This past construction season, MDOT learned about a situation where a contractor on an MDOT project entered into an agreement with a county road commission to pick up and haul away spoils material for the county’s reuse. Under the agreement, the county road commission sent its drivers and trucks to the project site to be loaded and to haul the material off the project site for their reuse.
In mid-December, MDOT issued a letter to MITA, the County Road Association of Michigan, and the Michigan Municipal League, clarifying its’ position that a local agency is prohibited from performing contract work, including any trucking activity, on any MDOT project, whether it is federal and/or state funded.
In support of this position on federally funded projects, MDOT referenced Title 23 of the Code of Federal Regulations, part 635.112(e), which states: “Except in the case of a concession agreement…no public agency shall be permitted to bid in competition or to enter into subcontracts with private contractors.” A public agency is defined as “any organization with administrative or functional responsibilities which are directly or indirectly affiliated with a governmental body of any nation, state, or local jurisdiction.”
As it relates to “state only funded” projects, MDOT cites a 1943 Attorney General (AG) opinion in which it was determined that a county road commission lacked the authority to perform work under contract for private entities. In this context, the term “contract” is intended to represent any contract mechanism including, but not limited to, sub-contract, purchase order, or any written agreement. As MDOT has found no contradicting opinion, MDOT believes this AG opinion holds the force of law and is binding on state agencies.
So what does this MDOT position mean to you as a contractor on an MDOT project? Does it mean you can no longer make arrangements with a local agency (county, city, village, etc.) to provide them with spoils material from an MDOT project that has a beneficial reuse?
No, it does not.
The MDOT position means that you cannot use local agency drivers and trucks to transport spoils material that have a beneficial reuse off the project site. If a contractor agrees to provide spoils material to a local agency, the contractor needs to truck those materials to the local agency using his/her own trucks or by contracting with other private truckers to perform this trucking work.
To view MDOT’s letter on this matter click here.