Livability Initiative under Special Experimental Project No. 14

AGENCY:

Federal Highway Administration (FHWA), DOT.

ACTION:

Notice; request for comments.

SUMMARY:

The FHWA is requesting comments on a livability initiative to harmonize and coordinate the Federal-aid Highway Program with grant-in-aid programs administered by the Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA). Under this initiative, the FHWA intends to utilize Special Experimental Project No. 14 (SEP-14) to permit, on a case-by-case basis, the application of HUD requirements on Federal-aid highway projects that may otherwise conflict with Federal-aid Highway Program requirements. One such requirement is contained in HUD's Section 3 Program, the goal of which is to provide training, employment and contracting opportunities to low and very low income persons residing within the metropolitan area (or nonmetropolitan county) in which the project is located and businesses that substantially employ such persons. The purpose of this proposed SEP-14 experiment is to further the goals of the DOT, HUD, and EPA partnership on sustainable communities.

DATES:

Comments must be received on or before May 14, 2010.

ADDRESSES:

All comments should include the docket number that appears in the heading of this document and may be submitted in the following ways:

• E-Gov Web site: http://www.regulations.gov. This Web site allows the public to enter comments on any Federal Register notice issued by any agency. Follow the instructions for submitting comments.
• Fax: 1-202-493-2251.
• Mail: DOT Docket Management System: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001.
• Hand Delivery: DOT Docket Management System; West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001 between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Instructions: You should identify the docket number at the beginning of your comments. If you submit your comments by mail, submit two copies. To receive confirmation that DOT received your comments, include a self-addressed stamped postcard.

Note:

Comments are posted without changes or edits to http://www.regulations.gov , including any personal information provided. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or may print the acknowledgment page that appears after submitting comments electronically. Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). Persons making comments may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70, Pages 19477-78).

FOR FURTHER INFORMATION CONTACT:

For technical information: Mr. Gerald Yakowenko, Office of Program Administration (HIPA), (202) 366-1562. For legal information: Mr. Michael Harkins, Office of the Chief Counsel (HCC-30), (202) 366-4928, Federal Highway Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. Office hours are from 7:45 a.m. to 4:15 p.m., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

You may submit or retrieve comments online through http://www.regulations.gov , which is available 24 hours each day, 365 days each year. Electronic submission and retrieval help and guidelines are available under the help section of the Web site.

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 Printing Office's Web page at http://www.gpoaccess.gov .

Background

On March 18, 2009, DOT and HUD announced a new “Sustainable Communities” partnership to help American families gain better access to affordable housing, more transportation options, and lower transportation costs. On June 16, 2009, the EPA joined the DOT/HUD partnership, which helps ensure that transportation and housing goals are met while protecting the environment, promoting equitable development, and helping to address the challenges of climate change. The initiative underlying this partnership has a number of goals and principles including coordinating and leveraging Federal investment, increasing community revitalization and the efficiency of public works investments, expanding location- and energy-efficient housing choices for people of all incomes, and aligning DOT, HUD, and EPA policies and funding to remove barriers to collaboration. This initiative has been developed, in part, to develop measures that enhance the livability of communities, neighborhoods, and metropolitan areas, help communities attain livability goals and remove barriers to coordinated housing, transportation, and environmental protection investments. More information regarding the DOT, HUD, and EPA Sustainable Communities Partnership can be found at http://www.epa.gov/dced/2009-0616-epahuddot.htm.

Recently, HUD and DOT recognized an opportunity for collaboration between our respective Agencies for the benefit of funding recipients who want to use certain HUD funds as a local match for FHWA grants-in-aid. In exploring this opportunity, FHWA found that certain HUD requirements were potentially in conflict with requirements of the Federal-aid Highway Program. Specifically, HUD's Section 3 program at 12 U.S.C. 1701u requires that recipients of funds from programs that provide certain housing and community development assistance ensure that opportunities for training and employment are given to low and very low income persons residing within the metropolitan area (or nonmetropolitan county) in which the project is located, to the greatest extent feasible, and that contracting opportunities generated by the expenditure of such funds be made available to businesses that substantially employ such persons, to the greatest extent feasible. Further, 12 U.S.C. 1701u(b) provides that it is the policy of the Congress to ensure employment and other economic opportunities generated by Federal financial assistance for housing and community development programs be directed to low and very low-income persons, particularly recipients of government assistance for housing.

Under 42 U.S.C. 5305, HUD's economic opportunity requirements apply to, among other things, projects utilizing Community Development Block Grant (CDBG) funds for public infrastructure improvements. Further, 42 U.S.C. 5305 provides that CDBG funds may be used as the non-Federal match required by other Federal grant-in-aid programs.

The FHWA regulations at 23 CFR 635.117(b) and 636.107 prohibit contracting agencies from using geographic preferences on Federal-aid highway projects. The FHWA's regulations were enacted pursuant to 23 U.S.C. 112(a), which provides that the Secretary of Transportation shall require such plans and specifications and such methods of bidding as shall be effective in securing competition, and 23 U.S.C. 112(b), which requires Federal-aid highway contracts be awarded by competitive bidding to the lowest responsive, responsible bidder.

