Construction Contract Administration

Randy OverDistrict Construction Engineer, ODOT District 12

Ohio Department of Transportation

http://www.dot.state.oh.us/communications/images/Odotsl_blk.jpg


• Getting Contract Administration off on the Right Foot….. Prior to PreCon– DBE Goals

• ODOT Qualified DBE’s• Total $s Meet Goal or….• Approved Waiver

– Qualified Staff• Names and qualifications of engineers and

inspectors• Testing Lab is AMRL certified


• Getting Contract Administration off on the Right Foot….. Prior to PreCon– Make sure District Construction & LPA

Coordinator are involved in PreCon planning, 2 weeks prior to meeting, invitations sent

– Draft invoice from District Construction, review funding amounts and categories w/DCE or designee

– Hold stand alone PreAward meeting if LPA and/or consultant is new to process, project is unique, etc., otherwise complete by phone or combine w/PreCon


• Getting Contract Administration off on the Right Foot….. Prior to PreCon– Last, but not least DBE/EEO/Prevailing Wage

personnel understand Federal and State requirements, District personnel available to answer questions, “shadow” LPA/consultant personnel


ExamplePreCon/PreAward Letter

ABC Bridge Consultants, LLC 1909 Portage Path(330) 775-1909, Fax (330) 775-1910 Akron, Ohio 44308

March 15, 2006

Randall S. Over, P.E.District 13 Construction EngineerOhio Department of TransportationColumbus, Ohio 43333

Re: BAB-Slagle Street, Local Let Project 06N001; PID 80001

Dear Mr. Over:

Based on our phone conversation, we have scheduled a combined Pre-Award andPreconstruction Conference on April 1, 2006. The meeting will take place at the HillmanHeights City Hall. The Pre-Award meeting will occur first at 9:00am, followed by thePreconstruction Conference at 10:00am with the contractor.

In terms of the City’s project management team for this project, it is as described inprevious correspondence including Construction Project Engineer David J. Smith, P.E. ofour office. Testing Services will be performed by Universal Testing of Columbus, Ohio.We have verified that they are AMRL certified. All Prevailing Wage and DBEcompliance efforts will be conducted by our office.

The contractor, Bridges-R-Us, Inc. has already submitted approved JMF’s for this projectas well as a list of subcontractors. Due to specialty work included in the project, thecontractor requested and was granted a DBE Goal Waiver of 2%, resulting in a new goalof 5%. A list of DBE contractors and suppliers will be presented at the meeting. Wehave already reviewed the names and they are currently approved by ODOT.

Your office has kindly submitted a draft of the first invoice on which we will complete onthe City’s letterhead for your approval and payment. We will require some explanationof the 30 or so forms submitted to this office as examples.

We look forward to seeing you and your Construction Monitor, Michael J. Jones on April1, 2004.

Respectfully,

Terry M. O’Conner, P.E.Chief Construction Engineer

C: Ronald Overmaher, MayorCairn Cuchmark, City Engineer


ExamplePreAwardOutline

April 1, 2006

Pre-Award Meeting OutlineBAB-Slagle StreetPID 80001

Discussion Topics:

1. Names, qualifications, roles of engineering, inspection and other staffDavid J. Smith, P.E., Construction Project Engineer (CPE), Universal Testing of Columbus,(AMRL Certified)

2. Preconstruction Conference, Progress Meetings

3. Review of Environmental Commitments

4. ODOT support and involvement Š Michael J. Jones, Construction Monitor (CM),Jeffery A. Humphrey, Area Engineer (AE), Doreen Enders, District Testing, Violet Shepherd,District EEO/DBE/Prevailing Wage

5. Contractor and railroad force account payment & LPA reimbursement

6. Change Order Review Process Š ups and downs, documented process for establishing new items,ODOT approvals

7. Maintenance of traffic requirements

8. Railroad force accounts, temporary crossings, flagger services-status

9. Utility relocations-status

10. Construction schedule tracking, time extensions, liquidated damages

11. Claims Management Process Š Chain of command, reviews prior to legal action

12. Materials Management Process Š Frequency of tests, ODOT JMFÕs, certified material sources, processof resolving failed tests

