California Department of Transportation

Local Labor Hiring Program (Pilot Program)



On March 6, 2015, the United States Department of Transportation (USDOT)  announced a one year contracting initiative Pilot Program to allow local or other geographic-based  hiring preferences, economic-based  labor hiring preferences, and labor hiring preferences for veterans.

The Pilot Program is primarily intended for construction projects, but USDOT may consider the application to Architectural and Engineering contracts as appropriate.  To be eligible, projects must be advertised, during the pilot period, by March 5, 2016.  Awarded contracts during this pilot period may continue to utilize the approved contractual requirements throughout the life of the project.  The applications may be for specific contracts, group of contracts or programmatic approvals where the agency proposes to use labor hiring preferences on more than one federal­ aid project during the pilot evaluation period.


How to apply and participate in the pilot:

This Pilot Program is carried out under Federal Highway Administration's (FHWA) Special Experimental Project No. 14 (SEP-14) Authority, which allows the experimental  use of innovative contracting practices.

To participate in the Pilot Program, local agencies will need to prepare and submit a SEP-14 Work Plan to the appropriate Caltrans District Local Assistance Engineer (DLAE).  DLAEs will review local agency SEP-14 Work Plans for completeness before forwarding to HQ Division of Local Assistance (DLA) Area Engineers.  The complete Work Plan will be submitted to FHWA for review and approval. 


Work Plan and Development General Requirements:

Questions and Answers:

Question: What is the goal and intended outcomes of the contracting initiatives pilot program?
Answer: This pilot program will enable DOT to evaluate whether State or local contracting requirements that have traditionally been prohibited on contracts awarded by the Federal Transit Administration (FTA) and Federal Highway Administration (FHWA) recipients and subrecipients, due to concerns that the requirement would restrict competition, may be used consistently with the standard established in a 2013 Office of Legal Counsel (OLC) opinion. The OLC opinion concluded that the Secretary has discretion to permit contracting requirements as long as they do not “unduly limit competition.”
The DOT will monitor and evaluate whether the contracting requirements approved for use under the pilot program have an undue restriction on competition in order to provide future guidance on their possible broader use under the FTA and FHWA programs.
This pilot program is limited to contracts awarded under the FTA and FHWA programs because these programs have general statutory provisions requiring competition. Programs administered by other DOT operating administrations are subject solely to the regulatory restriction in the Common Grant Rule at 2 CFR 200.319(b) prohibiting the use of geographic preferences. DOT has issued a separate notice of proposed rulemaking (NPRM) that would modify the DOT’s implementation of the Common Grant Rule by permitting recipients and subrecipients of DOT funds to use geographic preferences pertaining to the use of labor (see 80 FR 12092).

Question:What types of projects can be included in the pilot?
Answer:Any project funded by FTA or FHWA can be considered for the pilot program. This includes construction projects, as well as rolling stock procurements. This 1-year period is for contracts that will be advertised during this period.

Question:How long will the pilot program last?
Answer:This initiative will be carried out as a pilot program for a period of 1 year (unless extended).

Question:If approved, by when do I need to advertise my contract?
Answer: Contracts accepted into the pilot program must be advertised on or before March 6, 2016. Any contracting requirement approved to be utilized under the pilot program will be applicable throughout the life of the contract utilizing such requirement.

More Questions and Answers for Contract Initiatives (FHWA on 04/02/2015)


Related Links:



 If you have any questions regarding the Pilot Program, please contact your District Local Assistance Engineer.

 If you have any problems downloading files or other questions, please email to

Page Last Updated: 8/25/15 8:07 AM


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