109Measurement and Payment

109.01MEASUREMENT OF QUANTITIES

The Department will use the United States customary units to measure work completed under the contract. The Department will determine quantities of Work performed under the Contract using measurement methods and computations conforming to good engineering practice. The Department will designate Items as Measured Items or as Proposal Items by having a suffix of M or P in the Item number respectively. The Department will measure quantities of Measured Items for payment. For measured quantities, the Department will measure to the significant figure as specified in Table 109.01-1. Table 109.01-1 Item Price Significant Figure <$50.00 1 $50.00 to $500.00 0.1 >$500.00 0.01 For measured quantities that are measured by area, and where areas contain fixtures that are not part of the Item, the RE will only deduct the areas of individual fixtures having an area of greater than nine square feet. For measured quantities that are measured by volume, the Department will calculate volumes using the end area method. For measured quantities that are measured by weight, the Department will calculate weight using the net certified weight tickets corrected for any loss or waste. Whenever the phrase “Contract quantity” is used in this Subsection, it is the quantity in the Proposal adjusted by Change Orders. The Department does not typically measure quantities for Proposal Items, except quantities designated on the Plans as “if and where directed,” for payment . T he Contractor or the RE can measure Proposal Items for payment . If making a measurement for a change in payment, submit drawings, calculations, and other information demonstrating the as -built quantity to the party not initiating measurement. If the difference between the measured quantity and the Contract quantity is less than or equal to 10 perc ent of the Proposal quantity, the Department will make payment based on the Contract quantity. If the difference is more than 10 percent of the Contract quantity, the Department will make payment based on the measured quantity. For each Item that the Contractor requests a Proposal Item be measured, and it is determined that the difference between the quantity measured and the Contract quantity is less than or equal to 10 percent of the Proposal quantity, the Department will deduct $500.00. The Department will measure quantities for Proposal Items that are designated on the Plans as “if and where directed” for payment when the RE directs work using the “if and where directed” quantity.

109.02SCOPE OF PAYMENT

The Department will make payment for the elements of work described under the “Construction” or “Procedure” subsection under the corresponding Item in the “Measurement and Payment” Subsection. The Items included under the “Measurement and Payment” Subsection are full payment for the materials described under the “Materials” Subsection and the work described under the corresponding “Construction” or “Procedure” Subsection. The Department will not make additional or separate payment for work or portion of work unless specifically provided for in the “Measurement and Payment” Subsection. For Items subject to payment modification based on quality requirements, the Department will make the payment modification as specified. The Contractor agrees to accept the payment provided for in the Contract as full payment for furnishing labor, materials, tools, equipment, and other resources necessary to complete the Work, and for performing the Work contemplated and embraced under the Contract in a complete and accep table manner. Except where specified elsewhere in the Contract, payment will include full compensation for all risk, loss, damage, or expense of whatever character arising out of the nature of the Work or the prosecution thereof, or for the action of the elements that the Contractor may encounter during the prosecution of the Work. 80

109.03PAYMENT FOR FORCE ACCOUNT

For work done under force account, the Department will make payment for the costs allowed as specified in 104.03.08 based on the following documentation submitted by the Contractor at the completion of each force account:

expenses as specified in 104.03.08.6; and equipment as specified in 104.03.08.7.

discounts, and allowable sales tax.

in 104.03.08.

costs not covered by the rental agreement, provide certified records of the eligible hours and documentation of costs.

Provide to the RE a summary of costs for the force account in an electronic format provided by the Department, and a certification stating the following: All costs submitted have been incurred as a result of the force account, and all vendor invoices have been paid. The Department will adjust force account payment for those costs incurred that the Department determines to be the fault of the Contractor. The Department will further adjust the force account payment where the Contractor’s prices in its Proposal for any affected original Items did not include all the costs to complete the affected work as originally provided in the Contract.

109.04PAYMENT FOR DELAY DAMAGES

For eligible extensions, the Department will make payment for the costs allowed, as specified in 104.03.09, based on the following documentation submitted by the Contractor:

RE.

