1-79 Section 108. Prosecution and Progress
108.01. Subcontracting of Contract Work The Contractor must follow t he Department ’s written subcontracting procedures. The Contractor must use its own organization to perform w ork amounting to not less than 35% of the original contract amount. Materials produced and/or purchased by the Contractor may be included in the 35% required to be performed. The phrase “its own orga nization” only includes workers employed and paid directly, inclusive of employees who are employed by a lease agreement and equipment owned and rented with or without operators. Employees or equipment of a subcontractor, assignee, or agent of the Contract or will not be considered part of “its own organization.” Leased employees may only be included in “its own organization” if the Contractor meets all the following conditions:
A.The Contractor maintains control over the supervision of the day -to-day activities of the leased employees;
B.The Contractor remains responsible for the quality of the w ork of the leased employees;
C.The Contractor retains all power to accept or exclude individual employees from w ork on the contract ; and
D.The Contractor remains responsible for the payment of predetermined minimum wages, submission of payrolls, statements of compliance, and all other f ederal regulatory requirements. The Contractor must issue only subcontracts to subcontractors that are prequalified by the Department to perform the classification of the proposed work, if applicable. The Department ’s prequalification of the subcontractor is for the benefit of the Department and not for the benefit of the Contractor or any other person. The Department ’s prequalification is not a guarantee or warranty of the subcontractor ’s ability to perform or complete the subcontracted work. No subcontractor or supplier may maintain an action against the Department for payment relating to the w ork. Any such action must be brought against the Contractor or other responsible party. All pay items identified as Designated or as Specialty Classifications must be performed by subcontract if the prime C ontractor is not prequalified in the Designated or Specialty Cl assifications. All other work must be performed by subcontract. MDOT Form 1302-FED Subcontract – FED or MDOT Form 1302-State Subcontract – State must be used when subcontracting the contract work performed by others. MDOT Standard Specifications for Construction Section 108
1-80 The amount of Specialty Classification w ork performed will be deducted from
the total original c ontract amount before determining the 65 % available for subcontracting. MDOT Form 1386 Post Certification of Subcontract Compliance should be referenced to determine whether a subcontract is required for the contract work. Form FHWA-1273 Required Contract Provisions Federal -Aid Construction Contracts is required to be incorporated into each subcontract prior to signature on federally funded projects and is incorporated into MDOT Form 1302-FED. Use MDOT Form 1302-FED or approved equivalent on all projects with federal funding. Use MDOT Form 1302-State or approved equivalent for all other projects. Written consent of the Department is required to sell or assign any portion of the contract. No portion of the contract may be subcontracted prior to submitting a copy of the applicable MDOT Form 1302 (FED or State) cover page and pay items page to the Engineer before the start of the work associated with the subcontract. Subcontracting any portion of the w ork does not relieve the Contractor of full responsibility for the performance of the contract. The Contractor further agrees that every subcontract entered for the performance of the contrac t will contain a provision requiring nondiscrimination in employment binding upon each subcontractor. Breach of this covenant may be regarded as a material breach of the contract. The Department will determine the value of subcontracted w ork by multiplying the number of units of a subcontracted p ay item by the contract unit price for that pay item. If only a portion of a pay item is subcontracted, only that portion of the w ork to be performed by a subcontractor will be used for determining the percentage of the total w ork subcontracted. The Department will determine whether the subdivision of the subcontracted p ay item and the unit price are reasonable. Bonds furnished by the subcontractor do not red uce the Contractor ’s bonding requirements. A subcontractor must perform not less than 50% of the total value of the subcontracted work with in “its own organization.” This requirement is also applicable to and binding upon successive subcontracts. If any subcontractor is working or s ubcontractor ’s equipment is being operated in violation of this subsection, the Engineer may direct the immediate removal of the subcontractor or the subcontractor ’s equipment. The Contractor is responsible for any costs or damag es resulting from such removal. The Contractor ’s responsibilities in the performance of the w ork, in case of a subcontract, are the same as if the Contractor performed the subcontracted work with its own organization. MDOT Standard Specifications for Construction Section 108
1-81 Before final acceptance, the Contractor must certify that the subcontracting
