MANAGEMENT OF
CONSTRUCTION IN THE
SUPERFUND PROGRAM
-------
MANAGEMENT
OF
CONSTRUCTION
IN THE
SUPERFUND
PROGRAM
-------
MANAGEMENT OF CONSTRUCTION
IN THE SUPERFUND PROGRM~
ABOUT THE COURSE
As the Superfund program matures, more design and construction
projects at National Priorities List (NPL) sites will be undertaken. The
effective management of Superfund construction projects is critical due to
relatively large project costs and the complication of considerable
. liability and litigation issues. This course will serve to help provide
regional and state managers with a perspective on what is needed to plan,
schedule and control a Superfund construction project.
The course addresses the management issues to be considered in the
construction activity, and provides a foundation from which attendees will
grow in their technical and administrative competence.
Upon successful completion of this course, participants will be able
to more effectively act as managers in the Superfund program.
Participants will be more familiar with construction management and will
have a clearer understanding of authorities and responsibilities of all
parties involved in construction.
This course was developed under the direction of Russel H. Wyer,
P.E., Director, Hazardous Site Control Division by Thomas A. Whalen, P.E.,
Chief, Construction Management Section. Technical assistance was provid~d
by CH2M Hill in the preparation of the first draft and presenting the
course. Support assistance was provided by International Business
Services, Inc.~ through Camille Lee, of the Office of Solid Waste and
Emergency Response.
This course was modeled after "Management of EPA Construction
Grants," a course developed by the U.S. Army Corps of Engineers,
Huntsville Division. Technical information was also obtained from
"Construction Contract Administration and Management," a course prepared
by the Naval School, Civil Engineer Corps Officers, Port Hueneme,
California.
1-1
-------
Day and Time
AGE N D A
. n. -.-_.,,, -.--'u -.-.
MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
Topic/Subject Matter
Day One - Tuesday
8:30 a.m.
8:45 a.m.
9:00 a.m.
--.. . -..
9:30 a.m.
9:40 a.m.
10:50 a.m.
10:00 a.m.
10:15 a.m.
11 :45 a.m.
1:15 p.m.
2:15 p.m.
3:00 p.m.
3:15 p.~.
3:30 p.m.
3:45 p.m.
4:15 p.m.
4:30 p.m.
REGISTRATION
ORIENTATION/INTRODUCTIONS
OPENING REMARKS
INTRODUCTION
SUPERFUND RESPONSE
COURSE OVERVIEW
SUCCESSFUL MANAGEMENT
BREAK
PROJECT QUALITY
LUNCH
DESIGN
INTRODUCTION TO DESIGN
CASE STUDY
BREAK
VALUE ENGINEERING
PREFINAL DESIGN REVIEW
BIDDABILITY/CONSTRUCT-
ABILITY REVIEWS
FINAL DESIGN REVIEW
ADJOURN
1-2
Speaker
Thomas A. Whalen, P.E.
U.S. EPA
Guest Speaker
Thomas A. Whalen, P.E.
U.S. EPA
Michael L. Do1eac, P.E.
CH2M-Hi11
Michael L. Do1eac, P.E.
CH2M-Hi11
-------
Day and Time
Day Two - Wednesday
8:30 a.m.
8:35 a.m.
8:50 a.m.
9:00 a.m.
9:05 a.m.
9:.10 a.m.
9:30 a.m.
10:30 a.m.
10:45 a.m.
11:00 a.m.
11:15 a.m.
_..----H-:-45-a-om.
. 1 2 : 00 NOON
1:30 p.m.
2:15 p.m.
2:30 p.m.
4:30 p.m.
Topic/Subject Matter
PROCUREMENT
OVERVIEW
METHODS OF PROCUREMENT
TYPES OF CONTRACTS
BIDDING
INTRODUCTION
BID OPENING
BID EVALUATION
BID PROTESTS
BREAK
. CONSTRUCTION
INTRODUCTION
PRECONSTRUCT I ON CONFERENCE
SCHEDULES
- PROJECT MONITORING AND CONTROL
lUNCH
INSPECTIONS
GENERAL, DETAILED,
INTERIM
CONSTRUCTION MANAGEMENT
EVALUATION
PREFINAl, FINAL,
CERTIFICATION
BREAK
HEALTH AND SAFETY
ADJOURN
1-3
Speaker
J. Kent Holland, Jr., Esq.
Wickwine, Gavin & Gibbs
J. Kent Holland, Jr., Esq.
Wickwire, Gavin & Gibbs
James B. Kenney~ P.E.
CH2M-Hi11
_-____h__.__-- _n -------.. -_...-----
JamesB. Kenney, P.E.
CH2M-Hi11
James B. Moore
CH2M-Hi11
-------
Day and Time
Topic/Subject Matter
Day Three - Thursday
8:30 a.m.
8:45 a.m.
CONTRACT MODIFICATION
COST AND PRICE ANALYSIS
9:00 a.m.
CONTRACT CLAUSES
CHANGE ORDERS
10:30 a.m.
10:45 a.m.
BREAK
CONTRACTOR CLAIMS
12:30 p.m.
EVALUATION/ADJOURN
1-4
Speaker
James G. Zack, Jr.
CH2M-Hi11
Thomas A. Whalen, P.E.
U.S. EPA
- -.--.-.--. --- .+.~._~.__._---------
-------
SECTION
1.
2.
3.
4.
TABLE OF CONTENTS
INTRODUCTION
1.1 Superfund Response
1.2 Course Overview
1.3 Successful Management
1.4 Project Quality
DESIGN
2. 1
2.2
2.3
2.4
2.5
Introduction to Design
Value Engineering
Prefinal Design Review
Biddability/Constructibility
Final Design Review
PROCUREMENT
3. 1 Overview
3.2 Methods of Procurement
3.3 - Types of Contracts
BIDD ING
4. 1
4.2
4.3
4.4
4.5
Introduction to Bidding
Bid Opening
Bid Evaluation
Bid Protests
Fraud
1-5
-------
SECTION
5.
6.
7.
8.
9.
TABLE OF CONTENTS
CONSTRUCTION
5. 1 Introduction to Construction
5.2 Preconstruct ion Conference
5.3 Schedules
5.4 Project Monitoring and Control
INSPECTIONS
HEALTH AND SAFETY
CONTRACT MODIFICATION
8.1 Cost and Price Analysis
8.2 Contract Clauses
8.3 Change Orders
8.4 Contractor Claims
PROJECt PERFORMANCE
1-6
-------
,
~
...
~
o
Q.
c:
~
.0'
~
-------
Superfund Response
-. ---..-----
1-1
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I) INTRODUCTION TO MANAGEMENT
MODULE:
(1) Superfund Response
ESTIMATED TIME:
10 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Differentiate between EPA- and State-lead response actions
o Understand the respective roles and responsibilities of
Federal, State, A&E, and contractor participants.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
1-2
-------
REMOVAL
DISCOVERY
OR
1000FICA11DI
PRELIMIIARY
ASSESSMEI'
STAn ACTIOI
01 10 RELfASE
01 'HRUnIED
RELEASE
SUPERFUND RESPONSE
SITE
IISPEC1l01
HRS
FOR
IPL
10 PROBUM
FWIBlun
STUDY
RECORD
OF
DECISIOI
REMEDIAL ACTION:
TAKING THE LEAD
FEDERAL
LEAD
. EPA Contract (REM)
. Interagency Agreement with
Army Corps of Engineers
- COE Contractor
. Bureau of Reclamation
- Bu Rec Contractor
. Federal Acquisition Regs
. STATE
LEAD
. Cooperstlve Agreement
. State Contractor
. Procurement Undf' .
Assistance Regs
1-3
LIST
01 IPL
REMEDIAL DESIGN/
"REMEDIAL ACTION
. THIS COURSE
PRP
LEAD
. Consent Deer..
. PRP Contractor
If mixed funding:
. Preauthorlzatlon
Regs
REMEDIAL
IIVESTIGATIOI
COST
RECOVERY
-------
.__u. ~.~_. .un -.-..... - ..-
FEDERAL (CO E) LEAD REMEDIAL DESIGN PROCESS
COPIES TO
EPA HQ
USACE HQ
EPA REGION ISSUES
WA FOR INITIATING
PHASE I DESIGN
ACTIVITIES TO
USACE.MRO
I
EPA RPM . STAn
PRQCESS STATE LETT£R
OF REQUEST OR
AMEID EXISTlIG MaU
I USACE.MRO I
I OESIGI DISTRICT
- SYlDPSIZE REQMTS. II CBO
-DEVELOP AlE PRESELECTIOI LIST
-CDlTACT AlE FIRMS TO ASCERTAIN INTEREST
-DEVELOP AlE SELECTION LIST IMIN. 3 FIRMSI
-SELECT AlE FIRM nUTATIVELVI .
I
i ACTIVITIES PRIOR TO
ROD APPROVAL
ARE OPTIOIAL IN
ORDER TO EXPEDITE
DESIGI IIITIATION
EPA REGIOI PREPARES
DRAFT 'SITE.SPECIFIC
DESIGI lAG CONCURRENT
WITH EPA REGION
SUBMITTING FINAL ROO
PACKAGE FOR APPROVAL
---
-------1
I
SELECTION OF REMEDY BY EPA
ROD APPROVAL
----------
I
COPIES TO
EPA HQ
USACE HQ
EPA REGION'
USACE.MRD FINALIZE
DESIGN lAG
I
USACI.MRD
IlrrlAnS DESIGI
ACTIVITIES THRU
DESIGI DISTRICT
I
REMEDIAL PLANNING
IIFORMATIOI
PROVIDED TO
USACE.MRD BY
EPA RPM
III'M
USACI-MACI
IIIIIIDIAI. 1'tI000ECT IIIAIAGB
u.s. AlII, COIIPS OF EIGlIEEJIS-
IIIISSOUAIIIIVEII DIVISIOI
IITWIiIIIC't AGillOIEIT
IIECOIID OF DIClIIOI
SrAnIMIT DF won
won ASSIOIIIIEIT
COIIIMEIICE IUSIIEIS OAlL'
IA nOIAi. MOllITIES LIST
IIIEIIIOWOUIil OF AGIIIEIiEIT
I
DESIGI DISTRICT .
ISSUES SOW FOR
nESIGI TO. AlE FIRM
I
AlE FIRM DEVELOPS
DESIGI PACKAGE
BASED 01 sow
.:.=:""- I
DESIGI REVIEWS SCHEDULED
AT PRE.DETERMIIED
INTERVALS II.E.. PRELIMINARY.
NTERMEDIATE. PREFINAL FINALI
I
USACE.MRD APPROVES AND
ACCEPTS DESIGN WITH
COICURRENCE FROM EPA
REGIOI AND STATE
OVERSIGHT BY EPA RPM
-.
. ACROIVMS KEY
lAG
IIOD
SO.
WA
CIa
IIPt
IIIOU
*
*THIS COURSE
1-4
-------
ACIIoI'.S
...
sse
uua..
U
1M
....
au
FEDERAL (COE) LEAD REMEDIAL ACTION PROCESS
EPA RPM & STATE
PREPARE SSC
J
SSC EXECUTED
AT CO."'ETlOI
OF REMEDIAL
DESIGI
COPtES TO EPA RPM & USACE MRD
EPA HQ PREPARE & EXECUTE
~SAa HQ SITE-SfJECI'IC ItA lAG
USACE DESIGN DISTRICT
COIDUm PROCUREMENT
ACTIVITIES IFiRM FIXED
PRICE CDITRACT1
I
USACE.MRO INITIATES
RA ACTIVITIES OVERSIGHT 8' EPA RPM .
THRU APPROPRIATE
COISTRUCTION DISTRICT
r
USACE CONSTRUCTION
_DISTRICT OVERSIGHT
AND MOlilTORING ADDITIOIlAL OVERSIGHT
CONSTRUCTION 1D -
ENSURE COMPLIANCE BY EP"RPM
WITH EIIVIROII. AIID
COIITRACTURAL REOMTS.
I
COITRACTOR
COMPUTES
COlmUCTtOI
r
PREFIIAL COIST. USACE CONS
COlFEIIEla WITH PARTICIPAIITS EPA REGIDII
COITRACTOII STA TE
I COITRACTOR
PIIEFlIAL PARTtCIPANTS USACE CONS
IISPKTlOI EPA REGia II
I STA TE
USACE CONSTRUCTION COITRACTOR
DISTRICT PREPARES
PREFlIAL INSPECTION
REPOIIT FOR SUBMISSIOI
TO EPA. REGION AIID STATE
I
FIlM IISPICTtOI USACE CON
Ala
CUTIFICA TtOI PARTtCIP AIITS EPA REGIOI
I STATE
USACE CONSTRUCTIOI COITRACTOII
OISTRICT PREPARES FIlIAL
IISPECTIOI REPORT FOR
KET SUBMISSIOI TO EPA
REGION ANa STATE
..... JIIIO.IICT UU8IJI
U..,. STAn COITUCT EPA REGIOI
u.s. ... CIIIIPS Of EHlIHII - ACCEPT AICE OF
IIIIIIIGI8 IIVEI aN_.. COMPUTED PIIOJECT
UMIJIW. ACTIOI STATE ASSUMES
IITUAIIIC'I A""" fIN~tI.I:_c...I!.._R~PORT . O&M .RESPONSIBILITY
UnoUI. ~I LIlT Pu\Ef~'~.¥1 I
aPlunol , IllAllTUAICI
I
OEUTIOI OF SITE
FIIOM "'" *THIS
.
TRUCTION DISTRICT
.
TRUCTION OISTRICT
.
STRUCTION DISTRICT
.
4
COURSE
-------
STATE LEAD REMEDIAL DESIGN PROCESS
-----
STATE AND EPA-RPM
PREPARE AMEND
DRAfT CA CONCURRENT
WITH PREPARATION OF
FINAL ROD PACKAGE
I
- SELECTION OF REMEDY
ROD APPROVAL --
I
STATE AND REMEDIAL PLANNING
INFORMATION PROVIDED
EPA RPM TO STATE (ONLY
FINALIZE CA REQUIRED IF STATE WAS
NOT LEAD RIIFS PARTY)
I
I
STAn ISSUES SOW
FOR DESIGN TO AlE FIRM
r
AlE FIRM DEVELOPS
DESIGN PACKAGE
BASED ON SOW
I
MAUIII DESIGN REVIEWS SCHEDULED
AT INnRVALS (PREUMINARY, OVERSIGHT BY EPA RPM .,.
Tla. INnMEDlAn. PREFINAL
-- FINAU
--_..
T
STATE APPROVES
AND ACCEPTS DESIGN WITH
CONCURRENCE FROM EPA
---
ACRONYMS KEY
CA
RPII
lIaD
RllFS
saw
WA
Caal'UATM AGRHMUr
IIUIEDW PRG.IECT
RECaa af OKISIIII
REMEDIAL IIVUTIU
FWIIIm STUDY
STATu.IT Of W-
WOII ASSI&IIIDT
.,
*THIS COURSE
1-6
-------
STATE LEAD REMEDIAL ACTION PROCESS
ACRONYMS KEY
CA COOPOAnVE AGREEMEIIT
RPII REMEDIAL PROJECT MAIIAGER
IP\ IAnOUL PIIIOIlmU UST
O&M OPERATIOII & MAlllTENAILCE
EPA RPM AND STATE
AMEND CA
IF NECESSARY
I
STATE CONDUCTS
PROCUREMENT ACTIVITIES
(FIRM FIXED PRICE
CONTRACTl
I
STATE OVERSIGHT
AND MONITORING OF
CONSTRUCTION TO ADDITIONAL OVERSIGHT
ENSURE COMPLIANCE BY EPA.RPM
WITH ENVIRON. AND AND/OR DESIGNEE
CONTRACTURAL REQMTS.
r
CONTRACTOR
COMPLETES
CONSTRUCTION
I
PREFINAL CONST.
CONFERENCE WITH P ARTICIP ANTS EPA REGION
CONTRACTOR STATE
- CONTRACTOR
I
PREFINAL ~ PARTICIPANTS EPA REGION
INSPECTION STATE .
I CONTRACTOR.
STATE PREPARES
PREFINAL INSPECTION
REPORT FOR
SUBMISSION TO
EPA
r
FINAL INSPECTION EPA REGION
AND PARTICIPANTS
CERTIFICATION STATE
CONTRACTOR
I
STATE PREPARES FINAL
INSPECTION REPORT
FOR SUBMISSION
TD EPA
r
EPA ACCEPTANCE
OF COMPLETED
PROJECT
STATE ASSUMES D&M
AMEND CA AS NECESSARY
FINAL TECH. REPORT
PREPARED BY
STATE
r
DELETION OF SITE
FROM NPL
*
*
*
*
*THIS COURSE
1-1
-------
....-.--...--.---.-...---..
ROLES OF PARTICIPANTS
. PROJECT PLANNING
EPAu
. ACCOUNTABLE
. RESPONSIBLE
. OVERSIGHT
AlE
. PROCUREMENT
. PROJECT
MANAGEMENT
. CLAIMS RESOLUTION
. REPORTING
. PROJECT EXECUTION
---------
. -..-. -~. -.
. DESIGN SERVICES
. CONSTRUCTION INSPECTION
. IMPLEMENTATION
1-8
-------
- __n____- - --_._- ----- --.----
Course Overview
1-9
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I) INTRODUCTION TO MANAGEMENT
MODULE:
(2) Course Overview
ESTIMATED TIME:
10 Minutes
ri
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
...-- ---.
o Outline the key areas of management addressed by the course
o Understand the general flow of activities during construction
o Understand how and why conferences/meetings are essential to
the management of construction.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
1-10
and "hard
copy" of
-.--"---
-------
COURSE OVERVIEW
. Procurement of designers and constructors
. Design considerations
. Bidding
. Construction considerations
. Conferences
--,--.-.-- --.-__"__40- ...-.-."------+ U_.-.
DESIGN CONSIDERATIONS
. Permits, approvals, site access
. Site investigations
. Value engineering
.. Health and safety
. Biddability/co'ffs1. 'u'ctability review
1-11
-------
CONSTRUCTION CONSIDERATIONS
. Construction schedules
. Periodic inspections
. Change order management
. Contractor claims and remedies
. Health and safety considerations
. Remedial action completion and acceptance
CONFERENCES
. Project Management Conference
. Preliminary Performance Planning Conference
- Pre Design Meeting
- Pre Bid Conference
- Pre Constructio~ Conference
.. Pre Final Construction Conference
'------
1-12
-------
Successful Management
. -- -- ---------... _...--------- ---~ .--- ..~-.-
1-13
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I) INTRODUCTION TO MANAGEMENT
MODULE:
(3) ~uccessful Manag~ment
ESTIMATED TIME:
10 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the criteria of successful management
o Understand the techniques of design and construction
management
o. Understand general processes of contract changes.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
1-14
-------
SUCCESSFUL MANAGEMENT
DEPENDS ON:
. Responsible and Qualified Engineers and Construction
Contractors
.. Maintenance of Schedules
. Rapid Resolution of Problems
- -- .. -..-------- ---. n.... . -- --...------ .._---.
MEASURES OF SUCCESSFUL PROJECTS
. Design work less than 30 days late
. Bid within + 150/0 to - 10% of final cost estimate
. Construction on schedule
. Remedy consistent with ROD
. No contractor claims
. Final cost less than 1 0% over bid
1-15
-------
TECHNIQUES FOR
DESIGN MANAGEMENT
. Respond to problems
. Require detailed schedule
. Review schedule and design monthly
. Enforce schedule
TECHNIQUES FOR
CONSTRUCTION MANAGEMENT
. . Immediately resolve change order requests
. Require detailed schedule
. Review and update schedule monthly
. Verify progress
. '~.-.f(,.'ce schedule
1-16
-------
INCREASES IN CONSTRUCTION COST
. Inevitable changes in contracts
. Unexpected increases and delays
---- ---- --_. ..~_._---
----- --.
-.-.-..-.--- -0 . ... --.. -- .-...- -.-.
INEVITABLE CHANGES
IN CONTRACTS
. Differing site conditions
. Clarification of documents
. Small additions
. Substitutes
. Minor errors and omissions
1-17
-------
UNEXPECTED
COST INCREASES
. AND DELAYS
. Unresolved disputes
. Defective plans and specifications
. Rework, disruption, delays
1-18
-------
. Project Quality
------ - ~.. .
. . ---~. -------------------
1-19
-------
LESSON WORKSHEET-
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I) INTRODUCTION TO MANAGEMENT
MODULE:
(4) Project Quality
ES TIMA TED TIME:
90 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the procedures involved in quality assurance in
design and construction, including planning, coordinating,
reviewing and scheduling work
o Understand methods of encouraging teamwork and communication
among the .agents of the project
o Understand how to develop and enforce standards of work
performance.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
1-20
-------
QUALITY
IN TH E
CONSTRUCTED PROJECT
-- -. -.- - - . - . . -. -.- .
._..--.. -."-----
QUALITY .
. Dictionary has:
- 8 major definitions
- 22 minor definitions
1-21
-------
QUALITY
. Perfection not possible
. What level is enough?
. Level is function of:
- Objectives
- Expectation
The definition must recognize that we cannot be perfect
yet we must define what level of quality is satisfactory.
~ r
tnw
ocn
o~
a:
o
z
-
.
I
I
I
I I
I I
I I
I I
I I
I I
I
I
I
I
I
I
I
I
I
I
I
Reasonable
.Rangefor
Quality
Project
o
QUALITY
100% .
. (Perfection)
1-22
-------
QUALITY
The totality of features, attributes, and characteristics of a
facility, product, process, component, service, or
workmanship that bear on its ability to satisfy a given need:
fitness for purpose. Usually referenced to and measured by
the degree of conformance to a predetermined standard of
'performance.
. -~--- --- -.
PRODUCING TH EQUALITY'PROJ ECT--
. Define responsibility and authority of ALL parties
. Set levels of performance
. Define acceptable standards of quality
. Defirie expectations and objectives
1-23
-------
PRODUCING THE QUALITY PROJECT
(Continued)
.. Establish principles for communication
. Establish procedures for design and construction
. Establish organization, managerial, and administrative
procedures.
. Establish QA programs and QC procedures
QUALITY ASSURANCE
Is a planned PROGRAM of work that includes:
. Procedures and guidelines for conduct of work
. Project specific quality control
Note, Quality Assurance provides the program, Quality
Control the project specific implementation.
1-24
-------
QUALITY ASSURANCE (Continued)
. . QA manager is responsible for: .
- Developing program
- Timely monitoring
- Conformance
A quality assurance program requires owner, designer, and
construction contractor quality assurance managers and
supporting staff. Their job is to develop the program,
monitor it, and enforce conformance.
---- _. - .-
. ----- ~.._---- --.
QUALITY CONTROL
. Quality control is:
- Implementation of QC procedures in production of work
products and associated documents
Quality control is a production function executed by the
team performing the work, whether the design team or the
construction team.
1-25
-------
QUALITY CONTROL (Continued)
. Quality control includes:
- Planning'
- Coordinating
- Developing
- Checking
- Reviewing
- Scheduling of work
QUALITY
Quality relationships between team members depend
upon: .
- Communication
- Cooperation
- Coordination
- Teamwork
1-26
-------
_.~.-- --..".-... -"----- -..
COMMUNICATION
. Process(es) by which needed information is exchanged
among individuals
. 250/0 of all failures are result of poor communications
Team members have to communicate. This communication
must be documented. We cannot let things fall through the
cracks. .
COOPERATION
. Working together for a mutual goal or benefit
All team members should have a mutual goal - a quality
pro~&I.c~. This requires cooperation.
1-27
-------
COORDI NATION
. Bringing into harmony all concerted actions and
activities
Doing our own thing well is not enough. It must be
coordinated with what everyone else is doing~
TEAMWORK
. Several individuals (or groups) associated together,
working towards a common goal or project
Quality can only be obtained by teamwork.
1-2C
-------
-_u .-- --- --._~ -- --
OWNER'S
(EPA, COE, BUREC, STATE)
ROLE IN ACHIEVING A
QUALITY CONSTRUCTED
PROJECT .
. . RESPONSIBiliTIES DURING
PROCUREMENT OF DESIGN SERVICES
. Establish obtainable goals
. Establish reasonable schedule
-e-Provide-appropriateprocedures
. Communicate intentions
The owner should provide adequate quality assurance
programs and require quality control for all stages of the
p~ect .
1-29
-------
. RESPONSIBiliTIES DURING
PROCUREMENT OF DESIGN SERVICES
(Continued)
. Establish complete scope of work
. Designate authorized representative
RESPONSIBiliTIES DURING DESIGN
. Assign representative
. Communicate with team
. Cooperate with team
. Respond to problems
The owner should be involved in the design. The owner's
designated representative is t~ communicate and
cooperate with the team and respond to problems.
1-30
-------
~ --. -.--... - -_..- - ..
RESPONSIBiliTIES DURING DESIGN
(Continued)
. Require value engineering
. Implement QA programs and monitor QC
. Give designer freedom to be innovative
RESPONSIBiliTIES DURING DESIGN
(Continued)
. Be realistic
. Help avoid threats to quality
. Assign a pPl-opd ate_re.sp_Qn sJbJlities , -
.. Quality and cost control are not diametrically opposing
goals
. Quality does not mean perfection
l' ?1
-...J.
-------
RESPONSIBiliTIES
DURING.CONSTRUCTION
. Implement QA and monitor QC
. Seek qualified AlE firms for construction inspection
. Provide continuity from planning through construction
The owner should be actively engaged in quality
considerations. .
. RESPONSIBiliTIES.
DURING CONSTRUCTION (Continued)
. Use a realistic schedule
. Designate representative
. Make clear who has authority to stop work
. Relinquish authority
The owner should be represented by an individual who has
the responsibility and authority to act. The owner should not
IIsecond guess" the designated representative.
1-32
-------
. n'"",""" --_.......
RESPONSI.BI llTI ES
DURING CONSTRUCTION (Continued)
. Demand quality, not perfection
.. Insist on conformance to requirements
. Communicate with team
Problems arise in construction. The owner should be
actively involved so timely decisions can be made to
. preserve project quality. .
" RESPONSIBiliTIES
DURING CONSTRUCTION (Continued)
. Cooperate with team
. Respond to problems
. Timely response to change_Clrd~_Lreq.u.es_ts .
. Be realistic
All construction requires changes. The owner should
recognize that changed conditions are a fact of life and
change orders will be required and that they must
be paid for.
"1-33
-------
1-34
-------
i
en
~.
:J
-------
Introduction to Design
.. ~._-_._._-.----------------~---------.- -.--
2-1
-------
)
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(II) DESIGN
MODULE:
(S)
Introduction
ESTJMATED TIME: 60 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand what is involved in the predesign meeting
o Become familiar with the uses for engineering services needed
durin~ design .
o Understand the requirements for permits, approvals, and site
access
o Outline a proposed agenda for a predesign meeting.
INSTRUCTIONAL MATERIALS:
.. .u_,-, -------- '-_____.n
o Viewgraphs/Overhead . Projector/Screen
viewgraphs for participants.
and II hard copy" of
INSTRUCTIONAL ACTIVITIES:
o . Instructor Presentation
2-2
-------
INTROuDUCTION TO
.DESIGN
.-. --.. - - . --- .--~---_.-----.._-_._._-_._._-------
DESIGN
A scheme in which means to an end are laid down in such
an arrangement that the elements create a work of art,
machine, or other man made structures.
