

based on the widely-recognized VE

study process.

In order to provide States time to

establish VE programs, States need not

delay project approvals and letting

schedules when establishing or

changing VE programs to comply with

these requirements. Many States already

employ techniques that will meet these

VE requirements, however, States

should review all projects being

designed, without delaying projects

expected to be available for letting

during the current fiscal year, to identify

those needing a VE analysis.

Any State choosing to use an

innovative design/build concept to

expedite the completion of an

applicable NHS project must still

comply with the requirement to perform

a VE analysis on the project. In most

cases the VE analysis should be

performed prior to awarding the design/

build contract. The FHWA’s division

offices will have program oversight

responsibility.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory

Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this

action is not a significant regulatory

action within the meaning of Executive

Order 12866 or significant within the

meaning of Department of

Transportation regulatory policies and

procedures. This regulation requires

States to carry out a VE analysis for all

projects on the NHS with an estimated

total cost of $25 million or more.

The threshold triggering the

requirement to conduct a VE analysis

under this regulation—projects on the

NHS with an estimated total cost of $25

million or more—will greatly limit the

economic impact of this final rule

because the total number of federallyfunded projects requiring VE analysis

each year under this standard will be

small. It is estimated that States use a

substantial portion of their Federal-aid

highway funds, approximately 59

percent, on non-NHS routes. In

addition, the FHWA has found that

States with VE programs, usually States

with medium and large Federal-aid

programs, already include these high

cost NHS projects in their selection

process and should not have to adjust

their programs to comply with this

regulation. The FHWA contends that

States with small Federal-aid highway

programs will not encounter NHS

projects large enough to meet the dollar

threshold requiring a VE analysis on a

yearly basis and the regulation’s impact

on these States will be limited.

Therefore, the FHWA anticipates that

the economic impacts of this

rulemaking will be minimal, and has

determined that a full regulatory

evaluation is not required.

The regulation may affect staffing

levels in States that do not currently

utilize VE. Establishing programs to

assure that VE studies are performed on

all applicable NHS projects will require

each SHA to assign staff to carry out

specific VE functions. The FHWA

contends that the staff assignments

needed to perform the functions

required by this regulation will be

minimal due to the limited number of

projects that require an analysis and the

fact that States may choose to hire

consultants to perform the studies,

thereby reducing the regulation’s impact

on SHA staff. In addition, States with

existing programs probably already have

adequate staff assigned to carry out the

VE functions of this rule. In either case,

the study costs are eligible for

reimbursement with Federal-aid

highway funds at the appropriate prorata share for the type of project studied.

Historically, any additional costs due

to the need to hire or reassign staff to

manage the VE program have been more

than offset by the overall monetary

savings resulting from the application of

VE studies to highway projects. States

with active VE programs report a return

on investments of between 30 to 1 and

50 to 1. The opportunity for substantial

overall savings exists. In 1994,

California, Florida, and Massachusetts

reported savings in excess of $100

million as a result of VE study

recommendations.

Since this regulation only requires a

VE analysis of large ($25 million or

greater) NHS projects, most local

agencies’ projects will not fall into the

category of projects requiring a VE

analysis. Some local agencies, however,

that receive large amounts of Federalaid highway funds may find that they

occasionally have a large NHS project

that requires a VE analysis. When this

occurs, the local agency, in the same

manner as an SHA, may choose to

conduct the study itself or hire a VE

consultant to perform the study. As

stated above, the cost of performing VE

studies is project-related and is,

therefore, eligible for reimbursement

with Federal-aid highway funds.

Regulatory Flexibility Act

In compliance with the Regulatory

Flexibility Act (5 U.S.C. 601–612), the

FHWA has evaluated the effects of this

rule on small entities. Based on the

evaluation, the FHWA hereby certifies

that this action will not have a

significant economic impact on a

substantial number of small entities.

The FHWA has determined that most

small entities (which generally receive

small amounts of Federal-aid highway

funds) will not have to perform VE

studies because their projects are small

and are not expected to fit the project

selection criteria set forth in this

regulation for performing VE studies.

