Contract/Subcontract Management User Guide

Copyright © 1999. All Rights Reserved.

TOC

TABLE OF CONTENTS *
1 INTRODUCTION Purpose Scope Related Manuals 2 RESPONSIBILITIES Assignment of Tasks 3 INITIAL TASKS Pre-Award Activities Pre-Construction Meeting Filing System Correspondence and Correspondence Control Insurance and Bonds Schedule Submittals 4 PERFORMANCE Changes Commitment Approvals Schedule Requests for Information (RFI'S) Technical Transmittals Claims Backcharges 5 MONITORING/REPORTING Daily Report Progress Review and Coordination Meetings Progress Measurement and Payment Quality Surveillance Safety and Health Environmental

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TABLE OF CONTENTS

CLOSEOUT
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CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

6.1 6.2 6.3 6.4 6.5

Contract Closeout Beneficial Occupancy Substantial Completion Punch List Warranty

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SPECIAL TOPICS 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 Contract Law Basis for Claims Negotiation Interface Coordination Labor and Industrial Relations Force Accounts Liquidated Damages Delays and Extension of Time Acceleration Suspension of Work Differing Site Conditions Terminations Project Environmental Controls

INDEX

FORMS

TABLE OF CONTENTS

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CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

Introduction
TABLE OF CONTENTS

1.1 Purpose......................................................................................................................................1 1.2 Scope.........................................................................................................................................1

TABLE OF CONTENTS SECTION 1. INTRODUCTION Page i

1 INTRODUCTION 1.1 1. This Guide provides procedures for managing subcontracts.2 Purpose Scope This Guide establishes standard practices for managing subcontracts. INTRODUCTION Page 1 of 1 . A clear understanding of the terms and conditions of the contract being managed as well as those of the prime contract is required before any action prescribed by these procedures is taken. Many of the procedures in this Guide include a work practice Checklist to provide a quick overview of the key requirements of contract management. This Guide should be used in conjunction with approved Project procedures manuals. SECTION 1.

..............3 Procedure ......................................................................4 Exhibit ..............................................................................................................................................................1 Purpose .1..............................................................................1 2............2 Background ........................ RESPONSIBILITIES Page i ..........................................1 2...............................1 TABLE OF CONTENTS SECTION 2.........................................................1 2......................1 2...........1....1................................................1....CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Responsibilities TABLE OF CONTENTS 2...........................1 ASSIGNMENT OF TASKS.......................

4 Exhibit Division of Responsibility (DOR) Matrix (Exhibit 2.1 Purpose The purpose of this section is to provide a comprehensive list of tasks which should be performed to manage a contract successfully.3) 2.g.1.. A small project may have one DOR for the entire job or a large project may have separate DORs for each contract. However. independent of a group’s discipline responsibilities.3. Contract management is a team effort. change control procedures.). The generic DOR Matrix in this procedure is a guideline for development of a project or contract-unique DOR to ensure that each of the identified tasks is assigned to specific project personnel.1 ASSIGNMENT OF TASKS 2. daily reports. 2.3 Procedure The method of communicating and assigning the functional responsibilities for each contract is by a Division Of Responsibility (DOR) Matrix (Exhibit 2. insurance and safety/health requirements.1. RESPONSIBILITIES Page 1 of 11 .1. Effective management of a contract includes making sure that each of the essential task is assigned and performed. 2. correspondence log and files. The complexity and size of the individual contract and available project resources will affect the decision of which tasks are essential for the contract.2 Background 2. Optimizing a project’s personnel resources requires that administrative responsibilities be delegated through the project organization. certain tasks should be considered essential for all contracts (e.1.1.1 ASSIGNMENT OF TASKS SECTION 2.2 RESPONSIBILTIES 2.1.

prepare meeting minutes Chair and conduct meeting. labor requirements relations. is responsible for assignment of the functions listed in this matrix. indicate "Not Performed" in the "Assigned To" box. 2. technical scope. insurance. 3. provide input to bid evaluation criteria. bidding procedure. bid evaluation and bid clarification meeting Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Pre-bid Meeting Develop agenda. operational and project requirements. progress reporting and payment documentation Review quality control.3) Input to Material Contract Assignment Formation Schedule Regional Office Issued Contracts Development of proforma document and determination of mandatory prime contract flowdowns Assigned to:__________ Coordinate Input to pricing package and proposal development. contractor requirements interface and coordination Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ I For contracts which the company is managing on behalf of a customer. The Project Manager or Site Manager. general conditions. ethics and code of conduct Assigned to:__________ Review change management. Contractor DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. Notes: 1. facilities and services Develop and provide schedule requirements and cost estimates for contract package Review bids. If the nature of the contract or available project resources dictate that a task will not be assigned and performed. section pre-bid meeting and bidding/award of contract Assigned to:__________ Assigned to:__________ Prepare Material Requisition (MR). All tasks must be assigned and the responsible employee trained and familiar with the task. All employees are responsible for providing the necessary support to an employee assigned responsibility for a given task or function. 2. RESPONSIBILITIES Page 2 of 11 . in conjunction with the Contracts Manager. field engineering requirements Describe cost and Explain Safety Cover site schedule reporting and Health Plan.Contract No. the DOR should be modified to include customer representative interfaces. specifications and drawings Identify company or customer furnished utilities.1 ASSIGNMENT OF TASKS SECTION 2.1. commercial aspects. cover project scope. work rules.

equipment.1.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. Discuss Relations Authorized conduct meeting construction requirements Representative operations requirements such as facilities.1 ASSIGNMENT OF TASKS SECTION 2.3) Division of Responsibility Matrix (DOR) Initial assignments (by name) Updates Historical file Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Contract Package Turnover from Regional Office to Field Lead:__________ Monitor and Review turnover Compose status punchlist package for punchlist of completeness missing items in turnover package Establish responsibility for resolution of open items Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Pre-construction Meeting Cover Labor Define Company Prepare agenda. RESPONSIBILITIES Page 3 of 11 . coordination Assigned to:__________ Cover Safety and Health requirements Cover schedule and progress reporting requirements Cover contract administrative requirements including submittals and invoicing Review ethics and code of conduct Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Pre-construction Meeting (continued) Prepare meeting minutes and action/open items list Assigned to:__________ Monitor and status action/open items Assigned to:__________ Lead________ 2.

duration and impact of work stoppages Lead _______________ Labor Relations Dept.1. maintain Files Assign action Report and follow-up open action items Review RFI's "after Review and sign outgoing responses the fact" for commercial impact Assigned to:__________ Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ File/Route Miscellaneous Documents Contract files Drawings Technical documents (other than drawings) Assigned to:__________ Schedule submittals Payment files Expediting reports Inspection reports Progress photos Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ File/Route Miscellaneous Documents (Cont'd) Safety / Security files Assigned to:__________ 2.3) Labor Relations Administer Project Labor Agreement. log and monitor open items Review outgoing Review and sign Archiving and correspondence all outgoing permanent for compliance correspondence storage with contract and procedures Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Requests for Information (RFI's) Designate recipient Log RFI's. if applicable Assigned to: Coordinate labor Receive issues with contractor's contractor notices of actual/potential labor disputes Assigned to:__________ Assigned to:__________ Record nature. Assigned to:__________ Correspondence and Notices Assign actions Designate Log recipient for all correspondence and maintain files contract correspondence (except as noted below) Assigned to:__________ Assigned to:__________ Assigned to:__ALL_____ Report and follow up open action items Prepare outgoing correspondence.1 ASSIGNMENT OF TASKS SECTION 2.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. RESPONSIBILITIES Page 4 of 11 .

Approve schedule mitted schedule submittal with project schedule Monitor progress Obtain/review against approved periodic schedule contract schedule updates from contractor Review claimed impacts affecting critical path/ milestones Assigned to:__________ Lead:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Contract Schedule (Cont'd) Process company or 3rd Party backcharges arising from late schedule performance Evaluate whether contract milestone date changes are justified Issue Change Order to confirm justified and agreed upon changes to contract schedule Assigned to:__________ Issue notices if Direct acceleration to recover schedule contract milestone dates are in jeopardy Direct acceleration to advance milestone dates relative to contract dates Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ 2. RESPONSIBILITIES Page 5 of 11 .1 ASSIGNMENT OF TASKS SECTION 2.3) Insurance and Bonds Obtain and review Insurance Certificates and bond commitment letters for contract compliance Assigned to:__________ Verify validity of Insurance Certificates and letters Verify insurance and bonding companies are on company's approved list Maintain tickler system for policy expirations Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Contractor Technical Submittals Develop list of contractor submittals Receive and log contractor submittals Assign action items and monitor status of open items Conduct or coordinate technical reviews Approve Conduct or coordinate cost and contractor schedule reviews of submittals technical submittals Monitor closure of contractor submittal requirements Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Contract Schedule Set Milestone dates Obtain initial contractor schedule Verify schedule submittal meets contract requirements Coordinate sub.1.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2.

1.1 ASSIGNMENT OF TASKS SECTION 2. Change Notices for changes Orders and Amendments Issue. backcharges or other offsets Assigned to:__________ Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Technical Transmittals from Engineer Receive copies of Sign Change transmittals. review for Establish method compliance with and verify contract quantity or work measurement methods Review. compare to contract schedule and develop cash flow curve Assigned to:__________ Approve quantity progress calculations Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Invoices and Payments Check invoices for accuracy and that pricing is according to contract Verify billed work agrees with approved progress Verify contract requirements are met before payments issued Verify proper Approve payments deductions made for retention.3) Progress Payment Schedules Obtain. control and monitor Change Notices Track costs for all Negotiate changes pending changes negotiated settlements Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ 2. Notices prepare Change Notices Assigned to:__________ Assigned to:__________ Assemble and prepare transmittals to contractor Assigned to:__________ Lead__________ Contract Changes Initiate requests for changes Review requests Prepare Change Sign Change Notices.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. RESPONSIBILITIES Page 6 of 11 .

1. RESPONSIBILITIES Page 7 of 11 .3) Contractor Proposals Receive and log contractor proposals Assigned to:__________ Evaluate technical merit Evaluate schedule merit Evaluate commercial merit Assigned to:__________ Prepare responses Authorize to contractor negotiation limits Assigned to:__________ Plan and conduct Approve final negotiations settlements Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Contractor Proposals (continued) Prepare cost and commitment changes and obtain approvals Assigned to:__________ Daily Reports Observe.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. assemble and report significant information (Prepare Daily Reports) Assigned to:__________ Review Daily Reports for commercial significance Review Daily Reports for Project significance Log and retain Daily Reports Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Obtain reports Contractor's Force.1 ASSIGNMENT OF TASKS SECTION 2. review and approve Assigned to:__________ Resolve open action items Assigned to:__________ 2. Equipment Utilization and Material Usage Reports Lead__________ Assigned to:__________ Review and analyze reports Log and retain reports Assigned to:__________ Assigned to:__________ Contractor Quality Program Lead:__________ Obtain copy of program Assigned to:__________ Analyze.

DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2.1 ASSIGNMENT OF TASKS SECTION 2. work is prepare summary backchargeable Prepare notices Obtain of backcharge contractor approvals Establish unique cost code for backcharge work and verify work is properly coded Assigned to:__________ Summarize daily data and reports Approve backcharge settlements Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Safety and Health Obtain copy of Contractor's Safety and Health Program Monitor contractor compliance with Safety and Health Program Assigned to:__________ Obtain name of Identify and designated evaluate contractor violations employee for safety & health Assigned to:__________ Assigned to:__________ Prepare notices to Sign/approve contractor violation notices Transmit notices. maintain log and monitor status of violation notices Verify contractor corrective actions Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ 2. RESPONSIBILITIES Page 8 of 11 .1.3) Quality Surveillance Inspect work in progress and coordinate with contractor Assigned to:__________ Inspect offsite/shop fabrications Verify inspections comply with contract requirements Assigned to:__________ Review contractor's Determine best Determine remedial acceptance or proposed action and direct rejection of work remedial actions contractor Assigned to:__________ Assigned to:__________ Assigned to:__________ Monitor close-out of open quality issues Lead__________ Assigned to:__________ Assigned to:__________ Daily Report of Force Account Obtain reports from contractor Summarize data Approve reports Retain originals and report with contractor invoices Assigned to:__________ Assigned to:__________ Assigned to:__________ Lead__________ Assigned to:__________ Backcharges Identify scope of Determine if backcharge work.

if required Prepare a Construction Environmental Control Plan (CECP) Lead:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:_________ Assigned to:__________ Environmental (continued) Obtain Hazardous Materials and Waste List from contractor and. as appropriate. Material Safety Data Sheets (MSDS) Review contractor proposed use of hazardous materials and monitor hazardous materials and waste storage and removal Assigned to:__________ Determine whether contractor needs asbestos inspection if work includes demolition or renovation Monitor written notice to EPA or state designated agency 10 days prior to demolition or renovation as required Assigned to:__________ Develop and implement an environmental training plan Assigned to:__________ Assigned to:__________ Assigned to:__________ Monthly Progress Reports Provide data or Summarize and other information assemble data and information Approve and issue monthly report Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ 2.1 ASSIGNMENT OF TASKS SECTION 2.3) Environmental Identify project agencies.1. RESPONSIBILITIES Page 9 of 11 . if required and obtain name of designated contractor employee for ECP Assigned to:__________ Assigned to:_________ Review contractor permit requirements and monitor compliance Identify environmental design criteria and incorporate into design basis Facilitate the Monitor the preparation and progress of review process of permit acquisition the Environmental Impact Assessment.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. environmental regulations and constraints Obtain copy of Prepare a contractor's permitting plan written or matrix Environmental Compliance Program (ECP).

submittals.1 ASSIGNMENT OF TASKS SECTION 2. meeting minutes and monitor action items Obtain periodic updates of contractor's working schedules Review most recent as-built schedule data Evaluate near term (3 week/4 week) look ahead schedules Resolve schedule Coordinate contractor's plan conflicts with other contractors' plans and Company's Plan Approve update -ed contractor working schedules and any changes to working schedules Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Coordination Meetings for Contractors Chair meetings Prepare agenda. milestones. etc.DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Evaluate technical Evaluate schedule Evaluate Prepare merit merit commercial merit response to contractor Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ Claims or Disputes (continued) Authorize negotiation and set limits Approve final Plan and conduct Prepare cost negotiation and commitment settlement changes and obtain approvals Assigned to:__________ Assigned to:__________ Assigned to:__________ Prepare Contract Change Order or Amendment (if required) Assigned to:__________ Issue Contract Change Order or Amendment and obtain signatures Assigned to:__________ Assigned to:__________ 2. Resolve meeting minutes. coordination and monitor conflicts action items Assigned to:__________ Assigned to:__________ Lead__________ Assigned to:__________ Liquidated Damages Identify triggering Monitor requirements performance (e. mitigate potential contractor claims equipment and finding material usage claim situations on a daily basis.3) Contract Progress Review/ Coordination Meetings Chair meetings Prepare agenda. RESPONSIBILITIES Page 10 of 11 .1.) Assigned to:__________ Assigned to:__________ Collect/deduct liquidated damages Lead__________ Assigned to:__________ Claims or Disputes Conduct fact Monitor and Receive and log Monitor labor.g.

DIVISION OF RESPONSIBILITY MATRIXI (Exhibit 2. RESPONSIBILITIES Page 11 of 11 . recommend final acceptance Assigned to:__________ Assigned to:__________ Prepare Contract Closeout Checklist Coordinate completion of Contract Closeout Checklist Lead__________ Assigned to:_________ Assigned to:__________ Assigned to:__________ Release of Lien and Final Payment Obtain Issue final check contractor's to contractor certificate that all subcontractors and suppliers have been paid Assigned to:__________ Assigned to:__________ Lead__________ Warranty Claims Prepare warranty Notify contractor Monitor timely claim response Evaluate Monitor completion Inspect/accept proposed of remedial action remedial action remedial action and direct best solution Assigned to:__________ Assigned to:__________ Assigned to:__________ Lead__________ Assigned to:__________ Assigned to:__________ Assigned to:__________ 2.1 ASSIGNMENT OF TASKS SECTION 2.3) Final Inspection and Acceptance Prepare final acceptance package Assemble.1. status Coordinate and punch list perform final walk down.

.....................4...................................5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Initial Tasks TABLE OF CONTENTS 3..................................................................2-C) ............................................................. 19 3..2 Procedure ....4 Pre-Bid And Site Inspection Visit Contracts Agenda Checklist (EXHIBIT 3.................1 3............ 32 3........................1......2.....2............. 28 Correspondence Checklist (EXHIBIT 3.................4 Checklists..1 Purpose ......................... 26 3....6 Pre-Award Action Checklist (EXHIBIT 3................................. 27 Correspondence Log .......................................................................................................................................2-B).......................................................................... 25 3.......3 Exhibits...5.........................Incoming (EXHIBIT 3...........................................3....2 Insurance................................................................Outgoing (EXHIBIT 3................... 18 FILING SYSTEM ..........................................3..........................1 PRE-AWARD ACTIVITIES ............................................................4............1.....................................................4) ....................................... 11 Kickoff Letter To Contractor [SAMPLE] (EXHIBIT 3.......................................................................................................................... 14 Notice of Site Mobilization (EXHIBIT 3.............................................1......................................... 30 3.....................................................................................................2-C) .............................................4 Checklist ...7 PRE-CONSTRUCTION MEETING...................................................................................................... 22 CORRESPONDENCE AND CORRESPONDENCE CONTROL..1 3.................................... 19 3............ 26 Correspondence Log ........2 Procedure ..................1.............................................................3)..................2-A)................................2........................5 Pre-Award Meeting Agenda [SAMPLE] (EXHIBIT 3...............5....................................................................1 Purpose .........................................................5 Checklist ........... 30 3.......................................................................................4.................................................4 3......................................................................2-B) ...........................................4 Exhibits..2......................................................................... 10 3.................3 Exhibits......... 30 3....................................)............3................................................................................................................................................................................................................................5.....................4.....5....................5 TABLE OF CONTENTS SECTION 3.................................................... 21 Contract Management File Index [SAMPLE] (EXHIBIT 3..........................3 Pre-Bid Meeting Agenda [SAMPLE] (EXHIBIT 3........ 19 3. INITIAL TASKS Page i .......................................................................4..........3 Filing Index .....2 Effective Correspondence......................................................................................5..................................................................................1.............................................4 Exhibits...........1 Purpose ..............2....3 Bonds...........................................2 3...................................3 3...2..........5)......................9 3.. 21 3.....................1 3.....................................................3........................ 33 3.. 25 3........ 25 3................... 29 INSURANCE AND BONDS .....2-A) ................................................4-A) .......2...................2.................................................................... 10 Pre-Construction Meeting Agenda [SAMPLE] (EXHIBIT 3...1.............................................................................. 30 3............. 32 Insurance Certificate Review Instructions (EXHIBIT 3........................................................4.............4....1 Scope ........................................................................................2-B)...................................................3 Procedure ........................1...........................2 Procedure .......................................2-A)........................................9 3....................1...................................... 17 Pre-Construction Meeting Checklist (EXHIBIT 3.........................................................................4 Exhibit ........................4....................1 Purpose .........3 3.....................................................................................................9 3...3................................................

..............6.................................................................................................5........................................................5.....................................4-A .......... 37 Insurance and Bonds Checklist (EXHIBIT 3....................5................Attachment A) .................6 SCHEDULE SUBMITTALS ...... INITIAL TASKS Page ii ....... 36 Insurance Register (EXHIBIT 3..... 39 3.............................................6) .............................2 Procedure ........................................................... 39 TABLE OF CONTENTS SECTION 3.........................................1 Purpose . 38 3............................... 39 3......................6.......4-B) ......................................................................CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Certificate of Insurance (EXHIBIT 3......

Meeting minutes will be issued. Attendance. mutual understanding of the work to be awarded has been reached. after internal review. Bidders should be advised that for fairness and consistency they are only to rely on written answers to questions. • The Pre-Bid Meeting is an opportunity to elaborate on the requirements as stated in the bid documents.1. Pre-Bid Site Visits and Pre-Bid Meetings are held to provide prospective bidders an opportunity to evaluate jobsite conditions and to obtain clarification of bid or work scope requirements.1. (Refer to Exhibit 3.) 3. meeting minutes will not be used to change any contract requirement. All contacts with bidders prior to award of the contract are to be coordinated through the designated representative. pertinent information. questions and answers will all be recorded. the change will be implemented by addendum to the bid documents. Pre-Award Meetings are held with the selected contractor to assure that a clear.2 Procedure The following general guidelines apply to all meetings held prior to award: • • Each meeting will have an agenda prepared in advance.1 Purpose The purpose of this Section is to provide guidance to jobsite personnel with respect to their participation in the pre-bid and pre-award process.1 SECTION 3.3 INITIAL TASKS 3. to all meeting attendees. if necessary. If a change in the contract requirements is necessary. However.1. Bid Clarification Meetings are held with selected bidders prior to contract award to review their proposals and to allow further clarifications. 3. INITIAL TASKS PRE-AWARD ACTIVITIES Page 1 of 40 .2-A for a sample Pre-Bid Meeting Agenda. In addition. • The objective of the meetings held prior to award is to do the best job possible to ensure there is a meeting of the minds regarding the contract requirements.1 PRE-AWARD ACTIVITIES 3. it provides a forum for an interactive exchange with potential bidders to discuss questions and concerns they may have.

1. Ideally this is accomplished with a drawing by drawing review of the Issued for Construction drawings to ensure no design evolution has crept in.1 SECTION 3. if applicable) constitute the Contract Drawings. INITIAL TASKS PRE-AWARD ACTIVITIES Page 2 of 40 . each bidder should receive the same information and any questions answered must be recorded and shared with all bidders.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • The Pre-Bid Site Visit provides bidders an opportunity to examine the site and locale in order to reach their own conclusions regarding the many site related factors. labor market. the award will state that the Bid Issue Drawings (with markups.1.g. e. If the Bid Issue Drawings are to be used "For Construction" they shall be designated "Issued For Construction". (Refer to Exhibit 3. but prior to award (Refer to Exhibit 3. physical conditions/constraints. The following should be addressed: — Confirm that all addenda issued during the bidding process have been incorporated in the contract scope. — Confirm acceptability of all proposed substitutions. changes in sequence or other schedule constraints necessary for the contractor to be able to make its initial schedule submittal.2-C for a sample Pre-Award Meeting Agenda). access. — Confirm any agreements reached with respect to work plan. Terms. — Discuss in detail owner provided materials. access/congestion. services and facilities in • • 3. Bid Clarification Meetings are held to resolve any questions that may arise with respect to bids from bidders in the competitive range.) This is also an opportunity to share any unique or "superior" knowledge you may have regarding the project or site and how such factors might affect the contract.2-B for a Pre-Bid and Site Inspection Visit Contracts Agenda Checklist. specifications and drawings. Formally set aside (forever) the "Bid Drawings". The Pre-Award Meeting is held only after selection and approval of a contractor. If the drawings are not ready for reissue at the time of award. — Review the contract drawings to ensure that all changes discussed have been incorporated in the "Issued for Construction" set.. scope or price issues may arise that require negotiation to resolve. Bid Clarification Meetings may evolve into negotiation sessions. The Pre-Award Meeting provides an opportunity to reaffirm and confirm understandings that have been reached during the pre-bid/bidding stages and an opportunity to resolve detail level issues that affect the contractor’s mobilization. laydown area. If there are separate jobsite visits.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

— Reinforce the pre-mobilization administrative requirements (e.g. insurance, bonds, pre-job labor conference) that can be troublesome if not handled properly. — Discuss specific activities that must be accomplished to receive mobilization payment, if applicable. (Refer to Section 5.3 entitled "Progress Measurement and Payment.") • Combining Pre-Award and Pre-Construction Meetings There are some situations where a Pre-Construction Meeting (reference Section 3.3) and a Pre-Award Meeting can be held as a single meeting. In these cases, the agenda should be adjusted for appropriate content and the minutes should indicate a joint meeting.

3.1.3

Exhibits

Pre-Bid Meeting Agenda [Sample] (Exhibit 3.1.2-A) Pre-Bid and Site Inspection Visit - Contracts Agenda Checklist (Exhibit 3.1.2-B) Pre-Award Meeting Agenda (Exhibit 3.1.2-C) Pre-Award Action Checklist (Exhibit 3.1.4)

3.1.4

Checklists

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CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

Pre-Bid Meeting Agenda [SAMPLE] (EXHIBIT 3.1.2-A) Contract: Contractor: 1. Introduction of company (and Customer) participants A. Point of contact for questions B. Role of participants C. Brief description of evaluation and target award date D. Discussions and meeting minutes cannot change requirements, only addendum Review of technical requirements by Engineering representative A. B. C. D. E. 3. Overview of scope Interfaces with others' work packages/crews Explain drawing release plan Explain use of RFI's Quality

2.

Review site considerations by Construction representative A. B. C. D. E. Safety considerations Access and work areas Facilities and utilities provided Permits required and permits furnished Labor relations

This presentation may include a jobwalk of the work site.* 4. Review schedule requirements A. Milestone dates B. Reporting requirements C. Work execution/ interface 5. Review bid package mechanics A. Explain Exhibit C forms individually B. Explain formation process and content of contract C. Describe written question and answer process and stress that all questions must be in writing D. Describe bid package addendum process E. Restate due dates and point of contact 6. Conclusions A. Questions B. Minutes will be provided by the company and sent to all attending Bidders, company Departments and Owner

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Pre-Bid And Site Inspection Visit Contracts Agenda Checklist (EXHIBIT 3.1.2-B) 1. 2. 3. 4. Site conditions under which the work will have to be performed. Access to the project and the work area. Contractor laydown area(s). Location, capacity and details of Customer/Company -Furnished power, water, fuel, and compressed air. Material handling equipment and procedures. Site investigation program (i.e. borings, samples, test pits, borrow pits, quarries). Customer/Company -furnished permits, contractor-furnished permits and generation of hazardous waste. Customer/Company -furnished facilities and schedule for availability (e.g. camp, warehousing, delivery or construction materials or equipment on site, contractor responsibility for loading, unloading, storing of Customer/Company -Furnished materials). Contractor participation in the company's safety and first aid programs. Other work which will or may be in progress during the term of the contract. Scope of work for the contract and any unusual or difficult construction that may be required. Point out building sites, access roads, borrow pits, and other important site features. Work of a similar nature, if underway on the site, to show the required standard of workmanship. On foreign jobs, available communications set-up for on-job and external to job. Location of disposal areas for cleanup purposes, and cleanup areas where more than one contractor is working. Full scope of the project and the facilities yet to be performed that will have an influence on the work of the contract being bid. Details of the work which might involve premium time. __________ __________ __________

__________ __________ __________ __________

5. 6. 7.

8.

__________ __________ __________

9. 10. 11.

__________

12.

__________

13.

__________ __________

14. 15.

__________

16.

__________ __________

17.

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Pre-Award Meeting Agenda [SAMPLE] (EXHIBIT 3.1.2-C)

Request for Proposal (RFP) NO._________________ Title:_________________________________________ 1. General Introduction 1.1 1.2 1.3 2. Introduction; Individual greetings and Attendance Sheet signature Purpose; Review and sign finalized contract Distribution; Provide contractor copy of Contract Documents.

Contract Document Review 2.1 RFP Changes; Discuss agreed changes and indicate where incorporated in the Contract Documents. A. Specifications; Technical Department (Engineering and Construction) input as required B. Drawings; Technical Department input as required C. Terms and Conditions 2.2 Contract Interpretation; Review Terms and Conditions utilizing the General and Special Conditions definitions in Appendix I of the Contracts/Subcontracts Formation Manual.

3.

Securities (bonds or bank guarantees) and Insurance 3.1 3.2 Securities; Remind contractor when they are due or collect securities. Insurance; Remind contractor when they are due or collect insurance certificates.

4.

Jobsite Requirements 4.1 4.2 4.3 Jobsite Procedures; Construction to review Jobsite Procedures which bid was based on (key procedures should have been issued at Pre-bid Meeting). Jobsite Update Labor Agreements and Trade Council Meetings

5.

Contract Signing 5.1 5.2 5.3 Contractor Copy; Contractor takes home signed copy. Company Copy; Copied to provide conformed copy distribution and then maintained in Procurement contract formation file. Customer Copy; Only when the company is agent a third signed original is provided, otherwise conformed copy(ies) will suffice.

6.

Turnover to Contract Administrator

3.1 SECTION 3. INITIAL TASKS

PRE-AWARD ACTIVITIES Page 7 of 40

reviewed. Exchange notification with contractor under the General Condition titled NOTICES. Bid Evaluation: Substitutions. Comments: 8. Announce meeting minutes will be prepared and distributed to all parties and Company/customer departments in attendance. Comments: Pre-bid: Special construction support requirements.2 Point of Contact.1 6. Pre-Award: Pre-Mobilization requirements reviewed and understood. Comments: Bid Evaluation: Bidder understands total scope. facilities and construction services reviewed. Pre-Award: Issued for Construction drawings reviewed -. Meeting Minutes. Pre-bid: Company/Customer provided materials. Comments: 6. Bid Evaluation: Bidder's Safety and Health Plan and experience reviewed and determined to be satisfactory? Comments: . Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO 3.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 6. Comments: 7. Pre-Award Action Checklist (EXHIBIT 3. Comments: 10. Bid Evaluation: Manpower loading reviewed. INITIAL TASKS PRE-AWARD ACTIVITIES Page 8 of 40 .1 SECTION 3.1. Comments: 5. Bid Evaluation: Bidder’s schedule and construction plan reviewed and resolved.4) Contract Number:_____________________Contractor:______________________________ Contract Scope:________________________________________________________________________ 1. if any accepted/rejected (list accepted substitutions). Comments: 2. if any. Pre-bid: Contract Schedule conforms to project schedule.all bid period comments/changes incorporated.

INITIAL TASKS PRE-AWARD ACTIVITIES Page 8 of 40 .CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Name:_______________________________ Date:______________________________ 3.1 SECTION 3.

2-B for a sample Kickoff Letter. the agenda should be adjusted for appropriate content and the minutes should indicate a joint meeting. Attendance at the meeting will be recorded. (Refer to Exhibit 3.) There are some situations where a Pre-Construction Meeting and a PreAward Meeting (reference Section 3.2 SECTION 3.1. A contract representative will prepare an Action Items List and assume responsibility for verifying closure of open items.) can be held as a single meeting. A meeting agenda will be developed. A confirming letter summarizing contract management expectations and contract provisions of particular significance should be sent to the contractor. Each participant will be instructed by the meeting leader on the scope of their involvement.2 PRE-CONSTRUCTION MEETING 3.2. The Pre-Construction Meeting will be conducted prior to the contractor's mobilization.2. (Refer to Exhibit 3.) 3. The contractor will be provided an advance copy of the agenda.2.2.3 INITIAL TASKS 3. In these cases. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 9 of 40 .1 Purpose The goal of the Pre-Construction Meeting is to achieve a mutual understanding with the contractor regarding the way in which the contract requirements will be translated into action.2-A for a sample Pre-Construction Meeting Agenda.2 Procedure 3. A contract representative will prepare the meeting minutes and formally distribute them to the contractor.

2.2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL A Notice of Site Mobilization (reference Exhibit 3.2.3 Exhibits Pre-Construction Meeting Agenda [Sample] (Exhibit 3.2-C) 3.4) 3.2.2-B) Notice of Site Mobilization (Exhibit 3.2.2.2.2 SECTION 3.2-C) should be issued if there is a need to notify various departments of impending mobilization of a contractor. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 10 of 40 . 3.4 Checklist Pre-Construction Meeting Checklist (Exhibit 3.2-A) Kickoff Letter to Contractor [Sample] (Exhibit 3.

Scope 3. Yours B. H. G. F. E. Contractor III. IV. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 11 of 40 . C. D. Authorized representatives 1. Safety and Health A. Organization A. Introduction and Background A. I. Yours 2.2. Your Policy Contractor Environmental Control Plan Environmental permit requirements Hazardous waste generation and management Asbestos inspection and notification Compliance monitoring V. Construction A. Your policy Contractor Safety Action Plan First aid Fire protection and prevention Sanitation and housekeeping Review contractor's proposed usage of hazardous materials Hazardous Material handling and disposal Citations Drug Testing/Fitness for Duty (as applicable) Environmental A.2-A) Contract:_______________________________________________________________________ ______ Contractor:_____________________________________________________________________ ____ I. B. Contractor C.2 SECTION 3. F. C.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Pre-Construction Meeting Agenda [SAMPLE] (EXHIBIT 3. D. Introductions II. Meeting purpose B. E. B.

E. Other Submittals A. B. Contractor-furnished equipment and material (schedule and coordination) D. C. Coordinating work areas with others G. Manning curves C. C. Design drawings and their distribution B. Project/construction schedule • Initial submittal and requirements for approval • Periodic updates B. Construction Schedule and Progress Reporting A. D. B. H. Progress review meetings F. Four-week rolling schedule E. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 12 of 40 . Facilities and equipment furnished by you. B. F.2 SECTION 3. G. VI. D. approvals and schedules X. E. Fabrication procedures. D. Pre-job conference Craft access Project Labor Agreement Job Rules Daily Force Report Reporting disputes Badging Work assignments Jurisdictional procedures (disputes/grievances) VII. Quality Assurance/Quality Control/Quality Surveillance A. Contractor drawing submittals.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL B. C. if required Construction procedures QA/QC procedures Health and Safety Plan 3. IX. C. Contractor responsibilities Your/Owner roles Offsite QA/QC Pre-fabrication submittal requirements Drawings A. I. Drawing control C. D. owner and contractor Permits and Environmental Impact Statement Work coordination Quality control and inspection Labor Relations A. Coordination meetings VIII.

2. Directed Changes (Authorized) Notice Requirements and Constructive Changes (risk of proceeding without authorization) Discovery of potential errors. Correspondence 1. D. 2. 3. 3. 7. 6. Contract Management A.3) Force Account Work E. Conflicts of Interest Gifts G. Addressee Control and distribution Requirement for sequential serialization Formal notices Contract Change Procedures 1. 5. Backcharges 1.all changes Proposal requirements Duty to proceed Dispute resolution Claim submittal requirements C. 8. 4. omissions and ambiguities and required notifications Cost records . 3. Ethics and Conduct 1. 2. 2. 3.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL XI. 2. Progress payment schedule Progress measurement and approval Invoice and Certificates of Payment Submittals required prior to payment (see Mobilization Payment Checklist in Section 5. B. Warranty Procedures H. Project Schedule Reviews and Coordination Meetings I. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 13 of 40 . Notices Procedure Performance F. 4.2 SECTION 3. Contract Close-out Procedures 3. 4. 5. Insurance and Bonds -contractor submittals Payments 1.

This provision establishes the contractor’s obligation to comply with project labor agreements and provides the basis for settling jurisdictional disputes. It also establishes the company’s right to remove unacceptable personnel. licenses and certifications have been obtained prior to the start of construction. Please appoint a Safety & Health Representative for your work and inform the company of your designation in writing. during or after construction. Safety & Health Environmental Requirements 3. Title Action [Use project article numbers and titles and include clauses which should be highlighted for this particular contract. regulations and practices to minimize adverse impact to the site.2-B) To: Smith Construction Company COMPANY JOB NO.2 SECTION 3.] Authorized Representatives A letter designating the contractor's authorized representative and scope of authority should be submitted to the company prior to the start of construction The contractor should review this article and confirm that all required permits. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 14 of 40 . Although every provision of the contract is significant.2. Personnel and Work Rules Publicity and for any Advertising release of Project. we want to call your particular attention to the following: Section No.______________________ CONTRACT NO. personnel on the site and adjacent environmentally Permits Labor.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Kickoff Letter To Contractor [SAMPLE] (EXHIBIT 3. prior to.________________________ KICKOFF LETTER B-SCC-001 DATE Subject: Gentlemen: We are pleased to be working on this project with you and look forward to a mutually beneficial relationship. photographs and videos or any information regarding the contract or The contractor must comply with the requirements of the company’s Safety & Health Plan and shall have sole responsibility to implement its own Safety and Health Program. and that all permit conditions are satisfied. we have listed below some of the more important and sometimes overlooked contract articles. This provision emphasizes the contractor’s obligation to comply with environmental laws. Prior written permission is required from the company announcements. To ensure that this relationship is a positive one and to avoid any future misunderstandings.

The company has the right to direct the contractor to take corrective action to restore progress to meet the schedule. This policy will be firmly enforced and all invoices for work not covered by the contract or by Change Orders will be returned unpaid. All correspondence you receive from the company will carry sequential serial numbers. Letter logs will be exchanged on a monthly basis to ensure no letters have been lost or misplaced. The contractor should review this article carefully. A review of the contractor's coverage with the company representative is required. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 15 of 40 .2 SECTION 3. Please ensure that all letters which you send to the company are likewise numbered. the company may issue written instructions (Change Notices) to proceed with the change. and carry a unique sequential serial number. Title Changes Action This provision establishes the mechanism for change. All insurance requirements must be met before mobilization. but if the demand of time or the nature of the work makes that impossible.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL a copy of your Environmental Control Plan prior to commencing work. 3. The company will supply the correct forms and review the proper invoicing procedures. Prior written approval from the company is required before the contractor assigns the contract or enters into any subcontracts for the performance of work related to this contract. The progress reports specified in this article will be required as stated. Progress meetings and schedule submittals will be utilized to monitor this progress. An early meeting with the company to ensure a thorough understanding and complete compliance with this article is suggested. The contractor will be required to furnish the resources necessary to meet contract milestones. A detailed CPM contract is to be submitted within thirty (30) days of contract award and is therefore due on or before . Change Orders will be issued only for work authorized by the company. Assignments and Subcontracts Insurance Commencement. All correspondence to and from the company will be required to be identified with the contract number. Insofar as possible. Progress and Completion of the Work Contract Schedule Measurement for Payment The provisions of the contract relating to changes will be strictly observed. Any such work undertaken without such written instructions will be at your own risk and any resulting charges may not be allowed. be dated. A clear understanding and adherence to this provision from the onset of the project is of great importance. changes will be covered by Change Order prior to execution of the work. Section No.

When you encounter field problems that require our assistance. If we can otherwise assist you in any way. but if any should persist. do not hesitate to call on us. please feel free to contact me. and carry a unique sequential serial number. Please ensure that all letters which you send to the company are likewise numbered. For example: Letters To: Smith Construction Company Letters To: Company (Contract No. 3. Letter logs will be exchanged on a monthly basis to ensure no letters have been lost or misplaced. We expect that with the help of [Contracts Representative] you will be able to resolve such problems. please bring them to the attention of [Contracts representative]. ) _____________________[Contracts representative] has been assigned for your portion of this project. All correspondence to and from the company will be required to be identified with the contract number. . be dated. We feel that your success will be our success and we will extend our cooperation and assistance to the fullest degree possible. We will require [three] copies of all correspondence from your designated representative which shall be addressed to the attention of the. Very truly yours.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL All correspondence you receive from the company will carry sequential serial numbers. [Contracts representative] will work with your field supervisory personnel and will be your primary contact with respect to construction procedures and technical compliance.2 SECTION 3. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 16 of 40 .

Comments: 8. Comments: 9. Comments: 5.2 SECTION 3. Meeting minutes prepared and issued. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:______________________________________________ Date:___________________________ 3. Need for Pre-Construction Meeting. Agenda issued to contractor and key company participants. Contractor's authorized representative designated. Comments: 7. Notification(s) of contractor mobilization given.) Contract Number:________________________________________Contractor:_____________________ Contract Scope:________________________________________________________________________ 1. Comments: 4. The date is set PRIOR to contractor mobilization.4. Comments: 3. Comments: 6. Kickoff letter sent to contractor. Attendance list prepared.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Pre-Construction Meeting Checklist (EXHIBIT 3. Comments: 2.2. Open actions identified. INITIAL TASKS PRE-CONSTRUCTION MEETING Page 18 of 40 .

identification and retrieval.2 Procedure A complete contract file set will be maintained for each contract. The following file subjects. 3. as a minimum.3 INITIAL TASKS 3. The files should be integrated into the project's document control program.3 FILING SYSTEM 3. sequentially numbered correspondence and relevant phone notes of telephone and other conversations − Outgoing correspondence − Incoming correspondence • • • • • • • • Insurance and Bond Certificates Daily Reports Inspection Reports Construction Schedules Requests for Information Drawing File Backcharge File Progress Payment File 3.1 Purpose The Contract Management Files must contain all pertinent original contract data and documents and be organized to allow for efficient storage. INITIAL TASKS Page 19 of 40 .3.3 FILING SYSTEM SECTION 3.3. will be included: • • • • • Conformed Contract Change Notices/ Change Orders Amendments Internal Approval Chronological.

