Section 6: Bid Document PreparationAnchor: #i1026425
Bid documents include the plans, specifications and estimates (PS&E) developed to describe all of the elements of a construction project and become the contract between the local government (LG) and the selected contractor. The following sections list the applicable federal and state provisions associated with each bidding or contracting component with a brief description of the requirements associated with each.Anchor: #i1026435
Submittal of PS&E Documents
The PS&E are prepared by the LG and submitted to the TxDOT district for review and approval. On most projects, it is recommended the PS&E be submitted at several stages in the project, reflecting the 30 percent, 60 percent and 90 percent completion phases, in order to receive TxDOT [and Federal Highway Administration (FHWA), when required] concurrence during development of the design aspects of the project. For less complex projects, the TxDOT district may allow fewer submittals. The advance funding agreement (AFA) should state that a submittal and milestone schedule will be provided by the LG to the district with periodic updates, as appropriate.
The 30 percent complete design is submitted in the Preliminary Engineering and Design phase. The 60 percent and 90 percent complete designs are submitted in the PS&E Development phase. Upon final submittal, the PS&E and bid documents are reviewed and approved by TxDOT and a state letter of authority and federal project authorization and agreement, if required, are issued that allow advertising of the construction phase of the project. The district or division managing the AFA should also ensure the collection of the agreed-upon funds for this phase of the project from the LG in accordance with the terms of the AFA.
- Anchor: #EXXUNUER
- 23 CFR Part 630 Subpart A – Requires TxDOT to obtain authorization from FHWA before work begins on any federally funded project. Anchor: #LGRCAUUT
- 23 CFR Part 630 Subpart B – Prescribes procedures to be followed for the preparation, submission and approval of the PS&E, and supporting documents for federally funded projects. Anchor: #ADMBQEIA
- 23 CFR Part 635 Subpart C – Requires authorization before a federally funded project may be advertised for the receipt of bids. PS&E approval is a pre-requisite of authorization for design-bid-build projects. For design-build projects, FHWA’s approval of the request for proposals document will constitute FHWA’s project authorization. However, phased authorizations may be given under certain conditions contained in 23 CFR 635.309(p).
- Anchor: #HJIEJGRK
- 43 TAC §15.56 – Requires projects on the state highway system to be designed in accordance with TxDOT manuals, procedures, standards and guidelines. Additionally requires approval of the PS&E by TxDOT prior to advertisement for the receipt of bids for projects on the state highway system.
The LGPM Guide provides the required practices and LG and TxDOT responsibilities for submittal of bid documents. In general, the LG must coordinate with the district and submit the final PS&E well in advance of the proposed letting date.Anchor: #i1026502
A LG may include provisions for bid guaranties or bonds, or warranty bonds, in invitations for the receipt of bids. Bonding is grouped into five basic classifications: bid bonds; performance bonds; payment bonds; retainage bonds; and warranty bonds. These are described in more detail in the LGPM Guide.
- Anchor: #XCABWUWW
- 23 CFR 635.110(b) – Specifies the procurement or contract documents may not contain criteria that restrict competition.
- Anchor: #LKEDVCMS
- Texas Local Government Code §252.044 – Calls for a municipality to require the successful bidder to execute a good and sufficient bond. The bond must be executed with a surety company authorized to do business in Texas. Anchor: #LQTSWXVD
- Texas Local Government Code §262.032 – Allows a county to require the successful bidder to provide a performance bond. The bid bond must be executed with a surety company authorized to do business in Texas. Anchor: #WYFXVUQL
- Texas Government Code §2252.064 – Requires a contractor to execute a performance bond issued by a surety company authorized to do business in this state in an amount determined by the contracting state agency but not to exceed the contract price. Requirement applies to TxDOT only and is not applicable to a regional mobility authority (RMA) or regional tollway authority. Anchor: #HHTHMDCI
- Texas Government Code §2253.021 – Requires a contractor to execute a performance bond if the contract is in excess of $100,000 and a payment bond if the contract is in excess of $25,000 ($50,000 for municipalities). Anchor: #YLBVUOOJ
- Texas Transportation Code §223.205 (comprehensive development agreement by TxDOT) – Requires a private entity to provide a performance and payment bond or an alternative form of security in an amount equal to the cost of constructing or maintaining the project. Anchor: #FRUWKREQ
- Texas Transportation Code §370.308 (comprehensive development agreement by RMA) – Requires a private entity to provide a performance and payment bond or an alternative form of security in an amount equal to the cost of constructing or maintaining the project or an amount sufficient to ensure performance and protect the beneficiaries.
In general, the LG must get TxDOT approval of procedures used to bond contractors and must include these procedures in the contract documents. The LGPM Guide provides a description of the required practices and responsibilities of each party in the bonding process.Anchor: #i1026586
The LG must comply with the latest provisions of Buy America as listed at 23 CFR 635.410. The LG is required to use steel or iron materials manufactured in the United States except when:
- Anchor: #FIUNAMOO
- the cost of materials, including delivery, does not exceed 0.1 percent of the total contract cost or $2,500, whichever is greater; Anchor: #TEMRRDTU
- the contract contains an alternate item for a foreign source steel or iron product and the contract is awarded based on the alternate item; or Anchor: #FATUCTDW
- the materials are temporarily installed.
Buy America requires all manufacturing processes must take place domestically. Manufacturing begins with the initial melting and mixing, and continues through the coating stage. Any process modifying the chemical content, the physical size or shape, or the final finish is considered a manufacturing process. These processes include rolling, extruding, machining, bending, grinding, drilling and coating. The LGPM Guide provides additional information related to items included or excluded from Buy America provisions.
Application of Buy America
Buy America does not apply to minimal use of iron/steel materials provided the total cost of all foreign source items used in the project, as delivered to the project site, is less than $2,500 or one-tenth of 1 percent (1/10 of 1%) of the contract amount, whichever is greater. More information regarding the application of Buy America provisions to partial fabrication processes and temporary items are included in the LGPM Guide. The practice of making otherwise eligible items non-participating for the purpose of circumventing the Buy America requirements is unacceptable and will not be approved. FHWA retains the authority to resolve all Buy America issues.
Buy America provisions apply to all material permanently incorporated in a federal-aid project, even if an item is rendered as a “donated material” in accordance with 23 U.S.C. 323 – Donations and Credits. While the LG may receive a credit for donated material, this material must generally comply with Buy America.
Buy America does not apply to raw materials (iron ore and alloys), scrap, pig iron or processed, pelletized and reduced iron ore. Insufficient domestic supplies of raw materials caused FHWA to issue a nationwide waiver allowing foreign source supplies of these items. The waiver may be found at the FHWA nationwide waiver website. If domestically produced steel billets or iron ingots are shipped overseas for any manufacturing process and then returned to the United States, the resulting product does not conform to the Buy America requirements.
Approval authority for waivers of Buy America requirements is retained by FHWA for all federally funded projects. The FHWA may grant a waiver of the Buy America requirements for specific projects if the LG can demonstrate either of the following:
- Anchor: #ACGGJSMM
- compliance with the requirements is inconsistent with the public interest; or Anchor: #KXNVACYB
- insufficient quantities of satisfactory quality domestic products are available.
Materials delivery delay will not be considered as grounds for a waiver. The cost differential between domestic and foreign products is also not grounds for a waiver.
A LG may apply for a waiver of the Buy America provisions if it believes a waiver is warranted. The LG must submit the waiver request with supporting information through TxDOT to FHWA sufficiently in advance of its need to allow time for proper review and action.
Alternative Bidding Procedures
An alternative bidding procedure may be used to justify the use of foreign steel or iron. Under this procedure, the total project is bid using two alternatives: one based on foreign source products; and the second using domestic products. The use of foreign products may be justified if the lowest total bid based on domestic steel or iron products is 25 percent more than the lowest bid using corresponding foreign steel or iron products. The 25 percent differential applies to the total bid for the entire project, not just the bids for the steel or iron products.
The LG is responsible for enforcing the Buy America provisions. The contract provisions should require the contractor to provide a definitive statement about the origin of all products covered under the Buy America provisions. An alternate procedure is to use step certification for products. Under step certification, each handler of the product (supplier, fabricator, manufacturer, processor, etc.) certifies its step in the process was domestically performed.
- Anchor: #GWACGKCH
- 23 CFR 635.410 – Requires all iron and steel products to be of domestic origin. Waivers may be approved by FHWA. Anchor: #HKFNOPDU
- 23 CFR 636.119 – Requires TxDOT to ensure compliance with Buy America for design-build projects regardless of the form of FHWA funding.
- Anchor: #PSKIJEMP
- Texas Transportation Code §223.045 – Requires a contract awarded by TxDOT on the state highway system without federal aid must contain the same preference provisions for steel and steel products required under federal law for a federally funded project. There is no specific requirement for other entities to follow this statute.
The LGPM Guide provides the required practices that must be followed by the LG in order to comply with Buy America.Anchor: #i1026740
The construction industry recognizes it is unrealistic to expect a construction project to be built without deviating from the project plans. Project designers should be diligent and exercise due care in developing the plans. However, there are many peculiarities (e.g., unforeseen site conditions, utility conflicts, changes in the geology, etc.) that can arise during construction, and every project should anticipate the potential need for changes. Only the construction engineer is in a position to judge the adequacy of project designs and respond to needed changes.
For a project involving an agreement between a LG and TxDOT, TxDOT must formally approve proposed major extra work or major changes in the contract plans and provisions before work begins. However, when emergency or unusual conditions justify, TxDOT may give advance verbal approval and confirm such approval with formal approval, as soon as practical. Non-major changes and non-major extra work also require formal approval. However, such approval may be given retroactively at TxDOT’s discretion. The LGPM Guide provides a definition of a major change.
Early coordination between the LG and TxDOT district is essential in the review of change orders. There are five basic components TxDOT will consider during its review of change orders, which are described in detail in the LGPM Guide. These considerations are:
- Anchor: #OBQILRRF
- impact on the original “scope of the work;” Anchor: #URHHLWGE
- eligibility; Anchor: #SESXLRDG
- consultant design errors; Anchor: #DVKSDOTO
- basis of payment; and Anchor: #PHSFRXTR
- time extensions.
- Anchor: #PKJLYSMA
- 23 CFR 635.120 – Requires, for design-bid-build projects, all changes to federal-aid highway projects must be approved by the FHWA. TxDOT assumes this responsibility for projects administered under the provisions of the TxDOT/FHWA Stewardship/Oversight Agreement for Design and Construction. The bid documents should include language describing administration of change orders. Anchor: #VANOMWTM
- For design-build projects, since design and construction are performed under the same contract, it is not anticipated that change orders for plan errors or omissions would be approved. (This is a matter of FHWA policy. See FHWA’s Contract Administration Core Curriculum Participant’s Manual). However, TxDOT or a LG may direct changes to a design-build contract after work begins, in which case a change order may be appropriate.
