Value Engineering |
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Victor M. Mendez
Federal Highway Administration
August 29, 2013
[Federal Register Volume 78, Number 168 (Thursday, August 29, 2013)]
[Proposed Rules]
[Pages 53380-53383]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20315]
[[Page 53380]]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
23 CFR Part 627
[FHWA Docket No. FHWA-2013-0039]
RIN 2125-AF64
Value Engineering
AGENCY: Federal Highway Administration (FHWA), U.S. Department of
Transportation (DOT).
ACTION: Notice of Proposed Rule Making (NPRM); request for comments.
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SUMMARY: The FHWA proposes to update the existing value engineering
(VE) regulations to make the regulations consistent with the statutory
changes in the Moving Ahead for Progress in the 21st Century Act (MAP-
21) and to make other non-substantive changes for clarity.
DATES: Comments must be received on or before October 28, 2013. Late
comments will be considered to the extent practicable.
ADDRESSES: You may submit comments, identified by docket number FHWA-
2013-0039, by any of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov and
follow the online instructions for submitting comments.
Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
Hand Delivery: West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
Instructions: You must include the agency name and docket number
FHWA-2013-0039 on your comments. All comments received will be posted,
without change, to http://www.regulations.gov, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT: Mr. Ken Leuderalbert, Value
Engineering and Utilities Program Manager, FHWA Office of Program
Administration, Federal Highway Administration, 575 North Pennsylvania
Street, Indianapolis, IN 46204, (317) 226-5351, or via email at
ken.leuderalbert@dot.gov, or Mr. Michael Harkins, FHWA Office of the
Chief Counsel, Federal Highway Administration, 1200 New Jersey Avenue
SE., Washington, DC 20590, (202) 366-4928, or via email at
michael.harkins@dot.gov. Office hours for the FHWA are from 8:00 a.m.
to 4:30 p.m. e.t., Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
This document and all comments received may be viewed online
through the Federal eRulemaking portal at: http://www.regulations.gov.
The Web site is available 24 hours each day, 365 days each year.
Electronic submission and retrieval help and guidelines are available
under the help section of the Web site.
An electronic copy of this document may also be downloaded by
accessing the Office of the Federal Register's home page at: http://www.archives.gov or the Government Printing Office's Web page at:
http://www.gpo.gov/fdsys/.
Background
The FHWA proposes to update the existing regulations governing the
conduct of VE analyses in the planning and development of highway
improvement projects to ensure consistency and compatibility with
recent changes to the underlying statutory authority at section 106(e)
of title 23, United States Code (U.S.C.). On July 6, 2012, MAP-21 (Pub.
L. 112-141) was signed into law. Section 1503(a)(3) of MAP-21 amended
23 U.S.C. 106(e) by increasing the project monetary thresholds
triggering the need for a VE analysis, specifying that a VE analysis is
not required for projects delivered using the design-build method of
construction, and defining the requirements for a State Transportation
Agency (STA) to establish and sustain a VE Program under which VE
analyses are conducted on all applicable projects.
In late 1995, Congress passed the National Highway System
Designation Act which directed the Secretary to establish a program
that required States to carry out a VE analysis for all Federal-aid
highway projects on the National Highway System (NHS) with an estimated
total cost of $25 million or more. On February 14, 1997, FHWA
established its VE regulations in 23 CFR part 627, formally
establishing the FHWA VE program along with the requirement that STAs
create and sustain a VE program. Section 1904 of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users (Pub.
L. 109-59), required that a VE analysis be conducted for bridge
projects with an estimated total cost of $20 million or more and any
other projects determined by the Secretary of Transportation to be
appropriate.
Section 1503(a)(3) of MAP-21 modified the requirements and raised
the thresholds for when a VE analysis is required to $50,000,000 or
more for projects on the NHS using Federal-aid Highway Program Funding
(FAHP) assistance, and $40,000,000 or more for bridge projects on the
NHS receiving Federal assistance. Section 1503(a)(5) removed the
requirement to conduct a VE analysis for projects delivered using the
design-build method of construction. In addition, MAP-21 defined the
requirements for an STA to establish and sustain a VE Program under
which VE analyses are conducted on all applicable projects, consistent
with the current regulations pertaining to STA VE programs (as
specified in 23 CFR 627.9).