requirements have been met by completing MDOT Form 1386 Post Certification of Subcontract Compliance. 108.02. Limitations of Operations Unless the contract requires or the Engineer approves otherwise, the Contractor must not perform construction operations on Sunday s. The Contractor may perform emergency repairs or install proper protection of the work on Sundays. The Engineer may require the Contractor to cease construction operations during holiday periods or at other times as may be determined to be in the interest of the public. 108.03. Competence of Workers The Contractor must provide the labor to perform the work as required by the contract. The Contractor ’s workers must possess the skill and experience to perform the assigned work in accordance with the contract. If the Engineer determines that any worker employed by the Contractor or by any subcontractor does not perform the work in a proper and skillful manner or is intemperate or disorderly, the Engineer wi ll issue a written direction for removal of the worker. The Engineer ’s written direction will state in detail the reasons for the removal of the worker including specific reference to the worker ’s offending conduct and the affected work operation(s). The Contractor may appeal the Engineer ’s direction, during which the Engineer ’s direction will be suspended. The Contractor may not employ the removed worker again in any portion of the work without the Engineer ’s approval. If the Engineer ’s direction stands and the Contractor fails to do either of the following, the Engineer may suspend the work by written notice, withhold partial payment, or both until the Contractor complies with the contract requirements:
A.Remove such worker or workers as required above; or
B.Provide the labor for the proper prosecution of the work. 108.04. Adequacy of Methods and Equipment The Contractor must use equipment of sufficient size and in a mechanical condition necessary to perform the work required by the contract. If the contract does not r equire specific methods and types of equipment to perform an item of the work, the Contractor may use any method or type of equipment that will accomplish the work in accordance with the contract. MDOT Standard Specifications for Construction Section 108
1-82 If the contract requires specific methods and types of equipment to perform
an item of the work and the Contractor wants to use another method or type of equipment, the Contractor must obtain the Engineer ’s approval before using the other method or type of equipment. The Contractor must submit a written reques t to the Engineer that includes a full description of the proposed methods and types of equipment and the reasons for requesting the substitution. If the Engineer approves the request, the Contractor remains fully responsible for performing the work in acc ordance with the contract. If, after a reasonable trial, the Engineer determines that the work performed is not in accordance with the contract, the Contractor must stop using the substitute method or type of equipment. The Contractor must remove and replace the non-conforming work or take other corrective actions approved by the Engineer. The Contractor is not entitled to an extension of time or compensation for delays, inconvenience, or any other cause attributed to the failure of the Contractor ’s substit uted method or type of equipment to accomplish the work in accordance with the contract, even if the Engineer approved of the substitution. 108.05. Prosecution and Progress The Contractor must not begin w ork until after the a ward of the contract. After the Department notifies the Contractor of the a ward of the c ontract, the Contractor must perform the w ork according to the p rogress schedule and with sufficient resources to adequately complete the w ork within the contract time. If the Contractor fai ls to perform the w ork in accordance with the approved progress schedule or the Department believes that the Contractor is not performing the work in a manner that achieves completion within the contract time, the Engineer may require the Contractor to provide an updated progress schedule, detailing the efforts required to meet the requirements of the progress clause. This requirement will not qualify as directed acceleration as stated in subsection 109.05.F. If the Contractor fails to perform as directed, the Engineer may place the Contractor in default in accordance with subsection 108.11. If the Contractor fails to perform the w ork in accordance with the approved progress schedule, the Department may prevent the Contractor from bidding future contracts until the Contractor establishes a satisfactory rate of progress. If the contract requires it, the Contractor must submit a critical path schedule using the critical path method . Upon approval , the critical path method schedule will replace the p rogress sche dule. MDOT Standard Specifications for Construction Section 108
1-83 A. Progress Schedule
1.General. The Department ’s approval of any schedule does not relieve the Contractor of its responsibilities to adjust labor and equipment forces or work schedules and provide sufficient materials to complete the work within the contract time. The Contractor must submit the progress schedule to the Engineer within 7 calendar days of a ward and prior to starting w ork. Progress schedule updates must be submitted within 7 calendar days of Engineer request. The Engineer will provide documented approval, comments, or rejection within 7 calendar days of receipt of the Contractor ’s submittal, resubmittal, or responses. The Contractor must resolve all responses within 7 calendar days of receipt of any Engineer requests or rejections. If the progress schedule is not approved within 30 calendar days of original submittal or the Contractor fails to update the progress schedule, the Engineer may withhold all or part of contract payments until the p rogress schedule, or update, is approved. The cost of preparing and updating the progress s chedule will not be paid for separately but will be considered included in other bid items.
