From: Leegard, Mike (DOT)

Sent: Thursday, October 13, 2011 5:04 PM Subject: Traffic Control compensation for extended contract time.

Hi Everyone… MnDOT will endorse a pre-approved method for compensation for extended traffic control due to the statewide shutdown. Extended labor, equipment and materials will be compensated for based on additional time which is attributable to the state shutdown and classified as forgivable and compensable. Labor and equipment will be documented via payrolls and equipment logs during the actual shutdown time period. However, ownership costs for traffic control devices are difficult to document and contractors seem to be hesitant to reveal their ownership costs to MnDOT. Instead, contractors assert that the schedule of traffic control devices in the contract should govern for extra time for traffic control. MnDOT is forced to reject that notion because the schedule of costs in the contract for extra traffic control is limited to extra devices ordered by the engineer that are not in the plan and are used to solve traffic problems. Therefore, the following is pre-approved for compensation for extended traffic control for projects which were suspended due to the statewide shutdown:

No extra compensation will be due for traffic control for projects that are completed within the original time frame footprint for calendar completion date projects and calendar day projects.

Compensate the contractor for actual costs for labor, from payrolls, for extended traffic control (because any extra forgivable and compensable contract time will include the “tear down”, only the labor to maintain traffic control during the suspension period will be eligible).

Compensate the contractor for actual costs for equipment, from equipment records, for extended traffic control (again, because the extra forgivable and compensable contract time will include the “tear down”, only the equipment costs during the suspension period will be eligible).

Compensation for ownership costs for the devices: o First, consider the payment schedule for lump sum traffic bid items. The contract pays

50% of the lump sum pay item at 5% work completed, 75% at 10% work completed, 95% at 50% work completed and 100% at 100% work completed. Because this pay item is so very frontloaded, it supports the idea that that traffic control for a project requires most of the labor, equipment and materials to be expended in the first half of the project. Further, the pay item is frontloaded to the extent that it seems to support a notion that the devices should be considered as “small tools” and are consumed during the project. If this is not the case then the traffic control pay item is inappropriately front loaded and should be remodeled.

o Second, even though it is not appropriate to use the published schedule for extra traffic control devices from the special provisions for extended traffic control, there is an extended component to that schedule. Specifically, the schedule prices for traffic control devices are reduced to 40% of the original price after 90 days of service for individual devices. This reduced rate would include labor, equipment and materials. To extract just the ownership costs for the devises, it could be assumed that labor, equipment and devices are equal. Therefore, the ownership costs for the devices would constitute 13% of the lump sum bid price.

o Based upon the two scenarios, the correct extended ownership costs for traffic control devices probably lies somewhere between zero% and 13% of the total lump sum traffic control bid price. Therefore, MnDOT will pre-approve a method to compensate the contractor for extended traffic control device ownership costs as follows:

Compensation for extended ownership costs for traffic control devices will be

the product of the unit day cost (above) and the number of extra calendar days on the project which are forgivable and compensable.

This method will not require an audit in accordance with MnDOT Standard Specification 1721.

Contractors may also provide actual ownership costs in lieu of the above method, subject to MnDOT Standard Specification 1721.

Working day project considerations:

o Estimate the number of calendar days using the same criteria that was used to develop the calendar analysis portion of the “time and traffic” for the contract. If the working days were suspended during the shutdown, the forgivable and compensable extra calendar days = the actual number of days the projects was suspended and working days were not charged.