§ 112. — Letting of contracts.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 23USC112]
TITLE 23--HIGHWAYS
CHAPTER 1--FEDERAL-AID HIGHWAYS
SUBCHAPTER I--GENERAL PROVISIONS
Sec. 112. Letting of contracts
(a) In all cases where the construction is to be performed by the
State transportation department or under its supervision, a request for
submission of bids shall be made by advertisement unless some other
method is approved by the Secretary. The Secretary shall require such
plans and specifications and such methods of bidding as shall be
effective in securing competition.
(b) Bidding Requirements.--
(1) In general.--Subject to paragraphs (2) and (3), construction
of each project, subject to the provisions of subsection (a) of this
section, shall be performed by contract awarded by competitive
bidding, unless the State transportation department demonstrates, to
the satisfaction of the Secretary, that some other method is more
cost effective or that an emergency exists. Contracts for the
construction of each project shall be awarded only on the basis of
the lowest responsive bid submitted by a bidder meeting established
criteria of responsibility. No requirement or obligation shall be
imposed as a condition precedent to the award of a contract to such
bidder for a project, or to the Secretary's concurrence in the award
of a contract to such bidder, unless such requirement or obligation
is otherwise lawful and is specifically set forth in the advertised
specifications.
(2) Contracting for engineering and design services.--
(A) General rule.--Subject to paragraph (3), each contract
for program management, construction management, feasibility
studies, preliminary engineering, design, engineering,
surveying, mapping, or architectural related services with
respect to a project subject to the provisions of subsection (a)
of this section shall be awarded in the same manner as a
contract for architectural and engineering services is
negotiated under chapter 11 of title 40 or equivalent State
qualifications-based requirements.
(B) Applicability.--
(i) In a complying state.--If, on the date of the
enactment of this paragraph, the services described in
subparagraph (A) may be awarded in a State in the manner
described in subparagraph (A), subparagraph (A) shall apply
in such State beginning on such date of enactment.
(ii) In a noncomplying state.--In the case of any other
State, subparagraph (A) shall apply in such State beginning
on the earlier of (I) August 1, 1989, or (II) the 10th day
following the close of the 1st regular session of the
legislature of a State which begins after the date of the
enactment of this paragraph.
(C) Performance and audits.--Any contract or subcontract
awarded in accordance with subparagraph (A), whether funded in
whole or in part with Federal-aid highway funds, shall be
performed and audited in compliance with cost principles
contained in the Federal Acquisition Regulations of part 31 of
title 48, Code of Federal Regulations.
(D) Indirect cost rates.--Instead of performing its own
audits, a recipient of funds under a contract or subcontract
awarded in accordance with subparagraph (A) shall accept
indirect cost rates established in accordance with the Federal
Acquisition Regulations for 1-year applicable accounting periods
by a cognizant Federal or State government agency, if such rates
are not currently under dispute.
(E) Application of rates.--Once a firm's indirect cost rates
are accepted under this paragraph, the recipient of the funds
shall apply such rates for the purposes of contract estimation,
negotiation, administration, reporting, and contract payment and
shall not be limited by administrative or de facto ceilings of
any kind.
(F) Prenotification; confidentiality of data.--A recipient
of funds requesting or using the cost and rate data described in
subparagraph (E) shall notify any affected firm before such
request or use. Such data shall be confidential and shall not be
accessible or provided, in whole or in part, to another firm or
to any government agency which is not part of the group of
agencies sharing cost data under this paragraph, except by
written permission of the audited firm. If prohibited by law,
such cost and rate data shall not be disclosed under any
circumstances.
(G) State option.--Subparagraphs (C), (D), (E), and (F)
shall take effect 1 year after the date of the enactment of this
subparagraph; except that if a State, during such 1-year period,
adopts by statute an alternative process intended to promote
engineering and design quality and ensure maximum competition by
professional companies of all sizes providing engineering and
design services, such subparagraphs shall not apply with respect
to the State. If the Secretary determines that the legislature
of the State did not convene and adjourn a full regular session
during such 1-year period, the Secretary may extend such 1-year
period until the adjournment of the next regular session of the
legislature.
(3) Design-build contracting.--
(A) In general.--A State transportation department or local
transportation agency may award a design-build contract for a
qualified project described in subparagraph (C) using any
procurement process permitted by applicable State and local law.
(B) Limitation on final design.--Final design under a
design-build contract referred to in subparagraph (A) shall not
commence before compliance with section 102 of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332).
(C) Qualified projects.--A qualified project referred to in
subparagraph (A) is a project under this chapter for which--
(i) the Secretary has approved the use of design-build
contracting described in subparagraph (A) under criteria
specified in regulations issued by the Secretary; and
(ii) the total costs are estimated to exceed--
(I) in the case of a project that involves
installation of an intelligent transportation system,
$5,000,000; and
(II) in the case of any other project, $50,000,000.