2-3
-------
REQUIREMENTS FOR
REMEDIAL DESIGN
. Consistent with approved ROD
. Comply with CERCLA policies and procedures
. Minimize change orders
. Prevent claims
DESIGN CONSIDERATIONS
__h_. - - .-
. Level of protection required
. Unit prices for various levels of protection. per worker/day ---
. Health and safety requirements with certification
. Define contamination zones
. Construction contract packaging to separate classes of
work
. Testing of facilities
. Overflow consideratior'J
. Decontamination
. Security
2-.1
-------
PROJECT DELIVERY
ANAL YSIS
PRO~ECT DELIVERY ANALYSIS (PDA)
~"--'._._-.----.-
. Objectives
. Construction market considerations
. Resource considerations
. Project constraints
. Risk and interface evaluation
. r4rfarmance versus detail specification
2-5
-------
PROJECT DELIVERY ANALYSIS (PDA)
(Continued)
. Schedule
. Site investigations
. Health and safety considerations
. Delivery system alternatives
. Management arrangements
ENGINEERING SERVICES
DURING DESIGN'
. Preliminary design and performance criteria
. Subsurface investigation and/or sampling
.- Conduct site surveys
. Pre~are design memorandum
. . Detailed constructio"n drawin-gs and spe;;;;lfications
. Prepare site safety plan
2-6
-------
ENGINEERING SERVICES
DURING DESIGN (Continued)
. Review RI pilot and bench scale treatability studies
. Determine bidding and contract administration
requirements
. . Prepare construction cost estimate
. Perform value engineering
. Conduct initial constructibility/operability reviews of
design .
ENGINEERING SERVICES'
DURING DESIGN (Continued)
. Prepare initial O&M Plan
. Assist in obtaining permits, if required
. Progress meetings and progress reports
. Develop preliminary construction schedule
. Partic'ipate in public information/community relations
2-7
-------
PREDESIGN MEETING
. Points of contact for all parties
. Lines of authority and responsibility
. Interrelationships among the owner, EPA, design
engineer
. Periodic progress meetings
. Payment process
. Items in predesign report
DESIGN REVIEWS AND APPROVALS
Preliminary
- 300/oComplete
- 60% Complete
Intermediate
Final
- 90% Complete
- 100% Complete
. Prefinal-
2-8
-------
SITE INVESTIGATIONS DURING DESIGN
. Significant: prevent D.S.C. Claims
. Often neglected
- To red uce cost
- Poor economy
. Adequacy
- Thoroughness
- Extensiveness based on analysis
PERMITS, APPROVALS,'
SITE ACCESS REQUIREMENTS
. Identify early in design
. Assign responsibility
- State
-AlE
. Obtain during design
. Avoid delays during construction
£:-9
-------
..n. .......... -,....-.
2-10
-------
SUGGESTED OUTLINE FOR PRE-DESIGN REPORT
1.
2.
Site Description
Summary of Selected Remedy
- Description of remedy and rationale for selection
- Performance Expectations
- Site topographic map and preliminary layouts
- Preliminary design criteria and rationale
- Preliminary process diagrams
- General operation and maintenance requirements
- Long-term monitoring requirements
3.
Summary of Remedial Investigation and Impact on Selected Remedy
- Field Studies
(Air, surface water, ground water, geology)
Laboratory studies
(Bench scale, Pilot scale)
4.
Design/Implementation Precautions
- Special technical problems
- Additional engineering data. required
- Permits and regulatory requirements
- Access, easements, rights-of-way
- Health and safety requirements
- Community relations activities.
. 2-11
-------
SUGGESTED OUTLINE FOR PRE-DESIGN REPORT
5. Cost Estimates and Schedules
- Implementation cost estimate (Order of Magnitude, + 50%/- 30%)
- Preliminary annual O&M cost estimate and duration
- Project schedule (design, construction, permits and access)
6. Appendices
- Reports, data summaries, etc.
_. ------
2-12
-------
W63521A-CVOM
UNIT PRICE BID FOR
ACTIVATED CARBON SYSTEM OPTIONS
(The Bidder must submit with this Bid
unit prices in Section 11001, ACTIVATED CARBON SYSTEM)
The Bidder further proposes to accept as full payment for optional
additional work as specified for the Activa~ed Carbon system the
following unit prices:
1.
Additional activated carbon per pound
Extended carbon system operation per
week
$
$
2.
UNIT PRICE BID FOR
DISPOSAL OF DRUM WASTE
(The Bidder must submit with this Bid
a unit price for disposal of drum waste to a
RCRA-compliant hazardous waste landfill for quantities
greater or less than that included in the Lump Sum Bid)
___n___-
Number of 55-gallon drums for
disposal at a RCRA-compliant
hazardous waste landfill
included in the Lump Sum Bid
Unit-price cost per drum for
disposing of more (add on) or
less than (deduct) the number
of 55-gallon drums included
in the Lump Sum Bid
drums
$
$
/drum (add on)
/drum (deduct)
UNIT PRICE BID FOR
USE OF LEVELS OF PERSONAL PROTECTION
(The Bidder must submit with this Bid
unit prices for use of differing levels of personal
protection in accordance with INSTRUCTIONS TO BIDDERS)
The Bidder agre~s t~ accept as adjustment for use of levels of
personal protec~ion different from those used in preparing its Bid
the following unit price amounts:
1.
Adjusted amount for use
of Level D protection
instead of standard
construction p~actices
$
per worker per day
W63521.BA
BID
AUG
"1,1986.
00300
2-13
-------
W63521A-CVOM
2.
Adjusted amount for use
of Level C protection
instead of Level D
$
per worker per day--..
3.
Adjusted amount for use
of Level B protection
instead of Level D
$
per worker per day
4.
Adjusted amount for use
of Level B protection
instead of Level C
$
per worker per day
SMALL AND SMALL DISADVANTAGED BUSINESS ENTERPRISE UTILIZATION
CERTIFICATION
To be eligible for award of this Contract, the Bidder must execute
and submit with its Bid the certification relating to Small Business
Enterprise Participation. This certification shall be deemed a part
of the resulting contract: therefore, a failure to complete this
~ section of the Bid, or the inclusion of false information, shall be
considered as evidence that the Bid is nonresponsive to the
Invitation to Bid.
The unde~signed a~knowledges that goals have been established for
this Contract in the amount of:
Small Business Enterprise (SBE)
Small Disadvantaged Business Enterprise (SDBE)
30 percent
10 percent
The undersigned certifies that if it is the successful Bidder on
this project, the following SBE/SDBE firms will be utilized on the
project and compensated in the amounts shown: .
Dollar Amount
SBE SDBE
Firm Name
Description of Utilization
1.
2.
3.
4.
s.
Total Participation
.W63S21.BA
00300
AUG
1, 1980-
BID
2-14
-------
CASE STUDY
Project Delivery Analyses
Site:
Record of Decision
April 7, 1987
Pollution Products Co., Deep South, U.S.A.
Summary of Conditions: The pollution products company was
in business for 75 years. Their primary business was the
production and sales of hazardous chemicals for distribution
throughout the country. A secondary market was the
acceptance and disposal of anything from anybody. Their
'onsite treatment and disposal system consisted of pH
adjustment tanks followed by primary sedimentation. The
liquid fraction was deposited in unlined evaporation ponds
and the sludge'put in 55-gallon recycled oil drums and
buried in random locations on a 10-acre site. The site
which was once located 20 miles out of town is now in the
center of a large residential land development project owned
by J.R. Ewing (also aPRP).
..- .- -------._-- -... --".. - - -..----- ---.-
There are two aquifers under the site. The top unconfined
aquifer is contaminated with VOCs. . The plume is 1,000 ft.
by 200 ft. in size and migrating horizontally and vertically
toward the uncontaminated aquifer. The second 'confined
aquifer is the primary water supply for the development and
is not contaminated at this time. However, the hydrogeolic
model predicts that the upper aquifer will contaminate the
water supply in about one to two years if left unchecked.
Since the State is such an erivironmentally conscious state
with very few NPL sites, there are no local experienced
general contra~tors to work in the contaminated zone of the
project. The Governor has chosen this site cleanup to
2-15
-------
demonstrate his commitment to a clean environment and in a
press conference at the site' promised to have the cleanup
completed in 24 months, and 'the threatened aquifer problem
resolved in 6 months. Two reporters who were at the press
conference have become ill and are suing the State and the
Ewing Oil Company.
The Air Quality Control Commission has put a VOC emission
limit of 1 ppm at the nearest residence (100 yards away).
Description of Selected Remedy:
o
The ROD includes a near term remedial action to
install cutoff wells to stop the contaminated
plume from spreading. The discharge will go to
stripping towers located offsite at a nearby
abandoned cattle stock yard donated by J.R. Ewing
. .
for this project (no strings attached).
o
A two-acre triple lined final-holding cell will be
constructed to contain all of the sludges and soil
from the evaporation lagoons. A new laser fired,
photon irradiator has been tested on a pilot scale
at Carrington Environmental Laboratories and has
been proposed to be installed at the site to
neutralize all of the collected contaminated
materials. (It will also be included in the SITE
program. )
o
As many of the d~ums as are salvageable are
planned to be removed and treated at the nearest
acceptable hazardous waste offsite disposal
facility; however, no sites meeting RCRA standards
exist within several hundred miles.
2-16
-------
2.
3.
PROJECT DELIVERY CONSIDERATIONS
1.
What are the primary goals of the project?
l>. ,
B.
C.
D.
Are there any local site conditions which could affect
project?
A.
B.
C.
. -- -- --.--_u_---
.. -._._~.__..
D.
Are any of the materials or equipment for this project
long-lead delivery items, propriatory, innovative or in
limited supply?
A.
B.
C.
D.
2-17
-------
5.
6.
4.
Is the project further constrained by any other
conditions such as weather, schedule, access, permits,
health and safety requirements, community concerns,
etc.?
A.
B.
c.
D.
Are the financial and technical
in proportion to the benefits?
information reduce the risk at
A.
B.
c.
D.
risks on this project
Would additional site
a reasonable cost?
Based on these considerations and meeting the ROD
requirements, what packaging and contracting strategies
will best serve the needs of the project?
WDR236/019
2 ~"
-J.u
-------
Sludge
1',)
I
1-'.
'-='
Waste Pile
Bulk Solids.
400 ydJ
Active Storage
Drum Accumulalion
576 Drums
2880 ft2
NOle: NOI Shown are
Excavalion Transportation, Control and Administration Facililies,
, Laboralori~s, Maintenance Activities, amI Deconlamination Facilities.
Sludge
to
Rotary Kiln
Drums
Pressed Sludge
Decanter/Clarifier
Waste Oil
Raw Waste Water
Groundwater. .
Runol!.
Cleanup.
Produced Water
Belt Press
Waler 10
Waler Trealment
FIGUnE 1
8 OCK FLOW DlWAM - MAJOR CLEAN.UP PROJECT
Wasle Oilliorage
6000 gaj'ons
AClive S,6raqe
:iotary Kiln
Aflerburner
to Rotary Kiln
to Rotary Kiln
Ash Quarantine
Ash/Residue
to Dispofo\ll
Ouench
2 Stage IW5
Make.up Water
to Water Treatment
Fuel Oil Storage
ID fan
Slack
~J
Caustic/Lime Storage
-------
PERMIT SUMMARY
PROJECT
CONTRACT NO.
PREPARED BY
PROJECT MANAGER
ADDRESS: DATE DATE Copy
PERMIT PHONE FILED APPROVED POSTED WHERE"
FOR
. -
.
I
. .
-. .- q . .
- -
, ORIGINAL TO PROJECT FILE
2 copy RESIDENT ENGINEER
2-20
REV OCT 82
SF-6.1S
-------
. Value Engineering
2-21
-. -_.-._.. ..- ._-.~.,.~..~..,.._. ",- - ~._-_...-. - .
. .' ----,.--. -".-' " ..~.- - ".._,. . -' .
. .
. . . .. -- ... ... ~. .; -. -. - .." . . -.
. -. .', - .
. "'.- . .-~. '~'''''--'''':":T"~
. " - ;',' ~.'
-------
. n.
.' ~.-
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I1) DESIGN
MODULE:
(6) Value Engineering
ES TIMA TED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the historical development and purpose of value
engineering
o Outline when and how value engineering is done, and who does
it
o Understand the -components of the value engineering final
report.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
2-22
-------
VALUE
ENGINEERING
VALUE ENGINEERING
HISTORY
. WORLD WAR II
- Shortages of materials/labor
- Forced substitutions
. 1954
- 000 adopted V.E. concepts in procurement
. 1964
- 000 expanded cost reduction program
- Federal, state, local governments adopted
- Industry adopts V.E. ;,: in.)rove profits
2-2:;
. >. ."... ~-.'
--.--'-~-----'- _.."
" .- ~. -. .
. .'.' .t.
. . ~ - -~. -:----."
-------
,.' .'.' ,.
. .. '0' -.,-..-
VALUE ENGINEERING
WHAT IT'S NOT
. Good designer does anyway
. Essential function trade-off
. Eliminate "gold-plating" only
. Degrade performance and reliability
. Measure of designer competence
- H_,_-___._----~.__. -_... .,'
VALUE ENGINEERING STEPS
. I nformation phase
. Speculative/creative phase
. Evaluation/analytical phase
. Development/recommendation phase
. Feasible alternatives and identification of V.E.
recommendations.
2-24
- .. -- .""'-'.-'r .....~._..... -,~. ~ .....-- -: -........-,. --'.
: - -- "-':"""1':'---'
-------
CONTENTS OF
VALUE ENGINEERING
FINAL REPORT
. Accepted V.E. recommendations
. Cost and schedule for implementation
. Rejected recommendations and reasons for rejection
. Net savings (capital and O&M)
2-2!>
_.~ -.. -...._-..--~.~.~._.. ..--.-. ~ --
-- . - ~ '-" _.- . -. .
. .-. -...,......- - '.-........ . -. 00
-. - _.-'. -. -_.- -. .'.--
~ '.. -':" . ""\ .
. - -~ -'-
. . .
-------
... ---
. -,---- ---.._-- .-----~..--_.-.~----_._-,-----_.._-
2-26
-------
. - ... .~...~.- .- ~.- ~ -. - .
Pre final Des.ign Review
2-27
- - -. ~ - - - - --.. -. -. . ~- .- -'.. '." ~.
. . .
. . -..' , ._._~ - ._,,--,,,,,:,-......~
.' .': . ""I..
. -. ,----.
. .'
-------
':.'- ,- .':..-'::'-.>.'
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UN IT:
(II) DESIGN
MODULE:
(7) Pre-Final Design Review
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Distiguish between environment and technical considerations
of prefinal design review
o Understand the criteria involved in producing a final (95%)
cost estimate.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
. ...-- -- ._vJ.ewgraphs.--for_part.Jc.i pants.. -..
.
and "hard .copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
2-28
-..- - .- . - --+----~._-- ,-..- + -:'.' ----' .-'
+ _. " . -. -+~-. -..
-------
, . - '. "'.
. .'. ,.'. .' _._.._......~..,;
PREFINAL DESIGN REVIEW
. Environmental
. Technical.
PREFINAL DESIGN REVIEW
ENVIRONMENTAL CONSIDERATIONS
. Compliance with environmental laws
. Currently accepted control measures and technology
. Adequate specifications for QAPP and O&M plan
. Consistency with ROD
2-2~'
.. -.- - .
. ... .-" ...
-------
..,~: .}' .-"'';~,.....
PREFINAL DESIGN REVIEW
TECHNICAL CONSIDERATIONS
. Biddability and constructibility review
. Construction cost estimate accuracy
. Currently accepted construction practices and
techniques
. Construction schedule
. Accuracy of materials quantity estimates
. Operability and claims prevention review
-~OPERABrLITY~-----"~ .
.
An "operability" review is conducted to assure that the
completed project will conform to applicable performance
and operations requirements. .
. O&M" manual conformity with plans and specifications
. .
. Requirements for equipment installation, adjustment,
" alignment, lubrication and functional testing
. Specifications for pre startup ~;i'e("'
-------
.. "
.. '.. ._~'--"--
CLAIMS PREVENTION
A "claims prevention" review is conducted to eliminate
conflicts, inconsistencies, ambiguities, errors, omissions or
other identifiable problems in the plans, specifications and
contract documents that may become the source of
change orders and claims.
. Determine ad~quacy of site/soils investigation and
disclosure of technical information
. Remove conflicting general and special conditions in the
contract documents
. Review scheduling provisions to assure that the project
progress may be controlled including monitoring,
updating and reporting
. Ensure that the estimated quantities are reasonable
. Eliminate unduly restrictive specifications and review
"brand name or equal specifications" to assure that.
salient characteristics to be met are specified
FINAL (95%) COST ESTIMATE
. +150/0 to -10% of actual cost
- For each work item and unit price:
- - Labor, material and equipment cost
- - Overhead and ~rofit
- - Other basis fC~.'dsl,mate
- Waived for two-step sealed bidding
2-31
. ~
-------
- . -.._-~+ ,-- ----_.---_u.
2-32
..- ...
+...+~---.-.. ---....--.-.----- ---.
-------
" " .~. .
." ," ':.."0 . :..~"-...
Bidda bi I ity /Constructi bi I ity
2-33
-------
':...' ~ ~ ~'!.-",..
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(II) DESIGN
MODULE:
(8) Biddability/Constructibility
ESTIMATED TIME:
30 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the purpose of biddability and constructibility
reviews
o Understand the components of the Review Checklist
o Become familiar with some. possible deficiencies that may be
uncovered during a biddability/constructability review.
INSTRUCTIONAL MATERIALS:
o
Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and IIhard copjll.-or'-------
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
2-34
-------
. :.,
':"'- ....- :..!;-._::';:,;~;':!.::--'_:
BIDDABILITY/ .
CONSTRUCTIBILITY REVIEW
. BIDDABILITY- A "biddability" review essentially
attempts to insure that:
- The bid documents are clear and understandable
- All necessary information has been included
- The project is divided into biddable packages or contracts
- Specific bid items are clearly defined to facilitate bidding
and evaluation
- The plans and specifications are sufficiently detailed to
allow reasonable bidding
2-35
-------
. .'-" . : "".-. ..~
. CONSTRUCTIBILITY - A "constructibility" review
evaluates the suitability of the proposed project and its
components in relation to the project site, including:
- Any potential construction constraints imposed by the site
- Real and possible conflicts inherent in the plans and
specifications
- Compatability between plans and specifications
- Compatability of the plans and specifications with
construction procedures and equipment
- Other potential problems in constructing the project
SCHEDULING
B/C REVIEW
. . Prior to final design
. By
- Design engineer (separate team)
- Different engineer
2-36
-------
, 4.
:..' ~-.:..~.:". :.-;::.;;:;.~(.!::-:.
BIDDABILITY/CONSTRUCTIBILITY REVIEW
General and Architectural Checklist
l.
2.
Check Door Schedule - Make sure all doors are listed.
Check Finish Schedule - List finish for all
conflicts with wall sections.
check
for
areas,
3.
Painting Schedule - Make sure all areas to receive paint are covered
in plan schedule and specifications.
E ui ment Schedule - Make sure all equipment is listed and specifies
. who is to furnlsh owner, contractor furnished, etc.).
4.
5.
Are grade strips called for in the form work at construction joints,
and are chamfers indicated on exterior corners of the placed concrete
structure? Are these chambers either specified or clearly detailed?
6.
Is all below-slab piping and conduit to be tested and approved prior
to pouring of any slabs above?
7.
Wall Heights. - Make sure all wall heights are indicated for both
interior and exterior walls.
8.
9.
Hardware Schedule - Check for completeness.
Vertical Clearance - Check clearance of equipment, doors, windows,
transoms, ducts and etc. with ceilings and overhead structure.
Plan and S~ecification Conflicts - Check for conflicts between plans
and speciflcations. . .
10.
11.
Floor Plan and Site
floor plan and site'
equipment conflicts
entrances.
Plan Conflicts- Check for conflicts between
plan. Driveways, sidewalks and mechanical
with doorways loading docks and vehicle
12.
13.
Insulation Board and Underlayment Venting.
provided in wood nailers and at cants.
Waterproof Membrane - Make sure a waterproof membrane is provided
under wet area floors with living space below, or on ground floors
where it is required by wet soil conditions. .
Make sure vent kerfing is
Accessory Items - Check to see if towel bards, T.P. holders, shower
curtain rods, soap dispensers, P.T. dispensers, lockers and etc., are
specified.
15.
Masonry Bond - Check for conflicts between specs
especially, if "stacked" bond is indicated on plans.
and plans,
.2-37
-------
. 26.
-'_. .': ",.-. .:."7,.:::; ~'':.
General and Architectural Checklist (Continued)
16.
Window and Door Trim for Rehab. Jobs - Make sure detail is complete
and will work.
17. Power Operated. Doors and Other Power Operated E9uipment - Check for
conflicts between archltectural, specs and electrlcal.
18.
Is the bid form appropriate? Are the units correct? Are the bid
paragraphs properly coordinated?
19. Are the "or equal" clauses appropriate and consistent?
20. Are all of the pages provided, and in proper order, and legible?
21. Are the divisions and sections of the specifications in appropriate
CIS format?
22. Are all specification
. to be properly bid?
items clear as to quantity and quality, so as
23.
Is it clear as to who
required?
pays for the testing? And how many tests are
24. Are project photographs indicated? How many?
25. Who provi des the survey 1 ayout? .
By whom?
Is there rock excavation in the project? And if so, is it paid for
at a different rate?
27.
Review the legality of restrictive clauses.
28. Are all "sleepers" or.critical items properly flagged?
29.
Is all information (including EIS and soil reports) available to the
bidders?
30. Are the bonds and guarantees properly and clearly described?
31.
Is the insurance coverage indicated? Is flood insurance stipulated
if in a flood area?
32. Are liquidated damages clearly indicated and reasonable?
33. Are the drawings clear as
accurate take-off?
to dimension and notation, permitting
:t..
34. Are the scheduling restrictions justified and/or legal?
35.
Do the documents reflect the recommendations of the soil reports?
2-38'
-------
49.
50.
. .. '...-
. .-." .-_. . .-'
General and Architectural Checklist (Continued)
36.
37.
Are the materials
appropriate?
Is the time for completion sufficient?
and
equipment
standard and available and
38.
Is the project sufficiently complex to require computerized CPM
schedu1 e? .
39.
40.
Is there sufficient access to the site, staging areas, etc.?
Are the rights-of-way sufficient for the work that is to be
performed?
41.
42.
Are the details buildable?
Are the side slopes of ditches and embankments
erosion?
suitable to
prevent
43.
44.
Are there proper clearances for all equipment, piping, etc.?
Are standard ,tems indicated where feasible?
45. Are there any obvious code violations or OSHA violations?
46.
Is field verification specified for the housing for specialized
equipment?
Are all dimensions coordinated?
47.
48.
Are terminologies and notations
specifications?
consistent,
both in plans and
Are the most Appropriate construction methods indicated?
Is insulation specified and properly indicated?
51. Are the proper waterproofing and roofing techniques indicated?
52. Are the legends and symbols proper and consistent?
53. Are north arrows shown on all of the plans?
54. Are the pro~er scales indicated on a" of the drawings?
Mechanical Checklist
Check Contract Plans and Specifications for the following:
1. Testing of mechanical equipment and installations.
2.
Operational checkout of equipment, systems, and proceSses.
2-39.
-------
Mechanical Checklist (Conti d)
3.
4.
Dissimilar metal protection.
Elevations of piping installations checked against installation of
other equipment or construction.
5.
6.
Conflicts between plans and specifications.
Equipment size and requirements for space for connecting piping.
Support requirements: Spans, methods, maintenance requirements-
Conflicts between standard suppo t specs a d specific supports shown
on contract drawings.
7.
8.
9.
True existing conditions for renovations, additions, modifications.
Accessibility (check elevations and locations) of valves, gages,
readouts, etc. Also, relative locations of readouts to controls for
instruments.
10.
11.
Instrumentation locations (specifications and orientations).
Codings of piping systems.
12.
Insulation - submittal of samples.
13.. Wall, floor, ceiling (interior and exterior) penetrations for piping,
ductwork, etc. Check structural against mechanical for openings
requested by mechanical installations.
14.
Conf1 i cts between niechani ca 1 i nsta 1lati ons -..- -( piping_,__n-_-_ductJn9-,__----
equipment, etc.) and other construction such as ceilings, doorways,
access ladders, safety requirements, personnel access, vehicle
access, electrical installations, other mechanical equipment.
Reference to applicable fire codes for mechanical installations such
as fire protection sprinkler systems, gas burning equipment, etc.
15.
16.
Clarification and adequate identification of Government Furnished
Equipment (GFE). Also, instructions as to availability and method of
conveyance to contractor. Complete specifications of work required
to be done to GFE by contractor (installation, painting,
modification, testing, etc.).
17.
EPA and State requirements -
installations.
reference
to all pollution abatement
18.
19.
Corrosion protection requirements.
Operating and maintenance instructions and manuals.
2-40
-'. n.._.__-,
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. . - -.~'.
Electrical Checklist
1.
Check that Exterior Electric Power Systems comply with the National
Safety Code.
Check that all applicable standards are specified to reflect current
electrical industry standard practice for establishing quality of
materials and equipment.
2.
3.
Check that apparatus and system connections are simple and
straightforward to facilitate installation and checkout procedures.
Check distribution system structural strength, electrical clearances,
barriers, operating space, equipment identification, fire hazards
from flammable oil-immersed apparatus, and exists from areas
containing electrical apparatus.
4.
5.
Check that metal clad switching stations are same general type and
construction and are coordinated with those of the electric utility.
Check that metal clad switchgear in hazardous or corrosive locations
is enclosed in a building and that all ventilating air is ~reated to
remove the hazardous or corrosive agents. '
6.
8.
Check that high and medium voltage substation and switchi 9 stations
are physically protected and that adequate clearance is provided for
all station apparatus. .
Check that equipment grounding is in accordance with applicable
specified pUblications as well as non-energized structures such as
housings, metallic raceways, fences, etc.
9.
Check that installation of interior. electric power and lighting
systems complies with current edition of the National Electric Code.
Check that all applicable standards pertaining to interior electrical
systems are specified to reflect current electrical industry standard
practice for establishing quality of materials and equipment. .
10.
11.
Check that all circuits and conductors are identified in cabinets,
pull boxes and at terminals, and that typewritten, protected
schedules are provided at all panels.
Check that proper insulation is specified for the application and
environment.
12.
13.
Check switchboards, panelboards, fuses, switches, motor controls and
motors and generators conform to NEMA standard publications, and
other specified publications.
Verify that all appropriate color coding and marking is provided for
conductors, conduit and special panels.
14.
2-41
. . -- - .
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. :.. ...'.- -. .,.
15. Are electric motor starters specified under appropriate section?
16.
Are aluminum conductors permitted? And. if so, are the proper
safeguards and methods of installation clearly indicated?
2-42
'- . ..- ......
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. ..~_...' '..:"._'. .:'
EXAMPLES OF DEFICIENCIES THAT MAY BE FOUND DURING
BIDDABILITY AND CONSTRUCTIBILITY REVIEWS
A.
Contract Document Errors
Major work items not included in contract documents.
Quantities shown appear to be much greater than work
shown on drawings.
The contract documents did not include the following
items:
a.
b.
c.
d.
e.
f.
g.
h.
bid
bid bond
payment bond
performance bond
agreement
notice of award
notice of proceed
change order procedures
The length of time to be allowed for bidding, for bid
review and for construction are not specified 1fl the contract
documents.
Ois~repancies between bid (advertisement and proposal)
list" of quantities and the contract plans.
The Instructio"s To Bidders often do not specify a .
clear explanation on the method of evaluation of bid prices.
The name and telephone number of a person who the bidders
can contact with questions are not included in the bidding
documents.
When the proposed contract documents provide for multiple
schedules, add1tive~, alternatives and other options, the
procedu~e of determinatiofl of low responsive bidder, or
bidders, should be detailed in the specificatiofls.
The time span subsequent to bid opening in which all
bids remain in effect and are irrevocable usually has to be
increased.
Items bid by the lump sum are unclear as to what is
encompassed or the same work is covered under two or more
1 ump sum items.
No written responsibility standards for bidder evaluation.
No quantities estimated on unit price bids.
2-43
.<- . --- --.. -~.
-------
. -. .-... "-."""..0'"...""
Bid advertisement statement referencing Executive Order
11246.
a.
Missing entirely from bid advertisement section of
specifications.
b.
Statement is not verbatim.
Provisions whereby a contractor could modify as well as
withdraw bid (Bid Modification) missing.
General and Special Provisions Errors
B.
The word "responsive" is missing from the statement on
award of contract to the low, responsive, responsible bidder.
Failure to specify that Performance, and Labor and
Materials (payment) Bonds must each be in the amount of 100~
of the contract price. SpecifiCitTons as written would
allow Performance and Payment Bonds totaling 100~ of the
contract price.
