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Highway contract lettings

The State of Iowa will receive approximately $358 million in highway funding through the American Recovery and Reinvestment Act (ARRA) by federal formula, with approximately $120 million suballocated to the local metropolitan planning organizations (MPOs) and regional planning affiliates (RPAs). To expedite use of the funding, the Iowa DOT and local governmental agencies will be offering more expansive highway contract lettings this year.

The first letting containing ARRA-funded projects was held Feb. 17, 2009, the day President Obama signed the Act. The second letting that included ARRA-funded projects was held March 17, 2009; and a third held March 31, 2009.

The balance of state highway projects totally or partially funded by ARRA monies will be included in lettings scheduled for June 16, 2009, and July 21, 2009. This means all state highway projects will begin during the 2009 construction season.

Local projects, which are selected by the MPOs and RPAs, will be let as quickly as possible. The last bid letting opportunity for local projects is January 2010; however, it is anticipated that the majority of the work will be let by the end of July 2009.

Adjustments to bidder prequalification requirements

The State of Iowa will be receiving approximately $358 million in highway funds from the ARRA. This is in addition to the work already programmed and carried over from 2008. Completing this volume of work in the time allowed will be a great challenge to the contracting industry. To increase the opportunity for success and help increase competitive bidding, the Iowa DOT will be temporarily relaxing some of the prequalification requirements in Article 1102.01 and 1102.04 of the Standard Specifications.

Contractors may be allowed to bid in work types that they are not currently prequalified. The financial maximum prequalification amount may be removed for firms with CPA-reviewed statements or CPA-audited statements. Contractors may be awarded contract amounts in excess of their current maximum prequalification rating. Contractors will be provided written notice of any award limit imposed by the Iowa DOT.

This will not relieve the contractor of any other contract requirements. The prime contractor must still self perform the required minimum contract percentage, and must possess all necessary licenses, certificates and resources. A proposal guaranty, performance bond and insurance are still required. The bidder may be required to furnish evidence to the satisfaction of the Iowa DOT of their ability to perform and complete the work before being allowed to bid. The Iowa DOT retains the right to determine valid eligible bidders.

These changes will be implemented as a proposal note on all projects beginning in the April 21, 2009, letting.

DBE regulations

Section 1101(b), Disadvantaged Business Enterprises, of Public Law 109-59, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) applies to ARRA-funded projects. Except to the extent that the U.S. Secretary of Transportation determines otherwise, not less than 10 percent of the amounts made available for any highway program shall be expended through small business concerns owned and controlled by socially and economically disadvantaged individuals. To learn more about the DBE certification process contact the DOT’s Office of Contracts’ EEO section at 515-239-1422.

Due to the significant amount of federal funding from the Recovery Act, it may be difficult for contractors to achieve the disadvantaged business enterprise (DBE) goals on some projects. Bidders having difficulty locating DBE firms willing to submit a quote on a proposal should contact the Iowa DOTís Office of Contracts for assistance.

Bidders are reminded they are required to list on Form 102115 (or the DBE folder in Expedite) all DBE firms contacted, whether they received a quote and if it was used. Contractors who have a completed Form 102115 can provide more information to be considered in the Administrative Reconsideration of Project Specific Good Faith Effort process in Standard Specifications, Article 1102.17, D, 3, d.

Buy American

Section 1605 of the American Recovery and Reinvestment Act of 2009 requires use of American iron, steel and manufactured goods for the construction alteration, maintenance, or repair of a public building or public work, unless the federal department or agency involved finds that at least one of the following conditions applies:

  • Applying this subsection would be inconsistent with the public interest.
  • Iron, steel and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available qualities and of a satisfactory quality.
  • Inclusion of iron, steel and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent.

If the head of the federal department or agency determines that it is necessary to waive this provision based on their findings, they shall publish in the Federal Register a detailed written justification as to why the provision is being waived.

This section of the law shall be applied in a manner consistent with United States obligations under international agreements.

Wage rate requirements

Section 1606 of the American Recovery and Reinvestment Act of 2009 requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the federal government pursuant to the Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code, the Davis-Bacon Act.

Job creation goals and reporting

The Iowa DOT and other recipients of federal assistance must submit periodic reports to the respective federal funding agencies to comply with the accountability and transparency provisions of the Act. Some of the reporting provisions will require collection of information from contractors, including the number of direct, on-project jobs created or sustained by the federal funds, and to the extent possible, the number of indirect jobs created and sustained. Contract documents will specify special reporting requirements.