of any contract for any project until the program which includes such project has been approved.

§ 1.8 Surveys, plans, specifications, and estimates. (a) Surveys, plans, specifications, and estimates for all projects shall be prepared by or under the immediate direction of the State highway department and shall show in convenient form and detail the work to be performed and the probable cost thereof, all in conformity with the standards governing form and arrangement prescribed by the Administrator.

(b) (1) The State highway department may utilize the services of well-qualified and suitably equipped engineering organizations of counties, municipalities, or other local subdivisions, acting under its direction, for making surveys, preparing plans, specifications, and estimates, and for supervising the construction of any project. Inasmuch as the act requires each State to maintain at its own expense a State highway department having adequate powers and suitably equipped and organized to discharge the duties required, no part of the cost of maintaining the central office of a State highway department or the central office of any publicly maintained engineering organization which may be utilized by the State shall be paid with Federal funds.

(2) The State highway department may utilize the services of the engineering organizations of the affected railroad companies for railway-highway crossing projects subject to the same limitations as to the general overhead costs.

(3) The services of consulting engineers and private engineering organizations may be utilized on a contract basis for design, preparation of plans, specifications, and estimates, and in special cases for construction engineering other than general supervision, only under one or more of the following circumstances: (i) The work is of unusual character requiring highly specialized knowledge and experience; (ii) it would not be possible to enlarge the staff of personnel available to the State so as to perform the engineering services on the project within a reasonable time; or (iii) the State has a program substantially larger than normal or expected in future years and it desires to employ consulting engineers rather than build up its organization for a comparatively short period.

(c) Until plans, specifications, and estimates for a project or part thereof have been submitted and found satisfactory by the authorized representative of the Administrator, and the State has been so notified, no project or part thereof shall be advertised for contract.

(d) Specifications for individual secondary road projects in those States adopting the 1954 Secondary Road Plan are not subject to approval by the Administrator.

(e) If any part of the cost of a project is to be provided by a county, municipality, or other local subdivision of a State, the State highway department shall determine the official actions to be taken by, and shall enter into such agreements with, the appropriate local officials as the department shall find desirable to safeguard its responsibility under the act for the fulfillment of the project agreement and the continuous maintenance of the project.

§ 1.9 Project agreement. (a) A project agreement between the State highway department and the Administrator shall be executed for each project on a form furnished by the Administrator. No payment on any project shall be made by the United States unless and until such agreement has been executed, nor on account of costs incurred prior to authorization by the authorized representative of the Administrator.

(b) Subsequent to execution of the project agreement no change shall be made which will increase the cost of a project to the Federal Government or alter its termini, type, or other conditions except upon agreement with the Administrator.

(c) Agreements for the construction of projects on the Interstate System shall contain clauses relating to use of and access to rights-of-way required by section 112 of the Federal-Aid Highway Act of 1956.

§ 1.10 Construction and contracts. (a) Actual construction work shall be performed by contract awarded by competitive bidding under such procedures as may be required by this part and by the operating procedures and instructions issued by the Administrator unless the Administrator shall affirmatively find that under the circumstances relating to a given project some other method is in the public interest. Before any work is undertaken by direct labor, the State

highway department shall determine that the organization that is to undertake the work is able and equipped to perform such work at costs which are reasonable and which compare favorably with similar contract work.

(b) No part of the Federal money set aside on account of any project shall be paid until it has been shown to the satisfaction of the Administrator that adequate methods, either advertising or other devices appropriate for the purpose, were employed, prior to the beginning of construction, to insure economy and efficiency in the expenditure of such money. An advertising period of 2 weeks may be accepted, provided a suitable mailing list of contractors is maintained by a State highway department to whom notices of new work are mailed, and public advertisement is inserted at least once a week for 2 weeks in such publications as will insure adequate publicity, the first insertion to be 2 weeks prior to the opening of bids. In case of emergency an advertising period of less than 2 weeks, or another method insuring competitive prices, may be approved.

