Permissible Changes in Scope of Work for Construction Contracts (2015)

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B-1 APPENDIX B—SUMMARY OF STATE TRANSPORTATION APPROACHES TO CONTRACT MODIFICATIONS QUESTIONS ODOT California Connecticut 1. State Competitive Bidding Laws for construction contracts? Ohio Rev. Code § 5525, Construction Contracts See the Cal. Pub. Cont. Code §10115.2, Minority and Women Business Participation Goals for State Contracts. Conn. Gen. Stat. § 13a-95. Submission of bids on state highway construction. Standard Specifications Form 816. Section 1.02 Proposal Requirements and Conditions. 2. State laws or regulations that govern issuance and/or approval of construction contract modifications Construction policies 27-010P, Change Orders See the Cal. Pub. Cont. Code §10227, Contract Requirements. Contracts for highway construction. Standard Specifications Form 816. Section 1.03 Award and Execution of Contract, Section 1.04 Scope of Work, and Section 1.09 Measurement and Payment. Construction Contract Bidding and Award Manual. 3. Administrative process for approval of construction contract modifications? Ohio DOT Policy: Construction Policies 27-010(P), Change Orders. Ohio DOT Procedure, 510-010(SP), 03092012, Change Order Standard Procedure. Caltrans Construction Manual Section 5-3, Changes. Chapters 5–8 of the Construction Manual outline this process. 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. Factors considered: Change order over $25,000. Change order resulting from increase of final measurement quantity. Results from federal requirement. Circumstance creating life safety situation; (emergency situation). Chapter 5, Section 3 of Caltran’s Contract Administration Manual provides consideration of the following: Is the type of work significantly different from other types of work in contract? Is it necessary to mobilize specialized equipment? Will the estimated cost of proposed work plus other changes go beyond contract allotment? Does the proposed work represent significant deletion? Does it delay completion? Is it outside contract limits? Is the proposed change order necessary to complete the work? Will it cause a work character change? Will the contract time be affected? Contraction Manual Chapter 8 1-801, Review of change orders requires review of change: is the change in the public interest; does it provide an equal or better material or product; better method of construction? Does the contractor benefit from the change, and if so, is there a corresponding benefit to the project; assessment required on effect of change on contract lump sum items impact to construction activities; effect on project schedule

B-2 QUESTIONS ODOT California Connecticut Does the proposed change adhere to existing permits conditions, environmental mitigation requirements, local agency and utility obligations, and right of way agreements? Does the proposed change require new coordination, permit, or agreements? What is effect on contractor’s planned method of performing work? Is the proposed work already covered in the contract? Will the contractor cooperate with timely cost estimates? What methods of payment will be used? and budget. Survey response provided this additional information. Is the contractor well suited to execute the proposed work and provide a quality product? Is the work able to be completed by DOT Highway Operations (Maintenance) Staff? 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None None reported. None reported. 6. Any different policy or procedure for alternative project delivery projects? None None reported. Facilities Construction: Form 816 Section 1.20, Design Build 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? Ohio DOT Policy: Construction Policies 27-010(P), Change Order, Ohio DOT Procedure: Construction Policies 510-010(SP) 03092012, Change Order Standard Procedure Caltrans Construction Manual Chapter 5, Sec. 5-5, Emergency Contract Administration Same procedure adding non-emergency work. 8. Does your agency use “on-call contracting” for capital or maintenance? No, but on the operation side there are material supplier contracts to perform minor work “on-call.” None reported. No

