Construction Contract Administration Randy Over District Construction Engineer, ODOT District 12 Ohio Department of Transportation Construction Contract Administration • Getting Contract Administration off on the Right Foot….. Prior to PreCon – DBE Goals • ODOT Qualified DBE’s • Total $s Meet Goal or…. • Approved Waiver – Qualified Staff • Names and qualifications of engineers and inspectors • Testing Lab is AMRL certified Construction Contract Administration • Getting Contract Administration off on the Right Foot….. Prior to PreCon – Make sure District Construction & LPA Coordinator are involved in PreCon planning, 2 weeks prior to meeting, invitations sent – Draft invoice from District Construction, review funding amounts and categories w/DCE or designee – Hold stand alone PreAward meeting if LPA and/or consultant is new to process, project is unique, etc., otherwise complete by phone or combine w/PreCon Construction Contract Administration • Getting Contract Administration off on the Right Foot….. Prior to PreCon – Last, but not least DBE/EEO/Prevailing Wage personnel understand Federal and State requirements, District personnel available to answer questions, “shadow” LPA/consultant personnel Construction Contract Administration ABC Bri d g e Co nsul tan ts , LLC 1909 Portage Path (330) 775-1909, Fax (330) 775-1910 hio Akron, O 44308 Example March 15, 2006 Randall S. Over, P.E. District 13 Construction Engineer Ohio Department of Transportation PreCon/PreAward Columbus, Ohio 43333 Re: BAB-Slagle Street, Local Let Project 06N001; PID 80001 Letter Dear Mr. Over: Based on our phone conversation, we have scheduled a combined Pre-Aw ard and Preconstruction Conference on Apr il 1, 2006. The meeting will take place at the Hillm an Heights City Hall. The Pre-Awa rd meeting will occur first at 9:00am, followed by the Preconstruction Conference at 10:00am with the contractor. In terms of the City’s project manage ment team for this project, it is as described in previous correspondence including Construction Project Engineer David J. Smith, P.E. of our office. Testing Services will be performed by Universal Testing of Columbus, Ohio. We have ve rified that they are AMRL certified. All Prevaili ng Wage and DBE compliance efforts will be conduc ted by our office. The contractor, Bridges -R-Us, Inc. has already submitted approved JMF’s for this project as well as a list of subcontractors. Due to specialty work included in the project, the contractor requested and was granted a DBE Goal Waiver of 2%, resulting in a new goa l of 5%. A list of DBE contractors and suppliers will be presented at the meeting. We have already reviewed the names and they are currently approved by ODOT. Your office has kindly submitted a draft of the first invoice on which we will complete on the City’s letterhead for your approval and payment. We will require some exp lanation of the 30 or so forms submitted to this office as examples. We look forward to seeing you and your Construction Monitor, Michael J. Jones on Apr il 1, 2004. Respectfully, Terry M. O’Conner, P.E. Chief Construction Engineer C: Ronald Overmaher, Mayor Cairn Cuchmark, City Engineer Construction Contract Administration April 1, 2006 Pre-Award Meeting Outlin e BAB-Slagle Street Example PID 80001 Discussion Topics: PreAward 1. Names, qualifica tions, role s of en gineering, inspection and other staff David J. Smith, P.E., Construction Project Engineer ( CPE), Universal Te sting of Columb us, (AMRL Certifie d) 2. Preconstruction Confere nce, Progre ss Meetings Outline 3. Revie w of E nvironmental Commi tments 4. ODOT support and involvement Š Michae l J. Jones, Construction Monitor (CM), Jeffery A . Humphrey, Area Engineer (AE), Doreen Enders, Distric t Testing, Viole t Shepherd, Dis trict EEO/DBE/Prevailing Wage 5. Contractor and railr oad forc e account payment & LPA reimbursement 6. Change Order Revie w Process Š ups and downs, documented process for es tablishing new items, ODOT ap provals 7. Maintenance of traff ic require ments 8. Railr oad force acc ounts, temporary cr ossings, flagger services-status 9. Utility re locations-status 10. Construction sc hedule tracking, time extensions, liquidated damages 11. Claims Management Process Š Chain of co mm and, reviews