26 SECTION 104
104.01 Intent of Contract
The intent of the contract is to state the roles, responsibilities, and obligations of the Department and Contractor regarding the construction, execution, and completion of the work. Provide all resources required to complete the work and execute the work in accordance with the contract.
104.02 Contract Revisions
A.General. The Department may revise the contract as necessary to satisfactorily complete the project at any time between the date of contract execution and the date the Department issues the final payment statement to the Contractor. Contract revisions neither invalidate the contract nor release the surety. Perform the work as revised. Proceed with the revised work only when directed by the Engineer; continue with all wor k unaffected by the revision. If circumstances arise that may necessitate a contract revision, immediately notify the Engineer in accordance with Section 104.03, “Contractor Requested Contract Revisions”. Failure to provide notice as specified in Section 104.03 constitutes a waiver of entitlement to compensation or a time extension and releases the Department from responsibility for providing compensation or a time extension for any related claims filed under Section 104.04, “Notice of Intention to File a Claim (NOI)”, and Section 104.05, “Claims for Adjustment”. If the Department revises the contract the Department will determine compensation in accordance with Section 109.03, “Compensation for Contract Revisions,” and a time extension in accordance with Section 108.06, “Determination of and Extensi ons to the Contract Time.” The Engineer will issue a change order to document the nature of the contract revision, including any determined compensation, any time extension, or both. Sections 104.02 B, C, and D contain wording mandated by FHWA. As the ter ms “modification,” “change,” “adjustment,” or “alteration” are used in them they shall mean a contract revision.
B.Differing Site Conditions. During the progress of the work, if subsurface or latent physical conditions differing materially from those indicated in the contract are encountered at the site or if unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the contract, are encountered at the site, notify the Engineer of the specific differing conditions in accordance with Section 104.03, “Contractor Requested Contract Revisions”, before disturbing the site or performing the affected work. Upon written notification, the Engineer will investigate the conditions, and if the Engineer determines that the conditions materially differ and cause an increase or decrease in the cost or time required for the performance of any work under the contract, an adjustment, excluding anticipated profits, will be made and the contract modified in writing accordingly. The Engineer will notify the Contractor of the determination whether or not an adjustment of the contract is warranted. 27 No contract adjustment which results in a benefit to the Contractor will be allowed unless the Contractor has provided the required written notice. No contract adjustment will be allowed on work not affected by the changed conditions.
C.Significant Changes in the Character of Work. The Engineer reserves the right to make, in writing, at any time during the work, such changes in quantities and such alterations in the work as are necessary to satisfactorily complete the project. Such changes in quantities and alterations shall not invalidate the contract nor release the surety, and the Contractor agrees to perform the work as altered. If the alterations or changes in quantities significantly change the character of the work under the contract, whether such alterations or changes are in themselves significant changes to the character of the work or by affecting other work cause such other work to become significantly different in character, an adjustment, excluding anticipated profit, will be made to the contract. The basis for the adjustment should be agreed upon prior to the performance of the work. If a basis cannot be agreed upon, then an adjustment will be made either for or against the Contractor in such amount as the Engineer may determine to be fair and equitable. If the alterations or changes in quantities do not significantly change the character of the work to be performed under the contract, the altered work will be paid for as provided elsewhere in the contract. The term “significant change” shall be construed to apply only to the following circumstances:
1.When the character of the work as altered differs materially in kind or nature from that involved or included in the original proposed construction; or
2.When a major item of work, as defined in Section 101.04 “Definitions” , is increased in excess of 125 percent or decreased below 75 percent of the original contract quantity. Any allowance for an increase in quantity s hall apply only to that portion in excess of 125 percent of original contract item quantity, or in case of a decrease below 75 percent, to the actual amount of work performed. When an adjustment to the unit price is made due to a decrease in the original contract quantity to below 75 percent of the original quantity, the total payment made will not exceed the amount which would have been paid for 75 percent of the orginal quantity. If the Contractor intends to request a contract revision for a significant change in the work, the Contractor shall notify the Engineer in accordance with Requested Contract Revisi ons”.