GENERAL DISCUSSION OF DOCUMENTATION A. closeout and maintenance. should give the date. including a monitoring program for receipt. written notes and memoranda. All contract files that may have a bearing on open claims or other unresolved matters are to be separately dispositioned in accordance with project procedures. 3. it must stand on its own. Each must contain information to satisfy the fundamental six questions of what. where. Notes covering conferences. proper documentation will serve as sufficient and clear evidence to resolve problems at the lowest possible level. WHY IS DOCUMENTATION NECESSARY Documentation. documentation must be objective. Concise and complete documentary records always will have a substantial effect on the resolution of any problems. is of crucial importance to proper contract management. B. DISCUSSION 1. In addition to being complete. It is imperative in the administration of contracts that significant events be documented in permanent records such as correspondence. how and why. In order for any piece of documentation to be useful. telephone calls and discussions.3 SECTION 3. when who. Frequently. parties involved and important issues discussed. It is essential to summarize important discussions and meetings. INITIAL TASKS FILING SYSTEM Page 20 of 40 . 2. Documentation should be dated and signed providing continuity throughout the length of a project. The contract number should also be included on all of these items.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • • • • Minutes of Meetings File Claims File Warranty File Closeout File At the conclusion of the project all closed contract files will be dispositioned in accordance with project procedures. location. Its significance cannot be over-emphasized.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL If no problems materialize on a contract.3.3. 3.3.3 Filing Index The Contract Management Files will conform to approved project document control procedures and utilize the approved project document control computer tracking program. as the documentation effort likely contributed significantly to successful management of the contract. Contract Management File Index [Sample] (Exhibit 3. INITIAL TASKS FILING SYSTEM Page 21 of 40 . it may seem the time and efforts documenting a contract's performance was wasted. A Sample Contract Management File Index is provided in Exhibit 3. This is not the case.4 Exhibit 3.3) 3.4.3.3 SECTION 3.

5 Change Notices 2.5 1.8 1.9 1.4 Change Notice Log 2.3.3 Non-Manual Manpower Schedule 3.8 Commitment Authorizations 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Management File Index [SAMPLE] (EXHIBIT 3.3 Contractor Schedules 3.10 1.7 1.1 Master Bid Package 2.3.3) GENERAL FILES 1.13 File Index Prime Contract Contract Plan Project Master Schedule Contract Register Inter-Office Correspondence Customer Correspondence Standard Document Distribution Directives and Special Procedures Site Survey/Soil Reports Site Procedures and Instructions Site Labor Agreement Project F & A Procedures and Audit Programs CONTRACT FILES As each contract is awarded and Construction assumes responsibility from Procurement Contract Formation.2 Pre-Award Documentation (See Procurement Procedures) 2.7 Contract Change Orders/Amendments (Conformed) 2.9 Insurance Correspondence 2.1 Backcharge Register 3. INITIAL TASKS FILING SYSTEM Page 22 of 40 .11 Contract Fact Sheet ADMINISTRATION 3.0 CONTRACT 2.2 1.3.2 Backcharge Notices 3.2 Construction Schedules 3.4 1.10 Payment/Performance Bond Correspondence 2. individual files are established in the following typical major groups: 2.3 1.6 1.6 Change Order/Amendment Log 2.1 Contract Schedule 3.11 1.1 1.3.3 SECTION 3.3 Contract (Conformed Copy) 2.12 1.0 3.

4 Work Interruption Reports 5.0 3.6 Memos for Record 4.4 Inter-Office Correspondence 4.2 Security 6.1 Equipment Schedule 7.1 Daily Force Reports 5.6 Accident Reports 5.3 Progress Reports 5.3 Incoming Correspondence from Contractor 4.3 Non-Manual Manpower Schedule Contractor Key Personnel.3 Environmental Compliance 6.3 Log/General Facsimile Files 4.3.3.2 Control Procedures 7. Traffic) 6.2 Construction Schedules 3.7 Progress Photo/Video File CONTRACTOR PROCEDURES AND PROGRAMS 6.1 Safety (Personnel.5 4.7 Housekeeping CONTRACTOR EQUIPMENT 7.7 Transmittal Memo Receipts REPORTS 5.4 3.0 7.2.5 Minutes of Meetings 4.0 8.1 Correspondence Log 4.2.2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 3. INITIAL TASKS Page 23 of 40 .2 General Correspondence Files 4.1 Contract Schedule 3.2 Contractor Daily Report 5.3.1 Contractor Invoices/Applications for Payment 5.1 Correspondence with Customer 4.3 FILING SYSTEM SECTION 3.4 Contacts File (Discussions/Telephone) 4.2. Addresses.5 Inspection Reports 5.3 Customer/Company -Furnished Tools and Equipment PAYMENTS 8.4 Fire Protection 6. Equipment.2 Out-going Correspondence to Contractor 4.6 Training 6.0 6. Day/Night Phones Drawing and Specification Control COMMUNICATIONS 4.5 Inspection 6.0 3.

3 FILING SYSTEM SECTION 3.3 8.2 8.5 8.7 Quantity Verifications (Field Engineering) Cash Flow/Schedule "S" Curve Contract Financial Status Sheet Contractor Forecasts Contract Trend Reports (if required) Certified Payroll Reports (if required) 3.6 8.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 8. INITIAL TASKS Page 24 of 40 .4 8.

5 Maintenance Certificates 9.4 Completion Certificates 9.1 Log 10.2 Vendor Backcharges 10.0 CONTRACTOR PERFORMANCE EVALUATION/HISTORICAL 12.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 9.1 Contractor Proposal/Claims Log 11.2 Contractor Proposals (Claims) 11.7 Closeout WARRANTIES 10.4 Statements/Depositions (Personnel Concerned) 11.7 Claims Settlement Agreements 10.3 Taking Over Works 9.0 ACCEPTANCE AND CLOSEOUT 9.5 Claims Correspondence 11.1 Final Inspection Reports 9.6 Final Acceptance 9.3 FILING SYSTEM SECTION 3.1 Fact Sheet and Historical Record 12.3 Site Backcharges or Rework Accounts CLAIMS 11.4.2 Company/Contractor Correspondence 11.0 12.1 Customer Correspondence 11.0 11.2 Performance Evaluation 3.2 Punch List Reports 9. INITIAL TASKS Page 25of 40 .6 Claims Reports to Management 11.4.3 Claims Analysis 11.

2 Effective Correspondence 3. required replies are sent and responses received. Make an exceptional effort to eliminate any chance of communications being misunderstood. Everyone on the project team should understand that all contractual communications may have legal ramifications. Clear communication is essential to contract management success. Ideas should be presented logically. Coordinate all outgoing correspondence through one individual per contract Periodically exchange logs with contractors to secure agreement on open and closed items Write a separate letter for each subject Keep all correspondence objective and factual (avoid inflammatory language or style) Clearly state the subject in all correspondence Identify all referenced items by title. correspondence is cross-referenced. be one of the primary tools available to reconstruct facts if a dispute arises. or at a minimum. date or revision Identify all enclosures Establish a minimum response time for all communication and clearly state this in the correspondence 3. Separate topics should be addressed in separate letters. Correspondence should have a well defined purpose. and action requirements generated by correspondence are closed out on a timely basis. Clear. To maximize the value and effectiveness of correspondence: • • • • • • • • • • Serialize all contract correspondence Log all contract correspondence to ensure accountability for action and timely responses.4 CORRESPONDENCE AND CORRESPONDENCE CONTROL SECTION 3. correspondence can be quickly identified and retrieved.4. simple language should be used. INITIAL TASKS Page 25 of 40 .4 CORRESPONDENCE AND CORRESPONDENCE CONTROL 3.4.3 INITIAL TASKS 3.1 Purpose Contract correspondence control is designed to ensure that all correspondence to and from a contractor is accounted for.

All outgoing and incoming correspondence will be logged.4. is not to be used for contract correspondence unless each transmittal is serially numbered.5) 3. 3. various people on the project team may originate correspondence. Original documents will be retained in the Contract Management Files and only copies will be circulated.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • • • • Outgoing correspondence which requires no response should so state Show "blind" distribution on the file copy Date stamp all incoming correspondence to establish chronology Acknowledge every letter by one of the following: −Answer as required by incoming letter −Interim reply if full response cannot be provided within the established time period and then maintain an action item list to ensure follow up.Outgoing (Exhibit 3.4 Exhibits Correspondence Log . However.4. you can control the flow of correspondence.4.4.3. Email. By establishing designated points of contact.) Contract management correspondence control will conform to approved project document control procedures and utilize the approved project document control computer tracking program. Larger projects are encouraged to electronically "sort" the logs and distribute an open correspondence report weekly as a control device. An appropriate counterpart in the contractor's organization should be identified as contractor's addressee. logged.5.Incoming (Exhibit 3. Ideally the project should exchange logs monthly with the contractor to confirm agreement on open and closed items as well to confirm receipt of correspondence requiring no response.2-B) Correspondence Checklist (Exhibit 3. signed and controlled in the same manner as hard copy correspondence. (Multiple originators and multiple addressees results in lack of coordination and consistency.4. The authorized signatory should be identified to the contractor in writing and no others should sign correspondence. INITIAL TASKS Page 26 of 40 .3 Procedure Correspondence to and from each contractor will be sequentially numbered for each contract. A Sample Contract Management File Index is provided in Exhibit 3. while an attractive convenience. and replies recorded. action/reply responsibility assigned.2-A) Correspondence Log .3. 3. Correspondence control logs should be checked weekly to ensure that all open items are taken care of and to provide follow-up.4 CORRESPONDENCE AND CORRESPONDENCE CONTROL SECTION 3.5 Checklist 3.

: CONTRACTOR: LETTER SERIAL NO. DATE REPLY ACTION ASSIGNED CONTRACTOR ANSWERING LETTER Expedition .Correspondence Log (Outgoing) COMPANY: CONTRACT NO.: NOTE: ENTER ONLY ONE LETTER PER LINE REPLY REQUEST DATED SUBJECT NO YES JOB NO.

Comments: 8. Correspondence is objective/factual and has the appropriate tone. INITIAL TASKS Page 29 of 40 . No letter numbers are missing.5) Contract Number:________________________ Contractor:___________________________ Contract Scope:________________________________________________________________________ 1. Open items are statused and updated (at least bi-weekly). All letters to contractor including email are being logged and tracked. including email are being logged and tracked. Comments: 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Correspondence Checklist (EXHIBIT 3. All letters from contractor. There are no past due action due dates. Comments: 7. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:___________________________________ Date:___________________________ 3. Comments: 6.4.4 CORRESPONDENCE AND CORRESPONDENCE CONTROL SECTION 3. Open items are identified. Comments: 9. Correspondence is input to correspondence/document control system. Comments: 3. Comments: 4. Comments: 5.

3 INITIAL TASKS 3. including those that extend past final acceptance (e.2 Insurance 3. Certificates of Insurance are submitted by a contractor to confirm that the insurance policies required by the contract have been obtained.g. verifying and monitoring contractor Certificates of Insurance and bonds.5. There is no reduction in bond premium for a reduced bond penalty. The contractor should submit a Certificate of Insurance or other documentation of insurance meeting contract requirements immediately following contract award but no later than contractor's site mobilization.5 INSURANCE AND BONDS 3. if any.4-B). the contractor must be denied access to the site until the required insurance is in place. the contractor's insurance expires or is significantly modified. An Insurance Register with expiration dates will be maintained (reference Form 3.) After the contractor starts work.1 Scope This procedure outlines the requirements for obtaining.5. 3. (Refer to Exhibit 3. Because insurance policies can expire by their terms.5. An early notification system (tickler) which identifies 45 days in advance those Certificates which require renewal will be maintained. Contractors without complete and satisfactory Insurance Certificates will not be permitted to mobilize. A payment bond ensures that the contractor's suppliers and subcontractors are paid for the work and/or material they supply.5. Insurance Certificates will be monitored to verify that the coverage is maintained in force and proper renewal is obtained by the contractor. Bonding requirements.5 SECTION 3. Performance and payment bonds should be in a penalty amount equal to 100% of the contract. Verify that the certified insurance coverage conforms to the contract requirements and is valid. Furthermore. 3. warranty).5. INITIAL TASKS INSURANCE AND BONDS Page 30 of 40 . Performance and payment bonds are typically issued together as a package for a single premium.. are contained in the contract. if during the course of the work. their expiration dates must be monitored and policies extended as necessary.3 Bonds A performance bond is a surety company's guarantee that the obligations that the contractor undertakes pursuant to the contract will be performed.4-A for Insurance Certificate Review Instructions.

Typically. Therefore. the successful bidder's bid bond is not returned until receipt of satisfactory performance and payment bonds. If extra work is added that is equivalent to another contract. Performance and payment bonds typically provide coverage for the contractually specified warranty period without an additional premium. the premium is based on the final contract price. Contract Amendments for extra work outside of the original scope of the contract may require specific notification to the bonding company to ensure coverage of this extra work. Verify that the bond(s) conform to the contract requirements. Such payments may be construed to be "loans" to the contractor and therefore not credited toward the contract balance owed by the bonding company. Advance payments to a contractor in excess of what has been earned under the contract should not be made. INITIAL TASKS INSURANCE AND BONDS Page 31 of 40 . an adjustment to the premium will apply when pricing change orders. Note that while Change Notices do not normally necessitate notification to the bonding company. it will be necessary to obtain another bond to cover this work. 3. Note that bonds do not normally need to be updated during the course of the work.5 SECTION 3.S. When a contractor is required to obtain a performance/payment bond. Department of Treasury's approved list of sureties.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The contractor should submit performance and payment bonds which meet contract requirements immediately following contract award. Verify that the bonds conform to the contract requirements and have been issued. The surety should be on the U.

Reference Special Topics Section 7.5 SECTION 3. to be able to file a lien the contractors must submit a Preliminary Notice of Intent to file a lien at the start of work.5. An Advance Payment Bond assures that moneys advanced to the contractor will be used in connection with the project.5. In effect. In some jurisdictions. 3. A Maintenance or Warranty Bond is usually written by the surety that provided the Performance and Payment Bond and provides an extended warranty for defects in materials and workmanship.5 Checklist 3.2 "Basis for Claims" pages 27 and 28. Such bonds will typically have a penalty amount of 125% to 150% of the lien obligation. INITIAL TASKS INSURANCE AND BONDS Page 32 of 40 . but has no adverse consequences. these bonds allow the project to be turned over to a customer without any encumbrances and allow the contractor to receive its retention pending resolution of the dispute with its suppliers and subcontractors.5.5. Such a bond may be required prior to making advance payments to the contractor.4-A) Insurance Register (Exhibit 3.4-B) Insurance and Bonds Checklist (Exhibit 3. When a contractor's supplier or a lower-tier subcontractor has filed a lien against the owner’s property.6) 3. The supplier/subcontractor's lien is then attached to the bond allowing the lien to be removed from the customer's property. Its cost is significantly less than that of the Performance and Payment Bond. you may require the contractor to purchase a release of mechanic's lien bond to release the lien.4 Exhibits Insurance Certificate Review Instructions (Exhibit 3. The normal penalty amount is 10% of the contract price.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL An Advance Payment Bond is a special category of payment bond (unrelated to the standard performance/payment bond) which is sometimes used on international projects but rarely in the U. The Preliminary Notice looks very much like a lien and can be alarming.5.S.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Insurance Certificate Review Instructions (EXHIBIT 3. DEFINITIONS A Certificate of Insurance establishes that the contractor has appropriate insurance to cover claims for which the contractor is responsible. REQUIREMENTS Attachment A is a sample Insurance Certificate. The numbers also correspond to the sections on the Certificate. 4. This is the date the Certificate of Insurance was typed.5 SECTION 3. Letter designation will indicate which insurance company is providing insurance coverage from the list of insurance companies under Companies Affording Coverage. The names of the insurance companies providing the insurance for the insured.5.4-A) PURPOSE To establish responsibility for acquiring initial contractor submitted Certificates of Insurance and to provide guidelines for determination of the validity of such Certificates. This type of policy includes the following coverages: • • • • • • • Premises and Operations Products and Completed Operations Contractual Liability Broad Form Property Damage Explosion. Type of Insurance identifies the specific insurance being provided. 6. 2. Commercial General Liability (formerly Comprehensive General Liability) is the insurance generally available to contractors to cover third party liability arising from their operations. 3. The name and address of the agent or broker who placed the insurance coverage for the contractor. INITIAL TASKS INSURANCE AND BONDS Page 33 of 40 . The sections below provide explanations and directions. The name and address of the contractor who provided the evidence of insurance on the Certificate. Verify that the name of the contractor is the same as the name in the contract. Collapse and Underground Hazards Personal Injury Liability Cross Liability or Severability of Interest Clause The company requires that the Commercial General Liability policy be on an Occurrence Form. This form provides coverage for a loss that happened during the policy term even if 3. 5. When there is any question about a contractor purportedly having valid insurance coverage. contact the insurance company directly referencing the policy number. 1.

but only with respect to liability arising out of the operation for the Owner and the Company by or for the contractor. it should obtain an endorsement from its insurer to establish a project aggregate for the work it is doing for the company. A sample of what might appear: "XYZ Corporation (Owner) and the company are included as additional insureds except for Worker's Compensation for the Fixed Project.000. If the contractor has an aggregate less than $4 . it is likely that those contractors performing environmental work will be able to obtain only Claims Made coverage. Refer to the Procurement Manual for the acceptable limits.000 per occurrence/$4 . The policy number of the insurance policy provided to the contractor. Verify that the types of insurance and the limits of coverage being provided are consistent with the contract requirements. Both Occurrence and Claims Made policies will show per occurrence and annual aggregate limits.000. The policy expiration date must expire on or after the contract completion date. The policy effective date must be effective on or before the contract inception date. 7.000 annual aggregate. 8. If in doubt. This form provides coverage for a loss that happened during the policy term even if the claim is made after the policy has expired." 3. A Claims Made policy restricts the time that is allowed to make a claim to either the policy term or the policy term plus a limited extended reporting period thereafter. INITIAL TASKS INSURANCE AND BONDS Page 34 of 40 . have the Certificate reviewed by the Risk Management Department.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • Cross Liability or Severability of Interest Clause The company requires that the Commercial General Liability policy be on an Occurrence Form.5 SECTION 3. 9. #xxxxx. 10.000. Generally the typed entries and special request items will appear in this space on the Certificate of Insurance and may also include the "per project" limit mentioned above. Such insurance shall be primary with any other insurance maintained by the additional insured excess thereto. with this aggregate being a policy aggregate for all of the contractor's work. If the expiration date is before the contract completion date.000. Procurement (or Contract Administration if the contract has been transferred to the field) must monitor to insure receipt of renewal certificates. (While we require contractors to furnish Occurrence policies. The company requires that for contractors the minimum limits be $2. Subcontracts with reduced scopes may not need insurance limits this high.) The limits referred to herein are for the company’s long form subcontract.

it is preferable to have this provision shown on a separate endorsement attached to the Certificate. Look for a typed entry or require the standard Certificate to be modified. contract number. The certificate holder is the company entity which requested the Certificate of Insurance from the contractor. The company requires thirty (30) days notice of material alteration to the contractor's policies or cancellation. 12. INITIAL TASKS INSURANCE AND BONDS Page 35 of 40 . It can be signed by the agent. 3. 13. must appear. and the specific company entity named as additional insured as well as the Customer/Owner. The standard cancellation provision does not include a provision for notice of termination or material alteration and there is no industry standard for amending the Certificate.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The project name. Verify that the Certificate of Insurance has been signed. (While in practice the additional insured provision is show in item 10.5 SECTION 3. The Certificate of Insurance must be signed to be valid. the broker.) 11. Verify that it is the correct company entity. or the insurance company. if required.

Comments: ______________________________________________________ Special insurance coverage. YES NO 9. Comments: ______________________________________________________ YES NO Name:____________________________________ Date:____________________________ 3.5 SECTION 3. Insurance Certificates have been obtained from contractor PRIOR to mobilization. Comments: ______________________________________________________ Expiration dates have been entered into the tickler system. if required. YES NO 3. has been obtained. YES NO 5. YES NO 6. YES NO 8. Comments: ______________________________________________________ YES NO 2. YES NO 7. Comments: ______________________________________________________ Validity of Insurance Certificates and bonds have been verified with the insurance company as appropriate.6) Contract Number:_______________________Contractor:____________________________ Contract Scope:________________________________________________________________________ 1. INITIAL TASKS INSURANCE AND BONDS Page 38 of 40 . YES NO 4.5. Comments: ______________________________________________________ Bond (or Letter of Credit). Comments: ______________________________________________________ Insurance and bonding companies have been checked through the Risk Management Department.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Insurance and Bonds Checklist (EXHIBIT 3. if required has been obtained. Comments: ______________________________________________________ Insurance Register is maintained to monitor expiration dates. Comments: ______________________________________________________ Contractor's insurance coverage meets contract requirements.

no double shift if the site is working one shift. Assure the schedule is in the form required by the contract. the occurrence of float. • • • • • • 3. and the contractor submits a bar chart.6. The contractor’s schedule must show the logical sequence. Assure the schedule meets the milestones required by contract. completeness. 3. and the identification of critical paths.1 Purpose The contractor is usually obligated by the terms of the contract to submit a resource loaded. Changes to the schedule may also be directed pursuant to the Changes clause.6 SECTION 3. Assure that completion dates shown earlier than contemplated by the milestones do not adversely affect the work of others (or cash flow constraints). If the contract requires a CPM schedule. construction methods. and estimated durations of activities necessary to meet the milestones and completion dates established in the contract. e. Analyze the submitted schedule for reasonableness of network logic.6.. The contractor is committed to perform in accordance with the plan unless revisions are subsequently submitted and approved.3 INITIAL TASKS 3. Assure work as planned is consistent with parameters of the site. Review to see how the contractor's schedule supports the overall project schedule. approval in this form may act as a waiver of the CPM requirement. Review to see if the work of others supports the contractor's schedule.2 Procedure • • Verify that the contractor submits the initial schedule as required by contract. Project Controls should participate in the review and approval of all contractor schedules and revisions. Approval of the contractor’s schedule indicates that it appears to be a reasonable plan and commits us to cooperate in its implementation. precedence diagram schedule as an early deliverable for approval.g. INITIAL TASKS SCHEDULE SUBMITTALS Page 39 of 40 . durations. appropriate levels of detail.6 SCHEDULE SUBMITTALS 3. They should also review periodic updates which report progress against the current approved plan and fragmentary networks submitted in support of contractor proposals for adjustments to the contract milestones or completion dates based upon critical path analysis.

3.6 SECTION 3. but if an early finish is approved. you may be liable for extra costs if you fail to support or actively interfere with its accomplishment. Remember the contractor’s method of performance is its own. be considered a change to the contract. should be resolved before approval.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • Formally approve the schedule. Although a contractor may seek permission to finish early. comments and exceptions. Reasonable denial may be based on cash flow constraints. INITIAL TASKS SCHEDULE SUBMITTALS Page 40 of 40 . Requiring any non-essential changes in the contractor’s planned methods of performance.3 of this Manual for a discussion of schedule issues to be considered during performance. Finally. could. you and the owner have the right to reasonably deny the request and insist upon adherence to the contract completion dates. inability to support early access requirements or the delivery of customer-furnished equipment. or a significant change in sequence. Refer to Section 4.

..........7.............................................................................................................................2..1 Purpose..........6....... 44 4............................3-A) ................ 43 TECHNICAL TRANSMITTALS .4................................7....................................................3-B) ............. 58 4..................3-B). 27 4.................. 47 4...........................7..................................................................................3 Procedure.................... 47 4......4..................................................................3-D) .................................................................................... 42 Request for Information (RFI) Log (EXHIBIT 4.......................47 4............................4 Exhibits ...........................2 Definitions .............................................................................................................38 4.........6 4.................................................. 27 4.........................................4) ......................7..................6..................................4 Checklist .....................................................................................................4...........................................................5 4.....................3 4..................................................................................... 38 4.....................................Attachment) ........4 4....................... 54 4............................................... 61 Daily Summary of Backcharge Work (EXHIBIT 4.................... 37 REQUEST FOR INFORMATION (RFI) ..............3.........................................................................3.................. 37 4............3 Procedure................................................................... 62 Notice of Backcharge Completion (EXHIBIT 4....................................3 Procedure..........................4 Checklist ..................................1 Purpose... 51 4...................................................................................................6.................. 63 4.......4...........7.................. 40 Request For Information (RFI) Contractor Instructions (EXHIBIT 4...............................Performance TABLE OF CONTENTS 4.........1 4......................... 58 4.........2 Discussion ......................................4.......2 Scope ................5.....................................2 Procedure........1 INTERNAL APPROVALS.......2 Discussion . 56 BACKCHARGES.................................2 CHANGES ....................4 Claims Defense ..............................................5......................................................2............. 41 Request for Information (RFI) (EXHIBIT 4...................................................7........4.................... 60 Backcharge Log (EXHIBIT 4...................6.............................................4.... 59 Notice of Backcharge Work to be Performed (EXHIBIT 4....................................2............................................................................5.............................................. 28 SCHEDULE........................................................................ 38 4.........4-A) .....27 4..........5..........................................6 Exhibits ...........................5 Disputes .................................. 44 4...........................7 TABLE OF CONTENTS SECTION 4..................6.........1 Purpose............................................................. PERFORMANCE Page i .. 46 CLAIMS ............................................................................. 55 Claim Flowchart (EXHIBIT 4...........5... 45 Technical Transmittals Checklist (EXHIBIT 4............................................................................3-A) ...............................................................................................................6................1 Purpose. 38 4............................................................................................4-A .......................................................................................................................................................................................37 4..2 Procedure.................................... 44 4.......................................6................................3-C)....................3 Discussion ..................................................................................................1 Purpose..............................6..........................7.....58 4...............4-B) ..........................................................44 4.................................................................................................7..5 Exhibits ....................... 48 4.......................................4......................................................................................................................................................................................... 54 Directive To Maintain Schedule [SAMPLE] (EXHIBIT 4.......................... 38 4............................................................................................................................... 58 4......................1 Purpose.............................................................4 Procedure...............................................

4.1 Purpose This section describes activities and documentation required to handle Contract Changes effectively.a modification to the work.1.4 PERFORMANCE 4.a document issued notifying the contractor of a potential or directed contract change made. signed by both parties.1.e. additions and deletions) within the general scope of the contract.1. data or any other instructions to the contractor. Direct changes (revisions. which can be issued unilaterally. Amendment -. allow you to compensate the contractor based on your determination of an equitable adjustment (time and money) when agreement cannot be reached. or to change the basic provisions of the contract (i.3 Definitions The Change Notice requires the contractor either to confirm adjustments to time and/or compensation ( if any) or to submit its proposal for adjustments to time and/or compensation. Change -.1 CHANGES 4.. Change Notice Request -. constructive change or similar event justifying issuance of a Change Notice 4. PERFORMANCE CHANGES Page 1 of 63 . 4. An Amendment may be used to modify price and time of performance in lieu of a Change Order but normally will be used only for modifications outside of the scope of the Changes clause. time or method of performance authorized by the Changes clause within the scope of the contract. A directed change is one in which the contractor is directed to proceed with the work independent of resolution of the commercial impact (if any) arising from the change.2 Background Change Orders. The Change Notice is to be used to: • • • Transmit all new or revised drawings.1 SECTION 4. outside the operation of the Changes clause) and require bilateral agreement. which must be mutually agreed upon to effect a change to the rights and obligations of one or both. Invite a proposal for new prices or schedule. Amendments should be used for contract modifications outside the general scope of work of the contract. Directed Change Notices which affect the cost or time of performance obligate you to compensate the contractor.a formal modification of a contract. Change Notice -. but the incentive to do so is diminished considerably because of the amount already paid. but do not provide any funding for payment. The contractor may elect to continue to pursue additional compensation.a contractor initiated request for a Change Notice due to some differing site conditions.

manner or sequence of the 4. payment terms and schedule. Change Proposal -. price. issued unilaterally representing your determination of an equitable adjustment. designs or specifications.5 and Special Topics Section 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Change Order – a document which represents the commercial and technical resolution of a Contract Change. or.1 SECTION 4. (Refer to the paragraph on Force Accounts in Section 4.4 4. your position is that the work is within the work scope and thus not the subject of a Change Notice.1. The addition of Extra Work should be treated as sole source procurement requiring appropriate approvals.a proposed adjustment to contract price and/or time of performance in response to a Change Notice or any other circumstance in which the contractor believes an adjustment to the price or period of performance is due. however.a document ordering the contractor to proceed with the defined work despite a lack of agreement as to whether the work is within the scope of the contract.4. The original contract plus all of the Change Notices. is outside of the general scope of the contract. if authorized by the terms of the contract. The need for a directive arises when the contractor asserts that such work should be compensated as a change (additional time and/or money). Directive to Proceed -. which defines scope. schedule and method of payment for a change. It may be agreed to and signed by both parties. Change Orders and Amendments constitute the complete contract.1 Discussion Changes Contract Changes You may make changes to a contract that are within the general scope of the contract in accordance with the Changes provisions of the contract. 4. You cannot issue a directed Change Notice if the changed work was beyond the parties' original contemplation of the scope of work. The agreement with the contractor for Extra Work is formalized in an Amendment. The Directive will instruct the contractor to segregate all costs associated with the work described in the Directive. Proposals should conform to the contract requirements for pricing of adjustments. This is a complicated area with broad guidelines. Changes in the drawings. A Change Order describes the scope. See the section below under Discussion titled “Extra Work”. PERFORMANCE CHANGES Page 2 of 63 . Not all additional work is Extra Work.1.1.") Extra Work -. This work should be managed and monitored as force account work pending resolution of whether or not the work is a Contract Change. method.work.6 "Force Accounts. which the contractor is requested to perform and agrees to perform that.

changes to Customer or your furnished facilities. As a minimum. All approved Contract Changes must be communicated and confirmed in writing by using a Change Notice and then incorporated into the contract by use of either a Change Order or Amendment. The change approval process should include cost and schedule analysis in all cases. The project transmittal form should have language similar to the RFI form that indicates that the transmittal is not a Change Notice and that the contractor is not to proceed on 4. if they affect the contractor. the following items must be included in the Change Notice: • • • • • Descriptive scope of the change Method of payment (lump sum. materials. equipment. The cost estimate is also required for the committed authorization if it is intended to issue a directed change. NOTE: Marked up contractor-submitted drawings that are not expected to require an adjustment in time or money may be returned to the contractor by controlled transmittals in accordance with Project Engineering Procedures.1 SECTION 4. directing acceleration or deceleration of the work and modifying the contract schedule or contract milestones qualify as Contract Changes. constitute "constructive changes" and result in additional costs and delays for which the contractor may have to be compensated. and communicated to the contractor at the Pre-Construction Meeting. PERFORMANCE CHANGES Page 3 of 63 . The scope of each change should be clearly defined and coordinated with the on-site team by the originator. The formal lines of communication for design changes must be consistent with approved project procedures.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL contractor’s work. Engineering changes to drawings and specifications made in the office and not formally controlled and communicated to the site may. depending upon the contract terms and Project Procedures. or force account) Time (schedule) adjustments (if known) Direction to proceed or to wait for notice Acknowledgment The current status of all Change Notices must be formally monitored and recorded in a Change Notice Log. The designated contract administrator should assume responsibility for such coordination and clarification as may be required as soon as the contract administrator becomes aware of the proposed change. services or site. unit prices.

if submitted Cost analysis (or price justification) Schedule analysis Correspondence Record of negotiation Time sheets. Contractor Initiated Changes Contractors will frequently submit unsolicited proposals in response to what they view as a change under the Changes clause.2.4. arbitration or other procedures for resolution.g. 4. sketches. drawings. or from something the contractor believes to constitute a compensable change but entitlement is at issue.2. A claim is a disputed demand by the contractor for time and/or money. PERFORMANCE CHANGES Page 4 of 63 . It may arise from a Contract Change where impact is at issue. invoices or other supporting documentation.4.6 and 7.) In contracts which include a disputes resolution clause.1. This is particularly important to observe on Government projects. if the contractor gives you notice of a dispute.3 Change Order/ Amendment File 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL work it considers to be a change without Change Notice or Directive to Proceed. the issue should be handled according to company procedures for guidelines in establishing mediation. For additional information on claims see Sections 4.1 SECTION 4. DCNs) Change Notice(s) Contractor's proposal. Marked up contractor drawings being returned with comments that constitute Contract Changes must be transmitted to the contractor by Change Notice. A Change Order or Amendment package (which should be reviewed for completeness after execution of the Change Order or Amendment) consists of the following information: • • • • • • • • • • • Change Order/Amendment Commitment authorization Change Summary -. claims.1.. for which the acceptability of proposal preparation/negotiation costs differ for changes vs. if appropriate 4. An unsolicited contractor request may take the form of a proposal for work that you agree is a change or it may take the form of a claim in which you have made an initial determination of no entitlement.a narrative describing why the change was made Technical Documents (e. but should only be applied to disputed requests. The term "claim" has often been applied to any unsolicited proposal.

can be a gray area.5 Procedure A Change Notice is prepared and will include all related data.1. Adding one more pump and 500 feet of pipe to a mechanical subcontract scope that already includes pumps and pipe should be a directed change.) Change Notices authorizing work to proceed require internal approval.) The approved Change Notice will be transmitted to the contractor. for a discussion on negotiation preparation and strategy). 4.4-A for the Change Notice form. Adding a 250 MW turbine generator to the same contract probably should not be directed as a change. (Reference Exhibit 4.1. (Reference Section 4. unsolicited proposals and claims) must be provided a unique tracking identifier. The Log should be updated on a regular basis to status open Change Notices and follow up should occur where there has been no responses. Extra Work is work that is a significant departure from the contracted general scope (e. All contractor responses. Determining whether scope increases are "in scope" increases or “out of scope” Extra Work.. (Reference Exhibit 4. PERFORMANCE CHANGES Page 5 of 63 . and warranty provisions of the contract will be required. All proposed settlements should be approved internally prior to negotiation with the contractor. must be entered in the Change Notice Log. All negotiations with a contractor must be documented. whether acknowledgments without comment. bonding [including agreement by the bonding company]. All transmittals to contractors will contain a serialized letter number.4-C for the Contractor Proposals/Claims Log.3. directing a tank subcontractor to install a building).4 Extra Work Generally speaking. disagreement with the Change Notice.1.4. Changes "within the general scope of the contract" should be very broadly interpreted. (Refer to Section 7. or contractor counter-proposals. Depending on the nature and scope of the Extra Work. All proposals submitted by the contractor (in response to Change Notices.) 4. attention must be given to whether modifications to the insurance. Negotiation.1. increases in scope can almost always be directed. drawings and documentation that are available at the time of its issuance.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 4. The contractor should be required to respond to each Change Notice. It is rare for contractors to flatly refuse a directed change because if the work is later determined to be within the general scope of the contract. (Reference Exhibit 4.1 SECTION 4.4-B for the Change Notice Log form.g.) Each Change Notice will be sequentially numbered and entered in the Change Notice Log. Each proposal must be entered into a Contractor Proposals/Claims Log kept for each contract.1.2. they may be in default and liable for significant reprocurement costs.

Situations may arise where the contractor will be directed to perform changed/disputed work in the absence of mutual agreement.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Once contractor proposals are negotiated and adjustments are agreed upon.) In such cases. The terms of the contract and Project Procedures will dictate the basis for negotiating equitable adjustments. The following material is intended to provide general guidance.1 SECTION 4. an equitable adjustment shall be made and the contract modified accordingly. it would be inappropriate to modify the contract milestones or completion date. the work being performed must be clearly defined. even though changed work may require some time to perform.6 Equitable Adjustments The Changes article of the contract will generally provide words to the effect that: "If any change under this clause directly or indirectly causes an increase or decrease in the contractor's cost of. 4. the performance of any part of the work under this contract. Also. Schedule Adjustments Adjustments to the contract period of performance generally will be based on the effect the change has on the time required to perform the contract work. However. they will be incorporated into the contract by either a Change Order or Amendment. 4." Prompt and fair resolution of changes is contractually required and will also best serve your long-term interests.4-F for the Change Order/Amendment Log form. For example. not procedural direction.1. which is entered into a Change Order/ Amendment Log for each contract.) It is important that the cross-references in the logs are completed to ensure a change can be tracked from Its inception (Change Notice or Proposal) to its incorporation in a Change Order or Amendment. PERFORMANCE CHANGES Page 6 of 63 . (Reference 4. (Reference Exhibit 4.4-E for the Change Order and Amendment Forms. there are many factors to consider in evaluating the actual impact of a change on a contractor's schedule. it should be incorporated into the contract by Change Order.4-D and 4. If necessary. In such cases.1.) Each Change Order and Amendment should be given a unique sequential number. Consequently.1.1. (Reference Exhibit 4.4-G for a sample Directive to Proceed letter. a unilateral Change Order may be issued to modify the price or time of performance as determined per the Disputes clause. If there is a subsequent final agreement for additional costs for this work. whether or not changed by any order. the change may not affect any work on the critical path of the current approved schedule. complete documentation must be maintained to record costs and schedule impact.1. the Company will issue a Directive to Proceed to the contractor requiring the contractor to perform the work pending final agreement. or the time required for.

If the change is negotiated after the work is performed. etc. Price Adjustments Price adjustments will fall into one or a combination of three categories: lump sum. cleanup. The contract Changes article normally provides you the right to prescribe the pricing method. you may both take advantage of the actual costs incurred to assist in establishing an appropriate price for the change. Note that it may be expedient to establish the factors for indirects. the effect of a change may be exaggerated because of a performance problem for which the contractor is responsible.). skill and efficiency. etc. however. unit rates in lieu of lump sum.g. etc. The contractor is entitled to an equitable adjustment for the change. such as risk. If the change is priced before the work is performed. avoiding renegotiation of the rates for each change. the preferred method of pricing a change is to estimate the cost for the effect of the change and negotiate a fixed price. The preferred method of pricing a change generally follows the base contract pricing. That may or may not be reflected in the amount that the contractor has spent depending upon its productivity.) and for general and administrative expenses (home office support. Where available and appropriate for the nature of the change. for overhead (site facilities. rely solely on cost records if a "lump sum" settlement is being negotiated after the work is partially performed or completed. PERFORMANCE CHANGES Page 7 of 63 . the period of extended performance is excusable but not subject to compensation. unit price or cost reimbursable. e. Do not. site management. to which negotiated factors are applied for the indirect costs (scaffolding. When delays are caused by concurrent events for which both parties are responsible. the fixed price will be based on the estimated cost effect of the change plus a reasonable profit based on traditional profit factors. the contract 4. Fixed Price (Lump Sum or Unit Price) Contracts For a lump sum contract..1 SECTION 4. Cost records are a tool to evaluate proposed settlement values and are not necessarily an indicator of the reasonable amount the company is obligated to pay. overhead and G&A early in the project to be used for changes. The period of performance should only be adjusted for the effect for which the you are responsible. resources required and investment.). labor and equipment. regardless of the base contract pricing method.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Similarly. The estimated cost is based on the expected direct costs for material.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL unit prices should be used to price quantity changes. Cost Reimbursable Contracts Changes on cost reimbursable contracts are generally less complicated and controversial to administer (although more labor intensive) than fixed price contracts. Changes that add work for which no applicable unit rates exist will necessitate the establishment of new unit prices. Cost plus fixed fee contracts typically include language that requires adjustment in the "fixed" fee for changes. inspect. for approval. The fee for each change should be evaluated for its own impact based on the traditional consideration of risk. 4. investment and resources. The percentage markups for materials may cover the labor effort to purchase. Equipment is priced based on negotiated rates or a percentage (typically 80%) using industry publications such as the Blue Book for U. similar to the method described above for lump sum work. Cost plus percentage of cost contracts normally require no negotiations for any changes. and it is illegal in U.1 SECTION 4. T&M work. projects. The "negotiated" fee adjustment is not necessarily based on the ratio of the original fee to the original estimated cost. a Daily Summary of Time and Materials Work (reference Exhibit 4. plus a reasonable profit. federal government work. is often expensive. It is seldom appropriate to contract on a cost plus percentage basis. is not well understood and must proceed on an expedited basis. and will generally recover at least the site overhead as a factor applied to direct costs.S. expedite. federal government contracts do not allow a markup for material on T & M work. PERFORMANCE CHANGES Page 8 of 63 . All elements of cost and profit are adequately recovered directly or in the percentage fee. Time and Materials Work Time and materials (T&M) work is usually a combination of unit rates for labor and cost plus a percentage (typically 10%) for materials. as will changes for which established unit prices are inappropriate. overhead and profit.1.S. rather than waiting until the scope is better defined. The contractor will always recover its reimbursable costs. Unit prices are actually a form of fixed price and negotiated new unit prices will be based on the estimated cost for the changed work. tools. warehouse and handle the materials plus a profit. The unit rate for labor normally includes a markup for supervision. while convenient. T&M work should be limited to those occasions when the scope of the change work to be performed is not very large. T&M work should be monitored by requiring the contractor to submit.S.5). U.

