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.
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).
Pilot Program Extensions
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.
In the January 18, 2017 edition of the Federal Register, the DOT published the Notice: Contracting Initiative (https://www.gpo.gov/fdsys/pkg/FR-2017-01-18/pdf/2017-00984.pdf) which extended the local labor hiring preference pilot (LLHPP) for a period of 5 years to run through March 6, 2022.
Termination of the Pilot Program
On October 6, 2017, the US DOT published a Federal Register Notice announcing the withdrawal of a proposed rulemaking for geographic hiring preferences and related pilot programs (The Local Labor Hiring Pilot Program (LLHPP) and the Livability Initiative Pilot Program).
FHWA approved local labor hiring preference pilot projects under its experimental contracting program Special Experimental Project No. 14. Including all approvals to date, the LLHPP has 12 approved SEP-14 workplans and 18 total projects from 11 different contracting agencies, while the Livability Initiative has 7 approved SEP-14 workplans and 7 total projects from 7 different contracting agencies. The approved pilot programs projects may continue without change. Contracting agencies are encouraged to provide their project evaluations as proposed in their SEP-14 and forward these to the Office of Infrastructure.
- Division L, Section 192 of the Consolidated Appropriations Act (01/01/2016)
- "(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."
- Federal Register NPRM: Geographic-Based Hiring Preferences in Administering Federal Awards (03/06/2015) (.pdf). Note: Comment period closed April 6, 2015
- Federal Register Notice: Contracting Initiative (Pilot Program Extension) (01/18/2017) (01/18/2017)
- Federal Register Notice Contracting Initiative (Pilot Program extension) (03/17/2016)
- Federal Register Notice: Contracting Initiative (03/07/2015)
- May 12, 2015 - Contracting Initiative Fact sheet (DOT) (.pdf)
- May 27, 2015 - Contract Initiatives Questions and Answers (.pdf) (DOT)
- March 4, 2016 - Contracting Pilot Program - Additional Questions and Answers
- May 4, 2015 - FHWA's First Local Hiring Preference Pilot Program Webinar Recording
- June 18, 2015 - FHWA's Second Local Hiring Preference Pilot Program Webinar Recording
- July 9, 2015 - Sample Workplan - HIPA Director Tom Everett's Transmittal to Division Administrators
- January 8, 2016 Revised Sample Workplan - Local Labor Hiring Preference (.pdf, 0.2 mb)
- January 8, 2016 FHWA, Office of Program Administration Email, Subject: "Section 192 of Title I, Division L of the Consolidated Appropriations Act, 2016 (the Department of Transportation Appropriations Act, 2016), 'the FY 2016 Appropriations Act' and Local Labor Hiring Preference Provisions"
- March 4, 2016 - DOT Notice - Extension of DOT Contracting Initiative Pilot Program
- March 30, 2016, FHWA, Office of Program Administration Email, Subject: Extension of the Contracting Initiative Pilot Program until March 6, 2017
- January 18, 2017, FHWA Office of Program Administration Email, Subject: INFORMATION: Extension of Local Labor Hiring Preference Pilot Program (extended to March 6, 2022)
- October 6, 2017 FHWA Office of Program Administration Email, Subject: Information: Federal Register Notices regarding Local Labor Hiring
- Project List
- April 2013 - NCHRP Legal Research Digest #59- "Enforceability of Local Hire Preference Programs"
- March 3, 2015 - DOT Fast Lane blog post by DOT Secretary Anthony Foxx: "Local Hiring just makes sense"
- March 3, 2015 - DOT Press release: U.S. Transportation Department Proposes Initiatives to Give Local Workers a Boost in Federal Investments
- USDOT web page for the Local Hiring Contracting Initiative