Federal-Aid Project Agreement and Contract Procedures

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 630, 635 and 771

[FHWA Docket No. 96-3]

RIN 2125-AD58

Federal-Aid Project Agreement and Contract Procedures

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The FHWA proposes to amend 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 are

being proposed to reflect these adjustments. Additionally, procedures

would be added to provide flexibility in the format of the agreement

document and to permit the development of a single document to serve as

both the project authorization and project agreement document. Other

changes would be made to shorten the agreement document and to add

clarity to the process.

The FHWA also proposes to amend its regulation on contract

procedures by incorporating into it provisions regarding overruns in

contract time that would be removed from the project agreement

regulation. The FHWA believes this material more appropriately belongs

under contract procedures.

DATES: Written comments are due on or before April 1, 1996. Comments

received after that date will be considered to the extent practicable.

ADDRESSES: All written, signed comments should refer to the docket

number that appears at the top of this document and should be submitted

to Federal Highway Administration, Office of Chief Counsel, Room 4232,

HCC-10, 400 Seventh Street, SW., Washington, DC 20590. All comments and

suggestions received will be available for examination at the above

address between 8:30 a.m. and 3:30 p.m., e.t., Monday through Friday,

except Federal holidays. Those desiring notification of receipt of

comments must include a self-addressed, stamped postcard.

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: 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, the State and the Federal shares of a project's cost,

and commitments concerning maintenance of the project.

The present regulation, 23 CFR 630, subpart C, provides further

requirements concerning the project agreement. It includes detailed

instructions on preparation of the project agreement, a standard form

for the agreement, and an assemblage of agreement provisions that are

part of the standard form. This is a longstanding regulation and no

significant changes have been made to it in several years.

It is the FHWA's desire to update and modify the existing

regulation to incorporate needed changes to reflect adjustments made 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. The proposed changes are discussed in the following section-by-

section analysis.

Section-by-Section Analysis

Section 630.301 Purpose

The statement of purpose would be revised with minor changes for

clarity.

Section 630.302 Definitions

It is proposed to remove Sec. 630.302. The terms calendar day,

contract time, incentives/disincentives for early completion,

liquidated damages, and workday would be relocated to 23 CFR 635.102.

The terms bond issue project,

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Federal-aid highway project, and highway planning and research project

have such commonly recognized meanings that they would be removed from

the regulation.

Since it is proposed to move Sec. 630.305, Agreement provisions

regarding overrun in contract time, without modification to 23 CFR

635.127, definitions relevant to Sec. 630.305, i.e., certification

acceptance project, Division Administrator, and State highway agency,

would be removed from Sec. 630.302.

Section 630.303 Policy

Section 630.303 would be combined with Sec. 630.304 to create a new

Sec. 630.303, Preparation of agreement. A State would continue to be

required to prepare a project agreement for each Federal-aid highway

and FHWA planning and research project. However, it is proposed to

eliminate Form PR-2 (Federal-Aid Project Agreement) and the

instructions on its preparation. Instead, a State would develop its own

form for the project agreement, provided it contains information

identified as necessary by the regulation.

Additionally, the current practice of allowing the project

agreement and project authorization (as required under 23 CFR 630,

subpart A) to be combined into one document would be incorporated into

the regulation. This section also would allow the use of electronic

forms and signatures as developed and implemented by the FHWA.

Although the Form PR-2 would be eliminated from the regulation, it

is anticipated a sample project agreement form would be added as

nonregulatory guidance in the Federal-Aid Policy Guide. For

illustrative purposes only, a copy of a sample project agreement is

shown in Figure 1.

Section 630.304 Preparation of Agreement

This section would be eliminated because of the proposal to combine

Sec. 630.304 with Sec. 630.303 to create a new Sec. 630.303 with the

section heading, Preparation of agreement. As discussed, the regulation

would no longer provide for use of a specific form. Instead, a State

would be allowed the flexibility to use whatever format is suitable to

provide the information required for a project agreement document.

Section 630.305 Agreement Provisions Regarding Overruns in Contract

Time

This section, which covers provisions regarding overruns in

contract time, would be relocated to 23 CFR 635.127, without

modification. Because these provisions deal with aspects of contract

administration, they would more appropriately be included in FHWA's

regulation on contract procedures, 23 CFR 635, subpart A.

