Construction and Maintenance--Promoting Innovation in Use of Patented and Proprietary Products

Construction and Maintenance--Promoting Innovation in Use of Patented and Proprietary Products

Construction and Maintenance--Promoting Innovation in Use of Patented and Proprietary Products

Brandye L. Hendrickson
Federal Highway Administration
14 November 2018

[Federal Register Volume 83, Number 220 (Wednesday, November 14, 2018)]
[Proposed Rules]
[Pages 56758-56763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24687]

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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 630 and 635

[FHWA Docket No. FHWA-2018-0036]
RIN 2125-AF84

Construction and Maintenance--Promoting Innovation in Use of
Patented and Proprietary Products

AGENCY: Federal Highway Administration (FHWA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: This rulemaking would provide greater flexibility to States to
use proprietary or patented materials in Federal-aid projects. The FHWA
is seeking comment on two alternate co-proposals to help advance this
objective: First, FHWA proposes to amend and replace the requirements
relating to patented and proprietary product approvals with a more
flexible general requirement that enhances fairness, open competition,
and transparency in the product selection process. Alternatively, the
agency proposes rescinding the requirements, thereby encouraging
further innovation in the development of new highway transportation
technology and methods, as well as potentially reducing costs.

DATES: Comments must be received on or before January 14, 2019. Late-
filed comments will be considered to the extent practicable.

ADDRESSES: To ensure that you do not duplicate your docket submissions,
please submit them by only one of the following means:
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, West Building Ground Floor
Room W12-140, Washington, DC 20590;
Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE, Washington, DC 20590, between 9 a.m. 5 p.m.,
Monday through Friday, except Federal holidays. The telephone number is
(202) 366-9329.
Instructions: You must include the agency name and docket
number or the Regulatory Identification Number (RIN) for the rulemaking
at the beginning of your comments. All comments received will be posted
without change to www.regulations.gov, including any personal
information provided.

FOR FURTHER INFORMATION CONTACT: Mr. John Huyer, Office of
Preconstruction, Construction and Pavements, (651) 291-6111 or, Mr.
William Winne, Office of the Chief Counsel, (202) 366-1397, Federal
Highway Administration, 1200 New Jersey Avenue SE, Washington, DC
20590. Office hours are from 8 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.
Electronic submission and retrieval help and guidelines are available
on the website. It is available 24 hours each day, 365 days a year.
Please follow the instructions. An electronic copy of this document may
also be downloaded from the Office of the Federal Register's home page
at: http://www.archives.gov/federal-register and the Government
Publishing Office's web page at: http://www.gpo.gov/fdsys.

Background

There are differing practices across the United States on whether
government entities may specify a patented material, article, or
process in the letting of public works contracts through competitive
bidding.\1\ Some jurisdictions prohibit the practice altogether on the
grounds that it would inhibit competition, particularly where only one
contractor can provide the specified material.\2\ Other jurisdictions
allow the specification as long as the use of any other article equally
as suitable is also allowed.\3\ The Federal government's regulations on
direct procurement and the uniform regulations on Federal financial
assistance take the latter approach.\4\ In the majority of States,
however, the practice of specifying a patented product in government
contracts is allowed.\5\
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\1\ See generally 10 McQuillin Mun. Corp. Sec. 29.42 (3d ed.).
\2\ Examples include Illinois, Indiana, Kentucky, Louisiana,
Massachusetts, and Wisconsin.
\3\ Examples include California, Iowa, New Jersey, and New York.
\4\ See 48 CFR 52.211-6 and 2 CFR 200.319(a)(6).
\5\ Examples include Arizona, Colorado, Connecticut, Florida,
Idaho, Kansas, Maryland, Michigan, Montana, Nebraska, Ohio,
Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, and
Washington.
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The Federal-aid Road Act of 1916 (1916 Act) \6\ was silent about
patented and proprietary products but provided that Federal-aid funded
State highway construction was ``subject to the inspection and approval
of the Secretary of Agriculture, and in accordance with the rules and
regulation made pursuant to this Act.'' \7\
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\6\ 1916 Act, ch. 241, 39 Stat. 355.
\7\ The Office of Public Roads was the predecessor agency of
FHWA and was part of the Department of Agriculture in 1916.
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Accordingly, regulations implementing the 1916 Act were issued on
September 1, 1916. Regulation 8, Section 4 of those rules provided,
``No part of the money apportioned under the act shall be used,
directly or indirectly, to pay, or to reimburse a State, county, or
local subdivision for the payment of any premium or royalty on any
patented or proprietary material, specification, process, or type of
construction, unless purchased or obtained on open actual competitive
bidding at the same or a less cost than