--
Insurance requirements are incomplete.
a.
b.
Fire and extended coverage is incomplete or missing.
Flood insurance is missing.
Privity Clause'as required by 40 CFR 33.1030 is incomplete
or missing.
Excessive amounts of time for review and approval of
contractor progress payments.
Th. use of fixed percentages for overhead and profit in
lieu of negotiated amounts.
Percentages other than 15~ used to determine excessive
variation in estimated quantities for unit price bid items.
Incomplete or missing provisions for supervision,
testing and inspection as it pertains to both the Contractor
and the Owner.
Owner written clauses which conflict with required
clauses; i.e., Changes, Differing Site Conditions, Suspension
, 0 f Wo r k, e t c.
Mandatory arbitration for disputes, claims, counter-
claims and other matters in question between the owner and
the contractor conflict with 40 CFR 33.1030.
The lack of or improper editing of Standard Specifications
to eli~inate conflicts with EPA requirements. State "boiler-
plate" specfication generally conflict with .EPA required
"boi}er-plate." .
2-44.
-. . - .. - .... - -- -'''' --.- ._~-,-" -'.". .. ..--
-. .,~-~ - ~,~...,...
-------
.. "- ':.:._..'" :~..:::""..-".-,::i~:;
The time frames for delivery of information from the
contractor are not specified. .
Safety requirements not in accord with OSHA.
Completio~ date or time of completion is not established.
Improper or ambiguous assessment of liquidated damages
for delinquent performance or the amount of liquidate~
damages is not specified in the proper place.
No requirement for CPM charts or detailed progress
schedules or provisions for updating same.
Outdated Standard Federal Equal Employment Opportunity
Construction Contract Specifications are used.
Federal Wage Determination are missing or outdated.
Often incomplete.
Notice to Contractors of Nonsegregated Facilities
missing.
Certification of Nonsegregated Facilities was retyped
by designer and contained typing errors and omissions.
EPA project sign details contained in the specifications
are outlined. .
- .
Section on Protests missing entirely from specifications.
Davis-Bacon Act Statement
a.
b.
Missing entirely from specifications
Statement is not verbatim.
Poor quality copies of required Federal documents used.
Specifications binding obliterates portions of required
Federal documents.
State requirements are often omitted.
Instructions and/or sketches for handling traffic during
construction are not provided.
Numbered pages out of sequence.
Entire sections or portions of a section of the
specifications wittJut page numbers.
Contract documents not arranged in proper order or
order does not match Table of Contents. Incomplete Table of
Contents.
In many instances there are no provision for a
preconstruction conference.
2-45
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,":';".... n,:;_::;p'.~ " .
C.
Technical Provisions Errors
The "Technical Provisions" used are very general and
include specifications for material and equipment not used
in the simpler contracts. A-E's need to edit and delete
unnecessary information.
Projects involving more than one division of wor~ under
the same document do not adequately define the limits of the
various divisions at their interfaces.
Words such a~ "equivalent, similar, or approved equal"
u sed i n li e u of r e qui red wo r d s " or equal."
Only one brand name or trade name used.
Sole source materials, equipment or processes used
without receiving prior approval from EPA.
"Measurement and Payment" paragraphs under the various
sections of the Technical Provisions have not b~encoordinated
with the bid items listed in the Bidding Schedule.
Excavatiow and trenching section of the Technical
Provisions lack adequate information on dewatering of
excavations. ..
Cross references between vari~us sections of the
specifications and/or plans are incorrect.
Corrosion protection for ferrous metals not always
adequate or sometimes not specified. Grating, gate. operators,
handr"all, etc. in corrosive atmosphere .not galvanized or of
corrosion resistant material.. .
Ear t h wo r k, com pac t ion and t h ink n e s s 0 f g ran u 1 arm ate ria 1 ,
under foundations and slabls usually difficult to determine.
Compaction in ditches particularly in areas outside
roadways almost nonexistant. Even requirements and testing-
inspection of compaction under roadways is limited. Results
are settlement of disturbed area after Contractor has been
released.
Soil investigation (sub-surface, moisture content,
optimum for compaction, etc.) very limited; the designers
and Contractors don't know what to expect. Leads t ,."Ct,anged
Conditions" claims.
The location of waste and borrow areas are not adequately
described.
If rock excavation is suspected, the bid does not
include a method of payment for rock excava~ion.
2-l,.G.
. . ... ". ... .-........ ~-- . .
. --.~" -'-".'''--~-'.
-------
. ";:;:" :~;i.:::.::::'~;,--;~
Too much equipment is being installed i~ one ~eihanical
room or building causing cluttered, difficult to maintain and
repair problem.
Incorrect pipe elevation on Plan-Profile Sheets.
(Particularly critical to gravity flow sewers.)
Improper elevation of structures and system due to
inaccuracies inherent to aerial photo mapping due to ground
cover. (Need better ground control.)
Information concerning the amount and quality of street
repair is not included.
lagoon liners and installation are often precisely
sp~cified with the contractor held responsible for 1 imiting
seepage. The contractor should not be responsible for
seepage if it has no control over materials and installation.
Need great~r design effort and better specification for
both P. V. C. and natural material lagoon Sealers.
. lagoon seepage tests. The specified method used for
seepage tests to meet performance type specifications should
be delineated.. .
Construciion contracts which inc}udelagoon construction
do not include a clear definition of the testing liquid
source and of .who is responsible for providing the liquid.
The contract documents do not clearly define responsibility
for meeting exfiltration performance standards for lagoons.
Performanc~ testing of bentonite sealed ponds missi.ng
from specifications.
Failure to specify keeping the bentonite material wet
aft~r testing until final acceptance to preclude shrinking
of the material and losing the seal on the ponds.
Many hardware and equipment items shown on the plans
are not covered in the technical specifications.
Incorrect utility services specified for Owner-furnished
equipment.
Repairs necessary to make Owner-furnJshed equipment
ope rat b 1 e we reo m i t t e d fro m the s p e c i f i C il-t: i 0 ~: s .
Failure to specify that contractor must load and
transport Owner-furnished equipment from storage point to
work site as a part of the installation costs.
2-47 .
- ... ...-.. -.
. ..-'-"-.' '-'''''.-~
-------
..:.... . : ...o.!.-. .1'::.:" =';~'C.~'
Use of ambiguous phrases which are difficult to enforce,
such as:
a.
b.
c.
d.
e.
"if necessary"
"normal backfill"
"severe traffic load"
"minimum period of time"
"excessive infiltration in
engineer"
the opinion of the
Omitted referencing of National Electrical Code (29 CFR
1926.400a).
The following items are frequently omitted:
a.
b.
c.
d.
e.
Electrical voltage requirements for equipment.
Electrical communication systems.
Types and source of fuel for system equipment.
No work schedule or sequence of construction.
Hazardous Areas for electrical work are not
defined.
Enclosures for electrical equipment not of high enough
NEMA Standards; minimum weatherproof box not adequate for
most remote outside panels. Need gasketed water-proof
(almost explosion-proof type). .
Enclosures for electrical equipment and some pumps do
not meet the requirement that they be "Explosion~proof in
Manholes". .
Electrical conduit seal for. conduit leaving a Class I,
Div I, hazardous space (wet wells).
No outlet supports shown other than the conduit.
Insure that the Automatic Transfer Switch has the
capability to automatically transfer the load from normal to
emergency and back to normal.
Motors don't have complete specifications, i.~., lacking
;insultation type. bearing type. frame. etc.
Failure to fully document field test results by
manufactureres or contractors for machinery or equipment.
Resident Engineers' Log generally contain reference to the
fact that tests were performed satisfactorily but. frequently
qo cQPY of the actual testt results have been obtained and
included in the contract records.
Technical specifications for lift stations do not
include the following features:
a.
b.
c.
d.
e.
dehumidifier
alarm system
emergency bypass
ventilation system
emergency power supply
2-42
"'~.'~'-,
-------
- The quality and type of sewer bulkheading is not
specified.
Special tool requirement. Because specific tools are
not listed there is normally a disagreement between the
recipient and contractor as what constitutes a special tool.
Plant start-up and shakedown requirements. These items
are often not detailed to clearly identify requirements of
the contractor for overall plant start-up.
Drawing Errors
D.
Plan not final or sealed.
Detail letters and/or numbers missing from drawing on
w~ich section is taken.
Drawing refers to details and/or specifications not
readily available to all contractors.
Details and Elevations missing for fences.
New and existing work not clearly defined on the
drawings. Limits of work not clearly defined.
Insufficfent details and/or section to fully depict an
item or feature of the work. Details on drawin9s inc~mplete,
totally missing, or incorrect.
. .
If demolition of existing facilities is a part of the
bid, the scope and limits of work are not clearly defined.
The contract drawings do not clearly define the work,
storage and access areas. Rest~ictions to easements and
right of ways are not noted.
Insufficient earthwork cross-sections in lump sum
contr~cts.
The contract drawings do not include identification of
which trees are to be removed.
The contract drawings do not include identification of
areas to be sodded and/or seeded.
Miscellaneous drafting errors and omissions on drawings.
Cross referencing between incomplete and/or incorrec~.
Too much shown on one drawing; becomes very cluttered.
On many structural drawings rebar is not shown; not
called out; or it's length and bend length is not stated.
. Cover for reinforcement difficult t~ determine and not
always in accoardance .with the ACI Code.
2-~9
-------
.. >.~;~...:;:;':;:'; :~-:. .
Architectural drawings are not coordinated with the
structural, mechanical, and electrical drawings.
Frequently o~itted from contract drawings are the:
~.
drawing index,
abbreviation and symbol legends,
North arrows and scales,
fluid flow direction arrows,
concrete pads or other supports for system equipment,
location of project signs and isometrics and/or
schematics of plumbing and mechanical systems.
The abbreviation "TYP" is left off many dimensions
where needed.
a.
b.
c.
d.
e.
f.
Confli ct between pl an and profil e.
Contractor is held liable for existing utiltities not
shown on drawings.
~o specification for material shown. on ~rawing.
-
The meth~d of installation is not explicitly detailed
for the installation of any sewer within a body of water.
As..part of the electrical drawing, the following items
are .not covered:
The size of kilowatts or kilowatt-amphere
auxillary standby generating unit are not
The physi~al size of the main outdoor pad
transformer is not specified. .
The location and the mounting detail for the power
drop to all pumping stations is not provided. .
Oetails are not provided on equipment and
el~ctrical system grounding.
Electrical control circuits not shown in enough detail
to readily tell the required sequence of operation. (Usually
vague and left up to the supplier.) .
a.
b.
.. --.-..~._--
c.
d.
for the
specified.
mounted
. Improper or inadequate description of existing structures
to be demolished or midified.
No VE performed on design.
Plan and profile sheets fail to adequately show
conflicting structures and utilities.
2-50
. ~'.:"'. - ¥-.'."-~'
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Final Design Review.
2-51 . .
. . .," . . - -~ ... ".__.- :~.~...:.{:.~
-------
...:.. . - i....::.. ,;'-:S;:;:.;".:
LESSON WORKSHEET
COURSE: MANAGEMENT OF. CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(I1) DESIGN
MODULE:
(9) Final Design Review
ESTIMATED TIME: 15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the guidelines for reviewing 90% and. 100% plans
and specs .
o Understand the components of the site inspection checklist.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
. - - 0 - ------- ------ ~
-.- ---~.. . --- _nO..___-_.-
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
2-52
- . - - - _. - ~.. . - -. . '. ..-'.-'
. .-.-"_'0.-.-
-------
"... :.':.:._'.-2;:;..;~;:";;.:
FINAL DESIGN REVIEW
. Cost estimate
. O&M Plan
. QAPP and SSP SPECS
. Plan-in-hand site inspection
2-53
- . ~ -.". - ~ -. -.-. .
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-"~;:" u:.:.:::"._::,. ':t.~o
SAMPLE CHECKLIST OF
CONSTRUCTION SUBAGREEMENT BID DOCUMENT CONTENTS
Index of Subagreement Bid Documents
Advertisement for Bids
Instructions to Bidders
Bid Form
Addenda Acknowledgement
Bid Bond or Bid Security Form
Certificate of Surety
Acknowledgement of Principal Form
Non-Collusion Affidavit
Certification of Nondiscrimination in Employment
Certification of Nonsegregated Facilities
Authority to Execute Subagreement
Form of Subagreement
Performance Bond Form
Payment Bond Form
Certificate of Ability to Obtain Insurance
General Conditions of the Subagreement
Supplemental General Conditions of the Subag-reement
Federal Requirements and Subagreement Provisions
Davis-Bacon Wage Rate Determination
General Subagreement Requirements
Scope of Work
Control of Materials
Utility Coordination Requirements
----------- PtojectdSupervision Requirements
On-Site Inspection Procedures .
Safety Requirements and Responsibilities
Emergency Procedures
Progress Schedule and Report Requirements
Payment Procedures (Measurement and Payment)
Change Order Administration Procedures
Correspondence Distribution
Submittal, Processing Procedures
Material and Equipment Storage Requirements
Technical Specifications
Drawings and Plans (certified by a registered professional
engineer)
Supplemental Data (e.g., geologic data, hydrologic data)
2-54
. oO,T-- ...'~' ~-..~
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III.
GUIDELINES FOR REVIEWING 90% AND 100% PLANS AND SPECIFICATIONS
I.
COMPLETION TIMES
CPM Network Analysis System Needed
Sufficient?
Long lead materials?
Unusual scheduling restraints?
Unusual construction requirements?
Seasonal constraints (i.e., roofing during rainy
Any materials specified WhlCh are unavailable?
season, etc.)
II.
EXISTING CONDITIONS (Verify by Site Visit)
Conformance with Approved Master Plan
Properly indicated on drawings?
Any visible structures/utilities/roads, etc. not shown?
Any known underground obstructions not shown?
Clearly defined responsibilities for owner and contractor for
re10cat10n of any items?
Specifications clear on work in occupied spaces?
Disposition of exjsting items to be removed by contractor
adequately specified? (Become contractor's property or turned
over to owner?)
Access
Other construction contractors working in same area?
Any conflicts anticipated?
Situation clearly described in specifications?
Responsibilities clear?
Owner work to be done in the same area?
Storage space of material on site?
CONSTRUCTIBILITY
Any methods specified which have proven to be more expensive/
difficult than alternate method proven by experiences?
Any material s specified which are,-,'Jtci<1ted in modern
practice? .
Any value engineering cost savings possible?
construction
2-55.
."~... .~-'--~. "~'-'.>o-'.
. -..,.,.-~..-
-------
-,~------~---_.
REDICHECK SYSTEM USED?
Do the plans and specifications meet the requirements of the
customer?
IV. ADMINISTRATIVE ITEMS. TO CHECK IN REVIEW OF 90%/100% PLANS AND
SPECIFICATIONS
1.
BID ITEMS:
Should all be additive.
Should be non-cummulative,
drawings as applicable.
clearly define work and refer to
2.
3.
LIQUIDATED DAMAGES:
ENVIRONMENTAL PROTECTION
Most projects should include a section on Environmental
Protection (i.e., dust control, erosion, disposal of wastes).
4.
UNIFORMITY
Consistent use of the Division breakdown of Sections should be
followed.
All sections should be carefully identified.
Table of Contents to list Divisions
identification of these necessary.
but not further
5. APPLICABLE PUBLICATIONS
---u_u_--------
This paragraph should appear first in all Sections which use
reference publications. It must list the correct title,
applicable date and amendment data.
All documents listed must then be referred to in the technical
paragraphs.
6.
ORGANIZATION OF TECHNICAL REQUIREMENTS
Reference to Quality Control should be first.
Submittal data should 'be ne).t-samples, catalog cuts, etc.
Material requirements should be grouped next.
Installation requirements follow.
Field testing is last.
2-56
. - .. _,:~.::,..:..'~.::-,,: ~~~..:;..:~.
. ,". . .-''; <"- ~.-
-------
'::.. ':'..::--:::..r...:"';..;-::..~-
7.
PROPRIETARY SPECIFICATIONS
Not allowed without prior approval.
listing trade name with lIor equal II is okay as a last resort if
not other means of specifying is satisfactory.
8.
REPETITION
Specify a subject completely in one place only.
or split up a requirement in several sections.
Don't repeat
9. CORRELATION BETWEEN SPECIFICATIONS AND DRAWINGS
The same terms or words used to describe an
drawings should be used to describe the same
specifications. Be consistent.
i tern on the
item i n the
10. . OWNER-FURNISHED MATERIAL
Is defined as material not previously existing at the job site
but introduced by the owner for use on a particular project.
The place and time of availability must be stated.
11.
SALVAGE MATERIAL
Is to be listed.
Is defined as material coming from the job site which the Owner
wishes to keep. .
The place for its storage must be stated.
12. OWNER-FURNISHED UTILITIES
If a charge is to be made, the rates must be stated.
Use of "at prevailing ratesll is not permitted.
13.
BOILER PLATE CLAUSES
Must not be repeated, extracted from or modified by the project
specification, without prior approval.
14.
SUBMITTALS
Is responsibility for approval clearly indicated and hav~ all
appropriate items been identified for submission?
2-57.
. . -- .-~- .._..__..~'~.-
-------
15.
SAFETY
Are construct; on methods sped fi ed wh; ch coul d resul t
accidents, or are work areas confined unnecessarily?
16.
OUTAGES
Procedure for scheduling outages?
17.
TRAINING
Requ;rements?
-. ---..- ~._-- .
..2-5U
,.
.'~o".:..::.:;.,=-":..::::":_L.:,
;n
. --. '01-' .' --,......?"
-------
'.- -... ..' .. : -',-'... ~',:"~---'..
DPIC Communique / April 1984
REDICHECK:
A System of Interdisciplinary Coordination
by Lieutenant Commander William T. Nigro
Editor's Comment: Sometimes so-
lutions that work are very simple. We
think the REDICHECK plan and speci-
fication review presented in the follow-
ing article is such a solution. It has.
been shown to be an effective ap-
proach to one of the design profes-
sions' most serious problems - the
effective coordination of documents
among all disciplines involved in a proj-
ect at the design stage. It is the
author's experience that more than
half of e;rors and omissions result
from inadequate coordination of docu-
ments between disciplines.
REDICHECK Defined
REDICHECK is a structured review'
system which provides a logical and
1rderly approach to checking con-
~ruction drawings and specifications
It the 100% design stage. By locating
and eliminating coordination problems
among such disciplines as architec-
tural. structural, mechanical. civil. elec-
trical. dietary and plumbing, REDI-
CHECK -nas--redUceo-tostry-cn~h'ge'
orders and liability claims and has
saved from one to three percent of
total construction costs. In both mil-
itary and civilian applications, the sys-
tem has saved more than ten times its
implementation cost. Furthermore. 01
ten militar)/ projer.ts tracked to com-
pletion, not one experienced a claim
due to errors or omissions caused by
faulty coordination between dis-
Ciplines.
It should be emphasized here that this
is not a technical review and is not
intended for document review within
anyone discipline. REDICHECK is
most cost effective on projects con-
taining many disciplines. It has been
used successfully on projects with con-
struction costs ranging from as small
as $25,000 to as large as $60 million.
luring the coordination review of an
verage ten million dollar project with
100 drawings, almost 500 errors are
. typically found. -The proper use of REDI-
CHECK has reduced the following
types 01 coordination errors that occur
Irequent/y:
. Specification sections which refer
to other sections that do not exist;
. Specification sections that read: in-
stall something "as indicated" when
there is no indication of the item on
the contract drawings;
. Column and beam locations on struc-
tural drawings that vary with archi-
tectural drawings;
. Architectural floor plans that do not
match structural. electrical, or me-
chanical floor plans: .
. Light fixture locations on electrical
drawings that vary with archi-
tectural floor and reflected ceiling
plans:
. Mechanical drawings that read
"see structural drawings for addi-
tional supports" and the structural
drawings do not indicate such sup-
ports; and
. Mechanical drawings that indicate
items of .equipment with different
horsepower ratings and voltages
than those shown on electrical
drawings.
Ironically, those experienced
in the process are often
thought to be too valuable for
such work. Result: the least
experienced person in an
office frequently makes the
final coordination review.
Implementing REDICHECK
Many architects and engineers do not
devote enough time to a final coordi-
nation review. Those who know how to
coordinate documents tend to be very
experienced. Ironically. those experi-
enced in the process are often thaught
to be too valuable for such ~ork.
Result: the least experienced person
in an office frequently makes the final
coordination review. Sometimes de-
signers wait until the last minute to
consolidate drawings for other disci-
plines. Result: no coordination review
at all. For success, schedule REDI-
CHECK with sufficient time for review
prior to bid date.
Anyone directly involved in the con-
tract administration of design and con-
struction can benefit from this system.
For example, the checklist is an ex-
tremely effective way for field repre-
sentatives to troubleshoot plans and
specifications while learning about con-
tract requirements. By applying REDI- .
CHECK methods, field representatives
can anticipate problems and have
time to solve them. When these people
becomf.! part of the design team before
construction. they can help avoid time-
consuming' redesign, and can enjoy
smoother, less time-consuming con-
tract administration during con-
struction.
As an interdisciplinary review of con-
tract documents, REDICHECK has ex-
posed inconsistencies that can cause
pre-bid amendments. letters 01 clarifi-
cation, extended bid opening dates
and bids submitted with contingencies
10 cover ambiguities in the plans and
specifications.
How To Perform A
REDIC HECK Review
First, remove the staples from the
plans and follow the REDICHECK Plan
and Specifications review checklist on
page 5. Note that the checklist is
based on sequence of construction,
. with highest priority items checked
first. Use yellow highlighters to mark
correct items and red 'highlighters for
incorrect items or items that you do
not understand. The use of a light table
is strongly recommended and will help
greatly when comparing plans be-
tween disciplines. If you do not have a
light table, tape the drawings to a win-
dow to compare overlays. Plan on
spending an average 01 thirty minutes
Continued on page 4
2-59
...-. - -'-.+~._-" - - .--.-
. .. .
- - -.' . ... .-.',
. -- -- ..'--"".,-",
-------
, ... . -, -,. --
. .
DPIC Communique I April t984
. REDICHECK Suggestions on
Improving Quality 01
Contract Documents
. Show the right information the least
number of times - preferably only
once If there is a design change. it
is much easier to change the item
once. If the item is cross-
referenced fifteen times. it is very
likely that when a design change The system addresses the source of
occurs. the item will be 'corrected most design errors and omissions -.
fourteen out of the fifteen times - the point of interface between one dis-
the one that is missed will be a cipline and another. It not only has
change order. reduced such mistakes. but also has
.' Avoid notes such as "see architec- been an exceptionally effective way to
tural" or "see structural." Always increase the abilities of field represen-
refer to a specific detail and sheet. tatives. In performing REDICHECK.
Toes,e, tYRes_oLIlQ.t~_~_Ji~general!y__,-heY_J:!~ve gained a profound under-
made when one designer assumes standing of the prOJect. whIch has dlrect-
another discipline will provide a Iy influenced their performance of con-
detail. Very ofte'n that detail does struction observation.
not exist. Avoid this pitfall by insist-
ing that all details be cross-
referenced to a specific detail num-
ber and sheet in the other dis-
Cipline.
. Keep the number of drawings to a
minimum. Plan what will be on each
sheet and combine where possible.
On small projects. architectural. me-
chanical. or electrical site and roof
plans can often be combined on
one sheet. The rotential for re-
duced drafting tir'le fe '~r coordi-
nation conflicts a..d reduced repro-
duction costs is great.
. Avoid match-lines. Plans that are
split into portions are difficult to
read and check. Numerous design
errors have been caused by match-
lines.
REDICHECK
Continued from page 3
on each contract drawing.
This may seem like a lot of time. but it
is worth the effort.
Avoid match-lines. Plans that
are split into portions are dif-
ficult to read and check.
Numerous design errors have
been caused by match-lines.
. Keep the same orientation on all
plans. Keep the north arrow in the
same direction at all times. It is very
confusing to have different orienta-
tions between architectural. struc-
tural, mechanical or electrical
plans.
. All wall sections should be shOwn at
relative elevations to each other on
the same sheet. This is easily done
by drawing continuous horizontal
reference lines across drawings
that contain the sections.
The system addresses the
source of most design errors
and omissions, the point of
interface between one disci-
pline and another.
Checking the plans of one discipline
against another is an acquired skill.
The more one does. the better one
gets. REDICHECK. however. is a struc-
tured approach that has yielded Jmme-
diate dividends. Even relatively inex-
perienced design professionals have
uncovered potentially disastrous dis-
crepancies immediately. Result fewer
change orders and less litigation. .
About the author: LCDR. William T.
Nigro. an architect. is currently assist-
ant resident officer in charge of con-
struction. Kings Bay, Georgia. He has
conducted many training seminars on
RED/CHECK for both the military and
private architectural/engineering
firms. .
2-60
-- _.~ -. , ---'.--.-. -."- . '" -- "_.' --.. .
. ...
"''::'" .-,::;~: ::. ~"::' '-.."';~''''::''~.:l:':
. -'. - _. , . .'.-~' ~ '.' ----.,.~...
-------
n.. '...-'-.. . .> .......-,.-_u."-',.,
DPIC Communique / April 1984
I REDICHECK Plan and Specification Review
1. Preliminary Review I
a. Quickly make an overview of all sheets. spending no
more than one minute/sheet to become familiar with
the project.
2. Specification Check I
a. Check specs for bid items. Are they coordinated with
the drawings?
b. . Check specs for phasing of construction.. Are the
~ phases clear?
c. Compare architectural finish schedule to specifica-
tion index. Ensure all finish materials are specified.
d. Check major items of equipment and verity they are
coordinated with contract drawings. Pay particular
attention to horsepower ratings and voltage require-
ments. .
e. Verify that items specified "as indicated" or "where
indicated" are in fact indicated on contract
drawings.
f Verify that cross referenced specification sections
exist.
g. Try not to indicate thickness of materials or .qua!1ti-
ties of materials in specifications.
3. Plan Check Civil
a. Verify that site plans with new underground utilities
(power. telephone. water. sewer. gas. storm drain-
age. fuel lines. grease traps. fuel tanks) have been
checked for interferences.
b. Verify that existing power Itelephone poles. pole
guys. street signs. drainage inlets. valve boxes.
manhole castings. etc., do not interfere with new
driveways. sidewalks. or other site improvements.
c. Verify that limits of clearing, grading. sodding. grass
. or mulch are shown.
d. Verify fire hydrants and street light poles are shown
in their intended locations.
e. Verify profile sheets show other underground utilities
and avoid conflicts.
I 3. Plan Check Civil
I (continued)
f. Verity horizontal distances between drainage struc-
tures and manholes match with respect to scaled
dimensions and stated dimensions on both plans
and profile sheets. .
g. Verify provisions have been included for adjusting
valve box and manhole castings (sewer,power, tele-
phone. drainage) to match final or finish grade of
pavement. swales. or sidewalks.
h. Verity all existing and proposed grades are shown.
I 4. Plan Check Structural I
a. Verity property line dimensions on site plan against
architectural.
b. Verify building is located behind set back lines.
c. Verity column lines on structural and architectural. .
d. Verify all column locations are same on structural
and architectural.
e. Verify perimeter slab on structural matches archi-
tectural. .
f. Verity all depressed or raised slabs are indicated.
g. Verify slab elevations.
h. Verify all foundation piers are identified.
i. Verity all foundation beams are identified.
j. Verify roof framing plan column lines and columns
against foundation plan column lines and columns.
k. Verify perimeter roof line against architectural roof
plan. .
I. Verify all columns and beams are listed in column
and beam schedules.
m. Verity length of all columns in column schedule.
n. y:;.rify cill sections are properly labeled.
o. Verify all expansion joint locations against ar-
chitectural.
p. Verify dimensions.
.. -.. - -
-. .-. -- ".-._- - ,-_. -. - . " .. -, .',
2-6:'.
--,- - . -.-- --._~-_.-.
-------
."~;'.. '--:..-;. .~'. . :' . ~~ .'
: " _:-- ~..: ,;;-,-~:.:.~.. .