(c) All contracts for the construction of highways under the act shall require the contractor to furnish all materials entering into the work, except as otherwise authorized by the prior approval of the Administrator. No requirement shall be contained in any contract entered into by any State providing price differentials for, requiring the use of, or otherwise discriminating in favor of materials produced within the State.

(d) No procedure or requirement shall be approved which, in the judgment of the Secretary, is designed or may operate to prevent the submission of a bid by, or the award of a contract to, any responsible contractor, whether resident or nonresident of the State wherein the work is to be performed, such as laws or regulations which require the licensing of a contractor before he may submit a bid or which prohibit the consideration of a bid submitted by a contractor not so licensed, or rules which govern the prequalification of contractors by which the amount of work that may be awarded to a contractor is limited otherwise than by a full and appropriate evaluation of his experience, equipment, financial resources, and performance record.

(e) No contract for any project or part thereof shall be entered into or

award therefor made by any State without prior concurrence in such action by the Administrator, and no alteration in the contract subsequently shall be made without the approval of the Administrator. Prior to concurrence by the Administrator in any proposed award of a contract for work financed in whole or in part with funds made available under the Federal-Aid Highway Act of 1954 or subsequent acts, the State shall furnish a sworn statement executed by, or on behalf of, the successful bidder to whom such contract is to be awarded, certifying that such person, firm, association, or corporation has not, either directly or indirectly, entered into any agreement, participated in any collusion, or otherwise taken any action in restraint of free competitive bidding in connection with such contract.

(f) Where bids for a project are received on alternate types of construction, the award of contract shall be made to the responsible bidder submitting the lowest acceptable bid irrespective of type, unless it be satisfactorily shown that it is in the public interest to accept a higher bid.

(g) All contracts for projects under the act shall contain suitable stipulations designed to insure that the contractor shall perform with his own organization work amounting to not less than 50 percent of the combined value of all items of work covered by the contract for each project: Provided, however, That any work under the contract which will require highly specialized knowledge, craftsmanship, or equipment not ordinarily available in contracting organizations qualified to bid on the project, may be designated and shown in the advertised specifications as "Specialty Items" and the items so designated may be performed by subcontract without regard to the above limitation.

(h) No part of the money apportioned under the act shall be used, directly or indirectly, to pay or to reimburse a State, county, or local subdivision for the payment of any premium or royalty on any patented or proprietary material, specification, or process for a distinctive type of construction unless purchased or obtained on open actual competitive bidding at the same or less cost than unpatented articles or methods, if any, equally suitable for the same purpose, or unless the State highway department

or

certifies (1) that such material, specification or process is essential for synchronization with existing operating equipment or (2) that no equally suitable alternate exists: Provided, however, That patented or proprietary articles or methods of reasonable cost which constitute minor elements of a contract item may be specified and paid for if purchased in competition with one or more equally suitable patented or proprietary articles or methods or if information is included in the advertisement stating the price at which such patented or proprietary articles methods are available to all contractors. Manufactured patented or proprietary articles which constitute a major part of the cost of a contract item may be specified and paid for if competition is assured with unpatented or nonproprietary articles or between two or more manufactured patented or proprietary articles accepted as equally suitable for the same purpose. Nothing in this section shall be construed as a prohibition against the use of any patented or proprietary material, specification, or process for a distinctive type of construction on relatively short sections of road for experimental purposes.

(i) Construction engineering and inspection charges reimbursable with Federal funds shall be limited to the salaries of individuals directly employed on a project and to other necessary costs incurred in connection with such engineering and inspection.

(j) Federal funds may be used to reimburse the State for the cost of relocation, as defined in section 111 (c) of the Federal-Aid Highway Act of 1956, of publicly, privately or cooperatively owned utility facilities, including railroads, necessitated by the construction of any project. Such reimbursement shall not exceed the regular Federal pro rata share of the cost of such work actually paid by the State or its political subdivisions. When the State submits a project for approval which proposes Federal participation in the cost of relocation of a utility facility located on an existing public highway, right-of-way, it shall certify that payment to the utility does not violate State or local law or a legal contract between the utility and the State or its subdivisions.