2.Progress Schedule Format and Content. Unless the contract requires otherwise, the Contractor m ust submit a progress schedule using a diagramming method, bar chart , or MDOT Form 1130 Progress Schedule describing the work activities with the associated relationships. The progress schedule must reflect the scope of work and sequence of operations required by the contract and must:
a.Include and identify all activities th at are the controlling operations;
b.Include non-controlling operations and other activities to detail the work necessary to complete the contract including activities for submittals, working and shop drawing preparation, submittal review time for the Department, material procurement and fabrication, and the delivery of materials, plant, and equipment, third-party operations, or other activities ;
c.Identify the planned start and completion dates for each activity.
d.Provide a duration, ranging from 1 to 20 days, for each construction activity, breaking longer activities into two or more activities distinguished by the addition of a location or some other description; MDOT Standard Specifications for Construction Section 108
1-84 e. Include a written narrative that provides a description of the
planned work crews, w ork days per week, number of shifts per day, number of hours per shift, and h oliday and seasonal suspensions or other non- work periods;
f.Include other pertinent information that helps define the overall plan to com plete the contract or as requested by the Engineer; and
g.Include all contract -specified dates . The Contractor must allow for normal weather delays when developing the p rogress schedule. The Department may allow overlapping or concurrent controlling operations if the Contractor provides a written explanation of the associated overlap or concurrent controlling operation for each occurrence. The Contractor must submit the explanation with the progress schedule.
3.Progress Schedule Modifications . The Contractor and the Engineer will a ssess progress and discuss the schedule as needed. Submit a modified progress schedule when requested by the Engineer . At a minimum, progress schedule updates will include the actual start and finish of each activity , percentage completed , and remaining durations of activities started but not yet completed. The Engineer may request a modified progress schedule when any of the following events occur :
a.The Contractor ’s rate of progress falls behind that represented in the latest progress schedule;
b.A delay or c ontract revision affects a controlling operation, the contract time, or completion dates ; or
c.The Contractor revises the sequence of operations or plan to complete the contract from that represented in the latest p rogress schedule. 108.06. Determination of Contract Time for Work Day Contracts Starting no earlier than on the 10th day after the Contractor receives the notice of award or on the date agreed upon between the Engineer and the Contractor, the Engineer will determine and charge work days in accordance with subsections 108.06.A, 108.06.B, and 108.06.C. The Engineer will provide the Contractor with a written report of the number of work days charged to the contract each week within 6 days after the last day of the week covered by the report. If the Contractor disagrees with the MDOT Standard Specifications for Construction Section 108
1-85 number of work days charged in a report, the Contractor must notify the
Engineer in writing and set forth the reasons for disagreement within 2 1 days after the last day of the week covered by the report. The Contractor ’s failure to notify the Engineer of disagreement within the times established in this paragraph constitutes acceptance of the Engineer ’s determination of the number of work days for that time period.
A.Full Work Days. The Engineer will charge full work days for the following days:
1.Every day the Contractor is able to perform work for 6 or more consecutive hours, beginning at the scheduled st arting time, on a controlling operation with full and normal efficiency within seasonal limitations, except as listed in subsections 108.06.B or 108.06.C or as required by the contract;
2.Every day the Contractor elects to work for 6 or more consecutive hours, beginning at the scheduled starting time, or, on a controlling operation with full and normal efficiency within seasonal limitations, except as listed in subsections 108.06.B or 108.06.C or as required by the contract;
3.Sundays or holidays on which the C ontractor performs work if Sunday or holiday work is approved by the Engineer;
4.Days the Contractor is unable to perform work on a controlling operation due to delayed delivery of materials unless the Contractor identifies and the Department verifies that t he delayed delivery is the result of an industry -wide shortage;
5.Days the Contractor is performing required work, designated by the Engineer, to make the project acceptable for traffic and winter maintenance including emergency work or erosion control maint enance before or during the seasonal suspension; and
6.Days on which a delay to or suspension of the work is the fault of the Contractor.
