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Construction

 

Construction Program Guide

Special Experimental Project No. 14 - Local Labor Hiring Pilot Program

In the March 6, 2015 edition of the Federal Register, the U.S. Department of Transportation (DOT) published the Notice: Contracting Initiative (.pdf). The Notice announced DOT's decision to carry out a pilot program that will enable the FHWA or FTA grantees, including states and local recipients and subrecipients, to utilize social and/or economic contracting requirements in order to evaluate the impacts to the competitive bidding process. The pilot program will focus on local or other geographic labor hiring preferences, economic-based labor hiring preferences (i.e., low-income workers), and labor hiring preferences for veterans.

Also on March 6, 2015, DOT issued the Notice of Proposed Rule Making (NPRM) Geographic-Based Hiring Preferences in Administering Federal Awards (.pdf); proposing to amend its regulations at 2 CFR part 1201 to permit recipients and subrecipients to impose geographic-based hiring preferences whenever not otherwise prohibited by Federal statute. Comments on the NPRM must be received on or before April 6, 2015.

Pilot Program

This pilot program will enable the FHWA or FTA grantees, including states and local recipients and subrecipients, to utilize social and/or economic contracting requirements to evaluate the impacts to the competitive bidding process. The pilot program will focus on local or other geographic labor hiring preferences, economic-based labor hiring preferences (i.e., low-income workers), and labor hiring preferences for veterans.

Any project funded by FHWA or FTA can be considered for the pilot program. This includes construction projects, as well as rolling stock procurements. This one-year period is for contracts that will be advertised during this period.

This initiative will be carried out as a pilot program for a period of 1 year (unless extended). To be eligible for this pilot program, contracts with these requirements must be advertised within this 1-year period. Contracts awarded under the pilot program may continue to utilize any approved contract requirements throughout the life of the project. After the conclusion of the pilot program, DOT will evaluate the impacts of any approved contract requirement and provide additional guidance on their potential use in the future.

President Obama signed the Consolidated Appropriations Act, 2016 on December 18, 2015. Section 192 of Title I, Division L of the Consolidated Appropriations Act, 2016, "the FY 2016 Appropriations Act" provides a new requirement for projects using local labor hire provisions (see below). Any pilot project which has not received construction authorization by FHWA before December 18, 2015, is subject to the certification requirements in Section 192. Recipients need to provide a conforming project-specific certification with their SEP-14 workplan approval request (or with each construction authorization request under a programmatic workplan).

In the March 17, 2016, edition of the Federal Register, the DOT published the Notice Contracting Initiative (https://www.gpo.gov/fdsys/pkg/FR-2016-03-17/pdf/2016-06012.pdf) which extended the contracting initiative pilot program for a period of 1 year until March 6, 2017.