- Anchor: #WJYVNWKN
Local Government Code §252.048 – Requires that:
- Anchor: #CEYFGKOK
- the governing body of the municipality may approve changes; Anchor: #OCDOIUND
- the total contact price may not be increased unless there are available funds; Anchor: #LNFQIUER
- the original contract price may not be increased by more than 25 percent; and Anchor: #SJBFOPFQ
- the original contract price may not be decreased by more than 25 percent without the consent of the contractor.
- Texas Local Government Code §262.031 – Provides that the county commissioner’s court has authority to make changes. The total contract cost may not be increased unless there are available funds. Anchor: #OSYAMOEO
- Texas Local Government Code §271.060 – Allows a governing body to approve change orders if there are available funds.
The LGPM Guide provides a detailed description of the required practices for requesting and processing change orders. In general, the LG must get TxDOT approval of change orders.Anchor: #i1026867
Child Support Documentation
For all LG projects, the contractor must certify the business entity is not ineligible due to the requirements for child support included in the Texas Family Code. In accordance with Texas Family Code §231.006, a contractor’s bid for a contract must include the name and Social Security number of the individual or sole proprietor and each partner, shareholder or owner with an ownership interest of at least 25 percent of the business entity submitting the bid. The following language must be included in the bid document verbatim.
“Under Section 231.006, Family Code, the vendor or applicant certifies that the individual or business entity named in this contract, bid, or application is not ineligible to receive the specified grant, loan, or payment and acknowledges that this contract may be terminated and payment may be withheld if this certification is inaccurate.”
Failure to submit the required information with a bid makes it non-responsive and ineligible for award. If the LG determines an individual or business entity awarded the contract is ineligible to receive payment due to ineligibility, the contract may be terminated. In addition, if the required certification listed above is shown to be false, the contractor is liable to the LG for attorney’s fees, the costs necessary to complete the contract, including the cost of advertising and awarding a second contract, and any other damages provided by law or contract.
- Anchor: #NCMXOELA
- No comparable statute.
- Anchor: #ORUEABEO
- Texas Family Code §231.006 – Applies to recipients of state funds and state contracts.
The LG must follow the required practices outlined in the LGPM Guide in accordance with state statutory requirements related to child support.Anchor: #i1026934
A claim is a continued demand for payment by a contractor if it has been previously denied under the LG’s normal procedures for change order approval. Both the LG and the contractor share in the responsibility for claims.
- Anchor: #PVFVYCFF
- 23 CFR 635.124 – States federal participation on design-bid-build projects is determined on a case-by-case basis to the extent the claim is supported by the facts and is founded in the contract.
- Anchor: #YCNLBULN
- Texas Government Code Chapter 2001, Subchapter C – Provides procedures for contested cases that are to be followed if the procedures in Texas Transportation Code §201.112 do not result in a satisfactory resolution. Applies to state agencies but not to other entities. Anchor: #ABIATDVG
- Texas Transportation Code §201.112(a) – Allows the Texas Transportation Commission to establish rules for informal resolution of claims. Anchor: #SVIIJGDA
- Texas Transportation Code §201.112(b) – Allows a person to file for a formal resolution under Texas Government Code Chapter 2001 if he or she is dissatisfied with the informal process.
The LGPM Guide provides a description of the required practices that must be followed by the LG and TxDOT district when submitting or processing claims.Anchor: #i1026997
The term of the contract is an important part of every construction project. Too little contract time may result in higher construction costs, while too much contract time may encourage inefficiencies, increased user costs and potential delays and inconvenience to the public.
The LG must have an acceptable procedure for determining contract time. This procedure should include a comparison of the actual construction time against the estimated completion time for several projects to ascertain whether its procedures result in appropriate contract times. The goal should be to strive for the least practical number and duration of traffic interruptions during highway construction.
- Anchor: #SIICIAQJ
- 23 CFR 635.121 – Requires recipients of federal funding for highway projects to have adequate procedures for determining contract time.
- Anchor: #YVPRBFCB
- No comparable state statutes specifically address contract time determination. Each entity has broad authority to determine procedures to deliver projects, including methods to determine contract time.
In general, the LG should develop a time determination process and obtain TxDOT approval. The LGPM Guide describes the required practices and responsibilities of the LG and TxDOT.Anchor: #i1027047
Contractors are not allowed to participate in federally funded projects if they are suspended or debarred. The contractor is required to certify its current eligibility status. Certification is also required of all prospective participants in lower-tier transactions. This includes subcontractors, material suppliers, vendors, etc. Each participant must certify:
“...that it and its principals are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency …. and that they have not been convicted or had civil judgment rendered within the past three years for certain types of offenses.”
The General Services Administration (GSA) has the responsibility to compile, maintain and distribute the list of suspended and debarred parties excluded from all federal procurement and non-procurement programs. The GSA list is distributed to all FHWA field offices and is provided to TxDOT to assure suspended or debarred parties are not awarded federal-aid highway projects. GSA’s list of debarred firms may be accessed on the System for Award Management (SAM) website. The state of Texas has similar requirements prohibiting contracts with debarred contractors. The state’s list of debarred firms may be accessed on the Comptroller’s Vendor Performance Tracking System (comptroller’s list) website or on TxDOT’s Contractor Prequalification website.
- Anchor: #YVQNGBFU
- 2 CFR Part 180 and 2 CFR Part 1200 – Prohibits contractors and subcontractors that are debarred by any federal agency from participating in federally funded projects. A current list of debarred contractors is listed at the SAM website.
- Anchor: #UGDCWNSU
- 43 TAC Chapter 9, Subchapter G – Provides for contractor sanctions by the TxDOT executive director. A current list of debarred contractors is listed on the comptroller’s list website, as well as on TxDOT’s Contractor Prequalification website.
The LGPM Guide provides a description of the required practices that must be implemented by the LG and TxDOT to ensure contractors have not been suspended or debarred.Anchor: #i1027111
Designated Material Sources/Disposal Sites
General – Material Sources
Most construction contracts require the contractor to furnish all materials to be incorporated into the work. However, the LG can either furnish materials or require the contractor to use designated sources of materials under certain conditions. FHWA policy requires the contractor must furnish all materials to be incorporated in the work, and the contractor shall be permitted to select the sources from where the materials are to be obtained. Exceptions to this requirement may be made when there is a definite finding by the LG, with concurrence by TxDOT, that it is in the public’s interest to require the contractor to use materials furnished by the LG or from sources designated by the LG. The LGPM Guide describes the exception policy.
General - Mandatory Disposal Sites
Normally, the disposal site for surplus excavated materials is to be of the contractor’s choosing, although an optional site(s) may be shown in the contract provisions. A mandatory site shall be specified when there is a finding by the LG, with the concurrence of TxDOT, that such placement is the most economical or that the environment would be substantially enhanced without excessive cost. Discussion of the mandatory use of a disposal site in the environmental document may serve as the basis for the public interest finding.
Summarizing federal policy for the mandatory use of borrow or disposal sites:
- Anchor: #ANSQSPPL
- Mandatory use of either requires the LG to develop a public interest finding and gain TxDOT’s concurrence prior to advertising for receipt of bids. Anchor: #YDVXFUJD
- Mandatory use of either may be based on environmental considerations, where the environment will be substantially enhanced without excessive additional cost. Where the use is based on environmental considerations, the discussion in the environmental document may be used as the basis for the public interest finding. Anchor: #VXGDMDWF
- Factors to justify a public interest finding should include such items as cost effectiveness, system integrity and local shortages of material.
- Anchor: #KTFCDEMJ
CFR 635.407 – Provides for the use of materials made available
by a public agency in the following cases.
- Contractors must be permitted to select sources of materials. One exception is when there is a determination that it is in the public’s interest to require use of material from designated source. Anchor: #MSPPLBEJ
- Material meeting specification requirements may be made an optional source without a public interest determination. Anchor: #JEEOKIJY
- Except for natural materials, designated materials must be acquired by competitive bidding as a condition of federal participation. Other procurement methods may be approved if there is an approved public interest determination.
- Anchor: #QYNEJUNS
- No comparable statute.
The LGPM Guide provides the required practices that should be used by the LG (and approved by TxDOT) for designating material sources and disposal sites.Anchor: #i1027202
Differing Site Conditions
Due to the nature of highway construction and the conditions under which work is performed, designers cannot always accurately determine and describe the conditions existing at project sites. Consequently, actual conditions encountered during construction may differ from those indicated in the contract documents, resulting in a change in construction costs.
Situations may also develop during construction requiring the LG to order the contractor to slow down or stop construction through no fault of the contractor. These slowdowns or stoppages in the work may cause a change in construction costs. There also may be situations encountered during construction requiring the LG to make alterations to the design. In addition to changing the amount of contract work, such alterations could significantly affect the contractor’s production costs. In accordance with federal regulations, differing site or changed condition clauses must be included verbatim in the contract.
The standardized changed condition clauses in 23 CFR 635.109(a) must be included verbatim in all contracts. The regulation requires the use of three different clauses, which are described in detail in the LGPM Guide:
- Anchor: #SVOYJRKS
- differing site conditions clause; Anchor: #RGXJUUNC
- suspensions of work ordered by the engineer (LG); and Anchor: #JXNDCHSX
- material changes in the scope of the work.
- Anchor: #AHMUXNAC
CFR 635.109 design-bid-build
- Requires specific language be incorporated verbatim into all construction contracts. The language covers: differing site conditions; suspensions of work ordered by the engineer; and significant changes in the character of work. There are provisions for alternate language. Anchor: #XPTYMCNX
- FHWA’s Additional Guidance on 23 CFR 635A (formerly Federal-aid Policy Guide Non-regulatory supplement to 23 CFR Part 635 Subpart A) advises the “differing site condition” clause must be made part of the contract unless prohibited by state law.
- 23 CFR 635.109(c) design-build – Encourages administering agencies to use “suspensions of work ordered by the engineer” clauses and may consider “differing site conditions” and “significant changes in the character of work” clauses appropriate for the risks and responsibilities shared with the private entity.
- Anchor: #WXEHTOCB
- Texas Government Code §2269.363(1)(B) – Provides that, on design-build projects, the LG assumes the risks and costs associated with unknown or differing site conditions unless otherwise provided for in the request for proposals and final contract.
The LG must include the required contract language for differing site conditions as described in the LGPM Guide.Anchor: #i1027296
Disadvantaged Business Enterprises, Historically Underutilized Businesses and Small Business Enterprises
The federal and state programs for disadvantaged business enterprises (DBE), historically underutilized businesses (HUB) and small business enterprises (SBE) have been developed to encourage participation in the construction industry by a wide variety of contractors and therefore expand diversity in the industry.
