AASHTO 2016 NTPEP Annual Meeting May 9, 2016 FHWA Policy Basics: Patented & Proprietary Products under 23 CFR 635.411 John Huyer, P.E. Contract Administration Group Office of Program Administration FHWA Office of Infrastructure

Patented & Proprietary Products - References Construction Program Guide Web Page – Patented & Proprietary Products: http://www.fhwa.dot.gov/construction/cqit/propriet.cfm Revised Q&A – 23 CFR 635.411: http://www.fhwa.dot.gov/programadmin/contracts/011106qa.cfm FHWA 11/30/2011 Memorandum: Information: Guidance on Patented and Proprietary Product Approvals http://www.fhwa.dot.gov/construction/contracts/111130.cfm FHWA 11/14/2012 Memorandum: ACTION: Patented & Proprietary Products: Database of FHWA Approvals http://www.fhwa.dot.gov/construction/contracts/pnpapprovals/121114.cfm Database - FHWA Approvals of Patented & Proprietary Products: http://www.fhwa.dot.gov/construction/contracts/pnpapprovals/approvals.cfm AASHTO APEL State Certified Products: http://apel.transportation.org/CertifiedProduct/Index

Competitive Bidding 23 U.S.C. 112 – “…construction … shall be performed by contract awarded by competitive bidding” Extends to the individual bid items in a contract. 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.

Competitive Bidding FHWA requires a justification to deviate from competitive bidding principles

Competitive Bidding Allowable deviations from competitive bidding principles include Other Methods (with FHWA approval) Special Experimental Project No. 14 Emergencies 23 CFR 635.411

23 CFR 635.411 Allows Federal Participation for Proprietary products when: Bid competitively with equally suitable non-proprietary products, or State certifies: Essential for synchronization, or No equally suitable alternative exists, or Experimental Use, or FHWA makes Public Interest Finding even though other suitable alternatives exist

Construction Proprietary Products issues can come up during construction!! If a Contract Change Order specifies a proprietary product, it must meet criteria in 23 CFR 635.411 for Federal participation. If criteria not met, funding for product must come from non-Federal sources (State DOT, Local Agency, etc.) 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.

Requirements Certifications Public Interest Findings Certified by State DOT No FHWA approval required FHWA can contest the certification State DOT option to accept Local Public Agency (LPA) certification Public Interest Findings FHWA Division Administrator approval required In some States, delegated to State DOT via Stewardship Agreement Can be redelegated to LPAs.

Certifications Must include: Should include supporting documentation. Statement by the appropriate State official certifying that the proprietary product is: Essential for synchronization, or That no equally suitable alternative exists Should include supporting documentation. Unique need being addressed Why other products cannot meet the need

Public Interest Finding Includes: Request from State DOT, including supporting information Approval by FHWA, which considers: Evaluation of equally acceptable products Benefit to public Additional costs, if any Duration and extent of approval Approval may be delegated to State DOT

November 30, 2011 Guidance http://www.fhwa.dot.gov/construction/contracts/111130.cfm Clarifies differences between Certifications and Public Interest Findings Clarifies approval authorities for States and FHWA Clarifies experimental use when participating in certain programs Provides transparency

Certifications vs. PIFs (Old process) Certification = Public Interest Finding No difference in process de facto process – Everything treated as a PIF State DOTs had to request FHWA approval to use proprietary products, even with certifications Problem – Process did not conform to language of regulation.

Certifications vs. PIFs (Old process) Industry Complaint: – Process too Restrictive Asserted that regulation kept innovative products from use Attempted legislative remedies that would have prevented FHWA from contesting certifications

Certifications vs. PIFs (New process) Certification ≠ PIF

Certifications vs. PIFs (New process) Guidance = regulation language Certification Essential for synchronization No suitable alternative Public Interest Finding Other alternatives exist

Experimental Use Proprietary products approved under special funding/evaluation programs do not require additional certifications or approvals under 23 CFR 635.411 Examples: Highways for Life (http://www.fhwa.dot.gov/hfl/ ) Every Day Counts (http://www.fhwa.dot.gov/everydaycounts/ ) Section 1304 of MAP-21 (http://www.fhwa.dot.gov/map21/qandas/qaipd.cfm ) 12. Do the requirements of 23 CFR 635.411 apply to products or processes that FHWA is promoting through special funding/evaluation programs (e.g. Highways for Life, Innovative Bridge Research and Deployment Program, Innovative Pavement Research and Deployment Program. etc)? No. Products which have been approved under special funding/evaluation programs do not need additional certifications or approvals under 23 CFR 635.411 for the use of patented or proprietary products. The FHWA's approval of funding for these evaluation projects is essentially a finding that it is in the public interest to proceed with the evaluation of these unique products. However, additional use of these products on other Title 23-funded projects that are not funded under these special funding/evaluation programs must comply with 23 CFR 635.411.