B.Half Work Days. The Engineer will charge half work days for the following days:
1.Days the Contractor is only able to perf orm work on a controlling operation for between 3 and 6 consecutive hours beginning at the scheduled starting time for reasons beyond the Contractor ’s control and not the Contractor ’s fault or responsibility;
2.Days the Contractor elects to perform work on a controlling operation for between 3 and 6 consecutive hours beginning at the scheduled MDOT Standard Specifications for Construction Section 108
1-86 starting time for reasons beyond the Contractor ’s control and not the
Contractor ’s fault or responsibility; and
3.Days the Contractor is unable to perform work on a contr olling operation with full and normal efficiency for reasons beyond the Contractor ’s control and not the Contractor ’s fault or responsibility, including work stoppages due to a labor dispute.
C.No Work Day. The Engineer will not charge work days for the foll owing days:
1.Saturdays unless provided for in the contract;
2.Any day the Contractor is unable to perform work on a controlling operation for more than 3 consecutive hours beginning at the scheduled starting time for reasons beyond the Contractor ’s control and not the Contractor ’s fault or responsibility, including work stoppages due to a labor dispute;
3.Any day work is performed on the controlling operation during the seasonal suspension unless otherwise specified in the contract or in subsection 108.06.A.4;
4.Any day when suspension of work on the controlling operation is required, through no fault of the Contractor, for reasons including, but not limited to, the following:
a.Right -of-way or right -of-entry was not available when a controlling operation was required to start;
b.Delays resulting from utilities not moved out of the Contractor ’s work area; and
c.Work on an adjacent project prevented the Contractor from performing work. 108.07. Extension of Time on Work Day Contracts If the contract time is specified in work days, the Engineer will grant extensions of time for the following excusable delays without liquidated damages for opening to traffic and completing within the contract time on the following basis:
A.If, on a control ling operation, there is an increase in the quantities set forth in the contract and the increase is not offset by decreases in similar pay items, the Engineer will base the extension of time on Formula 108-1, not to exceed the actual number of days requir ed to perform the additional quantities of work. MDOT Standard Specifications for Construction Section 108
1-87 𝐸𝐸𝐸𝐸 =𝑇𝑇𝑇𝑇×𝐼𝐼
𝑄𝑄 Formula 108-1 Where: 𝐸𝐸𝐸𝐸 = Extension of time in work days; 𝑇𝑇𝐸𝐸 = Work days assigned to the pay item on the progress schedule; 𝐼𝐼 = Increased quantity of the pay item; and 𝑄𝑄 = Contract quantity of the pay item.
B.If extra work delays a controlling operation, as shown on the progress schedule, the extension of time will be the time the extra work delayed the controlling operation. 108.08. Extension of Time on Calendar Day o r Calendar Date Contracts If the contract time is specified in calendar days or by a calendar date, the Engineer will grant extensions of time without liquidated damages for the following excusable delays for opening to traffic and completing within the contract time on each of the following bases:
A.If the Department fails to award the contract within 28 calendar days after the Department receives all required documents specified in subsection 102.1 4 from the Bidder, the extension of time will be the duration of that delay.
B.If there are delays due to suspension of work ordered by the Engineer in accordance with subsection 103.02.D that affect the controlling operation or the suspension changes the controlling operation(s) required for completion of the contract , the extension of time will be the duration of the delay. The suspension must be for causes other than negligence, faulty work, failure, or refusal of the Contractor to carry out the provisions of the contract or the orders of the Engineer.