For operating costs not covered by the rental agreement, provide certified records of the eligible hours at the rates approved by the RE.

109.05ESTIMATES

The Department will make monthly payments to the Contractor for work perfor med and for materials delivered, as specified in 109.06. The RE will calculate the payment in an Estimate consistent with the provisions of the Contract. If not otherwise described in the Contract, the RE will be the sole judge of the amount of progress payment due for partially completed work. The quantities provided in the Estimate may be approximations and may not be based on as-built quantity measurements. The Department will establish the date of the month that the Estimate is processed. 81 Pay subcontractors and suppliers for satisfactory performance of their work no later than 10 days from receipt of each payment made by the Department. Pay subcontractors and suppliers the full amount of retainage no later than 10 days from receipt of payment made by the Department for the subcontractor’s or supplier’s work. The RE will provide a summary of the Estimate to the Contractor. Before the issuance of each payment, certify, on forms provided by the Department, whether:

payment and will be paid the amount due from the current progress payment, for the subcontractor or supplier’s work that was paid by the Department.

the previous progress payment and will be paid the amount due from the current progress payment, excluding retainage, for the subcontractor or supplier’s work that was paid by the Department; or

from the subcontractor or supplier. Therefore, the following subcontractors and suppliers have not been paid for work performed or materials supplied to the project from the proceeds of the previous progress payment or will not be paid for work performed or materials supplied to this project from the proceeds of the current progress payment, or both. If the certification indicates that the Contractor has withheld or will withhold payment from a subcontractor or supplier, provide written notice, according to N.J.S.A. 52:32-40 and N.J.S.A. 52:32-41, of such non-payment to the subcontractor or supplier. Provide a copy of the notice to the Department and to the Surety that holds the performance bond. Include the reason for withholding payment and state the amount of payment withheld in the notice. The date that the Department receives the certi fication will initiate the 20 day approval period under N.J.S.A. 2A:30A-1, et seq. The Department will not accept the certification before being requested by the RE. If the Contractor fails to pay the subcontractor or supplier within 30 days after the subcontractor or supplier satisfactorily completes the specified work, the Department may withhold progress payments from the Contractor, until the Contractor pays the subcontractor or supplier all delinquent amounts due, or the Contract is terminated, or the matter is resolved under N.J.S.A. 52:32-40 and N.J.S.A. 52:32-41. If the Department receives an allegation from a subcontractor or a supplier that the Contractor has not paid the subcontractor or supplier the amount due from a previous progress payment, including retainage, submit to the RE within 10 days of a request made by the RE, evidence that payment has been made. If no valid basis exists for withholding payment, N.J.S.A. 52:32-40 and N.J.S.A. 52:32-41 authorize any subcontractor or supplier from whom payment is withheld to receive from the Contractor, in addition to any amount due, interest at a rate equal to the prime rate plus 1 percent if the subcontractor or supplier is not paid within 10 days after receipt by the Contractor of payment by the Department for completed work that is the subject of a subcontract or a material supply agreement. This interest begins to accrue on the tenth day after receipt of payment by the Contractor. If court action is taken by a subcontractor or supplier t o collect payments withheld by a Contractor and it is determined that a valid basis existed for the withholding of those payments, the subcontractor or supplier shall be liable for any court costs incurred by the Contractor in connection with the action. The Department will not make payment for an Estimate having a value less than $5 ,000.00, unless it is for the Final Certificate. The Department will deduct and withhold 2 percent in retainage from the total Estimate amount for State Funded Projects. On State Funded Projects, the Contractor may not withhold subcontractor retainage that exceeds the amount of retainage that the Department withholds from the Contractor. 82 Regarding Federally Funded Projects, the Departm ent will deduct and withhold 2 percent in retainage from the total Estimate amount, excluding amounts for subcontracted work, until Substantial Completion. Pursuant to 49 C.F.R. § 26.29(b)(1), the Contractor may not withhold retainage from a subcontractor on Federally Funded Projects. In the first Estimate following Substantial Completion, the Department will reduce the retainage withheld to one percent of the Total Adjusted Contract Price, excluding subcontracted work on Federal Aid Projects, unless it has been determined by the Department that the withholding of additional retainage is required. If retainage is held in cash withholdings, the reduction is to be accomplished by payment under the next Estimate. If retainage is held in bonds, the Department will authorize a reduction in the escrow account. The RE has the right to not process an Estimate when, in the judgment of the RE, the Work is not performed or proceeding as specified in the Contract or following the Department giving the Contractor and Surety notice of default as specified in

