Additional Guidance on 23 CFR 635 D
Formerly Federal-aid Policy Guide Non-Regulatory Supplement 23 CFR 635 D,
October 5, 1995, Transmittal 14
See Order 1321.1C FHWA Directives Management
- Use of Material Made Available by a Public Agency (23 CFR 635.407)
- It is expected that in most instances a disposal site for surplus material will be at the contractor's option. This would not preclude the State highway agency from showing a possible disposal site in the contract provisions.
- Where mandatory borrow or waste sites will be permitted based on environmental considerations and which were discussed in the Environmental Impact Statements, such considerations may be used as the basis for subsequent PS&E public interest findings.
- Nationwide Waiver of Buy AMerica for Ferryboat Equipment and Machinery (23 CFR 635.410)
- On February 9, 1994, the FHWA published, in the Federal Register (59 FR 6080), a nationwide waiver of the Buy America requirements for cer tain steel items used in the construction of ferryboats. The effective date of the waiver is February 9, 1994. The waiver permits the use of specifically identified steel equipment and machinery manufactured outside of the United States in Federal-aid highway construction pro jects for ferryboats.
- Because the construction of ferryboats is increasingly difficult within the requirements of Buy America, a nationwide waiver of these re quirements was granted for certain ferryboatequipment and machinery items. The items in cluded in the waiver are marine diesel engines, electrical switchboards and switchgear, electric motors, pumps, ventilation fans, boilers, elec trical controls, and electronic equipment. Items not included in the waiver are products which are readily available in the United States such as steel and stainless steel plate and shapes, sheet steel and stainless steel, steel and stainless steel pipe and tubing, and galva nized steel products. Items not specifically included in the waiver remain subject to the Buy America requirements.
- The basis for the nationwide waiver is that the equipment and machinery identified in paragraph b are not manufactured in the United States, using exclusively United States steel and iron, in sufficient and reasonably available quanti ties to avoid an enormous administrative burden on the State, contractor, and suppliers. There fore, imposing Buy America requirements in this limited instance is not in the public interest.
- Warranty Clauses(23 CFR 635.413)
- The 1991 ISTEA permitted a State to exempt itself from FHWA oversight of projects located off the National Highway System (NHS). Therefore, a State highway agency (SHA) may use warranty clauses on non-NHS construction contracts in accordance with its own procedures.
- On April 19, 1996, the FHWA adopted as its Final Rule (61 FR 17234) the Interim Final Rule (60 FR 44271) expanding the use of warranty clauses on Federal-aid highway construction projects. Within prescribed limits and with the advanced approval of the FHWA Division Administrator, a SHA may choose to include warranty clauses in Federal-aid highway construction contracts for projects located on the NHS. This regulation became effective on August 25, 1995.
- The warranty clauses must be for specific construction products or features within the control of the contractor. General project warranty or maintenance bonds (which are broad or general in nature) should not be approved for NHS projects. Preventive maintenance activities may be included when a SHA can demonstrate, to the satisfaction of the FHWA, that a proposed activity is a cost-effective means of extending the useful life of a Federal-aid highway. Maintenance items not eligible for Federal-aid funds cannot be included. The SHA remains responsible for ordinary maintenance of wear and tear resulting from normal use.
- The regulation explicitly states that the contractor will not be liable for items over which he/she has no control. Since a construction contractor typically has no control over the project design, the warranty provision cannot hold the contractor responsible for early deterioration resulting from inaccurate design assumptions. However, when the contractor has control of the design of a contract element such as a value engineering proposal or alternate design, a warranty of the element may include its design.
- The June 1995 FHWA publication "Rebuilding America: partnership for Investment, Innovative Contracting Practices" identifies warranty applications which may enhance the quality of a Federal-aid highway construction project.
- Buy America Certification (23 CFR 635.410)
- The American Association of State Highway and Transportation Officials on July 17, 1989, ap proved a resolution supporting the use of step-step (i.e. step) certification. Furthermore, the DOT Office of Inspector General (OIG) in an audit report issued December 20, 1994, on FHWA's Buy America enforcement efforts, endorsed the step certification process as a method "to pro vide greater awareness of and adherence to BuyAmerica requirements." The process would also establish accountability and better enable States to take enforcement actions. . . against intentional violators."
- The FHWA supports step certification as an effective way to ensure Buy America requirements are met and encourages State highway agencies to implement such a process. Step certification creates a paper trail which documents the loca tion of the manufacturing process involved with the production of steel and iron materials. The step certification process requires the place ment of a certification on all mill test reports and requires a separate certification by each corporate entity involved in the manufacturing process (from melting to fabrication) on trans fer of the intermediate product, thereby gener ating "a chain of custody" documentation trail.