Section 630.306 Modification of Original Agreement

It is proposed to revise this section and redesignate it as new

Sec. 630.305 with retention of the same section heading. A State would

continue to be required to prepare a modification to a project

agreement as changes occur. However, it is proposed to eliminate the

specified Form PR-2A (Modification of Federal-Aid Project Agreement).

Instead, a State could develop its own form for modification of project

agreement, provided it contains necessary information as identified by

the regulation.

Although the Form PR-2A would be eliminated from the regulation, it

is anticipated that a sample form for a modification of project

agreement would be added as nonregulatory guidance in FHWA's Federal-

Aid Policy Guide (available for copying and inspection as prescribed at

49 CFR Part 7, appendix D). For illustrative purposes only, a copy of a

sample modification of project agreement is shown in Figure 2.

Section 630.307 Agreement Provisions

A new section would be added identifying the provisions that must

be a part of each agreement. Currently, the Form PR-2 contains 20

boilerplate provisions. These provisions take up three pages and add

considerably to the bulk of the form. In addition, many provisions just

restate requirements of law that apply to Federal-aid projects in

general.

It is FHWA's desire to simplify the project agreement by

eliminating all the boilerplate provisions from the agreement itself.

The provisions that are necessary would be included in this section of

the regulation. The simplified project agreement would then, by

reference to this section, incorporate the provisions into each

agreement. The following discussion covers each of the existing 20

boilerplate provisions and describes what deletions or revisions are

being proposed.

Provision 1, Responsibility for Work, would be eliminated and

replaced with the general provision that now appears on the top front

of the sample project agreement form. (This would appear as

Sec. 630.307(a) in the proposed regulation.) Under this general

provision, 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, language has been

added reflecting that 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, such as, Provision 1

which covers only a limited feature of title 23, U.S.C.

Provision 2, Highway Planning and Research Project, would be

eliminated. Requirements concerning planning, research funding, and

projects are set forth in 23 CFR 420. In light of proposed new

Provision 1 and its broad scope, there is no need for Provision 2.

Provision 3, Project for Acquisition of Rights-of-Way, would be

retained (proposed Sec. 630.307(c)(1)) because it corresponds to a

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

and the FHWA shall include a provision that construction shall begin

within a specified period of time. However, Provision 3 would be

modified to change the specified time period from 10 years to 20 years.

This reflects an amendment to 23 U.S.C. 108(a) resulting from passage

of section 1017(a) of the ISTEA.

Provision 4, Preliminary Engineering Projects, would be retained

(proposed Sec. 630.307(c)(2)) but modified. Prior to passage of the

ISTEA, this provision represented an administrative decision by the

FHWA to require 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. Provision 4

would be modified to reflect the 10-year payback period.

Provision 5, Interstate System Project, would be eliminated.

Requirements for agreements relating to use of and access to rights-of-

way on the Interstate system are contained in 23 U.S.C. 111. In light

of proposed new Provision 1 and its broad scope, there is no need for

Provision 5.

Provision 6, Project for Construction in Advance of Apportionment,

would be eliminated. The requirement in Provision 6(a) is adequately

covered in 23 U.S.C. 115. Provision 6(b) is considered superfluous.

Provision 7, Stage Construction, would be eliminated. This is dated

policy that is no longer appropriate in many cases.

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Provision 8, Bond Issue Projects, would be eliminated. Requirements

concerning bond projects are found in 23 U.S.C. 122 and the

implementing regulation 23 CFR 630, subpart G. In light of proposed new

Provision 1 and its broad scope, there would be no need for Provision

8.

Provision 9, Special Highway and Planning Research Project, would

be eliminated. Requirements on planning and research projects are set

forth in 23 CFR 420. In light of proposed new Provision 1 and its broad

scope, there would be no need for Provision 9.

Provision 10, Parking Regulation and Traffic Control, would be

eliminated. The State is ultimately responsible for any project

undertaken with the cooperation of another government agency (23 CFR

1.3) and for maintenance of the project (23 U.S.C. 116 and 23 CFR

1.27). Adequately maintaining a project includes the issue of parking

regulations and traffic control. In light of proposed new Provision 1

and its broad scope, there would be no need for Provision 10.