C.If there are delays due to unforeseen causes beyond the control and without the fault or negligence of the Contractor, including, but not limited to, the following, the extension of time will be the duration of the delay to the controlling operation:
1.Acts of God;
2.Acts of the public enemy;
3.Acts of g overnment;
4.Acts of state or any political subdivision;
5.Fires, floods, and epidemics;
6.Labor disputes; or MDOT Standard Specifications for Construction Section 108
1-88 7. Delayed delivery of the materials specified and approved for the
project when the Contractor identifies , and the Department verifies , that the delay is an industry -wide shortage of materials.
D.The Department will not consider weekends or Department -specified holidays as adverse weather days unless the Engineer directs the Contractor to w ork those days, or the Contractor ’s approved progress schedule or critical path method indicated that the Contractor intended to work on the controlling operation on those days.
1.For standard contracts , the contract completion date is based on a progress schedule using a 5 -work-day week. On standard contract s, work days are considered Monday through Friday. If, during a calendar month, the Contractor is prevented from working on the controlling operation, the Contractor may request an extension of time based on the difference between the actual work days lost that month compared to the normal work days lost per month. The Department will consider normal work days lost per month to be 4.5 work days for May through October and 2.25 work days for the partial months of April and November. The Department will convert work days to calendar days for contract s with completion dates prior to September 15 by multiplying by 1.75 and, for contract s with completion dates on or later than September 15, by multiplying by 2.0.
2.For expedited contract s, the contract completion date is based on a progress schedule using a 6-work-day week . On expedited contract s, work days are considered to be Monday through Saturday. If, during a calendar month, the Contractor is prevented from working on the controlling operation, the Contractor may request an extension of time based on the difference between the actual work days lost that month compared to the normal work days lost per month. The Department will consider normal work days lost per month to be 4.5 work days for May through October and 2.25 work days for the partial months of April and November. The Department will convert the work days to calendar days for contract s with completion dates prior to September 15 by multiplying by 1.4 and for contract s with completion dates on or later than September 15, by multiplying by 1.75.
3.For any p roject that specifies limited w ork days per month to be less than or equal to 72 hours per week, additional time will be provided on a day -for-day basis when the Contractor is not able to work on the controlling operation due to weather. The Department will not consider any days during seasonal suspension unless the Engineer directs the Contractor to w ork those days or the Contractor ’s approved progress schedule indicated that MDOT Standard Specifications for Construction Section 108
1-89 the Contractor intended to work on the controlling operation on those
days . The extension of t ime granted will be the duration of the delay to the controlling operation.
E.If, on a controlling operation, there is an increase in the quantities set forth in the contract that is not offset by decreases in similar controlling items of work, the Engineer will base the e xtension of time on Formula 108-2, not to exceed the actual n umber of days required to perform the additional quantities of work. 𝐸𝐸𝐸𝐸=𝑇𝑇𝑇𝑇×𝐼𝐼 𝑄𝑄 Formula 108-2 Where: 𝐸𝐸𝐸𝐸 = Extension of time in calendar days; 𝑇𝑇𝐸𝐸 = Contract time assigned to the pay item on the progress schedule; 𝐼𝐼 = Increased quantity of the pay item; and 𝑄𝑄 = Contract quantity of the pay item.
F.If extra work delays a controlling operation, as shown on the progress schedule, the time extension will be the time the extra work delayed the controlling operation.
G.The Contractor may propose and t he Engineer may approve another equitable method, supported by an acceptable rationale, to determine extensions of time for any of the excusable delays listed in subsection 108.08. 108.09. Request for Extensions of Time
A.General. The Contractor must submit written requests for e xtensions of time to the Engineer. The request must state the reasons for the extension of time . In case of delays due to unusual weather, the Contractor must submit requests for e xtension of time within 14 days after the last day of the calendar month in which the delay occurred. The Contractor must submit requests for e xtensions of time for all other delays within 14 days after the last day of the delay. Failure to submit written requests to the Engineer within the required time frame will constitute a waiver of claim for an extension of time . The Engineer will respond with a written decision within 14 days of receipt of the request for the e xtension of time . The Engineer may grant e xtensions of time with or without liquidated damages. An extension of time to a contract date subject to liquidated damages will apply equally to all contract dates subject to liquidated damages that are impacted by the extension of time. The Engineer will record the number of wor k days or calendar days granted for each MDOT Standard Specifications for Construction Section 108
1-90 extension of time . Any contract dates extended will thereafter be binding
upon the Contractor and surety as if they appeared in the contract originally. If the Contractor disagrees with the Engineer ’s denial of a re quest for an extension of time for any reason not explicitly covered elsewhere in the contract, the Contractor must notify the Engineer in writing within 7 days after receipt of the Engineer ’s denial and must proceed in accordance with subsection 104.10. If the Engineer allows the Contractor or the surety to continue and complete all or any part of the work after the original or extended contract time, the Department will not have waived any rights under the contract.