prior to le gal act ion 12. Materials Management Process Š Frequency of te sts, ODOT JMFÕ certifie d materia l sources, process s, of resolving fai led tests 13. Prevailing Wage, EEO & DBE C omp liance req uirements Š 7% DBE Goal Fie ld Intervie ws, 30% Payroll Wa ge Checks, DBE Sub Comm ercia lly Usefu l Function Revie ws, Quarterly Reports for DBE Goals 14. Documentation Process 15. Public re lations, damage cla ims resolution Š contact na me for ODOTÕ PIO s 16. Final Inspection, acceptance , project closeout procedures Š Jim Musia l part of t he off icia l final inspection an d DBE aff idavits Construction Contract Administration • Having a successful PreCon…. Best Practices – Contractor comes prepared with…. • List of subcontractors • List of suppliers (ODOT approved) • List of proposed JMF’s • Proposed schedule showing important milestones – Everyone prepared with…. • Contact info and sign-in sheet • Contractor’s and LPA/Consultants Decision Trees and hierarchy to resolve disputes – LPA/Consultant • Tape recorded and/or minutes taken and circulated • Rep of Design Consultant, Testing Lab, ODOT CM, ODOT LPA Coordinator, District EEO/DBE/Prevailing Wage, LPA EEO/DBE/Prevailing Wage personnel Construction Contract Administration • The First Shovel of Dirt Has Moved….Best Practices as the project moves forward – Weekly submissions of payrolls – Completion of Daily Diaries – Weekly, Biweekly or Monthly Progress Meetings including Construction Monitor (CM) – Materials are checked against ODOT certified materials lists – JMF’s are ODOT approved Construction Contract Administration Example Job Mix Formula (JMF) Construction Contract Administration • The First Shovel of Dirt Has Moved….Best Practices as the project moves forward – Through District Testing, OMM involved for steel fab, concrete beam shop approvals, if there is a timely request and staff is available – Track disposition of failed materials – Track materials use against PreCon suppliers Construction Contract Administration • Getting Everyone Paid….Best Practices for submitting invoices and getting approvals – Aim for a 30 day turnaround for all parties…. • Daily Diaries w/quantities • LPA, Consultant and ODOT reviews in parallel • 10 working days for ODOT to approve and submit for reimbursement or direct pay • Central Office turnaround 10 working days • Include only approved change orders • Don’t pay for it if it isn’t acceptable (don’t rely on retainage) • Don’t include retainage • Clearly note 100% local items Construction Contract Administration • Getting Everyone Paid….Best Practices for submitting invoices and getting approvals – Consultant & LPA Staff Invoices • ODOT approved overhead rates • Summary sheet • Include timesheets and/or monthly reports • Request for increases must be accompanied by justification, project completion date extended, extensive extra work, change in overhead rate mid-project, etc. • Should be in the range or 10-15% of contractor payments – Requests to District Construction Offices – Plan for Encumbrance Increases in advance….. – Proof of matching funds paid Construction Contract Administration LPA-AU10B Example City of Hillman Heights, Ohio Ronald Overmaher, Mayor Cairn Cuchmark. P.E., P.S. City Engineer Invoice for Local Let Summary & Payable Invoice Contractor Remit To: BAB-Slagle Street Bridges R Us Inc Bridges R Us Lane Invoice No. Date: Agree. No. 1 CO 1-Jul-06 29999 Middleton Heights, Ohio FAP No. E066(666) 45678 Enc. No. 599998 PID 80001 Proj. No. 06N001 The City Of Bryne certifies that the work as shown on this invoice has been performed and in no way represents any degree of duplication of payments that have been or will be received. LPA's Signature____________________________________ Date: ______________ Please indicate Final Invoice by Initialing: _________ Payment Item Participation % Total Cost to Date Previous Payments Amount Due This Invoice Construction STP $67,000.00 $0.00 $67,000.00 Construction Enh $5,000.00 $0.00 $5,000.00 Engineering STP $0.00 $0.00 $0.00 Engineering Enh $0.00 $0.00 $0.00 Less LPA 20% $14,200.00 $0.00 $14,200.00 Less LPA 100% $1,000.00 $0.00 $1,000.00 Totals $56,800.00 $0.00 $56,800.00 Max Amount $700,000.00 Funds Encumbered $671,000.00 Construction 599998 $610,000.00 Construct