109.11 Compensation for Project Delays (for Sec 109.11)

Sec 109.11 designates the conditions for which compensation may be appropriate to cover the cost of a project delay. Review the specification and refer any questions to the Construction and Materials Division.

109.11.1 Documentation of Delay Costs

When a delay has been determined to be compensable (that is, it was directly caused by the Commission), and the contractor has claimed impact costs due to the delay, reference Sec 109.11.1 for a list of eligible delay costs. An additional 10% is added to the sum of these costs to account for home office overhead and all other costs. The total of all costs, plus the 10% mark-up, should be summarized on a Documentation Record as supporting documentation for the lump sum delay cost change order. The Force Account spreadsheet should not be used as those accounting methods are only for added work and include other mark-up rates for profit and overhead.

There are four categories for additional costs. Below further clarifies what is included in each of these items.

(a) Non-Salaried labor expenses. This is most commonly for trade workers who are compensated on an hourly rate. This would be for workers such as laborers, carpenters, iron workers etc. During a delay there may be activities that need to still be ongoing. This would include activities such as traffic control and erosion control. Salaried workers are non-compensable. These workers can be reassigned to other projects or perform other activities. Their salary is ongoing and would be incurred regardless of the delay. Labor rate increases are allowed. For example, paving was to be performed in October and due to the delay, it could not be performed until May. A labor rate increase went into effect in January. Therefore, the net labor increase for the hours worked on the paving would be allowed. This does not apply to increases in prevailing wage rates as the original wage order remains in effect for the life of the project. The only mark-up for labor costs, prior to the 10% overall markup, should be inclusion of additives for insurance and taxes (FICA/FUTA/SUTA/General Liability/Work Comp).

(b) Material costs. This is for an increase in costs for materials due to the delay. Actual documented increases in costs for materials due to the delay is allowable. For example, a bridge deck scheduled to be poured in October is now being poured in March due to the delay. The concrete price was increased in January. Therefore, the net increase in concrete material cost is allowed.

(c) Equipment costs. This is the cost of on-site equipment that is idled. It would not include trucks or other mobile equipment that can readily be relocated. The reimbursement method is outlined in detail in Sec 109.11.2.

(d) Costs of extended job-site overhead. These are ongoing costs such as the job site office, porta-potty rental, utilities, dumpster rental etc. that are extended due to the delay. (It does not include cell phone costs which are portable and not tied to the project.) These costs are only compensated for the period from the original completion date to the extended completion date as a result of the delay. This applies even if the contractor’s submitted schedule indicates they would have completed the project before the original completion date (since there is no guarantee that the project would have been completed ahead of the original completion date).

109.11.2 Calculation of Equipment Delays

Equipment costs should be limited to on-site equipment that remains inactive due to the compensable delay. In lieu of computing actual ownership cost of the equipment, the Non-Active Use Standby Rate, as published in EquipmentWatch, shall be used to calculate the costs of idle equipment owned by the contractor. Multiply the hourly standby rate by 8 hours for each full weekday/non-holiday elapsed during the delay. If the delay extends for a month or more, use 176 hours/month. For rented equipment, payment will be made per the actual rate in the rental agreement.

Long-Term Delays

If the delay is anticipated to be long-term, such that the projected delay cost would exceed the cost to mobilize the equipment from/to the job site, the Resident Engineer should inform the contractor in writing that they have the option to mobilize the equipment off-site for use elsewhere. State the earliest possible date resumption of work is anticipated. Clarify that payment for equipment standby costs will be made only from the start of the delay period through the date of the notice of the long-term delay. If the contractor chooses to mobilize the equipment off-site, actual mobilization costs from/to the site will also be paid. If the contractor chooses to leave the equipment on-site, no standby costs for equipment will be paid past the date of the Resident Engineer's notice.

109.11.3 Common Claims

No other overhead costs are reimbursable. See Sec 109.11.3 for a list of common claims that are contractually ineligible.