D.Suspension of Work Or dered by the Engineer. If the performance of all or any portion of the work is suspended or delayed by the Engineer in writing for an unreasonable period of time (not originally anticipated, customary, or inherent to the cons truction industry) and the Contractor believes that additional compensation and/or contract time is due as a result of such suspension or delay, the Contractor shall notify the Engineer in accordance with Sec tion 104.03, “Contractor Requested Contract Revisions”, immediately after receipt of the notice to resume work. 28 Upon receipt, the Engineer will evaluate the Contractor’s request. If the Engineer agrees that the cost and/or time required for the performanc e of the contract has increased as a result of such suspension and the suspension was caused by conditions beyond the control of and not the fault of the Contractor, its suppliers, or subcontractors at any approved tier, and not caused by weather, the Engi neer will make an adjustment (excluding profit) and modify the contract in writing accordingly. The Contractor will be notified of the Engineer’s determination whether or not an adjustment of the contract is warranted. No contract adjustment will be allow ed unless the Contractor has submitted the request for adjustment within the time prescribed. No contract adjustment will be allowed under this clause to the extent that performance would have been suspended or delayed by any other cause, or for which an adjustment is provided or excluded under any other term or condition of this contract.
E.Extra Work. If the Contractor believes that the Department has required the Contractor to perform extra work that necessitates a contract revision the Contractor shall provide notice in accordance with Section 104.03, “C ontractor Requested Contract Revisions”.
F.Eliminated Items. The Department may eliminate a contract item partially or completely. If the Contractor believes that such elimination will necessitate a contract revision, the Contractor shall provide notice in accordance with Section 104.03, “Contractor Requested Contract Revisions”. The Department will reimburse the Contractor for costs incurred by the Contractor for eliminated items before notification of elim ination in accordance with Section 109.03, “Compensation for Contract Revisions”.
104.03 Contractor Requested Contract Revisions
A.Contractor Request, Work In Progress.
1.Contractor Request. If the basis for a contract revision does not become apparent until the Contractor has commenced work affected by the circumstance and it is not feasible to stop the work, the Contractor shall immediately notify the Engineer that the work is continuing and that written notification of the intent to make claim for additional compensation as specified in will be submitted within ten calendar days. If the request includes an extension to the contract time, submit a Contractor Request for Extension of Contract Time (SFN 14461) and follow the requirements of Section 108.06 B, “Extensions to the Contract Time.”
2.Record Keeping. For work that is continuing, provide the Engineer with updates of costs or delays related to the claim issues in accordance with Section 109.03 E, “Force Account”, and Section
109.03 F, “Delay Costs”.
29 If the request includes an extension to the contract time, submit a Contractor Request for Extension of Contract Time (SFN 14461) and follow the requirements of Section 108.06 B, “Extensions to the Contract Time.” The Engineer and Contractor shall maintain records in accordance with Section 109.03 E, “Force Account”, and Section 109.03 F, “Delay Costs” of all costs and delays that may constitute a contract revision. Such record keeping shall start when the Engineer receives the Contractor’s notice or when the Engineer orders the Contractor to begin work.
B.Contractor Request, Work Not Started. If the Contractor believes the Contractor is entitled to additional compensation, the Contractor shall, prior to beginning the work which the claim will be based upon, notify the Engineer in writing of the intent to make claim for additional compensation as specified in “Notice Of Intention to File a Claim (NOI)” . Do not begin the work associated with the notice until ordered by the Engineer. For work that is beginning under direction of the Engineer, provide the Engineer with updates of costs and delays related to the claim issues in accordance with Section 109.03 E, “Force Account” , and Section 109.03 F, “Delay Costs” .
104.04 Notice of Intention To File A Claim (Noi)
A.Submission of an NOI. Follow the procedures specified in Section 104.03 A.1, “Contractor Request” or
104.03 B,
“Contractor Request, Work Not Started”, before submitting an NOI. Within 10 calendar days of providing the notice required in Section 104.03 A.1, “Contractor Request” or immediately, as required in Section 104.03 B, “Contractor Request, Work Not Started” , notify the Engineer of the intention to file a claim by submitting a signed Notice of Intention to File a Claim (SFN 16743) . Define the basis for the compensation and time extension requested for each claim issue. Failure to notify the Engineer properly of the intention to file a claim constitutes a waiver of a claim for compensation or a time extension and releases the Department from responsibility for providing compensation or a time extension for any related claims filed under (NOI)”, and Section 104.05, “Claims for Adjustment”. If work related to the claim has begun and it is not feasible to stop the work, immediately provide notification to the Engineer that the work is continuing. For work that is continuing or for work that is beginning under direction of the Engineer, provide the Engineer with updates of costs and delays related to the claim issues in accordance with Section 109.03 E, “Force Account” , and Section 109.03 F, “Delay Costs”. Failure to provide the Engineer with access to the work and facilities for and assistance in record keeping constitutes a waiver of claim for compensation or a time extension and releases the Department from responsibility for providing compensation or a time extension for any related claims filed under Section 104.04, “Notice of Intention to File a Claim (NOI)” , and Section 104.05, “Claims for Adjustment”. Notification of a claim, or the fact that the Engineer has kept records, does not prove or substantiate the claim’s validity. 30 B. Dispute Resolution. The Department will not participate in dispute resolution if the Contractor has not followed the notification process as specified in Section 104.04 A, “Submission of an NOI”. Within 30 calendar days of the completion of the work included in the NOI, submit the total amount of additional compensation requested and a detailed explanation of the requested compensation. For an NOI involving time, submit specific days requested and the basis of such claim as determined by an analysis of the construction schedules. Submit any supporting documentation that may be useful to the Department in determining the merit of the issue detailed in the NOI. The Contractor may request a meeting, in writing, with the Project Engineer, District Engineer, and the Deputy Director for Engineering or the Director for Operations to review the documentation and attempt to resolve the dispute. The Department will arrange the meeting to convene no more than 30 calendar days after the Department has received the meeting request. The Department will issue a written response to the Contractor no more than 30 calendar days after receiving the documentation or holding the meeting. Time limits may be extended by mutual agreement. If the Contractor disagrees with the Department’s response, the Contractor may pursue a claim in accordance with Section 104.05, “Claims for Adjustment”.
