Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices 12257 

1While the 2013 opinion was specific to section 

112, which only applies to highway projects, it also 

is relevant in interpreting and implementing FTA’s 

statutory mandate under 49 U.S.C. 5325(a) that 

broadly requires full and open competition in the 

award of contracts utilizing financial assistance 

from the FTA. 

will not result in the creation a Class I 

or Class II rail carrier and will not 

exceed $5 million. 

The transaction may be consummated 

on or after March 20, 2015, the effective 

date of the exemption (30 days after the 

verified notice of exemption was filed). 

If the verified notice contains false or 

misleading information, the exemption 

is void ab initio. Petitions to revoke the 

exemption under 49 U.S.C. 10502(d) 

may be filed at any time. The filing of 

a petition to revoke will not 

automatically stay the effectiveness of 

the exemption. Petitions for stay must 

be filed no later than March 13, 2015 (at 

least seven days before the exemption 

becomes effective). 

An original and 10 copies of all 

pleadings, referring to Docket No. FD 

35902, must be filed with Surface 

Transportation Board, 395 E Street SW., 

Washington, DC 20423–0001. In 

addition, one copy of each pleading 

must be served on John K. Fiorilla, 

Capehart & Scatchard, P.A., 8000 

Midlantic Drive, Suite 300S, Mount 

Laurel, NJ 08054. 

Board decisions and notices are 

available on our Web site at 

www.stb.dot.gov. 

Decided: March 3, 2015. 

By the Board, Rachel D. Campbell, 

Director, Office of Proceedings. 

Brendetta S. Jones, 

Clearance Clerk. 

[FR Doc. 2015–05212 Filed 3–5–15; 8:45 am] 

BILLING CODE 4915–01–P 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary 

Contracting Initiative 

AGENCY: Office of the Secretary (OST), 

Department of Transportation (DOT). 

ACTION: Notice. 

SUMMARY: The DOT is announcing an 

initiative to permit, on an experimental 

basis, Federal Highway Administration 

(FHWA) and Federal Transit 

Administration (FTA) recipients and 

subrecipients to utilize various 

contracting requirements that generally 

have been disallowed due to concerns 

about adverse impacts on competition. 

This initiative will be carried out as a 

pilot program for a period of 1 year 

(unless extended) under the FHWA and 

FTA’s existing authorities. The purpose 

of this pilot program is to determine 

whether the use of such requirements 

‘‘unduly limit competition,’’ as 

provided in an August 23, 2013, opinion 

from the Department of Justice’s Office 

of Legal Counsel (OLC). Should DOT 

find that such restrictions do not unduly 

limit competition, DOT may provide 

further guidance regarding their use. 

DATES: This pilot program is effective 

March 6, 2015. 

FOR FURTHER INFORMATION CONTACT: For 

technical information: Mr. Michael 

Harkins, Deputy Assistant General 

Counsel for General Law, Office, U.S. 

Department of Transportation, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, 202–366–0590 (telephone), 

Michael.Harkins@dot.gov (email). 

SUPPLEMENTARY INFORMATION: 

Electronic Access 

An electronic copy of this document 

may also be downloaded from the Office 

of the Federal Register’s home page at 

http://www.archives.gov/federal_register 

and the Government Publishing Office’s 

Web page at http://www.gpoaccess.gov. 

Background 

Interpretation of Competition Mandate 

Traditionally, DOT has prohibited its 

recipients and subrecipients from using 

certain contracting provisions that do 

not directly relate to the bidder’s 

performance of work in a competent and 

responsible manner. An example of 

such provisions includes local and other 

geographic-based labor hiring 

preferences. The DOT’s position was 

reinforced by a 1986 opinion of the 

OLC, which concluded that 23 U.S.C. 

112 (‘‘section 112’’) obligated the 

Secretary of Transportation to withhold 

Federal funding from highway 

construction contracts that were subject 

to a New York City law imposing 

disadvantages on a class of responsible 

bidders, where the city failed to 

demonstrate that its departure from 

competitive bidding requirements was 

justified by considerations of costeffectiveness. See Compatibility of New 

York City Local Law 19 with Federal 

Highway Act Competitive Bidding 

Requirements, 10 Op. O.L.C. 101 (1986). 