(k) The procedures being followed in each State with respect to the award of contracts by competitive bidding shall be

designed to bring about the letting of contracts at the lowest cost consonant with capable performance under circumstances permitting a fair and adequate opportunity for the submission of bids. Such procedures shall conform with all pertinent provisions of this part and with all pertinent operating procedures and instructions now or hereafter issued. In the event a review by the Administrator discloses any procedures deemed by him to be contrary to the aforesaid purposes, the provisions of this part, or the operating procedures and instructions, then the Administrator shall require that such procedures shall be changed in order to conform to such purposes, regulations of this part, operating procedures and instructions.

(1) Suitable provisions shall be included in all contracts for projects under the act designed (1) to insure full compliance with all applicable Federal, State and local laws governing safety, health and sanitation, and (2) to require that the contractor shall provide all safeguards, safety devices and protective equipment and take any other needed actions, on his own responsibility or as the contracting officer may determine, reasonably necessary to protect the life and health of employees on the job and the safety of the public and to protect property in connection with the performance of the work covered by the contract.

§ 1.11 Rights-of-way. (a) Federal participation in the cost of rights-ofway acquired by a State or political subdivision thereof shall be restricted to the costs of rights-of-way actually acquired and dedicated for highway purposes subsequent to the date of approval or acceptance of the program which includes the project for which such costs are incurred. Such costs may include costs incurred and paid, pursuant to State law, for damages to property, resulting from the taking of the rights-of-way or construction of the highway. Such costs may include costs for portions of rights-ofway acquired for future highway use. Only such costs that actually result in disbursement from public highway funds of the State or political subdivision thereof shall be eligible for reimbursement. However, reimbursement may be made in proper cases for costs actually incurred in the readjustment, repair, or restoration of facilities or improvements

made necessary by reason of the construction of the highway.

(b) Before the Administrator institutes proceedings, at the request of any State, to acquire lands or interests in lands for projects on the Interstate System, the State shall declare and fully explain its inability to acquire such lands or interests in lands or its inability to acquire them with sufficient promptness, shall agree to reimburse to the Federal Government the State's pro rata share of the costs incurred in acquiring such lands or interests in lands, and shall agree to accept such lands or interests in lands thus acquired.

(c) The rights-of-way provided for Federal-aid highway projects shall be held inviolate for public highway purposes. No project shall be accepted as complete until all encroachments have been removed from the rights-of-way. No signs (other than those specified in § 1.17), posters, billboards, automotive service stations or other commercial establishments for serving motor vehicle users, roadside stands, or any other private installations shall be permitted within the right-of-way limits; neither shall any portion of the rights-of-way be used in connection with any private business or undertaking. Exceptions to the provisions of this paragraph may be made under circumstances approved by the Administrator on portions of rightsof-way acquired for future use.

(a)

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contract for the project. The published notice to bidders shall contain a statement that the minimum wage rates predetermined by the Secretary of Labor for the project are set out in the advertised specifications and bid proposal, and that such rates will be made a part of the contract covering the project.

(d) The Administrator shall prescribe such procedures as he deems necessary to be followed by the State highway department in order to insure that all laborers and mechanics employed by contractors and subcontractors on any project referred to in paragraph (c) of this section are paid wages at rates not less than those predetermined by the Secretary of Labor and set forth in the contract.

(e) All contracts, except those for the construction of projects referred to under paragraph (c) of this section, shall prescribe the minimum rates of wages for skilled, intermediate, and unskilled labor, as predetermined by the State highway department, which contractors or subcontractors shall pay, and such minimum rates shall be stated in the specifications advertised in the call for bids on the proposed project.

