1904Compensation for Contract Revisions

1904.1GENERAL

If the Department revises the Contract as provided in 1402, “Contract Revisions,” the Department will compensate the Contractor for the Contract revision following the sequence specified in 1904.2, “Contract Unit Prices,” through 1904.4, “Force Account.” Such compensation for the Contract revision constitutes final and full compensation for performing the revised Work, delay costs, and all other costs not expressly precluded by 1904.5, “Non-Allowable Charges.” The Engineer will determine the pricing method following the sequence specified in 1904.2, “Contract Unit Prices,” through 1904.4, “Force Account,” before directing the Contractor to perform the Work in the Contract revision. If the Contract revision includes a time extension for compensable delays as provided by 1806, “Determination and Extension of Contract Time,” the Department will compensate the Contractor for the costs associated with the time extension in accordance with 1904.6, “Compensation for Delay.”

1904.2CONTRACT UNIT PRICES

Before proceeding to another pricing method, the Engineer will attempt to price and pay for the Contract revision using Contract Unit Prices.

1904.3NEGOTIATED PRICES

If the Engineer and Contractor are unable to agree on compensation in accordance with 1904.2, “Contract Unit Prices,” they will attempt to negotiate unit or lump sum prices using one or more of the following methods:

decreased Material costs

Account” Negotiated mark-up for Subcontractor work may not exceed that provided for in 1904.4H, “Contractor Mark-up.” Within 5 Business Days of the Department’s request, the Contractor shall submit a written quote that includes pricing, cost justification, and a schedule for the Contract revision . The Department will respond within 5 Business Days after receipt of the Contractor’s submittal. The Department and the Contractor can mutually agree to extend these 5-Business-Day time limits.

1904.4FORCE ACCOUNT

If the Engineer and Contractor are unable to negotiate a price for the Contract revision in accordance with 1904.3, “Negotiated Prices,” the Engineer may direct the Contractor to perform all or part of the revised Work on a force account basis. When the Engineer directs the Contractor to perform revised Work on a force account basis, the Department will pay the Contractor as specified in 1904.4A, “Labor,” through 1904.4J, “Inefficiency.” A Labor The Department will compensate the Contractor for labor at the actual rate of wage paid and shown on the payroll for every hour that the labor and foreman are actually engaged in the revised Work . The foreman must be in direct charge of the specific operations and must be at the Project Site in order to be included in this compensation. Unless already included in the wage rates paid, the Contractor will also receive the actual labor-related costs incurred by reason of subsistence and travel allowances, heal th and welfare benefits, pension fund, or other fringe benefits, provided those payments are required by collective bargaining agreement or other employment contract generally applicable to the classes of labor employed on the Work. The Department will prorate the wages of any foreman who is employed partly on the revised Work and partly on other Work. The Department will determine the prorated wage based on the number of workers employed on each class of Work as shown by the payrolls . The Department will prorate any subsistence or travel allowances paid to the foreman on the same basis as the prorated direct wages. The Department will pay the Contractor an amount equal to 62 percent of the actual taxable rate of wage as full compensation for overhead, profit, additional bond, property damage and liability insurance premiums, workers' compensation insurance premiums, unemployment insurance contributions, employer Social Security taxes, and other indirect labor force costs. This compensation is based on a Workers' Compensation insurance premium of $21.00 per $100.00 of payroll . If the revised Work involves labor in a classification with a higher premium rate, the Contractor may submit a written request in accordance with 1403, “Notification for Contract Revisions,” for the additional premium amount. The request shall include the following:

classification code numbers and the premium rates that are being paid in the current year