DPIC Communique / April 7984
I 5. Plan Check Architectural
a. Venfy all concrete columns and walls against struc-
tural.
b. Verify on site plans that all existing and new work is
clearly identified.
c. Verify building elevations against floor plans. Check
in particular roof lines. window and door openings.
and expansion joints.
d. Verify building sections against elevations and
plans. Check roof lines. windows and door locations.
e. Verify wall sections against architectural building
sections and structural.
I. Verify masonry openings for windows and doors.
g. Verify expansion joints through building.
h. Verify partial Iloor plans against small scale floor
plans.
i. Verify reflected ceiling plans' against architectural
floor plan to ensure no variance with rooms. Check
ceiling materials against finish schedule. check light
fixture layout against electrical. check ceiling diffusers/
registers against mechanical. check all soffits and
locations of vents. .
J. Verify all room finish sChedule information including
room numbers. names of rooms. finishes and ceiling
heights. Look for omissions. duplications.and. incon~..
sistencies.
k. Verify all door schedule information including sizes.
types. labels. etc. Look for omissions. duplications.
and inconsistencies.
I. Verify all rated walls.
m Verify all cabinets will fit.
n. Verify dimensions.
I 6. Plan Check Mechanical and Plumbing I
a. Verify all new electrical. gas. water. sewer. etc. lines
connect to existing.
b. Verify all plumbing fixture locations against architec-
tural. Verify all plumbing fixtures against fixture sched-
ule and / or specs. .
c. Verify storm drain system against architectural roof
plan. Verify size of all pipes and that all drains are
connected. Verify wall chases are provided on archi-
tecturalto conceal vertical piping.
d. Verify sanitary drains system pipe sizes and all fix-
tures are connected.
I 6. Plan Check Mechanical and Plumbing I
(continued)
e. Verify HVAC floor plans against architectural.
f. Venty sprinkler heads in all rooms.
g. Verity all sections are identical to architecturail
structural.
h. Verity that adequate ceiling height exists at worst
case duct intersection.
i. Verify all structural supports required for mechanical
equipment are indicated on structural dr~wmgs.
j. Verify dampers are indicated at smoke and fire walls.
k. Verify diffusers against architectural reflected ceilmg
plan.
I. Verify all roof penetrations (ducts. fans. etc.) are
indicated on roof plans.
m. Verity all ductwork is sized.
n. Verify all notes.
o. Verify all air conditioning units. heaters. and exhaust
fans against architectural roof plans and mechani""'-
schedules. I
p. Verify all mechanical equipment will fit In spacE'
allocated.
.. .170-.Plan Check Electrical
a. Verify all plans are identical to architectural.
b. Verify all light fixtures against architectural reflected
ceiling plan. .
c. Verify all major pieces of equipment haveelectncal
connections.
d. Verify location of all panel boards and that they are
indicated on the electrical riser diagram.
e. Verify all notes.
f. Verify there is sufficient space for all electrica
panels to fit.
I 8. Plan Check Kitchen/Dietary I
a. Verify equipment layout against architectural plans
b. Verify all equipment is connected to utility systems
Copyrog"'. '983. ~ron'8d .,," permISSIon 01 W,lli8m T. NIgro
. - ,- --- ,'-.' ' .,... .,-
2-62
.'" - -- '-'.-.-,
-------
-: . .~;.,_.. ..,..£......:.:_:-o...:;..:...:..'.-..:-;...~'~
PLAN-IN-HAND SITE INSPECTION CHECK LIST
1. As~ure Accuracy of Topography Depicted on the Plans with Respect to
Actual Topography.
2.
Locate All Surface and Detectable Subsurface Utilities and Check to
see if They are Properly Shown on the Plans.
3. Locate All
Drawings.
4. Check Site Location to Assure that:
Existing Pavements and Structures and Correlate with
a. All Wet Areas are Shown on Plans
b. All Possible Environmentally Critical Areas are Shown on Plans
c. Any Unusual Site Condictions are S own on Plans.
5.
Determine if Construction Will Require a Corps Permit.
6. Check for the Availability of Borrow Pits and Spoil Areas.
7.
Locate Bench Marks, Reference Marks and Other Control Points and
Correlate with Plans.
2.-63
- - .~"- . -."~' . -_.__.~. --"-"'._' .- --. -----.-.- ".- -.-.--
. .
." -.. ~ ." .-
. ..' ,
. --,- .--' --::-'-.,--'-.;r--'-''''
-------
'''.'. nO.' =':..:'.:.-:;: .::. ....----...._:..:.":2.::;;..'
CONTRACT REVIEW SHEET
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
DIVISION OF SOLID AND HAZARDOUS WASTE
BUREAU OF REMEDIAL ACTION
Project Name:
Location:
(Town )
Date of Contract Documents:
(County )
Date Received by:
(Region)
Date Review Initiated:
Construction Contract(s) Number and Description with dollar estimate:
Design Engineer:
(Name of Flrm)
-.------.--. - -. -- -.. --
(AddreSS)
~ect Engineer Responsible - Contact Person)
(Phone)
A. Composition of Contract Documents
1. Specifications
b.
Index or Table of Contents
Item Presents
Yes No
Yes No
Yes No
Yes No
a. PE Stamp w/Signature
c. Set is complete - No missing pages/sections
2-64 -
. ,:-..-.;.~~_..,!,
-------
.'..~ .-. ..,-:'.,:- :.. .~-. ~ ..,
'...."_.:";:'::'........!.-.~_...
Item Presents
d. Advertisement or Notice Yes No
e. Instruction or Information to Bidders Yes No
f. Form of Bid or Proposal Yes No
g. Contract (Agreement) Yes No
h. Genera 1 Conditions of Contract Yes No
i. Speci al Conditions of Contract Yes No
j. General Specifications Yes No
-
2.
Construction Drawings WIPE Stamp, signature and
state~ent regarding alterations as required by
NYS Education Law on all sheets.
Yes
No
3.
Soil Boring Logs, As Applicable
Yes
No
B.
General Considerations
1.
Do the specifications generally comply with
CSI format?
Yes
No
2.
Any cost escalating clauses .in specifications
(None Allowed)
Yes
No
3.
.-----..------ ---- - -.
a.
. . . .
Do the contract documents agree with the
Project Scope, as approved in:
(1)
Investigation/Feasibility
Study (RI/FS)
Yes
No
2.
Cooperative Agreement
Yes
No
If not, explain:
2-65 .
. -~.,. -;.., -.
. - ..
. -. -. .. . --
. .
-------
b.
Is the Contract Award, Start of Construction,
and Completion of Construction scheduling
reasonable and in agreement with the Remedial
Investigation/Feasibility Study and Cooperative
Agreement?
If not, explain:
-' .~. ... '.; .:.... ...
......;-.. ..'~. .: ..--.; ..:.: .... '.-' .
,"
Item Presents
Yes
No
c.
Is there a definite completion time contained
in the specifications?
Yes
No
Calendar Days
Page/Sec. No.
4.
Has a dated Pre-Bid Estimate, prepared in
accordance with the Bid Proposal (Attach Copy)
5.
Have property lines and temporary and permanent
easements been lndicated on the plans?
(NOTE: Sufficient preliminary acquisition or
easement work must be accomplished to ensure
that construction work is not delayed.
6.
Has the Department chosen to pre-qualify
major items of equipment in accordance with
the proceedures of 40 CFR 33.230, FR 3/28/83?
a.
b.
If item (a) above is yes, have unique and
special circumstances been supported by
1 ega-l-op.in-i-on by DEC Counsell s Offi ce?
Conments:
Yes
No
Yes
No
Yes
No
. . Ye Sm.un_... No .d. .
2~66 .
", -... .' ~.'~.."'r"."'-
-------
C. Advertisement
1. Are there provisions in the Advertisement ~
deposit, 9.90 per set of drawings?
2.
Does Advertisement contain working included in
40 CFR 33.1030(2} FR 3/28/83? (Not required
in Advertisement, but recommended)
3.
Do the Advertisement and the Information for
Bidders contain the 5 percent Bid Bond require-
ments for contracts exceeding $100,000 contained
in 40 CFR 33.265, FR 3/38/83?
4. Do the specifications contain Sales Tax Exemption
wording in. Advertisement and Information for
Bidders sections? (No labor - material breakdown
required) . .
.__n___0..__--lnf9rro~ttQrlufQr._B i dders-
.
1.
a.
Do the specifications state that the
contract award will be made to the low,
responslve, responsible bidder? (For
alternate bid items, the lowest acceptable
bid for the alternate or combination of
a1 ternates)
b.
Do the specifications state that the Owner
may reserve the right to reject all bids?
c. Will award of contract be made within 45 days
of bid opening? .
2.
. .;.:: .-':"'-;".; :..: ".'..:..-f._l:':-."':,
Item Presents
Yes
No
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Page/Sec. No.
Yes
No
Page/Sec. No.
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Do the specifications provide for a Pre-Work
Conference with attendance by NYSOEC Representative? Yes
. No
2';'67-
- -. .- - . ...-. ...-.
..- --- .'~'_--'" - ",-"0"-""'----. .-"" ."".'-' ---:"'."- -- -J.-' .'\.
Page/Sec. No.
- '" ----n-'
-------
---------
-. ~ .,. ...
3.
Do the specifications provide assurance that State
and Federal representatives will have access to the
work wherever it is in preparation or progress and
that the Construction Contractor shall provide
proper facilities and records for such access,
inspection, and audit?
4.
Do the specifications require Construction
Contractors to provide the following insurance
requirements:
a.
Performance bond authentication requirements?
(Include form in bid proposal)
b.
Performance bond not less than contract price
and to remain in effect for one year beyond
final acceptance?
c.
Payment bond not less than contract price and
to remain in effect -for one year beyond final
- acceptance? -
u::~~.: .~- .-. . ..'
- -"::'-'.'::",':....:; ...;:~ I.. - .',",,,,,
Item Presents
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
d~.. Fire- i nsurance-on-ttien-Bunder~-rR;-sk Comp 1 eted
Value Form, with extended coverage, consistent
with NYSOGS-Artic1e 19, Insurance Requirements? Yes
. e.
Worker's Compensation Insurance in accordance
with Worker's Compensation Laws of New York
State?
f.
Liability and Property Damage Insurance for
damages arising during the policy period?
Each policy with limit of not less thc.l-
1)
Bodily Injury Liability:
Each person -
Each accident -
2-G8
.-~ ~ .... - - -.
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
-------
2) Property Damage Liability:
Each accident -
Aggregate -
g.
h.
OWner I S Protecti ve Li abil i ty Insurance?
E.
Is the New York State and the Department of
Environmental Conservation named as "Insured"
in applicable policies?
Bid Proposal
1. Are the bid invitation and bid form requirements
simple and unambiguous?
2.
a.
Do the specification call for construction
work to be performed by the Lump sum and/or
Unit Price Method?
Method Used:
.:: . . .-~ ,', ':.
. :'- -~ ," """":...J.-._'-~._-.~
Item Presents
Yes
No
Page/Sec. No.
Yes
No
Yes
No
Yes
No
Yes
No
b.
For Lump Sum Contracts - are stipulated unit
prices included in the specifications?
If stipulated unit prices are included, are
they reasonable?
-. -'-"-----.---.---------"--------.----'---'- ".
- .
.
If not, explain
Yes
No
Yes
No
c.
Payment items for Unit-Price Contracts:
1) Are ~ayment items adequately described in
draw1ngs and specifications?
2)
Is the method of measurement clearly
stated in the contract documents?
3)
For an overrun and/or underrun from
estimated quantitie~ will the unit prices
bid be used in comr.:idn~ payment?
2-69
.,'- .-: -. ";'I ~
Yes
No
Yes
No
Yes
No
Page/Sec. No.
. ~--:-"., -~,..,
-------
F.
4) For an overrun and/or underrun exceeding
15% of the estimated quantity, is a state-
ment included in the specifications that
the Department shall review the unit
price, if appropriate?
5)
Is payment to the Contractor adequately
addressed for anticipated removal,
replacement or relocation of above-ground
and underground structures or obstructions
to the work which are indicated in the
plans and specifications? .
6) Are there items identified as "Contingent
Items"?
If. so, explain:
'" :':_'~"'.~:"_..' .:. .:-'- ":"'''::~'-'r1_'.-.
Item Presents
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
3.
Does the bid.proposa1 contain the Non-Collusive
Bidding Certification required by State law?
. ------ .'H_--_- -_.- ------
General Contract Provisions
1.
Do the specifications provide that the
construction of the project, including the
letting of contracts in connection therewith,
will conform to applicable requirements of
Federal, State and local laws, ordinances, rules
and regulations?
2.
Work Progress Schedules:
a.
Do the specifications require that the
Owner/Engineer be responsible for the
coordination of Work Progress Schedules
for project with multiple prime contracts?
2-70
. -.-' ._.._.~. - -." - . ''''-_. '. 'J -. _....- ~.. +
. - -.' . 0' ~ . r'o"'
Yes
No
Page/Sec. No.
Yes
No
.-
Page/Sec. No.
Yes
No
Page/Sec. No.
--, -, -_.-. ._-~..
-------
b.
If the work is done by a Subcontractor,
- Subcontractor's overhead percentage
- Subcontractor's profit percentage
- Contractor's combined overhead and profit
percentage
c.
For Change orders over $100,000, are the
percentages for overhead and profit subject
to negotiation?
Is there a statement that overhead and
profit cannot be applied to payroll taxes
such as unemployment insurance, FICA,
workmen's compensation, personal liability
and property damage insurance?
d.
4.
00 the sp~cifications provide for change
orders to be issued for overruns and underruns
which change a single quantity by 15% of $25,000
or greater, or which cumulatively change the
contract cost by both 15% and $25,000 or
greater? Change orders not required for
simple item trari~fers.
Is a local building permit required?
e.
Who will obtain the permit? ..,---...,,------_u_-
....~----_. _.."--_._._-_..~...,-_._-
-
5.
Is construction along or across State Highways
or Railroads involved?
If so:
a.
For State Highways, are IINYSOOT. Rules and
Regulations for the Accommodation of
Utilities Within the State Highway Right-
of-Way" i ncorpoated ei ther di rectly or by
reference?
b.
Who will obtain the necessary
permits?
Grantee, or Contractor
- .~-
c.
Have arrangements been made by the
Applicant for securing necessary
NYSOOT'(or RR crossing) permits prior
to commencement of construction?
2-71
--....,.. -h'. ".---- .----.. . ","";"- "--."''''--'.'''''--...-''- '..- ,".- -"
,.:' ..": -, ':. ..:.."'. u_: u' ,~.L,:~:...~::"";. ,-
Item Presents
%
%
%
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Page/Sec. No.
~- .. ,,-~ ..". -or .,........,.-,"",,--
. . .
-------
"'~;'. ",::.:;. ""::" ::: "". ..._...-..--:..~,:~, ..:
Item Presents
d. Do the specifications provide for
Contractsor's Work Progress Schedule
utilizing CPM or Bar Graph Method?
Type of Schedule
Yes
No
Page/Sec. No.
e. Are specified schedule requirements
adequate for scope of contract?
Yes
No
f.
Do the specifications require that the
Work Progress Schedules of the separate
prime contractors be submitted within a
reasonable time subsequent to award?
Calendar days after award
Yes
No
Page/Sec. No.
g.
Do the specifications require that the
Work Progress Schedule be updated, revised
if necessary, and submitted to the
grantee on a monthly basis?
No
Yes
Page/Sec. No.
. 3. Change Order (extra work) Provisions:
a. Does the change order procedure section
of the contract documents generally foll~w
"Article 29 - ADDITIONS-DEDUCTION-DEVIATIONS"
of the former State Architect's Standard
Specifications? . .-. ----- --
.- Ye-s-----No-----
Page/Sec. No.
Comments:
b. The specifications provide for percentages
not to exceed the following:
1) Contractor's overhead percentage
G.
2) Contractor's profit percentage
Special Contract Provisions
1.
Payment and Retainage provisions:
a.
Do the specifications contain the following
wording to comply with Section of NYS
Finance Law?
2-72
. . .-. . . - . . .-
. . .
. 0" -" -"~.',-'-'----
-------
-. . ." ~,..- . ,-.. .
2.
liThe grantee will accept only bonds or notes
of the United States of America, New York State
or political subdivisions thereof in lieu of
all or part of the cash retainage."
State and Federal Wage Rage Provisions:
a.
Is provision made for insertion of New York
State wage rates prior to bidding?
Decision No. & Date, if available
. .':: ':" --,,;,.=... ":. .~"---:.. ~."""':"':"-..~,,;;.;,::::.~.;
I tem Presents
Yes
No
Yes
No
b.
Is a statement included requiring the
Contractor to pay the prevailing State wage
rates at the time the work is performed?
c.
Is area-wide Federal wage rate required?
If yes, has rate been inserted?
Decision No. &F. R. Date, if available:
Mod.' No. & Date, if available:
Yes
No
Page/Sec. No.
Yes
No
Yes
No
. d.
No
Is non-area-wide Federal wage rate required?
If yes, is provision made for insertion
of the rate prior to bidding?
Yes
Yes
No
Decision No. & Expiration Date, if available:
.'--.-". '---'-.-' -----...----
3.
Do the specifications comply with the elements
of Appendix A of the State Contract, including
the Non-discrimination Clause?
4.
In cases where experience clauses are used,
have they been justified in writing to DEC?
2-73
..-.. - --." '" .-.-
.._-------.~-------- ~----.---.-
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
.':"~,---~--
-------
5.
00 the specifications contain a copy of 40 CFR
33.295, Subpart F (33.1005 thru 33.1030), and
Subpart G (33.1105 thru 33.1135) of the USEPA
Rules and Regulations published in the Federal
Regist.er on March 28, 1983, Vol. 48, No. 60?
6.
Has a statement been included to indicate
that award of contracts or subcontracts are
specifically forbidden to any firm or individual
listed on USPEA's Master List of debarments,
suspensions? and voluntar~ exclusions, and that
the Contractor, if intendlng to award subcontracts
should contact the appropriate NYSOEC Project
Section Supervisor or Project Engineer to determine
if an individual or firm is currently listed?
H. General Specifications
1.
a. 00 the specifications define the
responsibility for providing temporary
services (heat, light, power, water, .
telephone, etc.) during the construction
period?
Under which contract?
b. Are requirements reasonable?
Comments:
,,~:'. ",:..:; ':',' :;" .':....:--".'. '-':":':':.:::..{:~.;,:.
Item Presents
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
--Yes
No
...--
Page/Sec. No.
..---- ._--+
Yes
No
2.
Is project layout responsibility adequately
covered in the specifications?
Comments:
Yes
No
Page/Sec. No.
3.
Is there provision for maintenance and
frotection of traffic during construction?
i.e., continuous maintenance of highways,
streets, utilities, temporary pavement, etc.)
2-71-~
. -- .,..' - - . --. .-'" . ',-.'.-' .".- ".
. . . .
Yes
No
Page/Sec. No.
. -t. - -",-.-;''7-
-------
4.
00 the contract documents require the
Construction Contractor to provide the
required EPA Project Signs?
5.
Are provisions for Engineer's project office
reasonable?
6.
Is adequate safety equipment provided for
on-site personnel by the contractor?
~~~~~~~~t~~na~~ :~~~~a~~~yw:~~~e~:~~~ia~i~~~~ng
acceptable disposal site, methods and procedures
in accordance with applicable rules and
regulations, etc.).
7.
2-75
. _.. .- -, -. .. . ..-.' .-. "--"'.,'"
'.. - .":. '. '...-.,....
'.............:....:~'~...
Item Presents
Yes
No
Page/Sec. No.
Yes
No
Page/Sec. No.
Yes
No
Yes
No
Page/Sec. No.
.. -- - -- ---.-...-----p
- - ''''-'-';-0--;-.---
-------
-,'~,:'.. '~.~;_:,,; :::." ;""-'; ...:......,:....:........:"::~ ::..
Deficient Items:
Date Revision Requested
Date -Satisfied
Prepared by:
Date:
(Program Englneer)
2-76
... -. .-- - -- ~-- -.- ~".---"---.- ~ -;.--.- --. -- . .. ".-,
-- --..--..--",.
-------
~ I
o I
n I
C I
~ I
CD I
3 I
CD I
::;, I
..
-------
Overview
3-1
."~. .,
.;-'~.'.. ,', -.. . ..:
- .-...;..... "~ ..':'~"_":".':':_.J _.',
-,". .;''''-;-.-'
-------
. ,.,:- .'~~' =-.:, ,.:. :;-. . .:.' ~_..'.- .
..:.,:,',ii;;-..:..~... .~''':'~;~~
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UN IT:
(III) PROCUREMENT/ACQUISITION
f10DULE:
(10) Overview
ESTIMATED TIME: 5 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the procurement/acquisition process.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen and
viewgraphs for participants.
II hard copyll of
INSTRUCTIONAL ACTIVITIES:
. .-----".------------..- '--'-.' ,. -.-
.
o Instructor Presentation.
3-2
. ,.,n -." .
. _. ." "'. -- --,-.
-------
... . ."~,~.. ,.\.,_.on .' ,~ . ...:~',-~--";".......~,....--...
OVERVIEW OF
THE
. PROCUREMENT PROCESS
.FLOW OF
:PROCUREMENT REGULATIONS
FEDERAL REGULATIONS
48 CFR Ch.1 40 CFR Pt 33
3-3
- -. -. .
. . . .-,.... ,'''''. .'- -"
: '. -: . -. . . -. ~ "). -',.. '-. .
...- "--.''''- ........
-------
":.. '-..'-., '.,. h'
'...-. ~;....._.:..."...:._~-"'_1
SCAP
F
U
N
D
I
N
G
TO CONTRACTING
OFFERS RECEIVED I E I
...s ,Contract in, Officer X ~ .
~.t .... .~~ I j
PREPARE SOLICITATION & R
PUBLICITY
$
THE ~_OI 'TRACT ADMINISTRA-
, ' TlON. PERFORMANCE
CONTRACTING
PROCESS
3-4
_. - . -'.' .';"
."-'--'-. '_h._"",,_,~
-------
- . ..~:'. ,--.'''; '':. ,'. -. ..._...-~--~--;.:~--.:....-.::,:.;...:.i:':
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460 Form Approved
&EPA PROCUREMENT SYSTEM CERTIFICATION OMS No. 2000.0453
Approval expires 10-31.87
APPLICANT'S NAME ASSISTANCE APPLICATION NUMBER
APPLICANT'S ADDRESS
SECTION I - INSTRUCTIONS
The applicant must complete and submit a copy of this form with each application for EPA Assistance. If the
applicant has certified its procurement system to EPA within the past 2 years and the system has not been
substantially revised, complete Part A in Section II, then sign and date the form. If the system has not been
certified within the past 2 years, complete Part B, then sign and date the form.
SECTION II - CERTIFICATION
A.I affirm that the applicant has within the past 2 years certified to EPA that its procurement MONTH/YEAR
system complies with 40 CFR Part 33 and that the system meets the requirements in 40
CFR Part 33. The date of the applicant's latest certification is:
B. Ba~ed upon my evaluation of the applicant's procurement system, " as authorized representative of the
applicant: (Check one of the following:)
01. CERTIFY that the applicant's procurement system will meet all of the requirements of 40 CFR Part 33
before undertaking any procurement action with EPA assistance
Please furnish citations to applicable procurement ordinances and regulations
0'
-
,.,
U2. DO NOT CERTIFY THE APPLICANT'S PROCUREMENT SYSTEM. The applicant agrees to
follow the requirements of 40 CFR Part 33, including the procedures in Appendix A. and
allow EPA preaward review of proDosed procurement actions that will use EPA assistance.
TYPED NAME AND TITLE SIGNATURE DATE
EPA Form 5700.48 (Rev. 5-84) Previous edition is obsolete.
3-5
'--;-"."7 '."... ...--..--. .
-'---,'.-- '~-_._'---'. '"7,.....
" .
-------
3-6
0. -. ,,'
'".- ~- .._,-.:-.:~;~.~..,~,-;,
~-~~- .-;-r-: ~
-------
Methods
3-7
. ,'~:'. ..,-~,.:; !:.:' .:~-_.:'~._j......",-,,-:,,,:,:::;;i...:.
.- ~ '. . "-.~
. . ..
_. -..,._u .- --_._~
. ."..
. .
-------
-' .-- ..--:. -. ...'.".1__..~,...._- .~..:...,~.
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(III) PROCUREMENT/ACQUISITION
MODULE:
(11) Methods of Procurement
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Differentiate among sealed bidding, competitive proposal,
sole source, and small purchase methods of procurements
o Understand the advantages and disadvantages of the different
procurement methods for differing requirements.
INSTRUCTIONAL MATE~IALS:
o Viewgraphs/Overhead Projector/Screen and "hard copy" of
viewgraphs for part_i_~_i_p_a_~~_s~------_n_---_a_-----_.__n_.
.
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
3-8
. .. . ....._"~~
-------
,,". . "::."""'.'-':'-""""'..'
METHODS OF PROCUREMENT
. Formal advertising (sealed bidding)
- Two step formal advertising (sealed bidding)
. Competitive negotiation (competitive proposals)
- Qualifications based procurement of AlE services
. Non-competitive negotiations (sole source)
. Small purchase
FORMAL ADVERTISING
(SEALED BIDDING)
. Public notice and solicitation of bids
. Open bids at specified place, date and time
. Award to the lowest, responsive, responsible bidder
3-9
. ''- ,.'4.,.
.- .- -, - - - . .
, -- ',' '--~'-~.'-'''''r
. . . " "-
-------
.0- :...:"': .:,~,:~.'f'::o:;-""::.;';':'_..::","
FORMAL ADVERTISING
(SEALED BIDDING) REQUIRES
. Complete, adequate, and realistic specifications
. Two or more responsive bidders
. Lends itself to a fixed-price contract
. Selection based principally on price
2-STEP FORMAL ADVERTISING--
(SEALED BIDDING)
. "--'----,'____0'_0- .'------~--
. Solicit technical proposals based on performance
specifications
. Evaluate or negotiate technical proposals
. Solicit bids from acceptable offerors
. Op~'1 bids at specified place, date and time
. . Award to lowest, responsible bidder
3-10
.. - .'. - 0
. . .
° ':'"....,..------.-
-------
COMPETITIVE NEGOTIATION
(COM PETITIVE- PROPOSALS)
. Use if Formal Advertising (Sealed Bidding) not
appropriate
. Public notice
- General scope
- Evaluation criteria
- Importance of criteria
- Deadlines
. Evaluate and rank
-. Negotiate technical and price proposals
. Best and final offer
__h -. .. ... .- -"_. .. ..-.--...' <--' -'
. Awar~ to responsible offeror whose proposal is most
advantageous .
QUALIFICATION BASED
PROCUREMENT OF AlE SERVICES
. Request qualifications
. Determine technically qualified
. Request technical proposals
. Determine best proposal (#1)
. Negotiate price with #1
. Terminate, go to #2
. Cannot renegotiate #1, etc.
3-11
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NON-COMPETITIVE NEGOTIATIONS
(SOLE SOURCE)
. Least favored method
. Only one source available, or
. Public exigency/emergency, or
. Competition inadequate, and
. Prior approval
. ..- ....-.--.
- --'- -.~ -. ~ ~ -"' .
-' 4- -... --,.. -- .'--
SMALL PURCHASE
. Under $10,000 ($25,000)
. May not segment
. Obtain price from multiple sources
. Docu mentation
- Available prices
- Recipient's estimate
- Basis for award
3-12
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TITLE
Recipient Respon.lblllty
Sub.I..lon of Infor.atlon
LI.ltatlon on Subagree..nt
A"'ud
Co.petltlon
Profit
S.all, Minority, No..n'.,
and L8bor Surplu.
Ar.a 8u.ln.....
Docu.enht Ion
Spec If Icatlon.
BondlR9 and In.uranc.
Code of Conduct
(.)
I
....
W
Pederal co.t prlnclpl..
Prohibited Type. of
Subaqree..nt. .
Cost and Price
Conalderatlona
'Lo",er Tier Subagre...nt.
'S.all Purchase
Por.al Advert"lng .