However, in August 2013, at DOT’s 

request, the OLC provided DOT with a 

memorandum opinion, clarifying its 

1986 opinion on section 112. See 

Competitive Bidding Requirements 

Under the Federal-Aid Highway 

Program, 23 U.S.C. 112, (Aug. 23, 2013) 

(‘‘2013 opinion’’). The 2013 opinion is 

available at http://www.justice.gov/olc/

opinions. The 2013 opinion clarifies 

that section 112 does not compel the 

DOT’s position with respect to 

contracting requirements that do not 

directly relate to the bidder’s 

performance of work, but rather 

provides the Secretary with discretion 

to permit other types of state or local 

requirements as long as they do not 

‘‘unduly limit competition.’’ 1

The 2013 opinion explains that 

competition would not be unduly 

limited by ‘‘[a] state or local 

requirement that has only an incidental 

effect on the pool of potential bidders or 

that imposes reasonable requirements 

related to the performance of the 

necessary work. . . .’’ 2013 opinion at 

2. In contrast, ‘‘a requirement that has 

more than an incidental effect on the 

pool of potential bidders and does not 

relate to the work’s performance would 

unduly limit competition unless it 

promotes the efficient and effective use 

of federal funds.’’ Id. at 2–3. In assessing 

whether a requirement does promote the 

efficient and effective use of federal 

funds, the agency ‘‘may take into 

account whether the requirement 

promotes such efficiency in connection 

with the letting of a particular contract 

and also whether it more generally 

furthers the efficient and effective use of 

federal funds in the long run or protects 

the integrity of the competitive bidding 

process itself.’’ Id. at 3. So long as a state 

or local requirement serves these 

purposes, ‘‘the Administrator may 

reasonably determine, consistent with 

section 112, that the requirement does 

not unduly limit competition, even if it 

may have the effect of reducing the 

number of eligible bidders for a 

particular contract.’’ Id. 

Thus, DOT retains discretion under 

the statute to evaluate whether a 

particular State or local law or policy 

that has more than an incidental effect 

on the pool of potential bidders is 

nonetheless compatible with section 

112(b)(1)’s competitive bidding 

requirement. The process used to 

evaluate whether state and local 

requirements satisfy section 112 also is 

a matter of agency discretion. Id. at 17– 

18 (‘‘It is for FHWA and DOT to 

determine the regulatory approach the 

agency should take in exercising this 

discretion and in evaluating whether 

certain state and local requirements are 

consistent with [section 112’s] statutory 

mandates. . . .’’). 

Experimental Authority 

In 1988, a Transportation Research 

Board (TRB) task force, comprised of 

representatives from all segments of the 

highway industry, was formed to 

evaluate Innovative Contracting 

Practices. This TRB task force requested 

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12258 Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices 

2See also 23 U.S.C. 114(d), which requires 

recipients, to the extent practicable, to encourage 

contractors to make a best faith effort to hire 

veterans on Federal-aid highway projects. 

that the FHWA establish a project to 

evaluate and validate certain findings of 

the task force regarding innovative 

contracting practices, which are 

documented in Transportation Research 

Circular Number 386, titled, ‘‘Innovative 

Contracting Practices,’’ dated December 

1991. In response, the FHWA initiated 

Special Experimental Project No. 14 

(SEP–14) pursuant to the authority 

granted to the Secretary, which now is 

codified at 23 U.S.C. 502. The SEP–14 

program strives to identify, evaluate, 

and document innovative contracting 

practices that have the potential to 

reduce the life cycle cost of projects, 

while at the same time, maintain 

product quality. Under SEP–14, the 

FHWA has the flexibility to experiment 

with innovative approaches to 

contracting. 

