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Construction Program Guide

Indefinite Delivery /Indefinite Quantity (ID/IQ) Contracting – Job Order Contracting (JOC)

From 2007 to the present, FHWA has allowed the experimental use of ID/IQ contracts for Federal-aid construction projects through Special Experimental Project Number No. 14 (SEP-14) authority of 23 U.S.C. 502(b)(2).  The FHWA has gained substantial experience through these experiments to operationalize this contract type in limited circumstances.  Additionally, Senate reports accompanying fiscal years 2017 and 2018 appropriations recommended that FHWA operationalize job order contracts (JOCs), a form of ID/IQ contracting, for all Federal-aid funded projects.

On May 2, 2018, FHWA published a Federal Register Notice and Request for Comments on a proposal to operationalize Indefinite Delivery/Indefinite Quantity and Job Order Contracts for low-cost construction contracts. This notice allowed FHWA to authorize ID/IQ projects without SEP-14 approval for low-cost contracts  - defined as competitively bid, short term (1- or 2-year) contracts that qualify as a categorical exclusion under 23 CFR 771.117 and where the total value of task or work orders does not exceed $2,000,000 per year.

On June 26, 2018, the FHWA published an Advance Notice of Proposed Rulemaking (ANPRM) in the Federal Register. The ANPRM seeks comment on how FHWA may further expand this contracting method on a permanent basis.  Possible expansions may include, but are not limited to: best value awards, multiple award contracts, and ID/IQ projects exceeding the low-cost criteria.

FHWA Notice 5060.2

On January 18, 2019, Deputy FHWA Administrator Brandye L. Hendrickson signed FHWA Notice N5060.2 , Indefinite Delivery/ Indefinite Quantity Contracting for Low-Cost Federal-Aid Construction Contracts.  Although this Notice allows State DOTs to use ID/IQ contracting and JOCs for low-cost Federal-Aid Construction Contracts without advance Special Experimental Project Number 14 (SEP-14) approval on a project-by-project basis, the ID/IQ contracting and JOC contracting methods will continue to be administered under the SEP-14 program.  Under this FHWA Notice, ID/IQ and JOC contracts meeting all of the specified factors do not need prior SEP-14 approval, including :

  1. The ID/IQ or Job Order contract must be a low-cost contract , which is:
    1. A short-term (1 to 2 year) base contract.  However, with FHWA approval, the base contract may be extended, but the maximum length of the contract period with extensions must not exceed 5 years;
    2. Awarded by competitive bidding to the lowest responsive bidder; and
    3. A contract where the total value of task or work orders may not exceed $2,000,000 per year on average over the contract term; and
  2. The contract must be a single-award - task or work order contract.  Approval for multiple award - task or work order contracts require SEP-14 approval.
  3. The actions covered by the contract will be for construction projects qualifying for National Environmental Policy Act (NEPA) categorical exclusions listed under 23 CFR 771.117.
  4. The work will comply with all applicable Title 23 requirements during construction, such as the applicable sections of Form FHWA-1273 (Required Contract Provisions for Federal-aid Construction Projects), job site poster requirements, environmental commitments, etc.
  5. The award of the contract and the performance of the project will comply with applicable Disadvantaged Business Enterprise (DBE) provisions of 49 CFR part 26.

Other requirements are detailed in FHWA Notice 5060.2 .

Since these contracting methods continue to be administered under SEP-14, this FHWA Notice directs Division Offices submit annual evaluation reports to FHWA Office of Preconstruction, Construction, and Pavements (HICP ). 

Federal-aid construction contracts not meeting the factors specified in the FHWA Notice require prior SEP-14 approval.  See Paragraphs 4 and 8(g) of the FHWA Notice.

Authority/Legal Basis

General Information
Updated: 04/08/2019
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