(D) Design-build contract defined.--In this paragraph, the
term ``design-build contract'' means an agreement that provides
for design and construction of a project by a contractor,
regardless of whether the agreement is in the form of a design-
build contract, a franchise agreement, or any other form of
contract approved by the Secretary.
(c) The Secretary shall require as a condition precedent to his
approval of each contract awarded by competitive bidding pursuant to
subsection (b) of this section, and subject to the provisions of this
section, a sworn statement, executed by, or on behalf of, the person,
firm, association, or corporation to whom such contract is to be
awarded, certifying that such person, firm, association, or corporation
has not, either directly or indirectly, entered into any agreement,
participated in any collusion, or otherwise taken any action in
restraint of free competitive bidding in connection with such contract.
(d) No contract awarded by competitive bidding pursuant to
subsection (b) of this section, and subject to the provisions of this
section, shall be entered into by any State transportation department or
local subdivision of the State without compliance with the provisions of
this section, and without the prior concurrence of the Secretary in the
award thereof.
(e) Standardized Contract Clause Concerning Site Conditions.--
(1) General rule.--The Secretary shall issue regulations
establishing and requiring, for inclusion in each contract entered
into with respect to any project approved under section 106 of this
title a contract clause, developed in accordance with guidelines
established by the Secretary, which equitably addresses each of the
following:
(A) Site conditions.
(B) Suspensions of work ordered by the State (other than a
suspension of work caused by the fault of the contractor or by
weather).
(C) Material changes in the scope of work specified in the
contract.
The guidelines established by the Secretary shall not require
arbitration.
(2) Limitation on applicability.--
(A) State law.--Paragraph (1) shall apply in a State except
to the extent that such State adopts or has adopted by statute a
formal procedure for the development of a contract clause
described in paragraph (1) or adopts or has adopted a statute
which does not permit inclusion of such a contract clause.
(B) Design-build contracts.--Paragraph (1) shall not apply
to any design-build contract approved under subsection (b)(3).
(f) The provisions of this section shall not be applicable to
contracts for projects on the Federal-aid secondary system in those
States where the Secretary has discharged his responsibility pursuant to
section 117 \1\ of this title, except where employees of a political
subdivision of a State are working on a project outside of such
political subdivision.
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\1\ See References in Text note below.
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(g) Selection Process.--A State may procure, under a single
contract, the services of a consultant to prepare any environmental
impact assessments or analyses required for a project, including
environmental impact statements, as well as subsequent engineering and
design work on the project if the State conducts a review that assesses
the objectivity of the environmental assessment, environmental analysis,
or environmental impact statement prior to its submission to the
Secretary.
(Pub. L. 85-767, Aug. 27, 1958, 72 Stat. 895; Pub. L. 90-495,
Sec. 22(c), Aug. 23, 1968, 82 Stat. 827; Pub. L. 96-470, title I,
Sec. 112(b)(1), Oct. 19, 1980, 94 Stat. 2239; Pub. L. 97-424, title I,
Sec. 112, Jan. 6, 1983, 96 Stat. 2106; Pub. L. 100-17, title I,
Sec. 111, Apr. 2, 1987, 101 Stat. 147; Pub. L. 104-59, title III,
Sec. 307(a), Nov. 28, 1995, 109 Stat. 581; Pub. L. 105-178, title I,
Secs. 1205, 1212(a)(2)(A)(i), 1307(a), (b), June 9, 1998, 112 Stat. 184,
193, 229, 230; Pub. L. 107-217, Sec. 3(e)(1), Aug. 21, 2002, 116 Stat.
1299.)
References in Text
The date of the enactment of this paragraph, referred to in subsec.
(b)(2)(B), is the date of enactment of Pub. L. 100-17, which was
approved Apr. 2, 1987.
The date of the enactment of this subparagraph, referred to in
subsec. (b)(2)(G), is the date of enactment of Pub. L. 104-59, which was
approved Nov. 28, 1995.
Section 117 of this title, referred to in subsec. (f), relating to
certification acceptance, was repealed and a new section 117, relating
to high priority projects program, was enacted by Pub. L. 105-178, title
I, Sec. 1601(a), June 9, 1998, 112 Stat. 255.
Amendments
2002--Subsec. (b)(2)(A). Pub. L. 107-217 substituted ``chapter 11 of
title 40'' for ``title IX of the Federal Property and Administrative
Services Act of 1949''.
1998--Subsec. (a). Pub. L. 105-178, Sec. 1212(a)(2)(A)(i),
substituted ``State transportation department'' for ``State highway
department''.
Subsec. (b)(1). Pub. L. 105-178, Sec. 1307(a)(1), substituted
``paragraphs (2) and (3)'' for ``paragraph (2)''.
Pub. L. 105-178, Sec. 1212(a)(2)(A)(i), substituted ``State
transportation department'' for ``State highway department''.