The innovative practices originally 

approved for evaluation under SEP–14 

were: Cost-plus-time bidding, lane 

rental, design-build contracting, and 

warranty clauses. Forty-one States have 

used at least one of the innovative 

practices under SEP–14. Based on their 

collective experiences, FHWA decided 

that cost-plus-time bidding, lane rental, 

and warranty clauses were techniques 

suitable for use as non-experimental, 

operational practices and in 1995 these 

were made regular Federal-aid 

procedures. Design-build contracting in 

the Federal-aid highway program was 

conducted under SEP–14 until Congress 

modified section 112 in section 1307 of 

the Transportation Equity Act for the 

21st Century to permanently authorize 

the use of this contracting method. 

Additionally, the construction manager/ 

general contractor method of contracting 

in the Federal-aid highway program was 

originally conducted under SEP–14 

until Congress modified section 112 in 

section 1303 of the Moving Ahead for 

Progress in the 21st Century Act to 

permanently authorize the use of this 

contracting method. The SEP–14 

program continues to be used to test and 

evaluate experimental contracting 

practices. 

Also, the FTA has authority under 49 

U.S.C. 5312 to carry out research, 

development, demonstration, and 

deployment projects that will improve 

public transportation. Additionally, 49 

U.S.C. 5314 authorizes FTA to carry out 

activities that will assist recipients of 

assistance to administer funds received 

under Chapter 53 in compliance with 

Federal law, including the development 

of voluntary and consensus-based 

standards and best practices by the 

public transportation industry, 

including standards and best practices 

for procurement. 

Pilot Program 

The DOT is interested in permitting 

State and local recipients of Federal 

financial assistance to utilize 

contracting requirements that 

traditionally have been prohibited on 

the basis that they would restrict 

competition by not directly relating to 

the bidder’s performance of work. Thus, 

DOT is establishing a pilot program 

under the existing authorities of the 

FHWA and FTA grant programs. The 

objective of this pilot program is to 

enable DOT to determine which 

requirements may be used consistently 

with the 2013 OLC opinion by 

promoting efficiency in connection with 

the letting of a particular contract, 

furthering the efficient and effective use 

of federal funds in the long run, or 

protecting the integrity of the 

competitive bidding process. 

In particular, with respect to 

procurements for which FHWA or FTA 

funds will be used, recipients and 

subrecipients may request those 

agencies to permit the use of a particular 

contracting requirement that otherwise 

may be found to be inconsistent with 

the general requirement for full and 

open competition. DOT is particularly 

interested in contracts for which 

recipients and subrecipients wish to 

utilize a local or other geographic labor 

hiring preferences, economic-based 

labor hiring preferences (i.e., lowincome workers), and labor hiring 

preferences for veterans 2 because, in the 

DOT’s view, such requirements can 

promote Ladders of Opportunity by 

ensuring that disadvantaged workers in 

the communities in which the projects 

are located benefit from the economic 

opportunities such projects present. 

DOT, however, will not approve 

projects for which recipients wish to 

alter the requirements of the 

Disadvantaged Business Enterprise 

Program. 

This pilot program will be carried out 

for a period of 1 year from the date of 

publication of this notice. As such, DOT 

is only interested in contracts that will 

be advertised during this time frame. 

For any such contracts, the DOT will 

monitor and evaluate whether 

contracting requirements that 

traditionally have been prohibited on 

the basis that they would restrict 

competition by not directly relating to 

the bidder’s performance of work have 

an undue restriction on competition. 

While DOT’s current plan is to conduct 

this pilot program for 1 year, DOT 

reserves the right to extend this time 

period at its discretion. 

FHWA 

For contracts to be funded by FHWA, 

State and local recipients and 

subrecipients must request prior 

approval from the FHWA to use a 

specific contracting requirement under 

SEP–14. In order to receive SEP–14 

approval, States and local recipients and 

subrecipients would follow the normal 

process that includes submitting work 

plans to the appropriate FHWA division 

office. For more information on the 

SEP–14 process, please see: http://www.

fhwa.dot.gov/programadmin/contracts/

sep_a.cfm. 