While it appears that CDBG- and FHWA-eligible projects would benefit from the use of joint funding, the potential conflict between HUD's economic opportunity requirements and FHWA's procurement requirements has been identified as a potential barrier to the efficient administration of joint FHWA/HUD funded projects and could inhibit the ability of State and local governments to utilize their HUD funding to support highway projects funded under Title 23.

SEP-14

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 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) ( http://fhwa.dot.gov/programadmin/contracts/021390.cfm ).

The SEP-14 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. However, SEP-14 does not seek alternatives to the open competitive bid process.

The innovative practices originally approved for evaluation 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. Additionally, design-build contracting in the Federal-aid Highway Program was originally conducted under SEP-14 until Congress modified 23 U.S.C. 112 in section 1307 of the Transportation Equity Act for the 21st Century (TEA-21) to permanently authorize the use of this contracting method. The SEP-14 continues to be used to test and evaluate experimental contracting practices.

Livability Features Under SEP-14

The FHWA proposes to permit States to request SEP-14 approval for contracting practices intended to enhance livability and sustainability as part of any project that is to be jointly funded with HUD. In order to receive SEP-14 approval, States would need to follow the normal process and submit work plans to the appropriate FHWA division office.

In particular, with respect to projects involving activities that otherwise meet the requirements for the use of FHWA and HUD funds, the FHWA proposes to permit States to experiment under SEP-14 by combining these funding sources for single, integrated projects that are procured and bid under a single contract while complying with training, employment and contracting requirements of HUD's Section 3, to the greatest extent feasible. The purpose of the experiment will be to gauge the extent to which HUD funding may be used for highway projects, the effects on competition whenever HUD's economic opportunity requirements are used on a joint FHWA/HUD project, and the extent to which the alignment of FHWA and HUD requirements further livability. As such, States would be asked to address at least four points in developing their work plans. First, States would be asked to describe how they will evaluate the effects of HUD's economic opportunity requirements on competitive bidding. In doing so, the States may wish to compare the bids received for the proposed project to prior projects of similar size and scope and in the same geographic area. Second, States would be asked to quantify and report on the expected economic benefits from advancing the joint FHWA/HUD project under a single contract.

Third, States wishing to utilize SEP-14 to permit the use of HUD-required hiring preferences on joint FHWA/HUD projects would be asked to identify the amount of HUD and FHWA funding involved in the project as well as the estimated total project cost. In order to qualify for a SEP-14 approval to use a geographic preference for a joint FHWA/HUD project, we propose that the amount of HUD funding involved with the project must be at least 10 percent of the amount of Title 23 eligible work, or with respect to projects financed with $100,000,000 or more in Federal funding in the aggregate, 5 percent of such eligible work. In any event, the FHWA may reject SEP-14 work plans for projects with only de minimis amount of HUD funding. Fourth, States would be asked to address in the work plan the degree to which the project enhances livability and sustainability.

Livability investments are projects that not only deliver transportation benefits, but are also designed and planned in such a way that they have a positive impact on qualitative measures of community life. This element of long-term outcomes delivers benefits that are inherently difficult to measure. However, it is implicit to livability that its benefits are shared and therefore magnified by the number of potential users in the affected community. Therefore, we propose that descriptions of how projects enhance livability should include a description of the affected community and the scale of the project's impact. Factors relevant to whether a project improves the quality of the living and working environment of a community include:

• Will the project significantly enhance user mobility through the creation of more convenient transportation options for travelers?
• Will the project improve existing transportation choices by enhancing points of modal connectivity or by reducing congestion on existing modal assets?
• Will the project improve accessibility and transport services for economically disadvantaged populations, non-drivers, senior citizens, and persons with disabilities, or to make goods, commodities, and services more readily available to these groups?
• Is the project the result of a planning process which coordinated transportation and land-use planning decisions and encouraged community participation in the process?

Sustainability refers to whether a project promotes a more environmentally sustainable transportation system. Factors relevant to sustainability include:

• Does the project improve energy efficiency, reduce dependence on oil and/or reduce greenhouse gas emissions? Applicants would be encouraged to provide quantitative information regarding expected reductions in emissions of CO2 or fuel consumption as a result of the project, or expected use of clean or alternative sources of energy. Projects that demonstrate a projected decrease in the movement of people or goods by less energy-efficient vehicles or systems would be given priority under this factor.
• Does the project maintain, protect or enhance the environment, as evidenced by its avoidance of adverse environmental impacts (for example, adverse impacts related to air quality, wetlands, and endangered species) and/or by its environmental benefits (for example, improved air quality, wetlands creation or improved habitat connectivity)?
• Does the project further the goals of the DOT, HUD, and EPA Sustainable Communities Partnership discussed above?

The FHWA would only consider the possible use of HUD's economic opportunity requirements under SEP-14 in the context of a joint FHWA/HUD project and only to the extent necessary to comply with applicable HUD statutes. The FHWA would not consider the use of such preferences unless necessary to meet the requirements of a Federal grant-in-aid program.

Request for Comments

The FHWA requests comments on all aspects of this notice, including the FHWA's proposal to use SEP-14 to test contracting methods that enhance livability and sustainability in projects funded jointly with HUD. Additionally, the FHWA specifically requests comments on the use of SEP-14 to experiment with the use of geographic preferences in joint FHWA/HUD projects and the type of data the FHWA should receive from States in evaluating this SEP-14 experiment.

Authority: 23 U.S.C. 315.