Subsec. (b)(2)(A). Pub. L. 105-178, Sec. 1307(a)(2), substituted
``Subject to paragraph (3), each contract'' for ``Each contract''.
Subsec. (b)(2)(B)(i). Pub. L. 105-178, Sec. 1205(a), struck out
before period at end ``, except to the extent that such State adopts by
statute a formal procedure for the procurement of such services''.
Subsec. (b)(2)(B)(ii). Pub. L. 105-178, Sec. 1205(a), struck out
before period at end ``, except to the extent that such State adopts or
has adopted by statute a formal procedure for the procurement of the
services described in subparagraph (A)''.
Subsec. (b)(3). Pub. L. 105-178, Sec. 1307(a)(3), added par. (3).
Subsec. (d). Pub. L. 105-178, Sec. 1212(a)(2)(A)(i), substituted
``State transportation department'' for ``State highway department''.
Subsec. (e)(2). Pub. L. 105-178, Sec. 1307(b), designated existing
provisions as subpar. (A), inserted heading, realigned margins, and
added subpar. (B).
Subsec. (g). Pub. L. 105-178, Sec. 1205(b), added subsec. (g).
1995--Subsec. (b)(2)(C) to (G). Pub. L. 104-59 added subpars. (C) to
(G).
1987--Subsec. (b). Pub. L. 100-17, Sec. 111(a), (b), (d), inserted
subsec. heading, designated existing provisions as par. (1), inserted
par. (1) heading, substituted ``Subject to paragraph (2), construction''
for ``Construction'' and inserted ``or that an emergency exists'', added
par. (2), and realigned margins.
Subsecs. (e), (f). Pub. L. 100-17, Sec. 111(c), added subsec. (e)
and redesignated former subsec. (e) as (f).
1983--Subsec. (b). Pub. L. 97-424, Sec. 112(1), substituted ``unless
the State highway department demonstrates, to the satisfaction of the
Secretary, that some other method is more cost effective'' for ``unless
the Secretary shall affirmatively find that, under the circumstances
relating to such project, some other method is in the public interest''
after ``by competitive bidding,''.
Subsec. (e). Pub. L. 97-424, Sec. 112(2), inserted exception
relating to a situation where employees of a political subdivision of a
State are working on a project outside of such political subdivision.
1980--Subsec. (b). Pub. L. 96-470 struck out provision that all
findings by the Secretary that a method other than competitive bidding
is in the public interest be reported in writing to the Committees on
Public Works of the Senate and the House of Representatives.
1968--Subsec. (b). Pub. L. 90-495 required that contracts for the
construction of each project be awarded only on the basis of the lowest
responsive bid by a bidder meeting established criteria of
responsibility and required that, to be imposed as a condition
precedent, requirements and obligations have been specifically set forth
in the advertised specifications.
Effective Date of 1998 Amendment
Pub. L. 105-178, title I, Sec. 1307(e), June 9, 1998, 112 Stat. 231,
provided that:
``(1) In general.--The amendments made by this section [amending
this section] take effect 3 years after the date of enactment of this
Act [June 9, 1998].
``(2) Transition provision.--
``(A) In general.--During the period before issuance of the
regulations under subsection (c) [set out below], the Secretary may
approve, in accordance with an experimental program described in
subsection (d) [set out below], design-build contracts to be awarded
using any process permitted by applicable State and local law;
except that final design under any such contract shall not commence
before compliance with section 102 of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332).
``(B) Previously awarded contracts.--The Secretary may approve
design-build contracts awarded before the date of enactment of this
Act.
``(C) Design-build contract defined.--In this paragraph, the
term `design-build contract' means an agreement that provides for
design and construction of a project by a contractor, regardless of
whether the agreement is in the form of a design-build contract, a
franchise agreement, or any other form of contract approved by the
Secretary.''
Effective Date of 1968 Amendment
Amendment by Pub. L. 90-495 effective Aug. 23, 1968, see section 37
of Pub. L. 90-495, set out as a note under section 101 of this title.
Regulations
Pub. L. 105-178, title I, Sec. 1307(c), June 9, 1998, 112 Stat. 230,
provided that:
``(1) In general.--Not later than the effective date specified in
subsection (e) [see Effective Date of 1998 Amendment note above], after
consultation with the American Association of State Highway and
Transportation Officials and representatives from affected industries,
the Secretary shall issue regulations to carry out the amendments made
by this section [amending this section].
``(2) Contents.--The regulations shall--
``(A) identify the criteria to be used by the Secretary in
approving the use by a State transportation department or local
transportation agency of design-build contracting; and
``(B) establish the procedures to be followed by a State
transportation department or local transportation agency for
obtaining the Secretary's approval of the use of design-build
contracting by the department or agency.''