Provision 11, Signing and Marking, would be eliminated. The FHWA

believes that 23 U.S.C. 109(d) and the implementing regulations in 23

CFR 655 adequately address this issue. In light of proposed new

Provision 1 and its broad scope, there would be no need for Provision

11.

Provision 12, Maintenance, would be eliminated. Maintenance

requirements for Federal-aid highway projects are found in 23 U.S.C.

116. In light of proposed new Provision 1 and its broad scope, there

would be no need for Provision 12.

Provision 13, Liquidated Damages, would be eliminated. Requirements

concerning liquidated damages are contained in FHWA regulations

(presently in 23 CFR 630, subpart C, although this proposed rulemaking

would transfer these requirements to 23 CFR 635, subpart A). In light

of proposed new Provision 1 and its broad scope, there would be no need

for Provision 13.

Provision 14, Implementation of Clear Air Act and Federal Water

Pollution Control Act, would be eliminated. These are requirements of

Federal law and they apply to Federal-aid projects in general. The

existing reference in the project agreement to these other Federal laws

serves no legal purpose and is considered extraneous information that

could be removed from the form.

Provisions 15, 16 and 17, covering Equal Opportunity,

Nondiscrimination, and Minority Business Enterprises, would be

eliminated. These same requirements are expressed in 23 CFR 200, 230,

and 633 subpart A. The three provisions have been updated and

incorporated into the Form FHWA-1273, ``Required Contract Provisions,

Federal-Aid Construction Contracts.'' Subpart A of part 633 contains

the regulatory requirements for Form FHWA-1273. In light of proposed

new Provision 1 and its broad scope, there would be no need for

Provisions 15, 16 and 17.

Provision 18, Bicycle Transportation and Pedestrian Walkways, would

be eliminated. The requirements of this provision are found in 23

U.S.C. 217 and 23 CFR 652. In light of proposed new Provision 1 and its

broad scope, there would be no need for Provision 18.

Provision 19, Modified or Terminated Highway Projects, would be

eliminated. This provision merely highlights exceptions to the payback

requirements that are found in other existing regulations. In light of

proposed new Provision 1 and its broad scope, there would not be a need

for Provision 19.

Provision 20, Environmental Impact Mitigation Features, would be

removed from 23 CFR Part 630 and moved to 23 CFR Part 771. The

requirements of this provision ensure that State Highway agencies

comply with Federal mitigation standards as directed by the Council on

Environmental Quality (CEQ) regulations for implementing National

Environmental Policy Act (NEPA)(40 CFR 1505.3). The State Highway

agencies would then be required to comply with 23 CFR 771 through the

broad scope of proposed new Provision 1.

New provisions would be added to require that certain

certifications be given to the FHWA. These certifications would be:

Sec. 630.307(c)(3) for drug-free workplace certification required by 49

CFR 29.630, Sec. 630.307 (c)(4) for suspension/debarment certification

required by 49 CFR 29.510, and Sec. 630.307(c)(5) for lobbying

certification required by 49 CFR 20.110. States must provide these

certifications for each project. Placing language in the project

agreement as part of the general provisions is considered an effective

solution to providing a separate certification action for every

project.

The FHWA is considering whether specific requirements of applicable

Federal laws and regulations should be expressly covered in the

proposed regulation. Proposed Sec. 630.307(a) provides that the States

generally agree, in the project agreement process, to comply with all

other applicable Federal laws and regulations. This general provision

would include laws such as title VI of the 1964 Civil Rights Act. The

FHWA is considering whether reference should be made to specific laws,

such as title VI. One possible option, for example, would be to have

the regulation require certification to the FHWA by the State that it

has met the Standard DOT title VI Assurance requirements, just as the

proposed rule would require certification for a drug-free work-place or

lobbying. Another option would be to list on the revised project

agreement certain Federal laws, such as title VI, with which the State

agrees to comply by signing the agreement itself. Comment is solicited

on the need to specifically refer to other non-title 23 Federal laws

and regulations with which the States must comply, such as through a

statement incorporating those laws and regulations by reference or

listing them directly on the project agreement form.

Appendix A--Federal-Aid Project Agreement, Form PR-2

The existing Form PR-2 would be eliminated. No specific form for

the project agreement would be specified. Instead, a State would have

the flexibility to develop its own form provided it includes the

appropriate information. For illustrative purposes only, a copy of a

sample project agreement is shown in Figure 1.

