For Locally Administered Projects (LAP), Local Government Agencies (LGA) should follow the same Contract Administration (CA) procedures and provide the same or similar documentation for all construction projects. In many cases, LAPs are smaller in scope and complexity and, as a result, will not be required to provide the quantity of documentation and testing as that of larger-scale projects. However, it is important to understand that any project constructed with federal funds must follow Federal Guidelines to qualify for Reimbursement.
The subsections that follow highlight several of the basic minimum requirements for CA. For a comprehensive document that follows the North Carolina Standard Specifications for Roads and Structures and provides further clarification and examples of those standards, refer to the NCDOT Construction Manual.
Project Inspection and Documentation
NCDOT requires inspection personnel to be present any time major items of work are being performed by the Contractor. Examples include but are not limited to:
- Placing concrete and asphalt
- Structures work
- Significant utility work
- Signals
- Pavement markings
- Installation of pipe
NCDOT also requires inspection personnel to be present at all times that the Contractor closes one or more lanes of traffic.
IMPORTANT: LGAs should ensure that Consultants include the costs for these inspection personnel in their submitted costs for services. If the LGA is utilizing their In-House Staff for CA, this should also be taken into account. See Professional Services for more details.
To ensure compliance with the Federal Highway Administration (FHWA), NCDOT has developed specific procedures and documentation requirements. While NCDOT and FHWA will accept other methods of documentation, the LGA is advised to obtain approval prior to use. If the LGA's methods are found to be inadequate in an audit or review after the work has been performed, then Reimbursement may not be approved and the LGA would be responsible for the respective costs.
Posters
Federal project requirements include posters that must be displayed at every jobsite. NCDOT and the LGA are responsible for ensuring that these posters are accessible to all employees on the jobsite, as described in the Construction Manual. A complete list of required posters is available at the FHWA website and electronic downloads are available at the US Department of Labor website.
Inspector's Daily Report
This daily report should be used to give a detailed account of all activities occurring during the life of the project and will be included as part of the complete Project Diary. These reports provide the necessary documentation for research activities, checks, measurements and tests performed, payments and responses to requests for contract time extensions and additional compensation on a project. Refer to the Construction Manual for an outline of the steps involved in creating the report.
Pay Records
NCDOT and FHWA require that there be a “source document" for each pay item included in a construction contract. All entries pertaining to pay items should be entered in a bound book (pay record, level, or field), ticket book, or on a specified form. Refer to the Construction Manual for more details.
Written Correspondence with the Contractor
Copies of all correspondence to and from the Contractor should be maintained in the project file, by date. All backup correspondence should be maintained in the project files for Supplemental Agreements, Shop Drawings, changes in contract requirements, claims for time extensions and additional compensation. Refer to the Construction Manual for more details about these requirements.
Meeting Minutes
Complete meeting minutes must be issued for all project meetings and include key discussion concerns and any resolutions along with action items, timelines and those responsible for delivering them. Preconstruction conference minutes shall be prepared by the LGA and sent to NCDOT, the Contractor and meeting attendees (see the Construction Manual for more details).
Buy America
Buy America provisions ensure that transportation infrastructure projects are built with American-made products, meaning Federal funds support an entire supply chain of American companies and their employees. Accordingly, 23 United States Code (USC) 313 (Buy America) and 23 Code of Federal Regulations (CFR) 635.410 (Buy America requirements) identify that all steel, iron, and manufactured products used in projects subject to the Buy America requirements are produced in the United States.
For LAPs, all steel, iron, and manufactured products must include a certification statement from the Contractor that the items provided for incorporation into the project were produced in the United States, including raw materials. The individual documents certifying the products are in accordance with this requirement should be maintained with the material test results and be available for audit or project material certification upon completion of the project. See the Resources tab at the bottom of this page for more information.
Certified Payrolls
The provisions of Form FHWA-1273, Paragraph IV require the submission of payrolls by the Contractor and each Subcontractor. Each LGA must become familiar with these contract provisions, obtain payrolls from the Contractor (including first and second tier Subcontractors), and check those payrolls for wage violations. Payrolls must be received for the payment period four weeks in advance of the payment being made and should be maintained in the project file once completed. Refer to the Construction Manual for more information.
Wage Rate Interviews – Calendar Year Quarterly Interviews
In addition to checking weekly certified payrolls prior to making payments, it is the responsibility of the LGA to perform quarterly Wage Rate Interviews for all federally funded projects. LGAs should conduct spot interviews with the Contractor's employees to determine that each employee is properly classified, paid at least the minimum hourly rate described for their classification in the contract, and is either on the Prime Contractor's payroll or on an approved Subcontractor's payroll. All individual interview documentation should be placed in the project files.
The LGA is required to take the investigative action necessary to determine the validity of any and all complaints by Contractor's employees with regard to proper classification and payment and submit its findings, together with recommendations, to NCDOT for further handling. Refer to the Construction Manual for more details.
Extensions in Contract Time and Additional Compensation (Claims)
NCDOT provides avenues of relief for contractors based on varying conditions and situations on a construction project through the claims process.
Extensions in Contract Time
Requests for Extensions in Contract Time are normally granted for delays, additional or extra work, winter months, or changed conditions. The LGA should obtain concurrence from NCDOT prior to approving contract time extensions. Additionally, the LGA should notify the Contractor of the final determination in writing as soon as possible. Delay in notification may require the Contractor to incur additional cost to complete the work by the original completion date that would be unnecessary if the appropriate time extension had been granted.
