GENERAL
The Specifications set forth the legal relationships between the Contractor and the Department, the FHWA, other governmental agencies, and the general public. It describes the Contractor's liabilities that may be incurred due to damages as may arise out of the prosecution of the work. It sets forth the provisions relative to the protection of the environment. It is not the intent of this section of the Manual to attempt legal interpretations. Accordingly, the detailed discussions are limited to those provisions which require direct implementation by engineering personnel. It is the policy of the Department that the
Attorney General's office will be contacted for written legal opinion only by the Administrator or
Chief Engineer. Inquiries concerning the need for legal opinions should be directed to them.
107-1 LAWS TO BE OBSERVED
Briefly, this is an indemnification clause protecting the Department or its employees from any liability due to the Contractor's failure to abide by laws which affect the work.
107-2 ASSIGNMENT OF CLAIMS VOID
By setting forth the fact that the Department will not recognize any assignment of claims by any Contractor against the Department, this is in effect declaring that all payments due the Contractor will be made directly to him except that with the written agreement of both the Surety and Contractor, payment may be made to them jointly. Questions of this nature should be referred to the State Construction Engineer.
107-3 PERMITS AND LICENSES
Unless otherwise specified in the contract, it is the Contractor's responsibility to secure all permits and licenses, pay all charges, fees, and taxes, and give all notices necessary and incident to the due and lawful prosecution of the work.
In general, the Department is not a policing agency to deliberately investigate and report all such violations. If, however, it is made known to the Engineer that the Contractor has failed to abide by this provision, it is his responsibility to promptly advise the Contractor, in writing, of any alleged violation and give him a reasonable time within which to comply. If the Contractor fails to comply within a reasonable time, it is the Engineer's responsibility to suspend such portions of the work as may be affected by the non-compliance in accordance with
Article 108-7.
As an exception to the above, the Engineer will fully investigate the special and general conditions of any environmental permits applicable to the project such as
Coastal Area Management Act or Corps of Engineers permits to ascertain compliance with
all conditions. In the event a discrepancy is discovered between the work being accomplished, whether in accordance with approved plans or not, the Engineer shall conduct an
immediate investigation. Work found not to be in compliance with the approved permit(s) shall be immediately suspended. Work may resume when the permits are amended and approved.
107-4 PATENTED DEVICES, MATERIALS, AND PROCESSES
This is an indemnification clause protecting the Department from any liability for claims arising out of the Contractor's infringement of any patented agent.
107-5 ENCROACHMENT ON RIGHT OF WAY
In no case shall any utility cross or otherwise occupy the right of way without written permission of the Department. The utility owner, his agent, or Contractor must have available at the utility construction site at all times during utility construction, an approved copy of the utility agreement with plans attached. The Engineer will be furnished copies of all authorized utility agreements and it will be his responsibility to ensure that all installations on the right of way are authorized. The Engineer or his designated representative will have the authority to stop any unauthorized work. Following the completion of the project, the Engineer shall transmit one copy of each encroachment agreement to the District Engineer and one copy to the Division Engineer.
Cases will arise where private owners or business enterprises either deliberately or unknowingly excavate, fill in, begin construction of temporary or permanent type structures or signs on the project right of way. Although it is within the authority of the Engineer to stop work of this nature immediately, direct action should be delayed to the extent of contacting the property owner or business to determine the exact nature of the work and if at all possible, contact the Division Engineer or
Division Right of Way Agent.
It is the duty of construction personnel to assist in the enforcement of these regulations on projects under construction, and also to call to the attention of the Division Engineer or appropriate District Engineer any known violation which they may observe along any highway in their Division.
107-6 FEDERAL PARTICIPATION
Federal participation in state highway construction is administered by the
Federal Highway Administration (FHWA) of the United States Department of Transportation. During the preconstruction phases of a proposed project, an agreement is consummated between the Department and the FHWA which sets forth the monetary amount of participation on a percentage basis depending upon the Federal Aid system on which the project is to be constructed. These construction projects are commonly referred to as "Federal Aid Projects."
In this agreement, it is provided that the FHWA will extend monetary assistance and in return the Department is charged with the responsibility of administering the contract with such engineering control, inspection, policies, and procedures that the project will be constructed in accordance with the terms of the contract and that the finished materials and workmanship will be in reasonably close conformance with the requirements of the Specifications. It is also a requirement of the agreement that the Department maintain documentation of contract pay quantities and progress of the work in accordance with the procedures set forth in this Manual.
Some Federal Aid projects require "step-by-step" approval or follow "certification acceptance" procedure during the construction of the project. However, the FHWA reserves the option to change the designation of a project from certification acceptance to step-by-step approval. This change would be made during the preconstruction phase of the project. Projects designated as requiring step-by-step approval will be periodically reviewed by representatives of the FHWA during the construction phase of the project and approval by the FHWA is required prior to making major changes in the work. Department representatives perform all reviews and approvals on projects designated to follow certification acceptance procedure. If a project is step-by-step, it will be noted in the
“Review Contract Details” in HiCAMS.
On all Federal Aid projects requiring step-by-step approval, representatives of the FHWA will make periodic inspections to determine if the Department is abiding by the terms of the agreement. Such inspections will include investigations of various phases of work in progress, adequacy of inspection, maintenance of traffic, engineering control, documentation in records and reports, and compliance with all federal requirements contained in the Special Provisions of the contract. During these visits, the Engineer shall cooperate fully with FHWA representatives by making all files, project records, and parts of the work available for inspection. He shall also, to the best of his knowledge, answer any questions concerning the work. On those Federal Aid projects requiring step-by-step approval, the FHWA must approve all changes and extra work. This approval will be made prior to such changes being made. Changes requiring advance approval would include work requiring negotiated prices or where force account provides the basis of payment, significant plan revisions, overruns, and underruns of quantities which would result in a major change in the cost of federal participation, and generally, any change which would require a Supplemental Agreement except as noted in the
Records and Reports Section of this Manual.