Executive Order 12372

(Intergovernmental Review)

Catalog of Federal Domestic

Assistance Program Number 20.205,

Highway Planning and Construction.

The regulations implementing Executive

Order 12372 regarding

intergovernmental consultation on

Federal programs and activities apply to

this program.
6868 Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations

Executive Order 12612 (Federalism

Assessment)

This action has been analyzed in

accordance with the principles and

criteria contained in Executive Order

12612. Under the Federal-aid highway

program, the FHWA reimburses States

for costs incurred in highway

construction projects. This regulation

would simply provide that, as a

condition of receiving such grants,

States must carry out a value

engineering (VE) analysis for all projects

on the National Highway System (NHS)

with an estimated cost of $25 million or

more. This regulation recognizes the

role of the States in employing VE and

gives States wide latitude in

establishing, administering, and

monitoring their VE programs.

Therefore, the FHWA has determined

that this action does not have sufficient

federalism implications to warrant the

preparation of a separate federalism

assessment.

Paperwork Reduction Act

This action does not require the

collection of information for the

purpose of the Paperwork Reduction

Act of 1995, 44 U.S.C. 3501–3520.

National Environmental Policy Act

The agency has analyzed this action

for the purpose of the National

Environmental Policy Act of 1969 (42

U.S.C. 4321 et seq.) and has determined

that this action would not have any

effect on the quality of the environment.

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 action with

the Unified Agenda.

List of Subjects in 23 CFR Part 627

Government procurement, Grant

programs—transportation, Highways

and roads.

In consideration of the foregoing, the

FHWA hereby adds part 627 to Chapter

I of title 23, Code of Federal

Regulations, as set forth below.

Issued on: February 4, 1997.

Rodney E. Slater,

Federal Highway Administrator.

The FHWA amends 23 CFR to add

Part 627 to read as follows:

PART 627—VALUE ENGINEERING

Sec.

627.1 Purpose and applicability.

627.3 Definitions.

627.5 General principles and procedures.

Authority: 23 U.S.C. 106(d), 106(f), 302,

307, and 315; 49 CFR 18.

§ 627.1 Purpose and applicability.

(a) This regulation will establish a

program to improve project quality,

reduce project costs, foster innovation,

eliminate unnecessary and costly design

elements, and ensure efficient

investments by requiring the application

of value engineering (VE) to all Federalaid highway projects on the National

Highway System (NHS) with an

estimated cost of $25 million or more.

(b) In accordance with the FederalState relationship established under the

Federal-aid highway program, State

highway agencies (SHA) shall assure

that a VE analysis has been performed

on all applicable projects and that all

resulting, approved recommendations

are incorporated into the plans,

specifications and estimate.

§ 627.3 Definitions.

Project. A portion of a highway that

a State proposes to construct,

reconstruct, or improve as described in

the preliminary design report or

applicable environmental document. A

project may consist of several contracts

or phases over several years.

Value engineering. The systematic

application of recognized techniques by

a multi-disciplined team to identify the

function of a product or service,

establish a worth for that function,

generate alternatives through the use of

creative thinking, and provide the

needed functions to accomplish the

original purpose of the project, reliably,

and at the lowest life-cycle cost without

sacrificing safety, necessary quality, and

environmental attributes of the project.

§ 627.5 General principles and

procedures.

(a) State VE programs. State highway

agencies must establish programs to

assure that VE studies are performed on

all Federal-aid highway projects on the

NHS with an estimated cost of $25

million or more. Program procedures

should provide for the identification of

candidate projects for VE studies early

in the development of the State’s multiyear Statewide Transportation

Improvement Program.

(1) Project selection. The program

may, at the State’s discretion, establish

specific criteria and guidelines for

selecting other highway projects for VE

studies.

(2) Studies. Value engineering studies

shall follow the widely recognized

systematic problem-solving analysis

process that is used throughout private

industry and governmental agencies.