13. Prevailing Wage, EEO & DBE Compliance requirements Š 7% DBE GoalField Interviews, 30% Payroll Wage Checks, DBE Sub Commercially Useful Function Reviews,Quarterly Reports for DBE Goals

14. Documentation Process

15. Public relations, damage claims resolution Š contact name for ODOTÕs PIO

16. Final Inspection, acceptance, project closeout procedures Š Jim Musial part of the official finalinspection and DBE affidavits


• Having a successful PreCon…. Best Practices– Contractor comes prepared with….

• List of subcontractors• List of suppliers (ODOT approved)• List of proposed JMF’s• Proposed schedule showing important milestones

– Everyone prepared with….• Contact info and sign-in sheet• Contractor’s and LPA/Consultants Decision Trees and

hierarchy to resolve disputes– LPA/Consultant

• Tape recorded and/or minutes taken and circulated• Rep of Design Consultant, Testing Lab, ODOT CM, ODOT

LPA Coordinator, District EEO/DBE/Prevailing Wage, LPA EEO/DBE/Prevailing Wage personnel


• The First Shovel of Dirt Has Moved….Best Practices as the project moves forward– Weekly submissions of payrolls– Completion of Daily Diaries– Weekly, Biweekly or Monthly Progress

Meetings including Construction Monitor (CM)– Materials are checked against ODOT certified

materials lists– JMF’s are ODOT approved

Construction Contract AdministrationExample Job Mix Formula (JMF)


• The First Shovel of Dirt Has Moved….Best Practices as the project moves forward– Through District Testing, OMM involved for

steel fab, concrete beam shop approvals, if there is a timely request and staff is available

– Track disposition of failed materials– Track materials use against PreCon suppliers


• Getting Everyone Paid….Best Practices for submitting invoices and getting approvals– Aim for a 30 day turnaround for all parties….

• Daily Diaries w/quantities• LPA, Consultant and ODOT reviews in parallel• 10 working days for ODOT to approve and submit for

reimbursement or direct pay• Central Office turnaround 10 working days• Include only approved change orders• Don’t pay for it if it isn’t acceptable (don’t rely on

retainage)• Don’t include retainage• Clearly note 100% local items


• Getting Everyone Paid….Best Practices for submitting invoices and getting approvals– Consultant & LPA Staff Invoices

• ODOT approved overhead rates• Summary sheet• Include timesheets and/or monthly reports• Request for increases must be accompanied by

justification, project completion date extended, extensive extra work, change in overhead rate mid-project, etc.

• Should be in the range or 10-15% of contractor payments– Requests to District Construction Offices– Plan for Encumbrance Increases in advance…..– Proof of matching funds paid


ExampleInvoice forContractor

LPA-AU10B

City of Hillman Heights, Ohio

Cairn Cuchmark. P.E., P.S.City Engineer

Remit To: BAB-Slagle Street Invoice No. 1 COBridges R Us Inc Date: 1-Jul-06Bridges R Us Lane Agree. No. 29999Middleton Heights, Ohio FAP No. E066(666)45678 Enc. No. 599998

PID 80001Proj. No. 06N001

The City Of Bryne certifies that the work as shown on this invoice has been performed and in noway represents any degree of duplication of payments that have been or will be received.

LPA's Signature____________________________________ Date: ______________

Please indicate Final Invoice by Initialing: _________

Construction STP $67,000.00 $0.00 $67,000.00 Construction Enh $5,000.00 $0.00 $5,000.00 Engineering STP $0.00 $0.00 $0.00 Engineering Enh $0.00 $0.00 $0.00 Less LPA 20% $14,200.00 $0.00 $14,200.00 Less LPA 100% $1,000.00 $0.00 $1,000.00 Totals $56,800.00 $0.00 $56,800.00

Max Amount $700,000.00Funds Encumbered $671,000.00Construction 599998 $610,000.00Construct Engineering 599999 $61,000.00Funds Remaining $643,200.00

The District has reviewed this invoice in accordance with the Departments written procedures and recommendspayment of the amount shown above.