On non step-by-step projects, prior FHWA approval is not required regardless of the amount.
On step-by-step projects changes in the work of this nature and/or magnitude will require concurrence of the Division Engineer, State Construction Engineer, Area Construction Engineer and the FHWA. Accordingly, when the Engineer discovers in advance that such changes are going to be required, he should first consult with the Division Construction Engineer. Wherever possible, he should also bring these impending changes to the attention of the Area Construction Engineer and the
FHWA's Area Engineer.
On Federal Aid projects designated to follow certification acceptance procedure, the Department assumes the responsibilities of the FHWA and performs the inspections and approvals otherwise performed by FHWA representatives under projects requiring step-by-step approval. In essence, the FHWA will not be involved in the normal overview and step-by-step approval process in the construction phase of the project. However, the FHWA reserves the right to become involved in the project and must still be notified in advance of all final inspections. Subsequently, the Department is placed with the burden to operate consistent with our governing procedures and with proper contract administration and construction management.
On Federal Aid projects following certification acceptance procedure, representatives of the Department will do the following: perform construction supervision, inspection and engineering, and record keeping; verify project charges; approve change orders and construction revisions; and resolve contract claims. The FHWA shall be notified of any major claims of an unusual or controversial nature and any major changes in the design or standards resulting in the need for a design exception. FHWA representatives will not normally make periodic inspections during the course of the project but
shall be contacted in advance of all final inspections. Final inspections will be made by Department representatives and should not be delayed pending the FHWA's attendance. Every effort should be made to administer construction projects in accordance with proper contract administration and construction management regardless of whether a Federal Aid project is designated to require step-by-step approval or to follow certification acceptance procedure.
107-9 COORDINATION WITH RAILWAY
For those contracts containing Special Provisions which require the Contractor and all Subcontractors to have railroad insurance, the following procedure is to be followed:
- It shall be the responsibility of the Division Engineer to review the Special Provisions relating to the special railroad insurance and to discuss them at the preconstruction conference. The Contractor shall be advised that neither he nor any of his Subcontractors will be permitted to perform any work within the limits specified in the contract until all required insurance has been approved by both the railway company and the Department. The Contractor shall also be advised that all correspondence pertaining to the insurance policies and certifications including the submission of them for approval shall be to the
State Railroad Agent. This shall be recorded in the minutes of the preconstruction conference (see
Article 108-3).
- After notification of award of the contract, the State Railroad Agent will write the Contractor and give him specific instructions as to the procedures to be followed in the preparation of the required insurance. A copy of the Insurance Special Provisions will be attached to the letter to the Contractor. A copy of the letter will be sent to the Contractor's insurance agency with a copy of the Insurance Special Provisions attached. One copy of the letter will also be sent to the Division Engineer and one to the Resident Engineer.
- As instructed in the letter, the Contractor or his insurance agency shall submit the required insurance, in its entirety, to the State Railroad Agent for review and further handling with the railway company.
- The policies and Certificates of Insurance will be reviewed by the State Railroad Agent. If correct, they will be forwarded to the railway company for approval with copies of the letter of transmittal being sent to the Division Engineer, the Resident Engineer, and if the project is a Federal-Aid project, the FHWA with a copy of the Certificate of Insurance. If incorrect, the State Railroad Agent will handle any communications necessary for corrections with the Contractor's insurance agency, primarily by telephone. Should it be deemed necessary to handle by letter, the State Railroad Agent will write the Contractor's insurance agency and set forth the specific corrections required with copies of the letter being sent to the Contractor, the Division Engineer, and the Resident Engineer.
- When railway company approval of the insurance policies and Certificates of Insurance have been received by the State Railroad Agent, the Resident Engineer will be notified of approval by copy of a memorandum to the Division Engineer. The date the policies expire will be shown in the memorandum of approval. The Contractor cannot begin work in the railroad right of way until these policies are received.
- The Resident Engineer shall advise the Contractor, in writing, that his insurance has been approved and shall also show the date that the policies expire. Copies of this letter shall be sent to the Division Engineer and the State Railroad Agent.
- At least
30 days prior to expiration of any policy, the State Railroad Agent will advise the Contractor by letter as to the date a specific policy will expire with a copy of the letter to the Contractor's insurance agency, the Division Engineer, the Resident Engineer, and the affected railway company.
- Insurance for a Subcontractor will be handled as set forth in Items (2) through (7) when work is to be performed in a railroad right of way by a Subcontractor. When the Resident Engineer approves the Subcontract Approval Form (SAF), for this work, the State Railroad Agent shall be mailed or, when approval needs to be expedited, faxed a copy.
- In those instances where a minor portion of a sublet contract item is to be performed within the railroad right of way, insurance for a Subcontractor will not be required if the Prime Contractor will perform that portion of the work within the railroad right of way. A minor portion of a contract item would be
10% or less. The entire contract quantity would be shown on the
Subcontract Approval Form (SAF), with an explanatory note to the effect that the portion of work for the affected line items within the railroad right of way will be performed by others.
- Whenever work is performed within railroad rights of way, the Prime Contractor and the Subcontractor shall maintain appropriate insurance coverage. The Prime Contractor is also required to ensure that those workers who perform work within the railroad right of way are legitimate employees of the Prime Contractor or Subcontractor with appropriate insurance coverage.
- The State Railroad Agent will communicate directly with a Contractor, Subcontractor or insurance agency. The State Railroad Agent will relieve the Resident Engineer of all responsibilities related to the contract insurance requirements except authorizing the Contractor or Subcontractor(s) to begin, continue or resume work on railroad right of way, and determining the necessity of a Subcontractor to furnish insurance as set forth in Item (8) above.