Studies must be performed using multidisciplined teams of individuals not

personally involved in the design of the

project. Study teams should consist of a

team leader and individuals from

different speciality areas, such as

design, construction, environment,

planning, maintenance, right-of-way,

and other areas depending upon the

type of project being reviewed.

Individuals from the public and other

agencies may also be included on the

team when their inclusion is found to be

in the public interest.

(i) Each team leader should be trained

and knowledgeable in VE techniques

and be able to serve as the coordinator

and facilitator of the team.

(ii) Studies should be employed as

early as possible in the project

development or design process so that

accepted VE recommendations can be

implemented without delaying the

progress of the project.

(iii) Studies should conclude with a

formal report outlining the study team’s

recommendations for improving the

project and reducing its overall cost.

(3) Recommendations. The program

should include procedures to approve

or reject recommendations and ensure

the prompt review of VE

recommendations by staff offices whose

speciality areas are implicated in

proposed changes and by offices

responsible for implementing accepted

recommendations. Reviews by these

offices should be performed promptly to

minimize delays to the project.

(4) Incentives. The program may

include a VE or cost reduction incentive

clause in an SHA’s standard

specifications or project special

provisions that allows construction

contractors to submit change proposals

and share the resulting cost savings with

the SHA.

(5) Monitoring. The program should

include procedures for monitoring the

implementation of VE study team

recommendations and VE change

proposal recommendations submitted

by construction contractors.

(b) State VE coordinators. Individuals

knowledgeable in VE shall be assigned

responsibilities to coordinate and

monitor the SHA’s program and be

actively involved in all phases of the

program.

(c) Use of consultants. Consultants or

firms with experience in VE may be

retained by SHAs to conduct the studies

of Federal-aid highway projects or

elements of Federal-aid highway
Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / Rules and Regulations 6869

projects required under § 627.1(a) of this

part. Consultants or firms should not be

retained to conduct studies of their own

designs unless they maintain separate

and distinct organizational separation of

their VE and design sections.

(d) Funding eligibility. The cost of

performing VE studies is project related

and is, therefore, eligible for

reimbursement with Federal-aid

highway funds at the appropriate prorata share for the project studied.

[FR Doc. 97–3758 Filed 2–13–97; 8:45 am]

BILLING CODE 4910–22–P

23 CFR Parts 630, 635, and 771

[FHWA Docket No. 96–3]

RIN 2125–AD58

Federal-Aid Project Agreement

AGENCY: Federal Highway

Administration (FHWA), DOT.

ACTION: Final rule.

SUMMARY: The FHWA is amending its

regulation on project agreements. The

Intermodal Surface Transportation

Efficiency Act (ISTEA) of 1991 modified

the requirement that preliminary

engineering and right-of-way projects

must be advanced to the construction

stage within certain time limits.

Changes to the agreement provisions

reflect these adjustments. The new

procedures provide more flexibility in

the format of the agreement document

and permit the development of a single

document to serve as both the project

authorization and project agreement

document. Other changes were made to

shorten the agreement document and to

add clarity to the process.

EFFECTIVE DATE: This final rule is

effective March 17, 1997.

FOR FURTHER INFORMATION CONTACT: Jack

Wasley, Office of Engineering, 202–366–

0450, or Wilbert Baccus, Office of the

Chief Counsel, 202–366–0780, FHWA,

400 Seventh Street, SW., Washington,

DC 20590. Office hours are from 7:45

a.m. to 4:15 p.m., e.t., Monday through

Friday except Federal holidays.

SUPPLEMENTARY INFORMATION: The

amendments in this final rule are based

primarily on the notice of proposed

rulemaking (NPRM) published in the

January 30, 1996, Federal Register at 61

FR 2973 (FHWA Docket No. 96–3). All

comments received in response to this

NPRM have been considered in

adopting these amendments.

Under the provisions of 23 U.S.C. 110,

a formal agreement between the State

highway agency and the FHWA is

required for Federal-aid highway

projects. This agreement, referred to as

the ‘‘project agreement,’’ is in essence a

written contract between the State and

the Federal government defining the

extent of the work to be undertaken and

commitments made concerning the

project.

