WHO WE ARE

The Partnership for Infrastructure Project Excellence (PIPE) is an association of stakeholders dedicated to improving the way infrastructure projects are bid at the federal and state levels. Currently, barriers to competition in the procurement of materials for federal transportation projects leads to more expensive infrastructure, while ignoring more economical and environmentally friendly alternatives.  PIPE works to identify inefficiencies and to eliminate these barriers through policies that encourage fair competition and prudent use of federal dollars within transportation departments at the state and federal level.

THE ISSUE

Today, as the result of an arcane provision in the federal transportation law, the Moving Ahead for Progress in the 21st Century Act (MAP-21), federally funded transportation projects are not bid under fair contracting terms.  In fact, the law creates a de facto preference for certain types of culvert piping - an integral component to highway infrastructure projects - over others.  The provision, which was quietly inserted at the behest of a special interest, effectively restricts competition in the choice of materials for culvert piping, resulting in millions of dollars of unnecessary overspending by federal taxpayers.

In these times of limited federal budgets and aging infrastructure, this anticompetitive policy is cheating taxpayers of their ability to get the best value - and the most infrastructure - for their dollar.

This policy applies only to one material – culvert pipe – and is the only one of its kind within the Department of Transportation procurement process.

The members of PIPE are infrastructure construction stakeholders who are negatively impacted by unfair competition for transportation project contracts.  PIPE believes that achieving the best project outcome depends on open and fair competition, and we are working hard to restore needed fairness to our infrastructure contracting process.

When PIPE wins, the American taxpayers wins.

STEERING COMMITTEE MEMBERS

IMPORTANT FACTS

A culvert pipe is a buried structure that allows storm water runoff to flow under a road, driveway, railway, or similar obstruction. Culvert pipe is buried at a designated depth below the surface and aligned so as to permit the passage of the water with minimum obstruction to the watercourse. Culverts are open at both ends, relatively short in length, and often must withstand substantial traffic loads.

A storm sewer pipe system is a network of buried pipes connected to inlets and manholes, which is designed to drain storm water runoff from a road, parking lot, sidewalk, roof, or landscaped area and outlet it to another designed area such as a ditch, pond, stream or river. Storm drains vary in design from small residential dry wells to large municipal systems.

In most cases, the same pipe materials used for culverts can also be used as a storm sewer pipe. Whether it is a culvert or storm sewer pipe, the installed drainage structure is extremely important to the road/drainage interface.

Culvert pipe is manufactured from a variety of materials, all with different and unique characteristics. The most common materials used for culverts are concrete, metal, and plastic.

All pipes are affected by the environment in which they are placed and must be designed to take into account the anticipated environment factors that will impact the longevity and integrity of the pipe. The most common environmental considerations are loading, corrosion, abrasion, and weatherability conditions. These conditions should be considered and evaluated when selecting pipes.

In our environmentally conscious society, construction materials are increasingly scrutinized for whether their attributes are deemed beneficial to the environment. Sustainable materials are generally those with a long service life and that have low impact on our natural resources. To limit the frequency of major maintenance and/or replacement, most state DOTs have design regulations which require culvert materials to have a minimum design service life of 50 to 100 years. Multiple materials can document their ability to meet and exceed high service life expectations. Pipe materials that can be made with raw materials drawn from existing recycling streams and/or whose materials can be reused are beneficial to the environment. Allowing material competition is the best way to encourage the development of emerging materials and to create the market opportunity for pipe materials that serve the environment in positive ways.

There are many factors that affect the cost of pipe materials including the material, application, installation, environmental conditions, and design service life. This is not a “one-size-fits-all” model. As a result, the procurement process should ensure flexibility and access to alternative pipes to meet the needs of the project while delivering the most cost effective installation. Each pipe should meet all specified performance criteria, be subject to fair competition, and optimize the value of the project.

Regardless of the pipe material selected or preferred by an engineer, agency, or installer, the installed costs for the material will always be lowest when the owner specifies and bids alternate materials to generate competition. In fact, it has been found that concrete pipe may cost as much as 20% more when it is the only pipe material specified and bid on a project versus when concrete pipe must compete with other pipe materials that meet similar performance criteria. In general, the total installed cost of metal and plastic pipe is typically less than concrete pipe. There are two primary reasons for this. First, metal and plastic pipe are significantly lighter weight than concrete, so it takes fewer trucks to deliver the pipe, which reduces the freight cost. In addition, because they are lighter weight and manufactured with longer lay-lengths, plastic and metal pipes can often be installed faster and with less labor and equipment than concrete pipe. Thus, when installation requirements and conditions are similar, the installed costs of metal or plastic pipe are commonly 10-25% less than those for concrete pipe.

The federal government’s programs for highway transportation are financed, for the most part, by various taxes on users and by revenues from the Treasury’s general fund that flow through the Highway Trust Fund—an accounting mechanism in the federal budget, recording specific cash inflows and outflows. Under the current system, receipts from various excise taxes, most notably those on the sale of gasoline, diesel, and other motor fuels, are collected and credited to the trust fund.

