237.8 Contract Time

Figures

Average Working Days per month for six major item types of work

Contract Time Determination

Request Form

Road User Cost Request Form

Contract time is to be set to encourage contractors to continuously and diligently prosecute the work in a reasonable fashion while causing the least disruption to traffic. Calculate contract time using the typical working days available during a construction season and anticipated production rates for the items of work , such as average working days per month for six major item types of work. Great care is to be taken in preparing a working day study for a project. Incorrect contract time can be the most significant factor in the bid prices on a project, as well as a primary cause of claims, particularly where other constraints such as tight working conditions, heavy traffic, multiple traffic shifts, complex staging or weather-dependent items are included. When preparing the working day study, review the standard specifications for construction restrictions and approval requirements, and consult with Bridge and district construction and materials personnel to determine probable order of work and time involved to receive material and mix design approvals. Consideration is to be given, but not limited to:

• When working days are charged

• Restrictions on construction of individual items of work (e.g. thickness of lifts allowed)

• Time allowed for asphalt mix design approval process (particularly on Superpave projects)

• Concrete curing time

• 120 calendar days are to be added to the working days in computation of the project completion date for fabrication and delivery of signal posts and lighting poles, when signals or lighting are a significant portion of the project

• Other materials fabrication or delivery time (including aggregate, steel, and other specialty items such as signal controllers)

When asphalt paving, a temperature-sensitive project activity, is a part of the project, the designer is to try to coordinate working days so paving activities can be completed during favorable weather conditions. If paving activities are to extend beyond one construction season, working days are to reflect a milestone around October 1 so plan thickness is constructed for all pavements to be opened to traffic over the winter season.

Design will assign the Notice to Proceed date based on the final estimate cost. Generally, the construction contract will include provisions that provide for the contractor to receive a Notice to Proceed for the contract 30 days from the award of the contract for projects of $2 million or less and 60 days from the award of the contract for projects greater than $2 million. The district is to coordinate with Design when determining an early or delayed Notice to Proceed. For early or delayed Notice’s to Proceed, a JSP stating the date of the Notice to Proceed is to be included in the final plans submittal.

A Contract Time Determination report is available for further information on developing working day studies. This report contains the most current data available for production rates. Core team members and Central Office personnel are good resources to use for assisting in establishing contract time.

237.8.1 Calendar Days vs. Completion Dates

Contract time should be governed by calendar days on most projects. Completion by calendar date may be used where a specific date has been established as necessary for the completion of the project. The completion date or calendar days specified is determined by the working day study that uses reasonable production rates for the project’s construction staging. The standard special provision "Contract Liquidated Damages" allows flexibility to administer the contract as calendar days with a completion date or as completion date only. If administering as both a completion date and calendar days, the contractor is provided a window of time in which to complete the work. Projects that will require more than one construction season to finish should be administered by completion date only. The use of working days contracts is allowed for special circumstances but approval must be obtained from the Design Division.

237.8.2 Liquidation Damages

The district will insert the standard special provision “Contract Liquidated Damages” into each project, and Design will insert the liquidated damages value in the JSP. If projects are in required combination, only one special provision is necessary for the contract. If conditions warrant, the district may recommend a different amount of liquidated damages than might ordinarily be determined. Liquidated damages are based on anticipated administrative and construction engineering costs, road user and work zone traffic accident costs. Typical costs resulting from the nature of the project may also be included and their nature and calculation identified in the project file. Liquidated damages are not penalties and are never to be identified as penalties. Liquidated damages are used to recognize delay in completion of a project or milestone has real cost that is difficult to estimate at the time a project contract is let. Liquidated damages recognize the difficulty to fix the costs. It is to be noted possible overlap of liquidated damage provisions may occur. If this is the case, care is to be taken so as to not structure the contract in a manner that may apply a double assessment of damages.

237.8.2.1 Table of Liquidated Damages

The amounts are based upon Road User Costs for a 2-mile slowdown in traffic flow and work zone crash costs from previous history.

AADT	Liquidated Damages
Under 3,500	$1,800 + Admin Costs
3,500 to 10,000	$2,300 + Admin Costs
10,001 to 20,000	$3,200 + Admin Costs
20,001 to 30,000	$5,400 + Admin Costs
30,001 to 50,000	$7,600 + Admin Costs
50,001 to 80,000	$9,800 + Admin Costs
Over 80,000	$11,400 + Admin Costs

237.8.2.2 Administrative Costs

Contract Amount		Construction Administrative Costs
From	Up To and Including
$0	$500,000	$250
$500,001	$2,500,000	$500
$2,500,001	$5,000,000	$1,000
$5,000,001	$10,000,000	$1,500
$10,000,001	$20,000,000	$2,000
$20,000,001	over	$2,500

Note: Total Liquidated Damages shall not exceed 5% of the total contract amount.