It is realized that railroad insurance is a special item and the Resident Engineer is not expected to be familiar with all insurance requirements. The State Railroad Agent will be responsible for the administration and technical review of the provisions.
107-10 WORK IN, OVER, OR ADJACENT TO NAVIGABLE WATERS
Prior to the final design of bridges and approaches over navigable streams, the Department secures all necessary permits from the U. S. Coast Guard. Similar permits are obtained from the Corps of Engineers for work proposed in constructing highways parallel to and encroaching on navigable streams. Any special condition of these permits will be outlined in the Special Provisions.
If a Contractor of his own volition during construction desires to construct haul roads or borrow pits which affect navigable waters and which are not specifically covered in the project permit, he must initiate the action to secure an additional permit from the Corps of Engineers coordinating as necessary with the Department.
107-11 PROTECTION AND RESTORATION OF PROPERTY
This article of the Specifications holds the Contractor liable for any act, omission, negligence, or misconduct on his part which results in damage to any property. This includes underground and overhead utility facilities, previously completed work, adjacent properties, and any other property directly or indirectly affected by his prosecution of the work.
The Department’s project personnel should assist the Contractor in avoiding damages by warning him of known underground facilities, the limits of project right of way, and/or easements in any operations connected with the prosecution of the work which it appears may result in property damage. These personnel must also guard against giving instructions to the Contractor which would result in property damage.
On some projects, the established right of way width purposely does not contain the outer limits of project construction. In these cases, permanent or temporary construction easements are included in project right of way agreements. These easements may be specific as to the limits involved or may be general in the sense that they include areas more than sufficient for project construction. The forces responsible for staking the project should be fully informed as to the project right of way limits and all construction easements which have been obtained by the
Right of Way Department. This information may be obtained by securing copies of all project right of way agreements.
All stakeouts shall be confined to the limits described in the right of way agreements.
In no case, shall the Resident Engineer allow the Contractor to proceed with construction outside the previously obtained limits on verbal authority from the property owner. Failure on the part of the Resident Engineer to follow this procedure may result in the Department being liable for property damage.
If property damage does occur due to the Contractor's operations, the Resident Engineer shall advise the Contractor, in writing, of such damage and direct him to restore the same within a reasonable period of time. If the Contractor fails to make the corrections within the stipulated time, the Resident Engineer shall consult with the Division Engineer to determine the method of restoring the damage. In the event restoration is made by State forces, the cost of performing such work will be deducted from any monies due the Contractor.
The Engineer should urge the Contractor's cooperation with property owners and postal service employees to ensure mail delivery to property owners affected by project construction during the life of the project.
107-12 CONTROL OF EROSION, SILTATION, AND POLLUTION
(A) GENERAL
The General Assembly of 1973-1974 enacted into law the
N. C. Sedimentation Pollution Control Act of 1973 and amendments to the Act of 1974. This is a comprehensive and strict law which governs the control of sediment in construction type activities, both public and private. As a result of this law, the Department developed an Erosion and Sedimentation Control Program and submitted it to the N. C. Sedimentation Control Commission, who approved it for use by the Department in lieu of their published program. The Department’s program consisted of the Standard Specifications for erosion control and the assurance that the Sedimentation and Pollution and Control Act would be adhered to. The Department is allowed to operate under this program because it was felt the same results could be achieved. The approval of this program must be renewed each year and can be revoked at any time it is determined the Department is not meeting its obligations. If the Department were not able to operate under this blanket program, it would require individual project submission to the N. C. Sedimentation Control Commission for approval and put another step and delay in the chain of requirements before a project can be constructed. For this reason, if for no other, it is imperative that the Department require Contractors to live up to the requirements and obligations imposed by its contracts.
It is the policy of the Department to prevent or retain all accumulations of sediment developed as a result of erosion within the project limits. This same policy holds true for waste, borrow, and soil type base material sources outside the right of way, to the extent that all accumulations of erodible material will be confined to the work site area. This containment of erodible materials will be in accordance with the applicable provisions of the Specifications and this Manual.
The Specifications provide the Resident Engineer with the authority to limit the areas over which the Contractor may carry out clearing and grubbing, excavation, borrow, and embankment operations. Reference should be made to the applicable provisions of the Specifications and this Manual for guidelines to follow in carrying out this authority.
The General Assembly of 1971 enacted into law
"The Mining Act of 1971." This Act provides that, except for on-site construction activities, "mining" shall consist of the breaking of the surface soil for the purpose of extracting of minerals, ores, or other solid matter over any area in excess of one acre. It further provides that no mining operations shall commence until the operator or firm proposing to perform the mining has submitted a "Plan of Reclamation" to the Mining Council for approval and subsequent permit. By prior agreement, the Mining Council has determined that the provisions of the Standard Specifications represent an acceptable "Plan of Reclamation" and accordingly, has extended an exemption to Contractors performing work in borrow and soil type base course pits solely for the purpose of construction of public roads systems of North Carolina.
This exemption applies only to those natural material deposits listed. Contractors are required to obtain permits for all other "mining" operations.
This is mentioned in this Manual to emphasize the fact that the exemption as allowed is based on the premise that both Department and Contractor personnel will see to it that the applicable provisions of the contract relating to shaping, draining, controlling of erosion, and reclamation within these areas will be fully enforced. Failure to enforce these provisions may result in the exemption being revoked.
It is further the policy of the Department, to the extent possible and/or practicable, to protect the natural beauty, water supplies, and atmosphere of the State from damage by construction activities within the terms of the contract and all applicable laws and ordinances affecting such operations. The public is made aware of environmental protection measures included in individual contracts through public hearings and environmental impact statements. The Engineer must make himself fully aware of the applicable terms of the contract and take such actions as will prevent damage from occurring.
Best Management Practices (BMP) are activities, practices and procedures undertaken to prevent or reduce water pollution. The Engineer should use these BMPs consistently on all projects.