B-3 QUESTIONS NYSDOT New Jersey DOT Florida 1. State Competitive Bidding Laws for construction contracts? NYS Highway Law, § 38, Contracts for construction or improvement of highways Florida Statutes 2013, Chapter 337 Statute Chapter 14-22, Administrative Rule 2. State laws or regulations that govern issuance and/or approval of construction contract modifications 3. Administrative process for approval of construction contract modifications? NYSDOT uses AASHTO Site Manager to process Change Orders. The CO is developed by field staff in accordance with the contract documents. Required documentation may need to be submitted by the Contractor (e.g., Force Account records, etc.). The Contractor's concurrence is sought, particularly when the contract provides more than one option (e.g., multiple options for Agreed Price). The Approval chain includes the EIC > Regional CO person > Area Supervisor > RCE> MO Reviewer > DCEC >FHWA (as appropriate) Funding > Fund Supervisor. NYS OSC reviews the CO, updates the Statewide Financial System (SFS), and files the CO. Change order guide provides details on processing of change orders, which include increases in quantities, changes in the character of the work, including different site conditions, constructive acceleration, delays, and inefficiencies. Process involved Change Control Board. This is covered in FDOT’s Construction Project Administration Manual (CPAM). Chapters 7 s 3. 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. Construction Admin. Manual provides for evaluation need for change, cost and benefits, and consequences as of revision; evaluation of potential on other agencies and the public; additional resolutions, right of way permits required; impact on contractor’s progress schedule and other contract work; need for extension of time and impact on time-related provisos. NJ Construction Procedure Handbook Section IV, Construction Changes provides modification to existing environmental permits; reason for change; advantages and disadvantages; effects and implementation; impact on time of completion; estimated cost, third party participation, and approval. Chapter 337 of Florida Statutes provide with respect to supplemental agreements and written work orders, statutory guidance, which include, does the change clarify the plans and specifications? Does the change meet the field conditions to provide a safe and functional connection to the pavement? Does the change expand the physical limits of a project only to the extent necessary to make the project functionally operational (such change to physical limits cannot exceed the greater of $100,000 or 10% of the original contract; does the change provide for unforeseen work, grade changes, or alterations in the plans that could not be reasonably contemplated or foreseen in

B-4 QUESTIONS NYSDOT New Jersey DOT Florida the original plans and specifications. In addition, Section 7 of the Florida Construction Project Administration Manual provides for the Engineer to provide estimate and entitlement analysis of the change outlining the reasons for extra work. In addition, delay to the project completion is one that is looked at closely when deciding whether or not to add work to a contract, particularly if the contract is short on or out of allowable contract time. The necessary work done without affecting the existing contract (such as adding to a different contract or letting a fast response contract), FDOT will take this into consideration. 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None reported. None reported. None reported. 6. Any different policy or procedure for alternative project delivery projects? Facilities Construction: Form 816 Section 1.20 Design Build: The only changes are in the wording of the specific project. Given that D-B is in general thought about as a lump sum with responsibility taken on by the D-B firm, then the pendulum of responsibility for producing a completed set of plans falls to the D- B firm. So unless there is an issue with the base technical concept, which essentially falls under a differing site condition, or there is a directed change, then there would only be contractor requested changes. The nuts and bolts of the processing of changes are unchanged. None reported. None reported. 7. Policy or procedure for governing additional work to existing contracts or competitive None reported. None reported. Emergency contracts can be entered into without competitive bid, however, FDOT will most often put the emergency work out to competitive bid. Florida Statute chapter 337 has language addressing FDOT’s authority for emergency

B-5 QUESTIONS NYSDOT New Jersey DOT Florida bidding for emergency contracting? contracts. CPAM chapter 7.6 addresses Emergency Contracts. 8. Does your agency use “on- call contracting” for capital or maintenance? Yes Yes Florida causing damage. FDOT also uses Push-Button Contracts (indefinite quantity/indefinite delivery). FDOT’s Maintenance Office uses Asset Maintenance Contracts to provide for its needs.

B-6 QUESTIONS MassDOT Highway RIDOT CDOT 1. State Competitive Bidding Laws for construction contracts? Massachusetts General Laws: Chapter 30 / Section 39M – Contracts for Construction and Materials, Manner of Awarding (horizontal) Chapter 149 / Section 44A-H – Public Building Construction (vertical) R.I. Gen. Laws § 37-2-1 thru 37-2-18. State Purchases 2. State laws or regulations that govern issuance and/or approval of construction contract modifications Chapter 30 / Section 39I – Deviations from Plans and Specifications Chapter 30 / Section 39N – Construction Contracts, Equitable Adjustment in Contract Price for Differing Subsurface or Latent Physical Conditions Chapter 30 / Section 39O – Contracts for Construction and Materials; Suspension, Delay or Interruption due to Order of Awarding Authority; Adjustment in Contract Price; Written Claim Chapter 29 / Section 20A – Orders or Claims for Extra Work or Materials; Notice Chapter 149 / Section 44J – Invitations to Bid; Notice; Contents; Violations; Penalty Chapter 38 of the Acts of 2013 / 44 – Repeal of Chapter 29 / Section 20A Internet-link: malegislature.gov N/A 3. Administrative process for approval of construction contract modifications? See MassDOT S.O.P. CSD 25- 12-1-000: Extra Work Orders over $100,000. See RIDOT Policy and Procedure for Change Orders dated July 2013. See 2014 CDOT Construction Manual Section 120.7, Change Orders. 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. Statutes listed in Section 1 above define certain types of contract modifications and the circumstances to which they apply. Statutes listed in Section 1 above define certain types of contract modifications and the circumstances to which they apply. See 2011 Standard Specifications for Road and Bridge Construction, Sections 104.01 to 104.07.

