108.11 Termination of Contract for Convenience of the Commission

Refer to Sec 108.11 for information on the termination of a contract.

Guidance for Sec 108.11.2 Settlement Provisions (Particularly Settlement for Leftover Material on a Construction Project)

When contract pay items are eliminated from the contract, the Resident Engineer should notify the contractor in writing as soon as possible so that the contractor can stop any unnecessary material purchases. If the material is delivered prior to notification, use the following guidance to settle the cost of returning or purchasing the material. If the cost of the material is significant, consult with the District Construction Engineer to discuss whether this resolution is appropriate.

1. Request that the contractor make every effort to return the material to the supplier. We should avoid adding inventory items to MoDOT maintenance lots if at all possible. Make payment to the contractor for the shipping cost, return shipping cost, plus any restocking fee charged by the manufacturer. To this total, add an amount equal to 5% of the invoice cost of the material to cover the contractor's general overhead expenses.

2. If the manufacturer will not accept the return, a negotiated settlement with the contractor can be made so that the contractor retains the material at the salvage value.

3. If the material cannot be returned or retained by the contractor, purchase of the material can be made. Delivery of the material should be made to the local maintenance facility. For this option, payment should be made to the contractor for the invoice cost of the material, plus 5% for overhead, plus shipping cost, plus any cost incurred by the contractor for delivering the material to the maintenance lot.