104.05 Claims for Adjustment
A.Submission of the Claim. Exhaust the process required by Section 104.04, “Notice of Intention to File a Claim (NOI)”, before pursuing a claim. The Department will only consider written claim submittals received within 90 calendar days from the time the Department submitted the final estimate to the Contractor, as outlined in Title 24 of the NDCC. The Contractor, by signing the final payment statement, accepts the amount stated as full and final payment on the contract and waives all rights to any further payments for the contract. Provide a claim submittal to the Engineer that contains, at a minimum, the following information for each claim issue included on the Notice of Intention to File a Claim (SFN 16743) . Failure to supply the following information for each claim issue constitutes a waiver of claim for addional compensation for each submitted claim item.
1.A detailed narrative describing the issue, including:
a.The dates, locations, and work affected by each claim issue.
b.The date or dates when the conditions became evident, or the date or dates events occurred, that resulted in each claim issue. 31 c. The dates of all notices submitted by the Contractor to the Engineer and the dates of all responses issued by the Engineer for each claim issue.
d.The name and work assignment of each Department representative knowledgeable of the facts related to each claim issue.
e.The name and work assignment of each Contractor employee knowledgeable of the facts related to each claim issue.
f.References to the relevant provisions of the contract that support each claim issue and a statement of how the provisions support each claim issue.
g.Schedules and updates prepared in accordance with Section 108.03, “Progress Schedule,” and Section 108.06, “Determination of and Extensions to the Contract Time”, describe delays or time extensions related to each claim issue.
h.The identification of relevant project documentation and communications related to each claim issue.
i.A statement indicating whether each claim issue is based on provisions of the contract or on an alleged breach of contract.
j.For time extension claims, the number of days requested and the basis of each claim as determined by an analysis of the construction schedules.
2.Copies of all project documentation that support the narrative.
3.Bid documentation used to prepare the bid, if the contract did not require escrow of bid documentation in accordance with Section 103.08, “Escrow of Bid Documentation”.
4.The amount of compensation requested and detai led explanations and calculations of the requested compensation in accordance with Section 109.03, “Compensation for Contract Revisions”. The Department will not allow “total cost” claims.
5.Copies of informati on previously provided under Section 104.04 B, “Dispute Resolution”. The Contractor shall provide the Engineer, or an authorized representative, with access to examine and copy all Contractor records pertinent to the justification of the claim and to the substantiation of all costs related to the claim. After the Contractor submits the claim submittal, the Department may consider additional information or documentation from the Contractor related to the claim iss ues. The Department will make a determination as to the inclusion of the additional information as part of the claim.
B.Certification of the Claim. Include a signed and notarized certificate of claim, in the form set forth below, with the claim submittal. Failure to provide this certification constitutes a waiver of the Contractor’s right for claim for compensation and a time extension. 32 CERTIFICATE OF CLAIM The undersigned is duly authorized to certify the enclosed documentation on behalf of (Contractor ). (The Contractor ) certifies the following:
1.That ( the Contractor ) has submitted the documentation in good faith;
2.That the information provided is accurate and complete to the best of the ( Contractor’s ) knowledge and belief;
3.That ( the Contractor ) has provided the Engineer access to examine and copy all Contractor records, documents, work sheets, payrolls, invoices, depreciation schedules, and other data which are pertinent to the justification of the claim and to the substantiation of all costs related to the claim;
4.That the compensation and time extension requested accurately reflects the contract revision for which (the Contractor ) believes the department is responsible; and
5.That ( the Contractor ) calculated the costs relate d to the claim in accordance with Section 109.03, “Compensation for Contract Revisions,” and the delays in accordance with Section 108.06, “Determination of and Extensions to the Contract Time.” , NAME , TITLE , COMPANY , DATE , SIGNATURE Subscribed and sworn before me this ____ day of, 20__ NOTARY PUBLIC _______________ My Commission Expires:
C.Department’s Response to Claim. After receipt of a properly submitted claim, the Department will give written notification to the Contractor indicating approval, partial approval, or disapproval of the claim for compensation or time extension requested in accordance with NDCC Chapter 24-02.