§ 1.13 Highway planning and research projects. Each State highway department shall prepare and submit a detailed program of proposed engineering and economic investigations and highway research necessary in connection therewith, showing the amount of Federal and State funds proposed for expenditure on each item thereof. Subject to the approval and project agreement procedure provided for construction projects, not to exceed 12 percent of the amount apportioned for any year to each State for expenditure on the Federal-aid primary highway system, the Federal-aid secondary highway system, the Federal-aid primary highway system in urban areas, and the Interstate System, respectively, shall be used for highway planning and research projects, and the funds programed for such purposes may be pooled and administered as a single fund for the financing of the various items of work. Pending the submission and approval of the final detailed program, 12 percent of the amount apportioned for any year to each State for expenditure on each of said Federal-aid systems shall be programed for highway planning and research projects.

§ 1.14 Railway-highway crossing projects. (a) Before a project for the elimination of hazards at a railway-highway crossing shall be approved for construction, either (1) an agreement shall have been entered into between the State highway department and the railroad concerned; or (2) an order authorizing the project shall have been issued by the State public utility commission. Such agreement or order shall contain provisions covering construction, maintenance, and railroad contributions relating to the project, which conform to, and are not inconsistent with, the policies, classifications of projects and procedures prescribed by the Administrator.

(b) State laws pursuant to which contributions are imposed upon railroads for the elimination of hazards at railway-highway crossings shall be held not to apply to Federal-aid projects.

§ 1.15 Coordination of airport and highway location. Federal highway funds shall not be used for the reconstruction or relocation of any highway giving access to, or closed or impaired by, an airport constructed or extended after December 20, 1944 unless, prior to such construction or extension, the State highway department and the Bureau of Public Roads have concurred with the officials in charge of the airport that the location or extension of such airport and the consequent reconstruction or relocation of the highway are in the public interest.

§ 1.16 Maintenance of projects. (a) Maintenance of all projects constructed under the provisions of the act shall be the responsibility of the State except as provided in paragraph (c) of this section and for those projects or portions thereof which may be eliminated from the Federal-aid highway system or from the Federal-aid secondary system through relocation in connection with further improvement of a project. The State highway department, acting under the laws of the State, may provide for the maintenance of Federal-aid projects by agreement with municipal or other local authorities, but the responsibility of the State to maintain such projects satisfactorily remains unchanged under the requirements of section 14 of the Federal Highway Act as amended by section 6 of the Federal-Aid Highway Act of 1950.

(b) A project for which the State highway department proposes to provide maintenance by an agreement with a municipality or a county shall not be approved if any project previously improved with Federal funds under the provisions of the Federal Highway Act, as amended and supplemented, which the said county or other subdivision has agreed to maintain, is not being satisfactorily maintained, or shall not be approved until such previously improved project shall have been placed in a proper condition of maintenance, as determined by the Administrator.

(c) The Administrator shall determine the extent to which Federal-aid funds apportioned to the Territory of Alaska may be expended for maintenance of roads within the system or systems selected and designated pursuant to section 107 (a) of the Federal-Aid Highway Act of 1956.

§ 1.17 Traffic signs and signals. All signs and traffic-control devices and other protective structures, whether paid for from Federal or other funds, erected on or in connection with highways or structures on which Federal funds are expended, shall be in conformity with such standards as may be adopted by the American Association of State Highway Officials, approved by the State highway department, and concurred in by the Administrator.

§ 1.18 Diversion of gasoline and motor-vehicle taxes; reduction of apportionment. If the Secretary shall find at any time that lesser amounts of the revenues derived from State motorvehicle registration fees, licenses, gasoline taxes, and other special taxes on motor-vehicle owners and operators in any State are required by its laws to be applied to highway purposes than were required to be so applied by the laws of such State on June 18, 1934, he shall take such action as he may deem necessary to comply with the provisions of section 12 of the act of June 18, 1934 (48 Stat. 995), by reducing the first Federal-aid apportionment made to a State after the date of a finding that such State has diverted contrary to the aforesaid act, by an amount not in excess of one-third of the total apportionment to which the State otherwise would be entitled under the Federal-Aid Road Act of 1916, as amended. In any such reduction, each class of apportioned Federal-aid funds; namely, pri