Co.petltlve Negotiation
Nonco.petltlve Negotiation
Requlre.ents for Reclplenta
01 Re.edlal Action
Cooperative A9ree.enta
under CF:RCLA
Suha9ree.ent provlslonB
Protests
BUHMARY or REQUI'Rf"~ FOR PR REMENT UNUER
ASSISTANCE AGREt~ENTS .40 crR ))8
SUMMARY Or REQUIREMENT
Syate. .u.t en.ur.that contractor. perfor. In accordanc. ",ith aU appUcabl.
contract requlre.ent.
I
,
I
Recipient .u.t Inf~r. A"'ard Official of con.tructlon .ubagr~e..nt. totalling
over '10,000 per ye~r
I
Sr.te. .u.t conalde;r U.ted factor. In deter.lnlng contractor re.pon.lbUity
i
Sy.t.. .u.t have prpcur...nt tran.actlon proc.dur.. which .provld. ".I.u. open and
fn. C08petlUon 1
sr.t.. procedur.. .~.t allow only fair and rea.onabl. profit. to contractor.
Sy.t.. .uat award a! fair .har. of .ub-.,r....nt. to .uch bu. In..... according to
.1. afflr..tlw. .t.r' .peclfl.d
Sy.t.. .u.t requlr.: that procur...nt r.cord. and f I I.. for purcha... ov.r
'10,000 Includ. It... .peclfl.d
. i
Sy.t.. proc.dur.. for ..tabll.hlng .peclflcatlon. .u.t ...t the requlre.ent. ll.t.d
,
Iy.t.. procur...nt,: .u.t ...t the .peclfl.~ requlr...nt.
Iy.t.. .u.t hav.. wrltt.n cod. of .tandard. qf.conduct for Itat. official. In
d.allng with contractor.
Sy.t.. proc.dur.. for d.t.r.lnlng allo",abl. co.t. .u.t ...t the .peclfl.d prlnclpl..
Sy.t.. .ar not allOW co.t-plu.-perc.ntag.-of-co.t C.ultlpll.rt or
p.rcentag.-of-con.tructlon types of contract.
Sr.t.. proc.dur.. .u.t .110w for consideration of cost and prlc., a. .peclfl.d
Sr.t.. .ust provld. that .uba9r...ent. b.low the flr.t tl.r c08ply with all
provl.lon. .peclfl.d
Sr.te. ...11 purcha.e .ethod .u.t .eet speclfl.d r.qulr...nt.
Sr.te. procedur.. r.latlng to for.al advert I. lng, Including tho.. for bidding
docu.ent. and contract a",ard., .ust .eet the epeclfled requlre.ents
Srste. procedures for co.petltlve ne90tlatlon .ust .eet the .peclfled requlre.ent.
Srste. procedures for nonco.petltlve ne90tlatlon .ust .eet the specified requlre.ents
Subpart require. use of for.al advertising for re.edlal action con.tructlon
procure.ents unless deter.lned not to be appropriate (not applicable for re.edlal
plannln9 or for en91neerln9 servlces8
Subpart Includes the clauses ",hlch .ust he contained In suba,ree.ents for procure.ent
Suhpar t applies to a" applicants for' EPA assistance eKcept non-proll t or9anlzatlons
SECTION
)).210
)).211
)).220
)).210
)).2)5
)).240
)).250
)).255
)).265
H.no
)).215
)).215
)).290
)).295
)). )05-)15
)).405-UO
)).505-515
)).605
Subpart E
Subpart F
Subpart G
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.
3-14
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MECHANICS OF SEALED BIDDING
The process begins when an activity, which needs a- certain product or
service, describes the item or. items in a purchase request. This it
submits to the purchasing activity which does its buying. The requiring
activity is held responsible for referring to all applicable
specifications, plans, or drawings, or, if nothing better is available,
for providing a purchase description which adequately specifies all the
essential features of the item needed. Once the contracting officer has
determined that the contract is susceptible of formal advertising, the
next step is to transfer the information contained in the requisition to
the schedule of an invitation for bids that will be issued, in such terms
that the requirements of the Government are. completely defined. It is the
individual contracting officer's responsibility to determine that the
terms and conditions included in the schedule of the invitation for bids
fully and completely describe the needs of the Government.
Complete invitations are circulated as widely as possible, in order
to obtain maximum competition. There are various ways of soliciting bids,
the principal method being the mailing or delivering of invitations to the
prospective bidders. Mailing lists of bidders are kept at purchasing
activities to provide ready information on current sources of supply. All
suppliers who appe~r to be qualified and eligible to fill the requirements
of a particular contract are carried on the appropriate mailing list.
Additional methods of soliciting bids include the displaying of copies of
the invitation at the purchasing office and at other appropriate public
places; publishing brief announcements of proposed purchases in trade
. journals; -and, in some instances, by publishing the essential details of a
proposed purchase in newspapers. In addition, with certain exceptions
dictated by practical considerations,...a11 unclassified procurement. in
the United States, which might result in an award for contracts in excess
of $10,000, are" -gfYei'f--'wiaespreaa-puoTfCfty fn -the Department of Commerce
publication the "Commerce Business Daily."
Each invitation for bids sets forth a specific place, date, and hour
for the opening of bids. The invitations are circulated a sufficient time
in advance of the opening date so that all those who care to bid are
afforded an adequate opportunity to prepare and submit their bids. Under
the law, it is the responsibility of each bidder to insure that his bid.is
submitted in time to be received in the office designated in the
invitation by the exact hour specified for the opening of bids.
At this specified hour, all bids are publicly opened and read aloud.
The names of the bidders and the prices bid are recorded on an abstract of
bids, whic~ is available for public inspection. Except in. the case of a.
mistake in ~;d ~lleged and conclusively' proved - in accordance with a most
detailed procedure - no bidder may be permitted to withdraw his bid once
bids have been opened. .
3-15
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.
- The contracting officer next faces the considerable and often
extremely difficult job of evaluating the bids received. This is the
process of determining whether each bidder1s offer meets the requirements'
of the invitation, both as to what is offered and as to the contractual
terms. During evaluation, he may be faced with the necessity of
eliminating some bids from consideration or, in some circumstances, of
rejecting all bids and readvertising the contract. Ordinarily, any bid
which does not conform in every respect to the essential requirements of
the invitation for bids will be rejected. The basic principle applied in
determining whether a bid meets the essential requirements of the
invitation is whether any deviation in what is offered by the bidder
affects the price, quantity, or quality of the item or the contract terms
specified by the Government; if it does, the contracting officer must
reject the bid. Nor can the bidder be permitted an opportunity to cure
suc~ a defect after the bids have been opened. .
In this connection, to be eligible for award of a contract, any
bidder whose bids has been determined to be IIresponsivell to the
invitation, must also be determined to be IIresponsible.1I This means that
~he contracting officer must establish that the prospective contractor is
a manufacturer or regular dealer in the supplies sought; that he has
adequate fi nanci a 1 resources; that he can' comply wi th the deli very
schedul e; that he has a sati sfactory record of. pri or performance and
integrity and is' otherwise qualified and eligible to receive an award
under applicable laws and regulations. This is usually accomplished by a
pre-award survey. .'
Finally, the contracting officer must determine which bid actually
. offers the Governmen_~~~he.Jowes~ price. To do this he must take into
account the actual prices bid. and additional factors such as price
escalation provisions, transportation costs, and the like. Award of a
contract will finally be made to the lowest responsible bidder who
survives the above eval uation~--whose-b-i-d--con-fol'nrs-to~h'e---'essenti al
provisions of the invitation for bids, and whose price is found to be fair
and reasonable. .
3-16
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Types of Contracts
. ~ - -_._---.-_.------------_.----- ---- ~.,- ,,--_. .. --
.
-- .. -- --
3-17
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(III) PROCUREMENT/ACQUISITION
MODULE:
(12) Types of Contracts
ESTIMATED TIME: 10 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Differentiate between fixed price and cost reimbursement
contracts
o Learn of types of contracts (subagreements) that are
prohibited
o Understand prevalent problems and possible solutions in
public procurement practices.
-----_._~ -- - --. .. '_..'h.-
INSTRUCTIONAL MATERIALS:
... ----.. '._-~----'
o Viewgraphs/Overhead Projector/Screen and
viewgraphs for participants.
"hard copy". of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
3-18
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. '._~--.-.-
TYPES OF CONTRACTS
(SUBAGREEMENTS)
FIXED PRICE
. Well defined requirement
. Contractor bears cost risk
- Lump sum (firm fixed price)
- Unit price -
. Required under Sealed Bidding
(Formal Advertising) -
TYPES OF CONTRACTS--------------------
(SUBAGREEMENTS)
COST REIMBURSEMENT
. Uncertain requirement
. Government bears cost risk
..-- . Cost principles
- Allowable
- Reasonable
- Allocable-
- Not prohibited
. Profit (fee) negotiated separately
3-lS~
--.-.. --, ...
-------
TYPES OF CONTRACTS
(SUBAGREEMENTS)
PROHIBITED
. Cost-pi us-percentage-of-cost
(Multiplier that includes profit)
. Percentage-of-construction-cost
(Fee curve for AlE design)
-~-~_.-._._- -- -.
3-20
. u_...h._____.----
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THE PROBLEMS WITH PUBLIC PROCUREMENT PRACTICES
- ,
. DESIGN SPECIFICATION~, FIXED-PRICE COMPETITION
. AND OTHER STUFF .
POSSIBLE SOLUTIONS. (Excerpted in part from Packard-Commission
Rfrfrt) .
Spec cations serve.as a basis for bidders
to prepare competitive bid~ describing how they would meet the
specifications, and at what cost to them and price to the public
ag~ncy. The preparation of competitive bids may very well expose
technical pr~blems with the specificatio~s, or reveal modifications
that would be cost effective. The environment in which program
competition typically takes place, however, encourages improvements.
within specifications, but discou,"ages modifications that devtate
from specifications. This effectively forecloses one principal
fact~r -- trade-offs between performance and cost -- on which the
competition should be based. The r"esulting competition, based
instead principally on cost, all too often goes to the bidder
whose bid is the most optimistic.
. In underbidding, bidders assume there will be an opportunity
later to '"ecover understated costs through engineering change
orders. For the public agency, the advantages of a fixed-price
arrangement, particularly the incentives it creates for realistic
bidding, are obvious. The disadvantages to the public agency,
while more subtle~ are nevertheless of real concern. Fixed-price
contracts eff~ctively can enshrine overstated requirements and
und~rstated costs in a legal arrangement that allows little or no
flexibility for needed trade-offs between cost and performance.
This contractual arran~ement, intended to protect the public
agency, may cause both sides to lose.
Public procurement. practices should provide for substanttally
incr"eased use of commer"ical-sty.le competition, emphasizing quanty--.----------
and established performance as well as price.
Foremost among these practices is competition, which should
be used aggressively in the buying of systems, products, and
professtonal services. Although public agencies have made major
effor"t.s in this direction, much mor"e can be done. It is part1cular'ly
important to focus on achieving more effective competition, .
modeled after the competitive procurement techniques used in
industry. .
Commercial procurement competition simultaneously pursues
several related objectives: attracting tte best qualified firms,
validating performance and quality, and securing the best price.
Price is, of course, as important a factor in commer1cal procurement
as it is in public procurement. But it is only one of several
equally important factors. Price should not be the sole
determination, especially for procurement of co~plex services,
supplies and construction. Public procurement tends to concentrate
heavily on selecting the lowest price, but all too often poorly
serves or even ignores other important objectives.
J-21
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Moreover, because competition is not a one-way street for
. the_buyer, public procurement practices must be less cumbersome
-f-f-hpubli c agencies are to attract the best fi rms. - Procurement
. officers must be allowed and encouraged to solicit bids through
purchase descriptions that are stated as functional performance
characteristics rather than th,"ough detailed design and Mhow-toM
specifications; limit bids to qualified firms; to give preference
to firms that have demonstrated the quality and reliability of
their supplies or services; and to recognize value (quality and
price) based on products' commercial acceptance in the marketplace.
These practices have been found to yield effective competition in
the commercial field, and their use in public p,"ocurement could
provide better supplies, services and construction at little
increase in cost.
A further problem stems from confusion regarding the intent
of procurement legislation such as the Federal Competition in
Contracting Act's (CICA) requirement of .full and open competition,.
which some have interpreted to mean th~t the Federal government
must buy from the lowest offeror. CICA sought to make it clear
that the award of a contract through competitive negotiation
(competitive proposals) is a method of procurement no less accep-
ta~le than an award using formal advertising (sealed bidding),
and thus to ,"ecogn1ze that competition entails more than just an
asse~sment 01 lowest price. CICA is also intended to permit.
public agencies to take advantage of the innovative ideas of the
pr1v~te sector to secure items which are best suited to program
needs. These goals have been obscu,"ed by the notion that full
and open competition precludes publ.1c agencies from establishing
qualification criteria, and forces the award of a contract based
on pdce without '"egard, for example, to technical expertise Ol"__-_____nu-
life cycle costs. This reinfor~es public agencies' proclivity
for writing detailed specifications rather than functional product
descriptions - in this context, in order to insure that all
bidders offer identical items. At the same time, however, narrow
specifications preclude the acquisition of most commercial products
and, in effect, public agencies doing business with many qualified
firms. Thus, the full potential of CICA is not being realized
because of a focus on the quantity rather than the quality of
competition.
Public agencies should great1y increase their use of truly
effective competition, using as a model the competitive buying
1U~_aJ:tJces of major corpo,"at1ons a"nd their suppliers as pe,"mitted
under CICA and State and local procurement policies.
Procurement Procedures
Two p,"im~;:; c~,"pet1t1ve procedures may be used for the
procurement of supplies, servtces and construction. These are
the solicitation of sealed bids (formal advertising method) and
the request for competitive proposals (competitive negotiation
method). .
CICA, while still recognizing the'advantage gained by the
objectivity of sealed bidding, also recogn1-zes-that full and open
competition is sometimes better facilitated by negotiation.
3-22
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The,'efo,'e, in determining the appropriate competitive
procedures to be used, a public agency should solicit sealed bids
only if: .
time permits the solicitation, submission, and
evaluation of sealed bids;
the award will be made on the basis of price and
other price-related facto,'s;
i tis not n e c e s sa,' y t 0 con d u c t d i s c u s s ion s wit h the
responding SOurce about their bids; and
there is a reasonable expectation of receiving more
than one sealed bid.
, 1ft h e c i "c u m s tan c e sa" e not
then competitive proposals should
ati~n, non-price factors relating
are ~onsidered as well as price.
a p p "0 p " i ate t 0 sea 1 e d bid s ,
be,' e que s t e d . 0 u " i n g n ego t i -
to the publ ic agencies' needs
a. .
Sealed Bidding (Fo,'mal Adve"tising)
Sea 1 e d bid din g i sam e c h ani c a 1, t i me con sum i n g p " 0 c e s s ..
It is bound up by numerous rules and regulations. Each step
is controlled and carefully prescribed. Any failure by the
Government to follow the rules, to adequately prepare the
Invitation fo~ Bids (IFB), to properly solicit bids 0" to
make award as .required can lead to protest and delays.
The sealed bidding process commences when the public
age n cy des c " i be san e e d t 0 be f u 1 f ill e d by con t "a ct. The
solicitation package must be prepared. Specifications must
provide a basis for exact comparison of bids.
Once the IFB is prepared, it must be furnished to
prospective bidders. The bidders in turn must be given
sufficient time to examine the solicitation, prepare and
submit their bids.
After the pOblic agency receives and opens the
they must be evaluated to determine which bidder is
to award. This evaluation may be accomplished in a
of days, or in some instances, it may take weeks.
bids,
entitled
mat t e "
The myriad steps involved take time. Hence, the
requirement for adequate time to conduct sealed bidding.
As noted, acquisition by sealed .bidding is a rigid system
which requires the submission of sealed bids by qualified
firms, a public opening of bids at a set time and place, arid
the awarding of a contract by the public agency to that
responsible bidder whose bid, conforming to the invitation
for bids, will be most ad~antageous to the public agency,
con sid e ,'i n g 0 n 1 y p ,'i c e and 0 the" p ,'i c e '.' e 1 a, t e d fa c to,' s
included in the invitation. In these four main steps,
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- _n .____'h____._--_._----_.~--
emphasis is consistently placed on balancing the interest of
speedy and efficient acquisition procedures against the
maximum opportunity to compete and the avoidance of .
favoritism or fraud in the making of public contacts. Only
under rare and special conditions may a bid be accepted that
deviates from the invitati~n for bids or be changed after
the public opening; and only, in verj narrow circumstances,
may mistakes or irregularities in bids be rectified. Seldom
can such important bargaining factors as quality, price, and
business reputati.on be unrestrictedly considered by the
public agency. There is no provision for any give and take
between buyer and seller over the inclusion and wording of
contract clauses, so each trans~ction is entered into at
. arm's length and is carried out with virtually no opportunity
for negotiating the deal itself or the particular terms of
the deal.
b.
. Competitive Proposals' (Competitive Negotiation)
When a public agency buys as a result of negotiation
the formal procedures and rather rigid rules for acquisition
by sealed bidding need not be observed. The negotiation
procedure i~ i~iti~ted when the public agency issues a
solicitation called a Request for Proposals (RFP) or a
Request for Quotations (RFQ) which is unlike the Invitiation
for Bids (IFB) used in sealed bidding. Both sealed bidding
and negotiation procedures require solicitatio~ of a sufficient
number of suppliers to ensure that competition is secured to
the maximum practical extent. Unlike sealed bidding, negotiation
requires no public opening of bids. For an offeror to be
considered for award in sealed bidding, that offeror must
have submitted a bid which was responsive to the solicitation,
but in negotiated acquisitions proposals not fully' conforming
to the terms of the solicitation may be considered. However,
while a nonconforming initial proposal may be considered if
it is reasonably susceptible to being made acceptable through
negotiation, the proposal must ultimately conform to the
solicitation to be awarded. Of particular importance, of
course, is the fact that when negotiating, the Government
may conside~_~t~er factors besides lowest cost when choosing
an offeror for award. Finally, the two processes differ in
the offeror's ability to change their bid/proposal. In
sealed bidding, an offeror may not change its bid after bid
opening. However, in negotiati~~~ if discussions are held,
an offeror may even be encourag~~ t~ modify its proposal and
may withdraw it at any time until award is made.
3-24
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Types of Contracts
The enormous scale and complexity of public acquisition has
necessitated the development of a wide variety of contract types.
The term "co~tract type" has several different connotations.
Often it is used to indicate the various methods of pricing
a r' ,. a n g em e n t s, 0 f w h i c h the r' e a ,. e t wo bas i c t Y pes: fix e d - P I' ice
contl'acts and cost-,'eimbu,'sement cont,'acts.
a . Fix e d - p r' ice t y P e con t I' act s . Fix e d ~ P ,. ice (u nit p ,. ice,
lump sum 0" combination of the two) type contl'acts p,'ovide
for' a f i ,'m p ,. ice, 0 ,. u n de,' a p p I' 0 P ,. i ate c i ,. cum s tan c e sma y
provide for an adjustable price, for the supplies or services
being acqui,'ed. In those cont,'acts pel'mitting p,'ice adjust-
ment, the contract may fix a c~i1ing price or target price
. (including target cost). In fixed-price type contracts,
the ceiling or target price is adjusted only when required
by the 0 p e ,. a t ion 0 f a con t I' act c 1 a use u po nth e 0 c CUI' " e n c e
of an event or contingency. Public agencies use only the
fixed-price and fixed-price with economic price adjustment
contracts in acquisition by sealed bidding.
A lump sum (fil'm fixed-p,'ice) contract is an agr'eement
to pay the contractor a specified price in return for certain
specified p~~formance.Theprice paid is not subject to
adjustment due to the cost history developed during perform-
ance of the contract. The contractor's profit or loss is
related e~tirely to its ability to control costs. As this
t y P e 0 f con t ,. act p 1 ace s the m a x i mum r'i s k and co s t ,. e s po n s i -
bility upon the contractor, it provides the contractor the
maximum incentive for effective performance with the resultant
benefit of increased profits. Because the contractor's
cost experience is not a factor in determining tompensation
under the contract, the administrative costs to both the
contractor and the public agency are kept to a minimum.
The lump sum (firm fixed-price) type contract is used
when reasonably definite specifications are available and
whenever' fair' and ,. e a son a b 1 e p,.; c e s can be est a b 1 i shed at
the outset. This type of contract is especially suited to
the a c qui sit ion 0 f sup P lie s, s e r' vie e san d con s t " u c t ion
where realistic cost estimates can be made. However, if
the contractor would have to place a significant contingency
factor in its contract price to cover fluctuations in labor
or' mater'ial costs, 0" to pr'otect itself fr'om its inability
to estimate the costs, then the use of a lump sum (fi~m
fix e d - p,'i c e) con t ,. a c.. wo u 1 d n o't be a p p ,. 0 p ,. i ate.
In a unit price contract, the selection of the lowest
bidder' is based on estimated quantities and payments to the
s u c c e s s f u 1 bid d e r' a r' e bas e don act u a 1 qua n tit i e s . T hat is,
the actual sum to bepatd is the aggregate total determined
by the quantity of work actually performed calculated upon
the unit price set out in the bid. If the estimated quantities
are faultly, a b1~ ~ay b~ mathematical.ly unbalanced by a
3..;25
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. .-- '-'--'.------ -.---- --~--
bidder who recognizes the real situation and may attempt to
gain an evaluation advantage by bidding high on the under-
estimated units and low on the overestimated units. The
inv_ttation fo,' bids should mean that if a "easonab1e doubt
exists that an award would result i~ the lowest cost to the
Agency (materially unbalanced) the bid will be considered
non-responsive. Also, a clause should be included in the
contract that would permit the negotiation of any unit price
w hen c h a n g e sin qua n tit i e sex c e e d 1 5 p e /' c e n t 0 f the 0 ,'i gin a 1
bid qua n tit Y and the tot a 1 doll a /' c h a " g e 0 f t hat bid i s
significant.
The unit p/'ice cont/'act shifts some of the cost ,'isk
. away from the contractor. Therefore, the burden is on the
public agency to insure that the estimated quantities are a'
reasonably accurate representation of the actual anticipated
needs in light of relevant factors and past experience. The
.-. est i In ate d qua n tit i e s s h 0 U 1 d 0 f f e /' a /' e a son b ale p /' 0 b a b i 1 i t Y
t hat a wa ,'d tot h e low est bid d e /' w 11 1, i n f act, /' e s u 1 tin the
lowest ultimate cost to the agency.
The fixed-price contract with economic price adjustment
p,'ovides fo,~ the upwa,'d 0" downwa/'d /'evision of the cont/'act
p r'i c e u po nth e 0 c c U /' /' e n ceo f c e r't a i n con tin g e n c i e s w hie h a /' e
specifically defined in the contract. Price adjustments
based on established prices should normally be restricted to.
industry-wide contingencies. Price adjustments based on
labor or material costs should be limited to contingencies
beyond the control of the contractor. Use of this type of
contract is appropriate when serious doubt exists as to the
stability of market or labor conditions that will exist
du/'ing an ext~nded period of contract performance and when
contingenci~s which would otherwise be included in the
contract price can be identified and covered separately by
a pr~ce adjustment clause. Close pricing is obtained by
minimizing contingencies through price adjustment provisions,
since a por'tion of the r'isk which the contr'acto/' would have
to cover in its price is shifted to the public agency. In
return for the price adjustment provisions the contractor is
expected to eliminate from its price those contingencies
c 0 v-~ cLb-y-t.h.e-pe-Ue:-a-dJ-l15-t me nt . .
b. Co s t - r'e imbu r'sement type cont "a ct s. Th e co s t - r'e imbu,' s em e nt
type contract provides for payment to the ~ontractor of all
(or sometimes a portion of) its allowable costs. Ir ~d~ition
to costs, some cost-reimbursement contracts also pr'i,d~ for
the payment of a fee (profit) to the contractor. Cost-
reimbursement contracts establish an estimate of total cost
for the purpose of obligating funds and establishing a cost
ceiling. The contractor must notify the public agency when
costs approach the ceiling and may not exceed the ceiling
( ex c e p tat its ex pen s e) wit h 0 u t the p.,' i 0 r' a p p "0 v a 1 0 "
subsequent ratifica~ion by the public agency. Thus when the
3-26
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contractor's costs reach the cost ceiling, it may stop and
await fu"the,' inst,'uctions f"om the agency. Cost-,'eimbu,'sement
type contracts are suitable for use when the nature and
complexity of the acquisition is such that the costs of
pe,'fo,'mance cannot be est imated wi th the accu,'acy necessa"y
for a fixed-price contract. The cost risk is on the public
agency.
c . I n c e n t i v e con t ,'a c t t Y pes. I n c e n t i v e con t "a c t s a I' e
designed to' harness the profit motive to stimulate the
cont"acto" to pe,'fo,'m at a lowe,'cost, to fu,'nish a bette,'
p,'oduct 0" Se,'vi ce, 0" to cut down 1 ead time in del i ve"y
dates. The goal when utilizing incentive cont.l'acts is to
affect the contractor's management decisions throughout
. contract performance. Incentive contracts fall into two
categories: those in which the contractor's additional
p " 0 fit so,' 1 0 sse sa" e d e t e "mi n e don a n 0 b j e c t i v e bas i san d
those in which the contractor's profit or loss is determined
in a subjective manne". The fixed-p,.;ce incentive cont"act
and the cost-plus-incentive-fee contract a"e examples in the
objective catego,'y, while the cost-plus-awa,'d-fee cont"act
is the main type in the latter category.
d. Time and materials coniracts. The time and materials
type contract provides for the acquisition of supplies and
services on the ~asis of direct labor hours at specified
h 0 u r'l y r' ate san d mat e,.; a 1 sat co st. It i s use d w hen i tis
not possible at the time of placing the contract to estimate
the ext e n tor' d u ,'a t ion 0 f the wo,' k 0" to ant i c i pat e co s t s
with any substantial accu,'acy.
.e. Indefinite delivery type contracts. Indefinite delivery
type contracts are bilateral agreements that reserve.to the
public agency the right to specify at a time subsequent to
the execution of the contr'act, when and in some cases in
what amounts and where, the contractor is to make deliveries
under the contract. The method of pricing is generally
fixed-price. Where appropriate, minimum and maximum limits
on the size of each order may be set. There are three types
of indefinite delivery type contracts: definite quantity,
indefinite quantity and requirements.
The definite quantity contract provides for a definite
quantity of supplies or services to be furnished for a fixed
period, with deliveries or performance at designated locations
upon order. .
The indefinite quantity contract differs from the
d e fin i t e qua n tit Y t Y P e con t " act i nth a tit set s for' tho n 1 y . a
minimum which the Agency is required to order and a maximum
that the Agency has a right to order~ This highlights its
chief use,!..:.i.:., whe"e it is impossible to dete,'mine in
advance the precise quantities of the supplies or services
that will be needed.du.ring a definite period of time and is
3-27
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not advi sab1 e fo,' the Agency to commi tj.J~_~JfH fo,' mo"e than
a minimum quantity. To lessen the pris~ibi1ity that indefinite
quantity contracts will be held invalid due to lack of mutual
obligations, the minimum amount specified should not be
purely nominal, yet it should not exceed the amount which
the Agency is fair1~_certain to order. While this type of
contract permits greater flexibility as to quantity than the
de fin i t e t y P e con t "a c t, the co s t per' un i t may be i n c "e a sed
by the contractor to cover the additional contingencies. .
The requirements type contract differs from the indefinite
quantity indefinite delivery type contract in that the Agency
g u a r' ant e est 0 0 ,'d e,' a 11 0 fit s nee d s f 0" a p a "t i c u 1 a,' sup ply
or service from the contractor and the contracto" agrees to
furnish all of the Agency's requirements for that item,
.regard1ess of amount. This type of contract eliminates some
of the cont"actor"s "guesswo,'k" of whethe,' 0" not the Agency
will place orders as is found under indefinite quantity type
contract, but adds the contingency that the Agencie's needs
---------~~X._~~n_~_u.~_hm.- g r~e ate ". .0". 1 e s s t h a n ant i c i pat ed .
