Construction Manual  

 

SECTION 109 - 2018 STANDARD SPECIFICATIONS

2018 STANDARD ROADWAY DRAWINGS

109-1 MEASUREMENT OF QUANTITIES

For each contract bid item that is included in the contract the accompanying Specification, or Project Special Provision will include a description of "Measurement and Payment." All personnel involved in the measurement of quantities for pay purposes should be familiar with the contract relative to these descriptions.

 

These measurements are used in computation of quantities for the respective item, i.e., the measurement as it is to be recorded in the pay record book or any other applicable source document. Unless the Standard Specifications indicate a specific method of measurement, pay items should be measured to the nearest reasonable digit and entered in HiCAMS up to five places.

 

If the computed numbers must be rounded so that the number of digits does not exceed the five places allowed in HiCAMS, the following rules of rounding off should be used:

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109-2 SCOPE OF PAYMENT

Everyone should thoroughly familiarize themselves with the "Measurement and Payment" article for each contract item. This article describes the work that the Contractor has contracted to perform at the contract lump sum or unit price. Thorough understanding of the work to be paid for will ensure that the Contractor does complete the work, and will also provide a basis of determining whether or not extra work is required. This article states that the same work will not be paid under more than one line item.

Example: Clearing and grading required in fence construction is included in the basis of payment for the fence item; therefore, the work of clearing and grubbing would not be measured and paid for under any other contract item.

Example: When a pipe line is installed across an existing asphalt surface, removal of the existing asphalt is a part of the pipe installation and shall not be measured and paid under the pavement removal line item.

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109-3 FORCE ACCOUNT WORK

When the Engineer directs the Contractor to perform work and the two parties cannot agree on the price for the work, the Engineer shall issue a Force Account Notice to the Contractor and the work will be paid for in accordance with the Force Account provisions in Article 109-3 of the Standard Specifications. When the above conditions have been met, the Engineer or his representative has the authority and responsibility to direct the Contractor's operations to the extent that only the equipment, material, labor, and hours worked as authorized by him will be allowed for payment. In no instance will force account records be assembled after the fact to form a basis for an agreed lump sum or unit price for work by supplemental agreement. However, it is permissible to perform and pay for the first portion of the work by force account in order to develop a price for payment of the remainder of the work by supplemental agreement.

 

When a Contractor is required to perform work that he considers to be extra work or to perform work which he feels justifies additional compensation and his request for additional compensation has been denied, it is the Contractor's responsibility to advise the Engineer in writing of his intention to file a request for additional compensation and to keep cost records in accordance with Article 109-3 of the Standard Specifications prior to beginning any of the affected work. In these instances the Engineer or his representative does not have the authority to direct the Contractor's operations but it is their responsibility to maintain independent cost records and continually compare them. The Resident Engineer’s staff must maintain exceedingly accurate and detailed diaries reflecting the performance of disputed work. Any differences between the records should be reconciled or, when they cannot be reconciled, the Engineer should objectively document the circumstances and the points of contention.

 

Authority to approve the performance of extra work on a force account basis is delegated to the Engineer when the estimated amount of the work does not exceed the respective amount for which they have authority to approve supplemental agreements for extra work. Approval to perform other work on a force account basis is secured from the State Construction Engineer or his delegated representative. To secure approval, the Engineer must extend the Contractor's proposed price for performing the work, and the Engineer's breakdown estimate of performing the work by force account. This may be a letter with attachments and not on a supplemental agreement form. In cases of emergency, this approval may be secured by telephone, Fax, or E-mail. Where applicable, the Engineer will secure the concurrence of the Federal Highway Administration. When approval is secured, the Engineer shall extend a Force Account Notice to the Contractor. The Contractor may proceed with the work after the Engineer has approved the base wage rates for labor to be utilized in the affected work. Payment for work performed on a force account basis must be documented in HiCAMS.

 

A pro-rata extension in the contract completion date in accordance with Subarticle 108-10(B)1 of the Standard Specifications will be allowed for performing the force account work. When justified by the Contractor, the completion date may be further extended as provided in Subarticle 108-10(B)4 of the Standard Specifications.

 

The Specifications contain specific guidelines for payment of work performed by force account.

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109-4 PARTIAL PAYMENTS

(A) GENERAL

Partial payments will be made to the Contractor based upon progress estimates prepared by the Engineer.

 

The Specifications provide that partial payments may be made twice each month if, in the judgment of the Engineer, the amount of work performed is sufficient to warrant such payment. If the Contractor requests an additional estimate and the amount due exceeds $100,000.00 for a one-half month period, the Engineer can approve the request. A partial payment should be made in the middle of the normal estimate period and will include only those items of work with a significant current amount. Payment for other items of work would be made only at the end of the estimate period.