4. profit.1. Then an affirmative statement should be made in each Change Order or Amendment either granting an extension to milestone completion dates or stating there are no schedule adjustments caused by this Change Order or Amendment. Contract Change Notice (Exhibit 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Force Accounts Force Accounts are actually an accounting mechanism (holding accounts) for work being performed prior to agreement on a price.1. and consequential.4-AA) Change Notice Log (Exhibit 4.4-EE) Change Order/Amendment Log (Exhibit 4.4-E) Subcontract Amendment (Exhibit 4. indirect.1. covered by this Change Order (Amendment) on all contract work.4-C) Contract Change Order (Exhibit 4.6 "Force Accounts".1. and "ripple effects") on the work. PERFORMANCE CHANGES Page 9 of 63 4.4-D) Subcontract Change Order (Exhibit 4.e. and all effects (direct.1.1.8 Exhibits . etc.1.) The terms Force Account and T&M are often used (incorrectly) interchangeably. “indirects. material and equipment usage reports review).1. impacts. overhead costs. general and administrative expenses. (Refer to the Special Topics Section entitled “Force Accounts” for a discussion of the application of Force Accounts." All of the indicated cost elements mentioned. including without limitation.7 Cost Records for Changes For fixed price contracts (lump sum or unit price) changes should be issued and negotiated on a fixed price basis.” should be discussed in negotiation.1 SECTION 4.) Settlement Finality Use this language when preparing a Change Order or Amendment: "The price adjustment and time extension (if any) granted under this Change Order (Amendment) constitute payment in full for the work covered by this Change Order (Amendment). all direct costs. whether or not changed by this Change Order (Amendment).4-F) Directive to Proceed (Notice to Proceed Letter) (Exhibit 4.4-DD) Contract Amendment (Exhibit 4.1. indirect costs.1.4-A) Subcontract Change Notice (Exhibit 4.1. (Reference Special Topics Section 7.1.4-B) Contractor Proposals/Claims Log (Exhibit 4. time sheet review. On all changes you should implement cost tracking upon initiation of the change to develop sufficient information on which to base pricing (i. consequential. This objective assumes the scope of the changed work is well enough defined and understood to support preparation of a fixed price estimate. including impacts. This can lead to misunderstandings if the contractor has a different view of the terminology.4-G) 4.

1.5) Contract Proposals Summary (Reference Form) Flowchart of Changes/Claims (Equitable Adjustment Procedure) [Sample] (Exhibit 4.8-A) Change Order/Amendment Checklist (Exhibit 4.1.8-C) 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Daily Summary of Time and Material Work (Exhibit 4.9 Checklists Change Notice Checklist (Exhibit 4.8-B) Contractor Proposal Checklist (Exhibit 4.1.1.9) 4.1 SECTION 4.1.1. PERFORMANCE CHANGES Page 10 of 63 .

Please complete this form as required and return the original to this office.: COMMODITY CODE: This change notice is forwarded for your signature.: SUBCONTRACTOR: ADDRESS: LETTER NUMBER: EFFECTIVE DATE: REPLY REQUIRED: SUBCONTRACT NUMBER: CHANGE NOTICE NO. DESCRIPTION OF CHANGE: PRICING METHOD: LS UP PROCEED with work NO change in price authorized Drawings/data ATTACHED NEW UP T&M COST RE Notice to proceed REQUIRED NO extension of time authorized SUBMIT proposal within _____ days N/A DATE COMMITMENT AUTHORIZATION APPROVED SIGNATURE AUTHORITY DATE TO : ACKNOWLEDGE AND ACCEPT SUBCONTRACTOR LETTER SERIAL NO.: D-U-N-S NO.: ACKNOWLEDGE WITH EXCEPTIONS: ARE A PROPOSAL SIGNATURE ARE NOT PROCEEDING WITH THIS CHANGE HAS BEEN SUBMITTED TITLE WILL BE SUBMITTED WILL NOT BE SUBMITTED DATE Expedition .Subcontract Change Notice COMPANY: OWNER: JOB NO. A copy has been included for your files.

In accordance with Article ___. [Company's Authorized Representative] Work proceeding. WA 99352 Attention: [Contractor's Authorized Representative] Subject: Company Job 29999 Hanford Waste Treatment Facility Tank Post Weld Heat Treatment Letter 29999-KLB-1234 Reference: Dear [Contractor's Authorized Representative]: The reference letter indicates that XYZ Corp. accepted as in scope. XYZ Corp. Work proceeding.1 SECTION 4.1. should this work be determined later to be a bona fide change. treat such work as if it were a change and segregate costs and maintain separate cost records.4-G) [Date] XYZ Corp. 123 Adams St. if XYZ Corp. If you have any questions. entitled Contract Interpretation. still considers this work to be out of scope. Please signify your intent with respect to this matter in the space provided below. is hereby directed to proceed with the Post Weld Heat Treatment and. but does protect both the interests of the company with respect to continuation of the work and the interests of XYZ Corp. as the company's acceptance that this work is a change. will prepare change proposal. PERFORMANCE CHANGES Page 20 of 63 . The company considers this work to be in scope work [OPTION: "but will research this matter and advise separately as to a final decision"]. This direction is not to be construed by XYZ Corp. Richland. please contact [contract administrator] at (509) 377-1234. Very truly yours.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Directive To Proceed (Notice To Proceed) [SAMPLE] (EXHIBIT 4. Authorized Representative: Name typed or printed: _____________________ _____________________ 4. considers the Post Weld Heat Treatment of the Liquid Effluent Tank to be out of scope and requests a Change Notice to proceed with the work.

HOURS ST OT RATE TOTAL WAGES TOTAL SUBSISTENCE EQUIP.Daily Summary of Time and Material Work CONTRACT NO.: LOCATION: LABOR NO. WORK DESCRIPTION: DATE: EQUIPMENT DESCRIPTION HOURS RATE AMOUNT TOTAL LABOR TOTAL EQUIPMENT OTHER QUANTITY DESCRIPTION UNIT PRICE AMOUNT TOTAL OTHER REMARKS SUBMITTED BY: APPROVED BY: TITLE TITLE Expedition .: CHANGE NOTICE/CHANGE ORDER/AMENDMENT/ WORK ORDER NO. NO.: CURRENCY: BC NO.: CONTRACTOR: COMPANY: JOB NO. MEN CLASS.

1. Comments: YES NO 3.1 SECTION 4. Change Notices have initiated cost commitment changes. Comments: YES NO 5. this. has been noted. Comments: YES NO 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Change Notice Checklist (EXHIBIT 4. Comments: YES NO 7.8-A) Contract Number:______________________ Contractor:______________________________ Contract Scope:________________________________________________________________________ 1. Comments: YES NO 4. too. Verify contractor's cost records for changes. PERFORMANCE CHANGES Page 24 of 63 . Comments: YES NO YES NO Name:________________________________________ Date:____________________________________ 4. Comments: YES NO 6. Cost and schedule impacts of Change Notices have been identified. If no cost changes. and proper approvals have been obtained. Change Notice documentation is sufficiently clear to minimize contractor questions and uncertainty. if necessary. Change Notices are accurately entered in Change Notice Log. Comments: 8. Verify that changed work is not actually part of original contract scope.

The file contains estimates. Comments: 8. if any. schedules. PERFORMANCE CHANGES Page 25 of 63 .1.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Change Order/Amendment Checklist (EXHIBIT 4. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:________________________________________ Date:____________________________________ 4. Comments: 6. Comments: 4. notes. Comments: 7. All Change Notices or unsolicited contractor requests (proposals) are available and on file as back up. Comments: 3. meeting minutes or other documents which substantiate the agreed upon price.8-B) Contract Number:______________________ Contractor:______________________________ Contract Scope:________________________________________________________________________ Scope of Change Order/Amendments is clearly defined. Comments: 5. Changes with no impact will be noted as such. Comments: 2.1 SECTION 4. Verify that the Commitment Authorization has been approved and signed by someone with appropriate delegated authority. Schedule impact or change. There are statements in the file regarding what caused the changes. is noted on the Amendments. Both parties have signed the Amendments. Verify that the Change Orders/Amendments have been approved and signed by someone with appropriate delegated authority.

Change Orders and Amendments have been prepared and approved to reflect settlements. PERFORMANCE CHANGES Page 26 of 63 . Comments: 3. Contractor proposals are evaluated for additional costs. if any. Contractor proposals are evaluated to verify if they are clearly changed work or are claims. At time of closure. Comments: 5. Comments: 2. The company is aware of all Contractor proposals and is focusing additional efforts on documenting contractor performance. alternative positions and possible negotiation positions are prepared.1 SECTION 4. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:________________________________________ Date:____________________________________ 4. Comments: 7. Contractor proposals are closed by Change Order or formally rejected in writing. Comments: 6. separately logged and acknowledged.8-C) Contract Number:______________________ Contractor:______________________________ Contract Scope:________________________________________________________________________ 1. Records of negotiations and settlements.1. if any are included in the contract file. Contractor proposals are immediately identified. Comments: 4. Comments: 8.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contractor Proposals Checklist (EXHIBIT 4.

preclude payment for work on Change Notices until a Contract Change Order Request is processed funding the change. e. Prepare an internal approval document. The supporting documentation will include: • • • • • 1 Commitment Authorization Change Notice/Change Order/Amendment Company's cost study or estimate Records of negotiations Pertinent correspondence or a summary of correspondence references For unit price contracts for which adequate funding exists.1 "Changes.4 PERFORMANCE 4. quantity releases are not considered commitments. No one is to execute Change Notices. 4. This is an intended control point.g. Prepare a concise change narrative if it will help convey the intent and purpose of the proposed change. for Work Orders.." Commitment Authorizations will be obtained in advance of any activity which may cause a change to the currently authorized expenditure limits or to the Contract Schedule.2 Procedure Assemble all documentation which is relevant to the proposed commitment change. The mechanics of the Change Notice/Change Order/Amendment cycle described below. Submit the Commitment Authorization and all relevant support documents to the approval authorities.2 INTERNAL APPROVALS 4. It is not appropriate or acceptable to fund changes from the base contract commitment unless a funding pool is specifically established. 4.2. PERFORMANCE COMMITMENT APPROVALS Page 27 of 63 . This includes field issued contracts. Change Orders or Amendments without the appropriate authority.2. Verify the proper approval authorities have been identified. Relevant documents may include: • • • Draft change document Records of negotiation Correspondence Retain the original change document for the Contract Management Files. The funding commitments for changes are to be separately processed and approved prior to issuing changes. changes or directives to contractors.1 Purpose This section defines the procedure for preparing and executing Commitment Authorizations and will be used in conjunction with Section 4.2 SECTION 4.

. Commitment Authorizations approved by both Regional and Contracts representatives.2 SECTION 4. Comments: 4.4) Contract Number:______________________ Contractor:______________________________ Contract Scope:________________________________________________________________________ 1.2. Comments: 3. Sole source approval on file for out of scope changes. Comments: 5. Comments: 7. Delegation of Commitment Approval Authority on file. PERFORMANCE COMMITMENT APPROVALS Page 36 of 63 . All relevant documents assembled. All Commitments reported to Central Procurement. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:________________________________________ Date:____________________________________ 4. Delegation of Execution/Signature Authority on file.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Cost Commitment Checklist (EXHIBIT 4. Comments: 2. Commitment Authorization obtained in advance of authorizing work to proceed. Comments: 6.

2 for a discussion of Progress Review and Coordination Meetings and Special Topics Section 7. Another important aspect of schedule management is keeping as-built schedules reflecting progress as it occurs.) The contractor's schedule should be marked up (maintained) in accordance with the contract requirements. Most contracts require regular updates to show progress on approved baseline schedules and submittal for approval of any proposed revised schedules. as appropriate. Further. Once a revised schedule is approved. In reviewing a revised schedule: • • • Assure that the schedule reflects changed work.6 "Claims". This mark-up should be retained as it reflects actual progress. Formal written approval of schedules is required.3. (Refer to Section 4. This not only provides a tool for statusing performance. All legitimate delays should be incorporated in the schedule as they occur.3. Allowing a contractor not to submit scheduling information may result in a waiver of those requirements.2 Procedure It is important to identify exactly the schedule submittal requirements of the contract. NOTE: See Section 5. contract changes and excusable delays may require adjustments to contract milestones. and/or the contractor's schedule.3.9 "Acceleration". 4. but is also essential to critical path analysis if a claim is filed at a later date. It is essential these requirements be rigorously enforced. 4. it becomes the basis for future progress measurement. If the contractor has changed milestone dates. Assure the schedule incorporates any approved time extensions.3 SECTION 4.6.1 Purpose Keeping a contract schedule current is a key element of contract management. Refer to Special Topics Section 7.8 "Delays and Extension of Time" and Section 7. When all tasks are complete the final mark-up constitutes the as-built schedule. PERFORMANCE SCHEDULE Page 37 of 63 . subsection 4. this may constitute a request for an extension of time and should therefore be addressed/resolved with the contractor.4 "Interface Coordination". Retain copies (hard copy and.4 PERFORMANCE 4.3 SCHEDULE 4. electronic) of all approved schedules and updates. Assure that the contract milestone dates are not changed except as modified by Change Order or Amendment .

a contractor initiated technical question.4 PERFORMANCE 4.) Immediately after a contract is awarded the contractor should be provided the instruction sheet and a supply of RFI forms. drawings or data). notification and resolution of contractor initiated technical questions.. it must be issued by Change Notice. specifications.1 Purpose This procedure provides for controlled identification. the project will identify for each contract an individual to be designated recipient for the RFI's on that contract. Consequently it is critical that an efficient.4 Procedure Each project should develop a project instruction for RFI's to be given to each contractor. To administer the RFI process. If a technical response represents a compensable change. if the contractor is performing initial design or other preparatory work offsite).4 SECTION 4. the single largest form of documentation on the project. the contractor should be informed immediately of the intended RFI procedure. An RFI is initiated if the contractor: • • • Is unable to understand the technical documents (i.e. PERFORMANCE REQUESTS FOR INFORMATION (RFI’S) Page 38 of 63 . 4. some RFI's may affect the contractor's ability to continue a portion of work until its question is answered. Further. Even if the pre-construction meeting is delayed. 4.4. in shear numbers. ambiguity. rather than a format of its own.4. Has an alternate/substitute material or method to propose that will not adversely affect cost or schedule. scope. This individual is responsible for ensuring that RFI's that may affect ongoing work receive appropriate expedited responses.4.4-A for a sample instruction. effective and timely mechanism for dealing with such technical questions be implemented immediately upon contract inception (prior to mobilization. Discovers or perceives a conflict.3 Discussion RFI's often represent. 4. Performing this bit of housekeeping will help to ensure that the contractor utilizes the standard format for dealing with technical questions.4 REQUEST FOR INFORMATION (RFI) 4.2 Definitions 4. RFI's are not change documents and cannot be used to direct a change in contract requirements.4. error or omission in or among the technical documents. (Refer to Exhibit 4. Request for Information (RFI) -.4.

within reason and with due care.) RFI's that indicate a specific date for a required response should be monitored for a response and. RFI's that indicate an immediate response is required should be responded to as quickly as possible. It is "contractually" advantageous if the responses to RFI's are written in the same professional. most direct and technically correct and complete manner. drawings and data. specifications. that "inorganic zinc paint is required in all outdoor environments. A special note with respect to tone. The target for responding to most RFI's should be within three (3) working days and for all RFI's within two (2) weeks. (Refer to Exhibit 4. article 13. in part.4 SECTION 4." Say instead: "Please refer to the painting specification. The reviewer will also provide a "commercial check" to ensure that you are not giving commercial direction in response to an RFI and provide a "tone check" to ensure that the response is limited to a factual and objective answer to the question." 4. indicates that inorganic zinc paint is required in all outdoor environments. review and control as the base technical documents. For example. even if the RFI question from the contractor suggests a commercial issue. It also serves no purpose to reply to an RFI with: "Perform the work in accordance with the technical documents. which has precedence over the drawing notes. avoid including a commercial phrase such as "the painting specification. Outgoing RFI's will be reviewed by the designated technical representative (reviewer) to verify that the response is technically adequate and correct. Reply in the simplest. Commercial language should be avoided in the responses to RFI's. if no response has been issued three (3) days before the response is due. impersonal style that standard specifications adopt. A-102. the designated recipient will ensure that the RFI is logged and that an individual is assigned to take the necessary action. The response has the same technical weight as the base technical documents: scope. PERFORMANCE REQUESTS FOR INFORMATION (RFI’S) Page 39 of 63 ." Trying to avoid a commercial liability by providing an incomplete response will actually disadvantage you if the contract issue turns into a dispute. It is counter-productive to use such phrases as "as the contract clearly indicates" or "this question is unnecessary" or other such terms or phrases that might be perceived as contentious or inflammatory.4. even if an RFI appears to be unnecessary or purposefully obtuse.1. and accordingly requires the same level of technical attention.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Upon receipt of an RFI. which states.2.4-B for a sample RFI Log form. Work should proceed on this basis. the individual responsible for follow up should contact the assigned person to ensure that the response will be issued on time.

XX.4-A) Request for Information (RFI) Log (Exhibit 4.4 SECTION 4. and all other such commercial issues should be dealt with in letter form. article 13." Order of precedence.4-B) 4.2." 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL or simply "The contractor is directed to proceed in accordance with painting specification A-102.4. the presence or absence of ambiguity or conflict. If it is clear that an RFI response requires a Change Notice for implementation. This provides an early warning if a contractor is likely to consider that the response will require a Contract Change Notice for implementation. your representative responsible for commercial administration of the contract should receive a distribution copy of all RFI's as they are issued. Consequently. In response. simply state: "Refer to (attached) Change Notice No.1.4. PERFORMANCE REQUESTS FOR INFORMATION (RFI’S) Page 40 of 63 .4. a Change Notice should be prepared and transmitted as the response to the RFI. your responses will often result in commercial impacts.5 Exhibits Request for Information (RFI) Contractor Instructions (Exhibit 4. Although commercial language is not included in RFI's.

If the company's response on the RFI has a cost and/or schedule effect. log the RFI using a sequential numbering system (e. • Upon determination that an RFI is required. and deliver the RFI to _________________________). specifications. PERFORMANCE REQUESTS FOR INFORMATION (RFI’S) Page 41 of 63 . the contractor should prepare its question on the attached form. An RFI is initiated if the contractor: • • Is unable to understand the technical documents: scope. it is the contractor's responsibility to immediately advise the company with a contractor change proposal. notification and resolution of contractor initiated technical questions. Discovers or perceives a conflict.4-A) This procedure provides for controlled identification.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Request For Information (RFI) Contractor Instructions (EXHIBIT 4. Has an alternate/substitute material or method to propose that will not adversely affect cost or schedule. RFI's are not authorized change documents and cannot be used to direct a change in contract requirements. drawings or data.4.. 4. A Request for Information (RFI) is a contractor initiated technical question.4 SECTION 4. if no response has been issued three (3) days before the response is due. the first RFI is [Job #]-RFI-0001. The company will target to respond to most RFI's with three (3) working days and all RFI's within two (2) weeks. ambiguity. RFI's that indicate a specific date for a required response should be monitored for a response and. the originator should contact the company to ascertain the status of the response. error or omission in or among the technical documents. Work undertaken without company authorization is at the contractor's risk and expense.g.

: RFI NO.Request for Information (RFI) PROJECT NAME: JOB NO.: PAGE 1 of 1 SPECIFICATION REQUESTED BY REPLY REQUIRED BY SUBCONTRACTOR Information to Subcontractor TO: OF: REQUESTED INFORMATION FROM: OF: DATE COMPANY NAME Expedition .: LOCATION: TO: OF: REFERENCE DRAWING LOCATION INFORMATION AND REASON REQUESTED SUBCONTRACT NO.

1 Purpose This procedure outlines responsibilities for transmitting company design documents to contractors and for processing technical submittals received from contractors. It is important that all team members understand and follow the project's technical document change and transmittal procedures. 4. ultimately. the quality of installed work.2 Discussion 4.5. the bid set of drawings will be updated to reflect changes during the pre-award phase and reissued in the status of "Issued for Construction.5 SECTION 4." All changes from the bid set to the Issued for 4.3 Procedure Revised Drawings Prior to the Pre-Award Meeting. Transmitting Your Drawings to a Contractor Drawings included in the contract at the time of contract award are considered the base set of drawings.5 TECHNICAL TRANSMITTALS 4. Processing Drawings Received from Contractors The procedure for processing contractor submittals will parallel approved Engineering procedures. Marked up contractor drawings being returned with comments that are known to impact cost or time of performance must be transmitted to the contractor by Change Notice.5. The base set of drawings is issued by Engineering and incorporated into the original contract. PERFORMANCE TECHNICAL TRANSMITTALS Page 44 of 63 .5. Poor control of technical documents can lead to uncontrolled changes to the contract and can raise questions about design configuration control and. Marked up contractor submitted drawings that are not expected to require an adjustment in time or money are returned to the contractor by controlled transmittals in accordance with Project Engineering Procedures. The project transmittal form should have language similar to the RFI form that indicates that the transmittal is not a Change Notice and that the contractor is not to proceed on work it considers to be a change without a Change Notice.4 PERFORMANCE 4.

PERFORMANCE TECHNICAL TRANSMITTALS Page 45 of 63 .5. Establish a logging and control system to monitor the submittal against contract requirements. A summary of significant changes associated with a revised technical document should accompany each drawing transmittal.4 Checklist Ensure that each contractor submittal is reviewed and returned to the contractor. Monitor timely (per contract requirement) return of submittals.1 "Changes" of this Manual. drawings and data will be kept current and updated every time drawings are changed or new drawings issued. Change Notices may address more than one drawing transmittal. Change Notices and unsolicited proposals will be handled in accordance with the Section 4. . A Change Notice which identifies the drawings and engineering data transmitted will be issued to the contractor.5. Contractor Technical Submittals Contractor drawings/data submittals required by the specifications will be received and processed pursuant to the appropriate project procedures. The contractor may initiate unsolicited proposals in response to the Change Notice transmitting the drawings.4) 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Construction set of drawings are to be noted on the drawings. Technical Transmittals Checklist (Exhibit 4. The list of contract specifications. They will be issued in a timely manner in order to avoid adverse impact to the contractor's performance of the work.5 SECTION 4. Contractor submittals and your review of comments for compliance with contractual commitments and commercial effect will be monitored via copies of the transmittal documents concurrently with the technical review to: • • • • 4. Monitor approved technical submittals for changes in scope.

Comments: YES NO 2. Number:__________________________ Cost/Schedule reviews have been performed for all revised or added drawings. Comments: YES NO YES NO YES NO YES NO YES NO Name:________________________________________ Date:____________________________________ 4. Comments: YES NO 3. Change Notice for added and revised drawings are processed within the time periods required by this procedure. Comments: 8. Change Notices.5 SECTION 4. Comments: YES NO 4. Comments: 7. Comments: 5. PERFORMANCE TECHNICAL TRANSMITTALS Page 46 of 63 . Comments: 6.4) Contract Contractor:____________________________________ Contract Scope: 1. Change Orders and Amendments are being processed for all contracts and include an accurate accounting of drawing revisions.5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Technical Transmittals Checklist (EXHIBIT 4.

PERFORMANCE of 63 CLAIMS Page 47 ." 4. facilities and utilities. disruptions and interferences by others Unduly strict inspection Force majeure conditions Interference by you of the contractor's method or manner of performance of the work Failure to disclose relevant information to the contractor Taking over/managing a contractor's subcontractor Untimely clarification and approvals Unanticipated subsurface conditions Failure to act fairly and in good faith Almost anything else you can think of • • • • • • • • • • 4.6 SECTION 4. specifications and drawings.2 Scope A wide variety of causes may give rise to claims from contractors.6. Definition: "A claim is a disputed demand by the contractor for time and/or money which arises from a contract change or a contractor's perception of entitlement for something the contractor believes to constitute a compensable change.6.1 Purpose This procedure describes the process for analysis. or payments Delays. Some typical causes are: • • • • Impact from directed changes (pricing and effect on unchanged work) Constructive changes (not formally directed by Change Notice but required by the work or your direction) Untimely direction and administration of changes Deficient or tardy customer supplied materials or equipment. evaluation.6 CLAIMS 4. and resolution of contractor claims for price or schedule adjustments. design releases.4 PERFORMANCE 4.

(Refer to Exhibit 4. PERFORMANCE CLAIMS Page 48 of 63 . If an extension is not acceptable.e. For the orderly administration of contracts.6. documentary evidence. equitable replies.. where the contractor has been compelled to accelerate its work to meet schedule in the absence of a response. Unanswered requests for time extensions. it is generally quickly determinable if a time extension is acceptable (whether or not justifiable) to the project. delayed or impacted Cost and schedule quantification Contractual basis for entitlement Requested relief Requested Schedule Extensions — Note that any claim for time extension.6 SECTION 4. quantified impact. the following procedure should be followed and documented. all members of the project team should endeavor to avoid claims by: • • • • Identifying potential claims and taking steps to mitigate Frank discussions with contractors to discourage spurious claims Application of contract provisions for relief where justified Prompt resolution of acknowledged changes When claims cannot be avoided or resolved by management. rejected or negotiated to conclusion. but sometimes ultimately in court. 4. should be expeditiously resolved i. preferably at the time the claim arises. Contractors are obligated to provide adequate explanation and documents of claims. you should direct the contractor to complete on time and simultaneously advise the contractor that you are evaluating the merits of its requested schedule extension. Even if it is impractical to make an immediate determination whether the contractor is entitled to a schedule extension.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Refer to Special Topics Section 7. 4. with or without money. applicable law.3 Procedure Submittals — Encourage the full and complete submittal of the factual causes. and proposed resolution from the contractor.6.2 "Basis for Claims". contractual basis.) If the extension is justified. If the extension is not justified. The basis for the settlement of claims or for your recommendations to your customers for settlements should be the contract. may be treated by the contractor (and by the courts) as "Constructive Acceleration". the contractor will be entitled to compensation for acceleration.3-A for a sample "Directive To Maintain Schedule" letter. the facts and fundamental fairness. the contractor has maintained the schedule at its own cost. They are entitled to fair and timely consideration of their claims and clear. Submittals should address: • • • • Description of the work performed.

• • 4. as a matter of management judgement.1.6 SECTION 4. • Technical Validity — The scope of work. accept or reject determination should be made based upon the terms and conditions of the contract and applicable law. be considered. Confidentiality — In a claim situation the confidentiality of your documents should be protected.6. Accordingly.) Logging and Tracking — Claims will be logged and tracked In accordance with Section 4. Analysis — There are three separate and distinct steps to be taken in evaluating claims. it is important to be thoroughly familiar with all of the facts. While sympathy claims or nuisance settlements may.8 on "Delays and Extensions of Time" in this Manual. The time and money involved should not be a factor in determining entitlement. fact-finding discussions or correspondence should be undertaken whenever necessary to identify all of the circumstances applicable to the issues. the contractual rights and obligations related to any claim should be analyzed and understood. you have protected the schedule while providing time to evaluate properly who has responsibility for the cost to maintain the schedule. Documents relating to your evaluation of the claim should have limited distributed and be maintained in a secure location.3-B "Claim Flowchart". (Refer to Exhibit 4. Entitlement — Unlike recognized changes where the contractor's right to seek price or schedule relief is not in question. a go/no-go. (Refer to Special Topics Section 7. resources required and technical engineering or construction methods involved should be evaluated by the appropriately skilled staff to ensure that the claim has a sound technical basis.4 of the "Changes" Section of this Manual.) Fact Findings — Before a reliable analysis or evaluation can be performed.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL By deferring the evaluation but not deferring direction to the contractor regarding the schedule. It can be wasteful and even counterproductive to develop a negotiating position and attempt resolution with an inadequate grasp of the fact situation. PERFORMANCE CLAIMS Page 49 of 63 . The first and second must be completed and done independently from the third.

a negotiation plan should be developed. PERFORMANCE CLAIMS Page 50 of 63 . each analysis should address to the extent applicable: − Labor. each claim should be evaluated for price and schedule impact. conflicting or overlapping claims. including taxes and transportation − Equipment. To avoid fragmented. All Contract Change Orders and Amendments for claims settlements must: • • Accurately define the technical scope. a Contract Change Order or Amendment and Commitment Authorization should be prepared and. Negotiations should be conducted with the objective of reaching a fair and equitable resolution of the claim. Negotiations — If the analysis validates all aspects of a claim. including fringe benefits. developed. priced. direct and indirect categories − Material. with appropriate approvals. entitlement or quantification exist. a Contract Amendment incorporating the requested adjustments should be prepared and processed in accordance with project procedures.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • Quantification — If and when it is determined that the contractor is contractually entitled to an adjustment to price and schedule. Provide price and schedule resolution. back-charges. If not. documented and approved as a prerequisite to negotiations with the contractor. An affirmative statement of 4.6 SECTION 4. Contract Change Order and Amendments — Upon reaching a negotiated settlement at any level. credits or off-sets arising out the same issues or circumstances should be identified. all counterclaims. and some significant difference of opinion regarding validity. executed by both parties. Counterclaims — After analysis of the contractor's claim and before an amendment or negotiation plan is prepared. tools and supplies − Overhead and G & A expense − Bond and insurance costs − Profit − Actual time durations (planned and actual) − Critical path significance − Impact on efficiency Rejection — Claims that are determined to be without merit will be rejected in writing. Unsuccessful negotiations should be governed by the disputes process of the contract or by escalation to senior management levels where appropriate. and included in the resolution. not to coerce settlements which deny either party their full rights under the contract.

correspondence.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL • • Provide price and schedule resolution.4 Claims Defense Because claims may arise and not be resolved. balanced conclusion. The specific contract clauses must be clearly understood before undertaking resolution of a claim. If applicable. An affirmative statement of no schedule impact must be made if applicable. Consider: a.6. State that the terms of the Contract Change Order or Amendment represent a "complete accord and satisfaction of all issues raised by and consequences arising out or related to the claims described. the following elements are essential in reaching a thorough.6 SECTION 4. of the contractor. and graphic material). 4. The comparative cost of alternatives 2." Provide payment terms for the price adjustment. 3. Determining Entitlement or Initial Liability In reaching a determination of the validity of the claim and the entitlement. d. Evaluate each claim element. • 4. Evaluation of the Claim or Change Proposal 1. settlement through arbitration. change proposal or expected Change Order or Amendment on its own merits. or recourse to litigation. Require the contractor to accompany its claim or proposal with a fully documented report. c. obtain the opinion of the Architect/Engineer of the validity of the claim. contracts will generally provide for a method of handling disputes. if any. These may range from resolution of protests in accordance with a specified procedure. PERFORMANCE CLAIMS Page 51 of 63 . The degree of responsibility and degree of fault caused by each side Whether the work was done in accordance with the contract specifications or in keeping with standard industry practice The contractors past practice with regard to settlement or litigation of claims b. Require all relevant information (including CPM schedules.

4. Identify the proper parties. When analyzing damages. d.6 SECTION 4. Factual defense includes: 1. 3. Disputing Damages: Carefully analyze and dispute the damages which contractor alleges to have suffered. Require the contractor to provide proof of expenditures and detailed calculation of damages. PERFORMANCE CLAIMS Page 52 of 63 . Include an audit. if feasible. Include as a deduct/offset any additional cost the customer has incurred in repairing or completing deficient work. 2. Require that the contractor prove a cause and effect relationship. b. Defense Preparation Review all records of contract actions and overall administration correspondence. using information from all relevant sources.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL made part of the contract. The outcome will ultimately depend upon the documentation and presentation of the facts. If possible. Concurrency: If both the customer and the contractor are at fault. the law may not provide for recovery or for the apportionment of damages 2. 5. Determine the facts. Carefully examine the material presented by the contractor as proof of causation to spot any inaccuracies or ambiguities which may discredit or negate all or part of the contractor's claim. c. remember that claims are often calculated on the basis that the customer has ample resources to compensate the contractor. Analysis of claimed damages should: a. Identify and utilize contradictions in the records. 3. so as to reduce potential liability to only those damages directly and specifically caused by the customer's actions. Most claims are based upon factual disputes and a full knowledge of the true facts is essential in reaching a correct conclusion. 4. require the contractor to provide actual cost information from its records as proof of damages. Disputing Facts: Use every opportunity to find inconsistencies in the contractor's approach.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL to either side. Prior Settlement: Be aware of all possible circumstances in the administration of the contract. Note that these clauses are strictly construed by the Court. Contractual or legal defenses include: 1. Exculpatory Clauses: Contract clauses which clearly relieve the customer of responsibility or which limit its exposure to potential liability for its actions. Excusable Delays: The contractor will not be able to assert a right to recover from the customer if the cause or the delay is excusable. 4.6 SECTION 4.4 provides a sample response for a claim which has been submitted without proper notice. c. 4. However. it cannot be held responsible for any excess costs which the contractor may incur for a delay which was outside the control of the customer. but not compensable. Notice Requirements: Compliance by the contractor to provide the notices required by the contract. consider other factors which may be pertinent. such as: a. b. Seek a legal opinion based on the actual circumstances and be guided by that opinion. Unless by contract the customer assumes the risk for a delay. Counterclaims Defense against a claim should include the possibility of asserting a claim against the contractor for breaches of contract (technical as well as substantive) and its actions or inactions which resulted in excess costs to the 4. PERFORMANCE CLAIMS Page 53 of 63 . 2. Mitigation: Utilize evidence to show steps/action that the contractor could have taken to avoid or reduce the effect of the claimed cause on its operation and did not do so. or in the settlement of changes where the contractor may have waived any of its rights or provided a release in connection with a particular issue. 3. but their validity is generally upheld.6. Constructive notice Waiver of notice requirements by actions of the customer Lack of prejudice to the customer by the contractor's failure to provide notice Exhibit 4.

Such a procedure may indicate the steps and sequence of events to resolve the dispute.6 SECTION 4. The most costly and timeconsuming process is litigation which should therefore be avoided if at all possible. If your prime contract has a disputes provision with express procedural requirements. 4.6.6. should be followed carefully. Alternative Dispute Resolution (ADR) processes (such as mediation.6.5 Disputes Occasionally it is not possible to resolve a claim.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL customer. PERFORMANCE CLAIMS Page 54 of 63 . it may be necessary to instruct the contractor how to proceed in a dispute in order for you to comply with these requirements. expert panels. Many contractor claims may ultimately be passed through to your customer. Where this is not possible.6. Detailed procedures. 4. It should be a goal to resolve all contractor claims at the project level through negotiations between parties who have the best knowledge of the facts and circumstances. and dispute review boards) can be considered.6. if provided.3-A) Claim Flowchart (Exhibit 4.4) 4.6 Exhibits Directive to Maintain Schedule [Sample] (Exhibit 4. The contract may contain a disputed article that provides a procedure for resolution of disputes. or may only provide that "the parties agree to attempt in good faith to resolve disputes". it may be necessary for the dispute to be resolved through a third party.3-B) Claim Rejection [Sample] (Exhibit 4.

3-A DIRECTIVE TO MAINTAIN SCHEDULE [SAMPLE] DATE_________________ ADDRESSEE __________________________________ __________________________________ __________________________________ __________________________________ Subject: Schedule Extension On ____________ [Contractor] made a request for an extension of time. Very truly yours. however. That request is being evaluated for merit. the extension you have requested cannot be accommodated. within [ ] days.EXHIBIT 4. Please provide an estimate of this cost as soon as possible and. You are directed to take such action as is necessary to recover schedule and meet the contract milestone dates and segregate the costs associated with this effort pending a final determination. Contract/Subcontract Mangement Manual Page 55 of 63 Section 4 .6. in any event.

We consider your request at this time to be unreasonable and. 1993 Dear Sir: Re: General Civil Contract Change Order Request for Imbedded Anchors in Primary Concrete for Gate Parts Your Ref. and after the work is essentially complete has denied us the opportunity to either return to the tender scheme. consider alternatives. PERFORMANCE CLAIMS Page 57 of 63 . dated April 15. more than 16 months after the work was commenced.6 SECTION 4. Yours truly. No. will not be given further consideration. in accordance with Section 36 of the General Specifications.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Claim Rejection [SAMPLE] (EXHIBIT 4. _________. 1991. Raising this issue more than two years after the construction drawings were issued.6.4) May 9. 1991 and that the first pour with these anchors was completed September 29. 1993 ________________________________________ We have reviewed your request and find that the construction drawings showing the revision were issued February 13. 4. or implement special monitoring of the operation.

7.") 4.7 BACKCHARGES 4. a Notice of Backcharge Work to be Performed (reference Exhibit 4. you should prepare a written notice to the responsible contractor identifying the nature of the problem and asking the contractor to perform the necessary work. they must be followed. material and equipment charges in accordance with project procedures and authorization.7.7.3-B) and issued seeking acceptance by the contractor and advising of the pricing mark-ups. If safety or other urgent considerations dictate.6 "Force Accounts.4 PERFORMANCE 4. (Note that if you have another contractor perform the backcharge work.. out of necessity to perform work on behalf of the contractor (e.) If the contractor is unable or unwilling to perform the work. proceed to authorize the work and establish a Force Account by cost code to accumulate labor. the notice may explain and provide that correction is being undertaken by you or others. PERFORMANCE BACKCHARGES Page 58 of 63 . cleanup. to have rework or other corrective action performed by the responsible party.1 Purpose This procedure describes the process for generating and collecting costs against a contractor who has provided goods or services that are not in compliance with the contractor's obligations under the contract. you should require adequate cost records to support the backcharge. (Reference Special Topics. if not provided by contract. material offloading or providing construction equipment).2 Discussion It is always preferable. resource and pricing purposes. If so. However.g. The necessary elements are: • • • • Notice Cost determination Pricing Collection 4. Contracts often have express provisions for backcharges describing the administrative requirements for notice and pricing terms. 4. Section 7.7.7 SECTION 4.3 Procedure When rework or other corrective action for defects is determined to be necessary or when you intend. legitimate backcharges may be generated and collected pursuant to other contract provisions or basic legal rights as well.7.3-A) should be logged (reference Exhibit 4. If agreement or acceptance cannot be obtained. for warranty.

3-D) 4.7. Upon completion of the work.7.4 Exhibits Notice of Backcharge Work to be Performed (Exhibit 4.7.7 SECTION 4. PERFORMANCE BACKCHARGES Page 59 of 63 .3-C) Notice of Backcharge Completion (Exhibit 4. close out the backcharge force account in accordance with project procedures. If refused. When resolved through collection or negotiation.3-D) apply agreed or appropriate rates and supply a consolidated request for billing (including any indirect or other costs for which the contractor is liable) to the Controller for collection or off-set against amounts otherwise due.7.3-A) Backcharge Log (Exhibit 4. prepare a Notice of Backcharge Completion (reference Exhibit 4. 4.7.7.3-C) and seek contractor acceptance on a daily basis. make a notation on the form and continue the process.3-B) Daily Summaries of Backcharge Work (Exhibit 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Prepare Daily Summaries of Backcharge Work (reference Exhibit 4.7.