All federal-aid projects are subject to the DBE requirements. The U.S. Department of Transportation (USDOT) must approve each state’s DBE program and its annual goals to ensure compliance with all DBE program requirements. FHWA has determined a LG must operate under TxDOT’s DBE program even if it has its own program already approved by USDOT. Participation in TxDOT’s approved DBE program requires the execution of a memorandum of understanding (MOU) between the LG and TxDOT. This can be accomplished by reference to the MOU in the AFA executed by both parties but eventually should be accomplished by joint execution of an MOU by the LG and TxDOT. LGs are encouraged to contact TxDOT’s Office of Civil Rights for assistance. Guidance may also be found at the USDOT’s Office of Small and Disadvantaged Business Utilization Office website. FHWA’s Federal Aid Essentials website is an additional source for general information regarding DBE requirements.
By regulatory definition, a DBE is:
“… a for-profit small business concern – (1) that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; and (2) whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.”
The DBE participation requirements in federal-aid highway contracts are contract provisions like any other contract provisions and should be administered as such. DBE administrative issues that will require review and attention may arise during a project. These issues will require the LG to have an adequate background of the DBE program. The LG should solicit the advice of TxDOT in resolving these issues as needed.
TxDOT’s DBE specifications and contract provisions include the following:
- Anchor: #JQBHAFWJ
- memorandum of understanding (MOU); Anchor: #GICOVSHV
- DBE program policy; Anchor: #DKKRNFDR
- definitions; Anchor: #WWEDHQDU
- DBE contract goal; Anchor: #OFEDYHIK
- eligibility criteria; Anchor: #QSDNHODM
- good faith effort provisions; Anchor: #QNLGSDNP
- DBE obligations; Anchor: #RNACFFOW
- commercially useful function (CUF) evaluations; Anchor: #IKWULPDX
- sanctions on failure to comply with DBE requirements; Anchor: #ABQHAKVJ
- determination procedures on counting DBE participation toward the DBE goal; Anchor: #GDQIEWRN
- award documentation and procedures; Anchor: #XKTQDYGS
- post-award compliance provisions; and Anchor: #OQBHLXRT
- records and reporting requirements.
49 CFR Part 26, titled “Participation by Disadvantaged Business Enterprises in Department of Transportation Programs,” implements a requirement that all federal agencies “narrowly tailor” their affirmative action programs to “meet a compelling government interest.” Transportation agencies (including LGs) must set their goals based on local evidence of the actual availability of qualified DBEs.
- Anchor: #SVNDTKOI
- State transportation departments must provide for a public participation process in establishing their overall goals. Once goals are established, LGs must maximize race-neutral methods, such as technical assistance and outreach, to meet as much of their overall goals as possible. The remainder of the overall goal will be met through race-conscious measures such as contract goals. All contracts should be individually reviewed and evaluated for the DBE goal standards and applicability. In some instances a project may justify a zero goal given the external or contributing factors. Anchor: #EABNUBEQ
- To participate in the DBE program a businesses must not exceed small business size standards or individuals must not exceed $750,000 personal net worth cap. To be seen as a small business, a firm must meet Small Business Administration (SBA) size criteria as defined by current size standard(s) found in 13 CFR Part 121 and average annual gross receipts as defined by SBA regulations ( 13 CFR 121.104). Anchor: #THJMJFQJ
- One-stop shopping certification programs have been established in Texas so businesses may obtain certification as a DBE to apply for contracts in highway, transit and airport agencies. The Texas Unified Certification Program is a certification process for the federal DBE programs in Texas. A business’ DBE certification is valid at any Texas entity receiving USDOT funds and has a DBE program. Anchor: #DVEQMNTM
- Contractors will not be penalized if they fail to meet contract DBE goals as long as they follow the good faith effort guidelines in 49 CFR Part 26, Appendix A and submit their good faith effort to their appropriate district DBE coordinator for review, guidance and approval. Anchor: #DXWABXKO
- Contractors who fail to meet DBE goals and fail to make a good faith effort may be penalized. The penalty may consist of:
- Anchor: #EDKKJWDR
- 49 CFR Part 26 design-bid-build – Requires the DBE program to not restrict competition or provide in-state or other local preference. Anchor: #JVBDWYUY
- 23 CFR 635.107(b) design-build – Applies the provisions of 49 CFR Part 26 and the receiving agency’s approved DBE plan. If DBE goals are set, DBE commitments above the goal must not be used as a proposal evaluation factor in determining the successful proposer.
- Anchor: #NDERHHDS
- 43 TAC §§9.354-9.355 – Requires TxDOT to establish overall HUB participation goals and assign individual project goals to achieve the overall goal. Note that the Comptroller of Public Accounts (CPA) certifies HUBs and provides that the CPA recognize some TxDOT-certified DBEs as HUBs. Requires provisions addressing HUBs to be included in TxDOT contracts funded entirely with state and local funds. The HUB requirements do not apply to contracts with federal funds. Anchor: #YQXTWALJ
- 43 TAC §§9.314-9.315 – Requires TxDOT to establish annual SBE contracting goals. Notes that TxDOT maintains a SBE directory and provides that TxDOT-certified DBEs and HUBs also meet SBE requirements without having to apply for SBE eligibility. Allows provisions addressing SBEs be included in TxDOT contracts funded entirely with state and local funds. The SBE requirements do not apply to contracts with federal funds. Anchor: #HTTSOIRW
- Texas Government Code Chapter 2161 (see also 43 TAC §§9.350-9.367) – Provides that the HUB program is applicable to state agencies and institutions of higher learning. Includes certification of HUBs and maintenance of a directory of certified HUBs. This requirement does not apply to local or other entities. Anchor: #EKLTNKDG
- Texas Government Code Chapter 2252 Subchapter E – Defines the general requirements for a contractor (including a subcontractor) claiming status as a DBE or HUB. Applies to all agencies and entities. It does not include language concerning requirements for agencies to consider DBEs or HUBs in contract administration. Anchor: #KLQPAFYK
- Texas Transportation Code §201.702 – Requires TxDOT to set goals for awarding state or federally funded contracts to disadvantaged businesses. The goals must approximate the federal requirement for federal funds. Anchor: #JASHLHGX
- Texas Transportation Code §366.184 – Requires regional tollway authorities (RTAs) to set goals for disadvantaged businesses consistent with general law. Anchor: #FYHHCGBU
- Texas Transportation Code §370.183 – Requires RMAs to set goals for disadvantaged businesses consistent with general law.
In general, the LG must follow state and federal guidelines in adopting TxDOT’s DBE program and developing local DBE goals as described in the LGPM Guide.Anchor: #i1027545
Equal Employment Opportunity
The LG, as a contracting agency, has a responsibility to ensure all federal-aid contractors, subcontractors, vendors and material suppliers do not discriminate in employment and contracting practices based on race, color, religion (in the context of employment), sex, national origin, age or disability.
As a sub-recipient of federal funds, the LG has the responsibility to ensure equal opportunity requirements are included in federal and federal-aid contracts and to ensure contractors are in compliance with those requirements under the LG’s authority. [The LG has no authority under Executive Order 11246 to enforce compliance with Office of Federal Contract Compliance Programs (OFCCP) requirements.]
A contractor’s federal regulatory requirements are set forth in the Required Contract Provisions Federal-aid Construction Contracts ( Form FHWA-1273) and are applicable to contractors and subcontractors that hold federal or federal-aid contracts of $10,000 or greater. Form FHWA-1273 includes federal equal employement opportunity contract provisions and proposal notices physically required to be incorporated in each direct federal and federal-aid highway construction contract and subcontract (at any tier) of $10,000 or greater and by reference in purchase order agreements, rental agreements and other agreements for supplies and services of $10,000 or greater. The requirements of FHWA-1273 are described in detail in the LGPM Guide.
The LG imposes specific nondiscrimination and affirmative action obligations on federal-aid highway contractors relating to its employment practices under the federal authorities listed under “Federal Requirements” below.
- Anchor: #ODOHVSFB
- Title VI of the Civil Rights Act of 1964 Anchor: #QBDAGWSL
- The Civil Rights Restoration Act of 1987 Anchor: #WTFXCPWL
- The Age Discrimination Act of 1975 Anchor: #OPFGIJFA
- The Rehabilitation Act of 1973 Anchor: #KCTBOWKR
- 23 U.S.C. §140 – Nondiscrimination and 23 U.S.C. §324 – Prohibition of discrimination on the basis of sex Anchor: #IGFHTYQY
- 49 CFR Part 21 – Nondiscrimination in Federally-Assisted Programs of the Department of Transportation Anchor: #MYATXALB
- 23 CFR Part 200 – Title VI Program and Related Statutes – Implementation and Review Procedures Anchor: #TLMTQYYE
- 23 CFR Part 230 – FHWA external program regulations Anchor: #BLOCYKAQ
- 23 CFR 1.9 – Limitation on Federal Participation and 23 CFR 1.36 – Compliance with Federal Laws and Regulations Anchor: #BLBRMYAG
- 23 CFR 635.117(d) and 23 CFR 635.117(e) – Labor and Employment Anchor: #MKSRMKTL
- Form FHWA-1273 Anchor: #AHXTAWEE
- FHWA Order 4710.8 – Clarification of FHWA and State Responsibilities under Executive Order 11246 and Department of Labor Regulations in 41 CFR Chapter 60 (the Office of Federal Contract Compliance Programs administers and enforces the equal employment opportunity requirements referenced in Executive Order 11246 and 41 CFR Chapter 60)
- Anchor: #MKAJWFVE
- 43 TAC §9.4 – Requires TxDOT to monitor recipients of federal funds for Title VI activities. Anchor: #JDXOBWSP
- Texas Labor Code, Title 2, Subtitle A, Chapter 21, Subchapter B – Prohibits employer discrimination on the basis of race, religion, sex, color, national origin, age or disability.
The LG, contractor, TxDOT and FHWA must cooperate to implement an equal opportunity contractor compliance program as described in detail in the LGPM Guide.Anchor: #i1027672
Equipment Rental Rates
The LG may elect to use its own equipment or rent equipment when performing force account work. The LG must follow federal and state regulations in order to get reimbursed for the costs associated with the equipment and must use actual costs to determine extra work payments.
Under federal policy, the LG may specify the acceptable rate guides and equipment rate schedules in construction contracts. The federal cost principles applicable to rental rates for contractor furnished equipment are contained in 48 CFR Part 31. The provisions in 2 CFR Part 200 apply when LG-owned equipment is used. Details related to the procedures to be used for determining equipment rental rates are contained in the LGPM Guide.
- Anchor: #RQYHPAVB
Additional Guidance on 23 CFR 635A (formerly Federal-aid
Policy Guide Non-Regulatory Supplement to 23 CFR 635A) – Equipment
- Anchor: #PLSGRUJT
- Requires actual costs be used for extra work payments. Anchor: #FXFUPQFQ
- Allows predetermined rate guides to be used for equipment rates for contractor-owned equipment in lieu of actual cost. The Blue Book is an acceptable guide. Anchor: #EJKJCSFN
- Allows reimbursement of reasonable rental cost if the contractor leases equipment.
