Local Labor Hiring Preference Pilot Program Q&A’s

As part of the recent FHWA webinar on the Local Labor Hiring Preference Program, several of the common questions they receive were discussed:

What types of projects can be included in the pilot?

Any project funded by FTA or FHWA can be considered for the pilot program. This includes construction projects, as well as rolling stock procurements. This 1-year period is for contracts that will be advertised during this period.

The Notice says that US DOT is interested in evaluating the use of local or other geographic labor hiring preferences, economic-based labor hiring preferences (i.e., low-income workers), and labor hiring preferences for veterans. How does DOT define these terms?

Under the pilot program, DOT considers the following approaches to be included within those terms.

*Example approaches include, but are not limited to the following:

  • Geographic boundaries based on factors such as:
  • state, county, city, or other public boundaries;
  • zip code limits;
  • census tracts; or
  • other geographically-defined borders.

*Economically defined areas based on factors such as:

*per capita income levels,
*unemployment rates, or
*other criteria that delineate areas of economic disadvantage.

Veterans for purpose of the pilot program are defined by 5 U.S.C. 2108.

Does the pilot program allow testing of preferences for state or local minority business enterprises

No. Pilot programs that may conflict with the administration of Disadvantaged Business Enterprise Program requirements will not be considered. The Notice specifically states that the DOT will not approve pilots for which recipients wish to alter the requirements of the Disadvantaged Business Enterprise Program.

Can contracting agencies propose other types of contracting requirements?

Yes. The pilot program is not limited to hiring preferences. Examples of other types of contracting specifications that contracting agencies may apply to use include pay-to-play provisions and domestic partnership benefits. The use of other contract requirements may be approved after coordination with the DOT Office of General Counsel.

What is the process for submitting a SEP-14 request?

State DOTs may submit a SEP-14 workplan to their respective Division Office for local hiring preferences. Local public agencies should submit all proposed work plans to their State DOT. State DOTs should review and provide appropriate recommendations to their Division Office for consideration. State DOTs or local public agencies may also submit a separate SEP-14 workplan for other contracting requirements that have previously been prohibited by FHWA as described in Q&A No. 7.

These requests will need to be coordinated with the DOT Office of General Counsel. Division Offices should forward the work plans to HIPA-30 for review and approval (contact: John Huyer, (651)291-6111,
John.Huyer@dot.gov). HIPA-30 will coordinate the review/approval of work plans, and post the workplans and evaluations on FHWA’s web site.

How may an FHWA recipient or subrecipient participate in the pilot program?

State and local recipients and subrecipients should request prior approval from the FHWA to use a specific contracting requirement under SEP-14. In order to receive SEP-14 approval, States and local recipients and subrecipients would follow the normal process that includes submitting work plans to the appropriate FHWA division office. The work plan should include the following information:

  1. Describe the project(s), including the amount of FHWA funding involved in the as well as the estimated total project cost.
  2. Describe the proposed contracting requirement that may otherwise be found to be inconsistent with the general requirement for full and open competition.
  3. Describe how the applicant will evaluate the effects of relevant contracting requirements on competitive bidding. In doing so, the applicant should, at a minimum, provide comparisons of bids received for the projects utilizing the relevant contract requirements to other projects of similar size and scope and in the same geographic area not utilizing such requirements. If a reduction in the pool of bidders is evident, explain the potential offsetting benefits resulting from the use of the requirement.
  4. Describe and quantify how the proposed contracting requirement would lead to increases in the effectiveness and efficiency of Federal funding for the project(s).
  5. Describe and quantify how the proposed experimental contracting technique would protect the integrity of the competitive bidding process either in connection with the particular contract or when considered over the long term for that agency’s program.
  6. Describe whether or not the proposed contracting requirement has been the subject of litigation or whether litigation surrounding the use of the requirement has been threatened.

Does the FHWA have any criteria or requirements for project selection for the pilot program?

No. Contracting agencies may propose to evaluate labor hiring preferences on any Federal-aid construction project funded under Title 23.

Can contracting agencies propose to use preferences or requirements for local contractors under the Pilot Program?

No, a requirement or preference for the use of State or local contractors is likely to create more than an incidental effect on the pool of potential bidders for Federal-aid highway or transit projects and thus would not fit within the scope of the Office of Legal Counsel opinion. Those kinds of contracting preferences may unduly limit competition by excluding a certain class (out of State contractors).

Does the pilot program allow for FHWA and FTA to consider the use of labor hiring preferences on architectural or engineering service contracts?

The Pilot Program is focused primarily on generating economic opportunity associated with construction employment. If a contracting agency has a project that would generate significant job or training opportunities, the USDOT encourages agencies to submit such requests for review.

The complete list of Questions and Answers posted by U.S. DOT can be found here.

Here’s a copy of the presentation used for the webinar. We’ll update this post with a link to the recorded webinar once it’s posted.