Congress then determines how much federal spending each state receives for highways, primarily through the use of formulas and, to a lesser extent, through appropriations directed to special-purpose programs and specific projects. Of the funds appropriated to the Department of Transportation (DOT) for highways under SAFETEA-LU from 2005 to 2009, about 80 percent was distributed using formulas, as directed by that law. Those formulas allocated spending to states through programs designed for a variety of purposes: the construction, improvement, and maintenance of highways and bridges; safety; pollution reduction; planning; and alternate forms of transportation. The formulas use different criteria (such as each state’s share of highway lane-miles, vehicle-miles traveled, fuel use, population, or contributions to the Highway Trust Fund) to determine the share of funds available to each state under a particular program. Once the Congress determines the formulas and the grants are allocated, the states determine which specific projects to undertake with those funds on the basis of their own criteria.

Our nation’s highways play a vital role in the U.S. economy. In 2007, the public sector spent $146 billion to build, operate and maintain highways in the United States. Quality and performance is of utmost importance, and so is the need to protect the taxpayers’ investment into our federal highway system. Barrier free competitive bidding that meets established standards is the best way to ensure taxpayer dollars are protected in the government procurement process.

Per 23 CFR 635.4 Subpart D – General Material Requirements, States have to follow prescribed requirements and procedures relating to product and material selection for funds used on Federal-aid highway projects. Important in these requirements is a section that states the following:

If the State transportation department wishes to substitute some other acceptable material or product for the material or product designated by the successful bidder or bid as the lowest alternate, and such substitution results in an increase in costs, there will not be Federal-aid participation in any increase in costs.

Clearly, the FHWA took into consideration costs as a main component in state procurement of materials with the goal of seeing funds used as judiciously as possible.

23 CFR 635.411 provides the regulations for which culvert and storm sewer materials and products are chosen for the construction of a project on a Federal-aid highway. The section had remained unchanged since 1976. For the purposes of culvert pipe, there have been two (2) recent changes:

1. In 2005, SAFETEA-LU (Section 5514) included legislative language that removed outdated requirements for the number and types of culvert pipe and required the Secretary of Transportation to ensure that States provide for competition with respect to the specification of alternative types of culvert pipes. These old requirements (Appendix A from the 23 CFR 635.411) were from 1974 and were completely outdated and no longer needed. The result of the SAFETEA-LU language was fair competition at the state level for all culvert pipe manufacturers.
2. In 2012, MAP-21 included language that effectively reversed the SAFETEA-LU provision and allowed for states to have autonomy in determining competition requirements for culvert pipe selection on a Federal-aid highway project. The language (Section 1518, State Autonomy for Culvert Pipe Selection) used the promise of “state autonomy” to exempt pipe from federal competition requirements.

The state autonomy language was inserted with the support of concrete pipe manufacturers to protect the market dominant product in culvert pipe – concrete. While technology advances have provided contractors and project owners with a variety of quality material choices for culvert and storm sewer components of highway projects, procurement processes have not kept pace, which drives up the cost of infrastructure projects, while ignoring more economical and environmentally friendly alternatives. State autonomy protects older technology from competing with proven alternatives. This lack of competition drives up costs to the tax-payer and further drains the Highway Trust Fund. PIPE believes that it is possible to promote competition, respect state autonomy, and ensure efficient use of federal dollars.

Additionally, current law, as established in MAP-21, exempts pipe from Federal Competition Requirement 23 CFR 635.411, which is a long standing federal policy in highway construction for selection of products and materials. For all other materials, it requires competitive bidding when suitable alternative products exist as determined by engineering judgment. Pipe is the only product material that has been designated with this exemption. Modifying this policy with “state autonomy” for pipe alone begs the question…”Why not allow ‘state autonomy’ for every other product such as guardrails, light posts, pavements, markings, safety equipment, etc.?” The answer is simple. This was a legislated earmark to serve a specific industry. We believe that it is fair and appropriate that federal investments should include some basic federal guidelines which apply across all materials.

Adequate State autonomy for pipe selection existed before MAP-21: 23 CFR 635.411 does not force states to emphasize price over engineering. Section 1525 was a solution looking for a problem. Under SAFETEA-LU and our proposed language, states may select one material and forgo competitive bidding when it is determined to be in the public interest, when no suitable alternative exists, and/or when project synchronization is required.

Competition reduces costs: Studies demonstrate when there is competitive bidding, costs are reduced regardless of which product is chosen. Conversely, when there is no competition (i.e. total state autonomy) costs will go up as quasi-monopolies emerge.

The PIPE Coalition enjoys support from all types of pipe manufacturers. Included in the coalition are representative from the metal and steel industry as well as the plastic pipe industry.

MISSION STATEMENT

The Partnership for Infrastructure Project Excellence (PIPE) was created to ensure the preservation of fair competition and minimum federal standards in the selection of culvert pipe for use in federally funded transportation related contracts.

STAFF BIO