Engineering 599999 $61,000.00 Funds Remaining $643,200.00 The District has reviewed this invoice in accordance with the Departments written procedures and recommends payment of the amount shown above. By:___________________________ Date: _____________ District Approval LPA-AU10B (Original & 2 copies) 2 Copies of Supporting Documentation 2-Apr-03 The City Where Roebling Lived for 30 Days 1955 Bridges Lanes, City of Hillman Heights, Ohio 45779 Construction Contract Administration Example LPA-AU10B City of Hillman Heights, Ohio Ronald Overmaher, Mayor Cairn Cuchmark. P.E., P.S. Invoice for City Engineer Local Let Summary & Payable Invoice Consultants Remit To: BAB-Slagle Street City of Hillman Heights Invoice No. Date: 1 CE 1-Jul-06 & LPAs 1955 Bridges Lane Agree. No. 29999 Hillman Heights, Ohio FAP No. E066(666) 45779 Enc. No. 599999 PID 80001 Proj. No. 06N001 The City Of Bryne certifies that the work as shown on this invoice has been performed and in no way represents any degree of duplication of payments that have been or will be received. LPA's Signature____________________________________ Date: ______________ Please indicate Final Invoice by Initialing: _________ Payment Item Participation % Total Cost to Date Previous Payments Amount Due This Invoice Construction STP $67,000.00 $67,000.00 $0.00 Construction Enh $5,000.00 $5,000.00 $0.00 Engineering STP $7,500.00 $0.00 $7,500.00 Engineering Enh $0.00 $0.00 $0.00 Less LPA 20% $15,700.00 $14,200.00 $1,500.00 Less LPA 100% $1,000.00 $1,000.00 $0.00 Totals $62,800.00 $56,800.00 $6,000.00 Max Amount $700,000.00 Funds Encumbered $671,000.00 Construction 599998 $610,000.00 Construct Engineering 599999 $61,000.00 Funds Remaining $637,200.00 The District has reviewed this invoice in accordance with the Departments written procedures and recommends payment of the amount shown above. By:___________________________ Date: _____________ District Approval LPA-AU10B (Original & 2 copies ) 2 Copies of Supporting Docum entation 2-Apr-03 The City Where Roebling Lived for 30 Days 1955 Bridges Lanes, City of Hillman Heights, Ohio 45779 Construction Contract Administration • So there is a changed condition, what next…. – Extend existing bid items…. – Extra Work…. No existing bid item – Funding Caps and Contract limits? – Contractor won’t agree to a price? – Hope and pray….. – Justification to ODOT for additional funds…. Construction Contract Administration • Justification to ODOT for additional funds…. – Establishment of a fair price…. • Extend bid items • Establish a new bid item, similar work on other contracts, cost analysis • Last choice, force account – Required to complete project as scoped – Doesn’t impact environmental approvals/permits – Communication to CM before work begins • Approval can be verbal, but noted in writing, via email or by letter – Summary of smaller changes so costs “reconcile” Construction Contract Administration • And the Contractor Yells, “Unless I am paid for the claim right now, I’m walking off the job!” What to do if you can’t agree….. And how to not get there in the first place…… – Make everyone follow an administrative process established prior to bid, preferably as part of the contract – Use comparatives, historical data such as days in the bid for traffic control, prorate the days…. – Resolve the changed condition if at all possible without stopping work, otherwise home office overhead claims could occur, keep the contractor working Construction Contract Administration • Claims solutions and avoidance – Pay estimates and changes promptly – Seek third party assistance, experts that both parties trust – Use formal Partnering – Don’t write yet another letter when a phone call or a personal visit has a chance to break the deadlock – Completing by the completion date is to everyone’s benefit, don’t be afraid to pay for some OT, MS concrete, etc., it builds goodwill with the public and the contractor – Before the attorneys take control, consider mediation, arbitration, etc., ODOT has names Construction Contract Administration • And one last comment on Claims….. – A contract is overall, an equally shared agreement although various specific responsibilities are not equally shared. If there is no clear solution yet there is agreement there