The antique proprietary products regulation states that “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, process, or type of construction, unless purchased or obtained on open actual competitive bidding at the same or a less cost than unpatented articles or methods equally suitable for the same purpose.’’
Proprietary products, defined as ideas and objects that are the property of the owner and cannot be recreated without the consent of the owner, have not been allowed for use by states on federally funded projects since 1916.
In a move intended to improve safety and increase efficiency, the U.S. Department of Transportation’s Federal Highway Administration (FHWA) is revising regulations by rescinding 23 CFR 635.411(a)-(e) to give states more flexibility and choice in which products or services can be used on federally funded highway projects while saving taxpayer dollars. The revised text is contained in the final rule under 23 CFR Part 635 Construction and Maintenance— Promoting Innovation in Use of Patented and Proprietary Products.
The proprietary rule had previously discouraged state contracting agencies from acquiring many of today’s new and innovative technologies that could help address the numerous challenges facing our nation’s highways. The repeal of this federal procurement rule removes a major regulatory roadblock and encourages investment in and the use of new technologies that look to alleviate traffic congestion, improve highways and advance safety for everyone. States will now have the ability to choose products to use for their federally funded projects that will work best for their specific needs.
The new rule will take effect on October 28, 2019.