[[Page 56759]]

unpatented articles or methods equally suitable for the same purpose.''
This regulation connected competitive bidding and lower cost to the
restriction on the specification of proprietary products in Federal-aid
contracts and has been a requirement of the Federal-aid highway program
since its issuance.
In the Federal Highway Act of 1938 (1938 Act), Congress established
in statute a competition standard by requiring the Secretary to
approve, in connection with federally aided State highway construction
projects, ``only such methods of bidding and such plans and
specifications of highway construction . . . as will be effective in
securing competition and conducive to safety, durability, and economy
of maintenance.'' \8\ This legislation preceded the current statute
codified at 23 U.S.C. 112(a).
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\8\ Public Law 75-584, 12, 52 Stat. 633, 636 (1938).
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During the debate related to the enactment of Section 13 of the
1938 Act, Congressman Whittington expressly tied the rule on
proprietary products to the newly enacted statutory requirement for
competitive bidding. ``It says there shall be competitive bidding. This
means that all types of roads conducive to safety, durability, and
economy will be considered. This means that only plans, specifications,
and methods that provide for competition will be approved. All will be
given a square deal. No special method, no special material will be
selected to the exclusion of other materials.'' \9\
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\9\ Daily Congressional Record, May 6, 1938, pp. 6383-6.
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In 1954, Congress explicitly required competitive bidding, while
also providing a public interest exception, when it mandated that
federally funded State highway construction work be ``performed by
contract awarded by competitive bidding under such procedures as may by
regulations be prescribed by the Secretary . . . unless the Secretary .
. . shall affirmatively find that, under the circumstances related to a
given project, some other method is in the public interest.'' \10\ This
legislation preceded the current statute codified at 23 U.S.C.
112(b)(1).
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\10\ Federal-aid Highway Act of 1954, Public Law 83-350, 17(a),
68 Stat. 70, 75 (1954).
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Over the years, the regulation was clarified through various policy
and guidance memoranda, and subsequent Federal Register Notices,
including 25 FR 4162 published on May 11, 1960. The regulatory language
has received only relatively minor changes since that time.
The current regulation at 23 CFR 635.411 seeks to promote
competitive bidding by prohibiting FHWA participation in the cost of
patented or proprietary products or materials except when: (1) Such
patented or proprietary item is purchased or obtained through
competitive bidding with equally suitable unpatented items; (2) a State
Department of Transportation (State DOT) certifies either that such
patented or proprietary item is essential for synchronization with
existing highway facilities, or that no equally suitable alternate
exists; or (3) a patented or proprietary item is used for research or
for a distinctive type of construction on relatively short sections of
road for experimental purposes. In addition, and also under the current
regulation, States may specify a material or product based on a showing
of public interest. Without using one of the exceptions described
above, the State DOT may choose to use a particular patented or
proprietary product, but FHWA funds may not participate in its cost.
Patented and proprietary products are used widely on Federal-aid
projects, through competition and where State DOTs apply one of the
exceptions provided in 23 CFR 635.411.
Many States have been delegated authority under 23 U.S.C. 106 to
approve public interest findings without the direct involvement of
FHWA. States retain the ability to apply the other exceptions
(certification, research) provided under 23 CFR 635.411.
Following its promulgation shortly after the inception of the
Federal-aid road program in 1916, and even with the availability of
exceptions, various stakeholders have criticized the regulation in 23
CFR 635.411 and its predecessors. Since 2005, FHWA has received
inquiries and some expressions of concern from public agencies and
industry about the perceived negative impact of the patented and
proprietary products requirements in 23 CFR 635.411 on the development
and use of new materials, equipment, or methods. Some claim the
regulation has resulted in the unintended consequence of prohibiting
the specification of innovative products on Federal-aid projects
because the products were patented or proprietary. Others claim the
requirements of 23 CFR 635.411 were unclear, were not being implemented
uniformly, and resulted in barriers to the use of innovation in
material and product selection on highway projects.
On December 1, 2017, the American Road and Transportation Builders
Association (ARTBA) submitted comments to the DOT's Federal Register
Notice soliciting Regulatory Review ideas (82 FR 45750, October 2,
2017) (docket ID: DOT-OST-2017-0069-2774). On March 27, 2018, ARTBA
submitted a Petition for Rulemaking to repeal the patented and
proprietary materials requirements in 23 CFR 635.411. The ARTBA
comments and Petition for Rulemaking are available for review on the
docket for this rulemaking.

