LAG MANUAL Sections B & C - Chapter 16

1. LAG MANUALSections B & C - Chapter 16 Construction and Contract Administration for Certified & Non-Certified Local Agencies Presented by: Brenda Marcus ODOT Contract Administration Unit January 30, 2009

2. OVERVIEW ODOT is responsible for the proper expenditure of Federal funds on Local Agency construction contracts. Ensuring compliance through proper project documentation is a vital part of the Contract Administration process. Non-certified local agency federally-funded projects are required to be administered according to the ODOT Construction Manual, and the LAG Manual. In contrast, the construction and Contract Administration responsibilities of the certified Local Agency will be identified in the Local Agency’s certification master agreement and project agreement. Certified Local Agencies have the option of developing and utilizing their own processes and procedures, or adopting the procedures identified in the ODOT Construction Manual.

3. Beginning of Contract Work Project Inspection Labor Compliance Quality Documentation Quantity Documentation Progress Payments Compliance with State and Federal Requirements Buy America Subcontracting Project Closeout Construction and Contract AdministrationTopics I will Cover

4. Construction and Contract AdministrationBeginning of Contract Work After ODOT has awarded the contract, the Local Agency is responsible for scheduling and holding the Pre-construction Conference and the Partnering Workshop (“Cooperative Arrangement”) if requested by the Contractor. Both should be held prior to commencement of any on-site work by the Contractor. Once the Contractor commences work on the project, the Local Agency will need to issue First Notification, using the ODOT Notification of Commencement and Completion, form 734-3233. Section 00180.50 of the project Special Provisions will identify the type of Contract Time applicable to the project – Calendar Day or Specified Completion Date.

5. Construction and Contract AdministrationPre-construction Conference / Partnering After award of the Construction Contract, the Pre-construction Conference needs to be held. For complex projects, a separate Pre-construction Conference should be held before each construction phase (pre-pave, pre-concrete pour, etc.). The meeting should be properly documented with official minutes and/or electronic recordings and distributed to all attendees. Examples of the Pre-construction Conference letter and Agenda are available for use on the ODOT Construction Forms website at: http://www.oregon.gov/ODOT/HWY/CONSTRUCTION/HwyConstForms1.shtml ODOT is responsible for arranging and facilitating the Partnering Session if requested. The Local Agency will coordinate with the ODOT LAL to make the necessary arrangements.

6. Construction and Contract AdministrationProject Inspection The Local Agency is responsible for all aspects of project Inspection using Local Agency staff, a certified Consultant, or ODOT Inspectors (if arranged with LAL). Inspectors will need to the applicable certifications for the work they will be Inspecting: • Certified Bridge Construction Inspector (CBCI) • Certified Erosion Control Inspector (CECI) • Certified Drilled Shaft Inspector (CDSI) • Certified General Inspector (CGI) • Certified Hot Mixed Asphalt Concrete Inspector (HMAC) • Certified Traffic Signal Inspector (CTSI) More information on the Inspection Quality Assurance Program is available on the ODOT website at:http://www.oregon.gov/ODOT/HWY/CONSTRUCTION/Cert/InspCert.shtml

7. Construction and Contract AdministrationLabor Compliance • The Local Agency is responsible for ensuring that all construction craft workers on Federal-funded projects receive the correct prevailing wage rates and fringe benefits. This responsibility is the same for both certified and non-certified Local Agencies. This includes: • Monitoring compliance with Prevailing Wage requirements, • Ensuring weekly certified payrolls are submitted by the Contractor and all Subcontractors, • Reviewing all certified payrolls for accuracy and compliance, • Investigating disputes and determining appropriate action, and • Reporting. • Additional labor compliance information is available from the ODOT Office of Civil Rights at: http://www.oregon.gov/ODOT/CS/CIVILRIGHTS/labor/labor.shtml

8. Construction and Contract AdministrationQuality Documentation (1) Quality Documentation both documents and substantiates the quality of materials incorporated into the project, the proper workmanship, the payment of correct prevailing wage rates and conformance to DBE, OJT and EEO requirements. The quality documentation requirements for a project are contained in the following: • Project Special Provisions • Project Plans • Standard Specifications or Highway Construction • ODOT’s Qualified Products List • The Non-Field Tested Materials Acceptance Guide • The Manual of field Tested Procedures • Quality Assurance Program

9. Construction and Contract AdministrationQuality Documentation (2) The ODOT Construction Manual, Chapters 12B and 12C cover the requirements for quality documentation. The non-certified Local Agency is required to follow the ODOT Quality Assurance Program which is contained in the Manual of Field Test Procedures. The Quality Assurance Program covers all aspects of project Quality Assurance including Quality Control, Verification and Independent Assurance (I/A). In contrast, the certified Local Agency has the option of following it’s own ODOT-approved Materials Quality Plan, or adopt the procedures in the ODOT Construction Manual and Manual of Field Test Procedures. The ODOT Region Assurance Specialist (RAS) will provide on-going periodic project reviews to confirm conformance with project quality documentation requirements on all non-certified Local Agency administered projects, but only on test projects administered by certified Local Agencies.

10. Construction and Contract AdministrationQuantity Documentation Quantity documentation is evidence to support progress payments, and eventually final payment, consisting of ‘source documents’ with appropriately signed and dated calculation sheets, showing the quantities of work completed or recommended for acceptance. ODOT Construction Manual, Chapter 12-D ‘Source Documents’ are the field notes, calculations, invoices, and reports used to determine project pay quantities. Chapters 12D – 12F of the ODOT Construction Manual provide guidance on the development of quantity documentation.