- 48 CFR Part 31 – Sets forth the federal cost principles applicable to rental rates for contractor furnished equipment. Anchor: #CIXPYKOL
- 2 CFR Part 200 – Sets forth regulations applicable when LG-owned equipment is used.
- Anchor: #UEUKAFHE
- 43 TAC §26.33(g)(1) – Requires specifications for projects administered by a RMA to conform to TxDOT standard specifications (including Article 126.96.36.199). Anchor: #JKESUTHQ
- 43 TAC §27.56(c)(3)(A) – Requires specifications for projects administered by a RTA must conform to TxDOT standard specifications (including Article 188.8.131.52) as a condition of state fund participation.
Equipment rental rates for all projects with federal or state funds must comply with TxDOT standard specifications. The required practices and responsibilities of both the LG and TxDOT are included in the LGPM Guide.Anchor: #i1027764
Form FHWA-1273, Required Contract Provisions, is a convenient collection of contract provisions and proposal notices required by regulations promulgated by the FHWA and other federal agencies. The provisions contained in Form FHWA-1273 are applicable to all federal-aid construction projects and must be made a part of, and physically incorporated into, all contracts, as well as all lower-tier subcontracts.
The LG is not permitted to modify the provisions of Form FHWA-1273. Minor additions covering other requirements may be included in a separate supplemental specification, provided they do not conflict with state or federal laws and regulations and do not change the intent of the required contract provisions.
- Anchor: #XFHWGHBB
- 23 CFR 633.102(b) – Requires specific contract provisions to be physically incorporated into all contracts and all lower-tier subcontracts.
- Anchor: #WCOXYFHL
- No comparable statute.
Required PracticesAnchor: #i1027819
Liquidated damages are required as a means of recovering, at a minimum, construction engineering costs from a contractor. Contract time is an essential element of the contract, and it is important the work be monitored closely to ensure completion within the time limits specified in the contract. The cost to the LG for the administration of the contract, including engineering, inspection and supervision, increases as the contract time increases. Likewise, the road user costs also increase as the completion date of the contemplated facility is extended. The liquidated damages contract provision provides a mechanism for the LG to recover these costs associated with the contract time overrun. TxDOT is required to have the LG incorporate liquidated damages provisions into its federal-aid contracts as a condition of the project agreement. The procedures used to determine liquidated damages are described in the LGPM Guide.
Additional guidance may be obtained from TxDOT's Accelerated Construction Strategies Guideline.
- Anchor: #QQMVQETK
CFR 635.127 –
- Anchor: #RRKQRPOQ
- Requires entities to develop liquidated damage rates for a contract time overrun. At a minimum, the rate should include the average daily cost of construction engineering. Anchor: #KRBCFETH
- Allows other costs to be included in liquidated damage rates. Anchor: #CUIXGYJP
- Allows incentive/disincentive provisions to be included in the contract but must be separate from liquidated damages. Anchor: #HJSMGQNU
- Every two years the change in liquidated damage rates must be approved or justification must be provided after review that the updated rates are not warranted.
- Anchor: #ABVYMRCU
- Texas Transportation Code §223.012 – Requires TxDOT to develop a schedule of liquidated damages. Anchor: #UGLKBUTH
- 43 TAC §26.33(g)(1) – Requires specifications for projects connecting to a state highway administered by a RMA to conform to TxDOT standard specifications (including Article 8.6). Anchor: #OMGGNLNB
- 43 TAC §27.56(c)(3)(A) – Requires specifications for projects administered by a RTA to conform to TxDOT standard specifications (including Article 8.6) as a condition of state fund participation.
In general, the LG must follow TxDOT policy on liquidated damages as described in the required practices and LG responsibilities contained in the LGPM Guide.Anchor: #i1027909
Lobbying is the attempt to influence decisions made by officials in the government, including elected officials and those who work for regulatory agencies. 49 CFR Part 20 prohibits federal funds from being expended to influence or attempt to influence a federal agency or Congress in connection with the award of any federal contract or grant. This prohibition applies to all recipients, including lower-tier subrecipients of a federal contract or grant. The LGPM Guide provides additional information related to the procedures that must be followed by the LG to ensure proper disclosure of lobbying activities.
- Anchor: #CGUPKMEV
CFR 635.112(g) – Requires that:
- the administrating entity must include the lobbying certification in the bid documents (by virtue of putting Form FHWA-1273 into the contract); Anchor: #ETXLRMHM
- by signing a bid document including Form FHWA-1273, the bidder certifies they meet lobbying requirements of 49 CFR Part 20; and Anchor: #NTXUNKCB
- the prime contractor must include lobbying certification in all lower-tier contracts in excess of $100,000.
- 49 CFR Part 20 – Places new restrictions on lobbying.
- Anchor: #KBNXQLDF
- No comparable statutes.
In general, the LG must include the lobbying certification in the bid documents and appropriate language must be included in the subcontractors’ documents as described in the LGPM Guide.Anchor: #i1027994
Local Hiring Preference
On projects including federal funds, the LG may not include any contract provisions requiring a contractor to give any preference in hiring. Some states and local public agencies have implemented policies encouraging or mandatomg the use of local employment or local contracting. In such cases, federal-aid contracts (including invitations for bids or request for proposals documents) must contain specific provisions stating such preferences are not applicable to contracts funded by FHWA. Compliance with local preference provisions will not be a condition of responsiveness in the consideration of bids or a condition of responsibility prior to the award of contract.
While the state and LGs are precluded from enacting preference requirements, this requirement does not apply to the federal government. Therefore, federal hiring preference requirements, such as equal employment opportunity/affirmative action, Appalachian preference and Indian preference are not in conflict with this policy.
- Anchor: #CBDALVIL
- 23 CFR 635.117(b) – Prohibits including provisions in the contract documents requiring or encouraging a contractor to give preference in hiring on any project including federal funds. Compliance with local preference provisions will not be a condition of responsiveness in the consideration of bids or a condition of responsibility prior to the award of contract.
- Anchor: #EPORTKWC
- Texas Transportation Code §223.043 – For projects on the state highway system, allows TxDOT to require a citizen of the United States and of the county in which the project is being proposed to be given preference in employment to perform manual labor.
In general, the LG may not include local hiring preferences on federal-aid projects and must obtain TxDOT approval for preferences used on other projects as described in the required practices in the LGPM Guide.Anchor: #i1028046
Non-resident Bidder and Texas Preference
Similar to the requirements described in the “Local Hiring Preference” provisions stated above, federal laws do not allow states to provide a bidding preference for resident bidders for federal-aid contracts.
For state-funded projects, the Legislature enacted a statute regarding non-resident bidders. Texas Government Code §2252.002 states:
“A governmental entity may not award a governmental contract to a non-resident bidder unless the non-resident underbids the lowest bid submitted by a responsible resident bidder by an amount that is not less than the greater of the following: (1) the amount by which a resident bidder would be required to underbid the non-resident bidder to obtain a comparable contract in the state in which the non-resident's principal place of business is located; or (2) the amount by which a resident bidder would be required to underbid the nonresident bidder to obtain a comparable contract in the state in which a majority of the manufacturing relating to the contract will be performed.”
TxDOT refers to this law as the “reciprocity requirement.” Information about states with bidding preference laws may be obtained from the Texas Comptroller of Public Accounts Office, including a List of States with Resident Bidding Preferences and a map referencing each state’s bidding preferences.
- Anchor: #CEFUVGGE
- 23 CFR 635.110(b) – Prohibits any procedures prohibiting consideration of a bid by any responsible contractor, whether a resident or non-resident of a state in which the work will be performed. Anchor: #LTPAEHQA
- 23 CFR 635.110(f)(1) – Prohibits, for design-build projects, any procedures giving geographical preference in the selection process.
- Anchor: #OQGPIIPX
- Texas Government Code §2252.002 – Prohibits governmental entities from awarding a contract to a non-resident bidder unless the non-resident bidder underbids the lowest resident bidder by a reciprocal percentage.
The LG must follow the requirements of federal and state statutes with respect to state hiring preferences as described in the LGPM Guide.Anchor: #i1028120
Material State or Local Preference
For projects involving federal funding, the LG may not impose any requirement or enforce any procedure requiring the use, or providing a price differential in favor, of articles or materials produced within a state or other political subdivision. This includes requirements prohibiting, restricting or discriminating against the use of articles or materials shipped from or prepared, made or produced in any state, territory or possession of the United States. Materials produced within a designated area may not be favored to the exclusion of comparable materials produced outside of the area on federal-aid projects.
For projects with only state and/or local funding, state and local material preferences may apply. State and local preference clauses give particular advantage to the designated source and, thus, restrict competition. However, local and state material preference provisions may not be used on any federal-aid construction projects.
This policy also applies to preference actions against materials of foreign origin, except as otherwise permitted by federal law. The LG may not give preference to in-state material sources over foreign material sources on federal-aid projects. Under the Buy America provisions, the state or LG is permitted to expand the Buy America restrictions provided the state or LG is legally authorized under state law to impose more stringent requirements.
- Anchor: #NMYRGESM
- 23 CFR 635.409 – Prohibits any contract provisions requiring the use of or providing a price differential in favor of articles or materials produced within the state. Anchor: #HCGWJGWK
- 23 CFR 635.410 – Requires all iron and steel products to be of domestic origin. Waivers may be approved by FHWA.
- Anchor: #VHYRKURU
- Texas Government Code §2155.444 – Requires state agencies to give preference to goods produced in Texas if the cost and quality are equal. Anchor: #IEITKPGX
- Texas Government Code §2155.449 – Requires state agencies to give preference to goods produced in economically depressed or blighted areas if the cost and quality are equal. Anchor: #GVSYAXJF
- Texas Government Code §2252.002 – Prohibits governmental entities from awarding a contract to a non-resident bidder unless the non-resident bidder underbids the lowest resident bidder by a reciprocal percentage. Anchor: #DTSHWGAN
- Texas Transportation Code §223.045 – Provides that contracts for the state highway system without federal funds must contain the same preference provisions for steel and steel products required under federal law for an improvement made with federal funds.
The LG must comply with state and/or federal statutes, as applicable for the source of funding on a project. The LGPM Guide provides the required practices related to contracting with material state or local preferences.Anchor: #i1028205
Materials used in a LG construction project must be clearly defined in the PS&E. Plans and specifications need to describe the types, locations and construction requirements for materials in detail to facilitate the construction, the contract control and the estimation of construction costs of the project. The estimate must reflect the anticipated cost of the project in sufficient detail to provide an initial prediction of the financial obligations to be incurred by the LG, TxDOT or FHWA and to permit an effective review and comparison of the bids received.
