The Federal Highway Administration (FHWA) sent a letter on Jan. 8 to its state field offices directing them to comply with a provision (section 192) in the fiscal year 2016 Omnibus Appropriations Act –signed into law in December 2015 – requiring states to certify that three conditions have been satisfied on each federally assisted highway project before it can allow the use of contract provisions that specify a “geographic, economic, or any other hiring preference.” The three conditions states must certify are present before using a local hire preference include:
- A pool of readily available but unemployed individuals possessing the knowledge, skill, and ability to perform the work required to fulfill the contract who live in the jurisdiction;
- The contractor will not be forced to displace any of its existing employees in order to satisfy such hiring preference; and
- Any increase in the cost of labor, training, or delays resulting from the use of such hiring preference does not delay or displace any transportation project in the applicable Statewide Transportation Improvement Program or Transportation Improvement Program.
AGC worked with the Senate and House appropriations committees to have this provision included in the omnibus appropriations legislation. The U.S. Department of Transportation has traditionally denied states the ability to use local hire requirements on federally assisted projects. Last year, however, DOT instituted a pilot program under its existing Special Experimental Project No. 14 authority, allowing states to use local hire requirements on an experimental basis and issued a notice of proposed rulemaking to allow the use of local hire requirements permanently in the future. AGC submitted extensive comments and a legal brief on the proposed rule. The Department has not finalized that rulemaking but has moved forward with the pilot program. Six states have already requested permission under the pilot program to use local hire requirements on specific projects.
The Highway Administration’s Jan. 8 notice specifies that any requests to use local labor hiring preferences as part of the pilot project that did not receive FHWA’s construction authorization before Dec. 18, 2015 are subject to the certification requirements detailed above. All future requests in fiscal year 2016 must provide a project-specific certification that complies with section 192 certification requirements in conjunction with their work plan.
The Highway Administration will soon be posting certification language and a revised sample work plan format for states to use to meet these requirements on its Special Experimental Project No. 14 - Local Labor Hiring Pilot Program web site.
For more information, please contact Brian Deery at deeryb@agc.org or (703) 837-5319.