: CONTRACTOR: COMPANY: JOB NO. NO. WORK DESCRIPTION: DATE: EQUIPMENT DESCRIPTION HOURS RATE AMOUNT TOTAL LABOR OTHER QUANTITY DESCRIPTION TOTAL EQUIPMENT UNIT PRICE AMOUNT TOTAL OTHER REMARKS SUBMITTED BY: APPROVED BY: TITLE APPROVED BY CONTRACTOR: (FOR WHOM BACKCHARGE WORK IS BEING PERFORMED): TITLE TITLE COMPANY Expedition . HOURS ST OT RATE TOTAL WAGES TOTAL SUBSISTENCE EQUIP.: CHANGE NOTICE/CHANGE ORDER/AMENDMENT/ WORK ORDER NO. MEN CLASS.: CURRENCY: BC NO.: LOCATION: LABOR NO.Daily Summary of Backcharge Work CONTRACT NO.

.........................................................................................................................................................................................1 Purpose .................2.................................... 22 5............................4 Checklists.....................3 Exhibit ..............................................................................2-A........................................................................................................................................................................................5 Reference . 24 5.............................................2.....3.................... 12 5..............1 5...............................2 Procedure ..........9 Coordination Meeting Checklist (EXHIBIT 5.......................................................3.................1...................................... 12 5............................1.. 23 5.........4 Contract Compliance ........................2-B) ............................................... 15 Certificate of Payment (EXHIBIT 5..............2...................................................................2-C)......................................................................................................5 TABLE OF CONTENTS SECTION 5....2 Procedure ...............................................3 5.......................................................................................................................................2-A.......................................................1..............................................................................................4-B).3............................1 Purpose .......4 5............................................................................................3 Exhibits.......................................... 11 PROGRESS MEASUREMENT AND PAYMENT................................ 17 Progress Measurement Procedure [SAMPLE] (EXHIBIT 5....3........5............................................8 5...4-A)....................................................................................................................3..........................6 Checklist ...................................... 22 5...............................1 5......................................... 12 5...... 13 5...............3.1 Purpose .....................................8 Progress Review Meeting Checklist (EXHIBIT 5.............1 Purpose ......................2 Definitions..................................................................2.....................3..................................................................................................................2...............4......................4 5........... 24 5...2....................1............... 18 Mobilization Payment Checklist (EXHIBIT 5.............................................................................7 5.......................................2).....................................................5....................................................................................3-A) .........................2............................................................ 24 5......2 Procedure ........................................................3.................................................................................................. 22 5................5................................. 21 5...............3 Procedure ............................................................2 5.............................. 21 SAFETY AND HEALTH................... 21 5...................................................................................................................... MONITORING/REPORTING Page i .1 DAILY REPORT .........................................3.......................................................................................................7 5............................................ 16 Invoice Concurrence Sheet (EXHIBIT 5.... 14 Invoice For Progress Payment .....................2...........3-B) ..........3....................1)........1...5 Exhibits.......................................5 Daily Report Checklist (EXHIBIT 5...Alternate (EXHIBIT 5..............................................................5......2) .................................1 Purpose ............................................4 Checklists....5....3 Exhibit........................................4 Daily Report (EXHIBIT 5.......................................1 5........5.........................2 Procedure ...........................................................................................4 Checklist .........................6 PROGRESS REVIEW AND COORDINATION MEETINGS........8 5.....CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Monitoring/Reporting TABLE OF CONTENTS 5......................................................................2-D).................................................................................... 13 Invoice For Progress Payment (EXHIBIT 5.................1.........3-C).........7 5..............3.......... 20 QUALITY SURVEILLANCE ............................. 10 Schedule Checklist (EXHIBIT 5.... 19 Invoice Processing Checklist (EXHIBIT 5..................................4) .4.............

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

Confirmation of Noncompliance with Contract Safety and Health Requirements (EXHIBIT 5.5.3-B)29 Safety and Health Checklist (EXHIBIT 5.5.6).................................................................................. 30 5.6 ENVIRONMENTAL ................................................................................................................ 31 5.6.1 Purpose.............................................................................................................................. 31 5.6.2 Discussion ......................................................................................................................... 31 5.6.3 Procedure ............................................................................................................................. 32 5.6.4 Checklist .............................................................................................................................. 33 Environmental Checklist (EXHIBIT 5.6.4)....................................................................................... 32

TABLE OF CONTENTS SECTION 5. MONITORING/REPORTING Page ii

5

MONITORING/REPORTING
5.1 DAILY REPORT

5.1.1

Purpose

This section identifies the information required on the Daily Report of a contractor's activities. The Daily Report is your internal document. It is an historical record that describes your observations of the contractor's day-to-day operations. It can be used later as a reference to determine the exact progress and status of a contractor's work at any given time. In the event of a claim or dispute, the details of events recorded in the Daily Reports become critically important. Daily Reports must be complete and factual. Utmost care must be exercised in preparing Daily Reports.

5.1.2

Procedure

General A Daily Report will be completed for each day a contract is active. The reports will be sequentially numbered, beginning with 001 for the first day of work. (Refer to Exhibit 5.1.2 for a Daily Report form.) Preparation of the Daily Report is primarily the responsibility of your representative who is monitoring the physical work (e.g., field engineer, contract coordinator, contract supervisor). (Although on short-staffed projects there may be a temptation to have the contractors prepare and submit Daily Reports for your concurrence, it is to be avoided because of a contractor's natural tendency to "shade" facts or include/exclude items based on its own best interests.) Each Daily Report will be signed by the preparer and submitted for management review no later than the morning of the following day. The original report will be retained in the contract master file. NOTE: If individuals feel compelled to enter contract related events, discussions or observations into personal diaries or logs, these diaries or logs should be submitted periodically to site management for review just as the Daily Reports are.

Each day of an active contract will be covered by a Daily Report; however, if no work is performed on the weekend or holidays, a separate Daily Report is not required for each day of the weekend, providing the Monday Daily Report contains a statement such as: "No work was performed on Saturday and Sunday, ___________(month) ____________(day) and ________________ (day), _________(year). " Also, if work is not performed for a number of days, one Daily Report may be prepared stating the specific dates covered by the report.

5.1 DAILY REPORT SECTION 5. MONITORING/REPORTING Page 1 of 33

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

The Daily Report should include the following information: Shift -- The shift and the starting and ending times will be indicated. Forces and Equipment -- Records will be kept of the number of craftsmen (by trade) and the major pieces of contractor equipment on site. Equipment moved on or off site since the last report will be indicated. Any down equipment and the downtime, if it can be established, will be indicated. (Note: this section will normally reference the contractor's prior daily force and equipment reports if adequate details are covered in those reports.) Description of Work Performed Today - Progress A brief description of the work being performed will be entered, indicating the area, location, elevations, column lines, etc.

The progress made relative to the contractor's plan will be indicated, noting the initiation and completion of any major item of work. (Note: This and the preceding item may reference the contractor's rolling 4-week schedule if the data is included in that document.) Major items of material received and/or removed or installed will be recorded. When a contractor ceases work or returns to work after a period of time away from the job, this will be noted with appropriately detailed comments.

• •

Special Comments -- While the level of detail indicated below is not expected for every Daily Report, each of the issues raised should be considered and chronicled, as appropriate, if potentially significant. It is important, though, for the report to include only factual statements. If the preparer has no factual basis for an assessment (e.g., regarding avoidable delays), the writer should not hazard a guess or opinion. This comment applies to all notations and reports prepared by those involved in contract management.

Work Stoppages, Interruptions, Delays, or Potential Causes of Delays

5.1 DAILY REPORT SECTION 5. MONITORING/REPORTING Page 2 of 33

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

In recording information on such delays, stoppages, and interruptions, the following items will be considered: — — — — — — — — Was the activity on the critical path? Was it unavoidable? What was the cause? What was the impact? What was the productivity result? How much time was lost - craft and man-hours? What equipment was affected or idled? Were there concurrent delays due to other causes (i.e., contractor caused)?

Weather — Weather conditions will be described, indicating if weather affected the contractor's operation. — Weather that may result in a force majeure request for extension from the contractor will be noted separately.

Surveillance — A record will be kept of such items as: Unusual field conditions Unsatisfactory work notifications and actions taken by contractor to remedy the situation. When comments are made concerning any unsatisfactory conditions, each succeeding report will indicate action taken by the contractor to remedy the situation until all unsatisfactory conditions have been corrected.

NOTE:

-

Tests performed and results Inspections performed (record satisfactory/unsatisfactory items)

Accidents, Injury, and Safety

5.1 DAILY REPORT SECTION 5. MONITORING/REPORTING Page 3 of 33

4 Checklist Daily Report Checklist (Exhibit 5..1.4) 5. injuries.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL — Any accidents. 5. MONITORING/REPORTING Page 4 of 33 .2.g. listing the name of the person and the time given.1.1.A) 5. • • • Requests from the contractor for field related assistance Requests from other departments and action taken Direction/Instructions — Direction/Instructions given to the contractor will be recorded.1 DAILY REPORT SECTION 5. conflicts) should be carried forward to the agenda for the Progress Review Meeting or Coordination Meeting (as appropriate). • Conflicts — When conflicts occur. Any action taken will also be indicated.3 Exhibit Daily Report (Exhibit 5. the following will be recorded: -----What was the conflict? Who discovered and reported it? Who was informed? What steps were taken to resolve the conflict? What was the resolution? • General — Action taken on any previous outstanding items will be recorded SPECIAL NOTE: Items of significance (e. work stoppages.2) Daily Report [Sample] (Exhibit 5. or safety violations will be recorded.1.1.

Daily Report SUBCONTRACT NO: SUBCONTRACTOR: CONTRACTOR REP: COMPANY: PROJECT: REPORT NO: PAGE: WEATHER SHIFT DATE Temp. -----------------------------------------------------------------------------Acme setting up paint mixing room. SPECIAL COMMENTS: EQUIPMENT DESCRIPTION PC200 Hoe Pickup Truck Dumpster D6 Bulldozer SOURCE STDPAV ACMEGC ACMEGC STDPAV UNITS TYPE 1 1 2 1 3/4 CY Hoe Ford .NJ 08996 30 ton dumpsters Caterpillar A ALL WORK AREA REMARKS REVIEWED BY: DATE REPORTED BY: DATE 09/02/1999 X X 09/02/1999 Expedition . Sky Precipitation Wind 1 of 1 Daily 03/30/1999 82 Clear None Light DESCRIPTION OF WORK PERFORMED TODAY: Building demolition completed.

Action items or potential problems identified and actions taken Comments: YES NO 6. Comments: 8. Comments: YES NO YES NO Name: ____________________________________ Date: __________________________ 5. Daily Reports are current within one day Comments: YES NO 7.1. Daily Reports cover all calendar days and are sequentially numbered Comments: YES NO 3. Comments: YES NO 4. Daily Reports include contractor's first day on site. days not worked and cover all shifts Comments: YES NO 2.4) Contract Contractor:_______________________________ Contract Scope: Number:____________________________ 1. MONITORING/REPORTING Page 6 of 33 . Sufficient information is included to reconstruct contractor's progress at a later date Comments: YES NO 5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Daily Report Checklist (EXHIBIT 5. Information on Daily Report is factual and cannot be considered as an opinion.1 DAILY REPORT SECTION 5.

and resolve interfaces and restraints. The meeting participants will: • • • • • Discuss outstanding action items from previous meetings. and current and potential problems.2 PROGRESS REVIEW AND COORDINATION MEETINGS 5. • • The use of a 4-week rolling schedule in lieu of a 3-week look ahead schedule is recommended as a tool to record as-built schedules and for planning new work.1 Purpose Progress Review and Coordination Meetings are held to evaluate the progress of a contractor. and potential problems.2 Procedure Progress Review Meetings (you and an individual contractor) Coordination Meetings (you and two or more contractors Progress Review Meetings – Progress Review Meetings are generally conducted once a week or as project or contract conditions warrant. For each new revision of the 4-week rolling schedule. the most recent past week (as-built) and the next three weeks should be shown.2. Discuss the schedule and the proposed plans and progress for the next schedule period.2. Determine action items and assign responsibility. Generally there are two types of meetings: • • 5. review schedules. Evaluate the contractor's progress since the last meeting and compare it to the scheduled progress. current. 5. distribute minutes to the participants. including a review of the Change Notices and Proposals/Claims Log.5 MONITORING/REPORTING 5. Discuss interfaces. and provide the contractor with a list of action items and any agreements or understandings reached.2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. Coordination Meetings are held periodically (e. their status and resolution.. weekly. for a sample Progress Review Meeting Agenda). Agree on status of work and mark up a schedule for progress to date. An agenda will be prepared by the company and sent to all participants in advance of each meeting.2. discuss past.g. and potential and pending claims. or on an as-needed basis).2. (Refer to Exhibit 5. MONITORING/REPORTING Page 7 of 33 . critical items. One of your participants will summarize the results of the meeting.

distribute minutes to the participants. equipment and schedule coordination among the contractors and you.2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The importance of adequate and proper monitoring of the contractor's progress cannot be over emphasized. Inevitably. The meeting participants will: • • Discuss outstanding action items from previous meetings.g. and provide the contractor with a list of action items and any agreements or understandings reached.3-A) Coordination Meeting Checklist (Exhibit 5.2. be sure it is understood by all that such "acceptance" or "approval" is for work coordination purposes only and does not alter the contract schedule milestone dates.2. Discuss foreseeable interfaces and potential conflicts between contractors. In addition to schedule performance there are numerous other ways to monitor progress in the field including comparison of actual to forecast: • • • • • Cash Flow Manpower Projections Quantity Installation Design and vendor drawing submittals Equipment Deliveries Coordination Meetings -. other contractors.2) Progress Review Meeting Checklist (Exhibit 5. documentation of progress and reasons for delays is a must.2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. government authorities). this becomes the most significant factor in processing claims after the Project is completed. including constraints caused by other parties (e..2. The contract schedule milestone dates can only be modified by Contract Amendment. • • SPECIAL NOTE: When "accepting" or "approving" the contractor's working schedule(s). their status and resolution.5 Reference 5.3-C) Contract/Subcontract Coordination Handbook 5.4 Exhibit Checklists Progress Review Meeting Agenda (Exhibit 5. MONITORING/REPORTING Page 8 of 33 . you.2.3-B) Schedule Checklist (Exhibit 5. Coordination Meetings are generally held weekly or as work schedules require. Therefore.2. A company participant will summarize the results of the meeting.3 5. Address foreseeable constraints to the flow of work. An agenda for the meeting will be prepared by you and distributed to the participants in advance of the meeting. customer. 5.Coordination Meetings are conducted to schedule work area accessibility. Determine action items and assign responsibility.2.

3-A) Contract Contractor:_______________________________ Contract Scope: 1. Is the 3/4-week working schedule being used to plan work?.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 5. Comments: YES NO 5. MONITORING/REPORTING Page of 35 . Comments: YES NO 8. Comments: YES NO 2. due dates and responsibilities are being identified.5 Reference Contract/Subcontract Coordination Handbook Progress Review Meeting Checklist (EXHIBIT 5.2. Comments: YES NO 3. Number:____________________________ Meeting frequency is appropriate for this contract and are being held as scheduled. Schedule changes are being approved per the contract. Comments: YES NO 6.2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. Agendas and meeting minutes are being prepared. Action items are being followed up. Comments: YES NO YES NO 5. The appropriate attendees are invited.2. Comments: YES NO 7. Action items. Comments: YES NO 4. Comments: 9.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Coordination Meeting Checklist (EXHIBIT 5. Comments: YES NO 2. Comments: 9. Number:____________________________ Meeting frequency is appropriate for this contract and are being held as scheduled. due dates and responsibilities are being identified. Action items are being followed up. MONITORING/REPORTING Page 10 of 33 . Comments: YES NO 6.2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. Comments: YES NO 7.3-B) Contract Contractor:_______________________________ Contract Scope: 1. Comments: YES NO 4. Comments: YES NO 5. The appropriate attendees are invited. Comments: YES NO 3.2. Comments: YES NO YES NO YES NO Name: ____________________________________________________ __________________________ Date: 5. Comments: 8. Schedule changes are being approved per the contract. Agendas and meeting minutes are being prepared. Action items.

2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. Comments: YES NO 7. Contractor submits a revised schedule for each claim of additional time indicating the cause and effect. Comments: YES NO 9.2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Schedule Checklist (EXHIBIT 5. Comments: YES NO 8. Comments: YES NO Name: __________________________________________________ Date: __________________________ 5. Change notices written to reflect contract schedule changes. Comments: YES NO 4. As-built schedule contains sufficient data to reconstruct events at a later date.3-C) Contract Contractor:_______________________________ Contract Scope: 1. Contractor's initial schedule has been obtained. Number:____________________________ YES NO Initial schedule has been approved and contractor has been formally notified. Comments: YES NO 6. Schedule submittals meet contract requirements for form and substance. Comments: YES NO 5. MONITORING/REPORTING Page 11 of 33 . Periodic schedule submittal received from contractor. Comments: 2. Continuous as-built schedule is maintained. Comments: YES NO 3.

Incidents/status since last meeting Project to date experience/trends (if any) Safety initiatives Requests for Information − − − − − − − − − − − − − VII. Correspondence Pending (reply required) Company to Contractor Contractor to Company VI. Change Orders/Amendments Executed to date Pending XIV. Change Notices Issued to date Priced by Contractor Negotiated Documentation Complete V. New Action Items with Target Closure Dates 5. Quantity Progress by Area or Activity − − − IX. MONITORING/REPORTING Page 8a of 33 . Manpower Availability Manpower curves against plan • Manual Crafts • Non-manual supervision Recruiting/approval issues XV. warranty items XVI.2.2) VIII.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Progress Review Meeting Agenda [Sample] (Exhibit 5.2 PROGRESS REVIEW AND COORDINATION MEETINGS SECTION 5. Quality I. Action Items from Last Meeting II. Equipment by Task/Crew Operated hours Standby hours Downtime hours Availability against plan Revised equipment plan (if any) XIII. Material IV. Manpower by Craft Headcounts since last meeting Updated manpower curves • by headcount • by man-hours expended Overtime issues Productivity • man-hours against quantities • man-hours against budgets Cost trends (if any) − − − − − − − − − − − − − − − − − − Initiated since last meeting Cumulative/resolved/open status Critical items XI. rejections. Updated Rolling 3/4 Lookahead Schedule III. rework. defects Proposed/Approved Corrections Trends and counter measures (if any) − − − − Progress since last meeting Total progress to date Planned progress to date Variations to baseline quantities • from changes • from design growth • from revised estimates Schedule trend (early/late) (if any) − − − X. Technical Data Submittals Submitted since last meeting Status of items for approval Delinquent data (if any) XII. ( if any) Exceptions. Invoice and Payment Status Submitted but not paid Paid to date Retained amounts. Safety Rejections. or revisions − − − − − Critical items lists Over/Short/Damaged information Purchase Order and Subcontract status • Contractor furnished • Owner/Company Furnished Equipment data issues Rejections.

material invoices and approved equipment lists with the invoice. For cost reimbursable contracts.1 and 5.3 PROGRESS MEASUREMENT AND PAYMENT 5.2-A.3. will include: • • Contract schedule Insurance Certificates and bonds and may include: • • • • • • Safety and Health Program Quality Plan Environmental Compliance Program.2-A.2 Procedure The contractor's progress payment schedule will be approved prior to commencement of contract work. submit verified time sheets. MONITORING/REPORTING Page 12 of 33 .) The reconciled payment schedule is returned to the contractor who submits an invoice with the updated and approved payment schedule as backup. reconcile percentage of completion and/or quantities with the contractor prior to the contractor's submitting an invoice. Effective contract management involves ensuring that what is paid for is actually received and acceptable. An updated progress payment schedule is prepared for each payment request received from the contractor.3 PROGRESS MEASUREMENT AND PAYMENT SECTION 5.2 for typical invoice formats.1 Purpose This procedure outlines actions required before progress payment requests are transmitted for payment. welding procedures) Pre-job (labor) conference results Progress payment schedule.5 MONITORING/REPORTING 5. (Reference Exhibits 5. when applicable In order to avoid progress payment disputes. Technical procedures (e. Most contracts contain provisions to pay a contractor upon completion of a measurable segment of the work.3. the contractor will. 5.. in addition.3.3. 5. These submittals.g. which must be listed in the contract as prerequisites for mobilization payment if the payment is intended to be withheld until submittal. The contractor's mobilization payment will not be made until certain submittals have been made.

3.3.3 Exhibits Invoice For Progress Payment (Exhibit 5. 5. contract-specific procedures for progress measurement.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The contractor will be required to submit with each invoice a Certificate of Payment form (reference Exhibit 5.2-C) Progress Measurement Procedure [Sample] (Exhibit 5. which should be signed by an officer of the contractor's firm.3.4 Checklists 5. Verify arithmetic and issue payment to contractor on approved invoices.2-A.3 PROGRESS MEASUREMENT AND PAYMENT SECTION 5.3.2-C for a Invoice Concurrence Sheet form.2-D for a sample "Procedure for Progress Measurement"). MONITORING/REPORTING Page 13 of 33 .3. This document. It is often advantageous to develop detailed.3. These procedures will reflect the contract terms for progress measurement and provide additional details typically not included in the contract language (reference Exhibit 5.3. certifies that the contractor has paid all of its subcontractors and suppliers for services and/or materials furnished for the period of time or scope of work covered by the invoice. The contractor's invoice should be verified for contract compliance and previously reconciled payment schedule.1) Invoice For Progress Payment .3.4-B) 5.3.Alternate (Exhibit 5.2-D) Mobilization Payment Checklist (Exhibit 5.2-B) Invoice Concurrence Sheet (Exhibit 5.4-A) Invoice Processing Checklist (Exhibit 5.2-A.2-B).) Reconcile all invoice offsets such as retention or backcharges.3.3. (Reference Exhibit 5.3.2) Certificate of Payment (Exhibit 5. and submitted for approval.

: SUBCONTRACTOR'S NAME SUBCONTRACT INVOICE NO. COMMODITY CODE SUBCONTRACT NUMBER NOTES: FUNCTION NAME CONC REJECT TECHNICAL REVIEW PROJECT CONTROLS CONTRACT SUPERVISOR COORDINATOR CONTROLLER APPROVAL FOR PAYMENT SUBCONTRACT MANAGER SITE MANAGER CONCUR WITH INVOICE PROCEED WITH PAYMENT IN FULL REJECT INVOICE-RETURN TO SUBCONTRACTOR CONCUR WITH INVOICE IN PART.Invoice Concurrence Sheet CONTRACTOR: COMPANY JOB NO. D-U-N-S NO. PROCEED WITH PARTIAL PAYMENT IN THE AMOUNT OF CONCUR WITH INVOICE PROCEED WITH PAYMENT IN FULL REJECT INVOICE-RETURN TO SUBCONTRACTOR CONCUR WITH INVOICE IN PART. PROCEED WITH PARTIAL PAYMENT IN THE AMOUNT OF QUALIFICATION FOR REDUCTION OF PAYMENT ACCOUNT CODE DISTRIBUTION ACCOUNT AMOUNT Expedition .

Based on a joint walkdown. Invoices submitted monthly. Contractor provided a unit price breakdown with bid showing material cost represented 50% of price. For example. such as 48" . The drawings will show break marks for what is on Progress Payment #1. Penetrations Procedure . such as all material for Face "A" of building XYZ. Alongside each green circle is marked the size of the penetration. drawings will be marked up showing what has been installed. 2. As siding arrives on site. Procedure . the Face "A" drawings may show that it is agreed that 1/3 of the square footage is installed.3. Receiving reports will show square footage and number of pounds shipped. Then allow progress payment based on 50% of that square footage. As each face is completed. MONITORING/REPORTING Page 18 of 33 . As siding is installed. 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Progress Measurement Procedure [SAMPLE] (EXHIBIT 5. Time of Payment: Measurement for Payment: 1. it will be shown in marked up drawings. Pricing for siding to be paid on a square foot basis as installed.perimeter. This can be figured roughly using dimensions on the drawings. Pricing established for penetrations on a per each basis. contractor must furnish bills of material. based on size. 3. 5.2-D) CONTRACT NO. The marked up drawings will be kept at Bill Smith's desk. Agreed to measure for payment prior to the 15th of each month. Note only one set of drawings will be kept. CONTRACT SCOPE . The company representative reviews contractor material receiving reports. For example for Face "A" the green circles represent penetrations. 2. etc. the marked up drawing will be transferred to the Progress Payment drawer for contract XYZ. Bill Smith is assigned responsibility for this work. 3.As penetrations are installed. they will be colored green on the marked up drawings. and progress will be added as work is complete. 20001 Terms of Payment: 1.3 PROGRESS MEASUREMENT AND PAYMENT SECTION 5.Furnish and Erect Siding Payment made for siding material as it arrives at the Site. #2. Procedure .Agreed with contractor on what material receiving reports represent.

Comments: 4. Comments: 3. Technical procedures have been received. Contractor has submitted evidence of adequate bonds.3. Contractor has submitted an acceptable Safety and Health Action Program. MONITORING/REPORTING Page 19 of 33 . Contractor has submitted and the company has approved a contract schedule. Comments: 9. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Number:____________________________ Name: __________________________________________________ Date: __________________________ 5. Comments: 6. if required. Comments: 7.4-A) Contract Contractor:_______________________________ Contract Scope: 1. Comments: 8. Contractor has submitted acceptable Certificates of Insurance. Comments: 5.3 PROGRESS MEASUREMENT AND PAYMENT SECTION 5. Comments: 2. Labor relations plan is in place. Progress payment schedule and payment procedures are approved and in place.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Mobilization Payment Checklist (EXHIBIT 5. Contractor has acceptable document controls in place.

All offsets such as retention and backcharges have been reconciled. Comments: 3. Comments: 9.3.3 PROGRESS MEASUREMENT AND PAYMENT SECTION 5. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Number:____________________________ Name: __________________________________________________ Date: __________________________ 5. The person(s) who will approve invoices is identified. Comments: 5. Comments: 6. Comments: 8. Comments: 2. Billings have been reconciled with approved progress requests.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Invoice Processing Checklist (EXHIBIT 5. Certification of Payment form is submitted with each invoice. Comments: 7. The invoice has been reviewed for contract and/or commercial compliance. MONITORING/REPORTING Page 20 of 33 .4-B) Contract Contractor:_______________________________ Contract Scope: 1. Comments: 4. Controller concerns or comments have been acted upon and closed out.

4 QUALITY SURVEILLANCE 5.1 of this Manual for a discussion of acceptance of the work.5 MONITORING/ REPORTING 5. Your role is quality assurance.1 of this Manual.4. A contractor's repeated inability to meet the technical requirements of the contract warrants consultation with management.2 Procedure The contractor will give notice of: • • Work in progress that is ready for inspection. where your inspections are required for work in progress. The contractor will be notified of non-conforming items and requested to provide a corrective action plan. for notifying you in a timely manner to permit inspections. 5. Rework will be re-inspected. or it may lead a contractor to the conclusion that it does not need to inspect its own work. not quality control. 5. Comment on and approve all corrective action prior to implementation. MONITORING/REPORTING Page 21 of 33 . Avoid giving direction to the contractor regarding potential corrective actions.4. First line inspection is the contractor's responsibility. The results of your inspections will be formally documented. (Refer to Section 6.1 Purpose This section addresses issues that may arise with respect to your quality surveillance of the contractor's work in progress. Over-inspection is to be avoided because it can potentially cause a constructive change in favor of the contractor.4 QUALITY SURVEILLANCE SECTION 5. Portions of the work that are ready for testing and acceptance when partial acceptance is permitted in the contract. The contractor is responsible for completing the work in accordance with the contract and.) Inspect the work. Your surveillance is a monitoring function to provide an independent assessment of both quality and physical progress. Refer to Section 6.

Any conditions or practices in any place of employment where an immediate danger exists which could reasonably and immediately be expected to cause death or serious physical harm. The fundamental principle is that contractors are responsible for developing the safety and health program for their employees and for ensuring the safety and health of their own employees.5 SAFETY AND HEALTH 5. state. Your Safety Group reviews the contractor's safety and health program submittal to verify contractor compliance with it’s Safety and Health Program and applicable Federal and state regulations. 5. but would have a direct or immediate effect on the safety or health of employees. including correcting unsafe working conditions. The contractor is also responsible for providing a safe and healthy working environment for its employees.If there is a potential probability that death or serious physical harm could result from an existing condition. Monitor contractor compliance with the contractual requirements of the contractor's safety and health program.1 Purpose This section provides an outline for monitoring a contractor's Safety and Health Program and for handling contractor safety and health violations. MONITORING/REPORTING Page 22 of 33 .5 SAFETY AND HEALTH SECTION 5. Contractors must adhere to the Project Safety and Health Program and its requirements.5 MONITORING/REPORTING 5. 5.2 Definitions Imminent Danger Violations -.5.Where an incident or occupational illness resulting from violation of a standard would probably not cause death or serious physical harm. Serious Violations -. Non-serious Violation -. local and contractual safety and health requirements. The Project Safety and Health Program is intended to implement safe work practices which must be observed by all jobsite employees.5. The contractor is responsible for performing work in a safe manner and for conforming to established Federal.

Non-Serious Violation • The contractor and your representative will be informed of the 5. • A Confirmation of Noncompliance will be issued to the contractor and monitored for a timely response. • A Confirmation of Noncompliance with the Contract Safety and Health Requirements form (reference Exhibit 5. Serious Violation • This condition will be brought to the immediate attention of management.3-B) will be issued to the contractor and monitored to ensure a timely response.5 SAFETY AND HEALTH SECTION 5. unless otherwise specified in the contract. • Correction of the cause of the violation by the contractor and verification of the correction shall be a prerequisite to resumption of work in that area. who shall cause the contractor to cease work and remove all personnel from the area if required to preclude possible physical harm.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 5. Management will be notified of all such potential and actual safety and health violations that come to attention. Violations will be classified by Safety as imminent danger. and the contractor instructed to remove all personnel from the area if required to preclude death or serious injury.5. • Resumption of work shall not be permitted until corrective action has been taken by the contractor and verified to eliminate the unsafe situation. Imminent Danger Violation • Work shall be immediately halted.3 Procedure Obtain the contractor's Safety and Health Program and forward it within 30 calendar days after contract award and prior to commencing work at the jobsite. Although "stop work" action in response to a safety or health problem is normally the responsibility of the contractor. serious or nonserious violations. MONITORING/REPORTING Page 23 of 33 .5. • Immediately notify management. potential safety and health violations may be reported by workers or observed in the course of day to day operations.

6 Checklist Safety and Health Checklist (Exhibit 5. • The contractor will confirm resolution of the violation.5.5. the contractor's site representative will be contacted to resolve the matter. MONITORING/REPORTING Page 24 of 33 .5. • If the safety and health violation is not corrected after a second notice.4 Contract Compliance When work is stopped or suspended.5. • A Confirmation of the Noncompliance will be issued to the contractor and monitored for a timely response. a confirming letter citing the contract provision under which the action was taken will be issued to the contractor.3-B) 5. 5. 5.5 SAFETY AND HEALTH SECTION 5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL violation as soon as practicable.5.6) 5. the situation will be referred to management to pursue remedies under the contract.5 Exhibits Confirmation of Noncompliance with Contract Safety and Health Requirements (Exhibit 5. • If the condition is not corrected within the time stipulated in the notice. or if the contractor has continued to repeat violations.

Safety and health submittals required by the contract have been obtained from the contractor. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Number:____________________________ Name: __________________________________________________ Date: __________________________ 5. Company comments have been resolved with the contractor.6) Contract Contractor:_______________________________ Contract Scope: 1. Comments: 3. The contractor is required to submit a Safety and Health Action Program and/or a Fire prevention Plan. Comments: 4. The contractor has submitted the name of its person responsible for safety and health compliance. Comments: 6. Company Safety and Health Services confirms contractor's safety and health and fire prevention plans comply with the company's requirements. Comments: 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Safety and Health Checklist (EXHIBIT 5. MONITORING/REPORTING Page 30 of 33 .5. Comments: 7. A copy of the contractor's Hazard Communication Program has been submitted to the company. The contractor's workers compensation insurance coverage has been confirmed by the company (if required).5 SAFETY AND HEALTH SECTION 5. Safety and health submittals have been reviewed and acknowledged by the company Safety and Health Services. Comments: 8. Comments: 5.

5 SAFETY AND HEALTH SECTION 5.5. Number of lost workday cases. EMR b. Hours Worked 1B. Check your type of work: t Non-Residential Building t Heavy (Non-Highway) Construction t Mechanical t Electrical t Other (State Type): ______________________________________________________ 5. Number of cases with medical attention only. 19_____ 19_____ _________ _________ 19_____ __________ __________ a. MONITORING/REPORTING Page 25 of 33 . provide the state EMR for the three most recent years and total hours worked. 200 Log to fill in the three most recent years: 19_____ 19_____ _________ _________ _________ _________ 19_____ __________ __________ __________ __________ __________ __________ __________ __________ a. Number of restricted workday cases. 19_____ a. OSHA Recordable Incident Rate b. Hours Worked 2. EMR 1A. __________ __________ List safety performance incident rates for the three most recent years: 19_____ 19_____ _________ _________ 19_____ __________ __________ a. EMR b.EXHIBIT 5. __________ __________ 19_____ _________ _________ 19_____ __________ __________ If the state where the jobsite is located has an EMR rating system. List your firm's Interstate Experience Modification Rate (EMR) for the three most recent years and total hours worked. __________ __________ Use your OSHA No. SAFETY PERFORMANCE 2A. c.3-A Safety and Health History (Page 1 of 5) CONTRACT NO. Number of fatalities. Lost Workday Case Incident Rate 2B. ________________________ COMPANY__________________________ COMPANY 1. b. d. 3.________________________ CONTRACTOR ________________________ JOB NO.

EXHIBIT 5. Costs totaled for the entire company b.5. b. ________________________ COMPANY__________________________ COMPANY 4. who conducts this inspection? TITLE HOW OFTEN? 7. How are accident records and accident summaries kept? How often are they reported? No Yes Monthly Annually a. Vice President/Mgr. Accidents totaled by project (1) Subtotaled by superintendent (2) Subtotaled by foreman 8. MONITORING/REPORTING Page 26 of 33 .________________________ CONTRACTOR ________________________ JOB NO. Project Superintendent/Site Mgr. How are the costs of individual accidents kept? How often are they reported? No Yes Monthly a. Do you hold site safety meetings for field employees both Manual and Non-Manual? No Yes How Often? Bi-Weekly Monthly Less Often. Costs totaled by project (1) Subtotaled by superintendent (2) Subtotaled by foreman Annually 5.5 SAFETY AND HEALTH SECTION 5. d. As Needed Weekly 6. Safety Director President of Firm 5. Accidents totaled for the entire company b.3-A Safety and Health History (Page 2 of 5) CONTRACT NO. Are accident reports (OSHA 200) and report summaries sent to the following and how often? No Yes Monthly Quarterly Annually a. of Construction c. Do you conduct project safety inspections? No Yes If yes.

Safety belts and lifeline f. Does it include instruction on the following? Yes No a.3-A Safety and Health History (Page 3 of 5) CONTRACT NO. List key Safety and Health personnel planned for this project.Do you have a written safety program? Yes No If yes. 11. Fire protection First aid facilities Yes No Yes k. flagging o.5 SAFETY AND HEALTH SECTION 5. expected position and safety performance on last three projects (OSHA Recordable and Lost Workday Case Incident (LWCI) rates). Perimeter guarding h.5.________________________ CONTRACTOR ________________________ JOB NO. ________________________ COMPANY__________________________ COMPANY 9. Rigging and crane safety q. Trenching and excavation n. NAME POSITION PROJECT OSHA LWCI ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ 10. list key company personnel.EXHIBIT 5. Respiratory protection e. Emergency procedures l. Eye protection c. Scaffolding i. Signs. MONITORING/REPORTING Page 27 of 33 . When a project has not been specified.Do you have an orientation program for new hires? No If yes submit a copy for evaluation. Hearing Protection d. Electrical safety p. Housekeeping 5. barricades. submit a copy for evaluation. Please list name. Toxic substances m. j. Road Safety (Driving) g. Head protection b.

S.________________________ CONTRACTOR ________________________ JOB NO.D. h.5. Safety supervision Toolbox meetings Emergency procedures No e. First aid procedures Accident investigation Fire protection and prevention New worker orientation Yes No 13. d. Safe work practices b.5 SAFETY AND HEALTH SECTION 5. As Needed 14. c.'s) for material/chemicals/equipment? No Yes If yes. explain field procedure for informing craft workers about potential hazards: 5. ________________________ COMPANY__________________________ COMPANY 12.Do you have a written Hazard Communication program? No Yes If yes.EXHIBIT 5. MONITORING/REPORTING Page 28 of 33 . f.Do you have a program for newly hired or promoted foremen? Yes No If yes submit a copy for evaluation.Do you hold craft "toolbox" safety meetings? No Yes How Often? Weekly Bi-Weekly Monthly Less Often.3-A Safety and Health History (Page 4 of 5) CONTRACT NO.Do you have/require Material Safety Data Sheets (M. Does it include the following? Yes a. how is it implemented on each project? 15. g.

MONITORING/REPORTING Page 29 of 33 . _______________ a. ____________________________ ________________________ ________________________ _______________ 5. Name Address Phone No.3-A Safety and Health History (Page 5 of 5) CONTRACT NO.5.EXHIBIT 5.5 SAFETY AND HEALTH SECTION 5. ____________________________ ________________________ ________________________ b. ________________________ COMPANY__________________________ COMPANY 16.________________________ CONTRACTOR ________________________ JOB NO. List three (3) client references that could verify the quality and management commitment of your safety program. ____________________________ ________________________ ________________________ _______________ c.

Each contractor should be provided a copy of your Construction Environmental Control Plan (CECP). contractors will be formally notified in their contract that they are required to comply with all federal.5 MONITORING/REPORTING 5. as appropriate. Management has the responsibility for overseeing that activities at the construction site adhere to environmental requirements. and of course. This will include 5. Contractors should immediately be notified of any activity observed which is perceived as being out of compliance with applicable procedures or requirements. Where required (in the contract).6. regarding compliance with environmental requirements. including proper handling and storage of hazardous materials and wastes. Noncompliance with environmental requirements. which they are solely responsible for determining. however. may result in agency actions that can include fines. Contractors should be required to cooperate fully in implementing any project specific procedures and guidelines developed regarding compliance and should be held responsible for failure to comply. as appropriate.6. it should be noted. contractors should also be required to develop their own written Environmental Compliance Plan. no matter whose fault. Routine inspections of the jobsite should be conducted. and local environmental regulations applicable to their project site activities. obtain the contractor's Environmental Control Plan submittal and forward it to environmental specialists for review prior to allowing the contractor to start work. MONITORING/REPORTING Page 31 of 33 . (This section references contractor’s activities. to verify that any such activities have been brought into compliance. have this responsibility by law regardless of contract terms. suspension of permits or authorizations. or stop work orders potentially affecting everyone. Any plans that are prepared by a contractor shall be submitted prior to the start of plan implementation. and advised that they must comply. that your responsibility for environmental activities and oversight of our contractors or a customer’s contractors varies depending on the contract and scope of work.6 ENVIRONMENTAL 5. Generally. with all requirements in it applicable to their work.1 Purpose This procedure describes methods for monitoring a contractor’s Project Environmental Control Program and other relevant environmental issues. and should be identified on a project specific basis). Reasonable steps will be taken to communicate pertinent project environmental compliance requirements to contractors and to require such contractors to communicate these requirements to their own personnel and subcontractors. As appropriate.2 Discussion 5. state. including requiring compliance by contractors.6 ENVIRONMENTAL SECTION 5. Follow-up monitoring should be conducted. as well as with all other laws and regulations applicable to their work. at a minimum.