B Materials The Department will pay the Contractor the actual cost of acceptable Materials delivered and used in the revised Work, including transportation charges paid by the Contractor (exclusive of E quipment rentals), plus an additional 15 percent for field and home office overhead costs and profit. C Equipment The Department will pay the Contractor for Equipment at the rental rates established by the Commissioner’s Equipment Rental Schedule available on the Department’s website and effective on the date the two parties execute the force account agreement (Change Order). This compensation is for Equipment, fuel, and lubricants that the Engineer authorizes and the Contractor uses on the Project . The Department will not pay for small tools. The Department will pay for the actual time the Equipment is in operation on the revised Work, plus travel time or transportation allowances. The Department will not pay for any additional Equipment costs except as provided under 1904.4D “Miscellaneous Compensation.” If the Equipment is moved to and from the location of the revised Work under its own power, the Department will pay for the travel time at the above rental rates. If the Equipment is moved to and from the location of the revised Work by means other than its own power, the Department will pay for the actual operating time during periods of loading and unloading at the above rental rates and will pay for the actual transportation costs. D Miscellaneous Compensation If the Engineer directs the Contractor to perform the revised Work on the R ight-of-way of a railroad, in addition to the compensation for labor, Materials, and Equipment, the Department will pay the Contractor for actual costs related to satisfying the requirements of 1708, “Railroad-Highway Provisions.” The Department will only pay for these costs to the extent that there is no duplication or overlapping of charges provided under 1904.4A “Labor,” 1904.4B “Materials,” and 1904.4C “Equipment,” or by any existing Contract Items. The Department will pay the Contractor for the actual cost of miscellaneous fees incurred in performing the revised Work, including but not limited to dump fees, permits, and licenses. Any negotiated mark-up for miscellaneous fees may not exceed 5 percent of the miscellaneous fees. The Department will not pay the Contractor for other miscellaneous costs that the Contract does not provide for specifically. E Daily Records The Engineer and Contractor will document the labor, Materials, and Equipment used in performing the revised Work on a Daily Equipment Labor Rental Record (Form 2137). At the end of each workday, the Engineer and Contractor will compare and sign the Daily Equipment Labor Rental Record. Daily Equipment Labor Rental Records signed by both the Department and Contractor will govern over other Department and Contractor records. In the event the Contractor declines to sign the Daily Equipment Labor Rental Record, the Department’s records shall govern. F Payments The Department will not pay for the revised Work until the Engineer has accepted the revised Work and the Contractor has submitted to the Engineer itemized statements of the cost, including the following:

and foreman

Equipment

Materials on the revised Work that the Contractor did not specifically purchase for the Work but were taken from the Contractor's stock, the Contractor shall submit an affidavit certifying that such Materials were taken from the Contractor's stock, that the quantity was actually used, and that the price and transportation costs represent the actual costs to the Contractor G Specialty Contract Work If the Contractor uses specialty contracting firms to perform the revised Work, the Department will pay the Contractor by reasonable invoice at the discretion of the Engineer . “Specialty work” is unique Work that cannot be performed by the Contractor, its Subcontractors, or other contracting firms that generally perform work on Highway construction projects. The provisions of 1904.4A, “Labor,” through 1904.4F, “Payments,” shall not apply to payments made by reasonable invoice. All firms or Contractors paid under these provisions and working on the Project are subject to all labor provisions required by the Contract. The Contractor shall provide the Engineer with a cost estimate of the specialty Work or service and obtain the Engineer’s approval before performing the specialty Work . As a minimum, the cost estimate shall include a complete description of types of Equipment to be used, the number and job classifications of employees who will perform the specialty Work, and all Material costs. H Contractor Mark-Up For any force account Work performed by a Subcontractor (including Work performed by a specialty Contractor), the Department will pay the Contractor one additional mark-up on revised Work performed by a Subcontractor to cover administration, general superintendence, overhead, profit, and expenses not otherwise recoverable. The additional mark-up will be a percentage of the total force account invoice for the Subcontractor’s portion of the revised Work equal to 10 percent of the first $50,000.00 plus 2 percent of the balance in excess of $50,000.00. I Acceleration The Engineer may order the Contractor to accelerate the Work to avoid delay costs or to complete the Project early. The Department will pay for accelerations in accordance with this section. J Inefficiency The Department will compensate the Contractor for inefficiency or loss of productivity resulting from 1402, “Contract Revisions.” Use the measured mile analysis, or other reliable methods, comparing the productivity of Work impacted by a change to the productivity of similar Work performed under unimpacted (unchanged) conditions to quantify the inefficiency. The Department will pay for inefficiencies in accordance with this section.