(B) EROSION AND SILTATION CONTROL
The Contractor shall install erosion control devices in accordance with the contract documents. The size and type of many measures are dictated by the erodible surface that a Contractor may plan to expose in one drainage area.
The purpose of erosion and siltation control is to provide protection for natural streams, water impoundments and adjacent property from eroded materials. The Engineer should be aware of the restrictions contained in the Specifications and, by appropriate consultation with representatives of the
Roadside Environmental and
Construction Units, see that adequate devices are installed to control siltation during construction. All devices must be maintained in order to be effective. If devices are overcome by extremely heavy rains, the Department, acting through the Contractor, must rebuild and restore the devices so that they will continue to function.
(C) COORDINATION OF EROSION CONTROL OPERATIONS
Incorporate the required erosion control measures into the project in an expeditious and continuing manner. If, due to impracticality or seasonal limitations, permanent features cannot be constructed, temporary measures must be coordinated with the various phases of construction. These provisions list some temporary measures that may be taken, but the Engineer should never feel limited to those features listed in this provision or in the plans.
(D) WATER AND AIR POLLUTION
The North Carolina Department of Environmental Quality
(DEQ) has developed and published rules and regulations governing water and air pollution in North Carolina. This agency has a staff that visits construction projects for the purpose of determining if any violations exist. The Contractor is required by Specifications to comply with all applicable laws and ordinances, including water and air pollution laws. Department personnel should cooperate with the staff of DENR in their reviews and should give full consideration to any recommendations that might be made. If a violation is brought to the attention of the Engineer, he should advise the Contractor of the deficiency and request that appropriate actions be taken to correct the situation. Copies of the appropriate rules and regulations should be obtained, if needed, from that agency in order to assure the most current information is obtained.
(E) DUST CONTROL
The Contractor may use any recognized dust palliative of his choosing that does not endanger the environment. These may include water, calcium chloride, or other chemical treatments. Dust control shall not be considered effective when the amount of dust creates a potential or actual unsafe condition, public nuisance, or condition endangering the value, utility, or appearance of any property.
(G) SANCTIONS
In the event the Contractor fails to provide erosion control measures as directed, the Engineer may temporarily suspend the work wholly or in part by written order as provided by
Article 108-7. The Engineer should consider suspending the contractor’s work when the weekly erosion control list has not been completed. If the Contractor fails to perform erosion control work as directed within twenty-four hours of notice, the Division Engineer, in consultation with the State Construction Engineer, can have the work performed with other forces and the cost of performing the work will be deducted from the monies due the Contractor, as provided in
Article 105-16.
It is the Department’s policy that the Engineer will suspend the contractor’s land disturbing operations when an ICA, NOV or C&D is issued.
107-13 PROTECTION OF PUBLIC LANDS
This article places special emphasis on the Contractor's responsibility in preventing and suppressing forest fires within State or National Forests.
107-14 RESPONSIBILITY FOR DAMAGE CLAIMS
This article ties together all of the damage and liability provisions of this section of the Specifications. It provides for the withholding of monies due the Contractor for certain claims arising from damages incurred as a result of the Contractor's prosecution of work. For other damage claims, it provides for the Contractor to show proof of protection from such liabilities by public liability and property damage insurance.
Generally speaking, monies may be withheld from the Contractor for (a) claims by reason of the Contractor's infringement of patent, etc., (b) amounts paid by the Department by reason of the Contractor's failure to comply with or violations of law, etc., and (c) claims arising from damages caused by the Contractor's failure to control erosion either within or outside the right of way in accordance with the terms of the contract.
The Department may withhold monies due the Contractor or may require him to show proof of public liability and property damage insurance for (a) claims for the failure of the Contractor to safeguard the work, (b) claims by reason of the Contractor's failure to erect adequate barricades, warnings, etc., and (c) claims by reason of blasting damage.
The examples listed are subject to review on an individual basis by the Division Engineer prior to taking action.
In implementing these provisions, it should be understood that it is the intent of these provisions that the Department does not propose to construct a project at the expense of third parties.
107-15 LIABILITY INSURANCE
The Contractor shall furnish to the Department an original standard ACORD form certificate of insurance evidencing commercial general liability with a limit for bodily injury and property damage in the amount of
$5,000,000.00 per occurrence and general aggregate, covering the Contractor from claims or damages for bodily injury, personal injury, or for property damages which may arise from operating under the contract by the employees and agents of the Contractor. The required limit of insurance may be obtained by a single general liability policy or the combination of a general liability and excess liability or umbrella policy. The State of North Carolina shall be named as an additional insured on this commercial general liability policy.
The Resident Engineer should verify that the Contractor has the applicable limits of insurance prior to the Contractor beginning work on the project.
The Contractor and his subcontractors shall provide the Resident Engineer proof of coverage of worker’s compensation insurance prior to beginning work. The Contractor’s proof of coverage may be from an insurance carrier or a certificate of compliance issued by the
Department of Insurance for self-insured subcontractors.
107-16 OPENING SECTIONS OF PROJECT TO TRAFFIC
This article gives the Engineer the authority to open all or any portion of a project to traffic when it is determined that the Contractor will not complete the project by the completion date. This article only applies when the contract provides that traffic will not be maintained through the project during construction.
This action is not taken unless it is deemed absolutely necessary due to extended inconvenience to the traveling public caused by the late completion of the project. Prior to taking such action, careful consideration must be given as to what the ultimate completion date will be as
"completion date" includes all authorized extensions. This will require the complete review of the project records to determine if the Contractor is due any authorized extensions of the completion date as may be allowed under
Article 108-10 of the Specifications. The placing of traffic on a project prior to expiration of contract time could well lead to the Department of Transportation being liable for extensions in the completion date as well as additional compensation. Requests to open a project to traffic should be made to the State Construction Engineer along with a complete written review in accordance with the guidelines set forth in
Article 108-10 of this Manual.
