1. Change Orders on Federal-aid Highway Construction Projects Bren George-Nwabugwu (FHWA) bren.george@dot.govbren.george@dot.gov ; (317) 226-7342 bren.george@dot.gov Mark Miller (INDOT) MRMILLER@indot.IN.govMRMILLER@indot.IN.gov ; (317) 232-5456 MRMILLER@indot.IN.gov Greg Pankow (INDOT) GPANKOW@indot.IN.govGPANKOW@indot.IN.gov ; (317) 232-5502 GPANKOW@indot.IN.gov 1

2. Agenda  FHWA/INDOT Stewardship & Oversight Agreement  FHWA Contract Change Order (CO) Policy & Related Definitions  Application & Processing  Eligibility  FHWA and INDOT Coordination/Communication 2

3.  FHWA and INDOT respective “Roles & Responsibilities  Full Oversight Projects – FHWA  State Oversight Projects – INDOT FHWA/INDOT Oversight Agreement 3

4. FHWA Policy Following authorization to proceed with a project, all major changes in the plans and contract provisions and all extra work shall have formal approval by the Division Administrator in advance of their effective dates.” – 23 CFR 635.120 (a) “ Following authorization to proceed with a project, all major changes in the plans and contract provisions and all extra work shall have formal approval by the Division Administrator in advance of their effective dates.” – 23 CFR 635.120 (a) 4

5. FHWA Policy Contd. “……..when emergency or unusual conditions justify, the Division Administrator may give tentative advance approval orally to such changes or extra work and ratify such approval with formal approval as soon thereafter as practicable.” – 23 CFR 635.120 (a) 5

6.  Formal Approval: It is a written and signed document issued for the proposed change before commencing the work authorized by the change order.  Division Administrator Approval: Delegated to the FHWA Transportation Engineer (TE) assigned to each INDOT District. Definitions 6

7.  Anthony Perkinson – Fort Wayne and La Port Districts  Eryn Fletcher – Seymour and Crawfordsville Districts  Ken Leuderalbert – Greenfield District  Bren George-Nwabugwu – Vincennes District TE Assignments 7

8.  Effective Date: The date of the FHWA approval given in advance of commencing the work authorized by the change order.  Verbal Approval: Given to INDOT for the contractor to continue work when emergency or unusual conditions justify it. Definitions …….. 8

9.  Major Change or Major Extra Work (“Major”): A change which will significantly affect the cost of the project to the Federal government or alter the termini, character or scope of work (23 CFR 635.102)  Non-Major Change or Non-Major Extra Work (“Minor”): All that do not fall under the definition of “major change order or major extra work” Definitions …….. 9

10. Basis of Payment (23 CFR 635.120) Basis of Payment (23 CFR 635.120)  Complete description of work to be performed.  Reason for the change, what caused it, and why it is necessary (“justify”).  INDOT independent analysis of costs to perform work for new pay items. Application; Processing … 10

11. Time Extensions (23 CFR 635.120 & 121) Time Extensions (23 CFR 635.120 & 121)  Time necessary to complete work  Effect on Critical Path  Utility delays usually non-participating (23 CFR 635.307 & 309) Application; Processing … 11

12.  INDOT analysis of validity of the claim  Detailed information on the claim  Contractor rationale for submitting claim  Negotiated settlements without full justification will be non-participating. Claims (23 CFR 635.124) 12

13. Eligibility Determination  Full Participation: Proposed change order is eligible as submitted  Participating in-part: Part(s) of the proposed change order is/are eligible  Non-Participating: Proposed change order is ineligible as submitted 13

14. FHWA Expectation In initiating COs, especially those that do not warrant verbal approval, early communication between the PE/PS and the FHWA TE is essential to assure that the changes being proposed are in conformance with the standards and prior authorization requirements of FHWA. 14

15. FHWA Expectation Each CO request (major or minor) must describe the proposed change in detail, discuss the exact reason(s) for the change, what caused the change, and why the change is necessary. All applicable supporting documentations must be attached to the request. 15

16. Change Order Authorization  Change Orders require authorization by the appropriate authority prior to proceeding with any contract change  As a minimum documented verbal approval is needed from the proper level  A phone call followed by a fax or e-mail is an example of documented verbal approval 16

17. Levels of Authority ($)  PE/S*+/- $50,000.00  Area Engineer+/- $250,000.00  Dist. Const. Dir.+/- $750,000.00  St. Const. Eng.+/- $2,000,000.00  Dir. Div. Const. Mgt. Over $2,000,000.00 17

18. Levels of Authority, Time Extensions LevelMaximum  PE/S10 Days  Area Engineer50 Days  Dist. Const. Dir.100 Days  St. Const. Eng.200 Days  Dir. Div of Const. Mgt.Over 200 Days 18

19. Project Manager Approvals  When the Scope or design is changed on a contract or a discretionary change occurs documentation of approval is required from the appropriate authority, obtained through the Project Manager (PM)  Examples include the following: Revision to the project limits Revision to the project limits Revisions to geometric design Revisions to geometric design Revisions to the pavement section Revisions to the pavement section 19

20. Project Manager Approvals Deviations from planned access control including drives Deviations from planned access control including drives Provisions for maintaining traffic Provisions for maintaining traffic Revisions that result in new environmental impacts or that result in reductions in environmental mitigation measures Revisions that result in new environmental impacts or that result in reductions in environmental mitigation measures When the change is due to a design error or omission so that the designer has an opportunity to provide options that will mitigate the cost of the solution. When the change is due to a design error or omission so that the designer has an opportunity to provide options that will mitigate the cost of the solution. 20

21. Change Order Don’ts  Don’t break up change orders to approve at a lower level.  Don’t use change orders to purchase items or to work on State/LPA property without DDCM (Director, Division of Construction Management) approval.  Don’t use a change order to add or delete a closure period or intermediate completion date without DDCM approval. 21

22. Change Order Documentation  A change order will include documentation necessary to describe the impact and the justification for the change.  The documentation is to be of sufficient detail that a person generally familiar with the construction process but not associated with the specific contract, is able to understand the impact and justification for the change. 22

23. Examples of Documentation  Justification for new unit prices. Unit price history information Unit price history information Cost breakdown from Contractor Cost breakdown from Contractor Include in the Header section in SiteManager Include in the Header section in SiteManager  Signature page from the Change Order  Detailed request from the Contractor for a time extension 23

24. Additional Info. Legislation, Regulations and Guidance www.gpoaccess.gov/nara FHWA Contract Admin Manual http://www.fhwa.dot.gov/programadmin/contracts/coreto c.cfm http://www.fhwa.dot.gov/programadmin/contracts/coreto c.cfm http://www.fhwa.dot.gov/programadmin/contracts/coreto c.cfm General Instructions to Field Employees (GIFE) http://www.in.gov/dot/div/contracts/standards/GIFE_Inter im09/GIFEindex.html http://www.in.gov/dot/div/contracts/standards/GIFE_Inter im09/GIFEindex.html 24

25. Questions? 25