was a changed condition, split shared responsibility items in half. Construction Contract Administration ABC Bri d g e Co nsul tan ts, LLC 1909 Portage Path (330) 775-1909, Fax (330) 775-1910 hio Akron, O 44308 Example June 15, 2006 Randall S. Over, P.E. Justification District 13 Construction Engineer Ohio Department of Transportation Columbus, Ohio 43333 Letter Re: BAB-Slagle Street, Local Let Project 06N001; PID 80001 Dear Mr. Over: As discussed in our phone conversations with your Construction Monitor, and at the last progress meeting, the condition of the substructure is worse than depicted in the plans. Also, ODOT has recently adjusted our overhead rate upwards based on a new accounting format. The following pa ragraphs describe the financial im pacts in detail as you have requested. Substructure Repairs: The plans included approximately 15 c.y. of concrete for repairs to pier caps for a total of $9000.00 . The contractor is required to perform additional forming and supporting of the structure to make repairs significantly below the pier caps. As such, the contractor will not accept additional cubic yards of concrete repairs at the bid price. Based on ODOT’s Summary of Contracts Awa rded, we have agreed to a new unit price for the original and additional work of $850/c.y. for a total of 45 c.y. This results in a contract increase of $29,250.00. We have evaluated the remaining areas and believe this will be sufficient. Since we did not prepare the plans, you might want to contact your design con sultant regarding this issue. However, the additional work, even if included in the original bid, would have been bid close to this price. This adjustment will be listed in the next invoice as Change Order #1. Overhead Rates: For calendar year 2005, ODOT approved an overhead rate of 239%. For calendar year 2006, the approved rate is 245%. Based on our contract with the City of Hillm an Heights, we respectfully request the new rate be applied for reimbursement for the month of June forward. The anticipated increase is approximately $10,000.00 through the end of this year. Should you require additional information, please do not hesitate to contact this office. Respectfully, Terry M. O’Conner, P.E. Chief Construction Engineer C: Ronald Overmaher, Mayor Cairn Cuchmark, City Engineer Construction Contract Administration • Adequate DBE/EEO & Prevailing Wage Contract Administration…… – Weekly payroll submissions and wage checks – Track the DBE $s against goals, approved subs and suppliers each pay request – DBEs actually doing the work, if not involve District – Monthly or quarterly DBE reports to District EEO/DBE – Jobsite EEO & Prevailing Wage Posters – Regular employee interviews, proper records – Complaint follow-through w/guidance and communication to District EEO/DBE or Prevailing Wage Construction Contract Administration Example Monthly Prevailing Wage Report Construction Contract Administration Example DBE Quarterly Report Construction Contract Administration Example EEO/DBE/Prevailing Wage Interview Form Construction Contract Administration The Project is almost complete….. Construction Contract Administration • So the project is open to traffic, but all that “paperwork” remains to final the project….. – Final Inspection by contractor, LPA, consultant, ODOT, official punchlist is developed – All claims resolved or dismissed, both with the contractor and with 3rd parties – Documentation compiled for failed materials have been removed or a deduct made – Contractor and DBE subs/suppliers sign affidavits – Final certification is signed and sealed by the CPE Construction Contract Administration Example DBE Affidavit Construction Contract Administration • Remaining “paperwork”….. – Upon completion of punchlist, ODOT completes the C-85 – Final estimate is processed when all required paperwork is completed – District notifies Central Office to close all encumbrances Construction Contract Administration Example Final Certification Construction Contract Administration Example C-85 All personnel and their respective employers portrayed in this example are fictional. Any resemblance to an existing or proposed project and involved personnel is purely coincidental.
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