In Fiscal Year 2011, STAs performed VE analyses on 378 Federal-aid
highway projects and approved and implemented a total of 1,224 VE
recommendations, resulting in a construction cost savings of $1.006
billion. In addition, a savings of $38.33 million was realized as the
result of approved construction VE change proposals (VECP) that were
submitted by contractors and accepted by STAs.
The STA VE programs, the VE analyses conducted on applicable
projects, and VECPs have resulted in annual cost savings of $1.7
billion on average from 2002 through 2011. Additional information on
STA, local authority, and FHWA VE programs and practices is available
at: http://www.fhwa.dot.gov/ve. In light of these savings, the FHWA
notes that Congress has provided the Secretary with authority to
require STAs to conduct VE analyses on other projects where the
Secretary determines that it is appropriate to do so. As such, the FHWA
may exercise this discretion on a project-by-project basis for projects
that do not fall within the statutory thresholds where the FHWA
determines that there is a clear potential for significant savings that
outweighs the administrative burden associated with conducting the VE
analysis.
Section by Section Discussion of the Proposed Changes to 23 CFR 627
The FHWA proposes to revise 23 CFR part 627--Value Engineering as
follows:
Section 627.1--Purpose and Applicability
Paragraph (b) would be amended to clarify that the policies and
procedures of a State DOT's VE program shall include the requirement to
implement approved VE analysis recommendations when a VE analysis is
conducted.
[[Page 53381]]
Section 627.3--Definitions
The definition of final design would be amended to read as follows:
``Final design. Any design activities following preliminary design and
expressly includes the preparation of final construction plans and
detailed specifications for the performance of construction work.'' The
definition of total project costs would be revised to clarify that the
total estimated cost of a project includes all of the work that is
conducted. The definition of VE Job Plan would be revised to state that
the VE Job Plan ``may'' be scaled to meet the needs of the project
rather than that it ``should'' be scaled.
Section 627.5--Applicable Projects
Paragraph (b)(1) would be amended to specify that a VE analysis is
required for each project on the NHS with an estimated total project
cost of $50 million or more that utilizes Federal-aid highway funding
instead of the previous threshold of $25 million.
Paragraph (b)(2) would be amended to specify that a VE analysis is
required for each bridge project on the NHS with an estimated total
project cost of $40 million or more that utilizes Federal-aid highway
funding instead of the previous threshold of $20 million. Paragraph
(b)(2) would also be amended to remove the VE analysis requirement for
bridges off the NHS.
Paragraph (e) would be amended to clarify that a VE analysis is no
longer required for projects delivered using the design-build method of
construction. However, STAs and local public agencies are still
encouraged to conduct VE analyses for such projects.
Paragraph (f) would be amended to clarify that a VE analysis is
required for projects delivered using the Construction Manager/General
Contractor (CM/GC) method of contracting that meet the monetary
thresholds defined in 23 CFR 627.5(b).
Section 627.9--Conducting a VE Analysis
Paragraph (c) would be amended to clarify that when a STA or local
authority chooses to conduct a VE analysis on a design-build project,
the VE analysis must be performed prior to the release of the Request
for Proposal (RFP).
Paragraph (d) would be amended to add a section clarifying that a
VE analysis is not required to be completed prior to the release of the
RFP for CM/GC contracts. However, the VE analysis would need to be
completed, and approved recommendations would need to be incorporated
into the project plans, prior to requesting a construction price
proposal from the CM/GC contractor.
Rulemaking Analyses and Notices
All comments received before the close of business on the comment
closing date indicated above will be considered and will be available
for examination in the docket at the above address. Comments received
after the comment closing date will be filed in the docket and will be
considered to the extent practicable. In addition to late comments, the
DOT will also continue to file relevant information in the docket as it
becomes available after the comment period closing date, and interested
persons should continue to examine the docket for new material. A final
rule may be published at any time after close of the comment period.