Specifications
A specification is a description of the technical requirements
to be met and the criteria for determining whether these requirements
are met. The des~ription must c~ntain the essential physical
characteristics and fu~ctions required to meet the minimum needs
of the Agency, not the maximum desired. Also, the manner in
which the needs are specified must achieve full and open competitio"
with due regard to the nature of the supplies, services or
construction to be procurred.
All specifications must be clear, c6mp1ete and definite as
we 11 a s not be un d u 1 y "e s t ,'i c t i v e. ; A 1 tho ugh s p e c i f i cat ion sa" e
restrictive by their very nature, to avoid being unduly restrictive,
they must be reasonable and necessary to meet the actual needs of
the agency. Also, specifications must include all significant
factors (including price) which the agency reasonably expects to
consider in evaluating sealed bids or competitive proposals and
the relative importance assigned to each of these factors.
The types of specifications include performance (fuhctional),
design (detailed) and b"a.rteLn..alJl~01~JtJ..a1 ~ Ttte-pe,'f-o,'mance 0"
functional specification is preferred. It permits a variety of
products or services to qualify and contains the range of acceptable
characteristics or ~he minimum acceptable standards. Performance
specifications encourage innovation and the play of new technologies.
Using performance (functional) specifications is neither a
panacea, vis-a-vis design specifications, -nor free from consider-
able effort in drafting them and the evaluation procedures.
Potential contractors then translate the specifications, and
provide a v~riety of notiations to the agency's needs. More
often than not performance specifications rather than desig~
specifications are used in negotiated procurement because of the
f1exability during negotiitions.
3-28
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The design 01' detailed specification should be avoided if at
all possible. Among othel' pl'oblems, thel'e is an implied wal"'anty
by the age n cy t hat i f the s p e c i f i cat ion sa" e f 0 1 lowed, the .
contractor will probably complete performance.
The minimum acceptable manner to identify the agency's
,'equir'ement is by use of a b"and name 0" equal specification.
T his s p e c i f i cat ion may 0 n 1 y b e use d w hen i tis imp " act i c a 1 0 "
uneconomical to make a clear and accurate description of the
techni cal ,'equi "ements. All known b,'ands that meet the ,'equi I'ed
need should be cited. Also, the specification must. list the
essential (salient) characteristics, oriented to the minimum
needs of the agency, which will be used to objectively evaluate
the .equality to the named brand(s).
Totally unacceptable and fraught with contract solicitation,
award and administration problems are those specifications
. pl agi a,'i zed f"om manufactu"e"s' b"ochul'es unde,' the gui se of
being functional or design specifications. They may exceed the
minimum agency needs, al'e p"one to p,'otest, may be impossible to
m e e t, a,' e p" 0 b a b 1 y u n d u 1 y " est I'i c t i v e and may" est I'i c t com pet i t ion.
3-29
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--,-> -- - -__~.--_n_'_'____n___.__~._~_.
--.--.-.-'- -.-...---..-.. .--..-.
--------...--- ..--... _._--...
3-30
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HAZARDOUS WASTE CLEANUP OPPORTUNITIES FOR CONTRACTORS
Presented At:
Associated General Contractors 1987 Convention
Washington, D.C.
March 5, 1987
J. Kent Holland, Jr.
Wickwire, Gavin & Gibbs, P.C~
Two Lafayette Centre, Suite 500
1133 21st Street, N.W.
Washington, D.C. 20036-3002
(202) 887-5200
I.
SUPERFUND AMENDI1ENTS AND REAUTHORIZATION ACT (SARA)
A.
Section 104 Response Activities
1 .
2.
Emergency "removal" or . long-term "remedial"
action may be taken by the Government. .
Clean-up actions must be consistent with the
.National Contingency Plan (NCP).
Clean-up actions may not be performed by
Potentially Responsible Parties (PRPs).
Cooper~tive agreements may be awarded by EPA to
sta.tes.
3.
4.
B.
Section 107 Liability
This Section states the following:
Except as provided in paragraph (2), no person
'---.snall--be liable under this title for costs or
damages as a result of actions taken or
omitted in the course of rendering care,
assistance, or advice in accordance with the
National Contingency Plan (NCP) (or at the
direction of an on-scene coordinator appointed
under such plan) with respect to an incident
creating a danger to public health or welfare
or the environment as a result of any releases
of a hazardous substance Or the threat there-
of. This paragraph shall not preclude
liability for costs or damages as a result of
negligence on the part of such a person.
. __0_- .-.------. - --.- _-_-__nn
C.
Section 119 Clarifies Liability Potential of a
Response Action Contractor.
1.
Who is a Response Action Contractor?
A person (including prime contractor's employees and
subcontractors) who enters into a response action contract with
respect to any release or threatened release. of a hazardous
3-31
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substance or pollutant or contaminant from a facility as a
response action contractor.
o Response Action Contractors will not be liable under
federal law with respect to any release or threatened release
of a hazardous substance or pollutant or contaminant except for
a release caused by: .
1) negligence,
2) gross negligence, or
3) intentional misconduct.
Thus, there will be no strict liability for a contractor
under federal law. State laws, however, are not affected.
Therefore, depending on which state the work is located, there
may be strict liability to the contractor. Note that although
Sections 107(d) and 119 provide protection for clean-up
contractors, this new liability standard does not affect the
liability of contractors who are otherwise liable under
Section 107, e.g., hazardous waste generators.
".". - __..._h____- .._n_"__- .'-____'n~~'~__'_.'
2.
Indemnification
o EPA may
against liability
tor's performance
Gross negligence,
liability can not
hold harmless and indemnify contractors
for negligence arising out of the contrac-
in carrying out response action activities.'
intentional misconduct and strict. tort
be indemnified.
o . This provision applies to response actions carried
out under written agreements with EPA, other Federal agencies,
State or political subdivisions which are acting under coopera-
tive agreements, and potentially responsible parties (PRPs)
carrying out agreements. . .
3. Source of Funding - The cost of indemnification
is considered governmental response costs and is payable from
appropriations from the Fund established by the SARA. If there
is insufficient money available from such appropriations, or if
the Fund is repealed, the legislation authorizes to be appro-
priated such amounts as may be necessary to make such indemni-
fication payments.
4. Requirements for Indemnification Agreffiru3nt-~An--
indemnification agreement can only be provided if EPA
determi~es that each of the following requirements are met:
(A) The liability co~~.'e( by the indemnification agree-
ment exceeds or is not covered by insurance available, at a
fair and reasonable price, to the contractor at the time the
response action contract is executed, and adequate insurance to
cover such liability is not generally available when the
response action contract is executed;
3-32
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WICKWIRE, GAVIN & GIBBS, P. C.
(B) The contractor has made diligent efforts to obtain
insurance coverage from non-Federal sources to cover such
liability; "
(C) In the case of a response action contract covering
more than one facility, the contractor must agree to continue
to make diligent efforts to obtain insurance coverage each time
work begins under the contract at a new facility.
5. Limitations on Coverage - Indemnification only covers
liability arising out of res~onse action activities.
6. Deductibles and Limits - An indemnification agreement
will include deductibles and place limits on the amount of
indemnification to be made available.
7.
Contracts with Potentially Responsible Parties (PRPs)
o Decision to Indemnify - Where a contractor is
working under contract to a PRP, EPA will determine an amount
which the PRP is able to indemnify the contractor. EPA will
enter into an indemnification agreement with the contractor
only if it is determined that the indemnification available
from the PRP is inadequate to cover the potential liability of
the contractor"arising out of negligence in performing the
contract.
o Conditions - EPA ~ill" only pay a claim under
such an above-described indemnification agreement after the
contractor has exhausted all administrative, judicial, and"
common law claims for indemnification against all PRPs partic-
ipating in the clean-up of the facility.
-.--- - -- ------ -".0-___._----------- -------
The indemnification agreement will require the contractor
to pay any deductible established, as described above, before
the contractor may recover any amount from the PRP or under the
indemnification agreement.
8. Regulations to Implement the Statute - The statute
requires EPA to issue regulations for carrying out the
indemnification provisions. Before issuing regulations, the
statute requires EPA to develop guidelines and provide
reasonable opportunity for public comment.
II.
PRECAUTIONS
A.
State "A~.t:" .IndemnityStatute"s
Many states have enacted statutes which prohibit indemnity
agreements in certain situations. In deciding whether, and
under what terms, to enter into indemnity agreements, a
contractor must consider and analyze the judicial and statutory
law of the appropriate state. "
:)-~J
-------
WICKWIRE, GAVIN & GIBBS, P. C.
B.
State Indemnification Statutes
A few States have passed laws providing for some
limited indemnification of Response Action contractors involved
in the clean-up of state supervised projects. (Illinois
HB3207; New Jersey AB1990; California SB2067).
C.
Quality Control
1.
2.
3.
4.
5.
6.
7.
D.
Substantial attention must be given to health
and safety above and beyond what is normally
required on a construction project. A
contractor must budget for health examinations
before an employee commences work and after an
employee completes work on a site. A contractor
must likewise budget for a firm with
specialization in on-site health monitoring and
for training and special equipment and clothing.
All these i terns must beu ant~cipated so that they
are placed in the budget for reimbursement or
the unit prices to be provided.
Contractor must be prepared to spend your own
.money for incident management.
Contractor must have quality control and don't
learn on the job.
Contractor should have long term monitoring and
maintenance which is a benefit to the engineer
or contractor.
Contractor must be able to deal with
uncertainties.
Contractor needs to have a formal risk
management structure in its organization.
Risk management involves more than insurance.
State Law
1.
2.
State law is relevant where there. is strict
liability. Don't work in those jurisdictions.
Be careful or work where there ar limitations
on indemnification unless the indemnification
agreement can be expressly drafted around such
limitations on indemnification.
'-
3~34
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WICKWIRE, GAVIN & GIBBS, P. C.
III. MARKET OPPORTUNITIES
A.
Introduction
There is a large and growing market for hazardous waste
clean-up. This market is not limited only to EPA funded
projects. In addition to EPA projects, there are projects
handled by other Federal agencies including the Department of
Defense and the Department of Energy. There is also a large
group of projects handled by States working under EPA coopera-
tive agreements. Finally, there are a large number of projects
being handled by potentially responsible parties (PRPs).
According to EPA estimates, the average per-site cost of a
clean-up will be approximately $7 million dollars. The market
may be over $100 billion aollars based on current estimates.
The major contracts in this area have thus far been for remedi-
al investigations and feasibility studies rather than the
construction clean-up contract. The real opportunitie~ for
construction contractors are just beginning. The market for
the Department of Defense and the Department of Energy programs
involving clean-up at Federal installations may be as large as
the EPA funded program.
B.
SARA Programs
Remedial action clean-ups can only be done for sites.
included on the National Priorities List (NPL). The.process of
.the site clean-up includes: preliminary assessment site
. inspection (performed by field investigation teams (FITS),
remedial investigation/feasibility study, remedial design and
remedial action. The remedial design is performed by the
architect/engineering firms and sets forth the remedial action
.-_u. for the construction phasfe."of--tne-project-which will involve
the actual physical clean-up measures.
In addition to the remedial action program, there is also
an emergency response program for cleaning up emergency spills.
This program is managed by the emergency response division in
the EPA Office of Emergency and Remedial Response.
Many of the EPA projects are driven by enforcement actions
brought by the EPA Office of Enforcement Counsel for Hazardous
Waste which initiates actions against potentially responsible
parties. In each action, EPA will first attempt to settle the
suIt with the potentially responsible parties, in which case
those parties would agree through a cr~sent order to partici-
pate in funding the clean-up and, in "'...n} cases, arranging for
the procurement of contractors to do the physical clean-up.
Where a case cannot be settled, EPA may undertake the clean-up
itself through direct Federal procurement or cooperative
agreement and may later bring a cost recovery action against
the potentially responsible parties. During the settl~ment
process, a remedial investigation is performed by EPA and the
negotiations with the potentially responsible parties is based
upon the results of that investigation. Depending on the
-_J~}~
-------
settlement agreement
sible party may then
remedial development
project.
and consent order, the potentially respon-
take over financial responsibility for the
and the remedial action work on the
C.
Department of Energy
The Department of Energy has two categories of hazardous
waste programs. The first is chemical and the second is
non-chemical, the second category being radio-active waste.
Disposal of nuclear waste from electric power plants is handled
by the Department's Civilian Nuclear Waste Program. Congress
has specified 24 sites in need of disposal of uraninum mill
tailings. The Uraninum Mill Tailings program of the Department
of. Energy is seeking ways to dispose of those tailings. Waste
sites which are not owned by the Government but which were used
by industrial firms for the manufacture of weapons, are being
cleaned up under the Department of Energy's program entitled
Formerly Used_Sites Remedial Action Program. The OakuRidg~H' -.-.
Laboratory in Tennessee is managing the mixed-waste program
which involves waste containing radio-active materials from
research and weapons production.
IV.
PROCUREME~T OF CONSTRUCTION CONTRACTO~S
A.
Formally Advertised, Sealed Bidding
EPA has adopted a policy favoring the use of sealed
bidding for construction. For procurement under cooperative
agreements, a State may not use any method other than sealed
bidding without first obtaining approval of EPA.
B.
o
Lump Sum or Unit Price Bids
Formal Two-Step Sealed Bidding
In certain cases EPA has indicated a willingness to permit
contractors to present their own proposals for how the con-
struction should be done and then after a negotiated review of
those proposals, EPA would permit contractors to submit sealed
bids on their own proposals. This is generally called the
two-step method of sealed bidding which is not to be used
unless it is impractical for the owner to provide a complete
and accurate set of specifications for the job.
V.
BID PROTESTS AND ~ONTRACTOR CLAIMS
A.
*
*
*
*
.
State Lead Projects
EPA provides. funds to the State or political subdivi-
sion;
State executes and administers contracts;
EPA is not a party to the contracts;
Bid protests must be filed with the State; appeals
from the State protest determinations are filed with
EPA;
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WICKWIRE, GAVIN & GIBBS, P. C.
*
State is responsible for negotiating all contracts,
change orders and claims;
Fundamental federal rules regarding state contract
administration are contained in 40 CFR Parts 30 and
33;
Claims are subject to arbitration or litigation in
courts of competent jurisdiction, as agreed to by the
parties to the contract.
*
*
B.
Federal Lead Projects by EPA
*
*
*
*
EPA executes and administers contracts;
Bid protests must be filed with GAO;
EPA handles all contract change orders
The procurement rules contained in the
Acquisition Regulation (FAR, Title 48)
supplement to the FAR apply;
Contract Disputes Act applies;
Claims may be filed before the Board of Contract
Appeals for the u.S. Department of Interior or in the
u.S. Claims Court. .
and claims;
Federal
and the EPA
*
*
C.
Federal Lead Projects by the u.S. Army Corps of
Engineers
*
EPA provides funds to the U.S. Army Corps of
Engineers;
The Corps executes and administers contracts;
Bid protests must be filed with GAO;
The Corps handles change order and claims management;
FAR and the Contract Disputes Act apply but the.
claims are filed with the Armed Services Board of
CanEract Appeals for the Corps"- of EngIneers" Iri"stead-----
of with the Department of Interior. They may also be
filed in the U.S. Claims Court or claims may be
handled through a mini-trial procedure of alternative
dispute resolution. .
*
*
*
*
D.
Contracting with Potentially Responsible Parties
(PRPs)
In addition to contracts with the State, EPA and the other
federal agencies, there are opportunities to contract with PRPs
who are taking responsibility for Superfund Remedial Actions.
The PRPs may receive partial reimbursement from EPA to under-
take responsibility for carrying out Remedial Actions. The-;:.;,~
PRPs, in turn, will execute contracts with firms to perforffi
various engineering and construction functions. EPA will
require free and open competition in the procurement of
contractors by PRPs who are receiving Federal funds.
*
*
*
Bid protests must be submitted to the PRP;
Change Orders are to be resolved by the PRP;
Claims are subject to arbitration or litigation in
courts of competent jurisdiction.
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WICKWIRE, GAVIN & GIBBS, :P.C.
. VI.
CHANGE ORDERS
Regardless of lead (State, EPA or other federal agency),
the essential requirements regarding change orders are the
same. You must review the regulations applicable to your
contract, however, to determine the specific requirements.
A.
Government May Make Any Change in the Work Within the
General Scope of the Contract, Including Changes
1)
2)
in the specifications;
in the time, method or
the work;
in the owner-furnished
materials, services or
directing acceleration
work.
facilities, equipment,
site; or
in the performance of the
manner of performance of
3)
4)
1. A change order includes any other written notice such
as direction, instruction, interpretation or determination,
from the owner which causes any change, provided the contractor
gives written notice stating the date~ circumstances .and source
of the order and that the contractor regards the order as a
change order. .
2. The owner is to pay the contractor an equitable
adjustment and modify .the contract is writing where ~ change
has caused an increase in the contractor's cost or time
required to perform part of the work under the contract,
whether or not changed by an actual order. However, the
contractor must carefully comply with the written notice
requirements or it may be barred from receiving payment.
3. Written notice requirement - If the contractor
intends to assert a claim for an equitable adjustment under the
changes clause, he must submit a written notice to the owner
stating the general nature and monetary extent of the claim.
That notice must be filed within 30 days of receipt of a
written change order or any notice that might be considered a
change order.
4. No claim for an equitable adjustment will be allowed
if itls filed after final payment.
B.
Conditions That May Warrant a Change Order
o
differing site conditions;
. risk allocation clauses required in con-
tracts;
errors and omissions in plans and specifica-
tions;
changes instituted because of modifications in
regulatory requirements such as building codes,
zoning and land use plans,. revisions to federal
o
o
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WICKWIRE, GAVIN & GIBBS, ~ C.
o
and state regulations and policies, and new
federal legislation;
design changes;
overruns/underruns in quantities;
factors affecting time of completion such as
directed or constructive acceleration and delays
beyond the contractor's control.
o
o
C.
Cardinal Change Doctrine
A cardinal change is one in which (1) the altered contract
attempts to purchase an item materially different from the one
originally called for, or (2) the cost of the changed contract
is substantially different from the original contract cost.
The contractor cannot be required to perform a cardinal change
since it is not redressable under the contract and further,
permitting such a change may constitute noncompetitive procure-
ment and violate the procurement rules which require open and
free competition.
VII. CLAIMS
A claim is a demand or written assertion by a contractor
seeking, as a matter of right, a change to the contract (e.g.,
additional tim~ and/or costs) which has originally been
rejected through the change order process. A voucher, invoice,
or other routine request for payment that is not in dispute
when submitted is not a claim but may be converted to a claim
- --"- if it is disputed as to liability or amount.
A.
Claims Resolution
----_.----,
1.
Claims Negotiation Process
. -- . - -..-------- - n.- -~-- - .------
For State lead projects, EPA advises the States to imple-
ment a fair and timely negotiation process in order to avoid
unnecessary arbitration or litigation.
For EPA and other federal agency lead projects, claims
must be submitted to the contracting officer and may be
appealed to the appropriate Board of Contract Appeals or to the
u.S. Claims Court.
VIII.
FORMATION OF SUBSIDIARIES
':\.
In recognition of the generally uninsurable practice areas
of asbestos and hazardous wastes, some firms have created
separate subsidiary corporations to perform this work. Such
decisions though well-intentioned, may sometimes be unduly
naive, exposing the assets of the parent corporation to the
substantial risks specifically sought to be avoided by forma-
tion of a subsidiary. Without proper guidance and rigid
adherence to the practices indicated by the law of the applica-
ble jurisdiction(s), the possibility of the subsidiary being
deemed a "mere instrumentality" is great.
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The following comprehensive list of factors set forth by
Powell, Parent and Subsidiary Corporations S 5-6 at 9(1931) has
been considered by several courts in evaluating whether or not
to permit "piercing of the corporate veil" in a subsid-
iary-parent situation:
"(a) The parent corporation owns all or most of the capital
stock of the subsidiary. .
(b) The parent and subsidiary corporations have common direc-
tors or officers.
(c) The parent corporation finances the subsidiary.
(d) The parent corporation subscribes to all the capital stock
of the subsidiary or otherwise causes its incorporation.
(e) The subsidiary has grossly inadequate capital.
(f) The parent corporation pays the salaries and other
expenses or losses of the subsidiary.
(g) The subsidiary has substantially no business except with
the parent corporation or no assets except those conveyed
to it by the parent corporation.
(h) In the papers of the parent corporation or in the state-
ments of its officers, the subsidiary is described s a
department or division of the parent corporation, or its
business or financial responsibility is referred to as the
parent corporation's own.
(i) The parent corporation uses the property of the subsidiary
. as its own..
(j) The directors or executives of the subsidiary do not act
independently in the interest of the subsidiary but take
their orders from the parent corporation in the latter's
interest.
(k) The formal legal.requirements of the subsidiary are not
observed."
Although not all states have as extensive a list of
considerations, and some also require a showing of fraud,
injustice, or fundamental unfairness, however, at a minimum,
attention should be given to assuring:
(a)
(b)
(c)
(d)
(e)
Sufficient capitalization
Separate financial records/reports and institutions
Separate board and shareholder meetings
Separate staffs
Formal arms length agreements re: use of assets and
purchase of services.
~':... T<:ENT HOLLAND, JR.
J. Kent Holland, Jr. recently joined the Washington, D.C.;
Vienna, Virginia; Madison, Wisconsin; and Los Angeles,
California law firm of Wickwire, Gavin & Gibbs, P.C. .He was
formerly a member of the United States Environmental Protection
Agency Board of Assistance Appeals and Procurement Attorney for
the Grants Branch of the United States Environmental Protection
Agency, Office of General Counsel. His practice emphasizes
federal assistance, government contracts, and hazardous waste
law. He earned his Juris Doctorate from the Villanova
University School of Law.
3-40
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AVOIDING BID PROTESTS AND COST DISALLOWANCES
THROUGH SUCCESSFUL PROCUREMENT
Presented at:
MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
A Seminar Sponsored by:
U~S. Environmental Protection Agency,
Associated General Contractor.s of America,
American Consulting Engineers Council
~--------..- "_0 ---.-
J. KENT HOLLAND, JR.
Wickwire, Gavin & Gibbs, P.C.
Two Lafayette Centre, Suite 500
Washington, D. C. 20036-3002
(202) 887 - 5200
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WICKWIRE, GAVIN & GIBBS, ~ c.
INTRODUCTION
Successful procurement is the key to avoiding costly and
time consuming bid protests and cost disallowances by EPA, and
potential cost disallowances by courts in subsequent cost
recovery actions against potentially responsible parties
(PRPs) .
Properly drafted specifications make a project easier
to manage and can help an owner avoid contractor claims.
This brief seminar presentation is intended to familiarize
you with some of the fundamental principles of federal procure-
ment law which apply to both federal and state lead Superfund
projects.
(These principles also apply to the EPA Wastewater
Treatment Construction Grants Program, and much of the bid
protest case precedents cited herein arose out of that pro-
gram. )
PROCUREMENT
Overview of the Procurement Process.
I. .
A.
Applicable Laws and Regulations
1.
Legislative
* Laws
* Congressional Inquiries
* GAO Reports
B.
Executive Branch
1.
OMS Circular.s
2.
EPA Orders, Guidance and Policies
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WICKWIRE, GAVIN & GIBBS, E C.
C.
Judicial Branch
1.
Court Decisions
2.
Contemplation of Legal Actions
*
Cost Recovery Actions
A possible defense in a cost recovery
action would be that the procurement
was not done properly and that the
costs incurred were consequently
excessive.
II.
Methods of Procurement
A.
Formal Advertising (Sealed Bidding).
1.
Requirements for Using it
*
Complete,-adequate, realistic
specifications.
. ..-.. ..----------
.*
Two or more bidders willing and able to
*
compete.
Procurement lends itself to fixed-price
award.
*
Price is the principal basis for selection.
2.
Public Notice and Solicitation of Bids
*
Must state. when and how bidding documents
may be obt~inea or examined.
3.
Time for Preparing Bids
*
Must allow adequate time between the date
the public notice is first published and
the date bids are due.
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4.
B.
Adequate bidding documents
*
Complete statement of work to be performed,
including, where appropriate, design
drawings and specifications and the
required performance schedule.
*
Terms and conditions of the contract, such
as payment and delivery schedules.
*
Clear explanation of the bidding method and
the method of evaluating the bid and
awarding the contract.
*
Responsibility requirements and evaluation
criteria which will be used in bid eval-
uation.
*
Prevailing wage determination under
Davis-Bacon Act.
*
Deadlin~ and place to submit bids.
Two-Step Formal Advertising
*
Solicit technical proposals based on
performance specifications.
*
Evaluate or negotiate technical proposals
(depending on what the RFP advised) .
*
Choose several acceptable offerors of
proposals.
Solicit sealed bids from those
*
Award
contract to lowest responsible
bidder.
.
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C.
Competitive -Negotiation
*
Use if formal advertising is not appropri-
ate under the circumstances set forth
above.
*
Issue public notice
general scope
evaluation criteria
o
relative importantance of
criteria
deadlines
*
Evaluate proposals and rank them.
*
Negotiate technical proposals and prices.
Do not divulge content on one
offeror's proposal to any other
offeror.
Do--not even divulge such
information to anyone within the
---- .-------------
owner's organization who does not have
a required need to know
*
Best and final offer received from each
offeror.
*
Unless the RFP advised that award would be
on basis of the initial offer with no
negotiation.
*
Award to the responsible offero: whose
proposal is most advantageous to owner.
D.
Architectural/Engineering Services - Qualification
Based Procurement Method (i.e., Brooks Bill type)
*
Request Qualifications of A/Es.
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WICKWIRE, GA.VIN & GIBBS, :P. C.
*
Determine most technically qualified A/Es.
After selecting and ranking the A/Es,
*
request technical proposals.
Inform them of evaluation criteria for
ranking the proposals
*
Determine and select best proposal.
*
Negotiate wfair and reasonable" price with
11.
*
Terminate negotiations if unable to obtain
satisfactory price.
*
Negotiate price with 12.
Cannot go back to renegotiate with #1.
*
E.
Noncompetitive Negotiation (Sole Source)
*
Least favored method
*
Only one source available, or
*
Public exigency/emergency, or
*
competition inadequate, or
*
prior approval by EPA where it is a
federally assisted project.
For the Superfund program, the sole
source procurement method cannot be
F.
Small Purchase
used without EPA approval.
*
. Under $10,000 ($25,000).
*
May not segment contracts to get under
small purchase ~ount.
*
Obtain price quotes from multiple sources.
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WICKWIRE, GAVIN & GIBBS, :P. C.
*
Documentation Required
available prices
owner's estimate of price
basis for award.
III. TYPES OF CONTRACTS
A.
Fixed Price
*
Well defined contract requirements.
*
Contractor bears cost risk
lump sum (firm fixed price)
unit price
*
Formally advertised (sealed bid) contracts.
require fixed price.
Cost Reimbursement
B.
*
Uncertain requirement.
------~- - - -- -
*
Government bears cost risk.
*
Cost principles
. ---.. ----- ---
allowable
reasonable
allocable
not prohibited by law
Profit (fee) negotiated separately
*
complete cos~ and price analysis.
C.
Prohibited Types of Contracts
*
Cost-plus-percentage-of-cost (Multiplier
that includes profit).
*
Percentage-of-construction-cost (Fee curve
for AlE design).
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BIDDING
I.
BID OPENING
A.
Time, Place and Procedures
*
Bids received before bid opening date are to be
kept unopened in a safe place.
Information about the number of bids received or
*
the identity of bidders is not to be made
available to anyone but government employees
whose duties require they know that information.
Procedure at opening.
*
Successively open each bid, reading the
price aloud.
o
Prohibition in a bid against
disclosure of significant information
will affect the acceptability of the
bid.
Information required for bid
evaluation must be disclosed because
of the requirement for a public
opening.
Under late bid rules, some late bids may be
accepted and these need not be read aloud
but should be abstracted and made available
for inspection.
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--........-." -.------.---
* Interesting Case of Early Opening
Bid opening official's wristwatch was wrong.
Bids were
opened two minutes early.
Bid was rejected even though it was
actually on time.
S~nce bid opening official gets to set the
time for bid opening the rejected bidder could not successfully
protest.
Compo Gen. Decision B-164625.
* .