 

Partial payments shall be subject to correction in the final estimate; however, the Engineer should take whatever measures necessary to ensure the quantities on the monthly estimate are substantially correct and therefore compensate the Contractor for all of the work performed during the partial payment period. Under no circumstances shall the Engineer utilize the Contractor's measurements alone as the basis for partial or final payment. A good example of this is estimation of earthwork quantities. The use of Contractor’s load counts for payment of ‘Unclassified Excavation’ is not acceptable. Cross-reference verification by another acceptable method such as cross-sections, balance point computations, photogrammetry, or average end area should be employed by the Resident Engineer’s staff to ensure accurate pay quantities.

 

These quantities determine whether or not certain administrative procedures will be implemented that have serious ramifications. For example, partial payment quantities determine whether or not a Contractor is subject to removal from the list of prequalified bidders or the withholding of anticipated liquidated damages. Accordingly, the Engineer shall take appropriate care in the preparation of the estimate and shall submit it as expeditiously as possible. The preparation of partial pay estimates should be given a top priority by the Engineer.

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(B) PROMPT PAYMENT

This subarticle provides that all levels of contractors - prime, subcontractor, or second tier subcontractor - must make payment to the obligee (subcontractor, second tier subcontractor or material supplier) within seven days of knowledgeable receipt of payment for work performed or services rendered during the time for which a partial payment was made by the Department. Failure of any level of contractor to make prompt payment as described in the provision can result in withholding future payments until the issue is resolved and removal of an approved contractor from the prequalified bidder’s list.

 

If a subcontractor, second tier subcontractor, or material supplier has a complaint regarding receiving payments in accordance with the prompt pay specification, he should write a letter to the Resident Engineer detailing the work performed or materials supplied and the date of services rendered. The Resident Engineer should investigate the issue to determine if the Department has made payment for work and, if so, the date payment was made. If the Department has made payment for the work and a reasonable amount of time has passed for the payment to be received, the Resident Engineer should send a certified letter to the contractor in question, requesting proof of payment or reason for nonpayment within seven calendar days of receipt of monies (See example letter). The Resident Engineer should notify the State Construction Engineer if the contractor fails to provide an acceptable response, within seven days.

 

The specifications allow the Department to withhold payment from contractors who are not in compliance with prompt payment specification. However, before withholding payments the Resident Engineer should consult with the State Construction Engineer. The State Construction Engineer should be copied on all correspondence relating to prompt payment.             

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(C) UNBALANCED BIDS

When the Board awards a contract that contains unbalanced bid price(s), the State Construction Engineer will notify the Division Engineer and Engineer of the reasonable unit or lump sum price(s) for the item(s) of work. Partial payment for work performed on an unbalanced bid item will be made at the reasonable unit or lump sum price(s) until the last partial payment estimate at which time payment will be made at the bid price.

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109-5 PAYMENT FOR MATERIAL TO BE USED IN THE WORK

Payment for materials delivered to or fabricated for a project may be up to 95% of the delivered cost of materials, if it is considered the remaining 5% is sufficient to compensate for the remainder of this work. The amount paid will be reduced by any potential savings or discounts regardless of whether the Contractor receives the benefit. If the Engineer is of the opinion that payment should be less than 95%, the State Construction Engineer should be consulted. See the Records and Reports Section of this Manual.

 

Prior to the Department making payment for materials, the Contractor shall request a materials payment in writing and shall furnish documentation as required by the Specifications as follows: 

 

These documents will be retained in the Engineer's files as materials payment documentation. Materials payments shall be documented in HiCAMS and shall be associated with the appropriate line items.

 

The unit of measure shall be the same as the contract item, i.e. Structural Steel - Lump Sum, etc. To arrive at the lump sum price, the material supplier's invoices shall be totaled including tax and less discounts. This total shall be multiplied by the percentage to be paid with the result being the lump sum price shown on the estimate.

 

To arrive at the unit price, add the dollar value of the material supplier's invoices including tax and deducting any discounts. Total the quantity of material being paid for, which is represented by the invoices. Divide 95% of the dollar value of the invoice total by the total quantity of the material to determine the unit price.

 

As the material is incorporated into the project, it shall be paid for at the contract unit price and the quantity paid will be deducted from the materials item. The Engineer must verify that the materials payments are deducted as payment is made at the contract unit prices. Payment for materials shall be included on a regular monthly estimate unless the amount of material being paid for is $100,000 or more, and the Contractor requests that the estimate be prepared before the end of the partial payment period. In this case, the estimate shall be for just the materials.

 

The following guidelines shall also be considered prior to making payments for materials items:

 

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109-6 PAYMENT FOR LEFTOVER MATERIALS

At the end of a contract, there are often leftover materials that will not be used on the contract. These are materials that were ordered for the contract by the Contractor, but were then not needed or used on the project. If the contract is a federally funded contract, the Resident Engineer’s office should ensure that FHWA will participate in the costs.  A leftover materials line item will be set up in HICAMS for the value of the materials only. The Department will often negotiate with the Contractor as to how to handle these items. Leftover materials are handled in one of three ways in SAP (R/3).

The process flow should be:

Construction Unit contacts the Division Engineer…

If DOT can use the item in inventory, follow instructions for #2 below.

If DOT cannot use the item in inventory, follow instructions for #1 below.