B.Compensable Delays. Compensabl e delays are delays that are caused by the Department and could not have been reasonably foreseen or anticipated by the Contractor. The Contractor will be entitled to compensation for the delay computed in accordance with 109.05.E only if the delay is caus ed by one or more of the following:
1.Contract revisions as defined in subsections 103.02.B, 103.02.C, 103.02.E, or 103.02.F;
2.Utility or railroad interference within the project limits;
3.An Engineer -ordered suspension as defined in subsection 103.02.D; or
4.The actions or neglect of the Department or its failure to act in a timely manner, including, but not limited to, unavailable right -of-way or right-of-entry, incomplete adjacent projects, and lack of Department -obtained permits.
C.Non-Excusable Delays. Non- excu sable delays are delays that are the Contractor ’s fault or responsibility. All non-excusable delays are non-compensable. 108.10. Liquidated Damages If the contract requires the Contractor to maintain through-traffic while the Contractor is performing the work or if the contract does not contain a time requirement for opening to traffic, the provisions herein will apply to the contract time only. The Department will not assess simultaneous liquidated damages for failure to open to traffic on time and for failure to complete within the contract time.
A.Failure to Open to Traffic w ithin the Contract Time. Unless the contract requires otherwise, the Department will assess l iquidated MDOT Standard Specifications for Construction Section 108
1-91 damages for each calendar day that the project or portion of the project
remains unopened to traffic, including time within the seasonal suspension. For seasonal suspension, the Engineer will not designate the project as open to traffic until the project is in an acceptable condition for travel and winter maintenance, including neces sary traffic control devices and erosion control measures. Unless the contract requires otherwise, when the Department has determined that the project or a portion of the project is open to traffic in accordance with subsection 107.21, the Department will discontinue the assessment of liquidated damages for failure to open to traffic.
B.Failure to Complete w ithin the Contract Time. The Contractor must complete the contract on or before the date the contract time expires. The Department will assess l iquidated damages for each calendar day that the work remains incomplete. For periods of seasonal suspension, the Department will not assess liquidated damages, except as provided in subsection 108.10.A, or as otherwise required by the contract.
C.Assessment of Liquidated Damages. Sums assessed as liquidated damages are not penalties but are fixed and agreed-upon liquidated damages due to the Department from the Contractor. The liquidated damages may contain one or more components of damages added together.
1.Liquidated Damages for Department Oversight Costs. This component of liquidated damages represent s the Department ’s added cost of engineering and supervision due to the Contractor ’s failure to open to traffic or complete the work within the contract time. The amount of these liquidated damages will be based on Table 108-1. Table 108- 1: Schedule of Liquidated Damages for Department Oversight Original Contract Amount Amount per Calen dar Day From More Than To and Including $0 $100,000 $500 $100,000 $500,000 $800 $500,000 $1,000,000 $1,000 $1,000,000 $5,000,000 $1,500 $5,000,000 $15,000,000 $2,000 Over $15,000,000 $4,000
2.Liquidated Damages for Other Department Costs. This component of liquidated damages represent s the inconvenience to the public, maintenance of detours, and other items that have caused an MDOT Standard Specifications for Construction Section 108
1-92 expenditure of public funds due to the Contractor ’s failure to open to
traffic or complete the work within the contract time. The contract will specify the amount of these liquidated damages. 108.11. Default of Contract
A.Notice of Default. If the Contractor is responsible for any of the following, the Engineer will give the Contractor and surety written notice of default and the action required to be taken by the Contractor and s urety:
1.Failing to prosecute the work with the labor, equipment, or materials sufficient to complete the work within the contract time and according to the progress schedule;
2.Performing the work impro perly;
3.Neglecting or refusing to remove material or to reconstruct work that has been rejected as defective and unsuitable; or
4.Failing to perform the work as required by the contract for any other reason.