107-17 CONTRACTOR'S RESPONSIBILITY FOR WORK
This article of the Specifications provides that the project is under the care and keeping of the Contractor until final acceptance (
Article 105-17). The Contractor is required to repair at his expense any damage which occurs to the work. Exceptions to this would include, but may not be limited to, the following examples:
- Damage to any work caused by actions of the elements of such exceptional nature as to be legally classified as Acts of God (Reference Article 101-3 of the Specifications).
- Damage caused by the elements to
embankments which have been properly constructed, drained, and maintained by the Contractor (Reference
Subarticle 235-3(D) of the Specifications).
- Damage to seeding and mulching which was caused without the fault or negligence of the Contractor.
- Damage caused by work being performed by Department forces.
(A) GENERAL
The acquisition of the right of way for a construction project is a function of the
Right of Way Branch. This portion of the Manual will, therefore, be limited to the responsibilities and duties of the Engineer and his assigned construction personnel in seeing that all work on the project is contained within the limits of the acquired right of way or construction and drainage easements and that all special conditions set out in the right of way agreements are carried out.
In accordance with practice and procedure in effect within the right of way, the Right of Way Agent will prepare a list of all items of work to be done by the Department or its Contractor which may have been agreed upon during negotiation and will furnish this list to the Division Engineer and the Resident Engineer. This list will contain, but not be limited to, such items as restoration of driveways, resetting of fences, sloping of banks, modification of drainage easements, etc. The Division Engineer or Resident Engineer will also be notified of any instance where a property owner has been allowed extended occupancy of a building beyond the date of contract award or any other instance of delayed right of entry. In the event it is determined when the project is staked that additional construction easements are needed or if any question arises relative to the administration of the right of way, the Engineer is to contact the Division Right of Way Agent immediately.
With the above mentioned information and services which are made available to the Engineer,
it should be reemphasized that in no case, even at the direct request of the property owner, should work be performed outside of the limits of the acquired right of way, construction, or drainage easements without the execution of a written agreement between the property owner and the Department covering the work to be performed.
(B) CONDEMNED PROPERTIES
In certain cases, the Right of Way Branch cannot obtain the necessary right of way for a project by negotiation. In these cases, condemnation proceedings are started by the Right of Way Branch and a declaration of taking and complaint is filed prior to the award of the contract. A plan sheet showing the property is filed with the complaint and, if the condemnee files an answer, a detailed map of the property is filed along with the other documents. These detailed maps are prepared by the Property Survey Section of the
Location and Surveys Unit. When only a part of the property is to be taken, this map shows the right of way lines and/or construction easement lines with respect to the property boundaries and also the general topography of the property. After the map has been prepared, it is sent to the Division Right of Way Agent who will consult with the Resident Engineer to determine that all slope easements, drainage easements, right of way lines, etc. are properly shown on the map and that the actual construction limits of the project are contained within the various lines shown on the map. This check of the map is very important in that inaccuracies discovered in the map during the actual trial can result in great embarrassment and loss to the Department.
Department forces and Contractor's forces are to confine all their work to the areas shown on the plans and the detailed map if it has been prepared. This should be emphasized during the project preconstruction conference and at that time the Contractor should be given a list of all condemned property on the project and impressed with the importance of staying within the areas designated. Should the Contractor, for any reason, work or park equipment outside the designated area, he should know that it is his responsibility and that any transaction between him and the property owner does not include the Department.
Any question arising as to the administration of the right of way on condemned property should be referred immediately to the Division Right of Way Agent, and in the event it is finally determined that additional area must be obtained to construct the project, it may be necessary to refer the matter back to the
Attorney General's Office so that an amendment be filed to the declaration of taking. This procedure is undesirable and can take three to four weeks to process.
(C) DRIVEWAYS
The location of driveways necessary to be relocated or otherwise adjusted during project construction should be determined during the field plan inspection. The driveways must be graded so that the property owner maintains use of the driveway. It may be necessary that the property owner be contacted before a final decision for driveway adjustment can be reached. If at all possible the representative of the Right of Way Branch negotiating for the right of way will obtain a construction easement to cover any work in adjusting the driveway which will exceed the project right of way. The Engineer should be familiar with the terms of the Right of Way Agreement and ensure that construction adheres to the agreement. In the event an easement has not been previously obtained or in the event the property owner requests a change in the construction outlined in the agreement, the Engineer is to allow no work to be performed outside of the right of way until the Division Right of Way Agent has been contacted and the proper action taken.
The Department has adopted a uniform policy for driveway widths and locations for commercial properties. A copy of this
Policy Manual and any necessary interpretations should be obtained from the Division Engineer.
(D) RELOCATION OF FENCES
Generally, the relocation of fences is covered in the Right of Way Agreement. In the event it becomes necessary to relocate fences as a contract item, the Right of Way Agent will furnish a list of the work necessary to the
Design Unit for inclusion in the contract. Fencing reset by contract is usually replacement in kind; however, should it become necessary to use new materials, the Resident Engineer should contact the Division Right of Way Agent to determine the proper course of action as the furnishing of new materials is not normally included in the contract. The Contractor may privately deal with the property owner to reset his own fence. Any agreement of this nature should be properly documented in the Engineer's files. The Engineer should also note that any labor performed on the right of way of a Federal Aid project is subject to the wage provisions of the contract (
Article 107-22).
(E) DRAINAGE EASEMENTS
The need for drainage easements is established by the
Hydraulics Unit during the design stage of a project. These easements are to provide the work area required for the widening, deepening, or relocation of flow channels along the project, or at the inlet or outlet ends of drainage structures. In some instances, where drainage structures outlet into existing ditches and cleaning out the existing ditch is all that is required, drainage easements are not considered necessary. In those cases, it may be desirable to clean out existing ditches with Maintenance forces prior to letting the project to contract. Factors of this nature should be thoroughly reviewed at field plan inspections.