Late Opening
Bids may be opened late without prior written notice
extending deadline when such action is deemed to be in the
government's best interest, e.g., bad weather.
*
Late Bids
Hand Delivery
o
Must be submitted on time.
Lateness not excused
even if delay was beyond control of the bidder and without his
fault or negligence, unless the delay was solely the fault of
the Government. .
The Rule is to prevent any possibility of
advantage or option to the late bidder.
o
Even where other bidders do not object to accepting
late bids, it must still be rejected.
Example of Scam Is Explained During Seminar
Discussion.
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WICKWIRE, GAVIN & GIBBS, ~ C.
excuse.
Wrong directions by government employee is no
But, at least one EPA decision held that where the IFB
o
confused bidder, the bid should be accepted.
Certified Mail
o
If mailed by certified mail at least five days
before bid opening, the bid will be considered even if it is
received late.
Regular Mail
o
Mailed bids that are received after the time set
for bid opening but before award will be considered if:
o
the Government was the cause of the delay;
the bid was in the possession of the Government
o
. at all times following bid opening; and
o
the bidder could not have obtained an unfair
option or advantage.
II.
BID EVALUATION
A.
Responsiveness Issues
1.
What is a "Responsive" bid?
*
It is one which meets all the meaningful
(material) te.ms of the IFB.
meaningful terms are those that could
affect price, quantity, quality, or
delivery,
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WICKWIRE, GAVIN & GIBBS, ~ C.
." . ---.. .--.--- ----- -.--..-.-
AND
Any other term set forth in the IFB
which for policy reasons must be met,
e.g.,
MBE Matters.
The key is whether the term could
have an effect.
o
Bidder cannot be permitted
to clarify intent after bid
2.
opening.
To be Responsive bid must be a definite unqual-
ified, .unconditional offer to meet the material
terms of IFB.
*
Purpose of strictly applying the rule
By requiring that only responsive bids
can be accepted it is assured:
o
All bidders stand equal, maintain
concept of full and open competi-
tion.
o
avoid giving any bidder the
option after bid opening to
take action to either
qualify him or disqualify
him for award.
no two bites of the
apple for bidder to
decide whether or not
to take the contract.
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WICKWIRE, GAVIN & GIBBS, R C.
o
Owner gets product or
service requested,
if willing to take
something different,
this shows the spec was
unduly restrictive.
*
Rigid Rule
necessary to reject a bid because of a
technicality if there is even a
theoretical possibility that the
bidder could obtain an unfair advan-
tage.
It is improper to accept nonresponsive
bid even if contracting officer
believes product offered will be
satisfactory or even better.
*
.conditional offers are nonresponsive
~., brand name or equ~l equipment
must meet salient characteristic --
Meeting just the performance needs is
not enough.
Where brand name or equal spec is used
and the "equal" products are to be
evaluated after bid opening, L oidder
cannot be awarded a contract on a bid
which was conditioned on the owner
evaluating the proposed "equal"
equipment before making the award.
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3.
Minor Informalities----.---must be waived
*
What are minor infOrmalities?
Examples:
failure to return required number of
signed bids.
failure to submit bid in sealed
envelope.
failure of bidder to print name on
each sheet of his bid.
*
failure to initial erasures in bid
h ---- - --- .
- -.- -_.. .-
where there is no question as to
amount intended.
4.
. Matters of Responsiveness also include:
*
Bid must commit to remaining open
available for acceptance for the
period set forth by IFB.
*
Signed bid
But an unsigned bid may be accepted if
it is accompanied by documents which
clearly show bidder's intent to be
bound by bid.
Authority of Signer.
*
Bid Bond
Must be in require,.1 am~unt.
See the
protest cases in this text.
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*
Experience Requirements
Generally a matter of responsibility
but where it relates to successful
operating experience of an item, it is
a matter of responsiveness.
*
Unbalanced or Buy-In Bids
An unbalanced bid is one offering
unreasonably low prices on some items,
and compensating for them by unrea-
sonably high prices on other items.
Purpose - on construction con-
tracts this is done to receive
. payment early in order to finance
later portions of project.
A buy-in bid is one that is so low it
will result in loss to bidder.
Purpose - to get the job and then
make a profit through change
orders or to get follow on
contracts at a profit.
Are they Responsive?
Treatment of these types of bids
depends on whether it is rea-
sonably certain that award on
such a bid will result in the
lowest cost to the Government.
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---,-----_._--~-_.- '_._----'-_._~__'n_'__._'-- - ___n'_'__~- -- --.. - -- .
- -
---'..----. _._~-- ----
Front loading is acceptable so long as
the bid will result clearly in the
lowest cost to the Government.
Examples of when an unbalanced bid
must be rejected
Requirements contract - the IFB
estimates that 100,000 widgets
will be required
x bids $1 per widget =
. . .. . - ~ -
$100,000; Y bids $.90 per
widget for the first 50,001
units and $1.10 per widget
for the remainder = -
$99,999.80 - low bid.
GAO Held that Y should be
rejected because if more
than $100,002 widgets are
ordered y is not the low
bidder.
Unbalanced bidding is most frequently
a problem in the case of inaccurate
estimated quantities for requirements
contracts, since a bidder who is aware
of the inaccuracies could obtain an
unfair advantage.
Other problems with unbalanced bids.
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WICKWIRE, GAVIN & GIBBS, :P. C.
on construction work it is common
to evaluate bids on basis of
estimated quantities but to base
payments upon the actual quan-
tities used.
If the estimates are faulty,
a bidder who recognizes the
actual situation may attempt
to obtain an evaluation
advantage by bidding high on
the understated items and
low on the overstated ones.
Result:
He gets award as
low bidder and then reaps a
windfall when the owner
orders more of the high bid
items than the IFB estimat-
ed.
*
Forms
Failure of bidder to submit bid on the
owner's form may cause rejection if
the bidder's form is not completely
consistent with owner's form.
o
Cover letter containing pro-
visions in small print may make
bid nonresponsive.
Failure to return all pages of the bid
may render bid nonresponsive.
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*
Amendment Acknowledgment
If the amendment could affect PQZD by
---.. -..--- -------
more than a trivial or negligible
amount - the bid is nonresponsive if
it fails to acknowledge the amendment.
Exceptions
Amendment that increases perfor-
mance by trivial amount;
measure of what is trivial
... - - ---. -~ -------------------_._-'---"_._-._--~.--..._-~.-
---------- __--depends on % of bid increase
and how it affects price of
bid compared with other
bids.
Technical amendment not affecting
performance.
~.,
correction of
a typographical error in IFB.
Ambiguities in Bid
*
Transmittal letter problems.
Letter not consistent with terms
of bid.
failure to price items.
indefinite offer.
~., approximate del~very date.
Bid Mistake, ~ words vs. figures.
Unit prices don't add up to lump sum
total price listed in bid.
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*
Subcontractor listing
Generally a matter of responsibility
rather than responsiveness, unless the
IFB clearly states to the contrary.
Under federal assistance projects
(e.g., Superfund State lead projects),
the applicable State law will
determine whether it is mandatory for
prime contract bidders to use their
intended subcontractors.
(In the
absence of state law on the subject,
the owner may choose to require or not
require .listing.)
EPA takes no policy on bid shopping
under federally assisted projects.
*
MBE Requirements
Like subcontractor listings, matters
relating to MBE are generally con-
sidered responsibility matters, unless
the IFB clearly states that they are
matters of responsiveness.
o
unless IFB states that certain
documentation requirements are
matters of responsiveness, EPA
may conclude that they are
actually responsibility matters.
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See EPA "Guidance for Utilization
of Small, Minority, and Women's
Businesses" (May 1986).
cannot use information from outside
the bid to determine responsiveness.
B.
Responsibility - 40 C.F.R. S 33.220
1.
Factors affecting bidder's responsibility
a.
A responsible contractor is one who has:
*
financial resources;
*
technical_qualifications~
*
experience;
*
organization and facilities to carry
out job;
*
resources needed to meet completion
schedule;
*
satisfactory performance record for
completion of contracts;
accounting and auditing procedures
*
adequate to control property, funds
and assets;
*
civil rights compliance;
*
must not be
debarred/suspended/excluded;
*
satisfactory record of integrity~
b.
Prior performance is key
*
bidder can be rejected if recent
history is poor;
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WICKWIRE. GAVIN & GIBBS. :P. C.
c.
d.
- - -~-. - -.
- - ~- .. - - - - -- . ..
e.
f.
*
must consider present responsibility
not just what happened years ago;
*
previous default terminations and law
suits can be considered.
Integrity
*
Criminal indictment or conviction
related to way firm does business may
be considered.
*
Corporation found nonresponsible
because president had been indicted
for perjury.
*
Nolo contendere to antitrust violation
is grounds for finding corporation
nonresponsible.
Bankruptcy
*
reorganization, and other financial
.- . .. . -. - .
difficultles cons{dered.
Unprofitable Buy-In Bid
*
concern that financially the firm will
not succeed or concern about likely
contract administration problems such
as change orders.
Experience Requirements
*
Meeting specified respc~sibility
requirements i~ prerequisite to being
found responsible.
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WICKWIRE, GAVIN & GIBBS, R C.
known as definitive
responsibility criteria.
g.
Licenses, certificates and permits
*
These will be matters of
responsibility even if IFB says they
are matters of responsiveness.
Note:
Licensing requirements and
experience requirements can be met through
a contractor's subcontractors.
h.
Debarred or Ineligible Contractor-
. ~. .. b - - - ..~.
*
GSA Master list of debarred/suspended
corporations and persons.
*
Labor Act Violations.
*
EPA List of violating facilities
(Clean Water Act and Clean Air Act
violations).
2.
Deciding whether bidder is responsible
*
Contracting Officer/OWner has much
discretion in deciding responsibility.
*
How much discretion does c.o./owner have in
establishing the responsibility criteria?
wide discretion in establishing
special experience criteria.
They
must, howeve:, l.~asonably relate to
the bidders' responsibility and not be
unduly restrictive.
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WICKWIRE, GAVIN & GIBBS, :P. C.
3.
Time for Making Responsibility Decision
*
Unlike responsiveness which is decided at
time of bid opening, this decision is made
after bid opening.
*
Consider all information available after
bid opening to determine whether bidder
will be able to perform on the date
performance is required.
*
A bidder who is not responsible when bids
areHsubmitted many still qualify for award
if he can establish before the agency makes
its award that he is responsible~
~,.
bidder who on date of bid opening
lacks trucks or drills needed for contract
performance may, nevertheless, be awarded
the contract if it is determined the bidder
willtlave thetrucksor.drJ.IIS by the date
the performance is required.
4.
GAO or EPA Review of Responsibility
Determinations
*
Affirmative findings of responsibility are
not reviewed unless there is a showing of
bad faith or fraud.
Except GAO will
consider whether bidder met definitive
responsibility criteria.
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WICKWIRE, GAVIN & GIBBS, :P. C.
*
Negative determinations are accepted for
review, but great deference is given to the
, contracting officer.
These decisions are
not often reversed.
5.
Bid Evaluation - Objective Determination
.*
Based on the four corners of the bid
document the contracting officer must
objectively determine whether the bid meets
the material requirements of the IFB.
Very little discretion by contracting
officer.
6.
Responsiveness determined at time of bid opening
*
Only information contained in or with the
bid can be considered in determining
responsivenes.
*
sometime after bid opening, the owner, with
.. -- -~ ---- .__._-~-----_._--- ---
the assistance of its architect/engineer
will evaluate the bids and determine
whether it meets the material requirements.
III. Rejection of all bids
*
Need sound, 90mpelling, documented business
reasons.
*
Be reluctant to reject all bids.
*
Seek advice of legal counsel.
*
Examples,
insufficient funds.
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WICKWIRE, GAVIN & GIBBS, :Po c.
defective specifications fail to state
needs or overstate needs
(i.e.,
unduly
restrictive specs).
IV.
Specifications
A.
CLEAR AND UNAMBIGUOUS SPECIFICATIONS ARE REQUIRED
1.
IFB.must clearly explain the information to be
submitted with the bid and the method of award.
Cullrnan, AI., (EPA IV, 7-6-82)
(Cal Corp.).
2.
Oral statements made by Owner or Engineer at
pre-bid conference cannot be-relied upon to
change the specifications.
Specifications can
only be amended by written addenda.
A bidder
who relies on oral statements does so at his own
risk and cannot protest a grantee's subsequent
enforcement of the written specifications.
SPECIFICATIONS MUST NOT BE UNDULY RESTRICTIVE
B.
1.
All specifications are by definition restrictive~
in that they define what will be accepted and
thus restrict the competition to those offering
acceptable equipment or services.
2.
EPA will not pay for a design or product that
exceeds the minimum performance needs of the
project (buy a Chevy not a Cadillac).
Ashland,
KY (EPA IV, 7-27-81)
(Fairbanks Morse Pump) .
3.
How do you determine whether a specification is
unduly restrictive?
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WICKWIRE, GAVIN & GIBBS, :P. C.
A.
Specification must be focused on
performance characteristics rather than
design features. Perryville, MD (EPA III,
3-21-83)
(Lyco) .
B.
Where the specification is alleged to be
supported by performance characteristics,
those characteristics must actually be
necessary for the minimum needs of the
project.
1.
The AlE must be able to show a
rational basis for the specification,
the performance based need for it, and
the basis for rejecting a particular
product.
a.
Technical feature need not be
only one possible as long as
----" ---- ----- --_.__._.__.__._--~---
there is rational basis.
Brazos
River, TX (EPA VI, 9-23-83)
(Jeffrey Manufacturing).
b.
Purpose of performance specifica-
tions is to compare operational
levels of various equipment that
may have different physical
configurations.
Reelfoot, TN
(EPA IV, 11-6-84)
(Carlon, Inc.);
Western Carolina, Greenville, SC
(EPA IV, 2-17-84)
(Ashbrook-Simon-Hartley) .
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WICKWIRE, GAVIN & GIBBS, ~ C.
c.
Requiring equipment supplied by a
manufacturer only, instead of a
supplier, is not performance
related.
Cordele, GA (EPA IV,
1-15-80)
(Tuttle, White
Constructors) .
C.
How does the specification affect competi-
tion?
Specification must not require
duplication of a competitor's design.
Mount Pleasant, SC..(EPApIV, - -3~31-82).(Bird
Maching Co., Inc.).
1.
The_fact that other suppliers can
alter their equipment to conform to
the specification does not prove that
the specification is proper.
It costs
time and money to alter a product and
hinders a supplier's ability to
compete.
Therefore, unless the
specified features and characteristics
are necessary to minimum performance
needs, the specification is unduly
restrictive.
2.
The fact that there are three or four
suppliers able to bid .__Ild compete
under a specification does not prove
that the specification is proper.
If -
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WICKWIRE, GAVIN & GIBBS, :P. C.
it eliminates even one supplier
unnecessarily, it is unduly restric-
tive.
-
D.
If a supplier offers equipment which is
able to perform adequately but does not
conform to the detailed design specifica-
tions, this demonstrates that the speci-
fications are too strict.
If the issue is
timely protested and appealed to EPA, EPA
will require that the specifications be .
revised.
Livingston Parish, LA (EPA VI,
1-27-84)
(Parson and Sanderson, Inc.).
E.
If Bonding and Experience requirements
eliminate competition, the owner must be
able to demonstrate that these were perfor-
mance related and reasonably necessary for
----- u.. -----' - .-.- -_._-------.._-~._- "--.
the success of the project.
Clinton
County, NY (EPA II, 4-30-84) (Compost
Sytems Co.).
C.
DESIGN SPECIFICATIONS
o
Only use design specifications where the specif-
ic features specified are required for the
particular project.
Design catalog specifica-
tions are to be avoid_d.
Ardmore, OK (EPA VI,
5-4-84)
(LYCO and Walker Process Corp.).
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WICKWIRE, GAVIN & GIBBS, R C.
D.
BRAND NAME OR EQUAL SPECIFICATIONS
1.
Bran1 Name or Equal Specifications are permitted
by EPA only when the use of performance based or
design specifications is impractical or uneco-
nomical.
40 CFR S 33.255(c).
See also Lewes,
--
DE (EPA III, 7~19-85) (Mixing Equipment Co.).
A.
Can only use brand name or equal specifica-
tions if there is a rational basis for not
stating the technical requirements.
Jerseyville, IL (EPA V, 4-14-83) - (Clow -_hh- -
Corp.).
B.
The salient requirements- of the named brand
which must be met by offerors must be
clearly stated.
They also must be related
to minimum needs.
Tangier, VA (EPA III,
2-11-82)
(Ultraviolet Purification Sys-
terns) .
1.
Where IFB is ambiguous concerning what
salient features are required, a
supplier would be unable to determine
or demonstrate that its product is
"equal" .
Frederick, MD (EPA III,
9-17-85)
(RDP Co.).
2.
Prime contract bidders who commit to meeting the
specifications cannot be rejected where one of
the subcontract equipment items listed in its
bid is found to be unacceptable.
To reject
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WICKWIRE, GAVIN & GIBBS, :P. C.
prime contract bids for this reason would chill
competition at the subcontractor/supplier level.
Chelan, WA (EPA X, 6-24-85)
(Marley Pump);
Monterey, CA (EPA IX, 12-17-85) (Dillingham
Const., Inc.).
E.
SOLE SOURCE PROCUREMENT
1.
The use of "Sole Source of Noncompetitive
Negotiation" is not permitted unless (a) the
item is available from only a single source; (b)
a public exigency or emergency exists justifying
its use;
(c) competition is inadequate; or (d)
the EPA award official authorizes it.
40 CFR
.S 33.605.
2.
If prequalification procedures or brand name or
equal specifications limit award of a subcon-
tract to a single supplier, some EPA Regions
. will require that the subcontract--})e-nne-gotia-tedihn
using cost and pricing data and an EPA 5700-41
form.
*
The reason for this is that since every
prime contract bidder must be the single
supplier available, that supplier would be
able to charge whatever it wanted for its
product and every prime would pay it ...-."".j
pass the cost along to the owner in its
bid.
The only way to insure that the
3-69
-------
'.,;
i~
'":;\
,{\
"-::rl,
'~.1,
.' '.\
j}
.""
WICKWIRE, GAVIN & GIBBS, :Po c.
6.
-------...-.--
., .
supplier is limited to a fair and reason-
able profit is to require the separate
negotiation.
3.
To use sole source procurement, an owner must
adequately justify the necessity for it.
Sacramento, CA (EPA IX, 10-2-81) (Westates
Carbon Co.).
4.
EPA may review the decision to sole source even
if the delegated State agency granted prior
approval.
Sacramento,CA (EPA IX, 6-17-83)
(Power Machine Co.).
5.
Brand name specifications sometimes disguise a
sole source procurement.
If only one brand of
equipment can meet the specification or if
catalog design characteristics can only be met
by one manufacturer, this results in a disguised
sole source.
Philadelphia, PA (EPA III,
6-22-83)
(Fisher and Porter Co.); Jerseyville,
IL (EPA V, 4-14-83)
(Clow Corp.); Chelan, WA
(EPA X, 4-26-85)
(Walker Process Corp.).
A Single Material Specification is distinguish-
able from a Sole Source Specification.
If more
than one supplier can supply a material made by
a s~n9le manufacturer, it is not considered sole
source procurement.
The specification may still
be unduly restrictive, however, if it is not
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WICKWIRE, GAVIN & GIBBS, :P. C.
necessary for the minimum performance needs.
Reelfoot Lake, TN (EPA IV, 11-6-84)
(Carlon,
Inc.).
F.
LOCAL AND IN-STATE PREFERENCES ARE PROHIBITED
1.
Bonus points or penalty points cannot be used to
give a preference to a local bidder over an out-
of-state bidder.
2.
Requirement that corporations be 51% owned by
licensed plumbers unduly restricted competition
. to local firms.
In fact, any publicly owned
firm would be unable to compete.
New York, NY
(EPA II, 2-2-84) Schiavone Const. Co. and Worth
~ngineering).
~--~_._--_.-._-- ..--
Conclusion
- ---.. ------
- -- -- --.----- - ---- ---_.-
Some of the key areas concerning procurement and bidding
are outlined in this paper for use in a seminar presenta-
tion.
As an outline, this may serve as a reasonable
starting point for analyzing issues encountered on
federally funded projects.
Basic fundamental procurement
principles are set forth in the outline which apply
generally to federal procurement (~., federal lead
superfund projects) and federally assisted projects (~.,
state lead superfund projects and municipal government
wastewater treatment projects).
The reader should
exercise caution, however, to ascertain the law that
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WICKWIRE, GAVIN & GIBBS, :Po C.
. .
specifically applies to particular projects involved, as
there are certainly differences between the Federal
Acquisition Regulation (FAR) and the EPA regulation
applicable to procurement under federal assistance' (40 CFR
Part 33).
J. KENT HOLLAND, JR.
J. Kent Holland, Jr. is a senior associate with the
Washington, D.C.; Vienna, Virginia; Madison, Wisconsin; and
Los Angeles, California law firm of Wickwire, Gavin & Gibbs,
P.c.
He was formerly a member of the United States
Environmental Protection Agency Board of Assistance Appeals and
Procurement ~ttorney for the Grants Branch of the United States
. Environmental Protection Agency, Office of General Counsel.
. His practice emphasizes. federal assistance, government
contracts, and hazardous waste law.
He earned his Juris
Doctorate from the Villanova University School of Law.
JKH6:01
901-186
n.._- -..--------
3-72
-------
m
a:
Q,
~
cc
-------
Introduction to Bidding
,
..'
;
'.II
. .
4-1
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(IV) BIDDING
;.
MODULE:
(13)
Introduction
ESTIMATED TIME: 5 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand what is involved in the pre-Bid conference
o Become familiar witW the needs for engineering services
during bidding.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
'",';
4-2
-------
PRE-BID CONFERENCE
. Mid-way between IFB and bid opening
. Explain procurement requirements
. I nspect work site
. Examine available data
. Oral statements do not amend IFB
..
. ,
u. .
..
. . .*.
4-3
-------
ADVERTISEMENT FOR BIDS
Owner
.--..
Separate sealed BIDS for the construction of (briefly describe nature, scope, and
major elements of the work)
will be received by
at the office of
until
, (Standard Time - Daylight Savings Time)
, and then at said office publicly opened and read aloud.
19
The CONTRACT DOCUMENTS may be examined at the following locations:
Copies of the CONTRACT DOCUMENTS may be obtained at the office of
located at
upon payment of $
for each set.
"
.
Any BIDDER, upon returning the CONTRACT DOCUMENTS promptly and in good
condition, will be refunded his payment, and any non-bidder upon so returning the
CONTRACT DOCUMENTS will be refunded $
Date
4-4
Document No.1
Advertisement for Bids: page 1 of 1
-------
INFORMATION FOR BIDDERS
BIDS will be received by
(herein called the "OWNER"), at
until
, 19
, and then at said office publicly opened and read
~
aloud.
Each BID must be submitted in a sealed envelope, addressed to
at .
Each sealed envelope containing a BID must be plainly marked on the outside as BID
for and the
envelope should bear on the outside the name of the BIDDER, his address, his license
number if applicable and the name of the project for which the BID is submitted. If
forwarded by mail, the sealed envelope containing the BID must be enclosed in another
envelope addressed to the OWNER at
All BIDS must be made on the required BID form. All blank spaces for BID prices
- must be filled in, in ink or typewritten, and the BID form must be fully completed and
~xecuted when submitted. Only one copy of the BID form is required.
The OWNER may waive any informalities or minor defects or reject any and all
BIDS. Any BID may be withdrawn prior to the above scheduled time for the opening
of BIDS or authorized postponement thereof. Any BID received after the time and date
specified shall not be considered. No BIDDER may withdraw a BID within 60 days after
the actual date of the opening thereof. Should there be reasons why the contrad' cannot
be awarded within the specified period, the time may be extended by mutual agree-
ment between the OWNER and the BIDDER.
BIDDERS must satisfy themselves of the accuracy of the estimated quantities in
the BID Schedule by examination of the site and a review of the drawings and specifica-
tions including ADDENDA. After BIDS have been submitted, the BIDDER shall not as-
sert that there was a misunderstanding concerning the quantities of WORK or of the
nature of the WORK to be done. ,.
The OWNER shall provide to BIDDERS prior to BIDDING, all information which is
pertinent to, and delineates and describes, the land. owne~ and rights-of-way acquired
or to be acquired. ..'
The CONTRACT DOCUMENTS contain the provisions required for the construc-
tion of the PROJECT. Information obtained from an officer, agent, or employee of the
OWNER or any other person shall not affect the risks or obligations assumed by the
CONTRACTOR or relieve him from fulfilling any of the conditions of the contract.
Each BID must be accompanied by a BID bond payable to the OWNER for five
percent of the total amount of the BID. As soon as the BID prices have been compared,
the OWNER will return the BONDS of all exc~pt the three lowest responsible BIDDERS.
When the Agreement is executed the bonds of the two remaining unsuccessful BID-
DERS will be returned. The BID BOND of the successful BIDDER will be retained until
the payment BOND and performance BOND have been executed and approved. after
which it will be returned. A certified check may be used in lieu of a BID BOND.
.
4--5
Document No.2
Information for Bidders: page 1 of 2
-------
, ,
A performance BOND and a payment BOND, each in the amount of 100 percent of
the CONTRACT PRICE, with a corporate surety approved by the OWNER, will be re-
quired for the faithful performance of the contract.
Attorneys-in-fact who sign BID BONDS or layment BONDS and performance
BONDS must file with each BOND a certified an effective dated copy of their power
of attorney.
The party to whom the contract is awarded will be required to execute the Agree-
ment and obtain the performance BOND and payment BOND within ten (10) calendar
days from the date when NOTICE- OF AWARD is delivered to the BIDDER. The
NOTICE OF AWARD shall be accompanied by the necessary Agreement and BOND
forms. In case of failure of the BIDDER to execute the Agreement, the OWNER may at
his option consider the BIDDER in default, in which case the BID BOND accompanying
the proposal shall become the property of the OWNER.
The OWNER within ten (10) days of receipt of acceptable performance BOND, pay-
ment BOND and Agreement signed by the party to whom the Agreement was awarded
shall sign the Agreement and return to such party an executed duplicate of the Agree-
ment. Should the OWNER not execute the Agreement within such period, the BIDDER
may by WRITTEN NOTICE withdraw his signed Agreement. Such notice of withdrawal,
shall be effective upon receipt of the notice by the OWNER.
The NOTICE TO PROCEED shall be issued within ten (10) days of the execution of
the Agreement by the OWNER. Should there be reasons why the NOTICE TO PRO-
CEED cannot be issued within such period, the time may be extended by mutual agree-
ment between the OWNER and CONTRACTOR. If the NOTICE TO PROCEED has not
been issued within the ten (10) day period or within the period mutually agreed upon,
the CONTRACTOR may terminate the Agreement without further liability on the part
of either party.
The' OWNER may make such investigations as he deems necessary to determine
the ability of the BIDDER to perform the WORK, and the BIDDER shall furnish to the
OWNER all such information and data for this purpose as the OWNER may request.
The OWNER reserves the right to reject any BID if the evidence submitted by, or in-
vestigation of, such BIDDER fails to satisfy the OWNER that such BIDDER is p,roperly
qualified to carry out the obligations of the Agreement and to complete the WORK con-
templated therein.
A conditional or qualified BID will not be accepted.
A ward will be made to the lowest responsible BIDDER.
All applicable laws, ordinances. and.. the rules and re~lations of all authorities
having jurisdiction over construction of the PROJECT shall apply to the contract
throughou t. '
Each BIDDER is responsible for inspecting the site and for reading and being thor-
oughly familiar with the CONTRACT DOCUMENTS. The failure or omission of any
BIDDER to do any of the foregoing shall in no way relieve any BIDDER from any obli-
gation in respect to his BID.""
Further. the BIDDER agrees to abide by the requirements under Executive Order
No. 11246. as amended. including specifically the provisions of the equal opportunity
clause set forth in the SUPPLEMENTAL GENERAL CONDITIONS.
The low BIDDER shall supply the names and addresses of major material SUP-
PLIERS and SUBCONTRACTORS when requested to do so by the OWNER.