108.14

The Department’s processing or payment of an Estimate is not an approval of defective or improper work. The Department, upon determining that any payment under a previous Estimate was improper or unwarranted for any reason, has the right to recover erroneous payment from the Contractor.

109.06MATERIALS PAYMENTS AND STORAGE

The Contractor may request payment for the cost of materials, including the storage cost, not incorporated into the Work. If approved by the RE, the Department will make payment for the cost of materials, including storage costs if such payment exceeds $25,000.00; however, the amount of payment may not exceed 85 percent of the bid price for the associated Item. The Department will not make payment for such materials until the RE is satisfied that:

leased by the Contractor or the Department within the State, except that the Contractor may store structural steel outside the State with the prior approval of the Department.

certification and materials test reports.

executed Release of Liens for Materials Stored for Incorporation in Department of Transportation Project Form, including the transfer of ownership to the Department.

access limited to the Department and the Contractor. Additionally, the Con tractor has posted a sign at the location clearly identifying, and printed in large letters, that the materials are without encumbrances and are to be solely used for the Project.

canceled only with the written permission of the Department. Submit a copy of the lease to the RE. The Department will not make payment for common materials not incorporated into the work such as but not limited to soil aggregates, pipe, conduit, poles, and wire, which could readily be removed and reused on other contracts. Payment for materials does not constitute Department approval or Acceptance of the materials or work. If materials paid for are damaged, stolen, or prove to be unacceptable, the Department has the right to recover the costs from the Contractor. The Department will not make payment for plant materials until they are planted or installed.

109.07BONDS POSTED IN LIEU OF RETAINAGES

The Contractor may deposit negotiable bonds of the State or any of its political subdivisions, which have been approved by the Department, in an escrow account to secure release of all or a portion of the retainage withheld as sp ecified in

. Establish the account under the provisions of an escrow agreement to be entered into between the Contractor, the

Department, and a bank located in the State that is an authorized depository with a trust department. Pa y the charges of the bank for services rendered according to the terms and conditions of the escrow agreement. The Contractor may obtain agreement forms and a list of approved bonds from the Department. Obtain bonds that have a rating of at least “B A A” by Moody’s Investor Service or “B B B” by Standard and Poors Corporation. If the market value of the bonds on deposit in the escrow account falls below the amount of retainage required by the Contract, deposit additional bonds of sufficient value in the es crow account to secure the release of retainage, or the 83 Department will deduct from current payments amounts sufficient to ensure that the total bond value on deposit plus retainage withheld will equal the total retainage requirement for the Contract. Ensure that the bonds deposited in the escrow account remain acceptable to the Department. If the Contractor does not replace unacceptable bonds with acceptable bonds, the Department will withhold from future payments amounts equal to the amount of retainage, the release of which was based upon the value of the now unacceptable bonds. In the event of a declaration of default or an Order of Termination of the Contract, the Department will notify the bank in writing of the declaration of default or the Order of Termination. Following said written notification, the bank shall not dispose of, release, or compromise any bonds or the proceeds of called or mature bonds, without written instructions from the Department. If directed by the Department, the bank shall sell any bonds in the escrow account and pay the proceeds of such sale or the proceeds held in the account from called or matured bonds to the Department or to any payee designated by the Department. The Department will send a copy of the instructions to sell to the Contractor.