General Discussion of the Proposed Action

Ensuring competition and requiring low bid contracting in the
Federal-aid highway program remain statutory duties of the Secretary.
Statutory text codified at 23 U.S.C. 112(a) provides, ``the Secretary
shall require such plans and specifications and such methods of bidding
as shall be effective in securing competition.'' The statute also
mandates that the Secretary ensure Federal-aid projects are performed
pursuant to a contract awarded through competitive bidding to the
lowest responsible bidder under 23 U.S.C. 112(b)(1). The regulation at
23 CFR 635.411 was promulgated to implement the statutory requirement
to secure competition.
The existing regulation could do more to provide States further
opportunity to consider the use of innovative, proprietary, or patented
materials in Federal-aid projects. The proposals contained in this NPRM
would promote the benefits of innovation and new technology and afford
the flexibility necessary to take advantage of technological
advancements in highway transportation. Such added flexibility may also
provide State DOTs an advantage by potentially obtaining highway
materials or products at a lower price. Specifying a patented article
in the solicitation materials may not, by itself, limit competition.
Rather, this practice might encourage various bidders to offer lower
prices in the competition to deliver needed materials and ultimately
lead to a more cost effective use of Federal funds in the long-term.
The FHWA believes most State DOTs utilize new product evaluation
processes and approved product lists that provide fair and transparent
procedures for the evaluation, selection, and use of materials,
including patented and proprietary products.
State DOTs are responsible for the effective and efficient use of
Federal-aid funds, subject to the requirements of Federal law. The FHWA
believes, absent the current Federal patented and proprietary products
requirements, State DOTs may implement material selection procedures
that ensure fair and open competition while allowing for, and
encouraging, innovation. Nevertheless,

[[Page 56760]]

the statutory requirements of 23 U.S.C. 112 for competition and
competitive bidding continue to apply to Federal-aid assisted State
contracts.
Over the past century, States have assumed greater responsibility
for Federal-aid project approval and oversight. For example, States may
assume responsibility for ``design, plans, specifications, estimates,
contract awards, and inspection of projects'' on the National Highway
System (NHS), including the Interstate System, pursuant to 23 U.S.C.
106(c)(1). For projects that are not on the NHS, the States have
assumed responsibility for those activities unless doing so would be
inappropriate under 23 U.S.C. 106(c)(2). Providing State DOTs greater
flexibility in the selection of products and materials used in Federal-
aid projects may also be consistent with the provisions of 23 U.S.C.
106(c).
Put in context, and pursuant to 23 U.S.C. 145, the Federal-aid
highway program is a federally-assisted, State-administered program. To
potentially reduce costs and allow greater flexibility for the States
in considering innovative products or materials for use in Federal-aid
projects, FHWA proposes to amend the requirements at 23 CFR 635.411
related to patented and proprietary product approval. The FHWA seeks
comment on two proposals: (1) Amending section 635.411 to allow States
to certify compliance with the fair and open competition requirements
of 23 U.S.C. 112 in selecting materials in Federal-aid projects; or
alternatively, (2) rescinding parts of section 635.411.
Neither proposal would alter any requirements in the Manual on
Uniform Traffic Control Devices found in 23 CFR part 655, subpart F.