B-7 QUESTIONS MassDOT Highway RIDOT CDOT Standard Specifications Sections 1.02, 4.03, 4.04, 4.05, and 4.06 define and prescribe the elements of contract permissible contract modifications. See also RIDOT Policy and Procedure for Change Orders dated July 2013. See also 2014 CDOT Construction Manual Section 120.7. 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None None None 6. Any different policy or procedure for alternative project delivery projects? MassDOT has different change order provisions in its standard design build contracts (on file with authors). (RIDOT permitted to do alternative contracting in accordance with federal regulations) N/A 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? S.O.P. CSD 25-12-1-000 permits the Chief Engineer to approve the start of extra work (subject to later process approvals) due to extreme emergency as a matter of public safety. See RIDOT Policy and Procedure for Change Orders dated July 2013 See 2014 CDOT Construction Manual, Section 120.8.1 to 120.08.8, Emergency Construction Projects. 8. Does your agency use “on- call contracting” for capital or maintenance? N/A RIDOT uses Master Price Agreements (MPA) for the following construction related activities: MPA 451 Statewide Pavement Striping and MPA 484 Statewide Sign & Delineator Installation & Removal. N/A

B-8 QUESTIONS MnDOT TennDOT MichDOT MaineDOT 1. State Competitive Bidding Laws for construction contracts? Minn. Stat. §161.32, Contracting for work on trunk highway. See Tenn. Code Ann. §§ 54- 5-114 thru 54-5-118, State Highways, General Provisions Tenn. Rules 1680, Transportation, 1680- 05, Construction Division,1680-05-03, Prequalification rules. See Mich. Comp. Laws Chapter § 247.661c, Sec. 11c, Construction and maintenance projects to be performed by contract awarded by competitive bidding; other method; finding; report. See Me. Rev. Stat. Ann. 23 § 4242, Contracts for transportation- related services and § 4243, Contracts for construction and maintenance. 2. State laws or regulations that govern issuance and/or approval of construction contract modifications See Minn. Stat 161.32, Subd. 7, Approval and payment of supplemental agreements. N/A N/A N/A 3. Administrative process for approval of construction contract modifications? See MnDOT Construction Tools – Contract Changes See Construction Tools – Construction Administration Manual (updated May 16, 2011). See Construction Circular Letters—104.02-01, 104.03- 01, and 104.03-02. See Bureau of Highways Instructional Memorandum 2012-03, “Processing Contract Modifications.” Bureau of Highways Instructional Memorandum 2013-126, “Contract Modification Procedures for FHWA Oversight Projects.” See Department of Transportation Construction Manual (revision of June 2003). 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. See Standard Specifications for Construction Section 1402. See MnDOT Construction Tools – Contract Changes. See Construction Tools – Construction Administration Manual (updated May 16, 2011). See Standard Specifications for Road and Bridge Construction Sections 104.01 to 104.03,which define and prescribe the elements of permissible contract modifications. See also Tenn. DOT Policy No. 355-01, Approval of Construction Change Orders and Force Account Work, Dec. 15, 2013 (on file with authors). See 2012 Standard Specifications for Construction Sections 103.01 to 103.02, Scope of work. See Department of Transportation Standard Specifications (Nov. 2014 edition) Section 109 (Changes). 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. See Fuller Co. v. Brown, 678 F. Supp. 506 (E.D. Penn. 1987) (cardinal change case). None N/A N/A

B-9 QUESTIONS MnDOT TennDOT MichDOT MaineDOT 6. Any different policy or procedure for alternative project delivery projects? N/A N/A N/A 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? See Standard Specification for Construction Section 1402. See Tenn. Code Ann. Title 54-1-135, Transportation System Failure. MichDOT has an emergency contract process (documents on file with the authors). N/A 8. Does your agency use “on- call contracting” for capital or maintenance? See MnDOT Indefinite Delivery/Indefinite Quantity (IDIQ) in the Construction Manual, Chapter 7. Yes N/A Maine DOT uses on- call contracts for maintenance (survey response on file with authors).