109.08AS-BUILT QUANTITIES

Following Substantial Completion, the RE will finalize as-built quantities for all Items and provide a list to the Contractor for review. Accept or reject the proposed as-built quantities within 20 days of receipt. If rejecting, submit the disputed quantities and supporting calculations with a notice of rejection. The RE will review su pporting calculations within 20 days, and will accept or reject, in part or in whole, the disputed as-built quantities. If the Contractor fails to respond or fails to provide supporting calculations with a no tice of rejection within the 20 day period, the Department will deem the Contractor to have accepted the proposed as-built quantities and will deem the Contractor to have waived any claim regarding the proposed as-built quantities. If prior to the issuance of the Final Certificate, the Department determines there is an error in the provided as -built quantities, the Department will provide a revised list to the Contractor for review. Accept or reject the revised as -built quantities as described above.

109.09AUDITS

All claims filed and force account work are subject to audit at any time following the filing, whether or not part of a suit pending in the courts of this State pursuant to N.J.S.A. 59:13 -1, et seq. The audit may begin af ter the Department has given 15 day notice to the Contractor, subcontractor, or supplier. If an audit is to be commenced more than 60 days after Acceptance, the Department will provide the Contractor with reasonable notice of the time when such audit is to begin. Provide adequate facilities that are acceptable to the Department for such audit during normal business hours. Make a good faith effort to cooperate with the auditors. Failure to retain and maintain sufficient records to allow the Department’s auditor to verify a claim submitted by the Contractor, subcontractor, or supplier constitutes a waiver of such cla im and bars any recovery; if the Department has already made payment, the Contractor shall refund to the Department the amount so disallowed. At a minimum, provide the auditors the following documents unless their availability is otherwise limited by the custody agreement specified in 103.05:

84

its accountant, or others.

establishing the cost of owning and operating equipment, all such other source documents.

performed and for each of the 5 years before the commencement of the Project.

bid was based.

of damages as to each.

but not limited to, labor, benefits and insurance, materials, equipment, subcontractors, and all documents that establish the time periods, individuals involved, and the hours and rates for these individuals. Where payment for materials or labor is based on the cost thereof to forces other than the Contractor, the Contractor shall ensure that the cost records of such other forces are open to inspection and audit by the Department on the same terms and conditions as the records of the Contractor. Pursuant to N.J.S.A. 52:15C-14(d), relevant records of private vendors or other persons entering into contracts with the Department are subject to audit or review by the New Jersey Office of the State Comptroller. Therefore, the Contractor shall maintain all documentation related to products, transactions or services under the Contract for a period of 5 years from the date of final payment. Such records shall be made available to the New Jersey Office of the State Comptroller upon request.

109.10CONTRACTOR’S COMPLIANCE

Provide the RE with a written statement on a form provided by the Department certifying that all employees employed by the Contractor or by any subcontractor have been paid wages not less than those required by the Contract in compliance with N.J.S.A. 34:11-56.25, et seq.