If DOT cannot use the item in inventory and the contract is closed, follow

instructions for #2, but charge the WBS and object (53290001NP).

At some point, the Contractor needs to talk to the inventory personnel at the location where the material will go so that a MIGO transaction can be prepared. The clerk should make sure the material number(s) have been extended to the inventory plant. After all numbers have been verified/extended the inventory plant clerk will enter the material using MIGO > Goods Receipt > Others > Movement type 961. The total value for each line is to be entered in the “Ext. amount LC” field on the “Where” tab (i.e. If 10 widgets are received at $2.00 each, the total value of $20.00 is to be entered in the Ext. amount LC field.)

 

There have been situations where the goods were charged to the contract at an amount that equals the material cost and the installation cost. If this is the case, do not use the contract to compute the cost unless a new line is added that charges only for the cost of the material.

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109-8 FUEL PRICE ADJUSTMENT

Fuel price adjustments are calculated automatically in HiCAMS when line item indicators are accurately verified by the Engineer.

 

When executing Supplemental Agreements that add line items that typically receive fuel price adjustments, the agreement should specify if fuel price adjustments are applicable to that item. If so, the line item indicator should be checked on the Supplemental Agreement to ensure the fuel adjustment is applied. The agreed price should be based on the fuel base index price contained in the contract. For example, if a Supplemental Agreement is executed for ‘Borrow Excavation’ which includes utilization of the contract base index price, the negotiated price should reflect receiving adjustment based on the contract base index price.

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109-9 FINAL PAYMENT

After the final estimate has been prepared and checked in accordance with the procedures outlined in the Records and Reports Section, the Division Engineer shall notify the Contractor, in writing, generally setting forth the following information.

When the Contractor requests a review meeting and has a request for either an extension of the completion date or adjustment in compensation, the Division Engineer or Division Construction Engineer and the Engineer should meet with representatives of the Contractor to review the final quantities. The Contractor should be given access in the Division Office to all documentation of pay quantities but not the Project Diaries. Diaries kept in connection with construction or repair contracts shall not be considered public records until the final estimate has been paid.

 

When the Contractor does present a written request for an extension of the completion date and/or adjustment in compensation, a closeout conference date should be established such that the Division Engineer or Division Construction Engineer, the Engineer, and the State Construction Engineer or the Area Construction Engineer will be in attendance. At the closeout conference the Contractor shall be given every reasonable opportunity to justify his contention within the terms of the contract. The Contractor should be notified in writing of the Department’s decision regarding extensions of the completion date and adjustments in compensation.

 

After receipt of the Contractor's final claim letter, if no review meeting is requested, the Division Engineer shall submit a written report to the State Construction Engineer setting forth his recommendations regarding the Contractor’s requests. This review of the Contractor's request must be fully documented by the project records and by specific reference to the Specifications. Valid requests for extensions of the completion date are limited to those as allowed under Article 108-10 of the Standard Specifications. Valid requests for adjustments in compensation are limited to the provisions of the Specifications.

 

"Final payment," as described in this article of the Specifications, should not be confused with any subsequent settlement that may be allowed under a verified claim. Final payment under the Specifications represents payment of the final estimate.

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109-10 DOCUMENTS REQUIRED FOR THE PAYMENT OF THE FINAL ESTIMATE

This article provides for certain documents to be submitted to and accepted by the State Construction Engineer prior to processing the final estimate. Sample copies of acceptable documents that need to be submitted are the sample affidavit and sample consent of surety.

 

It is particularly important that when these documents are received by the Engineer, they be examined for acceptability and the Contractor promptly notified, in writing, of the date of their receipt. If the Contractor has written a request for an extension of the completion date and/or adjustment in compensation, it is necessary for this request to be in accordance with the applicable provisions of the Specifications before such documents may be considered acceptable. For instance, in requesting an extension of the completion date, the Contractor must specifically set forth the documented circumstances resulting in the alleged delay, the controlling operation delayed, the calendar dates on which he was delayed, and the number of calendar days by which he is requesting the completion date to be extended (reference Article 108-10 of the Specifications). When the Contractor fails to include this information, he should be advised, in writing, that the document is not acceptable. The Specifications provide that the burden of proof is on the Contractor. It is not the Department’s responsibility to accept a vague, non-descriptive contention as an acceptable document.

 

The importance of the acceptability of these documents lies in the fact that they impact the effective date of interest accrual on the final payment (See Article 109-11).

 

Article 102-15 of the Standard Specifications provides for disqualification of a Contractor from further bidding due to submission of false information or failure to submit the documents required by Article 109-10 within 60 days of the Engineer’s request.

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109-11 INTEREST OF FINAL PAYMENT

The procedure for computing the date interest begins on the final payment is included in the final estimate portion of the Records and Reports Section of this Manual. There are four conditions that enter into the determination of the date interest begins.

The Department has the responsibility to complete the checking of the final estimate, to notify the Contractor of same, and to make final payment as expeditiously as possible.

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ADDITIONAL RESOURCES