In developing requests to FHWA to 

use contracting requirements under 

SEP–14, recipients and subrecipients 

should address, at a minimum, the 

following points: 

(1) Describe the project, including the 

amount of FHWA funding involved in 

the as well as the estimated total project 

cost. 

(2) Describe the contracting 

requirement that may otherwise be 

found to be inconsistent with the 

general requirement for full and open 

competition. 

(3) Describe how they will evaluate 

the effects of relevant contracting 

requirements on competitive bidding. In 

doing so, the recipient or subrecipient 

should, at a minimum, provide 

comparisons of bids received for the 

projects utilizing the relevant contract 

requirements to other projects of similar 

size and scope and in the same 

geographic area not utilizing such 

requirements. If a reduction in the pool 

of bidders is evident, explain the 

potential offsetting benefits resulting 

from the use of the requirement. 

(1) Describe and quantify how the 

relevant contracting requirement would 

lead to increases in the effectiveness 

and efficiency of Federal funds for the 

project. 

(2) Describe and quantify how the 

experimental contracting technique 

would protect the integrity of the 

competitive bidding process either in 

connection with the particular contract 

or when considered over the long term 

for that agency’s program. 

For contracts involving the use of 

local and other geographic labor hiring 

preferences, economic-based labor 

hiring preferences, and/or labor hiring 

preferences for veterans, FHWA may 

approve, at the request of the recipient 

or subrecipient, the use of such 

requirements for a specific contract, a 

specific group of, or on a more general 

programmatic basis. The use of other 

contracting requirements may be 

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Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices 12259 

3Effective December 26, 2014, 49 CFR part 18 

will apply only to grants obligated on or before 

December 25, 2014. Grants obligated on or after 

December 26, 2014 will be subject to 2 CFR part 

200. This provision (18.36(c)(2)) has been recodified 

at 2 CFR 200.319(b) and is substantively the same 

as 18.36(c)(2). Although Congress did not address 

the change in codification in section 418, FTA 

intends to apply section 418 to grants obligated on 

or after December 26, 2014 and subject to 2 CFR 

200.319(b). 

approved by FHWA after coordination 

with the DOT Office of General Counsel. 

FTA 

For contracts to be funded by FTA 

(including federal financial assistance 

under any FTA formula or discretionary 

program), State and local recipients and 

subrecipients must request prior 

approval from the FTA to use a specific 

contracting requirement pursuant to 

FTA’s research and assistance 

authorities discussed above. In making 

such requests, recipients and 

subrecipients must submit an 

application to their FTA Regional 

Office. In their application, recipients 

should address, at a minimum, the 

following points: 

(1) Describe the contracting 

opportunity, including the schedule for 

the type of project and type of asset 

being constructed and the amount of 

FTA funding involved in the project as 

well as the estimated total project cost. 

(2) Describe the contracting 

requirement that may otherwise be 

found to be inconsistent with the 

general requirement for full and open 

competition. 

(3) Describe how they will evaluate 

the effects of relevant contracting 

requirements on competitive bidding. In 

doing so, the recipient and subrecipient 

should, at a minimum, provide 

comparisons of bids received for the 

projects utilizing the relevant contract 

requirements to other projects of similar 

size and scope and in the same 

geographic area not utilizing such 

requirements. If a reduction in the pool 

of bidders is evident, explain the 

potential offsetting benefits resulting 

from the use of the requirement. 

(4) Describe how the relevant 

contracting requirement would lead to 

increases in the effectiveness and 

efficiency of Federal funds for the 

project. 

(5) Describe and quantify how the 

experimental contracting technique 

would protect the integrity of the 

competitive bidding process either in 

connection with the particular contract 

or when considered over the long term 

for that agency’s program. 

An evaluation committee comprised 

of FTA staff will evaluate applications 

for inclusion in the pilot program. The 

evaluation committee reserves the right 

to evaluate applications it receives and 

to seek clarification from any proposer 

about any statement that is made in an 

application. FTA also may request 

additional documentation or 

information to be considered during the 

evaluation process. The evaluation 

committee will provide a 

recommendation to the FTA 

Administrator regarding each 

application. The FTA Administrator 

will provide a final written 

determination to each applicant, on a 

rolling basis, regarding whether an 

application has been accepted into the 

pilot program. 

