September 30, 1992, Transmittal 5

NS 23 CFR 230D




    1. Contract compliance-FHWA and State Enforcement of OFCCP Required Goals and Timetables in contracts. FHWA and State enforcement of minority and female goals and timetables rests on the decision in the case of the Trustees of Tufts University versus Volpe Construction Company, Inc. in which it was found that parties to contract have the right and obligation to meet or enforce the provisions of the contract as appropriate, including EEO provisions of E.O. 11246 which are required to be included. States have both the authority and obligation to ensure compliance with EEO contract provisions. This applies only to federally assisted highway construction contracts.

    2. OFCCP Reporting Requirements, 41 CFR 60-4.2. On June 3, 1982, the FHWA reached an agreement with OFCCP to accept quarterly updated lists of active federally assisted prime contracts in lieu of reports by States of nonexempt contract awards. Prime contractors are required by the standard EEO provisions to report to OFCCP subcontract awards in excess of $10,000.

        (1) The requirement for contractors to submit the subcontracting information is between the contractors and OFCCP. The OFCCP is required to work through funding agencies and recipients in obtaining compliance with Executive Order 11246 in instances where determinations of noncompliance are made.

        (2) The standard EEO provisions do not require submission of subcontracting notices through the contracting (State) or funding (FHWA) agencies. The FHWA is obligated to cooperate with OFCCP in its efforts to obtain compliance.

    3. OFCCP Construction Contractors' Affirmative Action Requirements. FHWA interpretation of 41 CFR 60-4 as amended December 30, 1980:

        (1) Construction contractors' reporting requirementsare to continue as before the November 3, 1980, effective date of the OFCCP amendments to 41 CFR 60-4. These reporting requirements are "Under existing OFCCP practice, construction contractors have generally been submitting Forms CC-257 showing minority utilization only for construction work performed in geographic areas in which they hold Federal or federally assisted construction contracts and in which there has been a minority goal applicable."

        (2) Increased reporting requirements (beyond those required prior to November 3, 1980) are stayed pending clearance by the Office of Management and Budget.

        (3) OFCCP extended the 6.9 percent goal for female utilization.

  2. CLARIFICATION OF CONTRACT COMPLIANCE RESPONSIBILITIES (23 CFR 230.405). The FHWA and State highway agencies (SHA) EEO compliance personnel and Federal-aid highway contractors retain responsibilities under 23 U.S.C. 140 and E.O. 11246 for contract compliance.

    1. The SHAs will implement an EEO contract compliance program pursuant to 23 U.S.C. When appropriate, necessary sanctions under State contract administration procedures should be imposed. In instances where a State program is found to be inadequate, FHWA regional civil rights officers will intervene to obtain compliance.

    2. The FHWA regional civil rights staffs should work with State counterparts to establish annual or seasonal compliance review goals for the SHA. The FHWA civil rights staff should participate in or conduct a compliance review in each State to ascertain the effectiveness of State compliance review programs.

    3. In areas where the OFCCP reviews highway contractors, the SHA may opt to accept theses reviews as sufficient to meet 23 U.S.C. EEO requirements. Where this option is exercised and State or FHWA staffs did not participate in a joint review with OFCCP, reports should be analyzed to determine whether the need exists to conduct a supplemental inspection or review to obtain information on contractors' training and MBE efforts. The FHWA and SHAs are required by 41 CFR 60 to cooperate with the Department of Labor (DOL), OFCCP. Conversely, DOL/OFCCP is required by 23 U.S.C. 140 to provide information and assistance to DOT/FHWA.

    4. The SHAs may require contractor submission of theMonthly Employment Utilization Report (SF-257) reflecting specific area or statewide employment data. In any event, contractors will continue to be required to submit annual PR-1391 reports.


    1. A State's EEO conciliation agreement/voluntary corrective action form referenced Office of Federal Contract Compliance Programs (OFCCP) as party to the agreement. The form also used the authority of Executive Order (E.O.) 11246 as a basis for the determination of compliance or noncompliance. The Director, OFCCP, directed that neither the FHWA nor the States have authority to review or monitor the E.O compliance or Federal or federally assisted contractors. It is inappropriate to cite E.O. 11246 as an authority for State action. However, a State, as party to a contract, has the right and obligation to enforce all of the provisions of the contract (including EEO provisions based on E.O. 11246 which are required to be included).

    2. The State's, FHWA's, and OFCCP's responsibilities are set out in the following policy statements:

        (1) 8/27/80 - Proposed Changes to Federal-aid Highway Contract EEO Requirements and Compliance Review Program

        (2) 11/6/80 - Contract Compliance - FHWA and State Enforcement of OFCCP Required Goals and Timetables in Contracts

        (3) 12/11/80 - Clarification of Contract Compliance Responsibilities

    3. The reviews of State EEO/Contract Compliance Program implementation must include a review of all standard State forms or other documents used in conciliation agreements or voluntary corrective action plans and related actions. The State must be directed to remove any reference to the E.O. as an authority for its action.