By:___________________________ Date: _____________District Approval

LPA-AU10B (Original & 2 copies)2 Copies of Supporting Documentation

2-Apr-03

Amount Due This InvoicePrevious PaymentsTotal Cost to DateParticipation %

The City Where Roebling Lived for 30 Days1955 Bridges Lanes, City of Hillman Heights, Ohio 45779

Ronald Overmaher, Mayor

Local Let Summary & Payable Invoice

Payment Item


ExampleInvoice forConsultants& LPAs

LPA-AU10B

City of Hillman Heights, Ohio

Cairn Cuchmark. P.E., P.S.City Engineer

Remit To: BAB-Slagle Street Invoice No. 1 CECity of Hillman Heights Date: 1-Jul-061955 Bridges Lane Agree. No. 29999Hillman Heights, Ohio FAP No. E066(666)45779 Enc. No. 599999

PID 80001Proj. No. 06N001

The City Of Bryne certifies that the work as shown on this invoice has been performed and in noway represents any degree of duplication of payments that have been or will be received.

LPA's Signature____________________________________ Date: ______________

Please indicate Final Invoice by Initialing: _________

Construction STP $67,000.00 $67,000.00 $0.00 Construction Enh $5,000.00 $5,000.00 $0.00 Engineering STP $7,500.00 $0.00 $7,500.00 Engineering Enh $0.00 $0.00 $0.00 Less LPA 20% $15,700.00 $14,200.00 $1,500.00 Less LPA 100% $1,000.00 $1,000.00 $0.00 Totals $62,800.00 $56,800.00 $6,000.00

Max Amount $700,000.00Funds Encumbered $671,000.00Construction 599998 $610,000.00Construct Engineering 599999 $61,000.00Funds Remaining $637,200.00

The District has reviewed this invoice in accordance with the Departments written procedures and recommendspayment of the amount shown above.

By:___________________________ Date: _____________District Approval

LPA-AU10B (Original & 2 copies)2 Copies of Supporting Documentation

2-Apr-03

Amount Due This InvoicePrevious PaymentsTotal Cost to DateParticipation %

1955 Bridges Lanes, City of Hillman Heights, Ohio 45779The City Where Roebling Lived for 30 Days

Ronald Overmaher, Mayor

Local Let Summary & Payable Invoice

Payment Item


• So there is a changed condition, what next….– Extend existing bid items….– Extra Work…. No existing bid item– Funding Caps and Contract limits?– Contractor won’t agree to a price?– Hope and pray…..– Justification to ODOT for additional funds….


• Justification to ODOT for additional funds….– Establishment of a fair price….

• Extend bid items• Establish a new bid item, similar work on other contracts,

cost analysis• Last choice, force account

– Required to complete project as scoped– Doesn’t impact environmental approvals/permits– Communication to CM before work begins

• Approval can be verbal, but noted in writing, via email or by letter

– Summary of smaller changes so costs “reconcile”


• And the Contractor Yells, “Unless I am paid for the claim right now, I’m walking off the job!” What to do if you can’t agree….. And how to not get there in the first place……– Make everyone follow an administrative process

established prior to bid, preferably as part of the contract

– Use comparatives, historical data such as days in the bid for traffic control, prorate the days….