Effect on Experimental Program
Pub. L. 105-178, title I, Sec. 1307(d), June 9, 1998, 112 Stat. 231,
provided that: ``Nothing in this section [amending this section and
enacting provisions set out as notes under this section] or the
amendments made by this section affects the authority to carry out, or
any project carried out under, any experimental program concerning
design-build contracting that is being carried out by the Secretary as
of the date of enactment of this Act [June 9, 1998].''
Report to Congress
Pub. L. 105-178, title I, Sec. 1307(f), June 9, 1998, 112 Stat. 231,
provided that:
``(1) In general.--Not later than 5 years after the date of
enactment of this Act [June 9, 1998], the Secretary shall submit to
Congress a report on the effectiveness of design-build contracting
procedures.
``(2) Contents.--The report shall contain--
``(A) an assessment of the effect of design-build contracting on
project quality, project cost, and timeliness of project delivery;
``(B) recommendations on the appropriate level of design for
design-build procurements;
``(C) an assessment of the impact of design-build contracting on
small businesses;
``(D) assessment of the subjectivity used in design-build
contracting; and
``(E) such recommendations concerning design-build contracting
procedures as the Secretary determines to be appropriate.''
Private Sector Involvement Program
Pub. L. 102-240, title I, Sec. 1060, Dec. 18, 1991, 105 Stat. 2003,
provided that:
``(a) Establishment.--The Secretary shall establish a private sector
involvement program to encourage States to contract with private firms
for engineering and design services in carrying out Federal-aid highway
projects when it would be cost effective.
``(b) Grants to States.--
``(1) In general.--In conducting the program under this section,
the Secretary may make grants in each of fiscal years 1992, 1993,
1994, 1995, 1996, and 1997 to not less than 3 States which the
Secretary determines have implemented in the fiscal year preceding
the fiscal year of the grant the most effective programs for
increasing the percentage of funds expended for contracting with
private firms (including small business concerns and small business
concerns owned and controlled by socially and economically
disadvantaged individuals) for engineering and design services in
carrying out Federal-aid highway projects.
``(2) Use of grants.--A grant received by a State under this
subsection may be used by the State only for awarding contracts for
engineering and design services to carry out projects and activities
for which Federal funds may be obligated under title 23, United
States Code.
``(3) Funding.--There are authorized to be appropriated to carry
out this section $5,000,000 for each of fiscal years 1992 through
1997. Such sums shall remain available until expended.
``(c) Report by FHWA.--Not later than 120 days after the date of the
enactment of this Act [Dec. 18, 1991], the Administrator of the Federal
Highway Administration shall submit to the Secretary a report on the
amount of funds expended by each State in fiscal years 1980 through 1990
on contracts with private sector engineering and design firms in
carrying out Federal-aid highway projects. The Secretary shall use
information in the report to evaluate State engineering and design
programs for the purpose of awarding grants under subsection (b).
``(d) Report to Congress.--Not later than 2 years after the date of
the enactment of this Act [Dec. 18, 1991], the Secretary shall transmit
to Congress a report on implementation of the program established under
this section.
``(e) Engineering and Design Services Defined.--The term
`engineering and design services' means any category of service
described in section 112(b) of title 23, United States Code.
``(f) Regulations.--Not later than 180 days after the date of the
enactment of this Act [Dec. 18, 1991], the Secretary shall issue
regulations to carry out this section.''
Pilot Program for Uniform Audit Procedures
Pub. L. 102-240, title I, Sec. 1092, Dec. 18, 1991, 105 Stat. 2024,
directed Secretary to establish pilot program to include no more than 10
States under which any contract or subcontract awarded in accordance
with subsec. (b)(2)(A) of this section was to be performed and audited
in compliance with cost principles contained in Federal acquisition
regulations of part 41 of title 48 of Code of Federal Regulations,
provided for indirect cost rates in lieu of performing audits, and
required each State participating in pilot program to report to
Secretary not later than 3 years after Dec. 18, 1991, on results of
program, prior to repeal by Pub. L. 104-59, title III, Sec. 307(b), Nov.
28, 1995, 109 Stat. 582. See subsec. (b)(2)(C) to (F) of this section.
Evaluation of State Procurement Practices
Pub. L. 102-240, title VI, Sec. 6014, Dec. 18, 1991, 105 Stat. 2181,
directed Secretary to conduct a study to evaluate whether or not current
procurement practices of State departments and agencies were adequate to
ensure that highway and transit systems were designed, constructed, and
maintained so as to achieve a high quality for such systems at the
lowest overall cost and, not later than 2 years after Dec. 18, 1991, to
transmit to Congress a report on the results of the study, together with
an assessment of the need for establishing a national policy on
transportation quality assurance and recommendations for appropriate
legislative and administrative actions.
Section Referred to in Other Sections
This section is referred to in section 210 of this title; title 49
section 5325.