Executive Order 12866 (Regulatory Planning and Review), Executive Order
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory
Policies and Procedures
The FHWA has determined that this proposed rule is not a
significant regulatory action within the meaning of Executive Order
12866 and is not a significant rulemaking within the meaning of the DOT
regulatory policies and procedures.
The changes that this rule proposes are requirements mandated by
MAP-21 and are intended to clarify and revise the requirements for
conducting a VE analysis. Additionally, this action complies with the
principles of Executive Order 13563. After evaluating the costs and
benefits of these proposed amendments, the FHWA anticipates that the
economic impact of this rulemaking will be minimal. These changes are
not anticipated to adversely affect any action taken or planned by
another agency and will not materially alter the budgetary impact of
any entitlements, grants, user fees, or loan programs.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,
5 U.S.C. 601-612), the FHWA has evaluated the effects of this rule on
small entities, such as local governments and businesses. Based on this
evaluation, the FHWA anticipated this action would not have a
significant economic impact on a substantial number of small entities.
The proposed amendment clarifies and revises the requirements for
conducting a VE analysis on applicable projects using Federal-aid
highway funding. After evaluating the cost of these proposed
amendments, as required by changes in authorizing legislation, the FHWA
believes the impacts upon small entities that use FAHP funding on
projects would be negligible. Therefore, I certify that the proposed
action would not have a significant economic impact on a substantial
number of small entities.
Unfunded Mandates Reform Act of 1995
This NPRM would not impose unfunded mandates as defined by the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995,
109 Stat. 48). The actions proposed in this NPRM would not result in
the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector, of $143.1 million or more in any
one year (2 U.S.C. 1532). Furthermore, in compliance with the Unfunded
Mandates Reform Act of 1995, FHWA will evaluate any regulatory action
that might be proposed in subsequent stages of the proceeding to assess
the effects on State, local, and Tribal governments and the private
sector. Additionally, the definition of ``Federal Mandate'' in the
Unfunded Mandates Reform Act excludes financial assistance of the type
in which State, local, or Tribal governments have authority to adjust
their participation in the program in accordance with changes made in
the program by the Federal Government. The Federal-aid highway program
permits this type of flexibility.
Executive Order 13132 (Federalism Assessment)
This proposed action has been analyzed in accordance with the
principles and criteria contained in Executive Order 13132, dated
August 4, 1999, and the FHWA has determined that this proposed action
does not have a substantial direct effect or sufficient federalism
implications on States that would limit the policymaking discretion of
the States. Nothing in this proposed rule directly preempts any State
law or regulation or affects the States' ability to discharge
traditional State governmental functions.
Executive Order 12372 (Intergovernmental Review)
Catalog of Federal Domestic Assistance Program Number 20.205,
Highway Planning and Construction. The regulations implementing
Executive Order 12372 regarding intergovernmental consultation on
Federal programs and activities apply to this program.
Paperwork Reduction Act
The FHWA invites public comment about our intention to request the
Office
[[Page 53382]]
of Management and Budget approval for a new information collection,
which is summarized in the Background section of this document. We are
required to publish this notice in the Federal Register by the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).
Collection Title: Value Engineering Analyses on Federal-aid Highway
Projects.
Type of Request: New information collection requirement.
Respondents: 50 States, the District of Columbia, and Puerto Rico.
Frequency: One collection every year.
Estimated Average Burden per Response: Nationwide on average there
are approximately 400 VE analyses that are conducted annually. It will
take approximately 30 minutes to compile the results of each VE
analysis that is conducted. It will also take approximately 3 hours to
compile the results of all of the VE analyses that are conducted
annually in each State DOT, the District of Columbia, and Puerto Rico
and to submit these results to FHWA.
Estimated Total Annual Burden Hours: Approximately 356 hours per
year. When submitting comments for this proposed information
collection, use the FHWA Docket ID Number FHWA- 2013-0039. You may use
by any of the following methods:
Web site: For access to the document to read background documents
or comments received go to the Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Fax: 1-202-493-2251.