– Resolve the changed condition if at all possible without stopping work, otherwise home office overhead claims could occur, keep the contractor working


• Claims solutions and avoidance– Pay estimates and changes promptly– Seek third party assistance, experts that both parties

trust– Use formal Partnering– Don’t write yet another letter when a phone call or a

personal visit has a chance to break the deadlock– Completing by the completion date is to everyone’s

benefit, don’t be afraid to pay for some OT, MS concrete, etc., it builds goodwill with the public and the contractor

– Before the attorneys take control, consider mediation, arbitration, etc., ODOT has names


• And one last comment on Claims…..– A contract is overall, an equally shared agreement

although various specific responsibilities are not equally shared. If there is no clear solution yet there is agreement there was a changed condition, split shared responsibility items in half.


Example JustificationLetter

ABC Bridge Consultants, LLC 1909 Portage Path(330) 775-1909, Fax (330) 775-1910 Akron, Ohio 44308

June 15, 2006

Randall S. Over, P.E.District 13 Construction EngineerOhio Department of TransportationColumbus, Ohio 43333

Re: BAB-Slagle Street, Local Let Project 06N001; PID 80001

Dear Mr. Over:

As discussed in our phone conversations with your Construction Monitor, and at the lastprogress meeting, the condition of the substructure is worse than depicted in the plans.Also, ODOT has recently adjusted our overhead rate upwards based on a new accountingformat. The following paragraphs describe the financial impacts in detail as you haverequested.

Substructure Repairs: The plans included approximately 15 c.y. of concrete for repairs topier caps for a total of $9000.00. The contractor is required to perform additionalforming and supporting of the structure to make repairs significantly below the pier caps.As such, the contractor will not accept additional cubic yards of concrete repairs at thebid price. Based on ODOT’s Summary of Contracts Awarded, we have agreed to a newunit price for the original and additional work of $850/c.y. for a total of 45 c.y. Thisresults in a contract increase of $29,250.00. We have evaluated the remaining areas andbelieve this will be sufficient. Since we did not prepare the plans, you might want tocontact your design consultant regarding this issue. However, the additional work, evenif included in the original bid, would have been bid close to this price. This adjustmentwill be listed in the next invoice as Change Order #1.

Overhead Rates: For calendar year 2005, ODOT approved an overhead rate of 239%.For calendar year 2006, the approved rate is 245%. Based on our contract with the Cityof Hillman Heights, we respectfully request the new rate be applied for reimbursementfor the month of June forward. The anticipated increase is approximately $10,000.00through the end of this year.

Should you require additional information, please do not hesitate to contact this office.

Respectfully,

Terry M. O’Conner, P.E.Chief Construction EngineerC: Ronald Overmaher, MayorCairn Cuchmark, City Engineer


• Adequate DBE/EEO & Prevailing Wage Contract Administration……– Weekly payroll submissions and wage checks– Track the DBE $s against goals, approved subs and

suppliers each pay request– DBEs actually doing the work, if not involve District– Monthly or quarterly DBE reports to District EEO/DBE– Jobsite EEO & Prevailing Wage Posters– Regular employee interviews, proper records– Complaint follow-through w/guidance and

communication to District EEO/DBE or Prevailing Wage


ExampleMonthlyPrevailingWageReport


ExampleDBEQuarterlyReport


ExampleEEO/DBE/PrevailingWage Interview Form

Construction Contract AdministrationThe Project is almost complete…..


• So the project is open to traffic, but all that “paperwork” remains to final the project…..– Final Inspection by contractor, LPA, consultant, ODOT,

official punchlist is developed– All claims resolved or dismissed, both with the

contractor and with 3rd parties– Documentation compiled for failed materials have been

removed or a deduct made– Contractor and DBE subs/suppliers sign affidavits– Final certification is signed and sealed by the CPE


ExampleDBE Affidavit


• Remaining “paperwork”…..– Upon completion of punchlist, ODOT completes the C-

85– Final estimate is processed when all required

paperwork is completed– District notifies Central Office to close all

encumbrances


ExampleFinal Certification


Example C-85

All personnel and their respective employers portrayed in this example are fictional. Any resemblance to an

existing or proposed project and involved personnel is purely

coincidental.

Construction Contract Administration

Documents

Transcript of Construction Contract Administration