D.Conditions Precedent to Contractor’s Demand for Arbitration. No right shall exist to demand arbitration against the Department until the Contractor complies with the requirements specified in Section 104.02, “Contract Rev isions”, “Contractor Requested Contract Revisions”, Section 104.04, “Notice of Intention to File a Claim (NOI)” , Section 104.05, “Claims for Adjustment”, and NDCC Chapter 24-02. All arbitration hearings shall be conducted in Bismarck, North Dakota, unless relocated by mutual agreement.
E.Conditions Precedent to Subcontractor Claims. No subcontractor may maintain a claim action against the Department for payment relating to the work without presenting the claim to the Contractor and obtaining the Contractor's written certification of the following:
1.The Contractor has reviewed the subcontractor's claim and has determined it is fully documented and supported in accordance with the contract;
2.The Contractor will pay the subcontractor in the event of a favorable resolution of the subcontractor's claim; and
3.The subcontract and any releases or waivers executed by the subcontractor do not bar payment to the subcontractor. In addition to the claim submittal requirements in Section 104.05 A, "Submission of the Claim", the subcontractor's claim submission must include a copy of the subcontract and any releases or waivers signed by the subcontractor in favor of the Contractor. The Contractor may not assign or otherwise dispose of the Contractor's interest in the subcontractor's claim without prior written consent of the Engineer.
104.06 Department Initiated Claims
If the Department assesses a claim against the Contractor, the Engineer will immediately provide written notification to the Contractor. The Department may pursue a claim against the Contractor for the following reasons:
A.Unpaid royalty for material removed from Department controlled sources;
B.Materials, supplies, and services obtained from the Department;
C.Products and materials not meeting the contract requirements, including latent defects in the work discovered after final acceptance;
D.Judgments against the Contractor; and
E.Any reason deemed necessary by the Department. If the Contractor does not pay the Department the amount of the claim within 30 calendar days after receipt of the wr itten notification, the Department will withhold the amount of the claim from any payments due the Contractor under the Contract, except that the Department will immediately withhold the amount of a judgment against the Contractor by a court. The Department may withhold payment on any Department project for claims related to another Department project.
104.07 Value Engineering Change Proposals
A.General. The Department will consider written value engineering change proposals (VECPs) that would benefit the Department and require a revision to the contract. The Department encourages VECPs for any aspect of a project but reserves the right to reject any submission with or without review. The Department will notify the Contractor in writing of its decision to accept or reject a VECP in whole or in part. This decision is final and not subject to appeal. 34 Do not base bid prices on the anticipated approval of a VECP. If the Department rejects a VECP, perform the work at the contract unit prices and as r equired by the contract. The Department will notify the Contractor promptly in writing if the response date indicated on a VECP allows insufficient time for review. The Department bears no liability for costs or delays based on the Department’s failure to respond by the date indicated on the VECP. The Department bears no liability for costs or delays resulting from the rejection of a VECP including; development costs, loss of anticipated profits, increased material costs, labor costs, or any other cost. The Department retains the right to use, duplicate, or disclose, in whole or in part, any information needed to implement a VECP. The Department also retains the right to use, in whole or in part, any accepted VECP on other Department projects without obli gation to the Contractor. The Contractor may restrict the Department’s right to use or disclose information submitted with a VECP if the Department rejects the VECP. Propose such restrictions in writing with the VECP.
B.Preliminary VECP Meeting. Meet with the Engineer before formally submitting a VECP to discuss the proposed revision to the contract and its potential benefits.
C.Conditions. The Department will only consider a VECP when the following conditions are met:
1.The two parties have executed the contract in accordance with Section 103, “Award and Execution of Contract” .
2.The likely benefit is sufficient to warrant review and processing.
3.The Contractor submits the VECP. The Department invites and encourages VECPs provided by subcontractors but will only consider those submitted through the Contractor.
4.The Contractor clearly labels the VECP as a “Value Engineering Change Proposal” or “VECP.” The Department will reject a VECP that has any of the following characteristics:
1.Requires excessive time or cost for review.
2.Results in an increase to the total contract amount.