- Anchor: #OWJANHJV
- 23 CFR 630.205 – Requires the plans and specifications to describe the construction requirements for materials in sufficient detail to facilitate construction. Anchor: #AUIJSFSS
- 23 CFR Part 636 Subpart B – Requires solicitations for design-build projects to describe evaluation factors, which may include particular material quality requirements or design performance criteria (i.e., pavement design life). Anchor: #WOGJAHKU
- 23 CFR Part 637 Subpart B – Describes a program to determine specification compliance for materials incorporated into the project. See the project requirement “Quality Assurance Program” in Chapter 9 – Construction for more details.
- Anchor: #MJCNLEOP
- Texas Local Government Code §262.025 – Requires a notice for receipt of competitive bids must include specifications describing the item to be purchased. This applies to counties. Anchor: #IFNJDCJR
- Texas Local Government Code §271.025 – Requires a governmental entity advertising for competitive bids must include information describing the work. Anchor: #WRYHPJWC
- Texas Government Code §2269.058 – Requires the LG to provide or contract for material engineering, testing and verification testing for design-build projects that is independent from the design-build firm. Anchor: #QVAGIEIK
- 43 TAC §26.33(g)(1) – Requires specifications for projects connecting to a state highway administered by a RMA must conform to TxDOT standard specifications. Anchor: #BVKNCJWT
- 43 TAC §27.56(c)(3)(A) – Requires specifications for projects administered by a RTA must conform to TxDOT standard specifications as a condition of state fund participation. Anchor: #GXVUQVDI
- Texas Transportation Code §221.003(d) – Prohibits a county commissioner’s court from making improvements to the state highway system until the plans and specifications have been approved by TxDOT. Anchor: #EVBPJOBT
- Texas Transportation Code §366.185 – Requires contracts by RTAs must be procured by a competitive bid procedure. Anchor: #UDMLMSJV
- Texas Transportation Code §370.306 – Requires a RMA using a comprehensive development agreement for procurement to publish the criteria used to evaluate proposals. The criteria may include materials requirements.
In general, the LG must adopt TxDOT’s standard specifications for materials or obtain TxDOT approval of alternate specifications. The LGPM Guide provides more detailed required practices for the LG and TxDOT.Anchor: #i1028316
Method of Construction (or Method of Bidding)
Construction contracts are to be awarded by competitive bid. One of the most basic tenets of federal-aid contracting is that construction contracts are to be awarded competitively to the responsible contractor submitting the lowest responsive bid. This mandate is set forth in 23 U.S.C. 112 and reinforced by 23 CFR 635.114(a), which requires that:
“Federal-aid contracts shall be awarded only on the basis of the lowest responsive bid submitted by a bidder meeting the criteria of responsibility as may have been established by the STD (TxDOT)…”
The act of a LG negotiating with an apparent low bidder prior to award is defined as “bid rigging in reverse” and is expressly prohibited by 23 CFR 635.113(a).
Alternative Construction Contracting
There may be situations supporting the use of a contracting method other than competitive bidding. Noncompetitive construction contracting or other unusual methods of construction may be approved under one of two conditions:
- Anchor: #RFEDDIMH
- the option is proven to be more cost effective; or Anchor: #UTOSGFVT
- an emergency exists and time is a critical factor.
23 CFR Part 635 Subpart B allows that “rare” circumstances may justify the use of force account, negotiated contract or other unusual method of construction. The regulations clearly indicate, in the absence of an emergency, situation circumstances are unlikely to justify the use of other methods of construction. Therefore, the consideration of any noncompetitive construction contract method requires a cost effectiveness determination as well as an evaluation that demonstrates the circumstances are unusual and unlikely to recur.
A cost effectiveness finding is required for the TxDOT approval of any LG proposal to use a non-competitive method of contracting. 23 CFR 635.205 cites the following situations as possible reasons for the use of noncompetitive construction contracting.
- Anchor: #XGWNWYSO
- When the rights or responsibilities of the community are so affected as to require a special course of action, including situations where there is a lack of competition or unreasonable bids, it may be determined to be cost effective to use force account. Anchor: #WPVTOUFL
- When by reason of the inherent nature of the operation, it is deemed cost effective to do minor adjustments of railroad and utility facilities (major work still to be accomplished by competitive bidding) by force account.
Under the first circumstance, the use of force account may be found cost effective when properly documented. Under the second circumstance, FHWA has determined the use of force account is always cost effective and, therefore, no additional documentation is required.
Force account work using LG forces is discussed in 23 CFR Part 635 Subpart B and is defined as:
“…the direct performance of highway construction work by (a LG) by use of labor, equipment, materials, and supplies furnished by them and used under their direct control.”
Force account contracts with a private contractor are an exception to normal construction contracting procedures and should rarely be approved.
Circumstances justifying a negotiated construction contract should be even more of an exception, making approvals of such contract methods extremely rare.
- Anchor: #BTRYBPWI
- 23 CFR 635.104 – Requires construction work to be performed by competitive bids unless some other method is more cost effective or an emergency exists. Anchor: #AQQQGYMB
- 23 U.S.C. 112(b)(3) – Allows design-build as an acceptable contracting method for certain “qualified” federally funded projects as defined in the regulation. Anchor: #FPXBNVME
- 23 CFR Part 636 – Provides implementing language on design-build contracting.
- Anchor: #FNNDYGIY
- Texas Local Government Code §252.021 – Requires municipalities to use competitive sealed bids for contracts in excess of $50,000. Anchor: #SWYJUCQC
- Texas Local Government Code §262.023 – Requires counties to use competitive bidding procedures for purchases over $50,000. Anchor: #THAESUPJ
- Texas Local Government Code §271.006 – Requires a municipality to comply with the requirements of Chapter 252 and a county to comply with the requirements of Subchapter C, Chapter 262. Anchor: #OEIVQMYR
- Texas Government Code §2269.360 – Requires the LG to select a design-build firm for a design-build project using a combination of technical qualifications and cost. Anchor: #IJCEYIRI
- Texas Transportation Code §223.201 – Allows TxDOT to enter into a comprehensive development agreement with a private entity to design, develop, finance, construct, maintain, repair, operate and extend roadways. Anchor: #VHHMMBCX
- Texas Transportation Code §366.185 – Requires for contracts let by a RTA to be let by a competitive bidding procedure. Anchor: #MWUVHXUN
- Texas Transportation Code §370.185 – Requires for contracts let by a RMA to be let by a competitive bidding procedure. Anchor: #QBFYLACR
- Texas Transportation Code §370.302 – A RMA may negotiate and enter into a “development agreement” with a public or private entity.
The LG must obtain TxDOT approval for its competitive bidding process as described in required practices and responsibilities contained in the LGPM Guide.Anchor: #i1028511
The submission of a non-collusion statement protects the integrity of the federal-aid highway program by serving as a deterrent to bid rigging activities. The certification also becomes evidence in prosecuting cases involving construction contract bid rigging. A non-collusion statement is required from all bidders and is to be submitted as part of the bid proposal package. Failure to submit the required certification will result in the bid being considered non-responsive and ineligible for award consideration.
The LG must include provisions in the bidding proposals requiring all bidders to include a non-collusion statement with their bid. The FHWA, in consultation with the U.S. Department of Justice, has concluded the non-collusion statement may be either an unsworn declaration made under penalty of perjury under the laws of the United States or a sworn affidavit executed and sworn before a person who is authorized to administer oaths by the laws of the state.
All non-collusion certifications shall be retained by the LG in accordance with the retention policy of 2 CFR 200.333. These certifications could serve as important evidence in the event that collusion or bid rigging is discovered at a later date.
- Anchor: #VQIVVHRX
- 23 CFR 635.112(f) – Requires, for all projects with federal funds, a non-collusion statement from each bidder to be submitted as part of the bid package. If not submitted, the bid is non-responsive.
- Anchor: #VFEAVISJ
- No comparable state statute.
In general, the LG must require all bidders to submit a non-collusion statement with their bid as described in the LGPM Guide.Anchor: #i1028568
Non-discrimination against Persons with Disabilities
Discrimination on the basis of disability by public entities is prohibited. The prohibition extends to all activities of state and LGs participating in federally assisted programs. There are three federal laws requiring accessible planning, design and construction, and actions to integrate people with disabilities into mainstream society.
- Anchor: #QYEFYQSF
- The Americans with Disabilities Act of 1990, 42 U.S.C. Chapter 126 (ADA) prohibits discrimination against people with disabilities in all aspects of life, including transportation, public services, employment, housing, public accommodations, education, communication, recreation and health services, regardless of funding source. Anchor: #TOEGDUBI
- Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. §794 (as amended by the Civil Rights Restoration Act of 1987, 20 U.S.C. Chapter 38) addresses compliance with Federal design standards for accessibility. Anchor: #KCUQPFPW
- The Architectural Barriers Act of 1968 requires access to facilities designed, built, altered or leased with federal funds.
In addition, the Texas Architectural Barriers Act of 1969, as amended, requires each building and facility subject to the Act to be accessible to and functional for persons with disabilities. Subject facilities include facilities used by the public that are constructed, renovated or modified, regardless of funding source. The law requires compliance with the Texas Accessibility Standards and the rules promulgated by the Texas Department of Licensing and Regulation (TDLR) in 16 TAC Chapter 68.
The LG must ensure accessibility for individuals with disabilities is provided in the construction of all new transportation facilities. When altering existing transportation facilities, the LG must also ensure the alterations are made in such a way as to provide access and utilization by individuals with disabilities. Additional information related to accessibility requirements and the related responsibilities of the LG and TxDOT during construction are included in Chapter 9 – Construction of the LGPP Manual and LGPM Guide.
- Anchor: #RCFYTIDF
CFR Part 35 – Nondiscrimination on the Basis of Disability
in State and Local Government Services –
- Prohibits discrimination on the basis of disability by public entities. Anchor: #OGJTWKKX
- Requires the design and construction of new and altered facilities by, on behalf of or for the use of a public entity shall be designed and constructed in such a manner that the facility is readily accessible to and usable by individuals with disabilities. Anchor: #LEUPCFXM
- Established the Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (see also Appendix A to 28 CFR Part 36) as a standard for compliance. Departures from particular requirements by the use of other methods shall be permitted when it is clearly evident that equivalent access to the facility is thereby provided. Anchor: #DDVFWWIA
- Requires newly constructed or altered streets, roads and highways must contain curb ramps or other sloped areas at any intersection having curbs or other barriers to entry from a street level pedestrian walkway. Anchor: #SGHMPLQA
- Requires newly constructed or altered street level pedestrian walkways must contain curb ramps or other sloped areas at intersections to streets, roads or highways. Anchor: #TNRVNTFO
- Requires public entities to ensure communications with members of the public with disabilities are as effective as communication with others.