Section-by-Section Discussion

Option 1: State Certification and Procedural Requirements

Under Option 1, the existing regulatory requirements of 23 CFR
635.411(a)-(e) are being proposed for removal. The FHWA proposes
replacing them with general certification requirements in new
paragraphs 23 CFR 635.411(a) and 23 CFR 630.112(c)(6) to ensure
competition in the selection of materials and products. This change
would require a State DOT to: (1) Implement procedures and
specifications that provide for fair, open, and transparent competition
awarded only by contract to the lowest responsive bid submitted by a
responsible bidder pursuant to 23 U.S.C. 112; and (2) certify that it
adheres to those procedures and specifications. As mentioned above,
FHWA believes that many States already have procedures in place that
would comply with this proposed requirement. The requirement of 23 CFR
635.411(f) would be retained because it was implemented to fulfill the
mandate of section 1525 of the Moving Ahead for Progress in the 21st
Century Act (MAP-21). This section is not concerned with patented and
proprietary products, but with material types for culverts and storm
sewers.

Option 2: Repeal of 23 CFR 635.411(a)-(e)

Alternatively, FHWA proposes to rescind the current proprietary and
patented materials requirements contained in current paragraphs (a)
through (e) and change the title of section 635.411 to ``Culvert and
Storm Sewer Material Types.'' Under its new title, the former paragraph
(f) of section 635.411 would be retained to fulfill the mandate of
section 1525 of MAP-21 for States to retain autonomy for the selection
of culvert and storm sewer material types.

Request for Comment

The FHWA is seeking comment on these alternative proposals,
including the potential effects of the alternative proposals for the
patented and proprietary products rule. Therefore, comments are invited
with respect to the following questions:
(1) What are the challenges in incorporating patented and
proprietary products into projects under the current regulatory
process?
(2) How does the current regulation hinder the incorporation of
innovative or cost-effective safety and other products into projects?
(3) How does the current regulation hinder the incorporation of
proprietary products into projects?
(4) How would the proposals support or deter deployment of
innovative or cost-effective products on projects? Could the proposals
result in any unintended consequences that might deter such deployment?
(5) How could the proposals to allow specification of patented and
proprietary products be implemented consistent with existing
competition and low bid requirements?
(6) If FHWA rescinds the rule, what standards should FHWA rely on
to determine if a State's specification of a patented or proprietary
product violates the competition mandate in 23 U.S.C. 112? For example,
should FHWA rely on the standard found in the Office of Management and
Budget's (OMB) Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards at 2 CFR 200.319(a)(6)? OMB's
regulations at Part 200 provide a governmentwide framework for grants
management, and 2 CFR 200.319(a)(6) describes seven situations
considered to be restrictive of competition.\11\
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\11\ The regulations at 2 CFR 200.319(a)(6) describes some
situations considered to be restrictive of competition, including:
(1) Placing unreasonable requirements on firms in order for them to
qualify to do business; (2) requiring unnecessary experience and
excessive bonding; (3) noncompetitive pricing practices between
firms or between affiliated companies; (4) Noncompetitive contracts
to consultants that are on retainer contracts; (5) organizational
conflicts of interest; (6) specifying only a ``brand name'' product
instead of allowing ``an equal'' product to be offered and
describing the performance or other relevant requirements of the
procurement; and (7) any arbitrary action in the procurement
process.
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(7) What positive or negative consequences might result from
implementation of the proposals? Could the proposals result in
potential costs or cost savings? If so, please describe the costs or
cost savings and provide data to support these estimates. What might be
the effects of the proposals on transparency in the materials selection
process?
(8) What positive or negative consequences might affect small
businesses that do not have the same marketing resources as larger
firms?
(9) What differences in effects and compliance, if any, could
result from the two alternative proposals?
(10) What is the difference between the number of proprietary
products used on State and Federal-funded projects?
(11) Do the States follow rules or processes on State-funded
projects similar to the Federal process embodied in section 635.411?