1904.5NON-ALLOWABLE CHARGES

A General The Department will not pay the Contractor for any of the following, regardless of the method of payment for the revised Work:

opportunities, and insolvency

B Profit Adjustment Per 1402.4, “Suspensions of Work Ordered by the Engineer,” the Department will not pay the Contractor for profit on suspensions or delays ordered by the Engineer. The Department will remove profit from the mark-ups in 1904.4A, “Labor,” 1904.4B, “Materials,” and 1904.4H, “Contractor Mark-Up,” by reducing the mark-up percentages as follows:

$50,000.00

1904.6COMPENSATION FOR DELAY

A General For compensable delays as identified in 1806, “Determination and Extension of Contract Time,” the Department will pay for the costs specified in 1904.6B, “Allowable Delay Costs.” The Department will not pay for non-allowable charges specified in 1904.5, “Non-Allowable Charges,” or duplicate payment made under 1904.2, “Contract Unit Prices,” through 1904.4, “Force Account.” The Department will not pay for delay costs before the Contractor submits an itemized statement of those costs. The Contractor shall include the following content for the applicable items in the statement. B Allowable Delay Costs B.1 Extended Field Overhead The Department will pay the Contractor for extended field overhead costs that include costs for general field supervision, field office facilities and supplies, and for maintenance of field operations. General field supervision labor costs include, but are not limited to, field supervisors, assistants, watchman, clerical, and other field support staff. The Contractor shall calculate these labor costs as specified in 1904.4A, “Labor.” For salaried personnel, the Contractor shall calculate the daily wage rate actually paid by dividing the weekly salary by 5 Calendar Days per week. Field office facility and supply costs include, but are not limited to, field office trailers, tool trailers, office Equipment rental, temporary toilets, and other Incidental facilities and supplies. The Contractor shall calculate these costs to provide these services on a Calendar-Day basis using actual costs incurred due to the delay. Maintenance of field operations costs include, but are not limited to, telephone, electric, water, and other similar expenses. The Contractor shall calculate these costs to maintain these services on a Calendar-Day basis using actual costs incurred due to the delay. B.2 Idle Labor The Contractor shall calculate labor costs during delays as specified in 1904.4A, “Labor,” for all non-salaried personnel remaining on the Project as required under collective bargaining agreements or for other Engineer approved reasons.

B.3 Escalated Labor To receive payment for escalated labor, the Contractor shall demonstrate that the Department-caused delay forced the Work to be performed during a period when labor costs were higher than planned at the time of bid. The Contractor shall provide adequate support documentation for labor costs, allowances, and benefits. B.4 Idle Equipment or Equipment Mobilization and Demobilization The Department will pay the Contractor for Equipment, other than small tools, that must remain on the Project during Department-caused delays at the idle Equipment rate calculated in 1904.4C, “Equipment.” The Department will pay the Contractor's transportation costs to remove and return Equipment not required on the Project during Department -caused delays. B.5 Materials Escalation or Material Storage The Department will pay the Contractor for increased Material costs or Material storage costs due to the Department-caused delay. The Contractor shall obtain the Engineer’s approval before storing Material due to a delay. B.6 Extended or Unabsorbed Home Office Overhead The Department will pay the Contractor for unabsorbed or extended home office overhead costs in accordance with the Federal Acquisition Regulations, specifically 48 C.F.R. § 31. The Department will audit all extended or unabsorbed home office overhead claims in accordance with 1721, “Audits.” The Department will compensate the Contractor using the standard Eichleay formula. B.6.a Contractor Claim Requirements To recover home office overhead, the Contractor’s claim shall prove the following:

accordance with 1402.4, “Suspensions of the Work Ordered by the Engineer”

suspension period

within the original Contract performance period, as extended by any modifications

suspension B.6.b Subcontractor Claim Requirements The Department will consider Subcontractors eligible for separate extended or unabsorbed home office overhead using the standard Eichleay formula, if the Subcontract does not contain language disallowing such claim compensation. To recover home office overhead, the Subcontractor’s claim shall prove the following:

accordance with 1402.4, “Suspensions of the Work Ordered by the Engineer”

suspension

suspension period

by the suspension

within the original subcontract performance period, as extended by any modifications B.6.c General Claim Requirements The Department will not allow compensation for home office overhead for the Contractor or Subcontractor if any of the following conditions are met:

period

during the period of delay or suspension