DOT Pilot Program

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DOT Pilot Program 2016-07-27T11:48:33+00:00
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DOT Local Hiring Pilot Program Raises Serious Concerns

by Nick Goldstein

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Geography could trump safety and good business sense under a local hiring preference proposal from the U.S.
Department of Transportation (DOT).

The department’s one-year pilot program, launched March 6, allows state and local transportation agencies to utilize geography-based hiring preferences on federal-aid highway and transit projects. For now, the preferences are optional and require approval from the Federal Highway Administration or Federal Transit Administration.

Previously, DOT interpreted such hiring preferences as conflicting with federal law, which requires contracts to be awarded through a competitive, low-bid system, unless otherwise specified. Now DOT cites a 2013 U.S. Department of Justice legal opinion, which interpreted federal law as giving discretion to permit local hiring preferences provided they do not “unduly limit competition” in federal-aid procurement.

DOT noted that the pilot program will allow for the potential approval of geographic, income-based and veteran preferences. It asserted that allowing the preferences will enable “disadvantaged workers in the communities where projects are located to benefit from the economic opportunities such projects represent.”

ARTBA submitted detailed comments about the pilot program April 3. We found several problems, including how it would unduly limit competition.

By preferring workers in one location over another, businesses closer to the preferred location would enter the bidding process with a significant advantage. Out-of-state businesses would have to hire an entirely new workforce to bid on a job. If this did not deter them from bidding outright, at the least it would heap costs on their proposal, making it highly unlikely they could compete with firms located closer to the proposed job.

The proposed pilot program also could have on tremendous impact on workers.  Ideally, a state will have multiple
transportation projects underway in different locations. Workers should have the opportunity to be a part of building any of these improvements if they can get to the job site. But geographic-based preferences could disqualify these
workers simply based on where they live.

Additionally, a company in areas where the pilot program is engaged may have to lay off workers who meet the
geographic preference requirement for one job, but not the next project. This has the potential to transform careers in transportation construction from stable jobs to positions that could be taken away simply because a worker does not live in the “right” place.

In fact, this type of impact is already occurring in cities with their own geography-based hiring ordinances. Contractors have reported being forced to disband otherwise diverse workforces because local hiring requirements are done on a ward-by-ward or ZIP code basis. In some instances, this could be required on the same job, such as a road or boardwalk project that spans multiple ZIP codes or wards.

A literal interpretation of a geographic-based hiring preference could require a job crew to be broken up on multiple occasions during a single construction project. Such a course of action would drive up job costs and decrease stability for workers.

Geographic-based hiring preferences also could have a significant impact on job safety. Many transportation
construction jobs require very particular qualifications. Not all locations will have applicants who are qualified to fill such jobs. If a company is forced to hire unqualified workers to satisfy the geographic requirement, both safety and job quality could be put at risk.

ARTBA concluded the proposed rule would drive up the cost of public transportation improvements, jeopardize worker safety and possibly either conflict with, or run counter to, existing regulatory requirements to achieve a diverse workforce.

ARTBA strongly urged DOT to abandon this pilot program and instead focus on voluntary efforts designed to maximize both the economic growth and job-creating opportunities presented by transportation construction.  Indeed, a better area for DOT to focus its energies is the achievement of a long-term, stable source of transportation funding that would allow the country to maintain and grow its infrastructure network.

If that goal can be achieved, jobs in all locations will follow.

Nick Goldstein is ARTBA vice president of environmental & regulatory affairs.

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