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), Executive Order
13563 (Improving Regulation and Regulatory Review), Executive Order
13771 (Reducing Regulations and Controlling Regulatory Costs), and DOT
Regulatory Policies and Procedures

The FHWA has determined that this action would not be a significant
regulatory action within the meaning of Executive Order (E.O.) 12866,
and within the meaning of the U.S. Department of Transportation's
regulatory policies and procedures. This action complies with EOs
12866, 13563, and 13771 to improve regulation. The FHWA anticipates
that the economic impact of this rulemaking would be minimal. The FHWA
anticipates that the proposed rule would not adversely affect, in a
material way, any sector of the economy. In addition, these changes
would not interfere with any action

[[Page 56761]]

taken or planned by another agency and would not materially alter the
budgetary impact of any entitlements, grants, user fees, or loan
programs.
Although FHWA has determined that this action would not be a
significant regulatory action, this proposed rule is expected to be an
E.O. 13771 deregulatory action. This proposal could generate cost
savings that are applicable to offsetting the costs associated with
other regulatory actions as required by E.O. 13771. The FHWA has
determined the cost savings of both proposed options are nearly the
same. These cost savings, measured in 2018 dollars, are expected to be
$313,848 per year.
The cost savings resulting from this proposed regulatory action
result from reduced administrative burden associated with the efforts
by the States and FHWA related to the existing methods for approving
patented and proprietary materials.
Currently there are three methods available to approve specific
patented and proprietary products for use on Federal aid highway
construction projects: \12\
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\12\ https://www.fhwa.dot.gov/programadmin/contracts/011106qa.cfm#_Hlk307505978.
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1. Certification: A certification is the written and signed
statement of an appropriate contracting agency official certifying that
a particular patented or proprietary product is either:
a. Necessary for synchronization with existing facilities; or
b. A unique product for which there is no equally suitable
alternative.
2. Experimental Products: If a contracting agency requests to use a
proprietary product for research or for a distinctive type of
construction on a relatively short section of road for experimental
purposes, it must submit an experimental product work plan for review
and approval. The work plan should provide for the evaluation of the
proprietary product, and where appropriate, a comparison with current
technology.
3. Public Interest Finding (PIF): A PIF is an approval by the FHWA
Division Administrator, based on a request from a contracting agency
that it is in the public interest to allow the contracting agency to
require the use of a specific material or product even though other
equally acceptable materials or products are available.
To estimate the cost savings from removing the need for the above
categories of approvals, FHWA estimated the number of new approvals
that would be generated in the future in the above categories if the
rule does not change as a baseline scenario and compared it to a
scenario with the proposed rule. The estimated number of new approvals
per year is multiplied by the estimated number of hours required to
process the documentation for that specific type of approval (including
conducting analysis and documenting methods and results) by the
appropriate labor cost (wage rate multiplied by a factor to account for
employer provided benefits). Currently, the work related to approvals
is conducted by both FHWA and State agencies because, in some cases,
FHWA has delegated authority to States via stewardship and oversight
agreements for such issues. In addition to the time required to process
the approvals, time is also required by FHWA to review the resulting
documentation. Finally, both of those activities require a small time
allowance for management of the process.
Under the proposed rule, the costs associated with approvals for
patented and proprietary materials may not be completely removed. This
is because a number of States are known (according to information from
FHWA Division offices) to have their own laws or policies that are
similar to the FHWA requirements. Absent other information, this
analysis assumes those State laws or policies would remain in place
even after an FHWA rule change. For those States, this analysis assumes
that the total number of hours associated with processing and managing
approvals would remain unchanged but that the work would be conducted
solely by State agency staff (rather than a mix of State and FHWA staff
as is assumed in the baseline calculations) and that time spent on FHWA
review would no longer be needed.
In addition to the cost savings that have been quantified here,
there may be additional positive impacts from the rulemaking related to
supporting the adoption of patented and proprietary products. Although
FHWA has undertaken various efforts to grant States the flexibility to
use such products, to the extent that the current rules and guidance
discourage their use, the proposed rule removes those barriers. In the
short term, this could lead to States paying more for proprietary and
patented products if certain products are specified in Federal-aid
contracts. However, ARTBA, in its petition for repeal, states that such
products could ``save lives, minimize congestion, and otherwise improve
the quality of our nation's highways.'' \13\ Thus, there may be
benefits associated with greater adoption of existing products. An
increase in the willingness to adopt patented and proprietary products
may have secondary impacts and spur additional innovation if product
developers perceive there to be a larger market for new products. Those
potential benefits from additional innovation have not been quantified
in this analysis.
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\13\ ARTBA, ``Petition for Rulemaking to Repeal the Proprietary
and Patented Products Rule 23 CFR 635.411'', March 27, 2018.
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The public is invited to comment and provide information related to
any aspect of this estimation of cost savings.