Ensure the project permits allow the work planned within the drainage easement.
In the event drainage changes must be made during construction, the effect on adjacent properties is to be thoroughly studied prior to the change. Additional drainage easements required could be difficult to obtain, could be across condemned property and may require a revised permit. After the change has been determined necessary and approved by the Hydraulics Unit, the Resident Engineer is to contact the Division Right of Way Agent and request that easements required by the change be negotiated.
Where water is discharged from the right of way outside a natural drain or existing ditch, an easement is required for the necessary channel and construction operation to a natural drain. Where diversion of water is made to a natural drain or existing ditch which would increase the discharge considerably above its capacity, an easement is required to enlarge and improve the drain to a point where the increased discharge can be released without causing damage.
Where improvement to an existing drain is required for proper drainage and not covered in the paragraph above, a permanent drainage easement is not required. Even though the drain may be enlarged and deepened, if the property owner is informed of what is to be done and agrees, in writing, to allow entry onto his property for this work, this is all that is required. This should not be construed to mean that in all cases of this nature, a temporary permit of entry only should be obtained. There will be instances where a permanent easement is desirable. Also, it should not be necessary to obtain written permit of entry on those drains which have previously been routinely maintained. Permission for this is implied until otherwise advised by the property owner.
Ensure the project permits allow the work planned for drainage improvements.
Recommendations for clean outs which are to be covered by permit of entry should be so noted on the plans. The approximate length and cross section should be included so that this permit can be obtained at the same time as the acquisition of right of way.
107-20 NO WAIVER OF LEGAL RIGHTS BY THE DEPARTMENT
In the event of overpayment or underpayment on the part of the Department or in the event the Contractor fails to perform the work in accordance with the terms of the contract, the Department has the authority to correct such payment whether or not the final estimate might have been previously processed.
In the event it becomes necessary for the Department to recover overpayment from the Contractor and/or Surety after the final estimate has been paid, the matter will probably be handled by the
Attorney General's office involving considerable legal expenses. Preparing the monthly estimate accurately should avoid these unnecessary costs.
Underpayments on the final estimate will be handled by the State Construction Engineer in the form of a Supplemental Final Estimate.
107-21 SAFETY AND ACCIDENT PROTECTION
107-22 WAGES AND CONDITIONS OF EMPLOYMENT
General
The provisions contained in
Form FHWA-1273 are generally applicable to all Federal-aid construction projects; however, certain provisions, such as
Davis-Bacon and
Copeland Act requirements are only required for projects located on a Federal-aid highway system. Form FHWA-1273 must be made a part of, and physically incorporated into all contracts as well as appropriate subcontracts and purchase orders. These provisions can be found in the Standard Special Provisions of all Federal Aid contracts. If payrolls are not required of the Contractor, the contract will contain a Project Special Provision entitled, “Submission of Records- Federal-Aid Projects” which states the following:
This project is located on a roadway classified as a local road or rural minor collector, therefore the requirements of Paragraph IV - Davis Bacon and Related Act Provisions are exempt from this contract. Otherwise, the requirements outlined in Form FHWA-1273 do apply and should be enforced by the Department.
The Davis-Bacon Act requires the payment of locally prevailing wages and fringe benefits to laborers and mechanics employed on Federal contracts in excess of $2,000 for construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis Bacon was enacted as a means to prevent contractors from importing cheap labor from outside the area, thereby, keeping capital at home with the local labor force where it would do the most good. See the
US DOL's Wage and Hour Division Website for additional information regarding labor policies.
The provisions of Paragraph IV require the submission of payrolls by the Contractor and each Subcontractor as well as overtime regulations and the withholding of liquidated damages for wage violations. Each Engineer shall become familiar with these contract provisions. The Contractor should be requested to furnish
one copy of each week's payroll. Each approved second tier Subcontractor should send their payroll to the first tier Subcontractor and each approved first tier Subcontractor should send their payroll to the Prime Contractor who will check it for correctness and furnish it to the Resident Engineer. The payrolls are to run consecutively from the date the Contractor begins construction through the date of acceptance. During periods of time,
one week or longer, when no work has been performed, it will not be necessary for payrolls to be submitted.
With the increased use of technology, certified payrolls may be submitted electronically. The electronic versions shall include all the required information in accordance with the FHWA 1273 and include a signed "Statement of Compliance." If the Contractor elects to submit payrolls electronically, he shall maintain the original payrolls and basic records relating thereto for a period of three years after the payment of the Final Voucher for the project. Further, the Contractor must provide the original payrolls and basic records relating thereto upon request to the Department, the FHWA, or the Wage and Hour Division of the Department of Labor.
Site of Work
The “site of work” is defined as the physical place or places where the work called for in the contract will remain; and any other site where a significant portion of the work is constructed, provided that such site is established specifically for the performance of the contract or project. This would include borrow/wastes pits that are established exclusively for the project. Asphalt/Concrete plants are not typically considered "site of work" but there are cases where plants are established exclusively for the project, and in those cases they are considered "site of work." Transportation between locations, which are included in the “site of work”, are covered under Davis-Bacon and certified payrolls should be submitted for the employees (including truckers) performing work in these areas.
Payroll Exemptions
Instances where employees are not subject to requirements of the Davis-Bacon Act and certified payrolls are not required for the work include the following:
- Truck drivers, who come on the “site of work” to deliver or pick up construction materials, including those employed by the contractor.
- Project engineers, surveyors, superintendents, quality control or quality assurance inspectors and contract compliance inspectors are not usually considered to be laborers or mechanics.
Required Information
After the contract is awarded and work has started, payrolls shall be received and documentation shall be completed for each week of the period prior to processing of the monthly estimate. Payrolls are to be received for the period four weeks in advance of the period payment being made. Payrolls are only needed for Contractors that performed work during a given week. If no Contractors worked, complete the form and list "No Work" on the form.