Environmental assessments to determine the extent of hazardous substance contamination at a site. construction. deep well injection units). transport or disposal of contaminated soil and groundwater encompassing: • • • − Site investigations. spill controls. and analysis to determine the nature and extent of the contamination Remedial or corrective action designs for site contamination Construction and/or implementation of site cleanup (including storage. notices of violation. waste impoundments. transport.6 ENVIRONMENTAL SECTION 5. Advise appropriate contractor personnel that excavation. Monitor the project to identify any unexpected activities or scope changes that involve the potential for a contractor to perform hazardous waste services.6. MONITORING/REPORTING Page 32 of 33 . reviewing and making available the Material Safety Data Sheets to all affected parties. or management of mixed chemical and radioactive wastes. design. Monitor contract requirements where contractors are required to have a spill control plan and equipment available and on site at all times.. demolition 5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL storage. landfills. or operation of hazardous waste treatment facilities (e. chemical waste treatment facilities. compliance with permit conditions. Mixed waste. or disposal of hazardous) Environmental Property Audits. − − Contractor is to notify you in writing of all site inspections by environmental regulatory agencies and provide specifics of any notifications of noncompliance (e. Work involving investigation. Services related to the potential remediation of contaminated property or facilities. handling and removal of hazardous materials and hazardous waste. including those intended for use in connection with the sale of property or other financial transactions. Hazardous waste services include the following: − Site Remediation. Services related to the design construction. including excavation. and related issues.. sampling. incinerators. assessments.3 Procedure Monitor the contractor’s program for obtaining. treatment.g.g. fines or penalties). Monitor contractor activities with respect to storage. Waste Treatment/Disposal Facilities. waste management. 5.

6 ENVIRONMENTAL SECTION 5. and your contractual responsibilities should be identified.g.g. buried drums. discovery of contaminated soil. In many cases. the customer should be notified immediately.. Upon such a discovery. Notify the contractor in writing of any delay or stop work actions taken due to environmental issues (e.. 5. This potential requirement should be addressed immediately on a project-specific basis. or strong odors should immediately be discontinued.6. in writing the contractor or the customer of any activity of which you become aware that appears to be out of compliance with the project’s procedures or regulatory requirements.4) 5. If reporting is required and the customer does not report the event.4 Checklist Environmental Checklist (Exhibit 5.6.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL /disassembly or other actions resulting in the discovery of underground storage tanks. you should report it. MONITORING/REPORTING Page 32a of 33 . tanks) citing why it was taken. Log and track open environmental items. pooled liquids. reporting of releases of reportable quantities of hazardous substances in the United States). the contract provision and a response date. until it can be determined what regulatory requirements apply (e. stained soils. reporting to the responsible agency is required within 24 hours. Notify.

Contractor has submitted the name of the person responsible for environmental compliance. 1a. Required documents such as MSDS and proof of spill control procedures have been obtained from contractor. Comments: 8.6. If so. MONITORING/REPORTING Page 33 of 33 . Comments: YES NO 6. Comments: YES NO YES NO 5. has it been submitted to the company? YES YES NO NO Number:____________________________ 2. Comments: YES NO 5. Does the contract require a Project Environmental Control Plan ?.4) Contract Contractor:_______________________________ Contract Scope: 1. Contractor has provided lists of hazardous materials it will use and the list has been approved by the company Safety and Health Services before the contractor starts work. Comments: YES NO 3. Comments: YES NO 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Environmental Checklist (EXHIBIT 5. Contractor has agreed to remove all hazardous materials/waste that it has brought onsite. Determination has been made as to whether contractor needs to perform asbestos inspection and notification. Comments: YES NO 4.6 ENVIRONMENTAL SECTION 5.

6 ENVIRONMENTAL SECTION 5. MONITORING/REPORTING Page 32a of 33 .CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Name: __________________________________________________ Date: __________________________ 5.

5............................................................................................................... 12 Beneficial Occupancy Flowchart (EXHIBIT 6............1 6......................7 Release and Certificate of Final Payment (EXHIBIT 6........5 Certificate of Acceptance (Partial Acceptance) (EXHIBIT 6..... 10 6....3..................................CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Closeout TABLE OF CONTENTS 6.........1..................................2 Contractor Request for Inspection of Completed Work (EXHIBIT 6..........................2-C).............5..........1 Purpose ........................... 10 BENEFICIAL OCCUPANCY ............................1..........................................................................2-D)....................3...........................3...................1...........................................1................................................ 6.6 Certificate of Final Acceptance (EXHIBIT 6......8 Contractor Fact Sheet and Historical Record (EXHIBIT 6..........1..........................2-C) .............2-A) ............................ 14 6..................................................2 Procedure ................................2 6..........................2-B) ........... 26 Correction of Warranty Defect [SAMPLE] (EXHIBIT 6..1..................1..............................1 6....1..... CLOSEOUT Page i .................................... 23 6.............1 Purpose .................................................1 Purpose .................................................................................................................................. 10 6............................ 17 Certificate of Substantial Completion — Contractor [SAMPLE] (EXHIBIT 6..........5 TABLE OF CONTENTS SECTION 6....................................2 Procedure ..............................3...... 13 SUBSTANTIAL COMPLETION.............................. 14 6..3 Exhibits..........................2-B)....................................... 23 6.............1........................................................3 Exhibits....2-E) ..................2..................................5..................2-A) ...............2-B) .............2............2 Procedure ..................................................................................................... 14 6...................................1 6...................5............................................ 24 Warranty Defect Notice [SAMPLE] (EXHIBIT 6...................................................................................................................3..........2-H).........................1 CONTRACT CLOSEOUT ............................................. 25 Warranty Log [SAMPLE] (EXHIBIT 6....................................................................... 10 6.... 18 WARRANTY ..............2 Procedure ..................................................................................................................................................2.3 Contractor Demobilization Checklist (EXHIBIT 6................................................................................2.................................4 Contract Closeout Checklist (EXHIBIT 6.....................................1 Purpose .........................................................1................................................................... 15 Notice of Substantial Completion [SAMPLE] (EXHIBIT 6..3 Exhibits...2-C) .....2-A)........................................................................................................................................3 6........... 27 ....9 Contractor Performance Evaluation (EXHIBIT 6....3....................................................2....................2-F)..1.......................5..................................................................................... 16 Notice of Substantial Completion [SAMPLE] (EXHIBIT 6.2-A) ............................................. 23 6................................................................................................... 11 Notice of Beneficial Occupancy [SAMPLE] (EXHIBIT 6..................................................5..........................2-I)................3 Exhibits......2-B)...........

Deficiencies will be recorded on a punch list and prepared for formal transmittal to the contractor.1.2-G.1.) (Note: Some states.1 CONTRACT CLOSEOUT SECTION 6.2-A. requests for time extension.1. (Refer to Exhibit 6. such as California and Arizona prescribe the type of form that must be used in order for the waiver and releases to be valid.2-F). Final acceptance and closeout procedures will have to be modified for those contracts that have turnover. claims and backcharges. Prior to demobilization. and as approved by Management.2-B. a Partial Release and Certificate of Payment may be used (Exhibit 6.1.4 "Punch List.) A joint inspection of the work will be conducted by you. issue a Certificate of Final Acceptance (reference Exhibit 6.1 Purpose This section covers the final inspection and actions required to close out a contract.") Occasionally it may be necessary or appropriate to incrementally accept the work or "accept" just a portion of the work.) Initiate a Contract Closeout Checklist.1. start-up.1.2-D. Contract close-out means that all contractual obligations have been discharged by both parties.) When all check items on the Contract Closeout Checklist are complete. the contractor will be notified of non-complying items identified as they are discovered. (Refer to Section 6.1 CONTRACT CLOSEOUT 6.1.2-E) and provide the contractor with a form for a Release and Certificate of Final Payment (reference Exhibit 6. the customer (if appropriate) and the contractor. (Refer to Exhibit 6. In certain instances.2-C. utilize the form provided as Exhibit 6. If so. initiate Contractor Demobilization Checklist. CLOSEOUT Page 1 of 27 . (Refer to Exhibit 6. This includes all commercial. 6. Although the contractor has the primary responsibility for in-process inspection. The final inspection and walk down should simply be a confirmation of the closure of all open non-conformance reports issued during the progress of the work.1.1. technical and administrative obligations contained in the contract and requires formal resolution of all changes.2 Procedure The contractor will provide notice of work that is complete and ready for final inspection.6 CLOSEOUT 6. or performance test requirements.) 6.

2-C) Certificate of Acceptance (Partial Acceptance) (Exhibit 6.1.2-A) Contractor Demobilization Checklist (Exhibit 6.2-D) Certificate of Final Acceptance (Exhibit 6.1 CONTRACT CLOSEOUT SECTION 6.2-F) Partial Release and Certificate of Payment (Exhibit 6.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL After receiving a signed Release and Certificate of Final Payment from the contractor.1.1.2-E) Release and Certificate of Final Payment (Exhibit 6.2-B) Contract Closeout Checklist (Exhibit 6.1.3 Exhibits Contractor Request for Inspection of Completed Work (Exhibit 6.2-G) 6.1.) 6. (Note: A reasonable retention may continue to be withheld if necessary to ensure timely resolution of claims against a contractor. but should not be withheld simply to induce a contractor to settle on a claim against you or the customer. the contractor's final invoice may be processed.1. the contractor in lieu of continuing to withhold retention if both parties agree could provide an irrevocable Letter of Credit. including release of retention in accordance with the provisions of the contract.1. CLOSEOUT Page 2 of 27 . In some instances.1.

as amended. as amended. arising out of or in connection with claims against the said Owner or Contractor which claims arise out of the performance of the work under the Contract and which may be asserted by the Subcontractor or any of its suppliers. charges and expenses incurred by them or on their behalf for work. losses.: With reference to Subcontract No. services. materials and equipment supplied to the foregoing premises and/or used by them in connection with the Undersigned's work under said Subcontract and has obtained releases to that effect. [NAME OF SUBCONTRACTOR] dated and [CONTRACTOR] for [TYPE OF WORK] at [LOCATION OF OWNER'S PREMISES] the Undersigned hereby certifies and represents that it has made full payments of all costs. services. charges and expenses incurred by it or on its behalf for work labor. between the undersigned Subcontractor. liens and obligations of every nature arising out of or in connection with the performance of the said Subcontract and all amendments thereto except as set forth below: As additional consideration for this payment. labor. officers. The Undersigned further certifies that to its best knowledge and belief. which by their nature survive completion of the Work including. indemnify and hold harmless the said Owner and Contractor from and against all costs. causes of action. Executed this day of [NAME OF SUBCONTRACTOR] SIGNED TITLE Expedition . guarantees and indemnities. agents or employees except for those claims listed above. damages. and except for claims arising out of the sole negligence or willful misconduct of the party indemnified or held harmless. materials and equipment supplied to the foregoing premises and/or used in connection with the Work under said Subcontract.Release and Certificate of Final Payment COMPANY: JOB NO. including attorney's fees. The foregoing shall not relieve the Undersigned of its obligations under the provisions of said Subcontract. In consideration of as final payment under the Subontract. the Undersigned hereby unconditionally releases and forever discharges the Owner and Contractor and the Owner's premises and property from all claims. the Subcontractor agrees to the fullest extent of the law to. contractors of any tier or any of their representatives. without limitation. warranties. judgments and expenses. claims. each of its subcontractors and materialmen has made full payments of all costs.

as amended. damages. services. materials and equipment supplied to the foregoing premises and/or used in connection with the Work under said Subcontract through . liens and obligations of every nature arising out of or in connection with the performance of the said Subcontract and all change orders and amendments hereto. and expenses incurred by them or on their behalf for work. the Subcontractor agrees to the fullest extent of the law to. arising out of or in connection with claims against the said Owner or Contractor which claims arise out of the performance of the work under the Subcontract through and which may be asserted by the Subcontractor or any of its suppliers. the Undersigned hereby unconditionally releases and forever discharges the Owner and Contractor and the Owner's premises and property from all claims. without limitation. [DATE] The Undersigned further certifies that to its best knowledge and belief. causes of actions. claims. warranties. [NAME OF SUBCONTRACTOR] dated and [CONTRACTOR] for [TYPE OF WORK] at [LOCATION OF OWNER'S PREMISES] the Undersigned hereby certifies and represents that it has made full payments of all costs. contractors of [DATE] any tier or any of their representatives. between the undersigned Subcontractor. charges and expenses incurred by it or on its behalf for work labor. and except for claims arising out of the sole negligence or willful misconduct of the party indemnified or held harmless. officers.Partial Release and Certificate of Payment COMPANY: JOB NO.: With reference to Subcontract No. losses. as amended. indemnify and hold harmless the said Owner and Contractor from and against all costs. Executed this day of [NAME OF SUBCONTRACTOR] By: Title Expedition . materials and equipment supplied to the foregoing premises and/or used by them in connection with the Undersigned's work under said Subcontract through . including attorney's fees. judgments and expenses. guarantees and indemnities. The foregoing shall not relieve the Undersigned of its obligations under the provisions of said Subcontract. each of its subcontractors and materialmen has made full payments of all costs. services. [DATE] In consideration of through [DATE] as payment under the Subcontract for all work performed . through except as set forth below: [DATE] As additional consideration for this payment. charges. labor. agents or employees except for those claims listed above. which by their nature survive completion of the Work including.

or any part.1 Purpose The contract may expressly provide for the customer to take possession and use all. Beneficial Occupancy does not: • • • • 6. road or parking area which may be utilized by the customers or others Beneficial Occupancy is not used to take possession of an element of work such as concrete. CLOSEOUT Page 10 of 27 .2. the area should be carefully inspected with the contractor to establish the status of work remaining to be completed or corrected. The contractor remains responsible for completing the remaining work and for correcting any deficiencies noted during the period of occupancy. structural steel. Beneficial Occupancy is a contractually important step because it transfers responsibility from the contractor to the customer for maintenance of the area or for damage which may occur as the result of occupancy. The customer may use the area for any purpose it chooses. ranging from occupying a portion of a structure to turning a system over to a third party for testing or use.2 BENEFICIAL OCCUPANCY SECTION 6. of the contractor's completed or partially completed work at any time during the life of the contract.2 BENEFICIAL OCCUPANCY 6.2. water or sewer system A street. "Beneficial Occupancy" is the term used to describe the situation where the customer takes possession of a discrete part of the contractor's work such as: • • • A room. structure or area of land A site-wide system such as drainage. conduit or piping or other construction element. Beneficial Occupancy is initiated by giving the contractor written notice a number of days (usually specified by contract) before the date on which Beneficial Occupancy will occur. The notice should include: 6.2 Procedure Accept any work Impact the warranty duration Relieve the contractor from responsibility to complete its contract Release retention or form the basis for any additional costs Immediately prior to taking Beneficial Occupancy.6 CLOSEOUT 6.

CLOSEOUT Page 11 of 27 . A clear statement regarding the responsibility for maintenance of the area or structure after Beneficial Occupancy occurs. The date on which the customer takes Beneficial Occupancy. The area.2.2. or building designation which clearly defines the limits to be occupied.2 BENEFICIAL OCCUPANCY SECTION 6.2-B for a flowchart of a typical procedure for the turnover necessary to achieve "Beneficial Occupancy". 4.2-A) Beneficial Occupancy Flowchart (Exhibit 6.4) of all incomplete work or deficiencies which remain to be completed or corrected.3 Exhibits Notice of Beneficial Occupancy [Sample] (Exhibit 6.2. stationing.2. by column or line.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 1. Refer to Exhibit 6. 3.2-A for a sample Notice of Beneficial Occupancy and to Exhibit 6. 2. A Punch List (Reference Section 6.2-B) 6.2. 6.

12345-M-XXX NOTICE OF BENEFICIAL OCCUPANCY ________________________. Dear In accordance with the General Condition. the work shown on the attached list remains to be completed or corrected. Please contact the undersigned to arrange a schedule for completion of these work items which will be acceptable to the customer.2.2 BENEFICIAL OCCUPANCY SECTION 6. entitled "Use of Completed Portions of the Work. Very truly yours. you are relieved of responsibility for any damage which may occur as the result of the occupancy or use of the work. You are reminded that the warranty duration extends ___________ months from the Final Acceptance of the Project as a whole by the customer. That date is currently forecast to be ___________.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Notice of Beneficial Occupancy [SAMPLE] (EXHIBIT 6. and of maintenance of work or systems within the area.2-A) [ADDRESSED TO CONTRACTOR] Attention: Subject: ________________________ Project Manager XYZ Project Contract No. Beneficial Occupancy of this area does not constitute acceptance of the work or of the contract. 199__). COMPANY _____________________________________________ CONCUR _____________________________________________ [CONTRACTOR'S NAME] 6. Effective upon the customer taking Beneficial Occupancy. CLOSEOUT Page 12 of 27 . The work which the customer will occupy is described as Based upon the joint inspection of that area made with you on ____________________." the customer intends to take possession of a portion of the contract work on _______________. We recommend you periodically contact ______________ if you wish to be kept apprised of the actual acceptance date.

(The customer.1 Purpose Work under a contract may be considered to be "substantially complete" at some point before the entire contract is completed.3 SUBSTANTIAL COMPLETION 6. or area is complete while work continues on other work under the contract It is of benefit to the customer to take over and use a system or work area The work under the original scope is complete and the contractor is working only on changed or added/extra work which may extend beyond the original contract completion date 6.3. obtaining code #1 approvals of all engineering submittals.6 CLOSEOUT 6.4 "Punch List") of incomplete and defective work will be developed. such as completion of "asbuilt" drawings. A Punch List (refer to Section 6. CLOSEOUT SUBSTANTIAL COMPLETION Page 14 of 27 . as part of taking possession of work under the Beneficial Occupancy contract provisions may determine the work to also be substantially complete but is not required to do so. Firm completion dates for each item will be developed. if it is not. 6. the customer and the contractor. but it may be mutually advantageous to transfer work that is essentially complete from the contractor to the customer. The point at which work is substantially completed may not be defined in the contract and. or resolution of all outstanding proposals for changes to the work which is substantially completed.3 SECTION 6.) In either case. sitewide utility system. Substantial Completion of work is advantageous to both the contractor and to the customer under some circumstances.2 Procedure There is generally no specific contractual provision governing Substantial Completion.3. Normally. The Punch List will include not only physical work items to be completed. It also involves the transfer or activation of responsibilities among the parties. it occurs when: • • • • All major work under a contract is completed and only cleanup and punch list correction remains A discrete building. representatives of all parties will make an inspection of the work. is a matter of judgement on the part of you. but also all administrative or contractual items related to that physical work.

and company.2-B) Certificate of Substantial Completion [Sample] (Exhibit 6. In the event that the contractor fails to satisfactorily complete any or all of the items on the Punch List by the required dates.2-A) Letter from you to a contractor transmitting the "Certificate of Substantial Completion" [Sample] (Exhibit 6.3.2-C) 6. principally: • Submittal by the contractor (within a specified period — typically 30 days from the date of the Certificate) of a final billing for work under the contract.3. the responsibility remains with the contractor until Final Acceptance.3 Exhibits Letter from you to the owner advising that a contractor has achieved Substantial Completion [Sample] (Exhibit 6. Prior to issuance to the contractor. 6. Reinspection to record satisfactory completion of each item will be carried out by representatives of the contractor. If not. • Completion of all items on the Punch List will be tracked against the firm dates established by the Certificate of Substantial Completion. Start of maintenance by the customer.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Substantial Completion is formalized by issuance of a Certificate signed by all parties. the customer. and accompanied by the Punch List of work to be completed. CLOSEOUT SUBSTANTIAL COMPLETION Page 15 of 27 . the Certificate should be reviewed with the customer and responsibility for maintenance of the work clearly established.3.3. including a projection of all incomplete costs or fees. if the customer has elected to take over that responsibility.3 SECTION 6. Issuance of the Certificate of Substantial Completion activates several actions by both parties. the customer retains the right to have the work performed by others and the cost deducted from any funds due the contractor.

It has been determined that [all work under the contract] [a portion of the work under the contract] is substantially complete. together with the listing of remaining work to be completed by the contractor. After your review. CLOSEOUT SUBSTANTIAL COMPLETION Page 16 of 27 . You will note that it specifies the responsibility for future maintenance of the work described.3. the contractor. 12345-M-XXX Substantial Completion Dear . Attached herewith for your review and concurrence is the Certificate of Substantial Completion for the work. please sign and return the Certificate to the undersigned for issuance to the contractor. The work has been inspected by representatives of [customer].CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Notice of Substantial Completion [SAMPLE] (EXHIBIT 6.3 SECTION 6. Very truly yours. A date for completion of all items on the Punch List has been established and a re-inspection will be held on that date to assure that all remaining items have been completed.2-A) [ADDRESSED TO CUSTOMER] Subject: XYZ Project Contract No. and company to determine the status and a Punch List of all incomplete or deficient work has been developed. COMPANY _____________________________________________ ____/__ Attachment 6.

attached herewith is a fully executed Certificate of Substantial Completion covering [all work under the contract] [that part of contract work described in the Certificate] and the Punch List of remaining items has been resolved. The provisions of warranty as described in General Conditions continues to be in full force and effect.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Notice of Substantial Completion [SAMPLE] (EXHIBIT 6. It has been mutually agreed that [all work under the contract] [a portion of the work under the contract] is substantially complete. CLOSEOUT SUBSTANTIAL COMPLETION Page 17 of 27 . COMPANY _____________________________________________ ____/__ Attachment Response Required: 6. In accordance with the General Conditions. reference its letter) . As reflected in the Certificate. and are supplemented by other requirements of the technical specifications. or .3 SECTION 6. Maintenance of the work subsequent to [will be performed by others] [will remain your responsibility until Final Completion and Acceptance of the contract by the customer].2-B) [ADDRESSED TO CONTRACTOR] Attention: Project Manager Subject: XYZ Project Contract No. 12345-M-XXX Certificate of Substantial Completion (Reference: Dear If Contractor has requested Substantial Completion. Please note that a formal billing for all costs or fees which you believe to be due under the contract must be submitted within thirty (30) days of the date of the Substantial Completion. the work is determined to be substantially complete as of .3. Very truly yours.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Certificate of Substantial Completion — Contractor [SAMPLE] (EXHIBIT 6. INSPECTION CERTIFICATE CONTRACTOR:_____________________________ DATE:_____________________________ ACCEPTED BY COMPANY:__________________________________DATE:_____________________________ CUSTOMER 6.3.3 SECTION 6. and is complete with the exception of the attached Punch List which contractor agrees to complete by the date designated. The facility/area designated above has been inspected by representatives of all parties. The extended warranty period commences on the date the remedial work is completed as described in the punch list or from the date of Final Acceptance of the Project as a whole. PUNCH LIST COMPLETION DATE ______ : _________________________________________ This is to certify the work described above has been substantially completed in accordance with the contract and associated documents. whichever is later.2-C) Date: ____________________________________ FACILITY/AREA : _________________________________________ : _________________________________________ : _________________________________________ : _________________________________________ DESCRIPTION OF FACILITY/AREA CONTRACTOR CONTRACT NO. CLOSEOUT SUBSTANTIAL COMPLETION Page 19 of 27 .

and Civil/Architectural. Electrical. Depending upon the nature and scope of the contractor's work. CLOSEOUT Page 19 of 27 . 6.4-A) Contract Punch List [Samples] (Exhibit 6.1 Exhibits Procedure for use on CM projects (Exhibit 6.4 PUNCH LIST SECTION 6.6 CLOSEOUT 6.1 and Exhibit 6.4-B.4-B.4 PUNCH LIST An essential aspect of contract closeout is the management of the Punch List. the following types of events will require a walkthrough and inspection to develop a Punch List: 1) Substantial Completion/Completion of any contract package 2) Beneficial Occupancy of any portion of a facility by the customer Punchlists will typically be itemized into major categories such as Mechanical. A Punch List Procedure should be developed to efficiently identify work which requires correction or completion and to monitor the closeout of this work.4.2) 6.

CLOSEOUT Page 20 of 27 . To initiate a Punch List effort. Compile all Punch List input from various disciplines and other sources. Reinspection and sign off of completed items will be the responsibility of [designated company representative] to coordinate with [the customer's representative(s)]. Consolidation of Punch List input and issuance to contractor will be completed as follows: a. This walkthrough is communicated via a formal letter issued a minimum of one week prior to the schedule walkthrough. 6. and check for duplication Prepare the formal Punch List and issue to distribution b.4 PUNCH LIST SECTION 6.4-A) 1. the following action items will occur: • The company will notify the customer of a Punch List walkthrough. 3. The notification letter will include the following: a) b) c) d) Description of Punch List activity by category and area of facility Date and time of scheduled walkthrough Date required for final input from all parties on Punch List effort Date Punch List is to be issued to contractor • 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Punch List Procedure (EXHIBIT 6.

]________ Date__________ [Company]_____ _ [Cust.4 PUNCH LIST SECTION 6.:___________________ Item No.]________ Date__________ [Company]_____ _ [Cust.4-B. ____ DATE_____________ DISCIPLINE ________ PAGE ____ OF ____ Completion Date SCHD_______ ACT________ Completion Verification [Company]_____ _ [Cust.1) FACILITY/AREA: ___________________ CONTRACTOR _____________________ CONTRACT NO. CLOSEOUT Page 21 of 27 .]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ [Company]_____ Location RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ RM#____ Description __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ ____ SCHD_______ ACT________ SCHD_______ 6.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Punch List [SAMPLE] (EXHIBIT 6.]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ [Company]_____ _ [Cust.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL ____ Elev_____ Grid#____ RM#____ Elev_____ Grid#____ __________________________________ __________________________________ __________________________________ __________________________________ __________________________________ ACT________ ____ SCHD_______ ACT________ _ [Cust. CLOSEOUT Page 22 of 27 .]________ Date__________ [Company]_____ _ [Cust.]________ Date__________ 6.4 PUNCH LIST SECTION 6.

Deficiencies discovered in the work subsequent to Final Acceptance and not included in the Punch List issued to the contractor should be treated as warranty items and not as additions to the Punch List.2 Procedure 6.) (Reference 6.5 WARRANTY 6. re-testing. "Informal" acceptance of deviations can lead to an extensive misunderstanding or result in your liability for contractor warranty items. replacement. too.1 Purpose Your contract with the Owner generally provides that you are directly responsible for warranting work performed and/or you are to obtain warranties from its suppliers and contractors. for post-construction issues. CLOSEOUT Page 23 of 27 . These modified warranty requirements should be shown in the Special Conditions.5. Construction contracts should contain a warranty provision in the General Conditions for material and workmanship. etc. a letter should be issued confirming the anticipated date of Final Acceptance of the project as a whole and. A letter will be sent to the contractor confirming the direction and accepted method of rework and establishing a required completion date. Note that post-acceptance rework will most often have a different (extended) warranty period and this.2-A for a sample letter. you will notify the contractor of the problem and direct that corrective action be taken. After verifying that the deficiency is the contractor's responsibility. Recovery under the warranty requires that you follow the procedural requirements in the warranty clause(s). you will endeavor to obtain warranties from contractors that match the extent of your liability with respect to duration and with respect to coverage (e.g. Exhibit 6.5. equipment. including incidental cost of removal. Any potential warranty items noted by the customer or your personnel should be reported to the designated representative who was responsible for the construction contract. In either circumstance.. etc).5 WARRANTY SECTION 6. Maintain a log of warranty work items for each contract.6 CLOSEOUT 6. mech/elect. (Note that resolution of all discrepancies/deficiencies must be documented. whether discovered during the work or after acceptance.5. should be documented when accepted.) Contractors and their subcontractors returning to the site for warranty work must comply with all site safety and security rules in effect at that time. (Reference Exhibit 6. Be advised that the technical specifications may require a longer warranty on specific materials or equipment (roof.).2-B for a sample log. After Final Acceptance of the contractor’s work.5. the points of contact for you and the contractor.

5. The warranty requirements of the prime contract for a Project need to be understood as they relate to the contracted work.5. or if time does not permit correction by the contractor." Theoretically. and how it will be performed.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Upon completion of the corrective work and any required re-testing. for practical reasons. the warranty is "evergreen.5 WARRANTY SECTION 6. the defect is again corrected and the warranty again is extended a like amount of time.) Backcharges for Warranty Work In the event the contractor does not correct a deficiency within a reasonable time after written notification. if the same problem kept occurring within a year of being corrected. The contractor will be notified in accordance with the Project Backcharge Procedure that the corrective work is proceeding. In a true "evergreen" warranty. the work will be inspected and accepted by all parties. and it is the contractor's responsibility (and option unless the contractor refuses to act) to determine who will perform the warranty work. fabricated. Subtier Work Warranty claims for work that was originally supplied. you or the customer may have the deficiency corrected by others and charge the contractor for the cost of the work.2-C) 6. not to the subtier. Therefore. Many prime contracts require "full-wrap" warranties.2-B) Correction of Warranty Defect [Sample] (Exhibit 6.3 Exhibits Warranty Defect Notice [Sample] (Exhibit 6. Alternatively. CLOSEOUT Page 24 of 27 . you may decide not to have the rework performed and adjust the contract value accordingly. if a warranty defect is encountered during the original warranty period. Refer to Section 4. You have no contractual relationship with the subtier. (Reference Exhibit 6. "Full Wrap" Warranties Contracts need to be reviewed to determine exact warranty requirements. Under a "full-wrap" you typically warrant all of the work performed by your forces and contractors through the entire duration of the Project's overall warranty period. "Evergreen" Warranties Some contracts contain "evergreen" or partial "evergreen" warranties.5.2-A) Warranty Log [Sample] (Exhibit 6. but starting from the point of acceptance of the corrective work. 6.7 "Backcharges" of this Manual. the defect is corrected.5.2-C for a sample letter confirming correction work has been performed. The contractor will be notified by letter of the customer's acceptance. and the warranty for the corrected portion of work is extended for the original duration. If the same defect occurs again. the warranty would be endless.5. or installed by a subtier should be directed to the contractor.

CLOSEOUT Page 25 of 27 .CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Warranty Defect Notice [SAMPLE] (EXHIBIT 6. You are [directed to take immediate action] [directed to advise your proposed measures] to correct this problem by no later than September 8. 1 Sagging of Insulation Gentlemen: Confirming our verbal notice. COMPANY _____________________________________________ 6. the bottom insulation installed between metal studs in the west cavity wall is sagging.2-A) ____________________________ ____________________________ ____________________________ Attention: Subject: XYZ Project Contract No. Please contact the undersigned to establish a schedule for your corrective work.5 WARRANTY SECTION 6. 12345-M-XXX __________________________________ Warranty Item No. 1992. Very truly yours.5. you are hereby notified in accordance with the Warranty Provision of Contract General Conditions Article [ ] of the following defect in the work: At intersection with the PF-027 tour bridge column lines A and 6-7.

COMPANY _____________________________________________ 6. 12345-M-XXX _________________________ Correction of Warranty Defect Gentlemen: The deficiency described in reference letter has been corrected. CLOSEOUT Page 27 of 27 . Very truly yours.5.5 WARRANTY SECTION 6.2-C) (Contractor) Attention: Subject: XYZ Project Contract No. The corrective work has been re-inspected and appears to meet all of the requirements of the contract technical specifications. Your responsiveness in correcting this problem is appreciated. Please note that the extended warranty period for this corrective work begins as of the date of this letter.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Correction of Warranty Defect [SAMPLE] (EXHIBIT 6.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL

Special Topics
TABLE OF CONTENTS
7.1 7.2 7.3 7.4 CONTRACT LAW...............................................................................................................1 BASIS FOR CLAIMS .........................................................................................................12 NEGOTIATION ..................................................................................................................29 INTERFACE COORDINATION .......................................................................................35 7.4.1 Purpose........................................................................................................................... 35 7.4.2 Initial Steps ...................................................................................................................... 35 7.4.3 Construction Coordination................................................................................................. 39 7.4.4 Interfaces........................................................................................................................ 40 7.4.5 Schedule Coordination ...................................................................................................... 41 7.4.6 Coordination with Procurement ......................................................................................... 42 7.4.7 Coordinating Clean-Up and Housekeeping ......................................................................... 42 7.4.8 Other Coordination Interfaces........................................................................................... 43 7.4.9 Sub-Tier Subcontractors ................................................................................................... 44 7.4.10 Conclusion....................................................................................................................... 44 LABOR AND INDUSTRIAL RELATIONS.......................................................................44 7.5.1 Purpose........................................................................................................................... 44 7.5.2 Procedure........................................................................................................................ 44 7.5.3 Checklist ......................................................................................................................... 44 Labor Relations Checklist (EXHIBIT 7.5.3) ................................................................................. 45 FORCE ACCOUNTS ..........................................................................................................46 7.6.1 Purpose........................................................................................................................... 46 7.6.2 Discussion ....................................................................................................................... 46 7.6.3 Procedure........................................................................................................................ 46 7.6.4 Exhibit............................................................................................................................. 47 Daily Report of Force Account Work (EXHIBIT 7.6.3) ................................................................ 48 LIQUIDATED DAMAGES.................................................................................................49 DELAYS AND EXTENSIONS OF TIME...........................................................................50

7.5

7.6

7.7 7.8

7.10 SUSPENSION OF WORK...................................................................................................54 7.11 DIFFERING SITE CONDITIONS......................................................................................55 7.12 TERMINATIONS ...............................................................................................................56 7.12.1 Purpose........................................................................................................................... 56 7.12.2 Discussion ....................................................................................................................... 56 7.12.3 Procedure........................................................................................................................ 56 7.12.4 Exhibits ........................................................................................................................... 59 7.12.5 Checklists........................................................................................................................ 59 Notice Letter — Schedule Submittal Unacceptable [SAMPLE] (EXHIBIT 7.12.1)......................... 60

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Termination for Convenience Letter [SAMPLE] (EXHIBIT 7.12.3-A) .......................................... 61 Cure Notice — Refusal to Proceed [SAMPLE] (EXHIBIT 7.12.3-B.1)......................................... 62 Cure Notice — Schedule Performance Endangering Contract Milestones [SAMPLE] (EXHIBIT 7.12.3-B.2) ................................................................................................................................. 63 Cure Notice — Schedule Submittal with Unacceptable Milestones [SAMPLE] (EXHIBIT 7.12.3B.3) ........................................................................................................................................... 64 Termination for Default Letter [SAMPLE] (EXHIBIT 7.12.3-C)................................................... 65 Contract Termination Checklist/Termination for Convenience (EXHIBIT 7.12.5-A)........................ 66 Contract Termination Checklist/Termination for Default (Cause) (EXHIBIT 7.12.5-B) ................... 67 7.13 PROJECT ENVIRONMENTAL CONTROLS ....................................................................1 7.13.1 Purpose.............................................................................................................................1 7.13.2 Overview - Strategic Planning.............................................................................................1 7.13.3 Phase I - Planning..............................................................................................................1 7.13.4 Phase II - Design................................................................................................................2 7.13.5 Phase III - Pre-Construction...............................................................................................4 7.13.6 Phase IV - Construction......................................................................................................6 7.13.7 Phase V - Project Completion..............................................................................................6 7.13.8 Exhibits..............................................................................................................................7
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SPECIAL TOPICS
7.1 CONTRACT LAW

To manage a contract effectively and respond to claims by contractors, it is necessary to understand some fundamental legal principles, particularly those relating to contract interpretation. By understanding the basic principles of contracts you will be better equipped to analyze a contract problem and respond appropriately. Duty to Seek Clarification It is generally accepted that bidders are obligated to bring to the owner's attention major discrepancies or errors that they detect in the specifications or drawings. If they fail to do so, they may be required to bear the consequences that may ensue. Address this point in the Instruction to Bidders when soliciting bids for a contract. The legal rule that applies is: "Where a contractor knows that there is an ambiguity, or obvious omission or a significant conflict in provisions, it is under a duty to seek clarification prior to bidding." However, contractors are business people. They are usually pressed for time and are aggressively seeking to underbid a number of competitors. In order to be the low bidder, they estimate only those costs that they feel the contract terms will permit the owner to insist upon in the way of performance. They are not expected to exercise clairvoyance or spend time and money looking for hidden ambiguities in the bid documents. They are protected if they innocently construe in their own favor an ambiguity that is equally subject to different construction. In the case of patent ambiguities or discrepancies, the contractor's duty to seek clarification before bidding should be brought to the attention of contractors when questions of intent or interpretation arise. Contract Interpreted Against Drafter If during the performance of a contract, its language is found to be ambiguous or susceptible to two or more reasonable interpretations, it will be interpreted against the party who drafted it. However, before it is considered ambiguous, all specifications and drawings which form a part of the contract must be read together, and no portion is to be rejected or treated as meaningless if any meaning which is reasonable and consistent with the rest of the contract can be given to it. In the case of two or more reasonable interpretations, the ambiguity is construed against the drafter of the document. It was the

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drafter's responsibility to draft the documents with clarity and completeness in the first place. Rules of Precedence Unfortunately, discrepancies or ambiguities can occur in the best contracts. When agreement on interpretation cannot be reached, there is a legal question as to which of the conflicting interpretations prevails; that is, which provisions take precedence over others. The following are some basic rules to help address the resolution of ambiguities: 1. General vs. Specific The parties are largely free to establish any order of precedence they wish by specifically incorporating language in the contract which establishes the precedence of one part of the contract over another. In the absence of such express instructions, the following rules generally apply: a. Where, in an agreement, there are both general and special provisions relating to the same thing, the special provisions will prevail. Where the technical specifications or special conditions refer to a standard code or standard specification, the technical specifications or special conditions take precedence over the standard referred to when there is a variation. The specifications normally take precedence over the contract drawings. Large-scale details on the contract drawings take precedence over the small-scale portion of the drawings from whence the detail originates. Every note on a contract drawing is considered to be a portion of the specification commenting specifically on that particular portion of the drawing and must take precedence if a conflict exists.

b.

c.

d.

e.

2.

Writing vs. Printing "When a contract is partly typed and partly written and

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the written portion cannot be reconciled with the typed portion, the written portion will prevail." The reason behind this is that the written words are the immediate language in terms chosen by the parties themselves for the expression of their meaning. Accordingly, such written words are deemed worthy of greater weight than typed words intended for general use. 3. Written Words vs. Written Figures "In the event of any inconsistency between words and figures appearing in a contract, the words will govern." 4. Parol Evidence "The law will not allow parol (oral or verbal) evidence to be introduced to contradict what the parties have agreed to in writing if the contract is clear and unambiguous." This is known as the "Parol Evidence Rule" which is intended to limit the opportunity for fraud and mistake. When parties put their agreement in writing, all previous oral agreements merge in the writing and a contract as written cannot be modified or changed by parol evidence, in the absence of a plea of mutual mistake or fraud in the preparation of the writing. 5. Course of Conduct When the agreement is not clear on its face, you may refer to the "course of conduct of the parties" up to the time of the dispute as to how they interpreted the provision; or you may bring in the "standard practice of the industry," or what may have been the "interpretation of other parties to the identical contract provision," or the "record of negotiations" between the parties prior to execution of the contract.

6. Entire Agreement

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Contracts typically include a provision that states "This Contract embodies the entire agreement... and supersedes all other writings. The parties shall not be bound by, or be liable for any statement, representation, promise, inducement and or understanding not set forth herein." The purpose of the "Entire Agreement" provision is to ensure that at the time the parties enter into their agreement they clearly identify in one place everything that comprises the "deal." Furthermore, this has the effect of rendering ineffective anything not in the agreement (e.g., the contractor's bid, negotiation meeting minutes, bid drawings). Errors in the Contract 1. Clerical Errors "Where there is a definite and proper agreement between the parties and the sole difficulty is that a simple error of a clerical nature has been made in committing the understanding to writing, such a mistake will not invalidate the contract." In the occasional instance where the contracting parties cannot correct such an error by mutual agreement and one party seeks unfairly to take advantage of the situation, the other party may have the contract judicially enforced in accordance with the actual intent and original understanding of the parties. Courts frequently exercise the power to correct a clerical mistake when the available proof leaves no doubt that the real contract was meant to be something quite at variance with what appears in the writing. 2. Unilateral Mistake "One party to a contract can not void the contract simply by showing it erred or by claiming ignorance of what it promised or did." This rule applies and the contract will be enforced as written if there has been no misrepresentation; if there is no ambiguity in the terms of a contract; and if the other party had no timely notice of the mistake and itself acted in good faith. Subject to certain exceptions, a party must exercise ordinary diligence. The court will not relieve a party of the consequences of its own carelessness or poor judgement, no matter how unfortunate.