11. Construction and Contract AdministrationProgress Payments Progress payments must be based on documented measurements of work performed and materials accepted, independently verified by the Local Agency, of work performed by the Contractor. The Local Agency is responsible for measurement and quantity determinations for all pay items. Payment for work not properly documented may be deemed non-participating by FHWA. The Local Agency is responsible for funding non-participating work. State Law (ORS 279.435) requires payment of interest to the Contractor when payments (progress and final) are not made within the statutory requirements. Interest is calculated at three (3) times the rate from the Federal Reserve Bank and is not eligible for Federal-Aid participation and will become the responsibility of the certified Local Agency. This makes it even more important that Contractor payments are made on time! Non-certified Local Agencies will coordinate processing of pay estimates with the ODOT LAL. Certified Local Agencies will pay the Contractor and submit invoices for reimbursement by the Agency.

12. Construction and Contract AdministrationContract Changes Orders Whenever a change in the work defined in the contract is required, the non-certified Local Agency will coordinate with the ODOT LAL to initiate a Change Order. Change orders include Contract Change Orders (CCO), Extra Work Orders (EWO) and State Force Orders (SFO). To be eligible for FHWA participation, all Change Orders must first be approved by ODOT prior to commencement of the changed work. Local Agencies do not have delegated authority to approve changes to the contract. Chapter 15 of the ODOT Construction Manual provides further guidance on processing Contract Change Orders.

13. Construction and Contract AdministrationCompliance with State & Federal Contract Provisions All federally-funded construction contracts are required to comply with the FHWA requirements contained in FHWA Form 1273 – Required Contract Provisions. This document covers many federal requirements such as: • Payment of Predetermined Minimum Wage • Subletting or Assigning the Contract (Subcontracting) • Buy America • Disadvantaged Business Enterprise (DBE) and On-the-Job Training (OJT) • Drug Free Workplace • Equipment Rental Rates • Noncollusion • Changed Conditions Local Agencies administering federally-funded contracts must become familiar with the requirements of Form 1273.

14. Construction and Contract AdministrationCompliance with State & Federal Contract Provisions BUY AMERICA The Buy America requirements apply to all Federal-aid construction contracts. The requirements are covered in 23 CFR 635.410 and Section 00160.20 of the Standard Specifications. Section 00160.20 of the 2008 Standard Specifications states that: “all iron or steel manufacturing processes, including the casting of ingots, for iron or steel materials permanently incorporated into the project, shall occur in the United States, unless the cost of the foreign-origin iron or steel materials does not exceed one-tenth of one percent (0.1%) of the total contract cost, or $2,500. All foreign-origin iron or steel materials incorporated in the project in excess of the amount indicated above, shall be removed and replaced with domestic or iron or steel materials at the Contractor’s expense”.

15. Construction and Contract AdministrationCompliance with State & Federal Contract Provisions SUBCONTRACTING Current FHWA policy requires that the prime Contractor perform at least 30 percent of Contract work with its own organization. • The Contractor must obtain written consent before allowing any work to be done by forces other than its own. All subcontracts, at any tier, must be in writing and contain all of the required documents and/or language: • Federal contract requirements, Form FHWA-1273 • Minimum wage rates • State mandated prompt payment statements (ORS 279C) • The Local Agency must verify that the Subcontractor is qualified to participate in a public works contract (certified/licensed, not debarred and has a Public Works Bond on file with the CCB). Use of the ODOT Subcontractor Consent Checklist will prove helpful.

16. Construction and Contract AdministrationProject Closeout Within 90 days after issuance of Second Notification, the Local Agency is responsible for carrying out the following tasks to prepare the project for final acceptance by ODOT: Final Inspection: The Local Agency will coordinate with the ODOT LAL to complete a final project inspection. Final Project Documentation Submittal: The Local Agency is responsible for compiling the final project documentation and submitting to ODOT for review and acceptance, as guided by Chapter 37 of the ODOT Construction Manual: • All project quality and quantity documentation • Certified payrolls and labor compliance documentation • Project Narrative • As-Constructed Files • Right-of-Way Monumentation

17. Construction and Contract AdministrationProject Closeout • Quality Price Adjustments • Documentation Transmittal Letter • Local Agency Letter of Acceptance • Foreign Steel Summary (on all Federal-aid projects) • Final Materials Certification • Original General Daily Progress Reports and Project Manager Diaries • Original Erosion Control Monitoring Reports • Original TP & DT Daily Reports • Warranties Once all project documentation has been submitted and approved by ODOT, ODOT will notify the Local Agency that Third Notification can be issued. Within 30 days of issuance of Third Notification, ODOT will make final payment to the Contractor, issue the project acceptance letter, and notify FHWA of project acceptance.

18. Construction and Contract AdministrationProject Closeout ODOT is responsible for archiving the submitted project records according to the Secretary of State Retention Schedule. At this time the retention period for construction project records is 20 years. The non-certified Local Agency is required to maintain the remaining project records until notified by ODOT that the records are eligible for destruction. In contrast, the certified Local Agency is required to maintain the project records, which are not submitted to ODOT, for a period of six (6) years from the date of project acceptance.

19. Thank You ! Questions or Comments?