    4. The contract provisions in Form PR-1273 contain those required by E.O. 11246, which are to be included in contracts and bid documents and which may be incorporated by reference.

  4. SECTION 122, SURFACE TRANSPORTATION AND UNIFORM RELOCATION ASSISTANCE ACT (STURAA) OF 1987--INDIAN EMPLOYMENT PREFERENCE (23 CFR 230.403). The Federal HighwayAdministrator in May 1987 advised the regions of the enactment of an Indian employment preference provision as a part of the STURAA of 1987. It is the intent of this supplement to provide clarification of this provision.

    1. Enactment of the STURAA of 1987 which includes Section 122, now concludes any debate regarding the applicability of Indian employment preference on Federal-aid highway projects. Simply stated, Section 122 amends the antidiscrimination provisions contained in 23 U.S.C. 140 to make them consistent with certain provisions of Title VII of the Civil Rights Act of 1964, and thus Indian employment preference, as later defined in this supplement, States. Accordingly, the FHWA field offices should encourage States to meet with Indian tribes and their Tribal Employment Rights Offices (TERO) to develop contract provisions for Federal-aid highway projects which will promote employment opportunities for Indians.

    2. States and tribal representatives should identify employment opportunities in advance on appropriate Federal-aid projects. They should determine reasonable overall employment goals for Indians, establish clearly the acceptable requirements which can be used to achieve such goals, and make them an integral part of contract and proposal documents.

    3. To develop a workable and acceptable project Indian employment goals, the State should confer with tribal representatives during project development. In setting the goal, consideration should be given to the availability of skilled and unskilled Indian resources, the type of contract, and the potential employment requirements of the contractor in addition to its core-crew. Once established, the goal should only be changed by the State after consultation with the Indian tribal representative and the contractor and afterconsideration of good faith efforts to achieve the original goal. Sanctions for failure to meet the employment goal should be determined in advance and be made a part of the contract to facilitate enforcement.

    4. In order to assure a consistent application of Section 122, several significant items must be clarified:

        (1) Federal-aid projects eligible for Indian employment preference consideration are those projects which are (a) otherwise eligible for funding in whole or in part with Federal-aid highway funds and (b) located on roads within or providing access to an Indian reservation or other Indian lands as defined under the term "Indian reservation roads" in Section 101 of Title 23 and regulations issued thereunder. The terminus of a road "providing access to" is that point at which it intersects with a road functionally classified as a collector or higher classification (outside the reservation boundary) in both urban and rural areas. In the case of an Interstate highway, the terminus is the first interchange outside the reservation.

        (2) Indians eligible for employment preference are those living on or near a reservation or Indian lands (as defined above). Indian preference is to be applied without regard to tribal affiliation or place of enrollment. Indians already hired by a contractor should be included as part of the contractor's core-crew. In no instance should a contractor be compelled to layoff or terminate a core-crew employee to meet a preference goal.

        (3) TERO - many tribes have established a tax which is applied to contracts for projects performed on the reservation. The proceeds are used by the tribes to fund job referral, counseling, liaison, and other services relating to the employment of Indians. It has been FHWA's longstanding policy to participate in State and local taxes which do not discriminate or otherwise single out Federal-aid highway construction contracts for special or different tax treatment. Thus, if the TERO tax rate on Federal-aid highway contracts is the same as imposed on other projects, such costs are eligible for Federal-aid reimbursement.

        (4) Indian Contractor Preference - the language of Section 122 and the legislative history make it clear that the singular intent of the new amendment is to permit and encourage Indian preference in employment on Indian reservation roads. The only contracting preference which can be recognized in a Federal-aid highway contract is that authorized by disadvantaged business enterprise (DBE) statutory provisions (Section 105(f) of the 1982 Surface Transportation Assistance Act and issued thereunder. Under DBE regulations, Native Americans, which include American Indians, are rebuttably presumed to be socially and economically disadvantaged. Thus, Indian owned businesses are eligible for DBE certification by the State and once certified may be given equal preference with other certified DBE's to fulfill goals on Federal-aid projects. The availability of certified Indian owned businesses should be considered in setting contract DBE goals.

    5. The issues addressed herein, coupled with the information contained on earlier documents, should provide the guidance necessary to assure that FHWA policy relative to Indian employment preference is applied uniformly within the parameters of Section 122. States and Indian tribal governments should be made aware of this additional policy guidance.

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