CFR Part 37 – Prohibits discrimination against an individual
with a disability in connection with the provision of transportation
services. It also provides requirements for the construction or
alteration of transportation facilities by the following entities,
whether or not they receive federal financial assistance:
- Anchor: #BWNNMJXM
- any public entity providing designated public transportation or intercity or commuter rail transportation; Anchor: #IYVXYVJW
- any private entity providing specified public transportation; and Anchor: #HMRTAAYP
- any private entity not primarily engaged in the business of transporting people but operates a demand responsive or fixed route system.
- Anchor: #UADXVMNX
Government Code, Chapter 469 – State law to ensure each building
and facility subject to this chapter is accessible to and functional
for persons with disabilities without causing the loss of function,
space or facilities. This chapter relates to non-ambulatory and
semi-ambulatory disabilities, sight disabilities, hearing disabilities,
disabilities of coordination and aging.
- Texas Government Code §469.052 – Requires TDLR to adopt standards, specifications and other rules under this chapter that are consistent with standards, specifications and other rules adopted under federal law. Anchor: #VGSFCSBN
- Texas Government Code §469.101 – Requires all plans and specifications for the construction of or for the substantial renovation or modification of a building or facility to be submitted to TDLR for review and approval if the building or facility is subject to this chapter and the estimated construction cost is at least $50,000. Anchor: #PYAWVFXP
- Texas Government Code §469.105 – Requires inspection of buildings and facilities covered by the statute by TDLR or registered accessibility specialist.
- Texas Accessibility Standards – Sets standards for accessibility to: public buildings and facilities; privately owned buildings and facilities leased or occupied by state agencies; places of public accommodation; and commercial facilities by individuals with disabilities. Subject buildings and facilities are addressed in more detail in 16 TAC §68.20. These standards are to be applied during the design, construction and alteration of such buildings and facilities to the extent required by regulations issued by TDLR. Anchor: #QCACQPQC
- 16 TAC §68.31 – Establishes a variance procedure to address requests to waive or modify an accessibility standard. Anchor: #LCPIIIGV
- 16 TAC §68.102 – Updates rules applicable to projects within the public right of way. Estimated cost of construction is based on the pedestrian elements only. Clarifies specific issues related to sidewalks, curb ramps and handrail. Anchor: #KVJRKDGO
- Texas Occupations Code §1001.452(5) – Provides that a licensed engineer is subject to disciplinary action under Texas Occupations Code §1001.451 for a failure to timely provide plans or specifications to TDLR.
In general, the LG (with oversight by TxDOT) must ensure all new and existing transportation facilities comply with the provisions of state and federal statutes. The required practices and responsibilities of each entity are described in the LGPM Guide.Anchor: #i1028760
A non-responsive bid is deemed not to meet all of the written requirements of the advertisement and proposal. The subject of a non-responsive bid is briefly discussed Chapter 8 – Letting and Award in the “Bid Opening and Tabulation” sub-section. A list of reasons for a bid to be considered non-responsive must be included in the bid document in conjunction with 23 CFR 635.112(h). The reasons must be clearly defined and may not be subject to the discretion of the LG. The FHWA has stressed the use of potential subjective reasons must be eliminated – the bid is either responsive or non-responsive.
The LG must follow federal and state guidelines when determining the reasons for not accepting a bid. FHWA has determined the reasons for a bid being non-responsive listed in the proposal cannot be “waived.” Therefore, common provisions allowing a LG to waive technicalities determined to be in its best interest cannot be invoked regarding a non-responsive bid.
- Anchor: #PUREQWCT
- 23 CFR 635.112(h) – Requires bid documents to contain requirements with which a bidder must comply to make the bid responsive. Failure to comply with these requirements makes the bid non-responsive and not eligible for award.
- Anchor: #LBLGPQQE
- Texas Local Government Code §271.0245 – Requires a county to provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications. Anchor: #CBDUCDVC
- 43 TAC, §26.33(g)(1) – Requires specifications for projects connecting to a state highway administered by a RMA to conform to TxDOT standard specifications. Anchor: #AQJLTXDW
- 43 TAC, §27.56(c)(3)(A) – Requires specifications for projects administered by a RTA to conform to TxDOT standard specifications as a condition of state fund participation. Anchor: #XBLBVQPS
- Texas Transportation Code §370.306(c) – Requires a RMA must include criteria used to evaluate proposals in the request for proposals for projects acquired by comprehensive development agreement.
In general, the LG must follow state and federal guidelines. The LGPM Guide describes the required practices and LG and TxDOT responsibilities for determining a non-responsive bid.Anchor: #i1028836
For projects with federal funds, federal law does not allow the contractor to discriminate against any person by having segregated facilities. By entering into the contract, the contractor certifies he maintains non-segregated facilities conforming to the requirements of 41 CFR §60.1.8. This certification is included in Form FHWA-1273. The prime contractor is required to obtain a similar certification from each subcontractor and supplier, as applicable.
One exception to the non-segregated facilities provision is for the disabled when the demands for accessibility override the need to non-segregate (e.g., disabled parking). In addition, single-user or separate bathrooms or dressing facilities are also allowable for privacy purposes.
- Anchor: #LWQBCHUH
- 23 CFR Part 633 Subpart A – Requires contractors and subcontractors to certify they do not discriminate by providing segregated facilities or prohibiting minorities access to facilities. Does not prohibit providing access to the disabled and single-user or separate bathrooms or dressing facilities for privacy. Anchor: #YMIVPFIU
- 41 CFR §60.1.8 – Provides the basis for the non-segregated facilities certification.
- Anchor: #XCHMTTDP
- No comparable statutes.
In general, the LG must comply with the federal statutes related to non-segregated facilities on all projects with federal funds using procedures described in the LGPM Guide.Anchor: #i1028896
A “proprietary” purchase is the acquisition of a product or service that limits competition to one manufacturer or vendor and does not allow an equivalent product to be supplied. Federal funds may not participate in a premium or royalty on any patented or proprietary product. However, there are provisions allowing specifying brand names under certain conditions. The following are conditions under which FHWA may participate in payment for patented or proprietary materials, specifications or processes specifically set forth in the plans and specifications:
- Anchor: #PEHEKSEB
- the item is purchased or obtained through competitive bidding with equally suitable unpatented items; Anchor: #VVLSINCH
- the LG certifies either that the proprietary or patented item is essential for synchronization with the existing highway facilities or that no equally suitable alternative exists; or Anchor: #BNCAGUYO
- the item is used for research or for a special type of construction on relatively short sections of road for experimental purposes.
The LG may not specify patented or proprietary products in a contract unless it obtains approval from TxDOT. The primary purpose of the policy is to have competition in selection of materials and allow for development of new materials and products. The policy further allows that materials and products judged to be equal may be bid under generic specifications. If only patented or proprietary products are acceptable, they must be bid as alternatives with all, or at least a reasonable number, of acceptable materials or products listed.
Trade names are generally the key to identifying patented or proprietary materials. Products identified by their brand or trade name may not be specified without an “or equal” phrase. Further, all, or at least a reasonable number, of acceptable “equal” materials or products must be listed. The licensing of several suppliers to produce a product does not change the fact that it is a single product and should not be specified to the exclusion of other equally suitable products.
- Anchor: #MGQUUDUX
- 23 CFR 635.411 – Requires that, with a few exceptions, federal funds cannot participate in premiums or royalties for patented or proprietary products. Brand names cannot be used in plans and specifications unless either a public interest determination is approved or a reasonable number of equal product names are listed. Anchor: #FPVTCVRB
- 23 CFR 635.411(e) – Prohibits brand names from being specifically set forth on the request for proposals for design-build projects.
- Anchor: #GOUCEMFT
- Texas Government Code §2155.067 – Requires a written justification to be provided to the Texas Facilities Commission for products proprietary to one vendor and procured through the Comptroller.
In general, a LG may not specify the use of proprietary products on federal-aid projects unless it submits a public interest finding and receives TxDOT approval as described in the LGPM Guide.Anchor: #i1028975
The LG may include provisions for prequalification in invitations for receipt of bids. The American Association of State Highway and Transportation Officials (AASHTO) defines prequalification as a means of predetermining job experience and work capacity and to identify individuals and organizations from whom the agency may accept a bid. AASHTO has also encouraged the use of prequalification procedures in its 1981 Suggested Guidelines for Strengthening Bidding and Contract Procedures.The process used for prequalification is described in the LGPM Guide.
Although the LG may have a compelling reason (e.g., state or local law) to utilize a procedure differing from acceptable federal-aid practice, the procedure may not be applied to a federal-aid project. 23 CFR 635.112(d) specifically requires the LG to inform bidders of contract provisions not applying to federal-aid projects. This information must be included in the advertisement, specifications, special provisions or other governing documents as appropriate.
- Anchor: #XRDXEVQC
CFR 635.110 – Contains the following provisions for design-bid-build
- Anchor: #FGBQASTM
- Cannot include any procedure or requirement that may operate to restrict competition or provide in-state preference. Anchor: #NBLIPEDC
- Cannot require a contractor to be licensed before submitting a bid or before consideration of a bid. However, an entity may require the bidder to have various technical licenses (master electrician, etc.) if the requirement is consistent with competitive bidding practices, i.e. it is applied uniformly to all contractors.
- 23 CFR 635.110(f)(1) – Contains the following provisions for design-build projects.
- Anchor: #SPUOOBIF
- 43 TAC §9.12 – Requires potential bidders to be prequalified by TxDOT as a condition of submitting a bid. Includes waiver provisions for small projects, maintenance projects and specialty projects. Anchor: #KYGHCUDL
- Texas Government Code §2269.357 – Requires the LG to solicit qualifications outlined in this section for design build projects.
In general, the LG must require bidders to be prequalified by TxDOT on all projects on the state highway system. The LGPM Guide describes the required practices and includes the types of projects requiring prequalification.Anchor: #i1029066
Prevailing Minimum Wage (Davis-Bacon Act)
The payment of predetermined minimum wages for certain job classifications used on federal-aid contracts is derived from the Davis-Bacon Act of 1931 (40 U.S.C. §3141 et seq.) and is prescribed by 23 U.S.C. 113. The Davis-Bacon Act requires the payment of locally prevailing wages and fringe benefits to laborers and mechanics employed on federal contracts in excess of $2,000 for construction, alteration or repair (including painting and decorating) of public buildings or public works. Davis-Bacon was enacted as a means to prevent contractors from importing cheap labor from outside the area; thereby, keeping capital at home with the local labor force where it would do the most good. Davis-Bacon provisions are covered in Form FHWA-1273. The procedures that must be followed to comply with the Davis-Bacon provisions are described in the LGPM Guide.
Applicability of Davis-Bacon - Site of Work
The Davis-Bacon Act limits coverage to laborers and mechanics “employed directly upon the site of the work.” Since 1972, the U.S. Department of Labor (USDOL) and the courts have been addressing various aspects of the applicability of Davis-Bacon requirements to site-of-work facilities.
USDOL’s implementing regulation, 29 CFR 5.2(l)(2), extends coverage to off-site facilities dedicated exclusively and in proximity to the actual construction site.