When a payroll is submitted for a Subcontractor, it shall show the following:
(Name) , Subcontractor for (Name), Prime Contractor.
When a payroll is submitted for a second tier subcontractor, it shall show the following:
(Name) , Second Tier Subcontractor for (Name),Prime Contractor.
A Department representative, assigned by the Resident Engineer and working under his/her direction, shall review the Contractor's payroll to determine if there is reasonable compliance with contract requirements. The payrolls shall be assembled in the same order as listed on the attached coversheet, and filed in the Contractor's Payrolls section of the project file (or on the Construction Team Site).
Form FAP-1, is acceptable as the coversheet. Note: Where the Contractor provides certified payrolls electronically, the Resident Engineer's office shall complete a Form FAP-1 (or similar) and store it electronically with the electronic certified payrolls for the associated week of work.
The first payroll received from the Prime Contractor and each Subcontractor shall be thoroughly inspected for conformance with contract requirements. If error(s) are found in the first payroll, the second payroll shall be thoroughly inspected and so forth until a correct payroll has been submitted. Once a correct payroll has been received, the checking of subsequent payrolls may be limited to the review of wages for at least two employees randomly selected for each weekly payroll received from the Contractor and each Subcontractor. However, to ensure that a diversity of classifications is being examined, a thorough inspection shall be made of all payrolls received from the Prime Contractor and each Subcontractor for at least one week for each quarter year period. This review should be documented by the appropriate check box on the
FAP-1 form.
If a certified payroll is not received from a contractor during a week in which work was performed on the project, then the Engineer should contact the prime contractor to advise of any missing payrolls. If the payroll is not received, then money due to the contractor on the next monthly partial estimate may be withheld. If the contractor not submitting payrolls is a subcontractor, then only that subcontractor's portion of the partial pay estimate should be withheld. A letter should be sent to the contractor advising them that money is being withheld due to the failure to submit contractually required certified payroll. If payrolls are not received after withholding money due, then the Engineer should contact the Construction Unit for additional assistance."
The FAP-1 should be completed by reviewing daily diaries for the week. Each contractor who performs work on the project should be marked in the “Active" column on the FAP-1. If a payroll was received from a contractor, this should be marked in the “Payroll Received" column on the FAP-1. Comments can be provided if a contractor who performed work on the project is not required to submit a certified payroll. The FAP-1 should be signed by the individual performing the review of the certified payrolls.
An Electronic FAP-1 may be utilized in SharePoint in lieu of the FAP-1 included here. Contractors who are documented in electronic diaries stored on SharePoint will be captured as “Active" on the project. Additionally, the Engineer has the ability to denote any contractor who was not captured in the diaries by checking the box labeled “Active but No Diary" for the respective contractor. The date that the payroll is received should be recorded in “Date Received". If a payroll is not required, the “Payroll Not Required" check box should be checked. Additional comments can be provided in the “Notes" for each contractor. Manage Attachments can used to upload electronic copies of the certified payroll. The report should be approved upon receipt of all payrolls required.
The following check list should be used to determine the Contractor's compliance.
- The payroll covers the starting date of the project.
- A weekly statement of compliance, signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract, is attached to or made a part of each payroll, including each supplemental payroll. The Statement of Compliance shall certify the following:
- That the payroll for the payroll period contains the information required to be provided under §5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under §5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete;
- That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3;
- That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract.
The
USDOL Form WH-347 may be used to meet the requirements of the statement of compliance.
The payroll has the full name of the employee. Addresses and full social security numbers shall not be submitted on weekly transmittals, however, an individually identifying number for each employee (e.g. last four digits of employees’ social security number or an assigned employee number). If new employees are added to subsequent payrolls, the above information is required.
Classifications shown on the payroll are as listed in the general wage decision in the contract.
The basic hourly wage rate is as much or more than the rate for each classification shown in the general wage decision in the contract. Contractors may use “bona fide” fringe benefits to achieve the hourly wage rate listed in the contract wage decision. Where fringe benefits are required to be paid or are being used to offset required wage rates, they should be shown on the certified payroll information in order to verify the employees are being paid the prevailing wage rate for work performed.
All time worked by laborers and mechanics in excess of 40 hours per week shall be paid at a rate equal to 1-1/2 times the regular hourly rate.
The half-time premium for overtime must be at least one-half the basic hourly rate from the contract wage decision and cannot be met with fringe benefits. (See examples below.)
For those employees working in more than one classification, the daily and weekly hours worked in each classification, including actual overtime hours worked, are shown.
All deductions are itemized.
The appropriate fringe benefit notation has been checked or the benefits are itemized on the payroll.
All mathematical computations are correct.
The net wages paid are shown.
Example #1:
Minimum Wage Decision:
Required Hourly Rate = $14.00
Required Fringe Benefits = $0.00
Total Minimum Wage/Fringe Benefit Obligation = $14.00
The minimum wage and fringe benefit requirements may be met in either of the
following ways:
- $14.00 in hourly wages; OR
- $11.00 in hourly wages and $3.00 in pension contributions or other “bona fide” fringe benefits.
In case (2), if the employee works 41 hours, for the one hour of overtime, the
half-time premium is paid on the contract hourly rate. The one hour of overtime
may be shown as:
$11.00 (hourly wage) + $3.00 (fringe benefits) $7.00 (half–time premium rate)
Example #2:
Minimum Wage Decision:
Required Hourly Rate = $14.00
Required Fringe Benefits = $3.00
Total Minimum Wage/Fringe Benefit Obligation = $17.00
The minimum wage and fringe benefit requirements may be met in either of the
following ways:
- $17.00 in hourly wages;
- $14.00 plus $3.00 in pension contributions or other “bona fide” fringe benefits;
- Any combination of equivalent hourly wages and fringe benefits that equal $17.00.