Appendix B--Modification of Federal-Aid Project Agreement, Form PR-2A

The existing Form PR-2A would be eliminated. No specific form for

the modification of project agreement would be specified. Instead, a

State would have the flexibility to develop its own form provided it

includes the appropriate information. For illustrative purposes only, a

copy of a sample modification of project agreement is shown in Figure

2.

Appendix C--Federal-Aid Project Agreement (National Cooperative Highway

Research Program), Form PR-2.1

This form would be eliminated. It is no longer needed because the

greater flexibility for the project agreement process would allow for

planning and research project requirements.

Section 635.102 Definitions

This section would incorporate the definitions contained in

Sec. 630.302(b), (d), (h), (i), and (k). These definitions apply to

Sec. 630.305, Agreement provisions regarding overrun in contract time.

Due to the proposal to move Sec. 630.305 to Sec. 635.127, the

definitions contained in Sec. 630.302(b), (d), (h), (i), and (k) would

be moved and inserted in alphabetical order into the definitions

[[Page 2976]]

currently in this section. The term Secondary Road Plan would be

removed as this plan no longer exists.

Section 635.127 Agreement Provisions Regarding Overruns in Contract

Time

It is proposed to redesignate Sec. 630.305 as Sec. 635.127. The

text of the section would remain unchanged.

The following table is provided to assist the user in locating

regulatory paragraph changes proposed by this rulemaking:

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Old section New section

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630.301................................... 630.301.

630.302................................... Removed (except (b), (d),

(h), (i), and (k).

630.302(b)................................ 635.102.

630.302(d)................................ 635.102.

630.302(h)................................ 635.102.

630.302(i)................................ 635.102.

630.302(k)................................ 635.102.

630.303................................... 630.303.

630.304................................... 630.303.

630.305................................... 635.127.

630.306................................... 630.305.

Appendix A................................ Removed.

Prov. 1................................... Removed.

Prov. 2................................... Removed.

Prov. 3................................... 630.307(c)(1).

Prov. 4................................... 630.307(c)(2).

Prov. 5 through 19........................ Removed.

Prov. 20.................................. 771.109(d).

Appendix B................................ Removed.

Appendix C................................ Removed.

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Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination in the docket at the above address. Comments received

after the comment closing date will be filed in the docket and will be

considered to the extent practicable, but the FHWA may issue a final

rule at any time after the close of the comment period. In addition to

late comments, the FHWA will also continue to file relevant information

in the docket as it becomes available after the comment closing date,

and interested persons should continue to examine the docket for new

material.

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. The proposed amendments would

update the Federal-aid project agreement regulation to conform to

recent laws, regulations, or guidance and to clarify existing policies.

It is anticipated that the economic impact of this rulemaking will be

minimal; therefore, a full regulatory evaluation is not required.

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 certifies that this action

will not have a significant economic impact on a substantial number of

small entities. The proposed amendments would clarify or simplify

procedures used by State highway agencies in accordance with existing

laws, regulations, or guidance.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that this action does not have sufficient federalism implications to

warrant the preparation of a federalism assessment.

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.

Paperwork Reduction Act

The information collection requirements associated with this

rulemaking in Sec. 630.303 have been approved by the Office of

Management and Budget under control number OMB 2125-0529 and expire

June 30, 1997. The information collection requirements associated with

this rulemaking would update and modify existing requirements to

reflect statutory changes to the project agreement process enacted by

the ISTEA, streamline the project agreement form and provisions, and

allow more versatility in its use.

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 Parts 630, 635, and 771

Government contracts, Grant programs--Transportation, Highways and

roads, Project agreement procedures.

In consideration of the foregoing, the FHWA proposes to amend Title

23, Code of Federal Regulations, by revising Parts 630, 635, and 771 as

set forth below.

Issued on: January 12, 1996.

Rodney E. Slater,

Federal Highway Administrator.

PART 630--PRECONSTRUCTION PROCEDURES

1. The authority citation for part 630 is revised to read as

follows and all other authority citations which appear throughout part

630 are removed:

Authority: 23 U.S.C. 105, 106, 109, 110, 115, 315, 320, and

402(a); 23 CFR 1.32; 49 CFR 1.48(b).