Experimental Use However, additional use of these products on other Title 23-funded projects not funded under these special funding/evaluation programs must comply with 23 CFR 635.411. 12. Do the requirements of 23 CFR 635.411 apply to products or processes that FHWA is promoting through special funding/evaluation programs (e.g. Highways for Life, Innovative Bridge Research and Deployment Program, Innovative Pavement Research and Deployment Program. etc)? No. Products which have been approved under special funding/evaluation programs do not need additional certifications or approvals under 23 CFR 635.411 for the use of patented or proprietary products. The FHWA's approval of funding for these evaluation projects is essentially a finding that it is in the public interest to proceed with the evaluation of these unique products. However, additional use of these products on other Title 23-funded projects that are not funded under these special funding/evaluation programs must comply with 23 CFR 635.411.

Transparency FHWA posts only FHWA-approved “Public Interest Findings” and Experimental Products on its website Sortable by: State Basis of approval Product name Product type Extent (project, statewide, region/district, etc.) Approval date Expiration Date

FHWA Approvals of Patented and Proprietary Products http://www. fhwa FHWA Approvals of Patented and Proprietary Products http://www.fhwa.dot.gov/construction/contracts/pnpapprovals/approvals.cfm FHWA Headquarters Contact: John Huyer, 651-291-6111

Transparency (as of 10/13/2015) FHWA posts ONLY FHWA approvals of Proprietary Products on FHWA website Total = 566 Experimental products = 34 Public Interest Findings = 532

Transparency (as of 10/13/2015) Other Lists of Specified Proprietary Products: APEL Certified Product Listing website Certifications, Experimental Products, & PIFs = 43 (AZ, CO, CT, ME, MD, MT, NY, OH) State DOT websites Certifications, Experimental Products, & PIFs = 370 (AK, CO, IN, MD, MO, MT, NC, OR, TN, WA, WI, WY) Not on any website Certifications, Experimental Products, & PIFs = 480 Total Products not listed on FHWA web site = 893 Total Products from all sources = 1459

Transparency FHWA recommends that State DOTs post their Proprietary Products to either: APEL Certified Product Listing website (http://apel.transportation.org/CertifiedProduct/Index ); or A publicly accessible website (State DOT website)

Transparency FHWA cannot require that State DOTs post their Proprietary Product information to either: The APEL State Certified Products website at http://apel.transportation.org/CertifiedProduct/Index ; or to A publicly accessible website (State DOT website) Unless FHWA successfully changes the regulation at 23 CFR 635.411 through the rule making process.

Transparency AASHTO APEL Site – State Certified Products 8 State DOTs (AZ, CO, CT, ME, MD, MT, NY, OH) http://apel.transportation.org/CertifiedProduct/Index

Transparency State DOT Web Sites (12) AK, CO, IN, MD, MO, MT, NC, OR, TN, WA, WI, WY Alaska - Public Interest Findings, Approved for Federal Funding Colorado - Findings in the Public Interest Indiana: Programmatic Proprietary Material Approvals Maryland: State of Maryland Patented and Proprietary Products Missouri - Proprietary Item Approvals Montana - Public Interest Findings and Certifications North Carolina - NCDOT Approved Proprietary Products Oregon - Office of Project-Letting Public Interest Findings Tennessee DOT - Proprietary Products Washington State - Current Blanket Proprietary Approvals Wisconsin – Approved Statewide Proprietary Products Wisconsin – Log Sheet of Patented or Proprietary Products Wyoming - Proprietary Products

Patented & Proprietary Products 23 CFR 635.407 vs 23 CFR 635.411 23 CFR 635.407(d) Use of materials made available by a public agency Manufactured Material Material acquired on a competitive basis Commodity Contract Requires use of State DOT-provided Material State DOT Develops Public Interest Finding, FHWA Division Concurs Federal eligible cost ≤ cost to State DOT (include this in contract) May place State DOT in competition with the private sector 23 CFR 635.411 Material or Product Selection Material acquired as a part of a highway construction contract under 23 USC 112 and 23 CFR 635 Subpart D Unit price includes cost to construct Federal Participation for Patented or Proprietary Products Competitive Bidding Certification Experimental Use Public Interest Finding

Questions and Comments

For further information please contact: John Huyer, P.E. FHWA Contract Administration Group (HIPA-30) (651)291-6111 John.Huyer@dot.gov The FHWA Division Office in your state