*Note – if the employee works 41 hours in a week, for the overtime portion of their pay, the employer must meet the $14.00 per hour rate then add the half-time rate of $7.00.
“Bona Fide” Fringe Benefits:
The Davis-Bacon Act lists all types of fringe benefits which the Congress considered to be common in the construction industry as a whole. These include the following: Medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing unemployment benefits, life insurance, disability and sickness insurance or accident insurance, vacation and holiday pay, defrayment of costs of apprenticeship or other similar programs or other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other Federal, State or local law to provide any of such benefits.
The Davis-Bacon Act excludes fringe benefits which a contractor or subcontractor is obligated to provide under other Federal, State or local law. No credit may be taken for the payments made for such benefits. For example, payments for workmen’s compensation insurance under either a compulsory or elective State statute are not considered payments for fringe benefits. Payments made for travel, subsistence or to industry promotion funds are not normally payments for fringe benefits under the Act.
Classification Reviews
The Resident Engineer will then forward this request to the State Construction Engineer who will prepare the necessary forms and submit the request to the
Department of Labor (DOL). The State Construction Engineer will transmit the findings of the DOL to the Resident Engineer with any necessary instructions.
Process for Addressing Errors
If an error is found on a payroll, the following procedures for correction shall be utilized:
- The original payroll shall
not be returned to the Contractor.
- The Prime Contractor shall be notified of the error. Initial notification can be by phone, e-mail, or letter. However, should the prime contractor fail to provide requested information in an appropriate time frame, the Resident Engineer will follow up with a letter. If the payroll found in error is for a Subcontractor, the letter shall be addressed to the Prime Contractor with a copy to the Subcontractor.
FAP-2 is acceptable. The Department shall not make corrections to or amend certified payroll information provided by the Contractor.
- Upon receipt of the corrected payroll and other supporting data, document the resolution of the violation. A memorandum to the file shall be written along with the Contractor's letter of explanation and the copy of the canceled check which is payment from the Contractor to the employee for the underpayment or the copy of the statement signed by the employee that he has received the underpayment from the Contractor. FAP-3 is acceptable.
Spot Interviews
In addition to the checking of payrolls prior to payment of the monthly estimate, it is the responsibility of the Resident Engineer to perform the following for all Federal Aid projects:
- Conduct spot interviews with the Contractor's employees to determine they are properly classified. Interviews should be conducted on each project no less frequently than once a quarter (based on the calendar year, not the life of the project) and at least one employee of the Prime Contractor and each Subcontractor should be interviewed during the life of the project. The
interview form provided at the end of this section or similar form should be used. A
Spanish version of this form is provided also for the Engineer’s use in these interviews.
- Determine by spot interview that each employee is paid at least the minimum hourly rate described for his classification that is contained in the contract and that each employee on the project is either on the Prime Contractor's payroll or on an approved Subcontractor's payroll.
Trucking firms may not be required to submit payrolls (see information regarding trucking in this section). Verification of the information gathered during the employee interview should be made by comparing the information gathered during the interview with the payroll in effect on the interview date.
- Furnish the required Federal Aid Posters with regard to employment and wages to the Contractor and require these posters be displayed on the project on a weatherproof bulletin board along with a copy of the minimum wage rates and the Contractor's EEO policy statement.
U.S. Department of Labor’s website has a listing of required job site posters for NCDOT Federal Aid projects. Additional information regarding the posters can be found in the Records and Reports Section of this Manual.
- Maintain a record in the project files of the individual interviews made to determine job classification and wage rate compliance.
In addition to the above, the Engineer is expected to listen to any and all complaints by Contractor's employees with regard to proper classification and payment. When employees make complaints, the Engineer is expected to take investigative action he considers necessary to determine the validity of the complaint and submit his findings together with recommendations to the Division Engineer and the State Construction Engineer for further handling.
If there is any need for clarification and/or interpretation of any problems concerning labor compliance, the Engineer shall refer to the appropriate chapters of the Labor Compliance Manual and contact the Central Construction Unit.
Annual EEO Report
In addition to the weekly payrolls, the Federal Provisions (FHWA 1273) also require the Contractor to submit an annual EEO Report
(FHWA 1391) for each that is active during the month of July. Information related to this can be found in the
Records and Reports Section of this Manual.
With the above mentioned information and services which are made available to the Engineer, it should be reemphasized that in no case, even at the direct request of the property owner, should work be performed outside of the limits of the acquired right of way, construction, or drainage easements without the execution of a written agreement between the property owner and the Department covering the work to be performed.
107-24 RIGHT OF THE CONTRACTOR TO FILE A VERIFIED CLAIM
General Statute 136-29 provides that if the Contractor fails to receive in the final estimate payment such settlement as he believes he is entitled, he may accept such payment, then, within sixty days of receipt of the final estimate, file with the Chief Engineer a verified claim for an amount to which he feels he is entitled under the terms of the contract. Within ninety days after receipt of the Contractor's verified claim, the Chief Engineer and his staff review the claim. On the basis of this review, a settlement is offered to the Contractor or the claim is denied.
107-25 HAZARDOUS, CONTAMINATED, AND/OR TOXIC MATERIAL
When the Contractor exposes or encounters conditions which may indicate the presence of hazardous, contaminated, and/or toxic material, the Contractor shall immediately suspend operations and notify the Engineer. The Resident Engineer shall notify the Division Engineer and the GeoEnviromental Section of the
Geotechnical Engineering Unit to obtain information regarding the procedure for testing the site. The Contractor shall not be allowed to resume his operations at the site until directed by the Resident Engineer.
If the investigation reveals hazardous, contaminated, and/or toxic material which is to be disposed of, the work may be performed by others under a separate contract or may be performed by the Contractor at the contract prices or as extra work. This determination will be made by the Engineer.
ADDITIONAL RESOURCES