3.

Errors Discovered by the Contractor

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Contracts typically require a contractor to report immediately any error discovered in the contract document or in any data furnished. Any further work done on the affected part before you can issue instructions regarding what is to be done in the matter will be subject to correction at the contractor's expense. Disclosure Requirements 1. Intentional Misrepresentation A contract may be invalid if it has been prepared and signed under circumstances that are considered to be fraudulent. An intentionally false statement of a past or existing fact may be a basis for a claim of fraud. However, such a representation of purported fact must be distinguished from a simple expression of opinion about the future. Where fraud or material misrepresentation exists in the formation of a contract, the party to the contract that is the victim of this fraud may void the contract if: • A reckless or intentional misstatement of a material fact exists The contract was prepared with intent to deceive The contract was prepared in such a fashion as to mislead the innocent party to enter into the contract to its detriment

• •

2.

Unintentional Misrepresentation A misrepresentation that is made in innocence falls short of fraud. However, if the misrepresentation constituted a material inducement, it may still render a contract subject to void.

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In the real world." there is seldom any valid excuse for a contractor to refuse to perform. "contract performance" is not an absolute term and even "impossibility" may have shades of meaning. to determine what constitutes substantial performance in a given situation. however. The equitable doctrine of substantial performance stems from a desire of the courts to protect those who have faithfully and honestly endeavored to perform their contractual duties and to preserve the right of such persons to compensation despite minor variations or omissions in the performance involved.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 3. Full Disclosure It must be kept in mind that a misrepresentation may be created just as effectively by concealment or suppression of material facts as by affirmative misstatement. Any bidder who is requested to submit proposals should have access to and full awareness of the same information available to the other party. nevertheless there is a definite trend apparent from recent judicial decisions requiring merely "substantial performance" in lieu of absolute literal and total compliance with precise contract requirements. It should be emphasized that the concept is not intended to confer on one party the right to deviate freely from its contract or to substitute some material or type of operation that it may regard as just as good as what is actually called for in the agreement. for any 7. Except for unreasonably extended nonpayment and true "impossibility. This means that in preparing a contract (or amendment). Moreover. The following will provide some insights into how "performance" is construed in practical application: 1. SPECIAL TOPICS Page 6 of 67 .1 CONTRACT LAW SECTION 7. of course. you are bound to disclose any and all information available to it which is of a pertinent or significant contractual nature. While the performance of a contract must be strictly in accordance with its terms and a party cannot be required to accept performance that is less than that for which it bargained. the facility would be capable of being fully occupied and utilized in the manner intended by the contract. Substantial Performance Substantial performance may be defined as the accomplishment of all things essential to the fulfillment of the purpose of the contract. In the case of a construction contract for example. Performance Requirements Inherent in every valid contract is the obligation to perform. It is often difficult.

or both.1 CONTRACT LAW SECTION 7. but which do not comply in all respects with the requirements of the contract. hardship or greater costs than anticipated do not necessarily constitute "commercial impracticability. to be considered an excuse for nonperformance. However. or a time extension. In the event of deviations which permit the intended use of the facility. This is not always an easy distinction. a reduction in the contract price as compensation for the work not in complete compliance may be appropriate. That is. but also to the impracticability owing to extreme difficulties encountered. it is necessary to distinguish carefully between "commercial impracticability" (which may operate as an excuse for nonperformance) and mere hardship or severe inconvenience which is never really a valid excuse. Only when defects are purely unintentional and not so extensive as to prevent the other party from receiving substantially all that it bargained for does the principle of substantial performance come into play. Impossibility of Performance Contractors will sometimes use "impossibility" as an excuse for nonperformance. not just the one under the contract. these decisions all have in common the recognition that a release from a contractual obligation by reason of impossibility is necessarily subject to qualifications. SPECIAL TOPICS Page 7 of 67 . The expression "impossibility" when used in connection with excuses for nonperformance of contractual obligations refers not only to the literal impossibility of doing the work. a test usually applied for literal impossibility is an objective one.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL deviation from contract requirements which is willful or made in bad faith. the offending party is not entitled to recover at all. "Commercial impracticability" exists when performance would cause such extreme and unreasonable difficulty and expense that performance is not practical within the existing commercial circumstances and basic terms of the contract." By contrast. However. the impossibility must be such that no contractor could perform. 7. They also may try to use it as a basis for additional compensation. 2. Although the courts have delivered some comparatively liberal decisions.

SPECIAL TOPICS Page 8 of 67 . Generally. Almost every contract 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL First. The fact that the undertaking proves more burdensome than anticipated will not make the contract invalid or relieve the contractor of its obligation. 3. relief will not be allowed if: a. therefore." It is entirely plausible for a contractor to unequivocally contract to do a difficult piece of work in a certain fashion. The contractor initiated or was responsible for the design At the time of contracting the risk of impossibility was obvious to the contractor Performance specifications were involved The contractor had. Courts have held that a contractor who unconditionally obligates itself to a certain performance will not be excused by a subsequent impossibility brought on by an act of God or other unforeseeable emergency. Third. Second. Generally speaking. the difficulty arises in determining whether the circumstances involved constitute such impossibility as to provide an excuse at law for nonperformance or the basis of a claim. where one of two innocent parties must sustain a loss. In other words. superior knowledge regarding the feasibility of performance c. by failing to perform the "impossible" which it contracted to do. or represented that it had. While the doctrine of "impossibility of performance" is clear and well established. the performance will not be excused if the impossibility stems even to a limited extent from negligence or lack of diligence on the part of the contractor. d. the contractor has breached its obligation and is therefore liable for the damages incurred by the company or the customer as a result of the failure. Hardship or Inconvenience Hardship or severe inconvenience is not an excuse on the basis of "impossibility of performance. the contractor seeking to be excused must not have assumed the risk of impossibility. the law will leave the burden where the contract placed it. b. the impossibility involved must be bona fide and not simply a question of hardship or inconvenience.1 CONTRACT LAW SECTION 7.

failure to complete the undertaking within the period specified is a material breach. Needless to say. Breach of Contract It may be stated as a general proposition that where contractual promises have been exchanged one for the other. etc. interviews with knowledgeable personnel. SPECIAL TOPICS Page 9 of 67 . the material breach on the part of one party will (unless occasioned by misconduct of the other party) clearly justify the other's refusal to perform and will entitle the injured party to any provable damages resulting from the breach. Also. the breach must be material/substantial if it is to result in excusing subsequent nonperformance by the injured party. and experts be paid for the vast amount of time required in preparing the mass of law and detail involved in such litigation. the most common remedy for breach of a contract is the recovery of a sum of money awarded (often in court) as compensatory damages. In ascertaining the proper measure of such damages. when "time is of the essence" is a term in the contract. but the time of the contractor's and company's personnel must be consumed in digging out facts from records. every attempt should first be made to bring the claim within one of the provisions of the contract permitting an equitable settlement.1 CONTRACT LAW SECTION 7. Construction contract litigation is one of the most expensive types of litigation there is. the party in breach of contract has the right to expect that the adverse party will do everything reasonably possible to mitigate (minimize) damages. unforeseen difficulties or expense can result in a considerable loss for one party and perhaps for both. a contract may also be terminated by any of the following: 1.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL involves at least some measure of risk and in many instances. However. Your Breach of Contract 7. a fundamental consideration is to place the innocent party in the position it would have occupied had the contract been performed according to its terms. correspondence. On occasion. Probably the most important thing to remember about breaches of contract is that such claims must be avoided if at all possible. For example. Not only must lawyers. Undoubtedly. unjustified refusal to pay can be a material breach. In the determination of compensatory damages. consultants. Full and satisfactory performance by both sides is the usual mode. and the latter party cannot recover with respect to the portion of the loss which it could readily have avoided once the breach became known to that party. Termination A contract may be brought to an end in a variety of ways.

termination of the contract by mutual consent can sometimes be a viable option. Termination for Convenience This is the type of termination with which we are most likely to be involved. it sometimes happens that the contractor experiences unanticipated circumstances such as financial reverses. Under such circumstances both parties may agree to terminate the contract and to engage another contractor. When little or no work has yet been done. Section 7. continued uncorrected faulty performance. In such circumstances. Termination for convenience is accomplished through an "Optional Termination" clause in the contract. It must be understood that this is an option that is open for the convenience of you but not for the contractor. failure to meet financial obligations.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Failure to make prescribed payments to the contractor or causing unreasonable suspension of the project are probably the most common breaches. Mutual Agreement A third way in which a contract can be terminated is by mutual agreement of both parties. 2. For example. although this has occurred in some cases.12 "Terminations".) 3. Examples of material default by the contractor that convey to you a right of action against the contractor are nonperformance. the contractor is entitled to damages caused by your failure to carry out your responsibilities under the contract. 7.1 CONTRACT LAW SECTION 7. failure to show reasonable progress. and agrees that its sole remedy is to receive the payment specified. including loss of anticipated profits. or persistent disregard of applicable laws. 4. This is not common in the construction industry. SPECIAL TOPICS Page 10 of 67 . or loss of key personnel that make its proper performance under the contract a matter of considerable doubt. labor troubles. Breach of Contract by Contractor Default or failure to perform under the contract are the usual breaches committed by contractors. Under this clause the contractor agrees to waive any claims for damages. (Reference Special Topics.

6.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The payment specified is the contract price corresponding to work performed.1 CONTRACT LAW SECTION 7. For instance.) 5. and includes reimbursement for all in-process work and materials. the cost of performance would have been so disproportionate to that reasonably contemplated by the contracting parties as to make the contract totally impractical in a commercial sense. The deciding factor was that an unanticipated circumstance made performance of the contract vitally different from what was reasonably to be expected. at your option.. especially when the contractor's performance and/or cooperation has left something to be desired. or from time to time..12 "Terminations". even if performance were technically possible." Careful consideration should be given to utilizing this clause as an option to prolonged or indefinite suspension. unexpected site conditions may be found that make it impossible to carry out the construction described by the contract. when one party becomes bankrupt. at any time by written notice. plus such expenses as may be incurred by it in canceling its orders and demobilizing the work and also a reasonable profit for the effort associated with terminating the work. Operation of Law A contract may be terminated through operation of law as for example. However. in part. A typical clause provides that: "You may. Impossibility of Performance A contract may be rescinded because of Impossibility of performance under circumstances beyond the control of either party. terminate for convenience any work under the contract in whole. Impossibility of performance has been applied to cases in which. Section 7. (Reference Special Topics. SPECIAL TOPICS Page 11 of 67 .. 7. the doctrine of legal impossibility does not demand a showing of actual or literal impossibility.

Essentially. Of course.7 SPECIAL TOPICS 7. If you determine that such conditions do materially so differ and cause an increase or decrease in Contractor's cost of or the time required for performance of the Work under this Contract. most construction contracts contain a "Changed Conditions" or "Differing Site Conditions" clause. Should the contractor believe it has encountered either of these situations. No misrepresentation on your part is required. It deals first with the subsurface and latent physical conditions at the site of the work which differ materially from those stated in the contract. No claim of Contractor under this clause will be allowed unless Contractor has given the required notice. 7. Differing Site Conditions To discourage bidders from adding high contingency factors to their prices to protect themselves against unusual conditions. The second part of the clause deals with a physical condition at the work site. or if there is an emergency or urgent necessity (as in a case where steel ribs have to be installed to protect a tunnel from collapsing). failure by the contractor to give immediate notice will not bar its claim. differing materially from that which a contractor would ordinarily expect to encounter. of an unusual nature. SPECIAL TOPICS Page 12 of 67 . its claim can be jeopardized because you have a right to investigate the condition before it is changed or is covered up.2 BASIS FOR CLAIMS The following is a discussion of various contract clauses which contractors often rely upon as the basis for claims. there will be an equitable adjustment made for any change in the contractor's costs and/or time for performance. it must give notice to enable you to investigate the conditions. what this means is that if the data shown in the test borings or specifications are in error.2 BASIS FOR CLAIMS SECTION 7. You will.] 1.6 "Claims". differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract. A typical clause reads as follows: "Contractor shall promptly notify you in writing before proceeding with any work which Contractor believes constitutes a differing site condition with respect to: (1) subsurface or latent physical conditions at the Jobsite differing materially from those indicated in this Contract." This clause covers two types of special situations. if you are already on notice of such condition. If the contractor fails to give the notice. an equitable adjustment will be made pursuant to the General Conditions tilted “Changes”. and if the contractor has thereby been misled. then investigate such conditions and make a determination. [Note: Refer to Section 4. of an unusual nature. or (2) previously unknown physical conditions at the Jobsite.

from incomplete presentation of drilling logs. misrepresentation of soil conditions. from omission of subsurface water information or omissions from the drawings. there should be a reasonable compatibility. or not manifest. Furthermore. and if there are cores available for inspection. Likewise. While additional quantities of work added during the course of construction may not entitle a contractor to claim for additional compensation on a unit price contract. The entitlement can result from errors in surveying or exploratory drilling of the site. the condition must have been unknown when the parties entered into the contract. if a reasonable investigation would have disclosed the condition. 21 and Section 7. this could be fatal to the contractor's claim.11 "Differing Site Conditions. the contractor may in fact agree to accept SECTION 7. the contractor cannot successfully claim that it has encountered an "unknown" condition of unusual and not to be expected character. its general experience should give it the knowledge that there will likely be subsurface rocks or boulders. Most of the problem areas involve grossly inaccurate estimated quantities. borrow pits. if a contractor is working near the Rocky Mountains. Refer to Special Topics Section 7." 2. dormant. However. it is incumbent upon the contractor to examine the site of the work carefully.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL The conditions contemplated by the first part of the clause are physical in nature. it should examine them. Also. contour lines. however. every representation made to the contractor must be carefully documented so that a determination can be made whether the actual conditions encountered are materially different from those represented. inaccurate portrayal of subsurface water or rock conditions. they are either below the surface or latent. Furthermore. For example. it is certainly aware of the nearness of the water table to the surface. if the contractor is working in some parts of Florida.2 "Basis for Claims" p. Added Work Additional quantities ordered during the progress of the work generally entitle a contractor to claim extra compensation on a lump sum job. or failure to show accurately existing utility lines. To come under the second part of the clause. Revision 2 Page 14 of 67 .2 BASIS FOR CLAIMS December 1995 . The work added under unit prices need not be exactly the same as under the original contract. In fact. SPECIAL TOPICS 7. they must be at the site and they must differ from what is described in the contract documents. Thus. It can even arise from conditions inferred from equipment or methods indicated in the plans or specifications. this would be subject to interpretation as to whether the work added is of the same "nature and character" as the work contemplated in the original unit item of the contract. meaning hidden.

Revision 2 Page 15 of 67 . there may be (a) an equitable adjustment of the unit prices for the units in excess of 120% of the estimated quantities or. However. if the quantity of an item which exceeds 5% of the contract is varied by more than plus or minus 20%.2 BASIS FOR CLAIMS December 1995 . It is generally considered that an increase or decrease in the volume of work to be performed not exceeding plus or minus 20% of an item of work whose total value is less than 5% of the contract amount will have no substantial impact on the contractor. if the quantity of any particular pay item which amounts to more than 5% of the total contract varies in its final quantity by more than plus or minus 20% from the estimated quantities shown in the contract documents. Conversely. Reduction of Work A reduction in the quantity of work may be a proper basis for a price adjustment (increase) for the units of work actually performed under a unit price contract. SPECIAL TOPICS 7. A significant quantity underrun results in under-recovery of the fixed costs. Therefore. the quantity of work done under this Schedule of Prices may vary considerably from the estimated quantities. it is desirable that the contract should state the permissible variation in quantities. may be a proper cause for the contractor to claim extra compensation. This may be true when the SECTION 7. Payment for the actual quantity of work performed shall be made to the Contractor at the contract unit prices." Note that this language provides relief for the contractor solely as a result of a quantity variation. it does not provide relief in the event the contractor simply failed to meet its estimated levels of productivity. Such a statement will go a long way to avoid disputes. The rationale is that the contractor has spread the fixed components of cost over the estimated quantities. unanticipated difficulties which interfere with performance (the risk of which was not assigned to the contractor under the terms of the contract). Increased Difficulty of Performance Whether the work is increased in quantity or not. 3.” Inasmuch as the quantities may be affected by conditions encountered in the performance of the work or by written instructions to be issued as the work progresses. A typical clause dealing with variation in quantities would read as follows: “The Contractor's proposal is to be based upon the estimated quantities shown in the “Schedule of Prices. 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL unit prices even if the work is not compatible as long as the contractor feels the unit price compensation is adequate. (b) an equitable adjustment to the price (based solely on the effect of the quantity reduction) for all units if the actual quantity is less than 80% of the estimated quantity. there may be significant impact on the contractor's financial position due to its inability to recover its fixed costs.

it is the source of frequent disputes. implied obligations and warranties. (Reference Special Topics Section 7. etc. scope. Because of the overriding importance of time both to you. It is not required that a delay extends contract performance beyond the contract completion date to establish entitlement. In addition. (Reference Special Topics Section 7. Revision 2 Page 16 of 67 . A substantial number of the contract clauses address this subject in one way or another.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL work to be performed is found to be more difficult than that called for by or identified in the contract. The law does.1 "Contract Law" pg. or conditions of the work. You will find in practice that not everything in the contract can be taken at face value and applied in cookbook fashion. Circumstances play a large part in determining which clause or clauses will be applied to a particular delay claim. Also. SPECIAL TOPICS 7.) 5. NON-EXCUSABLE DELAYS B.") Types of delays are many and varied but they can be grouped in four broad classifications according to how they operate contractually. require that the contractor establish a direct cause-and-effect relationship between your breach of a contractual obligation and the delay. Delay is generally acknowledged to be the most common. however.2 BASIS FOR CLAIMS December 1995 . A good general understanding of the principles involved and the operation of the applicable clauses is essential to make appropriate decisions and to take the proper action in delay situations. the contract is formulated to identify known. EXCUSABLE DELAYS COMPENSABLE DELAYS CONCURRENT DELAYS SECTION 7. contract law encompasses concepts of reasonableness and fair dealing. claims. This is probably an overworked phrase but it never is truer than in the context of this subject. the contractor has the burden of establishing that its costs increased as a result of the delay. and law suits. Delays Time is money. For example. They are: A. D. costly and complex problem encountered on construction projects. 11. To control this situation insofar as possible. the contractor may be entitled to additional compensation if the contract documents are misleading as to the schedule. A contractor may complete the work ahead of schedule but still receive additional compensation if it could have finished earlier had it not been for your delay. C. potential delay situations in advance and to define and fix obligations in order to preclude controversies.8 "Delays and Extensions of Time. in terms of performance and to the contractor in terms of money.

2 BASIS FOR CLAIMS December 1995 . and money from building the job to pursuing claims and disputes over minor delays. and interferences. construction mistakes. An unreasonable delay. inadequate scheduling or management. that they be both. or use of certain facilities. You reserve the right to require Contractor to schedule the order of performance of its work in such a manner as will minimize interference with the work of any of the parties involved. whether a delay is excusable or non-excusable is determined by the provisions of the contract. may be interfered with as a result of such concurrent activities. These non-excusable delays can be the results of underestimates of productivity." This is a gray area because the amount of give and take cannot be precisely defined and the element of reasonableness which is stated or implied in the controlling contract clauses must be interpreted in the light of the facts in every case. A. disruptions. SPECIAL TOPICS 7. Non-excusable Delays Non-excusable delays are delays the contractor causes or delays for which the contractor assumes the risk. there will necessarily have to be a certain amount of give and take among the diverse elements battling for the same time and space. There is no question that in a large and complex undertaking. Examples are: • Failure to provide timely inspection of completed work • Failure to competently coordinate the work of separate contractors SECTION 7. can change a non-excusable delay to a compensable delay. Such delays which could have been foreseen or avoided by due care of the contractor are inherently the contractor's responsibility and no time extensions are allowed. even in the case of an event the contractor was advised to anticipate. the General Conditions typically contain clauses that put the contractor on notice to plan for certain events and that reasonable delays that occur as a result of these events are non-excusable delays. other Contractors and other Subcontractors may be working at the Jobsite during performance of this Contract and Contractor's work. One example is the following: Cooperation With Others “Owner. energy. equipment breakdowns. Revision 2 Page 17 of 67 . They are within the control of the contractor or are foreseeable.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Generally. We must avoid diverting time. Do not assume you know the difference without reading the full contract. (normal) weather . however. or just plain bad luck. Accordingly. it is not necessary.

give written notice thereof and within seven (7) calendar days of commencement of the delay. You are not entitled to the earlier completion date. within twenty-four hours of the commencement of any such delay.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL B. you will determine the duration of the delay and will extend the time of performance of this Contract by modifying the Special Conditions. A typical provision reads as follows: "If Contractor's performance of this Contract is prevented or delayed by any unforeseeable cause existing or future. Such extension shall be the sole remedy for the delay. but it will be entitled to additional time to complete its work (and relief from any contractually imposed liquidated damages for the period of delay). This term has the implied meaning that neither party is at fault under the terms of the contract and have agreed to share the risk and consequences when "excusable" events occur. it may be "excusable". flood. Excusable Delays When a delay is caused by factors that are not foreseeable and are beyond the contractor's reasonable control. sometimes referred to as Force Majeure. Failure to give any of the above notices shall be sufficient ground for denial of an extension of time." The general intent of this clause is to free the contractor from liability for the effect of a superior force that cannot be anticipated or controlled. SPECIAL TOPICS 7.2 BASIS FOR CLAIMS December 1995 . a written description of the anticipated impact of the delay on performance of work. Delays attributable to and within the control of the Contractor’s suppliers or subcontractors of any tier shall be deemed delays within the control of Contractor. beyond the control and without the fault or negligence of Contractor. This would typically include: (1) (2) (3) (4) Acts of God (e. The contractor will not receive compensation for the cost of the delay. Revision 2 Page 18 of 67 .g. but also are not obligated to the contractor for the contractor's delay costs. Within seven (7) calendar days after the termination of any excusable delay. If you determine that the delay was unforeseeable.. Contractor shall. which is beyond the reasonable control of the parties and without the fault or negligence of Contractor. earthquakes) Strikes Unusually severe weather Fire SECTION 7. Excusable delays are typically provided for by the "Delays and Extensions of Time" clause in the General Conditions. Contractor shall file a written notice specifying the actual duration of the delay.

there are compensable delays that can arise in other ways. Some examples are: (1) (2) Failure to properly and timely perform certain work which necessarily precedes the work of a contractor. C. Inherent in construction contracts is an implied obligation on your part not to unreasonably delay. Revision 2 Page 19 of 67 . which misleads and disrupts the contractor in its performance. Failure to disclose information necessary to the contractor's satisfactory performance. it is necessary to be aware that your actions or inactions that result in unreasonably delaying or disrupting the contractor could expose you to a claim for additional time or money or both. This may serve to limit the contractor's relief to the listed events. SPECIAL TOPICS 7.. Your right to control carries with it the obligation to control with reasonable diligence and competence. (3) (4) (5) SECTION 7. Failure to provide timely inspection of completed work. the contractor is entitled not only to an extension of time but also to an adjustment for any increase in costs caused by the delay. merely requires that the delay meet the following three criteria: (1) (2) (3) Beyond the contractor's control. interfere with.g. not patently or obviously erroneous. and not foreseeable.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL (5) Unusual delays in transportation Some contracts specifically identify the events or types of events that will constitute excusable delay. or hinder the contractor's performance of its contract. or interruptions to all or part of the work caused by an act or failure to act resulting from your breach of an obligation. but are silent regarding compensation for your delay. If the delay is compensable. Compensable Delays In addition to compensable delays that result from contract changes. Interfering with a contractor's schedule and ordering it to proceed under conditions (e. suspensions. and without contractor's fault or negligence. stated or implied. Accordingly. however. in the contract. Such compensable delays are delays. A typical clause. inclement weather) which the contractor felt precluded its satisfactory performance.2 BASIS FOR CLAIMS December 1995 . Generally contracts will authorize an extension of time for delays beyond the contractor's reasonable control. Supplying erroneous information.

in the method. by written Change Notice unilaterally make any change in the Work within the general scope of this Contract. SPECIAL TOPICS 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL (6) (7) Improperly assuming the direction or execution of field operations which are the responsibility of the contractor. Failure to competently coordinate the work of separate contractors. services or site(s).If at any time Contractor believes that acts or omissions of Owner or you constitute a change to the Work not covered by a Change Notice. at any time. without notice to the sureties. The usual equitable adjustment clauses that apply to delay are: (1) (2) (3) Changes and Differing Site Conditions Suspension A typical Changes clause provides for equitable adjustments as follows: 1. directing acceleration performance of the work. Requiring the contractor to perform by one particular method when the contract does not specify any particular method. Failure to timely process invoices. (8) (9) Contracts specifically address some potentially compensable delays and provide for equitable adjustments. SECTION 7. materials. Revision 2 Page 20 of 67 . equipment. Contractor shall within ten (10) calendar days of discovery of such act or omission submit a written Change Notice Request explaining in detail the basis for the request. designs or specifications.2 BASIS FOR CLAIMS December 1995 . manner or sequence of Contractor's work. in Owner or your furnished facilities. if any.. including but not limited to changes: (a) (b) (c) (d) (e) in the drawings. and contractor submittals. Changes “You may. change orders or amendments.. You will either issue a Change Notice or deny the request in writing. or deceleration in modifying the Contract Schedule or the Contract Milestones “.

SECTION 7... Differing Site Conditions The portion of the clause addressing cost/time adjustments for differing site conditions provides: "If . the performance of any part of the Work under this contract whether or not changed by any order. The Differing Site Conditions clause must not be confused with the "Site Conditions" clause. the contract clause provides for compensation for any delay resulting from a contract change by allowing payment for the increased cost of the performance of the work caused by the change. such conditions do materially so differ and cause an increase or decrease in the Contractor's cost of or the time required for performance of the Work under this Contract.2 BASIS FOR CLAIMS December 1995 . Reference Special Topics Section 7. Also. or the time required for.11 "Differing Site Conditions" for additional information on this subject.. sequence of work items.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL If any change under this clause directly or indirectly causes an increase or decrease in the cost of. No claim of Contractor under this clause will be allowed unless Contractor has given the required notice. 12-13 and Section 7. as where a change in method requires a greater or lesser period of performance. or interrelationships of various tasks. an equitable adjustment shall be made and the contract modified accordingly . SPECIAL TOPICS 7. manner or sequence of performance may require changes in the schedule or milestones and could necessitate revisions in activity durations.2 "Basis for Claims" Pgs. The change may have a direct impact on the schedule. Note that in addition to a time extension. an equitable adjustment will be made pursuant to the General Conditions titled “Changes”." The clause recognizes that changes in the work or changes in the method.." The intent is to leave the contractor neither damaged nor enriched because of the resultant delay. its effects may be more subtle. Revision 2 Page 21 of 67 . as where the change merely rearranges priorities. 2.

The critical path is commonly defined as the longest chain (in terms of time) of interrelated activities through the project (from beginning to end).2 BASIS FOR CLAIMS December 1995 . With the sophisticated computerized techniques now available. Concurrent Delays Concurrent delay occurs when both you and the contractor are responsible for the delay. or be liable for liquidated damages) nor can it recover delay damages against you in such circumstances. submit the required written notification of claim and within twenty (20) calendar days thereafter its written proposal setting forth the impact of such claim. Revision 2 Page 22 of 67 .. a court will apportion the fault and allocate delay damages accordingly. it must pursuant to the General Condition titled “Changes” and within ten (10) calendar days after receipt of notice to resume work. Suspension “The Company may by written notice to Contractor. it may be necessary or desirable to suspend all or part of the work. (Reference Special Topics Section 7. the contractor is required to take the actions enumerated in the provision.” From time to time during the course of the work. If one of the critical activities is delayed by one day and no pressure is applied to SECTION 7. However. there was no reliable method available to distinguish the impact of contractor delays from the impact of your delay. In order to establish a claim for an equitable adjustment.") Until the development of CPM schedule analysis. it is "critical" to completion of the project. if the delays are inextricably intertwined. If Contractor intends to assert a claim for equitable adjustment under this clause. it has become possible sometimes to accurately segregate the impacts of apparently concurrent delays. the contractor must show that the suspension was in no way caused by its own wrongdoing or fault. If there is some basis for doing so. suspend at any time the performance of all or any portion of the Work to be performed under the contract. and the rights of the parties will be determined solely in accordance with the critical path delays. the contractor cannot be faulted for delay (forced to accelerate.. SPECIAL TOPICS 7.8 "Delays and Extensions of Time. however.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL f3. D. In this eventuality. Generally. Because this chain of activities takes the longest time to complete. delays on the critical path cannot be offset by delays on a float path.

additional manloading or acceleration. Revision 2 Page 23 of 67 . the project completion date will be delayed by that one day. many different parties and natural forces have contributed to the situation. an analysis based on a comparison of the contractor's approved CPM schedule with the as-built CPM schedule should be performed to apportion properly responsibility for delay. within 7 days after the termination of any such delay. They frequently develop slowly during the course of the work. E.2 BASIS FOR CLAIMS December 1995 . you determine whether there were any concurrent contractor-caused delays. Failure to give either of the above notices is sufficient ground for denial of an extension of time. To avoid delay problems and potential acceleration claims. In analyzing a delay claim. contracts contain clauses that provide the flexibility that you SECTION 7. you are warned of the potential extra costs and has a chance to take alternative action to avoid or reduce the costs. By the time a contractor recognizes that there is a problem. delays do not always result from a single catastrophic event. the contractor is required to file a written notice with the company specifying the actual duration of the delay. failure to comply with the notice requirements may or may not defeat the claim. • • • not order early (or inappropriate) completion. Minor delays are generally overlooked by contractors until the cumulative effect becomes financially burdensome. 6. and advise the contractor that you will extend its time if justified. Delay Notice Requirements Contracts typically require that a delay claim be submitted in writing within 7 days from commencement of the delay. As a practical matter. it is best to: • award time extensions timely. You must always ask whether the contractor was in fact prepared to proceed according to schedule but for the owner (or your) delay or whether the contractor would have been delayed anyway for reasons within its own scope of responsibility or contractual assumption of risk. SPECIAL TOPICS 7. Further. respond timely and specifically.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL the schedule or critical activity by resequencing. if Notice of Claim is given. However. Breach of Implied Warranty Typically. By receiving this notice. Delay involving work not on the critical path generally has no impact on the eventual completion date of the project. It is vitally important that whenever a contractor asserts a claim for an extension of time and related costs.

would be on the party pressing the claim. just as it expects bad weather. However. if you provide plans and specifications that are incomplete or ambiguous and the contractor does not have sufficient time to seek and receive adequate clarification. Revision 2 Page 24 of 67 . (C) Proper Coordination of the Work: With the advent of the construction management approach. If no time limitation is stated. When you have authority to coordinate and sequence the work. Inasmuch as all delays due to defective specifications are per se unreasonable. of course. the contracts impose relatively few express obligations on you other than payment. it is not anticipated that such interruptions will be for an unreasonable amount of time. as in any claim situation. this has become a growing source of delay claims. Timely Review of Shop Drawings. The contractor should expect some periods of time when it might halt work in a specific area while changes are being made. The burden of proof. We mentioned a gray area where overstepping the bounds of reasonableness might change a non-excusable delay into a compensable delay. and Change Notice Proposals: You must render a decision within the period of time specified in the contract. However. Some of these were mentioned above in the paragraph on non-excusable delays. typically two to three weeks. do all that is reasonably possible to provide sufficient access. a standard of reasonableness is implied. A delay will be compensable if you cause the lack of access or knew in advance that there would be an access problem and failed to divulge this information to the contractor. you must. On the other hand. The most common sources of delay claims in this area are: failure to provide initial access to the (B) (D) SECTION 7. holidays and absenteeism. Payment Requests. Site Access: Courts disagree on the extent to which access to the jobsite is guaranteed.2 BASIS FOR CLAIMS December 1995 . there are a number of implied obligations or implied warranties to which you are held. the resulting delay is compensable (unless there is concurrent contractor-caused delay). In issuing changes and making decisions. As a general rule. you have a duty to do so in a proper and efficient manner.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL need to manage jobs that extend over long periods of time and which involve changing and sometimes unforeseeable circumstances. Some other implied warranties would include: (A) Sufficient Plans and Specifications: This is the most widely recognized implied warranty in a construction agreement. it is not unreasonable to consume a reasonable period of time to process the change or to ensure the correctness of the decision. SPECIAL TOPICS 7. at a minimum.

000 for its increased costs of performance. thereby entitling the contractor to its increased costs. based on the effect of the changes (and the RFI's) on the unchanged (base contract) SECTION 7. If no time period is stated in the contract. they are forms of interference in the progress of the work and as such they are compensable. Such direction may constitute "Constructive Acceleration. with a total value of $400. but can also result from excessive changes. In addition. Constructive Acceleration If a contractor is entitled to a time extension. This implies that an earlier completion date is required. rescheduling and stop-andgo situations. Acceleration can occur when you order the contractor to increase its pace. Acceleration and Disruption: Strictly speaking.") 8. the contractor may submit an impact claim of $800. acceleration can develop constructively without a change in completion date. SPECIAL TOPICS 7. (Reference Section 7. For example.") (F) 7. This is probably one of the most complex forms of claims and requires a detailed analysis of each change and its cost and schedule impact. At the end of the contract. there have been 625 Requests for Information necessary due to incomplete information in the contract documents. making such drastic changes that it soon becomes a matter of "changes on changes.2 BASIS FOR CLAIMS December 1995 . "Delays and Extensions of Time. Revision 2 Page 25 of 67 .CONTRACT/SUBCONTRACT MANAGEMENT MANUAL work site. However. Ripple or Impact Effect Where Change Notices have been issued so frequently. Ripple or impact claims are generally based on the cumulative effect of changes and other events under your control. Such claims are frequently larger in dollar value than the value of the changes themselves. if a contractor has an excusable delay and is not timely granted a time extension. you must provide necessary information and make all necessary decisions in a timely manner. assume a $1. but the project schedule requirements determine that a time extension is unacceptable.000. (E) Timely Performance: In addition to reviewing shop drawing submittals. failure to release a work area to a contractor on time." the courts have considered that this can have a "ripple or impact" effect upon the changed (and unchanged) portions of the work.9 "Acceleration. a reasonable period is implied. or directing a contractor to surrender a work area for an unreasonable period. these are not delays.8." (Reference Special Topics.000 contract has had 65 changes issued. Section 7. However. the contractor may be directed to hold the original schedule despite an excusable delay. Disruption usually occurs when you order a change in the sequence of the work.000.

While there is no set method for calculating loss of labor efficiency. it is particularly important that ripple or impact claims be avoided wherever possible. There are two different techniques used to calculate lost productivity claims. the boards and courts are suspect of methods of proof which do not compare the contractor’s normal labor productivity to actual productivity as affected by the claim event. The following is an example of appropriate release language: “The price adjustment and time extension (if any) granted under this Change Order constitute payment in full for the work covered by this Change Order. and all effects (direct. including impacts and "ripple effects") of the work covered by this Change Order on all contract work. including without limitation. SECTION 7. 9. A variety of methods of calculation have been developed and accepted by the boards and courts. SPECIAL TOPICS 7. Because of the magnitude of such claims. whether or not changed by this Change Order. one is to measure the loss and the other is to estimate the loss. A great variety of factors can contribute to an overall loss such that it is impossible to isolate and quantify an individual factor.2 BASIS FOR CLAIMS December 1995 . overhead costs. In addition. profit.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL work as well as the effect of the changes on one another. and consequential. all direct costs. The most successful method of avoiding these claims is to include in all settlements for changes the full effect of the change and to so state in the Change Order that resolves the equitable adjustment for the change. Loss of Productivity Claims One of the more difficult contractor claims for the contractor to prove and for you to analyze and respond to are claims for lost productivity or inefficiency. a contractor claim may involve other types of delay and disruption damages which need separate analysis and proof of causation. Consequently. Revision 2 Page 26 of 67 ." To be certain that this language will be binding on the contractors. the following analyses have evolved to provide such a comparison. it is important to note in the negotiation minutes that impact was discussed and included in the settlement. general and administrative expenses. and because there is no straightforward method by which such claims can be valued. indirect. indirect costs.

A satisfactory settlement of the claim will depend in large part on how well this item is established. These clauses disclaim responsibility for the completeness or accuracy of the data provided and place responsibility on the contractor for any problems that might result from relying on such data should it prove to be defective or misleading.e.2 BASIS FOR CLAIMS December 1995 . Revision 2 Page 27 of 67 . The concept is that the contractor is SECTION 7. Such estimates are commonly based on one or more of the following: • • • • • • other similar contracts industry standards project productivity studies estimated labor costs expert analysis bid comparisons One thing to keep in mind in analyzing/evaluating loss of productivity claims is that the burden of proof is on the contractor. Estimating the anticipated productivity rate is the most difficult item of proof because of the uncertainty involved. Do not be swayed by volumes of cost records showing contractor losses.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL One measures the amount of lost productivity by making a comparison of similar work activities in the same project. This analysis compares identical activities on an impacted and nonimpacted basis. The issue for the contractor is to show the link to an event or circumstance for which you are responsible.. It constitutes the most accepted calculation for lost labor productivity and is generally known as a “measuredmile.” The key to a measured-mile analysis is demonstrating that the period selected to represent the non-impacted performance is substantial enough to serve as a baseline against which the impacted period is then compared. Exculpatory Clauses Many contracts contain exculpatory clauses which attempt to shift the risk of unknowns to the contractor. SPECIAL TOPICS 7. Estimating the inefficiency almost always includes a comparison of the productivity rates (or performance factors) for the inefficient period and a reasonable estimate of the anticipated productivity rate (i. what the productivity rate would have been absent the efficiency loss).

the person providing the labor or material can place a lien on the real property if the person is not paid. SPECIAL TOPICS 7. (The specific procedural requirements set forth in the state laws must be strictly adhered to. the lien is known as a materialman's lien. Court decisions include numerous examples where an owner's exculpatory clauses did not protect it when the case went to court.2 BASIS FOR CLAIMS December 1995 . Although the validity of the clauses has been generally upheld. one important step to take without fail is to obtain a Certificate of Payment prior to paying any invoices. but the contractor does not pay one of its subcontractors. When work is performed on U. the contract should disclose all relevant facts affecting cost of performance which you knew or should have known. Revision 2 Page 28 of 67 . Of course. that subcontractor can file a lien and you can end up paying for the same work twice. it is always necessary to determine how the problem must be handled under the laws of the particular state involved. the Government requires its prime contractors to provide a special bond (Miller Act bond) against which liens may be filed. they are usually of serious magnitude and require careful study and evaluation. The requirement for full disclosure has been emphasized earlier. Consequently. In fact. Consequently. limitations. Failure to do so could impose liability for misrepresentation. and nearly all other considerations regarding these liens are set forth in the statutes of each of the fifty states. We cannot be assured of absolute protection by exculpatory clauses. Be aware that if a contractor is paid its invoice. In the case of a laborer or a contractor or a subcontractor who does work on the real property. In the case of the supplier of materials. in construction when a laborer or a contractor does work on real property or a supplier furnishes material which is incorporated into the work on the real property. Liens A lien is a claim against property. scope. procedures. So far as the construction industry is concerned. No general statements can be made regarding these liens other than to make it clear that statutes in every state are different.) SECTION 7. the lien is known as a mechanic's lien. there are no property lien rights available. when a lien problem arises. the rights.S.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL warned to either seek confirmation of the information provided or to include a contingency for some reasonable variation from the information provided as it may affect the cost/time to perform the work. Government property. circumstances are all important. Generally. When problems arise from these provisions.

