[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: 23CFR635.407]

[Page 189-190]
 
                           TITLE 23--HIGHWAYS
 
 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 635--CONSTRUCTION AND MAINTENANCE--Table of Contents
 
                Subpart D--General Material Requirements
 
Sec. 635.407  Use of materials made available by a public agency.

    (a) Contracts for highway projects shall require the contractor to 
furnish all materials to be incorporated in the work and shall permit 
the contractor to select the sources from which the materials are to be 
obtained. Exception to this requirement may be made when there is a 
definite finding by the State transportation department and concurred in 
by the FHWA Division Administrator, that it is in the public interest to 
require the contractor to use material furnished by the State 
transportation department or from sources designated by the State 
transportation department. In cases such as this, the FHWA does not 
expect mutual sharing of costs unless the State transportation 
department receives a related credit from another agency or political 
subdivision of the State. Where such a

[[Page 190]]

credit does accrue to the State transportation department, it shall be 
applied to the Federal-aid project involved. The designation of a 
mandatory material source may be permitted based on environmental 
considerations, provided the environment would be substantially enhanced 
without excessive cost. Otherwise, if a State transportation department 
proposal to designate a material source for mandatory use would result 
in higher project costs, Federal-aid funds shall not participate in the 
increase even if the designation would conserve other public funds.
    (b) The provisions of paragraph (a) of this section will not 
preclude the designation in the plans and specifications of sources of 
local natural materials, such as borrow aggregates, that have been 
investigated by the State transportation department and found to contain 
materials meeting specification requirements. The use of materials from 
such designated sources shall not be mandatory unless there is a finding 
of public interest as stated in paragraph (a) of this section.
    (c) Federal funds may participate in the cost of specifications 
materials made available by a public agency when they have been actually 
incorporated in accepted items of work, or in the cost of such materials 
meeting the criteria and stockpiled at the locations specified in 
Sec. 635.114 of this chapter.
    (d) To be eligible for Federal participation in its cost, any 
material, other than local natural materials, to be purchased by the 
State transportation department and furnished to the contractor for 
mandatory use in the project, must have been acquired on the basis of 
competitive bidding, except when there is a finding of public interest 
justifying the use of another method of acquisition. The location and 
unit price at which such material will be available to the contractor 
must be stated in the special provisions for the benefit of all 
prospective bidders. The unit cost eligible for Federation participation 
will be limited to the unit cost of such material to the State 
transportation department.
    (e) When the State transportation department or another public 
agency owns or has control over the source of a local natural material 
the unit price at which such material will be made available to the 
contractor must be stated in the plans or special provisions. Federal 
participation will be limited to (1) the cost of the material to the 
State transportation department or other public agency; or (2) the fair 
and reasonable value of the material, whichever is less. Special cases 
may arise that will justify Federal participation on a basis other than 
that set forth above. Such cases should be fully documented and receive 
advance approval by the FHWA Division Administrator.
    (f) Costs incurred by the State transportation department or other 
public agency for acquiring a designated source or the right to take 
materials from it will not be eligible for Federal participation if the 
source is not used by the contractor.
    (g) The contract provisions for one or a combination of Federal-aid 
projects shall not specify a mandatory site for the disposal of surplus 
excavated materials unless there is a finding by the State 
transportation department with the concurrence of the FHWA Division 
Administrator that such placement is the most economical except that the 
designation of a mandatory site may be permitted based on environmental 
considerations, provided the environment would be substantially enhanced 
without excessive cost.