Authority/Legal Basis

  1. Laws
    • Division L, Section 192 of the Consolidated Appropriations Act, 2016 provides that funds may be used to assist a contract using geographic, economic, or any other hiring preference not otherwise authorized by law, only if a grant recipient certifies the following:
      • "(1) that except with respect to apprentices or trainees, a pool of readily available but unemployed individuals possessing the knowledge, skill, and ability to perform the work that the contract requires resides in the jurisdiction;
      • (2) that the grant recipient will include appropriate provisions in its bid document ensuring that the contractor does not displace any of its existing employees in order to satisfy such hiring preference; and
      • (3) that any increase in the cost of labor, training, or delays resulting from the use of such hiring preference does not delay or displace any transportation project in the applicable Statewide Transportation Improvement Program or Transportation Improvement Program."
  2. Regulations
    • None
  3. Orders
    • None
  4. Rule Makings / Federal Register Notices
  5. Other
  6. Project List
    State Agency Project Contracting Method(s) Workplan Section 192 Certification FHWA Approval Evaluations
    CA SANBAG I-10/Pepper Avenue Interchange Local Labor Hiring Preference (20% of new hires)
    Local Hiring Goal = 40% of new hires
    Veterans Hiring Preference
    Local Worker Hiring Incentive = $5.00/worker/hour NTE $50,000
    07/23/2015 (.pdf, 4 mb)
    Revised 09/01/2015 (.pdf, 0.2 mb)
    N/A 08/03/2015
    Revised 09/28/2015 (.pdf, 0.1 mb)
    June 28, 2016 (.pdf, 0.1 mb)
    DC DDOT South Capitol Street Corridor Phase 1 Project Local Labor Hiring Preference (51% of new hires) 09/08/2015 (.pdf, 0.2 mb)   09/28/2015 (.pdf, 0.1 mb)
    MD Baltimore City DOT Reconnecting of West Baltimore/Fulton Avenue Bridge over U.S. Route 40 Local Labor Hiring Preference (51% of new hires)
    Local Worker Hiring Incentive = $3.50/worker/hour NTE $100,000
    09/29/2015 (.pdf, 0.2 mb) N/A 10/06/2015 (.pdf, 0.1 mb)
    VA VDOT Five (5) Projects in various locations in VA. VDOT selected these because local workers and veterans are more likely to have the requisite skill sets to perform work. Local and Veteran Workers Hiring Preference goal = 75%
    Veterans may reside anywhere within Commonwealth of Virginia
    09/02/2015 (.pdf, 1 mb)   10/07/2015 (.pdf, 0.1 mb)
    CO CDOT Central 70 Project: I-70 from Brighton Blvd. to Chambers Rd. Local Labor Hiring Preference (Percentage goal to be determined as part of SEP-14 workplan)) 10/14/2015 (.pdf, 0.5 mb)
    Supplement 12/07/2015 (.pdf, 0.1 mb)
      10/27/2015 (.pdf, 0.1 mb)
    Revised 02/01/2016 (.pdf, 0.1 mb)
    PA Sports & Entertainment Authority of Pittsburgh & Allegheny County (SEA) Lower Hill Infrastructure - Element II-C Centre Avenue and Street I Intersection Reconstruction Local Labor Hiring Preference (20% of new hires) 10/20/2015 (.pdf, 0.3 mb) 02/24/2016 (.pdf, 0.1 mb) 11/11/2015 (.pdf, 0.1 mb)
    TX TxDOT S. M. Wright Project (US 175 from Bexar St. to IH 45 in Dallas) Local Labor Hiring Preference (15% of contract labor hours performed by local workers)

    Local Worker Hiring Incentive = $4.50/worker/hour NTE $500,000

    December 2, 2015 (.pdf, 2 mb)   December 10, 2015 (.pdf, 0.1 mb)
    IL IDOT Reconstruct the intersection of Thornton/Lansing Road at Stony Island Avenue, Village of Lansing, Illinois Local Labor Hiring Preference (20% of contract labor hours to be performed by residents of Village of Lansing, IL, or reside within 10 miles north, south, or west of the Village border.

    Incentive: $3.50/hour for each project local labor hour NTE $15,000.

    January 13, 2016 (.pdf, 0.2 mb) January 29, 2016 (.pdf, 0.1 mb) February 9, 2016 (.pdf, 0.1 mb)
    CA Caltrans I-5 Pavement Rehabilitation project from PM 13.8 to 19.2 in Los Angeles County. The Project is in and near the City of Commerce, and Los Angeles from Route 5/710 Separation to the Main Street Undercrossing. Local Labor Hiring Preference (10% of all contract labor hours performed by local residents) Incentive =$10.00 per hour for each local labor hour above 10% local labor hours used on the project with a maximum total incentive of $350,000. March 2, 2016 (.pdf, 0.1 mb) March 2, 2016 (.pdf, 0.1 mb) March 4, 2016 (.pdf, 0.1 mb)
    MN MnDOT Series of three projects in Hennepin County

    1. CSAH 81 Reconstruct Bottineau Blvd. from 63rd to CSAH 8
    2. CSAH 53 Reconstruct 66th St. from W of Washburn Ave to 16th Ave S Xerxes to Cedar
    3. Hwy 169 between Hwy 55 and just north of Hwy 62
    The contractor will receive an incentive of $5 per hour for hours worked by

    1. residents of areas with an unemployment rate greater than 8%(Economic Labor Hiring Preference),
    2. residents of areas that have a high concentration of poverty (Economic Labor Hiring Preference), and
    3. veterans that reside in the County (Local Labor Hiring Preference), not to exceed $150,866.65 (CSAH 81: $15,149.65, CSAH 53: $45,392.20 and Hwy 169: $90,324.80).
    April 11, 2016 (.pdf, 1 mb) April 11, 2016, page 8 (.pdf, 1 mb) April 14, 2016 (.pdf,0.1 mb)  

Guidance

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Updated: 07/20/2016
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