109.11FINAL PAYMENT AND CLAIMS

The Final Certificate may result in either a Final Payment to the Contractor or a credit (payment) due the Department. After Acceptance and the as-built quantities are finalized, the RE will process an Estimate and the Department will issue the Proposed Final Certificate to the Contractor. Within 7 days after receiving this Proposed Final Certificate, submit a release or conditional release to the Department on a payment voucher provided by the Department. If the Contractor has no reservation of claims and accepts the Proposed Final Certificate, provide a written release to the Department stating the following: In consideration of the above payment, I hereby release the State of New Jersey, Commissioner of Transportation, the Department, their agents, officers, and employees from all claims and liability of whatsoever nature for anything done or furnished or in any manner growing out of the performance of the Work. If the Contractor has a reservation of specific claims, but otherwise has released all claims not specifi cally reserved and accepts the Proposed Final Certificate, state the following: In consideration of the above payment, I hereby release the State of New Jersey, Commissioner of Transportation, the Department, their agents, officers, and employees from all claims and liability of whatsoever nature for anything done or furnished in any manner growing out of the performance for the Work except for____________________. Include in the release the specific monetary amounts and the specific nature of the claims being reserved. Failure to state specific monetary amounts and the specific nature of the claim shall result in a waiver of such claims. The Contractor may reserve only those claims properly filed with the Department as specified in 107.12 and not previously resolved. If the Contractor reserves claims, proceed as specified in 107.12. The Contractor waives all claims for which the required notice has not been filed with the Department. 85 The Contractor’s failure to submit written release or conditional release within said 30 days constitutes acceptance of the Proposed Final Certificate without exception and a waiver of all claims. Upon receipt of the Contractor’s written acceptance of the Proposed Final Certificate without exception or conditional release, or when the Contractor fails to provide the Department written acceptance of the Proposed Final Certificate within 30 days of issuance, the Department will pay the entire sum due there under as provided by the N.J.S.A. 52:32-32, et seq., provided the Final Certificate indicates a payment is due the Contractor. However, where the Final Certificate indicates a credit (payment) is due the Department, the Contractor shall remit said credit (payment) to the Department. If the Contractor fails to remit the credit due the Department, as indicated on the Proposed Final Certificate, within 30 days of issuance of the Proposed Final Certificate, the Department has the right to recover the credit from the Contractor.

109.12ETHICS STANDARDS AND CONFLICTS OF INTEREST

Both the Department and the Contractor have a duty to prevent conflicts of interest or the appearance of conflicts of interest. Ensu re that all officers, employees, agents, and representatives are aware of these requirements. Obtain information regarding the State’s Business Ethics Guide at http://www.state.nj.us/treasury/purchase/ethics_guide.shtml. Do not pay, offer to pay, or agree to pay, either directly or indirectly, any fee, commission, compensation, gift, gratuity, or other thing of value of any kind to any Department em ployee, or agent as defined by N.J.S.A. 52:13D -13b. and N.J.S.A. 52:13D-13e., or to any member of the immediate family, as defined by N.J.S.A. 52:13D-13i., of any such officer or employee or agent, or any partnership, firm or corporation with which they a re employed or associated, or in which such employee or agent has an interest within the meaning of N.J.S.A. 52:13D-13g. Immediately report in writing the solicitation of any fee, commission, compensation, gift, gratuity or other thing of value by any State officer or employee or special State officer or employee from any State vendor to the Attorney General and the Executive Commission on Ethical Standards. Do not, directly or indirectly, undertake any private business, commercial or entrepreneurial relationship with, whether or not pursuant to employment, contract or other agreement, express or implied, or sell any interest in such contract to any Department employee or agent having any duties or responsibilities in connection with the purchase, acquisition or sale of any property or services by or to any State agency or any instrumentality thereof, or with any person, firm or entity with which he is employed or associated or in which he has an interest within the meaning of N.J.S.A. 52:13D-13g. Immediately report any relationships subject to this provision to the Executive Commission on Ethical Standards, which may grant a waiver of this restriction upon application of the Department’s employee or agent and finding that the present or proposed relationship does not present the potential, actuality or appearance of a conflict of interest. Do not influence, or attempt to influence or cause to be influenced, any Department employee or agent in his or her official capacity in any manner, which might tend to impair the objectivity or independence of judgment of said employee or agent. Do not cause or influence, or attempt to cause or influence, any Department employee or agent to use, or attempt to use their official position to secure unwarranted privileges or advantages for the vendor or any other person. The provisions cited above in this Subsection shall not be construed to prohibit a Department employee or agent from receiving gifts under the same terms and conditions as are offered or made available to members of the general public, subject to any guidelines the Executive Commission on Ethical Standards may promulgate. Provide to the RE at the preconstruction meeting, on a form provided by the Department, a certification that the Contractor understands these obligations, has adhered to these ethics standards and shall continue to adhere to these ethics standards.