Mail: Document Management Facility, U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
Hand Delivery or Courier: U.S. Department of Transportation, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.
National Environmental Policy Act
The FHWA has analyzed this rule for the purpose of the National
Environmental Policy Act (42 U.S.C. 4321 et seq.) and has determined it
will not have any effect on the quality of the human and natural
environment, because this rule merely establishes the requirements to
conduct a VE analyses whenever an applicable Federal-aid highway
project is to be design and constructed. Therefore, this action is
categorically excluded in 23 CFR 771.117(c)(20).
Executive Order 13175 (Tribal Consultation)
The FHWA has analyzed this action under Executive Order 13175,
dated November 6, 2000, and believes that this rule would not have
substantial direct effects on one or more Indian Tribes; would not
impose substantial direct compliance costs on Indian Tribal
governments; and would not preempt Tribal law. This proposed rulemaking
revises the existing requirements to conduct a VE analyses whenever an
applicable Federal-aid highway project is to be designed and
constructed. As such, this proposed rule would not impose any direct
compliance requirements on Indian Tribal governments nor would it have
any economic or other impacts on the viability of Indian Tribes.
Therefore, a Tribal summary impact statement is not required.
Executive Order 13211 (Energy Effects)
The FHWA has analyzed this proposed action under Executive Order
13211, Actions Concerning Regulations that Significantly Affect Energy
Supply, Distribution or Use. We have determined that this proposed
action would not be a significant energy action under that order
because any action contemplated would not be likely to have a
significant adverse effect on the supply, distribution, or use of
energy. Therefore, the FHWA certifies that a Statement of Energy
Effects under Executive Order 13211 is not required.
Executive Order 12898 (Environmental Justice)
Executive Order 12898 requires that each Federal agency make
achieving environmental justice part of its mission by identifying and
addressing, as appropriate, disproportionately high and adverse human
health or environmental effects of its programs, policies, and
activities on minorities and low-income populations. The FHWA has
determined that this rule does not raise any environmental justice
issues.
Executive Order 12630 (Taking of Private Property)
The FHWA has analyzed this proposed rule and has determined that
this proposed action would not affect a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.
Executive Order 12988 (Civil Justice Reform)
This action meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity and reduce burden.
Executive Order 13045 (Protection of Children)
The FHWA has analyzed this proposed action under Executive Order
13045, Protection of Children from Environmental Health Risks and
Safety Risks, and certifies that this proposed action would not cause
an environmental risk to health or safety that may disproportionately
affect children.
Regulation Identification Number
A regulation identification number (RIN) is assigned to each
regulatory action listed in the Unified Agenda of Federal Regulations.
The Regulatory Information Service Center publishes the Unified Agenda
in April and October of each year. The RIN number contained in the
heading of this document can be used to cross-reference this action
with the Unified Agenda.
List of Subjects in 23 CFR Part 627
Grant programs--transportation, Highways and roads.
Issued On: August 12, 2013.
Victor M. Mendez,
FHWA Administrator.
In consideration of the foregoing, the FHWA proposes to amend title
23, Code of Federal Regulations, part 627 as follows:
Title 23
PART 627--VALUE ENGINEERING
0
1. The authority citation for part 627 continues to read as follows:
Authority: 23 U.S.C. 106(e), 106(g), 106(h), 112(a) and (b),
302, 315; and 49 CFR part 18.
Sec. 627.1 [Amended]
0
2. In Sec. 627.1, amend paragraph (b) by removing the words
``identifying when a VE analysis is required'' and adding in its place
the words ``under which VE analyses are identified, conducted and
approved VE recommendations implemented on applicable projects (as
defined in 627.5 of this part)''.
0
3. Amend Sec. 627.3 by:
0
a. Revising the definitions ``Final Design'' and ``Total Project
Costs,'' and
0
b. Amending the definition of ``Value Engineering VE Job Plan'' by
removing the word ``should'' and adding in its place the word ``may''.
The revisions read as follows:
[[Page 53383]]
Sec. 627.3 Definitions.
* * * * *
Final Design. Any design activities following preliminary design
and expressly includes the preparation of final construction plans and
detailed specifications for the performance of construction work.