29 CFR 5.2 (l)(1) states:
“The site of the work is the physical place or places where the building or work called for in the contract will remain; and any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the performance of the contract or project …”
The LGPM Guide provides examples and additional guidance on the applicability of Davis-Bacon Act to the site of work. USDOL has made the determination that when transportation will take place in more than one wage determination area, the applicable wage determination will be the wage determination for the area in which the construction will remain when completed. This determination will apply to all bidders, regardless of where they propose to construct significant portions of the project.
FHWA has taken the position that since this is the USDOL’s program, it is inappropriate for FHWA to provide guidance in this area. FHWA encourages LGs to work jointly with TxDOT, the FHWA division office and the DOL regional offices to resolve “site of work” issues.
Applicability of Davis-Bacon to Specific Work Types
The LGPM Guide provides a detailed discussion of the applicability of the Davis-Bacon Act to specific work types. Additional discussion on specific work types can be found in the DOL’s Field Operations Handbook.
- Anchor: #BSAKSLBU
- 23 U.S.C. 113 – Requires laborers and mechanics to be paid wages at rates not less than those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor. This provision applies to all projects with federal funds on roadways functionally classified above a rural minor collector. Anchor: #VPTBABHM
- 40 U.S.C. §3141et seq. – Davis-Bacon Act of 1931 Anchor: #ECFLKOSI
- 18 U.S.C. §874 (Copeland Act) – Protects workers from paying “kickbacks” to employers for the “privilege” of being employed. Anchor: #UKFPCAKD
- 23 CFR 633.102 – Requires Form FHWA-1273 to be included in all construction contracts that have federal funds. Anchor: #EDFWXNBM
- 23 CFR 635.309(f) – Provides that minimum wage rates determined by the USDOL in accordance with the provisions of 23 U.S.C. 113 are in effect and will not expire before the end of the period within which it can reasonably be expected the contract will be awarded. Anchor: #GGXGLURF
- 23 CFR 636.119 – Requires projects developed under a public-private partnership to comply with all non-procurement provisions of Title 23 U.S.C. Anchor: #HQSEOJOR
- 29 CFR Parts 1, 2 and 5 – Provides procedures for predetermination of wage rates, Copeland Act and enforcement provisions.
- Anchor: #GIAVGOGI
- Texas Government Code §2258.021 – Requires a worker employed on a public work by or on behalf of the state or a political subdivision of the state shall be paid: Anchor: #MXDWCJDD
- Texas Government Code §2258.022(a) – Requires the public body to determine the general prevailing rate of per diem wages in the locality in which the public work is to be performed for each craft or type of worker needed to execute the contract and the prevailing rate for legal holiday and overtime work. Anchor: #YFARDWAE
- Texas Government Code §2258.023 – Provides for penalties assessed a contractor or subcontractor who violates the statute. Anchor: #BFJEEIPQ
- Texas Government Code §2258.024 – Specifies records to be maintained by the contractor and subcontractor. Anchor: #UPAXHIOY
- Texas Government Code Chapter 2258, Subchapter C – Describes enforcement actions for violations of the statute.
The LG must use accepted wage rates (approved by TxDOT) complying with the provisions of the Davis-Bacon Act. The LGPM Guide provides the required practices and responsibilities of the LG and TxDOT for compliance with the Act.Anchor: #i1029254
Prison-produced materials are products made by convict labor. There are limitations on using materials produced by convict labor in a federal-aid highway project. Materials produced after July 1, 1991, by convict labor may only be incorporated in a federal-aid highway construction project if:
- Anchor: #YALDPEEX
- such materials have been produced by convicts who are on parole, supervised release or probation from a prison; or Anchor: #LVUQEMGC
- Such material has been produced in a qualified prison facility (Texas does not have a qualified prison facility meeting the requirements of the regulation).
- Anchor: #TKRKGRXK
- 23 CFR 635.417 – Prohibits the use of materials produced in a prison facility or by prison labor on federally funded projects for roadways functionally classified above a rural minor collector.
- Anchor: #WRMUYEVL
- No comparable state statute.
The LG must follow the federal statute using the required practices described in the LGPM Guide.Anchor: #i1029309
Publicly Owned Equipment
Publicly owned equipment is defined as “… equipment previously purchased or otherwise acquired by the public agency involved for use in its own operations.” Publicly owned equipment should not normally compete with privately owned equipment on a contracted project. However, in exceptional cases, the use of publicly owned equipment may be justified if the LG can show it is clearly cost effective. When supported by a public interest finding, TxDOT may approve the LG’s proposal to use publicly owned equipment. The LGPM Guide describes the procedures that must be followed in order to use publicly owned equipment.
- Anchor: #YLGFTYIY
- 23 CFR 635.106 – Prohibits publicly owned equipment from competing with privately owned equipment on a project to be let to contract. There are limited exceptions when justified in writing as being in the public interest.
- Anchor: #TJYINYGU
- No comparable statute.
The LG may only use publicly owned equipment when supported by a public interest finding approved by TxDOT. The LG must follow the required practices as described in the LGPM Guide.Anchor: #i1029356
Railroad Insurance Provision
Contractors are required to purchase railroad protective liability insurance when work under the contract is located in whole or in part within railroad right of way. The insurance is for the benefit of the railroad. The requirement to provide the insurance is located at 23 CFR 646.107. The standards for railroad protective insurance established at 23 CFR 646.109 and 646.111 must be adhered to the extent permitted by the insurance laws of the state. The types and amounts of coverage are described in the LGPM Guide.
- Anchor: #SKXVCNEA
- 23 CFR Part 646 – Requires a construction contractor to carry public liability and property damage insurance when working on railroad right of way. 23 CFR 646.109 prescribes the types of coverage, and 23 CFR 646.111 provides the amounts of coverage required.
- Anchor: #ETNOCPAC
- No comparable statutes.
The LG must follow the requirements of the federal statute when a project is located in whole or in part within a railroad right of way. The required practices and responsibilities are included in the LGPM Guide.Anchor: #i1029408
Retainage is a portion of the construction contract fee that is withheld until the LG is satisfied the work is substantially complete. §223.010 of the Texas Transportation Code allows 5 percent of the contract price to be retained until the entire improvement has been completed and accepted. However, federal concerns over prompt pay ( 49 CFR 26.29) for subcontractors require that one of three options be used if federal funds are utilized. These options are described in the LGPM Guide.
- Anchor: #MIIYMYNE
- While there is no federal statute addressing retainage, FHWA policy allows recipients of federal funds to set retention rates from progress payments to protect the federal interest. Anchor: #GYAUFFTR
- 49 CFR §26.29 – Establishes a contract clause, as part of the DBE program, to require prime contractors to pay all subcontractors for satisfactory performance of their contracts no later than 30 days (changed to 10 days by Texas Government Code §2251.022) from receipt of each payment made by the LG to the prime contractor. Retainage may only be withheld if the contract provides for incremental acceptance of work with retainage paid to the prime contractor based on this partial acceptance. The prime must then pay all retainage to the subcontractor within 30 days (changed to 10 days by Texas Government Code §2251.022) after the prime contractor receives payment for satisfactory completion of the accepted work.
- Anchor: #EVJEYYNQ
- 43 TAC, §26.33(g)(1) – Requires a RMA to use specifications that conform to the latest TxDOT standard specifications on projects connecting with the state highway system. Anchor: #XSFFMNGL
- 43 TAC, §27.56(c)(3) – Requires a RTA to use specifications that conform to the latest TxDOT standard specifications on projects with state fund participation. Anchor: #PIEJRMLE
- Texas Government Code §2251.022 – Requires a vendor receiving payment from a governmental entity to pay a subcontractor the appropriate share of the payment not later than 10 days from payment to the vendor. Anchor: #ATLRQQMQ
- Texas Government Code §§2252.032-033 – Requires a governmental entity to deposit retainage in an interest-bearing account for contracts exceeding $400,000 and have a retainage clause of more than 5 percent. The interest must be paid to the contractor. Anchor: #NLVHHNIJ
- Texas Transportation Code §223.009 – Allows partial payments to a contractor. Anchor: #GCTVBNYR
- Texas Transportation Code §223.010 – Allows but does not require a 5 percent retainage until a project is completed and accepted. Provides for deposit of the retained amount under a trust agreement if requested by the contractor and approved by TxDOT and the Comptroller.
The LG may or may not hold a retainage but must follow state and federal guidelines as described in the required practices in the LGPM Guide.Anchor: #i1029502
The FHWA is required by law to ensure compliance with construction safety standards. The LGPM Guide describes the sections of Form FHWA-1273 that relate to safety. The LG has enforcement responsibilities of any applicable state standards. In addition, the LG should cooperate with and alert other responsible agencies regarding violations and provide full cooperation and assistance as required.
- Anchor: #NFYSDCVQ
- 23 CFR 635.108 – Requires contracts to include provisions to ensure full compliance with all applicable federal, state and local laws governing safety, health and sanitation and to require the contractor to provide all safeguards, safety devices and protective equipment. This is implemented in Section VII of Form FHWA-1273. Anchor: #DJJGVAOI
- 29 U.S.C. Chapter 15 – Describes the establishment and implementation of standards employers are to follow for the safety of their employees. Anchor: #IKAJBCYH
- 29 CFR Part 1910 and Part 1926 – Contains health and safety standards for construction.
- Anchor: #PVDYPIPA
Labor Code §411.103 – Requires employers to:
- Anchor: #XXPPAAGE
- provide and maintain employment and a place of employment that is reasonably safe and healthful for employees; Anchor: #TVNIJVIJ
- install, maintain and use methods, processes, devices and safeguards, including methods of sanitation and hygiene, that are reasonably necessary to protect the life, health and safety of the employer’s employees; and Anchor: #OOFGGRIK
- take all other actions reasonably necessary to make the employment and place of employment safe.
The LG (with oversight by TxDOT) must comply with state and federal safety standards as described in the LGPM Guide.Anchor: #i1029583
Federal regulations impose limitations on the amount of work than can be subcontracted. This provision prohibits a prime contractor from “brokering” (subletting all contract work). Subcontracting limitations are included in Form FHWA-1273 and described in the LGPM Guide.
FHWA requires each subcontract to be approved in writing by the LG. This allows some control to screen subcontractors that are not qualified or that may be ineligible (e.g., debarred). It also assures all federal and state requirements will be included in the subcontract. In order to reduce the amount of paper flow, the FHWA division administrator may permit the LG to satisfy the subcontract approval requirement by instituting a certification process. This process must require the contractor to certify that each subcontract arrangement will be in the form of a written agreement containing all the pertinent provisions and requirements of the prime contract. The LG must demonstrate it has an acceptable plan for monitoring such a certification.
