1. Prime Contractor Performance
Sunset Rule Changes

2. Sunset Report Recommendations – Contractor Performance
TxDOT lacks standard, effective remedies to address poor performance by construction contractors.
Liquidated damages do not reflect true cost of delays
Limited remedies built into contracts
No evaluation of contractor performance
Nonstandard and ineffective sanctions process
Hands-off approach to central monitoring of contractor delays
SB 312, Section 23 – Amended Transportation Code, Sec
We need to maintain the public’s trust that industry is ready to deliver. We all need to succeed together.

3. Transportation Code, Sec. 223.012. Contractor Performance.
The commission shall adopt rules to:
develop a contractor performance evaluation process and an evaluation tool that:
allows for the review of contractor bidding capacity to ensure that contractors meet each quality, safety, and timeliness standard established by the commission; and
contains criteria for modifying a contractor’s bidding capacity for competitively bid highway improvement contracts when appropriate.
The rules adopted must:
provide for a process for contractors to appeal the contractors’ evaluations; and
include criteria for the use of the evaluations by the department to address contractor performance problems.

4. Prime Contractor Evaluation Form
Three categories, with three questions each:
Quality
Safety
Timeliness
Scores should consider whether the contract provided sufficient time, as well as any events outside the contractor’s control.

5. Prime Contractor Evaluation – Quality
Contractor’s product was constructed in substantial conformance with the plans and specs without significant rework and/or significant TxDOT direction.
Contractor was professional and responsive in interactions with TxDOT and the public.
Contractor was substantially compliant with contract administrative recordkeeping requirements.

6. Prime Contractor Evaluation – Safety
Contractor’s safety practices were generally compliant with the contract and industry standards.
Contractor conducted safety meetings and worked to manage safety risks on the project.
Contractor responds in a reasonable manner to identified work zone traffic control deficiencies.

7. Prime Contractor Evaluation – Timeliness
Contractor substantially completed the project on time considering all adjustments and changes orders, or is on track to complete project on time.
Contractor met project milestones and/or callout work orders considering all adjustments and change orders.
Contractor worked to address project schedule impacts when work was added or unforeseen conditions encountered.

8. Prime Contractor Evaluation Process – District Activities
Area Engineer performs the Contractor Evaluation.
Interims – required annually for multi-year projects, or as needed to document performance issues and establish a Project Recovery Plan. Interim ratings only highlight district concerns; they are not used in the calculation of overall performance rating.
Finals – document overall performance through the term of the contract. All projects require a final evaluation to close out the project.

9. Prime Contractor Evaluation Process – District Activities
Collaborative
Focus on using evaluations as a tool for communication.
Request high ratings where applicable.
Contractors can provide documentation to justify a high rating.
Disputes
If there is any disagreement, the evaluation can be escalated to the District Engineer.
The District Engineer’s decision on final rating score and action recommendation is final.

10. Prime Contractor Evaluation Process – District Activities
Open Records
All documentation will remain at the district, filed with the project records in its own folder labeled, “DO NOT DISCLOSE – Attorney General opinion required”
Evaluations will be treated like Form 599 (Traffic Control Device Inspection), unless Attorney General rules otherwise.

11. Prime Contractor Evaluation Process – Division Activities
Division (CST or MNT) averages contractor ratings statewide on a quarterly basis.
Will work with the contractor on a Corrective Action Plan (CAP) if average rating is below the threshold.
Will monitor CAP for 120 days and close if performance has improved.
If contractor fails to meet CAP, Division will refer the contractor to the Performance Review Committee (PRC).
Default or major failure may result in immediate referral to PRC.

12. Performance Review Committee
Performance Review Committee – high-level group recommends actions for Deputy Executive Director’s decision.
5 possible recommendations:
Take no action
Reduce the contractor’s bidding capacity
Prohibit the contractor from bidding on one or more projects
Immediately suspend the contractor from bidding for a specified period
Recommend not awarding contract to contractor

13. Three Paths to Performance Review Committee
Project-Specific
Portfolio
Extra-Contractual
District requires Project Recovery Plan
If Project Recovery Plan is not met, or if the contractor is defaulted, District refers contractor to Committee and notifies Division
Division conducts statewide quarterly review – average of contractor’s 10 most recent final evaluations
If contractor average falls below threshold, Division requires a Corrective Action Plan
Contractor has 120 days to improve performance
If Corrective Action Plan is not met, Division refers contractor to Committee
Activities given in current Highway Improvement Contract Sanctions (43 TAC §9.107) that do not relate to default, ethics, or timeliness
Failure to execute a contract after award, unless contractor honors bid guaranty
Commission rejection of two or more bids by the contractor in the preceding 36 months due to contractor error
Chief Engineer reviews recommendations and forwards concurrence to Deputy Executive Director
Deputy Executive Director determines actions
Contractor may appeal actions to Executive Director within 15 days of communication of action to contractor.

14. Questions?