B-10 QUESTIONS DelDOT MonDOT WVDOT TXDOT 1. State Competitive Bidding Laws for construction contracts? Del. Code Ann. 29, § 6962, Large public works contract procedures.  See Mont. Code Ann. §18-1-102, State contracts to lowest bidder - reciprocity. See W. Va. Code § 5A-3- 1 (Purchasing Division) and W. Va. Code § 17- 2A et seq., Roads and highways. See Texas Admin. Code Title 43, Part 1, Chapter 9, Subchapters B, Highway Improvement Contracts, and E, Maintenance project contracts. 2. State laws or regulations that govern issuance and/or approval of construction contract modifications Del. Code Ann. 29, § 6963(b), Emergency procedures and contract change orders.   N/A N/A N/A 3. Administrative process for approval of construction contract modifications? N/A (no formal process) See Montana Department of Transportation Construction Administration Manual Section 104 (on file with authors) and Montana Department of Transportation Site Manager Construction Management System Section 10 Change Orders (on file with authors). See WVDOH Construction Manual (2002). See Standard Specifications for Construction and Maintenance of Highways, Streets, and Bridges, Section 4.2 (2004). 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. See Del. Code Ann. 29, § 6963(b). See also Standard Specifications for Road and Bridge Construction Sections 104.05 to 105.08 (Aug. 2001), Scope of work regarding changes in the character of work–differing site conditions. See Standard Specifications for Road and Bridge Construction Sections 104.01 to 104.03 (2014 Edition), Scope of work. See also Montana Department of Transportation Construction Administration Manual Section 104 (on file with authors) and Montana Department of Transportation Site Manager Construction Management System Section 10 Change Orders (on file with authors). See Road and Bridge Specifications Sections 104.01 to 104.03 (2010), Scope of work. See Standard Specifications for Construction and Maintenance of Highways, Streets, and Bridges, Section 4.2 (2004).

B-11 QUESTIONS DelDOT MonDOT WVDOT TXDOT 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None. None. None. None. 6. Any different policy or procedure for alternative project delivery projects? N/A N/A N/A TxDOT has different provisions for its P3 projects 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? See Del. Code Ann. 29 § 6963(b). N/A Would be considered force account work under Road and Bridges Specifications, Section 104.09 (2010). See Texas Admin. Code Title 43, Part 1, Chapter 9, Subchapters B, Section 9.19, Emergency contract procedures. 8. Does your agency use “on-call contracting” for capital or maintenance? N/A N/A N/A See Texas Admin. Code Title 43, Part 1, Chapter 9, Subchapter E, Maintenance project contracts.

B-12 QUESTIONS VDOT Nevada Kentucky 1. State Competitive Bidding Laws for construction contracts? See Code of Virginia Title 2.2, Chapter 43, Section 2.2- 4303.D.2 (Methods of Procurement) NVDOT is governed by Nev. Rev. Stat. (NRS) 408. Bidding is addressed in NRS § 408.323–§ 408.343 and § 408.367. Certain provisions of NRS 338–Public Works may also apply. Kentucky Model Procurement Code, KRS Chapter 45A. Specific language relating to the Department of Highways and contracts in KRS 176. 2. State laws or regulations that govern issuance and/or approval of construction contract modifications See Code of Virginia Title 2.2, Chapter 43, Section 2.2- 4309.A (Modification of the contract). Duties and powers of the Director are addressed in NRS § 408.190 to § 408.228. NRS § 408.205 addresses execution of instruments and documents. KRS 45A.210. Issuance of Regulations concerning modification and termination of contracts by Commonwealth. KRS 176.100. Deviation from Contract. 3. Administrative process for approval of construction contract modifications? See VDOT Construction Division Instructional and Informational Memorandum dated Aug. 1, 2013. NVDOT Construction Manual Section 303 of the Reference guide document. Part 4 and Part 8 of the reference guide. 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. See VDOT Road and Bridge Specifications (2007), Sections 104.02 (Alteration of Quantities or Character of Work); 104.03 (Differing Site Conditions); 109.04 (Compensation for Altered Quantities); and 109.05 (Extra and Force Account Work). Section 3-403.5.2 of the Nevada Construction Manual provides analysis of right of way, estimate of cost, analysis of whether work is outside the scope of the contract and essential to the satisfactory completion of the project, requires a time extension and justification for additional work days, or is the case of extreme emergency. Modifications outside the project limits are labeled supplemental negotiated agreements. The Kentucky Division of Construction Change Order procedure of June 7, 2013, requires that change orders address contract time, provide detailed explanation, provide statements justifying costs, and provide supporting documentation. Change order procedure CSGT-3-3-2 requires that the explanation describe the purpose and need for the change order and provide the basis of costs for the change. 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None None None 6. Any different policy or procedure for alternative project delivery projects? N/A Alternative delivery projects are relatively new to NVDOT (since 2007). To date we have completed 5 Design- Build projects and 2 CMGC projects. We have 2 more CMGC projects None