Employee Lease Agreements
Employee lease agreements are typically not considered a subcontract and are not subject to the 30 percent subcontract limitation. Employee lease arrangements are acceptable for federal-aid projects if the leased employees are under the direct supervision and control of the contractor’s superintendent and/or supervisor. The requirements for leased employees are included in the LGPM Guide.
- Anchor: #JFOSEFFV
- 23 CFR Part 633 – Requires contractors to include Form FHWA-1273 in all subcontracts. Anchor: #IQUXJQLY
- 23 CFR 635.116 – Requires that: Anchor: #QKEUWLKY
- 23 CFR 635.116(d) – Applies to design-build contracts.
- Anchor: #PUEWGXCF
- 43 TAC §26.33(g)(1) – Requires a RMA to use specifications conforming to the latest TxDOT standard specifications on projects connecting with the state highway system. Anchor: #XPEOKEXS
- 43 TAC §27.56(c)(3) – Requires a RTA to use specifications conforming to the latest TxDOT standard specifications on projects with state fund participation. Anchor: #KPOFSSTG
- Texas Government Code Chapter 2269, Subchapter H – Allows a local governmental entity to use the design-build method for the construction, rehabilitation, alteration or repair of a civil works project.
The LG must follow state and federal guidelines related to subcontracting as described in the required practices outlined in the LGPM Guide.Anchor: #i1029698
Termination of Contract
Termination is an action taken by the contracting agency to cancel a contract. Federal-aid contracts exceeding $10,000 must contain suitable provisions for termination by the LG. The provisions must identify the manner by which the termination will be effected and the basis for settlement. There may be a number of grounds to warrant termination, including termination for cause, termination for convenience and termination for default.
Prior to termination of a federal-aid contract for which TxDOT concurred in the award, the LG shall consult with and receive the concurrence of TxDOT. Federal-aid participation in a terminated contract is decided by the individual merits of the particular case. However, in no instance will federal funds participate in any allowance for anticipated profits on work not performed.
If the LG awards a contract for completion of a federal-aid contract previously terminated for default, FHWA policy limits the amount eligible for federal participation. The amount eligible is the lesser of the original contract or the sum of the new contract plus the payments made under the original contract. The LGPM Guide provides a description of Termination for Cause or Convenience and Termination for Default and additional information related to notice to contractor and surety of default considerations.
- Anchor: #YXRIQSMS
- 23 CFR 635.125 – Requires contracts exceeding $10,000 to contain provisions for termination of a contract, including the manner by which the termination will be effected and the basis for settlement. In addition, such contracts must describe conditions where the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor. Anchor: #PMLCSGOR
- 23 CFR 635.125(b) – Requires prior concurrence by FHWA for termination of a federal-aid contract.
- Anchor: #AEMRBINU
- 43 TAC, §26.33(g)(1) – Requires a RMA to use specifications conforming to the latest TxDOT standard specifications on projects connecting with the state highway system. Anchor: #RTMKBXWY
- 43 TAC, §27.56(c)(3) – Requires a RTA to use specifications conforming to the latest TxDOT standard specifications on projects with state fund participation.
The LG must include termination language in the contract in conformance with state and federal statutes. The LGPM Guide describes the required practices and responsibilities of the LG and TxDOT.Anchor: #i1029771
Contract time extensions granted by a LG that affect project costs or liquidated damages shall be subject to the concurrence of TxDOT and will be considered in determining the amount of federal participation.
Events normally considered to be under the control of the contractor and, therefore, do not warrant a time extension include:
- Anchor: #ODOLPMJR
- shutdowns for maintenance; Anchor: #QJDPQLYJ
- breakdowns; Anchor: #WNAJAVPW
- suspensions or stop work orders for violation of safety or pollution regulations; Anchor: #JOTFLKXW
- shutdowns for construction accidents; and Anchor: #REBYKYAK
- material delays.
Section 7(c) of the FHWA Additional Guidance on 23 CFR 625A (formerly the Federal Aid Policy Guide Non-regulatory Supplement 23 CFR Part 635 Subpart A) provides further guidance on materials delays. The contractor is responsible for the timely order and delivery of materials for the project. A delay in delivery of materials does not in itself generally support an extension of contract time. However, if an unusual market condition (i.e., an industry-wide strike, natural disaster or area-wide shortage) occurs, a time extension may be in order.
Delays due to inclement weather should be expected and should generally not be the basis for a change in contract time. Weather should be factored into the original contract time determination.
Federal policy also covers granting time extensions due to utility, railroad and right-of-way clearance delays. Because of the assurances required from the LG prior to TxDOT project authorization, the policy generally does not permit participation in time extensions for such delays. Whenever the railroad or utility is permitted to adjust its facilities coincidentally with contract operations, such activities must be clearly addressed in the contract provisions. All parties should understand that any interference by the railroad or utility to the contractor’s operations generally would not constitute an allowable delay. In general, an extension of contract time due to right-of-way delays is very unusual and is the exception rather than the rule.
- Anchor: #OOKDIJYP
- 23 CFR 635.121 – Provides that time extensions for federal-aid projects are subject to approval by the FHWA and will be considered in determining the extent of federal participation.
- Anchor: #XLRQPCVK
- No comparable state statutes.
The LG must have TxDOT approval of time extensions as described in the LGPM Guide.Anchor: #i1029863
Title VI Compliance
Title VI of the Civil Rights Act of 1964 is the federal law that states “no person in the United States shall, on the grounds of race, color, or national origin be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program to which this part applies.” Additional regulations and statutes broadened non-discrimination to include religion, sex, age, retaliation and disability.
The two main authorities enabling Title VI implementation, compliance and enforcement are the Civil Rights Act of 1964 and the Civil Rights Restoration Act of 1987. Various other statutes, laws and regulations, executive orders and the U.S. Constitution provide guidance for the effective execution of the objectives of Title VI. These include, but are not limited to the:
- Anchor: #WIYVLNIO
- Federal-Aid Highway Act of 1973, 23 U.S.C. Chapter 1; Anchor: #FQAKQQNO
- Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. §794; Anchor: #VYBWFGRV
- Americans with Disabilities Act of 1990, 42 U.S.C. Chapter 126; Anchor: #FMUGPNJR
- Age Discrimination Act of 1975, 42 U.S.C. §§6101-6107; Anchor: #TSWCASAV
- Executive Order 12898 – Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations; and Anchor: #INCYUPUK
- Executive Order 13166 – Improving Access to Services For Persons With Limited English Proficiency.
Pursuant to Title VI of the Civil Rights Act of 1964, as amended, the Restoration Act of 1987 and other nondiscrimination authorities, it is the policy of TxDOT that discrimination based on race, color, national origin, sex, age or disability shall not occur in connection with any of its programs or activities. Any recipient or sub-recipient receiving federal financial assistance shall adopt this assurance or provide one in accordance with 49 CFR 21.7 and follow all applicable laws, regulations and guidance including 49 CFR Part 21 and 23 CFR Part 200.
- Anchor: #PNQCLBND
- 49 CFR Part 21 – Nondiscrimination in Federally-Assisted Programs of the Department of Transportation Anchor: #EYPSWQTM
- 23 CFR Part 200 – Title VI Program and Related Statutes – Implementation and Review Procedures
In general, the LG may not discriminate and must comply with all applicable state and federal laws. The LGPM Guide provides a listing of the required practices and responsibilities of the LG and TxDOT to ensure compliance with Title VI.Anchor: #i1029977
Provisions of the Occupational Safety and Health Administration (OSHA) apply to all federal, state and LG projects. According to OSHA, dozens of people are killed each year and hundreds are injured in trenches on construction sites. The LGPM Guide describes trench safety requirements established by OSHA.To assure trench safety receives the attention it deserves, Texas Health and Safety Code, Chapter 756 Subchapter C outlines several construction project requirements. Additional guidance can also be found in Section 6.4 of TxDOT’s Geotechnical Manual.
- Anchor: #BCFXUICX
- 29 CFR Part 1926 Subpart P – Sets forth specific excavation requirements and requirements for protective systems established by OSHA to be utilized in excavation and trenching on construction projects involving open excavations.
- Anchor: #WSETFDJE
Health and Safety Code, §756.022 – Trench Excavation in State
– Requires any bid documents (if bid documents are used) and the
construction contract to contain the following provisions for any
trench excavation exceeding a depth of five feet:
- a reference to OSHA standards for trench safety; Anchor: #VNJOGNLI
- a copy of special shoring requirements, if any, of the state or of a political subdivision in which the construction project is located, with a separate pay item for the special shoring requirements; Anchor: #MJNNKKFL
- a copy of any geotechnical information obtained by the LG for use in the design of the trench safety system; and Anchor: #DUYFNHEV
- a separate pay item for trench excavation safety protection.
- Texas Health and Safety Code, §756.023 – Trench Excavation for Political Subdivision – Requires the same bid and contract provisions as Texas Health and Safety Code §756.022 plus additional requirements for cities and counties. The political subdivisions are required to have pay item for trench excavation safety protection and must be based on the linear feet of trench excavated or square foot of shoring used.
The LG’s contractor must follow trench safety guidelines for all projects as described in the required practices in the LGPM Guide.Anchor: #i1030056
Warranties and Warranty Clauses
With certain limitations, warranties may be specified for LG construction projects. Prior to 1991, the FHWA had a longstanding policy restricting the use of warranties on federal-aid projects to electrical and mechanical equipment. The rationale for the restriction was that such contract requirements may indirectly result in federal-aid funds participating in maintenance costs. The use of federal-aid funds for routine maintenance is prohibited by law.
23 CFR 635.413 addresses warranties related to projects on the national highway system (NHS). The regulation states warranty provisions shall be for a specific construction product or feature. Routine maintenance items are still ineligible.
The LG may include warranty provisions in NHS construction contracts in accordance with the guidelines listed in the LGPM Guide.
- Anchor: #EBTWDYJP
- 23 CFR 635.413 – Allows the use of warranty provisions for a specific product or feature for projects on the NHS. Warranties for the entire project are not acceptable. Contractors may not be required to warrant items over which they do not have control. Anchor: #FHFRQWPA
- 23 CFR 635.413(e) – Allows for certain regulatory changes for design-build projects on the NHS, as appropriate.
- Anchor: #MQAFDLQP
- No comparable state statute.
In general, the LG must submit warranty procedures to TxDOT for approval. The LGPM Guide provides required practices and responsibilities.Anchor: #i1030132
Workers’ Compensation Insurance
The state of Texas requires contractors and subcontractors performing on a building or construction to contract with a governmental entity provide workers’ compensation insurance coverage for each individual employed on the public project.
- Anchor: #HACRHQMM
- No provision
- Anchor: #TOASUFFA
- Texas Labor Code §406.096 – Provides that a governmental entity entering into a building or construction contract shall require the contractor to certify in writing that the contractor provides workers’ compensation insurance coverage for each employee of the contractor employed on the public project.
In general, the LG must require the contractor to provide certification of the workers’ compensation insurance coverage as described in the LGPM Guide.