For projects involving the use of local 

and other geographic labor hiring 

preferences, economic-based labor 

hiring preferences, and/or labor hiring 

preferences for veterans, FTA may 

approve, at the request of the recipient 

or subrecipient, the use of such 

requirements for a specific contract, a 

specific group of, or on a more general 

programmatic basis. The use of other 

contracting requirements may be 

approved by FTA after coordination 

with the DOT Office of General Counsel. 

With respect to in-state or local 

geographic labor hiring preferences, 

please note that Section 418 of the 

Consolidated and further Continuing 

Appropriations Act, 2015, Public Law 

113–235 (FY 2015 Appropriations Act), 

prohibits FTA from using FY 2015 

funds to implement, administer, or 

enforce 49 CFR 18.36(c)(2), for 

construction hiring. Section 18.36(c)(2) 

prohibits the use of statutorily or 

administratively imposed in-State or 

local geographical preferences in the 

evaluation of bids or proposals.3

Accordingly, for construction contracts 

awarded or advertised in FY 2015, FTA 

recipients may use in-state or local 

geographic preferences for construction 

labor hiring. Additional guidance on 

FTA’s implementation of Section 418 

may be found on FTA’s Web site at 

www.fta.dot.gov. 

As a result of the enactment of 

Section 418, recipients and 

subrecipients do not need to submit 

applications for participation in the 

pilot program for the use of in-state or 

local geographic labor hiring 

preferences for contracts awarded or 

advertised on or before September 30, 

2015. In other words, prior FTA 

approval is not required to use such 

requirements, and FTA recipients and 

subrecipients may impose such 

requirements for their contracts at their 

discretion. Such projects will receive 

automatic admission into the pilot 

program. However, in order to assess the 

effect of such preferences on 

competition, recipients and 

subrecipients that plan to utilize in-state 

or local geographic labor hiring 

preferences must notify their FTA 

Regional Office prior to advertising 

contracts that use such preferences. For 

in-state or local geographic hiring 

preferences proposed for inclusion in 

contracts advertised after September 30, 

2015, recipients and subrecipients must 

request prior approval from the FTA to 

utilize such hiring preferences through 

the above-described process unless 

provisions similar to section 418 are 

included in a new appropriations or reauthorization act. Requests to use 

requirements other than in-state or local 

geographic preferences for construction 

hiring, including requirements 

involving the procurement of rolling 

stock, must request prior FTA approval 

as described above. 

Issued in Washington, DC, on February 24, 

2015. 

Anthony R. Foxx, 

Secretary of Transportation. 

[FR Doc. 2015–05204 Filed 3–5–15; 8:45 am] 

BILLING CODE 4910–9X–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

[Docket No. NHTSA–2015–0013] 

National Emergency Medical Services 

Advisory Council (NEMSAC); Notice of 

Federal Advisory Committee Meeting 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), U.S. 

Department of Transportation (DOT) 

ACTION: Meeting Notice—National 

Emergency Medical Services Advisory 

Council. 

SUMMARY: The NHTSA announces a 

meeting of NEMSAC to be held in the 

Metropolitan Washington, DC, area. 

This notice announces the date, time, 

and location of the meeting, which will 

be open to the public, as well as 

opportunities for public input to the 

NEMSAC. The purpose of NEMSAC, a 

nationally recognized council of 

emergency medical services 

representatives and consumers, is to 

advise and consult with the U.S. 

Department of Transportation (DOT) 

and the Federal Interagency Committee 

on EMS (FICEMS) on matters relating to 

emergency medical services (EMS). Preregistration is required to attend. 

DATES: This open meeting will be held 

on March 31, 2015, from 1 p.m. to 5:00 

p.m. EDT, and on April 1, 2015 from, 9 

a.m. to 12 p.m. EDT. A public comment 

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