* * * * *
Total Project Costs. The estimated costs of all work to be
conducted on a project including the environment, design, right-of-way,
utilities and construction phases.
* * * * *
0
4. Amend Sec. 627.5 by:
0
a. Amend paragraph (a) by adding the words ``prior to authorizing the
project for construction (as specified in 23 CFR 630.205)'' at the end
of the sentence.
0
b. Revise paragraphs (b) introductory text, (b)(1), (2) and (3),
0
c. Amend paragraph (b)(4) by removing the words ``for which'' and
adding in its place ``where'', and by adding the word ``construction''
between the words ``the letting''.
0
d. Amend paragraph (b)(5) by removing the words ``Federal-aid'' and
``the'' and adding the words ``that utilizes Federal-aid highway
program funding'' to the end of the sentence.
0
e. Revise paragraph (c).
0
f. Amend paragraph (d) by removing the words ``any additional VE
analysis'' and adding in its place ``additional VE analyses'' and by
adding the words ``where there is a high potential for the project to
benefit from a VE analysis'' at the end of the sentence.
0
g. Revise paragraph (e) to read.
0
h. Add paragraph (f).
The revisions and additions read as follows:
Sec. 627.5 Applicable projects.
* * * * *
(b) Applicable projects requiring a VE analysis shall include the
following:
(1) Each project located on the National Highway System (NHS) (as
specified in 23 U.S.C. 103) with an estimated total project cost of $50
million or more that utilizes Federal-aid highway funding;
(2) Each bridge project located on the NHS with an estimated total
project cost of $40 million or more that utilizes Federal-aid highway
funding;
(3) Any major project (as defined in 23 U.S.C. 106(h)), located on
or off of the NHS, that utilizes Federal-aid highway funding in any
contract or phase comprising the major project;
* * * * *
(c) An additional VE analysis is not required if, after conducting
a VE analysis required under this part, the project is subsequently
split into smaller projects in the design phase or the project is
programmed to be completed by the letting of multiple construction
projects. However, the STA may not avoid the requirement to conduct a
VE analysis on an applicable project by splitting the project into
smaller projects, or multiple design or construction projects.
* * * * *
(e) A VE analysis is not required for projects delivered using the
design build method of construction. While not required, FHWA
encourages STAs and local public authorities to conduct a VE analysis
on design build projects that meet the requirements identified in
subsection (b) of this section.
* * * * *
(f) A VE analysis is required on projects delivered using the
Construction Manager/General Contractor (CM/GC) method of contracting,
if the project meets the requirements identified in subsection (b) of
this section.
* * * * *
Sec. 627.7 [Amended]
0
5. Amend Sec. 627.7 by:
0
a. Amending paragraph (a) by removing the phrase ``conducted for all
applicable projects'' and inserting the phrase ``identified, conducted
and approved VE recommendations implemented on all applicable projects
(as defined in 627.5 of this part)''.
0
b. Amending paragraph (b) by adding the words ``prior to the project
being authorized for construction (as specified in 23 CFR 630.205).''
to the end of the sentence.
0
6. Amend Sec. 627.9 by:
0
a. Revising paragraph (c).
0
b. Redesignating paragraphs (d), (e), (f), (g) and (h) as paragraphs
(e), (f), (g), (h) and (i) respectively.
0
c. Adding a new paragraph (d) to read as follows:
The revisions and additions read as follows:
Sec. 627.9 Conducting a VE analysis.
* * * * *
(c) When a STA or local public agency chooses to conduct a VE
analysis for a project utilizing the design-build project delivery
method the VE analysis must be performed prior to the release of the
final Request for Proposals or other applicable solicitation documents.
* * * * *
(d) For projects delivered using the CM/GC contracting method, a VE
analysis is not required prior to the preparation and release of the
RFP for the CM/GC contract.
The VE analysis is required to be completed and approved
recommendations incorporated into the project plans prior to requesting
a construction price proposal from the CM/GC contractor.
[FR Doc. 2013-20315 Filed 8-28-13; 8:45 am]
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