[Code of Federal Regulations]
[Title 23, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 23CFR635.106]

[Page 172]
 
                           TITLE 23--HIGHWAYS
 
 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 635--CONSTRUCTION AND MAINTENANCE--Table of Contents
 
                     Subpart A--Contract Procedures
 
Sec. 635.106  Use of publicly owned equipment.

    (a) Publicly owned equipment should not normally compete with 
privately owned equipment on a project to be let to contract. There may 
be exceptional cases, however, in which the use of equipment of the 
State or local public agency for highway construction purposes may be 
warranted or justified. A proposal by any STD for the use of publicly 
owned equipment on such a project must be supported by a showing that it 
would clearly be cost effective to do so under the conditions peculiar 
to the individual project or locality.
    (b) Where publicly owned equipment is to be made available in 
connection with construction work to be let to contract, Federal funds 
may participate in the cost of such work provided the following 
conditions are met:
    (1) The proposed use of such equipment is clearly set forth in the 
Plans, Specifications and Estimate (PS&E) submitted to the Division 
Administrator for approval.
    (2) The advertised specifications specify the items of publicly 
owned equipment available for use by the successful bidder, the rates to 
be charged, and the points of availability or delivery of the equipment; 
and
    (3) The advertised specifications include a notification that the 
successful bidder has the option either of renting part or all of such 
equipment from the State or local public agency or otherwise providing 
the equipment necessary for the performance of the contract work.
    (c) In the rental of publicly owned equipment to contractors, the 
State or local public agency shall not profit at the expense of Federal 
funds.
    (d) Unforeseeable conditions may make it necessary to provide 
publicly owned equipment to the contractor at rental rates agreed to 
between the contractor and the State or local public agency after the 
work has started. Any such arrangement shall not form the basis for any 
increase in the cost of the project on which Federal funds are to 
participate.
    (e) When publicly owned equipment is used on projects constructed on 
a force account basis, costs may be determined by agreed unit prices or 
on an actual cost basis. When agreed unit prices are applied the 
equipment need not be itemized nor rental rates shown in the estimate. 
However, if such work is to be performed on an actual cost basis, the 
STD shall submit to the Division Administrator for approval the scheduie 
of rates proposed to be charged, exclusive of profit, for the publicly 
owned equipment made available for use.