237.8.3 Liquidation Damages Specified

Job Special Provisions are available for use when it is determined liquidated damages specified is appropriate for the completion of a specific stage, part or feature of the construction. The time or completion date provided must be justified by an accurate workday study. The amount of liquidated damages specified is to bear a direct relationship to the actual costs incurred by not having the specified portion of the work complete. Road user costs are to be used and other costs may be considered in establishing liquidated damages specified. The administrative, construction and engineering costs expected to be incurred may also be considered but care is taken to ensure these costs are not included in damages listed elsewhere in the contract. Typical costs to MoDOT, road users and other third parties may be considered and included and their nature and calculation identified in the project files. Similar to liquidated damages; liquidated damages specified are not penalties and are never to be identified as penalties. It is to be noted that possible overlap of liquidated damage provisions may occur. If this is the case, care is taken so as to not structure the contract in a manner that may apply a double assessment of damages.

Suggested criteria for use:

• Time of completion of milestones or specific features is critical to future work

• Minimize detours

• Public and worker safety

• Completion time of a specific feature is critical to minimize extraordinary impacts to travelers

• Generally, periods of short duration

• Units of time may be number of calendar days, completion by a calendar date, hours or portions of hours.

237.8.4 Acceleration of Work Clauses

Project Complete

An acceleration of work clause, also referred to as an Incentive/Disincentive clause or A+B bidding, is defined by a job special provision that allows the bidder to bid the time the bidder believes the work may be completed. Under the A+B method, each submitted bid consists of two components: The “A” component is the traditional bid for the contract items, and the “B” component is the total number of calendar days, or other units of time, the bidder stipulates will be required to complete the project or phase of a project, multiplied by the road user cost per unit of time. The lowest bid is determined by adding the sum of the amount bid for the contract items to the cost associated with the time bid to complete the project or phase of the project. This total value is used only to determine the winning bidder and is not included in the contract cost (the incentive to be earned or disincentive to be deducted may only be determined when the work is completed). The pay item number used for the “B” portion of an A+B project is 618-99.16 (Misc. Average Road User Cost).

For projects with high road user impacts, the A+B method can prove to be an effective technique. By giving contractors the flexibility to establish thier own completion time, operational efficiency is rewarded and significant reductions in project impacts may result. Projects selected for acceleration of work clauses are generally high profile, high traffic areas, and typically involve road or bridge closures, however this provision can become too complicated to administer on extremely complicated multi-year projects. Road user costs are required and an accurate workday study is critical. Routine projects are not to incorporate A+B bidding. The potential incentive amount is to be factored into the project budget as soon as possible.

Suggested criteria for use:

• Traffic restrictions, lane closures, or detours resulting in high road user impacts

• Traffic control phasing may be structured to maximize a contractor’s ability to reduce the duration of construction

• The project is substantially free of third party conflicts, e.g. right of way, utilities, etc.

• Significant impacts to the local community or business economies

• Safety concerns

• Usually the contract time is one season or less (bidding days for more than one season adds potential risk to the bidder although it may be suitable in unique circumstances)

• Usually used on projects where more than one or two bidders are expected

The use of A+B bidding may motivate the contractor to gain incentives by using innovative methods of construction and phasing thus reducing contract time and impacts on the traveling public.

237.8.5 Liquidated Savings Specified

Liquidated savings, or straight incentive, is defined by job special provision, allows an incentive payment if the contractor finishes a phase or the project by a certain time. Again, a road user cost and accurate workday study is necessary. The potential incentive amount is to be factored into the project budget as soon as possible.

Suggested criteria for use:

• Completion of milestones are critical to future work

• Long detours

• Contract time is lengthy

237.8.6 Liquidated Savings Specified/Liquidated Damages Specified

This is a job special provision that encourages early completion of a project or phase of a project by offering an incentive while limiting construction time by assessing a liquidated damage specified. This provision is similar to A+B bidding except MoDOT sets the time. If the contractor finishes the described work ahead of time, the contractor receives an incentive. If the contractor finishes the described work after the time set, contractor is assessed a liquidated damage specified. If the time set is for project completion, the liquidated damage specified is not to be applied in addition to regular liquidated damages for the same costs (double assessment). The potential incentive amount is to be factored into the project budget as soon as possible.

Suggested criteria for use:

• Completion of milestones are critical to future work

• There is a critical completion date

• Long detours

• Public or worker safety

• Contract time is lengthy or short