B-13 QUESTIONS VDOT Nevada Kentucky underway. And NVDOT is in the process of preparing an RFP for its first P3 project. Alternative delivery projects are administered by the Project Management Division. Project managers are required to complete a Project Management Plan that includes change management (Page 17 of Plan template). There does not appear to be a written formalized set of rules or procedures for changes on alternative delivery projects comparable to the guidance found in the Construction Manual used on conventional design-bid-build projects. 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? See Code of Virginia Title 2.2, Chapter 43, Section 2.2- 4303.F. See answer to question 2 above. No 8. Does your agency use “on- call contracting” for capital or maintenance? Sample contract on file with authors. No No, but on the operation side there are material supplier contracts to perform minor work “On-call.”

B-14 QUESTIONS Oregon Wyoming DOT Vermont 1. State Competitive Bidding Laws for construction contracts? ORS 279C.300 Policy on competition Wyo. Stat. 24-2-108. Road and bridge construction. Section 1502 of V.S.A requires compliance with federal rules and regulations for federal funding. State of Vermont Agency of Administration Bulletin 3.5 provides for competitive bidding. 2. State laws or regulations that govern issuance and/or approval of construction contract modifications Or. Admin. R (OAR) 137-049- 0910 Contract Suspension; Termination Procedures None reported. 3. Administrative process for approval of construction contract modifications? Chapters 12-G and 15 of the Construction Manual Section 104 of WYDOT Construction Manual provides detailed guidance on change orders and contract amendments. See Section B-21 of construction administration manual for details of multi-level approval process. 4. Factors considered in determining whether to approve a contract modification or undertake a competitive bidding process. ORS 137-0490-910 provides exemptions from competitive bidding if within the general scope of the work if the work is reasonably implied from the solicitation documents only when they are the original scope of the procurements, and the field of competition would not likely have been affected by the contract modification. Factors to be considered are similarities in work, project site, dollar value, difference in risk allocation, and whether the original procurement was competitive bid, competitive proposals or sole source, or emergency contract. Chapter 15 of the Construction manual procedures provides for cost justification reason coding, which includes new requirements after contract award, changed conditions, scope changes, and added work in an anticipated work item. Section 104 of the Wyoming DOT Construction Manual provides for changes that are advantageous to the Dept. It requires the reasons be listed and the effect on inter- department programs if it involves complex design, estimate cost to the project, evaluation of contract time extension. Appendix B-21 of the construction administration manual provides for analysis of the change as a “nicety “or “necessity”; is the work eligible for federal aid; impact on original scope of work; basis of payment with cost analysis. 5. Case law or legal decision that affects decision to issue a contract modification or competitively bid additional work. None reported. None reported. None reported.

B-15 QUESTIONS Oregon Wyoming DOT Vermont 6. Any different policy or procedure for alternative project delivery projects? OAR 731-007-0340 through 0400 (Alternative contracting methods) Alternative delivery is not allowed in Wyoming for highway projects. None reported. 7. Policy or procedure for governing additional work to existing contracts or competitive bidding for emergency contracting? OAR 731-147-0030 (Emergency procurements process) None reported. None reported. 8. Does your agency use “on- call contracting” for capital or maintenance? Only if emergency is declared. No. Yes, use maintenance rental agreements.