- A certification containing language substantially as follows is recommended for use in step certification or other certification process a State may choose to establish:
"All manufacturing processes for these steel and iron materials, including the application of coatings (unless granted a waiver pursuant to 23 CFR 635.410), have occurred in the United States."
- Material or Product Selection (23 CFR 635.411)
- Direct reference to patented or proprietary material, specifications, or processes of any nature should not be included in standard or supplemental specifications since they are subject to change without notice to or acceptance by the States or the Federal Highway Administration. In specific circumstances where the State's certification in accordance with 635.411(a)(2) is approved, the complete specification or such parts as are applicable should be incorporated in the standard or supplemental specifications.
- The use of trade names in specifications and on plans should be avoided. Instead, specifica-tions should be formulated that will obtain the desired results and at the same time assure full opportunity for competition among equivalent materials, equipment and methods. In exception al cases, however, where satisfactory specifica tions cannot be developed by the highway agen cies or obtained from organizations maintained for the specific purpose of developing specifi cation requirements based on laboratory tests or other performance requirements, there will be no objection to the use of trade name designations provided all, or at least a reasonable number, of acceptable materials or products are listed. The foregoing procedure will be permitted for a reasonable period while specifications based on performance requirements are being developed. These requirements are not intended to limit the development of new materials, equipment or methods or to discourage ingenious utilization of them. New materials, equipment or methods that show sufficient promise may be approved for inclusion and evaluated as experimental construction.
- Guaranty and Warranty Clauses (23 CFR 635.413)
- The guaranty or warranty restrictions are not intended to prevent a State from benefiting under any warranty or guaranty given as a customary trade practice for any material or product purchased for use on a Federal-aid project. No objection will be made to provi sions in Federal-aid contracts requiring the contractor to obtain, and assign to the State, such warranties or guarantees. Plant establishment periods are not to be considered under this provision.
- The intent of the warranty and/or guaranty requirements of 635.413(b) is clarified below:
- It is the intent of paragraph b(1) to provide for equipment which performs asintended by the manufacturer for the period guaranteed by the manufacturer when installed in accordance with the recommendations of the manufacturer. Failure to perform as indicated above requires that the manufacturer replace in kind or repair, at his/her option, the equipment in question. User labor costs resulting from replacement of the equipment are not a burden to be borne by either the manufacturer or the contractor. Likewise, it is not the intent of the paragraph that user labor costs due to normal maintenance or emergency, or costs not normally provided as trade practice be borne by either the manufacturer or the contractor.
- Paragraph b(2) recognizes the fact that installations involving electrical or me chanical components often require a period of operation before an acceptable level of service can be established. It is the in tent of paragraph b(2) to obtain from the contractor a level of workmanship which will assure the State of an operational system devoid of contractor laxities. The stated operational period will allow for adjustment, repair or replacement of equip ment or materials not covered by manufactu rers' guarantees and the correction of mal functions attributable to installation de ficiencies.
- The cost of operating motorist-aid facilities for a period of time after installation is considered an integral part of installing and ironing out early operational problems. A contract requirement for such work is considered acceptable on Federal-aid projects. The following special provision may be included in Federal-aid highway construction contracts where a State considers it warranted:
- For a period of 18 months after acceptance of the construction work by the State thecontractor shall perform, or with the State's approval arrange for the performance of, all the work necessary to keep the completed facility in full operation. The work shall include furnishing all necessary labor, materials, equipment, tools, transportation, supplies, and incidentals required to complete the work. The work shall not include repairs or replacements made necessary by damage resulting from vandalism or traffic accidents.
- No direct payment will be made for this work but payment will be considered as included in the bid prices for other items of the contract.
- Section 635.413 of 23 CFR generally prohibits guaranty and warranty clauses from being used on Federal-aid contracts. Section 109(p) of 23 U.S.C. titled 'Compliance with State Laws for non-NHS Projects' states that exempted non-National Highway System (NHS) projects shall be designed and constructed in accordance with State laws, regulations and directives. A State, therefore, has the latitude to follow its own procedures on exempted non-NHS projects, and include provisions such as guaranties and/or warranties on these projects to the same degree they are permitted to include them on State funded only projects. For NHS projects where a State desires to include a guaranty or warranty clause, the project must be submitted to the Contract Administration Branch, HNG-22 for approval under Special Experimental Project (SEP) 14. The SEP 14 requirements and approval process were transmitted with the September 18, 1992, Design/Build, SEP 14 memorandum to the field from the Director, Off Concept ice of Engineering.
- Due to the FHWA's interest in the application of guaranty and warranty clauses on highway pro jects, information on those exempted non-NHSprojects where the State includes a guaranty or warranty clause should be provided to the Con tract Administration Branch, HNG-22.
- Convict Produced MaterialS (23 CFR 635.417). Standard State and Federal-aid contract procedures should be used to assure compliance with the requirements of 635.417.