Requirements covering project

agreements are contained in this final

rule. This final rule updates and

modifies the existing Federal-aid project

agreement regulation to incorporate

changes mandated by the ISTEA, Pub. L.

102–240, 105 Stat. 1914, to streamline

the project agreement form and

provisions, and to allow more versatility

in its use. This final rule amends the

existing regulation in the following

manner and for the reasons indicated

below.

Section 630.301 Purpose

The statement of purpose is revised

with minor changes for clarity.

Section 630.303 Preparation of

Agreement

This section no longer requires the

use of a specific form. Instead, a State

has the flexibility to use whatever

format is suitable to provide the

information required for a project

agreement document.

Section 630.305 Modification of

Original Agreement

A State is still required to prepare a

modification to a project agreement as

changes occur. However, this section no

longer requires the use of a specific

form. Instead, a State is allowed to

develop its own form for modification of

the project agreement, provided it

contains necessary information as

identified by the regulation.

Section 630.307 Agreement Provisions

This section identifies the provisions

that must be a part of each agreement.

The project agreement has been

simplified by eliminating all the

boilerplate provisions that are not

required from the agreement itself. The

provisions that are necessary have been

included in this section of the

regulation. The simplified project

agreement would incorporate, by

reference to this section, these

provisions into each agreement. The

following discussion covers each of the

required provisions.

Section 630.307(a) is a general

provision under which the State agrees

to comply with title 23, United States

Code (U.S.C.), the regulations

implementing title 23, and the policies

and procedures established by the

FHWA. In addition, States must also

comply with all other applicable

Federal laws and regulations. This

general provision is broad in scope and

there is little need for other provisions

which cover only a limited feature of

title 23, U.S.C.

Section 630.307(b) represents an

acknowledgment by the State that it has

a financial obligation for the nonFederal share of the cost of the project.

Sections 630.307(c)(1) and (c)(2)

contain provisions that implement

statutory requirements concerning a

State’s payback of Federal funds it has

received for right-of-way acquisition or

preliminary engineering should the

project not be advanced within the

designated statutory time frames.

Paragraph (c)(1), Project for Acquisition

of Rights-of-Way, implements the

requirement in 23 U.S.C. 108(a) that the

agreement between the State and the

FHWA for right-of-way acquisition

projects shall include a provision that

construction shall begin within 20

years. This reflects an amendment to 23

U.S.C. 108(a) resulting from passage of

section 1017(a) of the ISTEA.

With regard to paragraph (c)(2),

Preliminary engineering project, prior to

passage of the ISTEA, an administrative

decision by the FHWA required

repayment of Federal-aid highway funds

authorized for preliminary engineering

if right-of-way acquisition or actual

construction had not begun within 5

years after authorization of the

preliminary engineering. The general

concept of this provision is now found

in the statute; section 1016(a) of the

ISTEA incorporated this provision into

23 U.S.C. 102(b). One significant

difference between the statutory

provision and the existing FHWA

practice is that 10 years instead of 5

years must pass before payback is

required. Paragraph (c)(2) reflects the

10-year payback period.

Sections 630.307(c)(3), (c)(4) and

(c)(5) contain provisions for a drug-free

workplace, suspension/debarment, and

lobbying required by 49 CFR 29.630, 49

CFR 29.510 and 49 CFR 20.110,

respectively.

According to 49 CFR 29.630(c), a State

is allowed to make one yearly

certification for the drug-free workplace

certification. Although the FHWA has

used annual or quarterly program

certifications for the others in the past,

it was determined that these

certifications do not fully comply with

the provisions of previously cited

requirements in 49 CFR 29.510 and 49

CFR 20.110. Placing language in the

project agreement as part of the general

provisions provides the separate

certification action required for every

project. Project-by-project certifications

are deemed to fully satisfy the

requirements in title 49, CFR, and