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U.S. DOT Pilot Program Could Push Transportation Project Costs Higher

ARBTA's analysis of the pilot program raise finds a multitude of issues.

Thu April 09, 2015 - National Edition
Construction Equipment Guide

A U.S. Department of Transportation (DOT) pilot program that would allow state and local transportation agencies to utilize local hiring preferences on federal-aid highway and transit projects will increase costs, decrease competition, and could actually result in less frequent hiring of minorities and women, according to the American Road and Transportation Builders Association (ARTBA).

U.S. Secretary of Transportation Anthony Foxx announced the one-year pilot program on March 3. The agency said allowing the local preferences will enable “disadvantaged workers in the communities where projects are located to benefit from the economic opportunities such projects represent.” State or local transportation agencies would need to initiate a hiring preference and seek approval from the Federal Highway Administration or Federal Transit Administration through the pilot program. Previously, U.S. DOT prohibited these provisions on all federal-aid highway and transit projects, which require the competitive low bid process. Under the department’s long-time interpretation of this low-bid requirement, hiring preferences could negatively influence competition by disfavoring or eliminating contracting firms unable to meet local hiring requirements.

In April 3 comments, ARTBA said it agrees with U.S. DOT’s assertion that “transportation investments and policies can improve access to jobs, education, and goods movement, while providing construction and operations jobs.” However, contrary to the agency’s assertions, ARTBA observed that local hiring preferences can actually function as barriers to facilitating economic and job growth.

The association said that preferring one group of individuals over another based on residency would almost certainly limit competition in the bidding process and warned such requirements could disrupt the stability of transportation construction jobs by forcing companies to lay off workers that do not live in the preferred geographic area.

ARTBA urged U.S. DOT to consider the pilot program’s safety implications—an unintended consequence of geographic-based preferences could force companies to hire individuals for positions in which they have no qualifications. If training them within the project’s time frame is impractical and unsafe, then they may be given job duties that are safer and more peripheral, but largely unnecessary to the project itself. As a result, the association said, the transportation project would cost taxpayers more.

ARTBA also noted that geographic-based preferences could dilute existing regulatory requirements aimed at increasing the employment of minorities and women in transportation construction.

In its conclusion, ARTBA called on the U.S. DOT to focus its energies on developing and building political and public support for a long-term, stable proposal to grow federal Highway Trust Fund revenues. Such a course, the association said, would allow the nation to improve its transportation infrastructure and grow the size of the workforce building and maintaining it.

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