6 "Insurance and Bonds" pgs.2 BASIS FOR CLAIMS December 1995 . Revision 2 Page 29 of 67 . 30-32.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Reference Section 3. SPECIAL TOPICS 7. SECTION 7.

it puts pressure on the other side to do the same Be willing to compromise on an issue that is important for the other side to win. This is first a process of education. The objective of negotiations is to find a combination of issues and price(s) that is acceptable to both parties. Ethical negotiations serve the needs of both contracting parties.1 Purpose Negotiation is essentially communication of ideas by the parties in an effort to reach an agreement which will maximize the benefits of all parties. then a process of persuasion. 7.3. but not personally. The objective of negotiations is not simply for one party to convince another party that it is right or wrong. Successful negotiation requires a knowledge of facts (to educate) and a knowledge of people (to persuade). the tone of all team participants should be controlled with this in mind Let the other side know you are comfortable with your position and with your grasp of their position Be fair. Coercion provokes polarization and makes it very difficult for the coerced party to offer concessions or accept compromise. even if they may not be right -.take the long view Composure - Ÿ Confidence - Ÿ Ÿ Receptiveness - Flexibility - Attempting to negotiate by coercion is generally ineffective and often counterproductive. SPECIAL TOPICS .3 NEGOTIATION 7.3 NEGOTIATION SECTION 7. The key principles for successful negotiation are: Ÿ Ÿ Ÿ Preparation Internal Accord Know the issues and the participants' needs Achieve consensus among your team members before entering negotiations Take issues seriously.SPECIAL TOPICS 7. reasonable and honest -. Page 29 of 67 .

For all negotiations involving a potential commitment in excess of $1 million (and other commitments when approval is at all in doubt). and negotiating experience. the Lead Negotiator should request a caucus to discuss what direction should be taken to resolve the issues and to complete the negotiations.3 NEGOTIATION SECTION 7. appropriate commitment authority should be obtained in advance of negotiations to avoid having to renege on negotiated points. Negotiation Session If negotiations seem to be breaking down. A pre-negotiation plan is to be developed on all matters to be discussed. The Lead Negotiator should coordinate negotiation objectives with the Site or Project Manager to make sure that the customer's and the project goals are achieved. The negotiating team may agree that the other team is not interested in resolution and may recommend termination of negotiations. Create a consensus among the negotiating team to provide a united front. SPECIAL TOPICS Page 30 of 67 . The Lead Negotiator must be knowledgeable of various negotiation techniques and must be familiar with Company policies concerning negotiation. 7.3.2 Lead Negotiator Role and Responsibility Selection of Negotiator The Lead Negotiator's experience and capability should fit the expected complexity of the negotiations. No negotiation should be started before the full agreement of all members of the team is assured. familiarity with the issue(s). The team members should rely on their experience in researching and developing the pre-negotiation plan. The most important criteria for the negotiator are familiarity with the contract.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 7. Negotiating Strategy The Lead Negotiator should clearly understand the policy philosophy and the aims and objectives of the negotiating team.

7 SPECIAL TOPICS 7. The contracts representative is involved in a wide variety of activities most if not all of which require some type of coordination. Project Controls and sometimes the customer. The process is structured and provides several opportunities for the contracts representative to participate in the pre-award activities: • • • The Project Team review of the proposed bid package The Pre-Bid Meeting The Pre-Award Meeting If it is not possible to attend all of these meetings. Remember to "RTFC — Read the Full Contract. This eliminates possible misunderstandings with the contractor and keeps the line of communication clear.1 Purpose The designated contracts representative has the primary responsibility to ensure that the contractor performs in accordance with the contract.4 INTERFACE COORDINATION SECTION 7." The first step is to be thoroughly familiar with the contract documents. The formation of a company contract is a lengthy process involving participation by Engineering. It is important that all official contact and communication with the contractor be coordinated through the person(s) designated in the Division of Responsibilities (DOR) matrix (reference Section 2. Construction. Field Engineering) are involved with the contract in some way or other.g. Legal. the agenda and minutes of the meetings located in the contract files should be reviewed. The bid tabulation.1 "Assignment of Tasks" of this Manual).4.4. You will be at a definite disadvantage if you wait until the contractor arrives at the site to "come up to speed. Procurement.2 Initial Steps Keep in mind that the contractor has been living with the contract for a long time before it was even awarded. SPECIAL TOPICS Page 35 of 67 . It is important to realize that although assigned only specific contracts. the various contracts representatives must work in close conjunction and harmony with each other as well as with others on the project team to minimize or eliminate interface problems.4 INTERFACE COORDINATION 7. Coordination is required not only between the contractor and you or interfacing contractors but also wherever the various supporting project entities (e.. technical specialists. 7. To be successful in this objective. the recommendation to the customer and other bid period correspondence are important sources of background information. Procurement. technical inspectors. Project Engineering. 7. this individual plays a major role in the total project team effort to construct a quality project within the schedule and budget. Contracts." You should be thoroughly familiar with the contract before the work begins.

registered. Contractor shall act as an independent contractor and not as the agent for you or Owner in performing this contract. Notification of changes of authorized representatives for either you or Contractor shall be provided in advance.3. SPECIAL TOPICS Page 36 of 67 ." 2. During periods when the work is suspended.. maintaining complete control over its employees and all of its suppliers and subcontractors. "Independent Contractor.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL Before the contract work can start.4 INTERFACE COORDINATION SECTION 7. arrangements shall be made for an authorized representative acceptable to Company for any emergency work that may be required. in writing to the other party. organized. licensed. This meeting is where the ground rules for working with the contractor should be discussed and the last level of detail established.3. At this time it is particularly important to note two basic provisions of the Contract General Conditions which typically appear in contracts. These clauses establish that the contractor is solely responsible for all its work and operations and establishes the channel of communication through which interface coordination problems are resolved. You shall designate in writing one or more representatives to represent and act for you and to receive communications from Contractor... equipped. and financed to perform the Work under this contract. "Authorized Representatives .. They are: 1.2-A) is a good checklist of the areas where the active participation by the contracts representative as coordinator may be required. Contractor represents that it is fully experienced. Contractor shall designate in writing an authorized representative acceptable to you to represent and act for Contractor and shall specify any limitations of such representative's authority. All communications given to the authorized representative by you in accordance with this contract shall be binding upon Contractor.2 and Exhibit 3. Before starting work. Nothing contained in this contract or any purchase order or subcontract awarded by Contractor shall create any contractual relationship between any such supplier or subcontractor and either you or Owner. Such representative shall be present or be represented at the Jobsite at all times when work is in progress. properly qualified. and shall be empowered to receive communications in accordance with this contract on behalf of Contractor. 7. Contractor shall perform its work hereunder in accordance with its own methods subject to compliance with the contract. two preliminaries remain: Preconstruction Kick-Off Meeting The "Agenda for the Preconstruction Kick-Off Meeting" (reference Section 3.

individual contractor work areas. In addition. Now is the time to start working to avoid or resolve them. the customer. there will be problems. By this time.2-C. 7. in writing. to the other party. Notice of Site Mobilization Preliminary to site mobilization. Some things that need to be considered are: • • • Is the contractor mobilizing as scheduled? Are there areas available to start work in? Is there adequate lead time for the contractor to erect office buildings. if required. a contractor cannot commence work onsite without first having the required Certificates of Insurance on file. or the contractor according to responsibilities specified in the contract and in accordance with the Division of Responsibility Matrix." (Refer to Section 3.2 and Exhibit 3.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL The company shall designate in writing one or more representatives to represent and act for the company and to receive communications from contractor. or equipment to be furnished by others going to be available? • • • If the answer to any of these questions is negative.4 INTERFACE COORDINATION SECTION 7. storage and lay-down areas and priority of work operations have been established. facilities. Notification of changes of authorized representatives for either the company or contractor shall be provided in advance. the contracts representative alerts all jobsite departments that a new contractor is arriving at the jobsite.3. Before any work requiring third party authorization or approval is permitted.) This should be done as early as possible but at least two weeks before the required starting date to allow advance preparation. the contract representative should ensure that necessary permits are obtained by either you. SPECIAL TOPICS Page 38 of 67 .3. access routes. if applicable? Is fabrication on schedule? Will enough material be onsite to support field activity? Are materials. warehouses and shop facilities. Many front end problems can be avoided through the foresight and active involvement of the contracts representative at this stage. This is accomplished by issuing a "Notice of Site Mobilization.

and Contractor's work. or company forces. or both. or use of certain facilities. the Owner and other contractors may be working at the site during the performance of this Contract. A primary function of the contracts representative is to coordinate the construction efforts of a contractor with other contractors.4.4 INTERFACE COORDINATION SECTION 7.3 Construction Coordination The contracts representative is the key player in overall coordination and control. 7. This person must see to it that the contractor conducts its operations in cooperation with all others in the vicinity and avoids interference with others' work. This clause states: "You. occupancy or work area. This is an extremely important area of attention and fraught with potential for "impact" claims or claims based on alleged delays. and disruptions. may be interfered with as a result of such concurrent activities. a detailed schedule or plan of operation with respect to access. and the status and daily progress of the contract. You on the other hand may have a tendency to regard this as a license to do what is best for the project." Bear in mind that this provision is part of each interfacing contract and therefore applies equally to all contractors. should be developed in advance. review of the Daily Reports. using good judgment. etc. potential problems. the contracts representative can minimize potential for such claims. The Construction Manager should be kept fully informed and advised of contract status and schedule through established jobsite channels. The key words are "minimize interference with the work of any of the parties involved. This is accomplished through daily communications with other contract representatives. SPECIAL TOPICS Page 39 of 67 . and monitoring jobsite activities. storage area." As a matter of practical fact. This individual must be kept aware of all problems. By being fair and reasonable. The basic contract provision which typically enables the contracts representative to do this is the General Condition titled Cooperation With Others. precedence of work operations. each contractor will probably tend to interpret this to mean the other contractors are supposed to stay out the way.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL 7. and thinking and planning ahead. Whenever possible. interferences. You reserve the right to require Contractor to schedule the order of performance of its work in such manner as will minimize interference with the work of any of the parties involved.

However. interfaces. anticipated problem areas. Communicate with your direct-hire superintendents and other contracts representatives monitoring contracts in the same area. also. craft densities. This is the acid test for coordination. particularly as it relates to the contractor's schedule and project. An HVAC duct cannot be installed in its allotted space if someone else installed a pipe or support or a cable tray first. An effort to agree on methods of correction of problems needs to be made as early as possible to avoid any delays. The basic approach is the same. you need to keep in touch with what is going on generally. In such instances. make sure it stays open and thereby avoid an expensive "fix. two objects cannot occupy the same space. Coordination problems may also involve a contractor and your direct-hire operations. Agreements shall be documented. SPECIAL TOPICS Page 40 of 67 . All parties need to realize the urgency of each others' activities related to schedule and be ready to have a hands-on attitude for whatever is best for the project.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL The contracts representative must take appropriate steps to foresee probable conflicts and interferences. keeping them apprised of such things as where work is in progress. To exercise this responsibility. holds. the contracts representative must be thoroughly familiar with the contractor's work under its contract. The key to a successful and unstrained operation is good communication.4. the responsible contracts representative should arrange a meeting between the contractors to encourage a solution of all difficulties by mutual cooperation directly between the contractors. If a space is allotted for a particular contractor's work." As a general rule. etc. The best solution of course is to know the drawings. and to arrange in advance for scheduling of the work by the contractor to avoid. or at least minimize. the contracts representative should be prepared to support and justify an appropriate contract change. If a contractor is fairly entitled to additional compensation or time as a result of a "coordination" decision. work planned in other areas and dates.4 Interfaces Probably the most troublesome problem in managing major contracts in congested areas is "interferences." 7. all such difficulties. even though it may not necessarily be in their own best interests. The contracts representative will frequently be operating in gray areas. It is most important to communicate completely and accurately with all parties involved. How well those situations are handled will be the true measure of this person's stature and worth to the project. interferences. because field changes occur. 7.4 INTERFACE COORDINATION SECTION 7. Coordination problems may involve several contractors. Get the parties to the problem together and work it out. because much of the work is field routed and. Whatever is best for the project may stretch the limits of cooperation beyond what was intended by the contract. The astute observer may have noticed that there is a gray area here.

CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Another common interference problem is access. In most cases. Jointly analyze the problem and decide which work would be most desirable to change in terms of time and money and whether or not engineering must be involved. The sooner an item is put in place. clearly stating each party's responsibilities. It does not solve the problem. including the craft supervisor responsible for the interference in case of a company interference and/or the contracts representative assigned to the interfacing contractor to resolve the problem. the fewer interferences there will be for that item. SPECIAL TOPICS Page 41 of 67 . If a contractor is asked to change its method or sequence. 7. etc. this decision can and should be made the same day the interference occurs. or permanently by other permanent plant equipment or materials.4. make it in a timely manner. If they are of relatively minor significance they should. as a minimum. Do not let the contractor load the change with cost just for the sake of making its contract more profitable. Sometimes the best solution is to get there first. Try to get work scheduled for the most advantageous installation. scaffolding. as they surely will. Therefore. Whatever the decision is.5 Schedule Coordination Because Project Controls plays a major role in the successful management of the project. ask how it proposes to do the change.. it is vital that each contracts representative works in close conjunction with the scheduler. it is mandatory that both the contracts representatives and Project Controls work closely together to foresee and eliminate possible conflicts that would be cause for project schedule slippage. Project Controls evaluates the contractor's reports and plots the contractor's progress on the project master schedule. Sometimes it may even pay off to install certain items in congested areas with temporary hangers or fastenings to simplify access problems or to nail down the space. When interferences do occur. it is imperative that Project Controls is promptly given copies of all contractors' scheduling reports along with the contracts representatives' comments. It is important to document fully these kinds of agreements. be noted in the "Daily Report. but the final decision is yours. the contractor has the expertise. There may be room for a contractor's work but the access to the space has been obstructed (two-blocked) temporarily by other crafts." 7.4 INTERFACE COORDINATION SECTION 7. However. To manage the project successfully and efficiently. The Project Controls Manager is responsible to the Construction Manager for the total project schedule. be ready to discuss the problem with the others on the project team. do not rush ahead and ignore a rationale priority. The solution is again the same as outlined above. Remember. Allowing "your" contractor to two-block another contractor just defers a problem.

This individual is in the best position to determine the impact of major schedule decisions on the contract and can aid in assessing the potential consequences and. On the other hand. When this occurs. including contractor-furnished equipment and materials. partial suspension.4. Material purchase and delivery schedules are initially coordinated with construction requirements. recommend alternate solutions. 7. impending problems and interface requirements. the contracts representative. in monitoring the contractor's progress. The contracts representative can make important contributions to such decisions because of intimate knowledge of the status of contract activities. 7. Purchase orders sometimes may require that a manufacturer's representative be present during the installation of the equipment by a contractor. or deferral of some work because of cash flow or other major problems. clean and safe condition. Materials delivered too long before they are needed may adversely affect cash flow or create storage and handling problems. materials or equipment delivered late are likely to delay not only a contractor but could impact and delay other contractors or even the total project and result ultimately in disputes or claims.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL This area of coordination becomes of utmost importance when major upheavals take place such as slowdowns. The contracts representative must keep fully informed of the progress of the various parts of the work and the status of related procurement activities to ensure that all elements are in balance.6 Coordination with Many (but not all) major contracts include a provision in the Special Conditions for you or the customer to furnish some or all of the equipment or Procurement materials. if appropriate. Consider expediters to assist in obtaining a smooth flow of manufactured equipment and prefabricated materials. SPECIAL TOPICS Page 42 of 67 .7 Coordinating Clean-Up and Housekeeping The contractor is typically obligated by the terms of its contract to keep its work areas in a neat. termination or partial termination or merely significant schedule changes. Important decisions need to be made concerning possible suspension. will coordinate with the contractor and the manufacturer to establish the required date for the manufacturer's representative to be onsite.4 INTERFACE COORDINATION SECTION 7. Procurement plays an important role in the total project effort in that it is responsible for the issue and administration of purchase orders and the receipt and issue of customer-furnished material and equipment. 7.4.

If trash and debris are allowed to accumulate. cleanup and housekeeping can also be an important interface coordination problem. you may arrange for the work to be done by your own forces or by others as a backcharge to the contractor (reference Section 4. A clean job is a safer job and most likely a more efficient one.4. daily cleanup is an absolute necessity.8 Other Coordination Interfaces It is immediately evident from a review of the General and Special Conditions of the contract that the administration of all the provisions will require the involvement or assistance of numerous participants.7 "Backcharges") in accordance with the terms and conditions of the contract. Hence. 7. If there are any deficiencies. Enforcement of this contract provision must be exercised regularly and vigorously. The contracts representative must give particular attention during inspections to the contractor's daily housekeeping practices. The contract is likely to interface at some time or other with: • • • • • • • • • • • • • • • • Health and Safety Security Environmental Labor Relations Document Control Field Engineering Testing Laboratories Resident Engineer (when assigned) Surveyors Project Engineering Start-up Project Controls Controller Customer Local building code inspectors Supervision The knowledgeable attention and timely coordination effort in all of these areas is a basic responsibility of the contracts representative who must be very familiar with contract requirements. If the contractor fails to take appropriate action. 7. it becomes impossible after a few days to identify the trash belonging to a particular contractor. SPECIAL TOPICS Page 43 of 67 . resulting in each contractor refusing to accept the responsibility. as a last resort. notice must be given by the contracts representative to the contractor insisting that corrective action be taken.4 INTERFACE COORDINATION SECTION 7. and with notice to the contractor.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Because work in and around a construction site can be confined and create very close working conditions among contractors.

Conflicts between subcontractors should be brought to the attention of the contractor's field representative.4. the contracts representative must be careful not to render decisions that might lead to claims against you and your customer.9 Sub-Tier Subcontractors The contracts representative must not do any coordinating between a contractor and its subcontractors or subcontractors of different contractors engaged on the project.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL 7. 7. This type of coordination is the function and responsibility of the contractor(s). (Reference Section 4. Subcontractors are not to be regarded as separate contractual entities. No decisions that impact others or have significant impact on the project should be made in any case without the involvement and approval of the responsible supervisory personnel in the field. Situations frequently occur that require the contracts representative to coordinate the work of one contractor with that of other contractors and/or with Supervision. Contractors are required by contract to cooperate with other contractors.3 "Schedule" and Section 5.10 Conclusion 7. but should be treated as part of the contractor's force. the meetings should be arranged between the contractors.4. SPECIAL TOPICS Page 44 of 67 . In addition.4 INTERFACE COORDINATION SECTION 7. The contract also gives rise to extensive and varied interface coordination requirements.2 "Progress Review and Coordination Meetings. The primary tools of the contracts representative in minimizing coordination and interface problems are the approval of schedules and Progress Review Meetings. When the problem involves interface conflicts with two or more contractors. In executing coordination responsibilities.") The purpose of these meetings should be to expose and resolve potential problems and to promote an easy working relationship between contractors and your organization. Contractors Coordination Meetings should be held as often as necessary with all the major contractors. with you acting only as a moderator and encouraging solutions directly between the contractors by mutual cooperation.

This guideline generally describes how to monitor a contractor's conformance to site labor relations requirements on a union project.5. where this responsibility is within the scope of your responsibilities. and local laws Certified Weekly Payroll Reports (if required) Notify the contractor if improper administration of the applicable labor agreements or work rules is adversely affecting the project. state.3) 7.5.3 Checklist Labor Relations Checklist (Exhibit 7.5 SECTION 7. Follow up and close out open labor issues.5 LABOR AND INDUSTRIAL RELATIONS 7.1 Purpose Your responsibilities relating to the labor and industrial relations obligations of contractors will be dependent upon whether the project is being performed on a union.5. The contractor is nevertheless responsible for administering its own labor relations. 7. but not limited to: • • • • • • Craft work assignments Late starts.5. Monitor that contractor labor is paid in accordance with site labor agreements and other governing regulations such as for Davis-Bacon work. SPECIAL TOPICS LABOR AND INDUSTRIAL RELATIONS Page 44 of 67 . Such notification may first be oral (documented on the Daily Report) and followed up with formal correspondence. Immediately notify company management of any unauthorized work stoppages.2 Procedure Become familiar with applicable labor agreements and site work rules. early quits Unauthorized breaks Wage and fringe payment agreements Compliance with Federal.7 SPECIAL TOPICS 7. Monitor contractor compliance with and enforcement of applicable labor agreements to include. 7. It is vitally important to the overall success of any project to ensure that labor harmony exists between the different work forces on site. open shop or merit shop basis.

Potential labor issues have been identified and resolved. labor requirements and mobilization schedule.3) Contract Number:______________________ Contractor:_______________________________ Contract Scope: 1. Comments: 8. Comments: 4. Comments: 3. SPECIAL TOPICS LABOR AND INDUSTRIAL RELATIONS Page 45 of 67 . Company Labor Relations has been notified of contractor's scope.5 SECTION 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Labor Relations Checklist (EXHIBIT 7.5. Contractor has received and acknowledged site work rules. Comments: YES NO YES NO YES NO YES NO YES NO YES NO YES NO YES NO Name:________________________________ Date:_____________________________ 7. Contractor's daily labor management is routinely monitored and deficiencies noted on Daily Reports. When required. Comments: 5. The contract requires a labor agreement. Comments: 2. Comments: 6. Comments: 7. contractor submittals such as certified payrolls are available and submitted on time.

7. Cost Accounting will assign a unique cost code with an appropriate descriptive title and include it in the project reporting scheme.7 SPECIAL TOPICS 7. overheads. but for which costs can be reasonably segregated during performance.6. A "not to exceed" funding limitation will be established and monitored. interferences or revisions are anticipated.6 FORCE ACCOUNTS Page 46 of . SPECIAL TOPICS 67 7. Several circumstances give rise to the need for force accounts which are an accounting method for accumulating costs as incurred with concurrent approval by you in the field. Typical applications are: • New or modified tasks which are difficult or impractical to accurately estimate. verifying and dispositioning force accounts.A limited number of designated management staff (perhaps only the construction manager) should be authorized to initiate a force account. and impact costs on related work must be separately estimated when applicable. Specific responsibilities for initiating such accounts. disruption. warranty work or variations where estimated values are in dispute. A commitment authorization for this amount will be processed at the time the force account is initiated. Costs are tracked and reported until dispositioned through Change Notice negotiations. and equipment charges incurred by contractors and approved by you. "Inspect and repair as necessary" and "excavation in unknown conditions" are examples. backcharges. Work undertaken with incomplete design information or where significant rework. tracking and closing-out such accounts must be assigned on a project basis between Field Engineering. Changes. SECTION 7. approving charges. It should be recognized that only direct costs can be coded to force accounts and that indirects. Project Controls and Contract Administration. documenting.6. material. or completion of the task.2 Discussion • • Force accounts accumulate actual labor.3 Procedure Initiating Force Accounts -. They may also accumulate your direct hire costs for similar purposes.1 Purpose This procedure describes the process for identifying. 7.6.6 FORCE ACCOUNTS 7.

If backcharges or warranty claims are involved. 7. under the “Pricing of Adjustments” clause. SPECIAL TOPICS FORCE ACCOUNTS Page 47 of 67 . force accounts should only be used as an interim measure to accumulate cost information. Material and equipment costs must also be individually authorized. material and equipment costs being charged to each account are: • • • Reasonable Necessary Actual Individual timesheets coded to the force account should be reviewed and signed by the assigned individual.3).In most cases. However. When appropriate.4 Exhibit Daily Report of Force Account Work (Exhibit 7.6.3) 7. lump sum changes should be negotiated and the force account discontinued or closed. and material charges should be differentiated. costs may be transferred into standard accounts when documentation objectives have been accomplished. Reporting -.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Each account will be assigned to a specific individual for authorization of charges.6. equipment. When sufficient documentation has been developed. but may be increased with appropriate approval. Periodic cost reports must identify all open force account codes and summarize expenditures on as current a basis as possible.6 SECTION 7. Disposition -. That individual will be responsible to ensure that labor.6. the final costs will be priced in accordance with contract agreements or normal pricing practices and submitted for collection in accordance with project procedures.The contractor will be required to submit for approval a Daily Report of Force Account Work (reference Exhibit 7. you may direct payment on a cost reimbursable basis. Funding limitations shall not be exceeded. Labor.

HOURS ST OT RATE TOTAL WAGES TOTAL SUBSISTENCE EQUIP. MEN CLASS.: LOCATION: LABOR NO. WORK DESCRIPTION: DATE: 03/30/1999 EQUIPMENT DESCRIPTION HOURS RATE AMOUNT TOTAL LABOR TOTAL EQUIPMENT OTHER QUANTITY DESCRIPTION UNIT PRICE AMOUNT TOTAL OTHER REMARKS SUBMITTED BY: APPROVED BY: TITLE TITLE Expedition .: CURRENCY: BC NO.: CONTRACTOR: COMPANY: JOB NO. NO.Daily Report of Force Account Work CONTRACT NO.: CHANGE NOTICE/CHANGE ORDER/AMENDMENT/ WORK ORDER NO.

In this case. liquidated damages serve as a limitation on a contractor's liability. However. this will be the sole measure of damages. liquidated damages are used to assess a party's liability on a daily basis for failure to meet schedule milestones or the contract completion date. the courts will nevertheless enforce the parties' original agreement. penalties are normally strictly enforced. under the French code. For example. whereas the German code applies a reasonableness test. will not enforce the parties’ agreement on the basis that the law will not give effect to a "penalty. There has to be a clear understanding of what the deliverable is and when it is required. Provided the contract states that the liquidated sum represents the contractor's entire liability for the identified performance failure.) International Work: In Civil Law jurisdictions (the majority of nonCommon Law states and specifically in the developed countries of continental Europe and their former colonies) penalties are permitted. application of these guidelines are also the best way to meet Civil Law requirements. Where the measure of damages has been agreed in advance (liquidated). They are also sometimes applied to a contractor's failure to meet specified performance criteria. 7. However. the only real controversy will be whether damages are due (entitlement) and not the amount. SPECIAL TOPICS LIQUIDATED DAMAGES Page 49 of 67 .7 LIQUIDATED DAMAGES Many contracts provide for liquidated damages as the measure of damages contractually agreed by the parties as just compensation for a party's failure to satisfy a term of the contract. Although this approach permits greater flexibility in setting liquidated damages. Civil Law courts will vary in determining their validity. Typically. In the absence of an agreement stipulating the liquidated damages or any other contractual limitation." (Where the actual damages turn out to be more or less than the stipulated liquidated damages.7 SECTION 7. Parties to a contract may stipulate in their contract the amount of damages ("liquidated damages") that will be paid where the harm which will be caused by the breach is difficult to assess accurately and the parties have in good faith endeavored to make a reasonable estimate. The inclusion of liquidated damages clauses in a contract makes it imperative that the deliverables associated with the liquidated damages be carefully monitored and damages collected when milestones are missed.7 SPECIAL TOPICS 7. realistically it may require litigation to recover damages from the contractor to the extent the damages exceed retention or other amounts owed to the contractor. Common Law courts (primarily in those nations deriving their legal system from England). the contractor may be fully liable for all of the actual damages (including indirect or consequential) resulting from its failure to perform. Unless this condition is met.

SPECIAL TOPICS LIQUIDATED DAMAGES Page 49a of 67 .7 SECTION 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Enforcement of liquidated damages will require thorough documentation of the contractor's failure to achieve the pre-established milestone activity or performance criteria. Changes and time extensions will generally require modification to the liquidated damages dates. 7.

has requested a schedule adjustment. The analysis shall demonstrate the time impact based on the date the change was given to the contractor. The contractor shall submit a written schedule analysis illustrating the effect of the [change] [delay] [your request] on the current contract schedule completion date. If the contractor's delay or failure to give notice prejudices the company's ability to take alternative courses of action. Some contracts specifically address whether the contractor is also entitled to compensation to recover its costs incurred as a result of certain delays. the status of construction at that point in time. 7.8 DELAYS AND EXTENSIONS OF TIME Often events outside of a contractor's control or conditions arise which cause delay (e. It is also the contractor's obligation to support any such request to your satisfaction. in accordance with article _______. this can be grounds for denying the contractor additional time. even if it is uncertain whether the contract schedule will be extended or delayed. Suggested response to a contractor request for time extension: "The contractor. and the event time computation of all affected activities. Time extensions are only to be provided when the schedule critical path is impacted. The contract generally provides that when these events or conditions occur the contract completion date can be extended.8 SECTION 7. use of float. Once time extensions have been agreed with the contractor. A contractor's notice of delay should be followed by the contractor's request for a specific extension of time. they must be incorporated into the contract by Change Order. Analyzing delays and requests for extensions of time is frequently difficult. SPECIAL TOPICS DELAYS AND EXTENSIONS OF TIME Page 50 of 67 . The contractor is typically required to give written notice to you when an event or condition occurs which has the potential to delay any portion of the work. In most cases a clear analysis cannot be performed without having an approved critical path schedule available as a baseline. The schedule analysis shall include a network analysis demonstrating how the contractor proposes to incorporate the [change notice] [delay] [your request] into the contract schedule.g. The event times used in the analysis shall be those included in the latest updated copy of the detailed progress schedule or as previously adjusted by mutual agreement.7 SPECIAL TOPICS 7.. acts of God commonly referred to as "force majeure" events or your delays) to the contractor’s completion schedule.

Therefore. the advice of experienced schedulers. the contractor may be unable to recover its acceleration costs. if a delay on a fixed price project is a contractor-caused delay.e. (Refer to Special Topics Section 7. the concept of concurrent delays applies to only those portions of the delays that actually overlap.8 SECTION 7. the additional costs incurred by the contractor would be to you or your customer’s account (even though the contractor's delay was concurrent with your’s).CONTRACT/SUBCONTRACT MANAGEMENT MANUAL If the request for an extension to the schedule is denied by you (e. If a critical path delay is caused by (or is the responsibility of) one party. concurrent delay analyses can be complicated. If the contractor accelerates the work to meet the project schedule without first providing notice to you giving you the option to have project completion extended or alternatively pay the acceleration costs. First. However. Their implications for contract management are important to understand. the contractor can treat your refusal to grant an extension of time as a direction to accelerate the work to maintain the original schedule..) If there are two delays (occurring simultaneously and with the same delay to the critical path) and one is the responsibility of the contractor and the other is the company's responsibility. and if you denied this request and subsequently the contractor accelerated the work to maintain the original contract schedule. Obviously. SPECIAL TOPICS DELAYS AND EXTENSIONS OF TIME Page 51 of 67 . For example. in the absence of any other circumstances. Third. sometimes all or a portion of one delay may overlap or occur concurrently with all or a portion of another delay. If the contractor was actually entitled to a time extension. One of the more difficult and complex aspects of delay analysis is the resolution of concurrent delays.2 "Basis for Claims" pg. Any preceding and succeeding portions of either delay are the responsibility of the party causing that delay. the contractor is faced with three courses of action.g. the contractor can accept the decision and proceed. an "excusable delay" equivalent to force majeure). 22. claims analysts and legal professionals should be 7. Such delays are referred to as "concurrent". each party must bear the financial consequences of the delay but the contractor would typically be entitled to a time extension for the duration of the delay (i. the contractor may have grounds for cost recovery associated with the acceleration effort. that party bears the responsibility for the delay. Second. the contractor would be responsible for the additional costs necessary to make up for the delay (or be responsible for you or your customer's actual damages or contractually specified liquidated damages to the extent project completion is delayed). Generally. If you were to refuse to grant a time extension and the contractor was compelled to accelerate its work to meet the original schedule. contractor-caused or controlled).. the contractor can advise you that its wrongful refusal to grant an extension of time will result in the project being completed later than originally scheduled.

7. are the fault or responsibility of the contractor) must be overcome by the contractor by accelerating the work. or between early finish date and the late finish date.e. you may decide not to direct the contractor to complete on time and not to extend the schedule pending a complete schedule review.. you may be entitled to actual damages sustained by you or your customer because of the contractor's inexcusable delays.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL sought when concurrent delay issues arise. Contractor delays which are not excusable (i. Float Ownership Activity delays shall not automatically mean that an extension of the contract completion date is warranted or due the contractor. Otherwise. for each and every activity in the schedule. Section 7. (Refer to Special Topics. the contractor may accelerate the work and attempt to charge the resulting costs of acceleration to you. A Change Notice or delay may result in only absorbing a part of the available total float that may exist within the schedule. Alternatively. Total float is defined as the amount of time between the early start date and the late start date. 15-23. A Contract Change Notice or delay may not affect existing critical activities or cause non-critical activities to become critical. if liquidated damages are not specified in the contract.2 "Basis for Claims" pps.9 "Acceleration". SPECIAL TOPICS DELAYS AND EXTENSIONS OF TIME Page 52 of 67 . A dispute may arise with respect to entitlement for an excusable delay. If an event occurs that the company does not agree warrants an extension (but the project is not disadvantaged by the contractor's delay). the contractor may want to rely on its claimed entitlement and complete the work based upon a schedule extended by the period of excusable delay. Float is not for the exclusive use or benefit of either you or the contractor. Depending on the circumstances. thereby not causing any effect on any interim milestone date or the contract completion date. see Section 7.) Note: For additional discussion on delays. you may be entitled to assess liquidated damages at a specified amount per day of delay (if the contract so provides). Such damages may be withheld from the contractor's retention or amounts otherwise due to contractor.8 SECTION 7. Extensions of time to interim milestone dates or the contract completion date under the contract will be granted only to the extent that equitable time adjustments to the activity or activities affected by the Change Notice or delay exceeds the total float of the affected activity or subsequent paths and extends any interim milestone date or the contract completion date. Alternatively.

before entitlement is established. (The term "constructive acceleration" is sometimes used to describe the situation where a contractor is denied valid time extensions and is forced to accelerate its efforts to meet the original schedule. if you have by your conduct or unreasonable delay in responding to the contractor's request made it clear that no extensions would be granted).2 "Basis for Claims" pg. unless it would be useless to do so (for example.) Certain steps must be followed. the contractor is entitled to an equitable adjustment for its acceleration costs if you order the contractor to accelerate the work. 7. The contractor must then actually accelerate the work. yet all costs expended in good faith will be compensable.) Ÿ Ÿ Ÿ Unless these steps are carefully followed giving you the opportunity to decide whether it is willing to extend completion of the project or alternatively whether it will pay for the costs of acceleration. In this case. (The acceleration effort need not be entirely successful. 25.9 ACCELERATION The contract Changes article in a typical contract establishes your right to accelerate the work. the contractor may be able to claim that it has been constructively accelerated. passage of a reasonable period of time with no response) denial by you. SPECIAL TOPICS Page 53 of 67 . A good faith and reasonable attempt is all that is required. or major changes are added to a contractor's scope and the company refuses to grant an extension of time.9 ACCELERATION SECTION 7. (Reference Special Topics Section 7.SPECIAL TOPICS 7.) Upon either express or implied (for example. where there was an excusable delay based on force majeure. or does so indirectly by not granting a time extension when the contractor is otherwise entitled to an extension. the contractor may not be able to recover its costs for accelerating the work.) The contractor must request a time extension. or your delays. Whether the contract contains an acceleration provision or not.8 "Delays and Extensions of Time" and Section 7. the contractor must notify you that the denial (or lack of timely response to the request) will cause the contractor to accelerate the work and that the cost of doing so will be for your account. (For example. however. The steps which the contractor must follow to establish the basis for recovering its acceleration costs are the following: Ÿ The contractor must be properly entitled to an extension of time.

10 SUSPENSION OF WORK Occasions arise when it is necessary or desirable to suspend all or some portion of a contractor’s work without a known date for resumption. force majeure conditions where continued work would create unacceptable safety conditions of undetermined duration. (3) full cooperation and mitigation of impact by the contractor.” The suspension clause normally authorizes (1) complete or partial suspension. project interface conflicts with others of uncertain duration..7 SPECIAL TOPICS 7. pursuant to the General Condition titled “Changes” and within ten (10) calendar days after receipt of notice to resume work. and what preservation measures are to be taken. Unlike some contract clauses. Typical reasons for suspension include: − − − Unsatisfactory or defective performance by the contractor requiring an indefinite period of time to fix the problem.10 SECTION 7. and (6) equitable adjustment in price and schedule for the unavoidable impact of suspensions on performance. (4) the obligation to resume as instructed. (5) contractor liability for suspensions required to remedy its own problems. what is to continue. the typical 7. (2) flexibility in the definition of what is to stop. suspend at any time the performance of all or any portion of the Work to be performed under the contract.. submit the required written notification of claim and within twenty (20) calendar days thereafter its written proposal setting forth the impact of such claim. If the period of suspension is known with some certainty. SPECIAL TOPICS SUSPENSION OF WORK Page 54 of 67 . changes or performance problems caused by the customer requiring significant replanning before work can continue in a cost effective manner. If Contractor intends to assert a claim for equitable adjustment under this clause it must. which deny profit or suspension costs or disallow adjustments for impact on the cost of the work when resumed. in part: “You may by written notice to Contractor. then the Changes clause is the proper authority to modify the contract period of performance. − A typical suspension clause reads.

Any notice to suspend or to resume work must be in writing from your authorized representative. SPECIAL TOPICS SUSPENSION OF WORK Page 54a of 67 . Suspension caused by contractor problems should cite the nature of contractual liability for such problems and should describe a course of action required to lift the suspension. Suspension notices should be absolutely clear when issued to define the scope of the suspension and any special instructions.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL clause allows full equitable adjustment and must therefore be carefully coordinated with the provisions of your prime contract. 7.10 SECTION 7. You do not want to unknowingly give a contractor a benefit that you do not have in your prime contract.

Videotapes and photographs are useful ways to record the conditions which were encountered and the actions taken. 7. you have been precluded from directing a more cost-effective approach.7 SPECIAL TOPICS 7. the contractor may still have entitlement.11 DIFFERING SITE CONDITIONS One of the most common types of variation. Note: Refer to Special Topics Section 7. or which are of an unusual nature and differ from those ordinarily encountered and inherent in the type of work being performed under the contract.2 "Basis for Claims" pgs. is the differing site condition. a misrepresentation of the nature of a structure to be demolished. One. but most contain the same elements. The typical Differing Site Conditions clause provides for additional compensation and time to the contractor if its costs increase or it is delayed as a result of conditions which differ from those indicated in the contract. There are two reasons for timely notification. Second.) The contractor must provide written notice of a differing site condition immediately after its discovery.11 SECTION 7. . you must be given the opportunity to make its own assessment of the conditions encountered before they are disturbed. other conditions at the site different from those represented in the contract or by the customer may be the basis for a claim for additional time or money (e. in the event you concur that there is a differing site condition but the contractor has undertaken on its own a costly solution to deal with the conditions.g. If you have misrepresented the conditions. SPECIAL TOPICS DIFFERING SITE CONDITIONS Page 55 of 67 .. or has withheld pertinent information from the contractors bidding the project. 12 & 13. Contract clauses vary concerning entitlement. as well as one of the most contentious. Even if the contract does not contain a Differing Site Conditions clause. the contractor may still be able to recover the costs and time resulting from the differing site conditions which were encountered. Although differing site conditions generally involve subsurface soil conditions.