PART 635--[AMENDED]

2. The authority citation for part 635 is revised to read as

follows:

Authority: 23 U.S.C. 101(note), 109, 112, 113, 114, 116, 117,

119, 128, and 315; 31 U.S.C. 6506; 42 U.S.C. 3334, 4601 et seq.; 23

CFR 1.32; 49 CFR 1.48(b); sec. 1041(a), Pub. L. 102-240, 105 Stat.

1914.

Sec. 630.305 [Redesignated as Sec. 635.127]

3. Section 630.305 is redesignated as Sec. 635.127.

4. Part 630, subpart C is revised to read as follows:

Subpart C--Project Agreements

Sec.

630.301 Purpose.

630.303 Preparation of agreement.

630.305 Modification of original agreement.

630.307 Agreement provisions.

Sec. 630.301 Purpose.

The purpose of this subpart is to prescribe the procedures for the

execution of the project agreement required by 23 U.S.C. 110(a) for

Federal-aid projects, except for forest highway projects pursuant to 23

U.S.C. 204, and for non-highway public mass transit projects

administered by the Federal Transit Administration.

Sec. 630.303 Preparation of agreement.

(a) The State highway agency (SHA) shall prepare a project

agreement for each Federal-aid highway and FHWA planning and research

project eligible for Federal-aid funding.

(b) The SHA may develop the project agreement in a format

acceptable to both the SHA and the FHWA provided the following are

included:

(1) A description of the project location including State and

project termini;

(2) The Federal-aid project number;

(3) The phases of work covered by the agreement along with the

effective date of authorization for each phase;

(4) The total project cost and amount of Federal funds under

agreement;

(5) The Federal share expressed as either a pro rata percentage or

a lump sum;

(6) A statement that the State accepts and will comply with the

agreement provisions set forth in 23 CFR 630.307; and

(7) Signatures of officials from both the State and the FHWA and

date executed.

(c) The project agreement may be combined with the project

authorization required under 23 CFR 630, Subpart A.

(d) The SHA may use an electronic version of the agreement as

provided by the FHWA.

[[Page 2980]]

(Approved by the Office of Management and Budget under control number

2125-0529)

Sec. 630.305 Modification of original agreement.

(a) When changes are needed to the original project agreement, a

modification of agreement shall be prepared.

(b) The SHA may develop the modification of project agreement in a

format acceptable to both the SHA and the FHWA provided the following

are included:

(1) The Federal-aid project number and State;

(2) A sequential number identifying the modification;

(3) A reference to the date of the original project agreement to be

modified;

(4) The original total project cost and the original amount of

Federal funds under agreement;

(5) The revised total project cost and the revised amount of

Federal funds under agreement;

(6) The reason for the modifications; and,

(7) Signatures of officials from both the State and the FHWA and

date executed.

(c) The SHA may use an electronic version of the modification of

project agreement as provided by the FHWA.

Sec. 630.307 Agreement provisions.

(a) The State, through its highway agency, accepts and agrees to

comply with the applicable terms and conditions set forth in Title 23,

United States Code, Highways, the regulations issued pursuant thereto,

the policies and procedures promulgated by the FHWA relative to the

designated project in which the FHWA authorized certain work to

proceed, and all other applicable Federal laws and regulations.

(b) Federal funds obligated for the project must not exceed the

amount agreed to on the project agreement, the balance of the estimated

total cost being an obligation of the State. Such obligation of Federal

funds extends only to project costs incurred by the State after the

FHWA authorization to proceed with the project involving such costs.

(c) The State must stipulate that as a condition to payment of the

Federal funds obligated, it accepts and will comply with the following

applicable provisions:

(1) Project for acquisition of rights-of-way. In the event that

actual construction of a road on this right-of-way is not undertaken by

the close of the twentieth fiscal year following the fiscal year in

which the project is authorized, the SHA will repay to the FHWA the sum

or sums of Federal funds paid to the highway agency under the terms of

the agreement.

(2) Preliminary engineering project. In the event that right-of-way

acquisition for, or actual construction of, the road for which this

preliminary engineering is undertaken is not started by the close of

the tenth fiscal year following the fiscal year in which the project is

authorized, the SHA will repay to the FHWA the sum or sums of Federal

funds paid to the highway agency under the terms of the agreement.