B.Termination for Default . If any of the following oc curs, the Department will have full power and authority to terminate the contract for cause and take over the uncompleted work from the Contractor and s urety, including appropriation and use of any materials on the project . The Department may demand perfor mance of the surety , enter into a completion contract , or undertake any other method that the Department determines may be necessary to complete the work:
1.The Contractor or surety , within 10 days after the notice of default, does not proceed satisfactorily ;
2.The Contractor commits any act of bankruptcy, becomes insolvent, or is declared bankrupt;
3.The Contractor allows a final judgment against the Contractor to remain unsatisfied for 5 days;
4.The Contractor makes an assignment for the benefit of the Contractor ’s creditors; or
5.The Contractor files proceedings for reorganization in accordance with the Bankruptcy Act, or such proceedings are filed against the Contractor. If the Department terminates the contract for cause, the Department will deduct all additional costs and damages and the costs and charges of completing the work from monies due or to become due the Contractor. If the total of the damages, costs, and charges exceeds the balance of the MDOT Standard Specifications for Construction Section 108
1-93 contract amount that would have been payable to the Contractor had the
Contractor completed the work, the Contractor and surety must pay the amount of the overage to the Department upon request. 108.12. Termination of Contract for Convenience If the Department determines that termination is in the Department ’s best interest, the Department may terminate the contract for convenience or any portion of the contract. If the Department orders termination of a contract for convenience effective on a certain date, the Department will pay the Contractor for completed or partially completed work as of that date at the contract unit prices or on a force account basis, as determined by the Engineer. If the Department terminates a portion of the contract for convenience, the Department may stop delivery and payment for materials made unnecessary. The Department will pay for pay items eliminated in their entirety by the termination in accordance with subsection 103.02.F. The Department may choose to purchase from the Contractor acceptable materials obtained for the work but not used at actual cost delivered to a prescribed location plus 15 %. If the Department does not choose to purchase the acceptable materials that were obtained for the work but not used, the Department will pay for actual material costs, plus 15% , for disposal of the acceptable materials in an approved manner. The Contractor must submit any claim for additional compensation within 60 days after the effective termination date or as otherwise authorized by the Department. The C ontractor must make records available to support the validity and amount of compensation sought. The Contractor is not entitled to loss of anticipated profits due to the Department ’s termination of the contract or any portion of the contract. The Department ’s decision to terminate the contract or a portion of the contract will neither relieve the Contractor of its contractual responsibilities for the completed work nor relieve the surety of its obligation for any just claim arising out of the work performed.
A.Immediate Obligations. The Engineer will deliver a Notice of Termination to the Contractor that specifies the extent of termination and the effective date. After receipt of a Notice of Termination, the Contractor must immediately proceed with the followi ng obligations:
1.Stop work as specified in the notice;
2.Place no further subcontracts or orders for materials, services, or facilities, except as necessary to complete the remaining portion of the contract; MDOT Standard Specifications for Construction Section 108
1-94 3. Terminate all subcontracts to the extent they relat e to the work
terminated;
4.Transfer title and deliver to the Department the following:
a.Fabricated, partially fabricated, or unfabricated parts ; all work in progress ; completed work ; supplies ; and other material produced or acquired for the terminated work; and
b.Completed or partially completed plans, drawings, information, and other property that, if the contract had been completed, the Contractor would have been required to provide to the Department;
5.Complete the performance of the non-terminated work;
6.With the Engineer, on a date identified by the Engineer, take inventory of acceptable materials obtained for the contract that has not been incorporated into the work; and
7.Take any action necessary, or directed by the Engineer, for the protection and preservation of the property related to the contract that is in the possession of the Contractor and in which the Department has or may acquire an interest.
Source: Michigan Standard Specifications for Construction, 2020 Edition. Pages 91–106 of 1,146.