12 TERMINATIONS 7.12. in whole or in part.7 SPECIAL TOPICS 7. First. the bonding company must be: 1) Copied when the Cure Notice is sent.1 Purpose This procedure describes the process for terminating the services. For these reasons (and others) reconsider carefully any threats or actions taken that will be perceived as precursors to termination for default." Although the Termination article may refer to the Changes article for determination of compensation.12. these notices maintain focus and attention on intermediate potential failures and help avoid an accumulation of such failures leading to significant schedule or quality problems. Notices and instructions relating to terminations can be especially significant and contract provisions must be strictly followed. 7. in a termination for default for which you expect the contractor's bonding company to be financially responsible.12 SECTION 7.g. should actual termination be necessary and appropriate.3 Procedure Termination for Convenience (Optional Termination) Under many contracts. Termination for default is generally an act of desperation and is generally undertaken in the heat of battle. SPECIAL TOPICS TERMINATIONS Page 56 of 67 .. This word of caution is not intended to dissuade projects from liberal use of notice letters. either for default or for convenience (optional termination for you or your customer's convenience). Termination for 7.12. long range implications and must have adequate management and legal review to ensure an understanding of probable liabilities and to evaluate direct hire or contracting alternatives to achieve project objectives. of contractors. Wrongful or improper default termination procedures may result in the loss of contractual remedies and protection. 7. 2) Copied when the Default Notification is sent.1 for a sample). pointing out items of potential concern (reference Exhibit 7. e.12. Contract provisions are normally written to define specifically the administrative process and to describe or limit the recovery of damages. In addition. the intermediate notices assure you have not waived your rights by tacit acceptance of the intermediate failures. you have the right to terminate all or a portion of the incomplete work under a clause entitled "Termination for Convenience" or "Optional Termination. Second.2 Discussion Terminations have potentially significant. Keeping a contractor on notice that schedule milestones must be met or that quality concerns must be resolved accomplishes two objectives. and 3) Given an opportunity to complete the work.

Request the contractor to submit a termination settlement claim in accordance with the terms of the contract.) Schedule a discussion with the contractor to communicate the termination. For this reason. 7. to initiate/review the contractor's demobilization plan.3-A for a sample Termination For Convenience Letter. no prior notice is required as no "cure" is desired) stating exactly what is terminated and the effective date of termination. Typically. (Reference Exhibit 7. financial).CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Convenience clauses normally have specific provisions defining the contractor's entitlement. the clause which is applicable depends upon the scope and magnitude of the portion terminated/deleted. as appropriate. a summary of current contract progress and status (cost. SPECIAL TOPICS TERMINATIONS Page 57 of 67 . the customer. Prepare a package describing the circumstances which prompt consideration of a contract termination for convenience (including why termination for default is not appropriate) and the contractual basis for this recommendation. it is important to calculate the adjustment using each approach and then to encourage settlement of the adjustment on terms most advantageous to you. Generally. the Termination for Convenience clause should be carefully examined to determine which costs (direct and indirect) the contractor would be entitled to recover upon termination. Include any appropriate instructions such as those suggested below. a draft of the termination letter.12. Obtain required Management approvals before notifying the contractor. Notify the contractor (only once. and a contingency plan for completing the work (if work has not been deleted). a plan explaining the benefits and recommendation shall be prepared for review and approval by management and. and to review the contract close out procedures. Another mechanism to delete work from the contract is a deductive change order.12 SECTION 7. If in the best interests of the project it is desirable to terminate (in whole or in part) a contractor's work for convenience. Since the decision of which approach to take can have significant financial consequences for you. schedule. The adjustment for a termination for convenience is typically based on the contract price for the work terminated. the adjustment for a deductive change is based on "what it would have cost" to perform the deleted work. The decision whether a scope reduction is a deductive change or a convenience termination is not simple and there are no clear guidelines for making such a determination.

3 for sample Cure Notice Letters.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Prepare a Contract Amendment describing the terminated work. and 7. financial). If the decision is to terminate for default. Include a chronology of events and correspondence and the current status of the event(s) leading to the termination. and establishing the modified or final contract price and schedule (with appropriate release language). and a contingency plan for completing the work. Notify the contractor and its surety of the defect or non-performance and your intent to partially or entirely terminate for default and provide a reasonable opportunity in the notice for the contractor to remedy the problems.2. the following steps will be taken: If grounds for default appear to exist. 7. The plan must provide for the contractually required notices and opportunity to cure the existing default. Termination for Default (Termination for Cause) Appropriate grounds for termination for default are normally set out in the contract and include continued and uncorrected defective work. Termination for default requires extensive Legal and management involvement. failure to make progress and insolvency. as appropriate.3-C for a sample 7. SPECIAL TOPICS TERMINATIONS Page 58 of 67 .12. schedule. Prior to taking action that leads directly to a termination for default.3-B. Prepare a package containing the descriptive statement.3-B. failure to complete. a proposed scope and justification together with an alternative source plan shall be prepared and reviewed and approved by you and.12 SECTION 7. produce a second notice stating exactly what is terminated (refer to Exhibit 7. including an assessment of the likelihood that the surety will elect to complete the work.) If the problems are not resolved. customer management.12. (Refer to Exhibits 7. a summary of current contract progress and status (cost.12.12.3-B. It is important that this document accurately and fairly reflect your position and the contractor's position. proceed with the following steps: Prepare a brief document describing the circumstances which prompt consideration of a contract termination for contractor default and state the contractual basis for this recommendation.1. incorporating the negotiated settlement.

Include any appropriate instructions regarding: • • • • • Demobilization of personnel Retention of equipment.1.3-B. Arrange for inspections.3-C) Contract Termination Checklist/Termination for Convenience (Exhibit 7.5-B) 7. and establishing the modified or final contract price and schedule.12.12.12.3-A) Cure Notices [Sample] (Exhibits 7.12. Prepare a Contract Amendment describing the terminated work.3-B. incorporating the negotiated settlement of any termination claims or counterclaims.3-B.12. SPECIAL TOPICS TERMINATIONS Page 59 of 67 .12.12.12 SECTION 7. Provide the surety a reasonable period to initiate completion of the work.5 Checklists 7.12.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Default Termination Notice Letter) and the effective date of termination.4 Exhibits Notice Letter — Schedule Submittal Unacceptable [Sample] (Exhibit 7. and 7. tools and materials Turnover or transition of work to others Cancellation or assignment of purchase orders and subcontracts Protection of work in progress Establish a force account for record purposes and accumulate costs incurred as a result of the default (including reprocurement) for future claims against the contractors or its surety. Proceed with the alternative plan as authorized by management.12.1) Termination for Convenience Letter [Sample] (Exhibit 7. 7. 7.12.2. inventory and documentation of progress at the time of termination.3) Termination for Default Letter [Sample] (Exhibit 7.5-A) Contract Termination Checklist/Termination for Default (Cause) (Exhibit 7.

12. dated ________ Dear _______________: The referenced submittal contains proposed schedule dates which do not meet the contract milestone dates. within five (5) days.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Notice Letter — Schedule Submittal Unacceptable [SAMPLE] (EXHIBIT 7.1) [Date] [Contractor .12 SECTION 7. a revised submittal which reflects completion of contract work in accordance with the contract milestone dates. Very truly yours. Please take appropriate action to recover the schedule and submit. 7. ______. The proposed dates are not acceptable. SPECIAL TOPICS TERMINATIONS Page 60 of 67 .Formal Notice Address] Attention: Reference: [Contractor's Authorized Representative] Schedule Submittal [Letter]/[Transmittal] No.

sub-tier suppliers and subcontractors. contractor's Surety is also advised of this Notice.3-A) [Date] [Contractor . that the contract is terminated for convenience. entitled OPTIONAL TERMINATION.* [Provide specific instructions with respect to disposition of work in progress. and similar direction. delete the reference to the bonding company and the cc.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Termination for Convenience Letter [SAMPLE] (EXHIBIT 7. 7. cc [Surety Bonding Company] registered letter * If the contract has no performance bond. in accordance with the termination article.12. SPECIAL TOPICS TERMINATIONS Page 61 of 67 . Article __.12 SECTION 7.Formal Notice Address] Attention: Subject: [Contractor's Authorized Representative] Termination for Convenience Dear _______________: [Contractor's name] is hereby notified in accordance with the General Conditions.] Very truly yours. By copy of this letter.

CONTRACTOR shall be considered in default of its contractual obligations under this contract if it abandons or refuses to proceed with any or all work. if refusal is by letter] [by its actions..* Very truly yours cc * [Surety Bonding Company] registered letter If the contract has no performance bond. The Contract General Conditions. This letter is formal notice that [contractor's name] is to demonstrate by its actions that it intends to comply immediately with the direction." [Contractor's name] has indicated. if contractor just declines to accept work.Formal Notice Address] Attention: Reference: [Contractor's Authorized Representative] 1. "whether or not contractor considered such action to be a change. instructions. including modifications directed pursuant to the clause entitled 'CHANGES'. provides.3-B. in part: ". contractor's Surety is also advised of this Notice. and further.. entitled CONTRACT INTERPRETATION. Article __. Article __." The contract General Conditions.12. [Reference 2. that [contractor's name] is to provide within three (3) days. By copy of this letter. but will not formally acknowledge its refusal] that it does not intend to proceed with the direction in Reference 1. delete the reference to the bonding company and the cc.12 SECTION 7. in part: "At all times CONTRACTOR shall proceed in accordance with the work in accordance with the determinations. 7. written confirmation of its intent to comply with the company's direction. provides. [Company's Direction Letter] 2.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Cure Notice — Refusal to Proceed [SAMPLE] (EXHIBIT 7. entitled TERMINATION FOR DEFAULT. [Contractor's Refusal Letter] Dear _______________: Reference 1 directed [contractor's name] to take action to correct repeated quality deficiencies in its work.1) [Date] [Contractor . and clarifications of COMPANY." It is the company's determination that the reference direction is appropriate. SPECIAL TOPICS TERMINATIONS Page 62 of 67 .

the number of shifts.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Cure Notice — Schedule Performance Endangering Contract Milestones [SAMPLE] (EXHIBIT 7. the number of shifts.12 SECTION 7.... provides.." The Contract Special Conditions.Formal Notice Address] Attention: [Contractor's Authorized Representative] Dear _______________: The company has determined that [contractor's name]'s performance is endangering the contract milestone dates. 7. Article __." [Contractor's name] is directed to take appropriate action to recover the schedule and to submit. provides.] By copy of this letter. PROGRESS AND COMPLETION OF THE WORK. entitled TERMINATION FOR DEFAULT. fails to make progress so as to endanger performance of this contract. delete the reference to the bonding company and the cc.CONTRACTOR shall be considered in default of its contractual obligations under this contract if it. entitled COMMENCEMENT. overtime operations. entitled COMMENCEMENT... additional days of work per week and an increase in the amount of construction plant as is necessary to achieve the contract milestone dates. The Contract Special Conditions. overtime operations.12. [Provide details whether contractor is specifically directed to increase its labor force. contractor's Surety is also advised of this Notice. and an increase in the amount of construction plant and equipment. expedited shipment(s) of equipment and materials." The Contract General Conditions.3-B. Article __. CONTRACTOR'S actual progress is inadequate to meet the requirements of this contract. in part: ". in part: ” If within a reasonable period as determined by COMPANY. Article __. SPECIAL TOPICS TERMINATIONS Page 63 of 67 . a revised submittal which reflects completion of contract work in accordance with the contract milestone dates. within three (3) working days. all without additional cost to COMPANY. provides in part: "If at any time. COMPANY may require an increase in CONTRACTOR’S labor force.. CONTRACTOR does not improve performance to meet the Contract Milestones . COMPANY may notify CONTRACTOR to take such steps as may be necessary to improve its progress. PROGRESS AND COMPLETION OF THE WORK.2) [Date] [Contractor . additional days of work per week.* Very truly yours cc * [Surety Bonding Company] registered letter If the contract has no performance bond.

CONTRACTOR shall be considered in default of its contractual obligations under this contract if it. within three (3) days.. provides.fails to make progress so as to endanger performance of this contract.3-B. dated ________ Dear _______________: The referenced submittal contains proposed schedule dates which do not meet the contract milestone dates. 7.. entitled TERMINATION FOR DEFAULT. ______. CONTRACTOR'S actual progress is inadequate to meet the requirements of this contract. Article _____. a revised submittal which reflects completion of contract work in accordance with the contract milestone dates. By copy of this letter..Formal Notice Address] Attention: Reference: [Contractor's Authorized Representative] Schedule Submittal [Letter]/[Transmittal] No." The Contract General Conditions.* Very truly yours cc * [Surety Bonding Company] registered letter If the contract has no performance bond. SPECIAL TOPICS TERMINATIONS Page 64 of 67 .12. contractor's Surety is also advised of this Notice. The proposed dates are not acceptable." [Contractor's name] is directed to take appropriate action to recover the schedule and to submit.. in part: ".3) [Date] [Contractor . Article ____..12 SECTION 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Cure Notice — Schedule Submittal with Unacceptable Milestones [SAMPLE] (EXHIBIT 7. delete the reference to the bonding company and the cc. PROGRESS AND COMPLETION OF THE WORK. entitled COMMENCEMENT. COMPANY may notify CONTRACTOR to take such steps as may be necessary to improve its progress. in part: "If at any time.. provides. The Contract Special Conditions.

] Very truly yours cc [Surety Bonding Company] registered letter * If the contract has no performance bond. Article __.3-C) [Date] [Contractor . The Surety has ten (10) days from the date of receipt of this letter to respond with respect to its intent to complete the work. and is hereby notified in accordance with the General Conditions. in accordance with items (g) through (k) of the termination article. 7. delete the reference to the bonding company and the cc. SPECIAL TOPICS TERMINATIONS Page 65 of 67 .Formal Notice Address] Attention: Subject: Reference: [Contractor's Authorized Representative] Termination for Default [Company's Cure Notice Letter] Dear _______________: The reference letter. By copy of this notice. sub-tier suppliers and subcontractors.* [Provide specific instructions with respect to disposition of work in progress.12. provided specific instructions and a schedule to cure a material breach of the contract. contractor's Surety is also advised of this notification of termination for default. TERMINATION FOR DEFAULT that the contract is terminated. [Contractor's name] has not cured the failure.12 SECTION 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Termination for Default Letter [SAMPLE] (EXHIBIT 7. copy attached. and similar direction. The period for curing the failure has lapsed.

Comments: YES NO 6.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Termination Checklist/Termination for Convenience (EXHIBIT 7. Alternate work completion plan has been prepared and approved. Comments: YES NO 7. Comments: YES NO 5. Company management and Legal have approved the termination package.12 SECTION 7. Comments: YES NO 3. Comments: 8.5-A) Contract Contractor:____________________________________ Contract Scope: Number:__________________________ This checklist is not for terminations for default 1. if any have been obtained. SPECIAL TOPICS TERMINATIONS Page 66 of 67 . The contract terms for termination have been reviewed and are understood. Comments: YES NO 2. A termination package has been prepared. The Site Manager has approved the contract termination package. Comments: YES NO YES NO Name:____________________________________________ Date:________________________________________ 7. Other required approvals.12. Comments: YES NO 4.

12 SECTION 7. Number:__________________________ 1. Company management has approved the termination package. Comments: YES NO 9. A detailed description with adequate supporting back up of why the contract is being terminated (termination package) has been prepared. A contingency plan has been prepared to deal with the results of the contract termination addressing work completion. The Site Manager has approved the contract termination package. Other required approvals have been obtained. Comments: YES NO 6. Comments: YES NO 2. Comments: YES NO 4.12. Comments: YES NO 3.5-B) Contract Contractor:____________________________________ Contract Scope: This checklist is not for termination for convenience. The contractor has been given a Notice of Default with a reasonable period to "cure" the default. The Legal Department has reviewed the termination package. Contractor's Surety has been contacted to determine when/whether it will complete the work. The contract terms for termination have been reviewed and are understood.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Contract Termination Checklist/Termination for Default (Cause) (EXHIBIT 7. Comments: YES NO 7. Comments: YES NO 8. SPECIAL TOPICS TERMINATIONS Page 68 of 67 . Comments: YES NO 5. Comments: YES NO 7.

SPECIAL TOPICS TERMINATIONS Page 69 of 67 .12 SECTION 7.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Name:____________________________________________ Date:________________________________________ 7.

Selection of environmentally compatible construction materials (such as aerosols. The potential cost of compliance activities.13. and international environmental regulations and public concerns has increased the need for environmental planning for construction projects of all kinds.13. as well as the potential of later cleanup costs.3 Phase I Planning The effectiveness of the initial planning will set the tone of the project. 7. and layout with environmental requirements.7 SPECIAL TOPICS 7. should include such topics as: 7. Environmental planning and control goes beyond basic compliance with applicable regulations. has the potential to expose both the company and its employees to civil and or criminal liability. organizations and authorities that have cognizance over the various environmental aspects of a project. the compatibility of the project location.13. design.1 Purpose The proliferation of federal. penalties and imprisonment. the project designers. Research may be required to identify significant legislative or community requirements that may affect the project but which are not mentioned in the bid documents. and the time required to obtain permits. and biodegradable materials) will simplify disposal of construction debris and reduce the cost of handling. even where inadvertent. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 1 of 9 . Clear understanding of the areas of responsibility and authority among the customer. 7. Their overlapping and sometimes conflicting requirements must be factored into the early planning of a project. local. followed by carefully monitored implementation. Failure to comply with environmental laws and regulations. Working with your environmental specialists. Successful projects are based on early planning.13 PROJECT ENVIRONMENTAL CONTROLS 7. the proposal and project managers should review the Request for Proposal for environmental requirements.2 Overview Strategic Planning Environmental Controls planning begins during the project proposal or bid cycle.13 SECTION 7. The Project Division of Responsibility. as shown in the attached Matrix (Exhibit 7. agency reviews and other approvals are important elements in evaluating a prospective project.13. often reduced to a matrix for ease of understanding. Complicating the planning process is the multitude of agencies. and the constructor is essential. including fines. state. Constructability reviews of the design and planning of construction work methods can effectively integrate the necessary personnel and processes for environmental compliance and reduce the production of waste products.2 ). recyclable containers.

or viability. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 2 of 9 . those you are responsible to obtain (if any). These environmental issues or constraints are important to identify early to determine if any are incompatible with the project development basis. This information assists in the identification of those which the customer or Project will obtain. Implementation of the ECP begins with design. can avoid the need for certain permits and other approvals. the design team. listing and scheduling applicable permits and licenses that must be obtained by you in the performance of its work.2). (Refer to Exhibit 7. or contractors.13 SECTION 7. if any. Agencies may have conflicting requirements that should be addressed. These issues should be identified and reconciled early in the project planning phase.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL • Applicable Environmental Laws and Regulations The regulations and agencies that will be involved in a project should be identified and the applicability and requirements of each thoroughly understood. design.13. the schedule for the deliverables and responsibility for the preparation of the deliverables. Environmental Design Criteria During initial stages of engineering. • 7. and to avoid unnecessary cost and schedule implications for you. • Environmental Compliance Plan The Environmental Compliance Plan (ECP) establishes the deliverables. • Permitting Plan The final phase of the planning stage is a permitting plan or matrix.13. cost.4 Phase II Design During the design phase of the project. the strategy for environmental compliance established in the planning phase can be integrated into the engineering activities. schedule. have the potential to have a significant impact on the project’s location. environmental design criteria should be identified and incorporated into the design basis as appropriate to facilitate later project review and approval by regulatory agencies. layout. These design criteria are essential to complying with environmental regulations. and in some cases. it is important to maintain appropriate interface between the customer. Environmental requirements are reviewed to identify which. and those which are to be included in the scope of contractors. 7. including feasibility. • Environmental Constraints One of the early steps in project planning or development is the identification of environmental constraints that may affect the project. Those requirements should be considered in developing the project cost and schedule . the customer. In developing the design criteria.

• Environmental Impact Assessments (EIA) Often the customer elects to develop. • Constructability Review As design evolves. Selection of materials and processes should be done with attention to reducing the amount of hazardous waste generated. or techniques that should be addressed during construction planning. If the company has a contractor preparing an EIA. • Permit and License Acquisition The acquisition of permits and other approvals for a project is generally apportioned among the customer. access.13 SECTION 7.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL construction and any contractors. Such requirements also need to be communicated to contractors. qualified labor should be performed. In cases of actual or anticipated shortages that could affect the project. environmental input to constructability reviews can assist in the development of a more effective and constructable design. Environmental review may also identify regulatory requirements that may affect construction schedule. The design team also needs to stay current with design commitments made in the permit applications and requirements associated with permit terms and conditions that must be met in the final design and construction of the facility. Disposal of hazardous waste is a major area of potential long-term liability. and improved maintenance of the completed facility. but will still require support from the project in the form of design details or other information. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 3 of 9 . cost. you. Reviews will typically pinpoint areas of potential over-design. recommendations can be provided for alternative methods or materials that would avoid 7. • Material and Source Selection It is important to review the scope and design criteria of each facility or construction element for materials that can effectively reduce cost and construction duration yet comply with environmental restrictions. Early identification of the information and the dates by which it is required is essential in facilitating the EIA preparation and review process. the progress of permit acquisition should be monitored against the ECP. • Trade and Labor Availability Studies Market and trade studies on the current availability of environmentally sound construction materials and the availability of environmentally trained. increased ease of assembly or installation. it is important to monitor design and schedule commitments made in the EIA and how they may affect cost. as appropriate. Regardless of who has responsibility for obtaining the permits. other contractor(s) and subcontractors. apply for and obtain approval of the project EIA.

cultural resources). must be included in all contracts and. When the project develops the construction contract terms and conditions it must include environmental compliance. • 7. These can be most economically provided when combined into manageable work releases or contract packages. at a minimum. extent. and condition of environmental resources (e. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 4 of 9 . The Project Manager is responsible for having the CECP prepared prior to site mobilization. sensitive plants. with all requirements in it applicable to their work. Contracting Plan The requirements for environmental compliance. • 7. fish and wildlife.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL delays or increased costs of construction. and often must be documented and submitted to an agency(ies) prior to start of construction. in many cases. in material purchase orders. The need for and responsibility for timing of such surveys should be communicated to contractors in advance of construction mobilization to avoid initiation of site activities prior to satisfying these regulatory requirements. Each contractor should be provided a copy of the CECP. It will establish a sequenced schedule for finalizing increments of design and the release of material/equipment acquisition that supports the overall project schedule requirements. which they are solely responsible for determining.g. training and certification requirements.5 Phase III Pre -Construction Construction Environmental Control Plan Prior to the start of construction. as well as all other laws and regulations applicable to their work. it is important to identify regulatory requirements. or at a minimum reviewed by your environmental specialists. Work packaging will determine the most effective grouping of work elements into packages for bid and award using a phased construction approach to minimize the overall onsite duration of these special aids. including flowdown of requirements from the prime contract. These surveys are often required during specific timeframes. and advised that they must comply. may involve approved survey areas and techniques. • Work Subcontract Packaging Often the sequencing of work will require the installation or use of construction aids (such as temporary on-site storage of materials or disposal of wastes). The plan must be prepared.13. • Preconstruction Surveys The terms and conditions of a project’s permits may require projectspecific preconstruction surveys to document the presence.13 SECTION 7.

and to make that clear in the bid package/contract documents. or contractors. and should be carefully complied with by the customer. If the customer is doing the inspection. prior to initiation of site activities.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL • Asbestos Inspection and Notification Whenever your scope of work or that of a contractor involves demolition or renovation. not only at the inception of the project but on a continuous basis throughout the life of the project. • Delineation of Required Exclusion Areas Permits and other regulatory approvals may require protection of sensitive areas or resources through exclusion of specific or all construction activities. written notice is required to the EPA or designated state agency 10 days prior to (1) any demolition or (2) certain renovation activities where asbestos was found to exceed the prescribed threshold levels. If the customer is not conducting the inspection. their survey/inspection report should be attached to the bid documents. or already has. Once the inspection has been conducted. Such requirements should be communicated to contractors so that they do not begin activities before final agency authorizations are received. personnel must acquire specific training for performance of various aspects of the work. • Personnel Training In almost every aspect of construction. In preparing contract documents. • Permit or EIS-required Plans or Submittals Often a project is authorized to proceed with permit conditions that require the preparation. and approval of additional projectspecific environmental plans or documentation prior to the initiation of project construction. it is important to determine whether the customer is going to perform the inspection. submittal. company. The selection of contractors who can provide environmentally trained personnel is critical. Any such exclusion areas should be carefully 7. The development and implementation of an environmental training plan and training records may be a valuable asset to the project. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 5 of 9 . Appropriate training of customer. Both the customer of the building and the “operator” of the demolition/renovation are responsible for this activity. the company should make it clear to the contractor in the bid documents that it is their responsibility to have a licensed asbestos consultant inspect before beginning any demolition or renovation activity. an asbestos inspection must be performed by a certified asbestos contractor prior to commencement of work.13 SECTION 7. your or other project personnel is of equal importance. These requirements are binding on a project. as appropriate.

Site activities include a number of key elements as follows: • Implementation of Construction Environmental Control Plan (CECP) The CECP prepared during the construction planning phase will be implemented with the start of construction jobsite activities.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL delineated and marked (e. flagged. • Document Control and Records Retention Documenting the design. 7. quality and construction performance is a basic project requirement. spills or releases of hazardous substances). construction inspection reports.6 Phase IV Construction The planning and process development actions taken during the planning.13.13 SECTION 7. 7.g. The Site Manager is ultimately responsible for overseeing implementation of the company’s environmental compliance under the day-to-day direction of the Construction Environmental Coordinator designated in the CECP.Project As construction of individual facilities or the overall project nears completion. monitoring of sensitive resources).g. Variances from the plan can then be quickly identified for prompt action.7 Phase V . • Environmental Trends and Cost Control Program Maintain a schedule and cost tracking system that reflects the effectiveness of the project’s environmental control program. Contract management will include oversight that contractors are operating in accordance with the project environmental controls. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 6 of 9 . These requirements should be incorporated into the project document control program to insure that the performance is recorded and maintained in a complete and cost effective manner. First. Second. Routine reporting requirements will be identified in the CECP and should be complied with by jobsite personnel. a wide range of complex functions must be carried out to Completion 7. and the need to avoid such areas must be communicated to all of your and the contractor field personnel. staked) prior to initiation of construction activities. reporting may be required in response to non-routine events on the jobsite (e. design and preconstruction phases of the project will be implemented at the work site. Added to these standard processes should be the documentation of compliance with environmental regulations and the heath and safety status of personnel engaged in the work. • Regulatory Reporting Two types of reporting to regulatory agencies may be necessary on a project.13.g. routine reporting may be required under permit or other approval conditions (e. as appropriate. Reporting requirements should also be communicated to contractors.

13 SECTION 7. if possible. A series of final inspections. Major components of the closeout phase include: • Surplus Materials and Waste Disposal As the construction site demobilizes. and should be included in contractor communications as applicable. • Post-Construction or Startup Monitoring Permits and other regulatory approvals may include conditions specifically requiring monitoring during post-construction or startup activities. and should be communicated to contractors whose work may be affected by such requirements. • Restoration or Revegetation Restoration and revegetation activities must be performed to meet all specifications in project-approved plans and permits.8 Exhibits 7. Part of the final inspection process may involve site visits by responsible environmental agencies. used petroleum products. and/or sign-off by agencies. coolants. Completed contractor releases should be received before acceptance of the contract. and turnovers to the customer should be planned and implemented in a smooth sequence. These requirements must be satisfied as specified. Special regulatory requirements apply to the transport and disposal of hazardous waste.CONTRACTS/SUBCONTRACT MANAGEMENT MANUAL demonstrate to the customer that the technical. Disposal records created by the project should be flagged for retention in the project files in accordance with the document retention policy. acceptance of completed contractor work. Material requiring manifesting or disposal at a qualified landfill require special documentation. inspection by. coatings and similar materials require special handling. special care is required during disposal of surplus materials and construction waste and debris. • Final Inspections and Turnover As part of project completion. These activities should. SPECIAL TOPICS PROJECT ENVIRONMENTAL CONTROLS Page 7 of 9 . These materials must be disposed of in accordance with the Construction Environmental Control Plan. be scheduled well enough in advance of the planned completion date so that unnecessary delays are avoided. These requirements will be identified in the project’s CECP. Restoration and revegetation plans and approval also may require documentation to. 7. the documented closeout of environmental requirements plays an important role in reducing any exposure of you or the customer to future costs or legal liability. The information and documents gathered during the preceding phases of the project are utilized to close out the project smoothly and effectively.13. financial and contractual requirements of the constructed work have been completed in an integrated manner. Disposal of solvents.

Section 4. 10 Breach of Implied Warranty.INDEX Acceleration of work. Section 3. pg 58-63 Backcharge Log. pg 32 Payment Bonds. pg 60 Notice of Backcharge Completion.2 Bonds Advance Payment Bonds. pg 1. pg 30-32 Performance Bonds. pg 22-24 INDEX Page 1 of 7 . Section 3. pg 5 Lien Bonds. 7 Accidents (See Insurance) Action Checklists (See Checklists) Advance Payment Bonds. pg 61 Daily Summary of Backcharge Work. Section 3. pg 32 Breach of Contract. Section 4. pg 30-31 Credit Review. pg 30-32 Warranty Bonds. Section 6. 15 Punch List. Section 7. 50. pg 32 Maintenance Bonds. pg 30 Extra Work. Section 3. Section 3. Section 7. Section 3. 53 Acceptance. Section 4. Section 3. pg 62 Notice of Backcharge. Section 4. pg 31 Bid Bonds. pg 19-22 Bid Clarification Meeting. Section 4. pg 9. 52. Section 3. returning. Section 7. Section 6. 6. Section 3. pg 1. pg 8 Amendments (See Changes) Backcharges. Section 3. pg 10-13. pg 24. Section 4. pg 63 Beneficial Occupancy. pg 53 Constructive Acceleration. Section 6. Section 7.

Section 6. pg 4. 7 Commitment Approvals (See Commitment Approvals) Company Initiated. 7 Certificate of Final Payment (See Closeout) Certificate of Payment. 5 Cost Records For Changes. Section 4. 6 Certificate of Final Acceptance. pg 23 Impact/Ripple. Section 4. Section 7. pg 7-10. pg 13. Section 4. Section 4. pg 29-34 Price Adjustment. 4 Contractor Initiated. Section 4.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Certificate of Acceptance. Section 4. pg 40 Schedule Adjustment. pg 19 Change Notice Change Notice Form. Section 4. Section 4. pg 1. Section 4. 16-19 Negotiations. 20 Equitable Adjustments. pg 6-7 Change Order Change Order Form. pg 11. Section 6. pg 1. Section 4. Section 4. Section 4. 13.12 Definition.16 Changes. pg 19 Procedure. Section 4. Section 4. Section 4. Section 4. 18 Definition. pg 4-5. Section 4. pg 13 Procedure. Section 4. Section 4. pg 6. pg 1 Log. pg 10 Daily Summary of Time and Material Work. pg 1. Section 4. pg 2. Section 4. pg 1-26 Amendments Amendment Form. pg 3. pg 14 Release Language. Section 4. pg 7 INDEX Page 2 of 7 . pg 2 Log. 23 Extra Work (See Extra Work) Flowchart.2 Log. pg 21 Directive to Proceed. Section 7. pg 7-9 Proposals Log. Section 4. pg 24-25 Log. pg 17. pg 5. Partial. Section 4. Section 4. pg 15-16 Definition. Section 5. Section 7. pg 25 RFI's Not To Be Used For Changes.

Section 5. Section 5. pg 38 Invoice Processing. 5 Demobilization (See Demobilization) Files. pg 12-28 Flowchart. pg 1. pg 27-36 Commitment Register. pg 27-36 Commitment Authorization. pg 1-9 Certificate of Final Acceptance. 7 Checklist. Section 7. pg 4 Coordination Meeting. 49 Closeout. pg 8. Section 7. Section 5. Section 4. Section 6. Section 3. pg 20 Inspection (See Inspection) Lien. Section 5. 8 Substantial Completion (See Substantial Completion) Completion. Section 6. pg 20. Section 5. pg 11 Technical Transmittals. pg 1. Section 6. pg 20 Labor Relations. Section 3. pg 45 Mobilization Payment. Section 4. pg 67 Claims. Section 4. Section 6. Section 4. pg 46 Termination For Convenience. Section 7. Section 7. pg 26 Contractor Demobilization Checklist. pg 6 Environmental. pg 1. pg 7 Pre-Bid and Site Inspection Visit. pg 33 Insurance and Bonds. Section 4 Contract Closeout. pg 30 Schedule. pg 9 Safety & Health. Section 6. Section 4. Section 6. pg 23 Contract Change Notice. Section 5. Section 5. Section 6. pg 47-57 Basis For. Section 4. pg 1. Section 7. Section 3. 10 INDEX Page 3 of 7 . pg 56 Log. pg 66 Termination For Default (Cause). pg 35-43 Meeting. Acceptance (See Closeout) Commitment Approvals. pg 18 Progress Review Meeting. Section 3. pg 5 Release and Certificate of Final Payment. Section 6. Section 4. (See Release and Certificate of Final Payment) Partial Release and Certificate of Payment. pg 29 Daily Report. Section 4. Section 4. pg 14. Section 5. pg 1-11 Convenience Termination (See Termination) Coordination. Section 3. Section 4. Section 7. pg 5 Contractor Proposals. Section 3. pg 5 Pre-Construction Meeting. Release of. pg 10 Cost Commitment.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Checklists Contract Amendment. Section 5. pg 24 Contract Change Order. 8a Punch List (See Punch List) Records Retention. pg 19 Pre-Award Action. (See PTS Commitment Register) Concurrent Delay (See Delay) Contract Law.

pg 25. 44-46 Bid Drawings. Section 7. pg 15-24. 26 Logs. 26 Control. 4 Checklist. pg 52 Non-Excusable Delay. 3. pg 16. 55 Difficulty of Performance. pg 20 Credit Review. pg 31-33 Project Environmental Controls Matrix. Section 7. pg 1. Section 7. Section 3. Section 3. pg 21. pg 25. Section 7. pg 37-38. Section 3. pg 2. Section 3. Section 4. Section 3. Section 3.22. pg 18-21 Concurrent Delay. Section 7. pg 1-6 Default (See Termination) Delays Changes Leading To. pg 8 Drawings. Section 4. Section 3. Section 2. pg 22-24 Point of Contact. Section 7.20 Compensable Delay. 52 Float Ownership. pg 12-13. 51 Demobilization.26 Records Retention. pg 54 Division of Responsibilities (DOR) Matrix. Section 3. pg 19. 28 Closeout. pg 1-11 Documentation (See Filing) Transfer. pg 2 Environmental. 4 Differing Site Conditions. pg 16-18. Section 7. Section 6.13. 15 Disputes. Section 5. Section 3. pgs 1-9 Equitable Adjustments (See Changes) Excusable Delays (See Delays) Exhibits (See Forms) Extension Of Time (See Delays) Extra Work. Section 3. Section 3. Section 7. pg 11. pg 27.16.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Correspondence Action Items. 20.51 Delays and Extensions of Time. Section 4. Section 3. pg 25. pg 8 Critical Path (See Schedule) Cure Note (See Termination) Daily Reports. 5.26 Filing System. Issued for Construction. pg 19-24 Contract Administration Filing Index. Section 3. pg 25 Effective Correspondence. pg 15. Section 6. pg 1. pg 2 Review. Section 7. Section 7. 50-52 Excusable Delay. 6 INDEX Page 4 of 7 . Section 5.

Section 3. Section 5. pg 46-48 Force Majeure (See Delays. pg 9-18. Section 7. 33-35 Register. pg 23 System. pg 49 Relief From. pg 30-32 Liquidated Damages. Section 7. 25 Impossibility of Performance. 14. pg 11. Section 7. 18-22 Insurance. pg 24. pg 44. pg 9 Filing Index. 10. Section 7. Section 5. 17 Progress Payment. Section 7. pg 27-28 Bonds to Avoid. Section 7. Section 7. 45 Liens. pg 7. Section 4. pg 30. pg 19-24 Float Ownership. pg 16-18. pg 22-24 Flowchart of Changes/Claims. Section 3. pg 30-38 Certificates. Section 3. pg 41-42 Impact/Ripple. 15 Kickoff Letter. 3. Section 3. (See Environmental) Health (See Safety & Health) Historical Fact Sheet (See Fact Sheet) Housekeeping/Clean-up. Section 7. pg 9. pg 14. Section 6.37 Interferences.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Fact Sheet. Section 7. Section 6. pg 36-37 Labor Relations. Section 4. Section 7. pg 39-40 Interpretation. Excusable) Forms (See Forms Index behind Forms Tab) Hazardous Materials. Section 3. 16. Section 3. Section 3. pg 1. 30. pg 52 Force Accounts. 15 Inspection. 51 Logs (See Correspondence) INDEX Page 5 of 7 . Section 7. pg 13. pg 14-16 Meeting. Section 7. Section 3. pg 1-5 Invoice Concurrence Sheet.

Section 3. pg 1-2. pg 21 Reports (See Daily Reports) Request for Information (RFI). pg 8 Project Environmental Controls Matrix. pg 3. Section 3. pg 7. Section 5. Section 4. pg 1-3. Section 6. Section 5. pg 1-3. Section 5. 4-5 Pre-Construction. Section 5. pg 1-2. pg 38-43 Log. Section 6. pg 12-20 Pre-Award Meeting. pg 19-22 Beneficial Occupancy. pg 1-11 Retention Release. pg 14-15 Quality Surveillance. 9-18 Pre-Job Conference. Section 3. pg 7-9 PTS Commitment Register. pg 12 MSDS (Material Safety Data Sheet. 4-5 Pre-Construction Meeting. Lien) INDEX Page 6 of 7 . pg 18 Progress Payments. pg 3. Section 3. Section 4. Section 7. 6. Section 5. Section 3.13. pg 5-6. Section 6. Section 4. Section 3. 4-5 Mobilization Notice of. pg 12-20 Progress Review Meeting. Section 5. 17. pg 10. 35 Punch List. 6. 9-18 Progress Review. 7 Pre-Bid Meeting.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Meetings Coordination. Section 5. Section 7. pgs 1-9 Progress Measurement and Payments. 4-5 Pre-Bid Site Visit. pg 29-34 Notices (See Individual Topics) Payment Procedures. pg 11 Substantial Completion. pg 1-2. pg 8. Section 4. pg 1 Release and Bonds (See Bonds. Section 3. pg 43 Responsibilities Division of Responsibility (DOR) Matrix. Section 3. Section 7. pg 12 Procurement Transfer Package. Section 6. pg 12-20 Progress Measurement Procedure (Sample). pg 1-2. pg 37 Payment. Section 3. Section 2. Section 3. see Environmental) Negotiation. 7 Pre-Bid. 28. pg 1 Pre-Award. Section 5. Section 3. Section 5. 9 Site Visit. 10-11 Minutes/Action Lists. Section 3.

Section 7. Section 4. pg 9-11. pg 44 Termination. pg 54 Technical Transmittals. pg 21 Delays and Extensions of Time. Section 4. pg 40-41 Acceleration. Section 3. Section 4. 18 Punch List. Section 3. pg 7 Critical Path. Section 5. Section 7. pg 19-22 Suspension of Work. Section 3. pg 22 Violation. pg 22-24 Schedule. Section 6. Section 5. pg 14-15 Waiver and Liens. Section 4. 4-5 Substantial Completion. 25-28a Program. pg 26 Written Communication (See Correspondence) INDEX Page 7 of 7 . pg 14-18 (See also Closeout) Certificate. 29 History. pg 1-2. Pre-Bid. Section 5. pg 24 Full Wrap. Section 5. pg 50-52 Extension vs. pg 27 Evergreen. pg 52 Submittal Requirements. Section 6. Section 3. Section 7. Section 6. Section 7. Section 6. Section 4. Section 6. pg 24 Log. pg 7 Site Conditions (See Differing Site Conditions) Site Mobilization. pg 30-31 Correction. 56-67 Time and Materials Work. pg 30. pg 15. Section 6. Section 4. Section 6. pg 44-46 Comments Requiring Change Notice. Section 6. pg 10. Section 5. Section 7. Section 5. Section 6. pg 23-27 Backcharge. pg 23. pg 7-11. pg 24 Bonds. Section 7. pg 37. (See Closeout) Warranty. Section 5. pg 8 Unit Price Quantity Variation. Section 6. pg 23. pg 24 Confirmation of Non-Compliance. pg 50-52 Float Ownership. Section 7. Section 7. pg 22-30 Citations. Release of. 17 Site Visit. Section 3. pg 53 Changes. Acceleration. Section 5.CONTRACT/SUBCONTRACT MANAGEMENT MANUAL Safety and Health. pg 9. Section 7. 21 Transfer Documentation. pg 37. pg 26 Subtier Work.

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