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 action on
small entities and has determined that the action is not anticipated to
have a significant economic impact on a substantial number of small
entities. The proposed amendment addresses obligation of Federal funds
to States for Federal-aid highway projects. As such, it affects only
States and States are not included in the definition of small entity
set forth in 5 U.S.C. 601. Therefore, the Regulatory Flexibility Act
does not apply, and FHWA certifies that the proposed action will not
have a significant economic impact on a substantial number of small
entities.

Unfunded Mandates Reform Act of 1995

This proposed rule would not impose unfunded mandates as defined by
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48,
March 22, 1995) as it will not result in the expenditure by State,
local, Tribal governments, in the aggregate, or by the private sector,
of $155 million or more in any 1 year (2 U.S.C. 1532 et seq.).
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)

This proposed action has been analyzed in accordance with the
principles and criteria contained in E.O. 13132 dated August 4, 1999,
and FHWA has determined that this proposed action would not have a
substantial direct effect or sufficient federalism implications on the
States. The FHWA has also determined that this proposed action would
not preempt any State law or regulation or affect the States' ability

[[Page 56762]]

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 E.O.
12372 regarding intergovernmental consultation on Federal programs and
activities apply to this program.

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501,
et. seq.), Federal agencies must obtain approval from OMB for each
collection of information they conduct, sponsor, or require through
regulations. The FHWA has determined that the proposed rule does not
contain collection of information requirements for the purposes of the
PRA. Any action that might be contemplated in subsequent phases of this
proceeding will be analyzed for the purpose of the Paperwork Reduction
Act for its impact.

National Environmental Policy Act

The FHWA has analyzed this action for the purpose of the National
Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.),
and has determined that this action would not have any effect on the
quality of the environment and meets the criteria for the categorical
exclusion at 23 CFR 771.117(c)(20).

Executive Order 12630 (Taking of Private Property)

The FHWA has analyzed this proposed rule under E.O. 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights. The FHWA does not anticipate that this proposed action
would affect a taking of private property or otherwise have taking
implications under E.O. 12630.

Executive Order 12988 (Civil Justice Reform)

This action meets applicable standards in sections 3(a) and 3(b)(2)
of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate
ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

We have analyzed this rule under E.O. 13045, Protection of Children
from Environmental Health Risks and Safety Risks. The FHWA certifies
that this proposed action would not cause an environmental risk to
health or safety that might disproportionately affect children.

Executive Order 13175 (Tribal Consultation)

The FHWA has analyzed this action under E.O. 13175, dated November
6, 2000, and believes that the proposed action 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 laws. The proposed rulemaking
addresses obligations of Federal funds to States for Federal-aid
highway projects and would not impose any direct compliance
requirements on Indian Tribal governments. Therefore, a Tribal summary
impact statement is not required.