(3) Drug-free workplace certification. The SHA agrees that it will

provide a drug-free workplace by:

(i) Publishing a statement notifying its employees that the

unlawful manufacture, distribution, dispensing, possession, or use of a

controlled substance is prohibited in the SHA's workplace and

specifying the actions that will be taken against employees for

violation of such prohibition;

(ii) Establishing an ongoing drug-free awareness program to inform

its employees about--

(A) The dangers of drug abuse in the workplace;

(B) The SHA's policy of maintaining a drug-free workplace;

(C) Any available drug counseling, rehabilitation, and employment

assistance programs; and

(D) The penalties that may be imposed upon employees for drug abuse

violations occurring at the workplace;

(iii) Making it a requirement that each of its employees engaged in

the performance of the work covered by the project agreement be given a

copy of the statement required by paragraph (c)(3)(i) of this section;

(iv) Notifying its employees in the statement required by paragraph

(c)(3)(i) of this section that, as a condition of employment on work

covered by the project agreement, the employee will--

(A) Abide by the terms of the statement; and

(B) Notify the employer in writing of his/her conviction for a

violation of a criminal drug statute occurring in the workplace no

later than 5 calendar days after such conviction;

(v) Notifying the FHWA Division Administrator in writing, within 10

calendar days after receiving notice under paragraph (c)(3)(iv)(B) of

this section from an employee or otherwise receiving actual notice of

such conviction. Such notification shall include the employee's

position title and the identification number(s) of the project(s)

employed on;

(vi) Taking one of the following actions, within 30 calendar days

of receiving notice under paragraph (c)(3)(iv)(B), with respect to any

of its employees so convicted--

(A) Taking appropriate personnel action against such an employee,

up to and including termination, consistent with the requirements of

the Rehabilitation Act of 1973, Public Law 93-112, 87 Stat. 355, as

amended; or

(B) Requiring such employee to participate satisfactorily in a drug

abuse assistance or rehabilitation program approved for such purpose by

a Federal, State, or local health, law enforcement, or other

appropriate agency;

(vii) Making a good faith effort to continue to maintain a drug-

free workplace through implementation of paragraphs (c)(1) through

(c)(5) of this section.

(4) Suspension and debarment certification. The SHA agrees that its

principals engaged in the performance of the work covered by the

project agreement:

(i) Are not presently debarred, suspended, proposed for debarment,

declared ineligible, or voluntarily excluded by any Federal Department

or Agency;

(ii) Have not within a 3-year period preceding the agreement been

convicted of or had a civil judgment rendered against them for

commission of fraud or a criminal offense in connection with obtaining,

attempting to obtain, or performing a public (Federal, State or local)

transaction or contract under a public transaction; violation of

Federal or State antitrust statutes or commission of embezzlement,

theft, forgery, bribery, falsification or destruction of records,

making false statements, or receiving stolen property;

(iii) Are not presently indicted for or otherwise criminally or

civilly charged by a governmental entity (Federal, State or local) with

commission of any of the offenses enumerated in paragraph (c)(4)(ii) of

this section; and

(iv) Have not within a 3-year period preceding the agreement had

one or more public transactions (Federal, State or local) terminated

for cause or default.

(5) Lobbying certification. The SHA agrees that:

(i) No Federal appropriated funds have been paid or will be paid,

by or on behalf of the SHA, to any person for influencing or attempting

to influence an officer or employee of a Federal agency, a Member of

Congress, an officer or employee of Congress, or an employee of a

Member of Congress in connection with the awarding of any contract, or

modification of any contract covered by the project agreement;

[[Page 2981]]

(ii) If any funds, other than Federal appropriated funds, have been

paid or will be paid to any person for influencing or attempting to

influence an officer or employee of any Federal agency, a Member of

Congress, or an employee of a Member of Congress in connection with

work covered by the project agreement, the SHA shall complete and

submit to the FHWA Division Administrator Standard Form- LLL,1

Disclosure Form to Report Lobbying, in accordance with its

instructions;

1The FHWA Division Office can provide the latest

information on the availability of this form.

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(iii) The language of this certification shall be included in the

award documents for all contracts and subcontracts, covered by the

project agreement, which exceed $100,000 and all recipients of such

contracts and subcontracts shall be required to certify and disclose

accordingly.