Additional Compensation
Claims for Additional Compensation are typically granted for the following:
The LGA should obtain concurrence from NCDOT prior to approval of additional compensation claims. The LGA should notify the Contractor in writing of their response to the Contractor's claim. Complete documentation of the Contractor's request, any subsequent decision, and NCDOT concurrence in granting additional compensation should be included with the project files. The LGA should note that based on the terms of the Agreement, additional funds may not be available for Reimbursement under certain situations. The NCDOT Division can advise the LGA on possible courses of action under these situations.
Force Account (by Contractor)
Two potential situations will require the LGA to issue a Force Account notice to the Contractor.
- The LGA directs the Contractor to perform work, and the two parties cannot agree on the price for the work.
- A Contractor is required to perform work that he considers to be extra work or work he feels justifies additional compensation and his request for additional compensation has been denied. In this instance, the Contractor should advise the LGA of intent to file a claim for additional compensation.
The LGA has the authority and responsibility to direct the Contractor's operations in the first instance but not in the second. In both cases, the LGA must maintain separate and detailed records reflecting the performance of disputed work.
The LGA must gain concurrence from NCDOT to issue a Force Account notice to the Contractor. The LGA must review and approve the base wage rates for labor and the equipment that will be utilized in the affected work. Refer to the Construction Manual and the Records and Reports Section for specific guidelines and more information.
Prompt Payment
The LGA must ensure that the Contractor meets the requirement of the prompt payment provisions for all subcontractors and materials suppliers for the project. Generally, payments should be made to subcontractors and materials suppliers within 7 days of receiving payment. Refer to the Construction Manual for details.
Disadvantaged Business Enterprise (DBE) Payments Reporting
The Contractor must provide the LGA with an accounting of payments made to DBE firms, including material suppliers and Contractors at all levels (Prime, Subcontractor or second tier Subcontractor). This accounting is furnished to the LGA along with each pay request. Also, the LGA should have a record of final payments as compared with commitments and explanation of any shortfall. Failure to submit this information accordingly may result in withholding payment until the information is provided. See Minority Business Participation and the Records and Reports Section of the Construction Manual for more information on solicitation and utilization of DBEs.
Project Final Acceptance
The LGA is responsible for scheduling and performing the final inspection with NCDOT staff to ensure all work has been completed satisfactorily. The LGA should not advise the Contractor in writing of acceptance of the project until all work is complete, and concurrence has been obtained from NCDOT. See Final Acceptance and Project Closeout for additional details.
Project Materials and Testing Requirements
NCDOT is responsible for ensuring that all materials and manufactured products incorporated into transportation projects meet the required criteria and will function as intended. The NCDOT Materials and Tests (M&T) Unit performs this function and will work with the LGA and the NCDOT Division to provide the required materials oversight and assurance testing. M&T personnel (Section Materials Specialists and Area Materials Engineers) will work with the LGA to ensure that materials documentation and testing requirements are met. See Construction Manual for more details.
NCDOT must certify that the LGA meets its requirements for:
- Sampling and Testing (Minimum Sampling Guide)
- Using Qualified Technicians (Training and Certifications)
- Fulfilling the FHWA “Buy America" Requirements and North Carolina State Law
- Using Approved Materials (Approved Producer/ Supplier List, Mix Designs for both Asphalt and Concrete)
- Resolving any Failures or Discrepancies (must be in writing)
Materials Receipt and Acceptance Requirements
A Materials Received Report (MRR) should be completed when any material is received on the project that is to be incorporated into the construction on a temporary or permanent basis. The MRR is not required for certain items (refer to the Records and Reports Section of the Construction Manual for more information). The MRR is necessary to ensure that all materials are tested and meet the requirements of Division 10 of the Standard Specifications. The Minimum Sampling Guide (MSG) lists materials that are pretested and materials that are to be sampled by project personnel.
Certified Construction Technicians
The LGA will provide Technicians to inspect and document the construction of the project. Specific items of work (including the placement of asphalt and concrete) and testing of certain materials (such as soil and aggregate base course materials) require certifications by NCDOT. It is the responsibility of the LGA to ensure that individual Technicians are thoroughly familiar with the contract requirements and certified for the various phases of work which they are called upon to inspect. Refer to the Construction Manual for more information.
Independent Assurance Testing
FHWA requires independent assurance test samples be taken to provide independent verification of the reliability of project material test results. Independent assurance is required to independently assess the testing procedures performed by each technician and to ensure the proper operation of any equipment used in inspection or testing. These test results are compared with the acceptance test results for verification.
NCDOT's Independent Assurance Section personnel will periodically visit the LGA project. However, the LGA should advise the Independent Assurance Section personnel and/or the Area Materials Engineer when operations and the progress of work allow key samples to be taken. Feedback is given to the construction technicians once an evaluation has been made as to accuracy of the acceptance tests.
Project Materials Certification
FHWA requires NCDOT to materially certify each project that receives Federal funding. This includes the verification of the field and lab test results, certifications and Buy America requirements. To accomplish this certification, the LGA is required to submit the original project materials records to the Materials and Tests Unit. Copies of the submitted materials should be maintained by the LGA in accordance with the Records Retention Schedule for the project. See Final Acceptance and Project Closeout for additional details.
Records Retention Schedule
FHWA requires that all project records must be retained for three (3) years from the date of the FHWA final payment voucher. NCDOT will include the records retention date as part of the final closeout letter to the LGA. See Final Acceptance and Project Closeout for additional details.