Executive Order 13211 (Energy Effects)

We have analyzed this action under E.O. 13211, Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use. The FHWA has determined that this is not a significant energy
action under that order since it is not a significant regulatory action
under E.O. 12866 and is not likely to have a significant adverse effect
on the supply, distribution, or use of energy. Therefore, a Statement
of Energy Effects is not required.

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

23 CFR Part 630

Grant programs, transportation, highways and roads.

23 CFR Part 635

Construction materials, Design-build, Grant programs,
transportation, highways and roads.

Issued on: November 6, 2018.
Brandye L. Hendrickson,
Deputy Administrator, Federal Highway Administration.

Option 1

In consideration of the foregoing, FHWA proposes to amend title 23,
Code of Federal Regulations, parts 630 and 635 as follows:

PART 630--PRECONSTRUCTION PROCEDURES

Subpart A--Project Authorization and Agreements

0
1. The authority citation for part 630 continues to read as follows:

Authority: 23 U.S.C. 106, 109, 112, 115, 315, 320, and 402(a);
Sec. 1501 and 1503 of Pub. L. 109-59, 119 Stat. 1144; Pub. L. 105-
178, 112 Stat. 193; Pub. L. 104-59, 109 Stat. 582; Pub. L. 97-424,
96 Stat. 2106; Pub. L. 90-495, 82 Stat. 828; Pub. L. 85-767, 72
Stat. 896; Pub. L. 84-627, 70 Stat. 380; 23 CFR 1.32 and 49 CFR
1.48(b), and Pub. L. 112-141, 126 Stat. 405, section 1303.

0
2. Amend Sec. 630.112 by adding paragraph (c)(6) as follows:
* * * * *
(c) * * *
(6) Competition in Products Certification--By signing the project
agreement, the State Department of Transportation (State DOT) agrees to
abide by and certify that its product evaluation and selection process,
and the specifications used for Federal-aid projects, will provide for
fair, open, and transparent competition awarded only by contract to the
lowest responsive bid submitted by a responsible bidder pursuant to 23
U.S.C. 112. By signing the project agreement, the State DOT is
providing the certification required in 23 CFR 635.411(a).
* * * * *

PART 635--CONSTRUCTION AND MAINTENANCE

Subpart D--General Material Requirements

0
1. The authority citation for part 635 continues to read as follows:

Authority: Sections 1525 and 1303 of Pub. L. 112-141, Sec. 1503
of Pub. L. 109-59, 119 Stat. 1144; 23 U.S.C. 101 (note), 109, 112,
113, 114, 116, 119, 128, and 315; 31 U.S.C. 6505; 42 U.S.C. 3334,
4601 et seq.; Sec. 1041(a), Pub. L. 102-240, 105 Stat. 1914; 23 CFR
1.32; 49 CFR 1.85(a)(1).

0
2. Revise Sec. 635.411 to read as follows:

Sec. 635.411 Material or product selection.

(a) As a condition of receiving Federal-aid funds, the State
Department of Transportation (State DOT) certifies that its product
evaluation process and the specifications used for Federal-aid projects
will provide for fair, open, and transparent competition pursuant to 23
CFR 630.112(c)(6).
(b) State DOTs shall have the autonomy to determine culvert and
storm sewer material types to be included in the construction of a
project on a Federal-aid highway.

[[Page 56763]]

Option 2

In consideration of the foregoing, FHWA proposes to revise title
23, Code of Federal Regulations, part 635 as follows:

PART 635--CONSTRUCTION AND MAINTENANCE

Subpart D--General Material Requirements

0
1. The authority citation for part 635 continues to read as follows:

0
2. Revise Sec. 635.411 to read as follows:

Sec. 635.411 Culvert and Storm Sewer Material Types.

State Departments of Transportation (State DOTs) shall have the
autonomy to determine culvert and storm sewer material types to be
included in the construction of a project on a Federal-aid highway.

[FR Doc. 2018-24687 Filed 11-13-18; 8:45 am]
BILLING CODE 4910-22-P