3.Contains revisions to the contract that the Department has previously considered and rejected.
4.Proposes a lesser -quality material. 35 5. Contains revisions to the contract that the Department has previously accepted on another Department project, or is based on or similar to standard specifications, special provisions, or another set of plans .
6.Impairs essential functions or characteristics of a project, including service life, economy of operation, maintenance, appearance, safety, or other means of measuring the Department’s cost or risk related to the performance of the project.
7.Proposes cost reductions resulting from corrections to contract errors identified by the Contractor.
8.Proposes the substitution of one contract item for another contract item.
9.Contains proposed revisions that are inconsistent with the Department’s design policies and criteria for the contract.
10.Proposes the use of an aggregate source other than those identified in the Contract, or proposes the reduction of bitumen content by switching aggregate sources. The Contractor may use aggregate sources other than those identified in the contract, but the Department will not consider this type of proposal to be a VECP.
11.Any VECP containing experimental features.
12.The Department will not consider a VECP if the contract contains equivalent options.
D.Subm itting a VECP. To submit a VECP, provide two copies of the following to the Engineer:
1.A cover letter indicating the submission is a VECP.
2.A description of the difference between the existing contract and the proposed change and the comparative advantages and disadvantages of each. Where applicable, include effects on service life, economy of operations, maintenance, appearance, and safety.
3.Separate cost estimates for the affected parts of the contract, including the performance bond, with and without the proposed changes. Break the estimates down by pay item numbers, and indicate quantity increases or decreases and deleted pay items. Use current Department pay item names and numbers to identify proposed work not covered by the existing contract. In preparing the estimates, include overhead and profit within each affected pay item.
4.Preliminary drawings and specifications describing the proposed changes. Include an itemization of details, sheets, design standards, and specificati ons requiring changes or additions if the Department adopted the VECP.
5.Analysis in sufficient detail to identify and describe features of the contract requiring change if the Department adopted the VECP. Support design changes to engineered - elements by computations sealed by a professional engineer in the appropriate discipline. Provide a discussion of how these changes can be accomplished, and assess their effect on other contract elements. 36 6. The date by which the Department must execute a change order adopting the VECP to obtain the maximum benefit.
7.A statement detailing the VECP’s effect on the scheduled completion date.
8.A description of previous use or testing of the same or a similar VECP and the circumstances and results. If submitted on another Department project, indicate the date, project number, and the action taken by the Department.
9.Provide any additional information requested by the Department within 10 business days of the date of request. The Department will consider the Contr actor's failure to do so as cause for rejection.
E.Payment. The Department will use a change order to incorporate changes resulting from an accepted and adopted VECP and to authorize payment. The Department will determine and make payment as follows:
1.As appropriate, the Department will change contract item quantities, add new contract items, eliminate contract items, or change the unit prices for contract items, as agreed.
2.The Department will pay the Contractor 50 percent of the net savings realized, calculated as the difference between the total contract amount with and without the VECP. Section 105 37 SECTION 105 CONTROL OF WORK
105.01 General
The Contractor is responsible for the successful performance of the work as required by the contract, whether the Contractor’s personnel are performing the work or not. The Engineer’s decisions will be final on all questions regarding the quality and acceptability of materials furnished, work performed, rate of work progress, interpretation of the contract, and the acceptable fulfillment of the contract.
105.02 Contractor Requirements
Keep one complete copy of the contract at the project during the performance of the work. Give the work the constant attention necessary to facili tate progress. Cooperate fully with the Engineer. Submit all project submittals and correspondence to the Engineer. If the contract allows the Contractor to correspond directly with other Department representatives, the Contractor shall submit a copy of a ll such submittals and correspondence to the Engineer at the same time the correspondence is submitted to the other Department representative. Before starting the work, designate a qualified superintendent and notify the Engineer of the superintendent’s c ontact information in writing. If replacing the superintendent, immediately notify the Engineer in writing. To be considered qualified the superintendent must be:
A.A responsible employee of the Contractor;
B.Capable of reading and understanding the contract;
C.Present at the project site while work is underway, including work by subcontractors, unless otherwise approved by the Engineer;
D.Authorized to:
1.Represent and act for the Contractor;
2.Attend project meetings, when required by the contract;
3.Execute orders and directions of the Engineer; and
4.Ensure subcontractors are performing work in accordance with the contract requirements.
105.03 Cooperation With Utility Owners
A.General. The vertical and horizontal utility locations shown in the plans are approximate. Plan locations should not be interpreted as exact for bidding or construction purposes .
Source: North Dakota Standard Specifications for Road and Bridge Construction, 2022 Edition. Pages 61–71 of 550.