PART 635--CONSTRUCTION AND MAINTENANCE [AMENDED]

5. Subpart A of part 635 is amended by revising Sec. 635.102 to

read as follows:

Sec. 635.102 Definitions.

As used in this subpart:

Administrator means the Federal Highway Administrator.

Calendar day means each day shown on the calendar but, if another

definition is set forth in the State contract specifications, that

definition will apply.

Certification acceptance means the alternative procedure which may

be used for administering certain highway projects involving Federal

funds pursuant to 23 U.S.C. 117.

Contract time means the number of workdays or calendar days

specified in a contract for completion of the contract work. The term

includes authorized time extensions.

Division Administrator means the chief FHWA official assigned to

conduct business in a particular State. A State is as defined in 23

U.S.C. 101.

Force account means a basis of payment for the direct performance

of highway construction work with payment based on the actual cost of

labor, equipment, and materials furnished and consideration for

overhead and profit.

Formal approval means approval in writing or the electronic

transmission of such approval.

Incentive/disincentive for early completion as used in this

subpart, describes a contract provision which compensates the

contractor a certain amount of money for each day identified critical

work is completed ahead of schedule and assesses a deduction for each

day the contractor overruns the incentive/disincentive time. Its use is

primarily intended for those critical projects where traffic

inconvenience and delays are to be held to a minimum. The amounts are

based upon estimates of such items as traffic safety, traffic

maintenance, and road user delay costs.

Liquidated damages means the daily amount set forth in the contract

to be deducted from the contract price to cover additional costs

incurred by a State highway agency because of the contractor's failure

to complete the contract work within the number of calendar days or

workdays specified. The term may also mean the total of all daily

amounts deducted under the terms of a particular contract.

Local public agency means any city, county, township, municipality,

or other political subdivision that may be empowered to cooperate with

the State highway agency in highway matters.

Major change or major extra work means a change which will

significantly affect the cost of the project to the Federal Government

or alter the termini, character or scope of the work.

Materially unbalanced bid means a bid which generates a reasonable

doubt that award to the bidder submitting a mathematically unbalanced

bid will result in the lowest ultimate cost to the Federal Government.

Mathematically unbalanced bid means a bid containing lump sum or

unit bid items which do not reflect reasonable actual costs plus a

reasonable proportionate share of the bidder's anticipated profit,

overhead costs, and other indirect costs.

Public agency means any organization with administrative or

functional responsibilities which are directly or indirectly affiliated

with a governmental body of any nation, State, or local jurisdiction.

Publicly owned equipment means equipment previously purchased or

otherwise acquired by the public agency involved primarily for use in

its own operations.

Specialty items means work items identified in the contract which

are not normally associated with highway construction and require

highly specialized knowledge, abilities or equipment not ordinarily

available in the type of contracting organizations qualified and

expected to bid on the contract; in general these items are to be

limited to minor components of the overall contract.

State highway agency (SHA) means that department, commission,

board, or official of any State charged by its laws with the

responsibility for highway construction. The term ``State'' should be

considered equivalent to ``State highway agency'' if the context so

implies.

Workday means a calendar day during which construction operations

could proceed for a major part of a shift, normally excluding

Saturdays, Sundays, and State-recognized legal holidays.

PART 771--ENVIRONMENTAL IMPACT AND RELATED PROCEDURES

6. The authority citation for part 771 is revised to read as

follows and all other authority citations which appear throughout part

771 are removed:

Authority: 42 U.S.C. 4321 et seq.; 23 U.S.C. 109, 110, 128, 138

and 315; 49 U.S.C. 303(c), 5301(e), 5323, and 5324; 40 CFR part 1500

et seq.; 49 CFR 1.48(b) and 1.51.

Sec. 771.109 [Amended]

7. Section 771.109 is amended by adding paragraph (d) to read as

follows:

* * * * *

(d) When entering into Federal-aid project agreements pursuant to

23 U.S.C. 110, it shall be the responsibility of the State highway

agency to ensure that the project is constructed in accordance with and

incorporates all committed environmental impact mitigation measures

listed in approved environmental documents unless the State requests

and receives written Federal Highway Administration approval to modify

or delete such mitigation features.

[FR Doc. 96-1156 Filed 1-29-96; 8:45 am]

BILLING CODE 4910-22-P