Inspection trips for prospective BIDDERS will leave from the office of the
.,
at
The ENGINEER is
. His address
is
Document No.2
Information for Bidder.: page 2 of 2
4-6
-------
Bid Opening.
w. "
" .
. 4-7 ..
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF .CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(IV) BIDDING
~
MODULE:
(14) Bid Opening Procedures
ESTIMATED TIME: 5 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Outline the requirements for bid submission
o Discuss some examples of bid opening procedures.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and II hard copyll of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
"~';
.
4-8
-------
BID OPENING
. Submission
- As authorized in IFB or Addendum
." Place
- As stated in I FB or Addendum
. Time
- As stated in IFB or Addendum
- Late receipt is non-responsive
. Withdrawal
- Common law is any time before acceptance
- Federal government has firm bid rule (30-60 days)
',,,"<
4-S
-------
EXAMPLE OF
BID OPENING PROCEDURES
A few minutes before bid opening time check the exact time with the
phone company and announce that there are so many minutes remaining until
bid opening time and that any hand carried bids will be accepted at this
time. Accept any hand carriea bids or written modifications. .
lilt is now 3:45 P.M.,
Contract(s) No.
198X and time to open bids on
for
Bid Bond is
ammendments.1I
required.
There
are
bid
items
and
Formally open bid box and sort bids by contract number.
After opening a bid, give duplicate to witness so they can check copy
against original as it is read aloud. Assure that bid is signed.
Read Aloud (Clearly, slowly, and without voice "inflection"):
Name and address of the company of bidder from whom the bid is
from.
Whether Bid Security has been furnished; name and address of
Surety Company; Bid Bond, Certified or Cashier's Check (stating
percent of bond and/or amount of check).
Acknowledgement. for receipt of each amendment.
The amount of each bid item exactly as entered on the bid Torm
(i.e., any clarifications added by the bidder).
DO NOT say that any bid is rejected, regardless of form of bid,
language, failure to acknowledge amendment or failure to submit bid bond.
Read aloud any modification of bid received.
"This concludes the bidding on Contract No.
II
"Bidders may examine the bids in the Contract Office. II
-- .
:
IIWe thank you for the proposal submitted by your firm and appreciate
your interest in bidding. As the need for future work arises, you will be
notified and invited to bid."
.
NOTE: Allow bidders to examine the duplicate copies of Bids to preclude
possibility of substitutions, additions, etc., on originals.
.,'
4-10
-------
TO: NEW YOU STAn DtPARTMEh' Of ENVIRONMENTAL COfCilVAnON
PROPOSAL.
(Construction Contrect)
nOj(~T CO.\IJ'UJlON OAn
LlQUIOA TED OA.\tA<;U
$1,000
JE DESCILIPTION
CLEANING OF THE LOVE CANAL AREA STORM AND SANITARY SEWERS,
'er D~,
rleln relc:rfoa
"INSTRUCTION TO IIDD£lS..
NIAGARA FAllS, NEW YORK
All work necessary to: clean stOMm and sanitary sewers, manholes, culverts and pump
stations; construct dewatering and drum storage facilities; and transfer drums of
hatardous wastes' materials to the"sto~age facility.
. .
n. wderstCJfted bidder hereby d.elares that h. has ecrefuUy emmi1:sed the drawinqs, specifications, c::!d for::t 0:
- coatract, f:lf t!\. aboyc projeet, and personaUy laspccted the actual l==ti= of the wl')rk tcc;ether '\'Ii th the' loe:::
.ources of supply: that he has saU.n,d bimself as to the quantHies :znd eondiUons, and understands teat i:
slc;aing ~s pccpcsal bo waives all right tQ plead aay misunders~inq tegardiag the So2:ne.
ne ltiA!der further u:dersbnds aad agrees that h. Is to fW"Dish and pravide all necess:ry equirm:nt, mcteria!.
labor, ..rvices, .tc. to perfor= the WOzK required under the aforesaid caad.iUons and ID accordance with dcawinqs
pd specificstiCi:1s.' .
. .
n. Itldder further a~es to !:Iegill wode on this project within teD (10) days of DOttce to Frxeed and to cc::spl~tE
work by th, "Projeet Completioa Date" iIId1e=ted above. As provided la the "InstNctions to Sidc,~s"
faUum to cccplete the project by the "Projection Completion Oat." .hail result ia a deductioe fr:=z:: the coetr.1c'
. price for each ca1cciar day after the comp1etl= date that the contraet Is DOt completed ia every detail.
n. ))idc!er. bether ac;reu to a~c:ept la full compeDsaUoe ther.for. the amount bid, hereinafter referred to as :.'1!
"Cross Sum Bid", or for itemized proposals, tti. ClDOUAt of th. true .ammaUoa of the products of the act~::
.aDUti8S~ultiplied by the unit pric.. bid.
ne ))I~.r further a~ees to ac:ccmpany this proposal with ~ deposit as a propos:l qu:::D:.e equal to the ar!o~r.
specified hi the "Notice to Bidders" which shall be submitted ID the fc:m of a carUEed ~heck dr~~'''l1 upc: ~ 1!1:-
,aUy 1n~o:porated ba:\lc or ~st company of th~ St:to end mczde p.1yc:ble b ille New York Stale Depcrtlneat of E:w;.
lDIImental CoaservatioD or a bl~ boad from a Surety Company aPi'rov.d by the State. ..' .
''By su1:CDissicn of this bid, each bIdc!er and ecch person sICJftinc: 1D behc:If of any bidder, certifies, aD:! In the c:::!
of a Joint bid, each party thereto certifies as to Us own orqan1z=tton, a.:er penalty of perjury. tha~ to the best .;&. .
his bowledqe a:sd beUef: (1) Th. p:ices ill this bid have beea amv.1i at taci.peadendy wi~~out collusion, ==::
suhatioD, communi~cHoD, or ac;reemeat, for the pu:pcse of restricting compeatioD, as to aay ma~~r relatl:q ~o s~:!
pric:es with cmy other bidder or wilh emy com;aetitor: (2) Unless otherwise required by law, the pri~es ",'b:c!2 htJ'''~
ha ~te: in this bid have Dot bee bowinC;ly dlsc!:».ecI by the biddet:. ClCd will Dot Y.nO"Ninqly b. dlscl~se:i =i
the bidder prior to oyemnq. directly cr IDdirect1y, to =y other bidder or tic) any co::pe~itc:; cnd (3; N:) at~em;:t h:3
be- made or will b. =ade by the bidder to Induc. any other persOll, p~ership oc ccrpor:tion ~o sut:lDi~ or cet tc
submit c: bid for the FUrpoSCt ohestricUn9 CDmp.UUoD."
(NOD.coUusive BiddiDg Certific:atioD pursUGat to SectioD 139-d of the Stczta rusanc:e Law).
.
n. bidder fuether uaderstaDJs emd aqrees t!sat =1 con=et made pursuant to this proposaJ mcy b. cancelled by
the DepartmeDt at emy time for aay violation by the bidder or contractor, either prior or su~sequll!tnt to the executlor:
'.reo! of uy State law requlating or applicable to pubUc coDtracts before the same are aFPro'oed by the St.:tc
Comptroller. ..
( f).,~ P'*~
ADDEm3A RECZrlED Ir I , 1./0-' S") . . 2 (7-/'r 6)"' )
,
TOTAL Clt CWSS SUM 110 .~ITT£N IN "CADS
T't~a "":It~'d. 7Z" Ja~'/ ~/ 6~ -~C1
,
7~~ J'..',r J~~ (),,~ ~k
tOtS Slilft 84d ." fi,UfCS PrOI'O:a' C'''!4nCft
$.3 60 $ - sib p'>1t) BoloJ()
AL "AM£ ASO ACC.aSS Of P£~o..... flltM OR COAI'OaATlCN
SEYENSDN CONTAINMENT CORPORATION.
27L4q LoClC.po~r RCJ~D
N l"OA2". FA~. N~ VOIt-I'- ''3~Z.
Te'~~""OMcI""&? . '7'(... za4 0 ~
AUG
1 1985
~ \Z's \ 0 C~,...
4-11
..~.I~
-------
-- -- ---
. . -.- ._- -.-- -- ---
----- S£VEN_~ON CONTAinMENT CORPORATION
CLEANING THE LOVE CANAL AREA
STORM AND SANITARY SEWERS
PROPOSAL IQ! ~ ALTERNATES
To the Gross Sum Bid submitted-on the Proposal Form (Construction Contract), th.
following prices are bid for ADD ALTERNATE work as described in Section 01100,
Alternates.
ADD ALTERNATE '1
ADD ALTERNATE '2
Aim
11985
Date
Add.
30,000
-r-1,:.e1
'"T~O~J'A"/ ~ ,g,,;r..
In Words
~
--
~.
Add.
30JDOO
7~~;,z;L~
". c::
. .
In Words
7h~~~~/ ~4~.) . v
~
~~~
Signature and Title
MICHAEL A. EllA
.--/ PCZ~\OE\o.l~
.. ...-
'",.
4-12
-------
BID BOND"
KNOW ALL MEN BY THESE' PRESENTS, that we, the undersigned,
as Principal, and
as Surety, are hereby
held and firmly bound unto
~
as OWNER
in the" penal sum of
for the payment of which, well and truly to be made, we hereby jointly and severally
bind ourselves, successors and assigns.
Signed, this
day of
,19
The Condition of the above obligation is such that whereas the Principal has submitted
to
a certain BID, -
attached hereto and hereby made a part hereof to enter into a contract in writing, for the
NOW, THEREFORE,
(a) If said BID shall be rejected, or
(b) If said BID shall be accepted and the Principal shall execute and deliver a con-
tract in the Form of Contract attached hereto (properly completed in accord-
ance with said BID) and shall furnish a BOND for his faithful performance of
said contract, and for the payment of all persons performing labor or furnish-
ing materials in connection therewith, and shall in all other respects perform
the agreement created by the acceptance of said BID,
then this obligation shall be void, otherwise the same shall remain in force and effect;
it being expressly understood and agreed that the liability of the Surety for any and.
all claims hereunder shall, in no event, exceed the penal amount of this obligation as
herein stated.
4-13
Document NO.4
Bid Bonet Page 1 of 2
-------
The Surety, for value received, hereby stipulates and agrees that the obligations of said
Surety and its BOND shall be in no way impaired or affected by any extension of the
time within which the OWNER may accept such BID; and said Surety does herby waive
notice of any such extension.
IN WITNESS WHEREOF. the Principal and the Surety have hereunto set their hands
and seals. and such of them as are corporations have caused their corporate seals to be
hereto affixed and these presents to be signed by their proper officers, the day and
year first set forth above. .
;.
PrInCipal
(L.S.)
Sur8ty
By:
,..
IMPORTANT-Surety companies executing BONDS must appear on the Treasury De-
partment's most current list (Circular 570 as amended) and be authorized to transact
business in the state where the project is located. .
4"':14 '
Document No.4
Bid Bond: Page 2 of 2
-------
Bid Evaluation
.,,;,
":;,..,'.
4-15 . ',-
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM'
UNIT:
(IV) BIDDING
~
MODULE:
(15) Bid Evaluation
ESTIMATED TIME: 20 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand basic criteria for
responsiveness and responsibility
o Understand the importance of justification of bid rejection.
evaluating
bidder
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen and
viewgraphs for participants.
IIhard copyll of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
.~':
1
"
4-16
-------
BID EVALUATION
(Formally Advertised Solicitation)
(Sealed Bid)
Responsive - Objective
Responsible - Subjective
Price - Lowest
BID EVALUATION
RESPONSIVE
. Objective
. Determined at bid opening
. . Maintain integrity of procurement system
. What contractor agrees to do
.'
. Exact conformity of a bid with all of the material terms
and conditions
4-17
-------
BID EVALUATION
RESPONSIVE (Continued)
. Time and place of submission
. ~ .
. Price
. Quantity
. Quality
. Delivery
. Bid Bond
. Complete forms/signatures
BID EVALUATION
....
RESPONSIBLE
. Subjective
. Independent analysis
. Ability to do business
. Capability to perform
"..A. "~
:
. Discretion of contracting party
. Need actual or constructive knowledge of issues of non.
responsibility
~ .: ..
. 4-18
-------
BID EVALUATION
RESPONSIBLE (Continued)
~
. Financial resources
. Workload (capacity to perform)
. Performance history
. Integ rity
. Eligibility (debarred, labor issues)
""
REJECTION OF ALL BIDS
. Need sound, compelling, documented business reasons
. Be reluctant to reject all bids
. Seek advice of legal counsel
. a,.'!
:
. Examples
- Insufficient funds
- Defective specifications fail to state needs
- Time delay of litigation
...-.-
4-19
-------
4-20
",.
'~\'
:
. -
-------
EXAMPLE OF
BIDDER'S CHECKLIST
This checklist is an example that could be prepared and furnished" to
aid" Bidders in including all necessary supporting information with their
bid. Bidder's submittals should include, but are not limited to, the
following: ~
ITEM
CHECKED
1.
2.
Proposal (Bid)
Bidder's Bond or other security
Power-of-Attorney for Surety's Agent
to execute Bidder's Bond
3.
4. Authority to sign Proposal if signature
is by agent other than officer of
corporation, partner, or Owner
5. Certification of Nonsegregated
Facilities
6. Certification of Bidder Regarding EEO
7. Acknowledgement of Addenda (on Proposal)
8. Acknowledgement of Addenda (on each Addendum)
9. Minority Certification
10. Non-Collusion Affidavit
"11. Affidavit of Eligibi1ity/Nondebannent
* * * * * *
. .',,,:
....
:
4-21
-------
Contracts Signed by
Performance Bond
received
Final contracts in
possession
Cost breakdown received
Material and sublist
received
Contractors Liability
Insurance Received
Contractor's Liability
Insurance Sent to Owner
Owner's Builders' Risk
Insurance Received
Owner's Builders' Risk
Insurance sent to
Contractor .
Sets of Plans:
General
Mechanical
El ectri ca 1
Color Schedule approved
Color Schedule sent to
Roof Bond received from
contractor
Roof Bond sent to owner
EXAMPLE
PROCEDURE CHECK LIST
GENERAL
ELECTRICAL
~
Building accepted by owners
Expiration of one-year guarantee
Certificate of Substantial
Completion sent to owner
MECHANICAL
4~22'
ARCHITECT
OWNER
-------
BID EVALUATION NOTES
Basic Premise: Award contract to Low, Responsive, Responsible Bidder.
I . LOW
A. . Single bid item - ~
B. Multiple bid items -
II. RESPONSIVE - conforming to requirements in invitation for bids.
A. Late Bids/Late Modifications - Instructions to Bidders
1. Acceptance-
2. Hand1 ing -
B. Irregular Bid Security - Instructions to Bidders
'~'?
4723 .
-------
1. Failure to submit -
2.
Insufficient amount -
~
3. Surety not approved -
C. Mistakes in Bid
1. Correction of low Bid
2. Correction that will displace low bid
3. Clerical-
4. Acknowledge Amendment -
D. Conditional Bids
1. Qualified-
"~t..~
4-'2'4,
-------
III.
2. Discounts-
3. Paired-
~
E.
Other Problems
1. Tie Bids -
2.
Incomplete Forms -
3. 'Includes No Signature
RESPONSIBLE -
A. Considerations
1. Finanancia1 Resources
2. Technical Qualifications
3. Experi ence
4-25
'.......\'
-------
4. Adequacy of Organization and Facilities
5.
Resources To Meet Schedule
;.
6.
Performance History
7. Compliance with Civil Rights, EEO, Labor Laws
8. Not Debarred or Suspended
.
..-
-;,;:I
1
4-26.
-------
EXAMPLE OF
CONTRACT PRE-AWARD CHECKLIST
ITEM
1. Bid Bond Sufficient?
2. Bonding Agent Certified?
3. Amendment Acknowledged?
~
4. All Forms Completed?
(signed, checked)
5. Conditional Bids?
(Paired, qualified, discounts)
6. Mistakes? (Low, clerical)
7. Late Receipt/Modification
8. Unit Costs Extended Properly?
9. Timing of Award (Within Acceptance
Period)
10. Funds in Hand?
11. Protests Resolved?
12. Responsible Contractor?
13. Current Wage Rates?
14. State Registration No..
15. Compliance Statements
16~ Non-Collusion Statement
17. Certification
''.;,.''1
.
18. Non-Discrimination Statement
19. Experience Statement
20. Power of Attorney
4-27
-------
EXAMPLE OF
CONSTRUCTION CONTRACT AWARD CHECKLIST
1.
Issue "Notice of Award" to low, responsive, responsible bidder.
- Formal acceptance of Contractor's offer
- States amount and basis of award (Items of Bid)
- States exact completion date (includes days for contract mailing
and days for submi ss ion' of acceptance 1)"Q'jids) .
- Contract when subsequently effected will bear same date as Notice of
Award
- Notice must be signed by person authorized to execute contract
- Notice is "issued" when delivered to Contractor's representative or
placed in mail or in telegraphic channels
- Contractor acknowledges by signing and returning
- Requests Contractor furnish performance and payment bonds within 10
days.
2.
Receipt/Approval
Insurance
of Performance and Payment Bonds and Certificates of
- Surety agent must be authorized to execute bonds where work is to be
performed
- Surety must be on approved list - Treasury Department Circular 570
3.
Issue "Notice To Proceed"
- Formal notice to contractor to proceed following receipt of bonds/
insurance
4.
5.
- Instructs Contractor to attend a pre-construction conference.
Execute Construction Contract
Notice to Unsuccessful Bidders
"":"
:
4-23..
-------
ASSISTNCE AOONISI'RATI~
5700
12/3/84
Qw.;JU.IS'r POR R£VIEWIt«; f'CRWLy ADJERrISED ~
1. GD£RAL.
a. N1en reviewing a non-certified recipient's ~<:poeed Proc1lr8llent award
or reviewing a ~enent action of a recipient with a certified pr:ocurElllent
sy8b!m, the reviewer must detelmine that the recipient has COIIplied with all of
the requirenents in 40 CFR IU't 33. 'Ibis checklist asks questions concerning
the fomaal advertisement PE'OQ1r8llent met.md.
b. Has the recipient mde the fcllowil'rJ deteCllinations?
(1) A caaplete, adequate, am realistic specification or purchase
desc:riptiat of wt is required;
(2) The recipient is 1"eaS)nably "certain that there will be two or DDl"8
responsible bidders tlltic:h are wUlil'rJ and able to CCJlptte;
(3) The ~oc:ur8D8nt lema itself to the arard of a fJxed~rice at>-
agr~nt; and
(4) The selection of the successful bidder can be made ~incipa1ly on
the basis of pro ice.
c. Has the recipient maximized free am <:pen caapetition? The ~incipa1 .
review EI1phasis is at the recipient's 8Olicitation am bidding pl:'(X:edures to
assure that the recipient used maxiDnln free an:! <:pen CODpetition.
{
d. Has the recipient used a fixed-~ice type of subagreenent? S~e.uents
awarded under the fomal advertising methx! are fixed~ric:e am involve no
negotiations bet~n recipients and bidders. P!xed-price S\bagreenents .~.
are generally the least difficult an:! tJme consunil'rJ types of subagre&Dents to
administer. A fixed-price Subag[ohalCnt is a lUip SUI awrd tlltic:h includes .
labor, material costs, overhead, am profit, or a U'\it proic:e abagreement.
e. Has the recipient sutmitted cc:pies of the p\blic notices or annan:emants,
solicitation packages, S\IIIIIU'ies or abstracts of bids, as wll as oc:pies of
~~ subagreenents?
f. Has the recipient obtained the EPA lliard Official's ~ior written
appt"OVal for using a pr:ocur8lent methJd other than fez:mal advertising fer
RBnedial Action 8Iards \ftter SUperf\n2? .. "
".
2. PVBLIC tOrICE.
a. Has the recipient given adequate pblic notice of the pt'qI<)Sed .ward?
Review the notices, annOU'1Cenents, and other materials intended to infoma
prOSpective bidders of the solicitation fer bids (e.g., newspapers of general
.
\
4-29
, .
-------
ASSISTNa AD4INISI'RATI~
5700
1213/84
. cirallation, trade and professional journal anncuncsnents, am other publications
of general circulation). Assure that the notices indicate how and an to
acquire irwitatio.. for bid. .
b. Are the recipient's specifications clear and 4Caaate? ChecX the soli-
citation packages to e..ure that they include clear am accurate descriptions
of the products or services to be prcx:ured. Perfoanance and design specifica-
tions IlUSt not be ari)iguaJS am nor written to favor one product or design owr
another. (Coordinate this portion of the review with ~nlcal or e~ineer1rg
staff.) If the solicitation includes a .brand n... description, the words
.or equal. III.ISt fellow the words .brand nane,. am the solicitation must list
the salient requirEll8l\ta of the named brand. .
c. Has the recipient allowed maquate time for bidders to prepare bids?
In addition to clearly identifying an and are bids are to be sutmitted,
check to assure that the solicitations allow sufficient time for prospective
bidders to prepare and sutmit their sealed b~ds. If the recipient is not
certified, the recipient must allow 30 days for the pblic notice and give
pE'opcsed bidders 30 days to prepare bids (see 40 CFR Part 33, Appendix A,
(b)( 3), am (4». If the recipient is certified, it must allow an . adaqua te
. tim8. for the bidder to prepare its bid (see 533.415).
d. Has the recipient cx:mplied with the affbmative steps to solicit ..11,
minority, and 1IIaI8n's tusinesses and to procure frem labor surplus area f11ms
in accordance wi th 40 CFR 33.240 (c) and any 1qerK¥ guidance issued by the EPA?
e. Q:)es th8 recipient's bid solicitation doamBnts includez
(1) A ccraplete statsnent of woEk to be perfozmed includi~ any design
drawings and specifications and the period of perfermmce (ask technical or
e~ineeri~ staffs to review the plans, specifications, am any other pertinent
technical or engineering doonntsh ...
( 2) The tea118 and conU tiolw of the S\bagreenent to be awarded,
including any payllBnt, deliwty schedules, point of delivezy, and acceptance
criteria,
(3) A clear explanation of the recipient's metmd of biddirYJ and the
_tb:xS r1 evaluating bid prices, and its basis and mstrod for awarding the
. S~re&D8nt,
(4) Ani other ~ns1bility requir-..nts or evaluation requiranents
the recipient will U8 to evaluate bidders, ...
( 5) Indication which Department of Labor DlYis-Bacon wage detezminations
will be used, if applicable, and
(6) The' deadline and place to lRtmit bids, a ~y of 533.925, &bparts
P and G, and, if appr:op:iate, Em rom 5720-4, .tabor Standards Provisions..
;,
4-.30
-------
ASSISTNa: AOONIS'l'RATI~
5700
12/3184
3. BID OPENm; AND cnn'RACT AJrND PIO: "!$S.
'a. Bas the recipient conducted a ;rice analysis if fewr than three bids
wre received? 1he ;rice analysis wuld inc1\de canparimn8 of the recipients'
in-hcuse est_tea against the bids. Befbre the recipient makes the awrd, it
must detezmine that the bid is reuonab1e, am that the ;ropoeed contractor is
re&p)nsib1e. If the recipient receives only one bid, it IllU8t conduct a ;rice
analysis ~ review the bidder's ~it (see 33.290 and 33.235).
b. Has the recipient checked that the proposed contractor is not on the
list of suspemed or debarred contractors i88UBd under 40 CPR Part 32? If the
contractor is on the list, the recipient must obtain the D1rec:tor, ~ants
Idninitration Division's ap~al to _reS the 8\bagreaent (see 32.209).
Such ap;roval wUl be given only in extraordinary circ\llllt.ances.
c. Bas the recipient c::heck8d to assure that none of the t80rlt on 8\bagre&-
Jlltnts aceedif9 $100,000 wUl be perfoz:med at a facUityen EPA's List of
Violatil'9 Pac:Uities (see 40 erR Part 15)?
d. Bas the recipient selected the lowest ree~nsi... ard res~nsible bjdder?
.. Bas the recipient received frcm the contractor (for construction ~r88Dents
over $100,000) bid guarantees in the 8IDmt of 5t of bid ;rices, and perfozmance
am payment ~s for 100' of the s\bagre8D8nt ;rice (8M 33.265)?
f. tbes the recipient haYS a p:oc:ed\Z'9 to notify the A18rd Official wi~in
ten calemar days after the award of each construction abagreeent Wiich bas or
is expected to have an aggregrate value over $10,000 within a twlve IICI\th period?
(1) 'ft1e recipient is to 8m the IIIard Official the followir1;3 infozmationz
(a) Hane, Iddress, teleph:nJ n\IIt)er, an:! 8IIpl0)e8 1dentif.leation
n\alDer of the c:cnstruction contractor; .
(b) IIIIomt of the awrd;
(c, £IItJmated 8tarti1'9 an:! ccmpletion dates;
(d) Project rubtr, n_, and site location of the ;roject: and
(e) Capy of the bid tabulation or list of offerora.
(2) 'Dwt AIerd Official is to eend the infi:)J:mat1cn in 8~agraph
3.f.(1)(a) through (d) to the 8P;ropriate DBpartment of tabor RBgional. Office.
'!be AMud Official is to send the inmJ:l'll8tion required in 3.f.(1)(e) to the
apsrcpriate Divisional Inspector General for Investigations.
(3) In States that haYS been delegated the pr'OC\r88nt fmction \mder
the wastewater treatment construction grants ;rcgra, the delegated State must
88m the infoJ:m8tion required in 3.f.(1)(a) through (d) to the Department of
:
4-:n :
-------
ASSISfNCE AOONISTRATI~
5700
12/3/84
Labor Regional Office with jurisdiction in that State. The State will sen:! the
infomation required in 3.f.(1)(e) to the EM Divisional Inspector General for
Investigations ~ has aJdit cxgnizance in that State.
g. Bas the recipient reported to the Award Official each s~",lent it
or its contractors awarded to a minority or wcmen's l11siness 00 an EPA Fozm
6005-1, "Recipient Report on Minority and W:lren's 8.JSiness Utilization,. (see
O\apter 24, .small, 1bDen's and Minority B1siness Utilization,. for discussion
of the fom). .
h. Did the recipient pblicly open bids at the time and place identified
in the solicitations? .
4. SVBAGRmtI!Nr rcx::tJ4!NrS.
a. Has the recipient incotpOrated the apprcpriate 1'IDde1 s\bagreEment
cl&lS8s, or their equivalent, in s~eeuA&nts? Q}uivalent clause l1IJSt p:ovide
the same p:'otectiona and assurances as the I'IDdel clause. Check to assure that
the followil'9 clauses cited in 40 CFR 33.1030, or their equivalents, haw been
included I
.U) 3Upersesaion (clause 1),
(2) Privity of S~eeilA&nt (clause 2),
( 3) O\arJJes (clause 3),
(a) Paragraph (a) applies to subagreeDents for contractors,
(b) lVagraph (b) applies to subagreeaents for services, and
(c) ~ragraph (c) applies to sbagresnents for supplies,
.
(4) Differing Site O:x\ditions (clause 4, for constructia\ s~ts
cmly) ,
(5) SUSpension of 1IJrlt (clause 5, for oonst.ruction s1bagreEments
ooly) , .
(6) 'l'9uaination (clause 6),
(7) Rlllaldiea (claJ8e 7),
(8) Price Reduction for Defective Cost 'or Pricing Data (for negotiated
S~I1t8 or change orders exceeding $100,000), (clause 8),
;
(9) Audit, Acce88 to Recotds (clause 9),
(10) Q:M!nant Against COntingent Pees (clause 10),
4-32
-------
.AGREEMENT
THIS AGREEMENT, made this
day of
, 19
, by
and between
(Name of 0...,), (en tndhridual)
, hereinafter called "OWNER"
and
doing business as (an individuaL) or (a
~
partnership,) or (a corporation) hereinafter called "CONTRACTOR".
WITNESSETH: That for and in consideration of the payments and agreements herein-
after mentioned:
1. The CONTRACTOR will commence and complete the construction of
2. The CONTRACTOR will furnish all of the material. supplies, tools, equipment,
labor and other services necessary for the construction and completion of the PROJECT
described herein.
3. The CONTRACTOR will commence the work required by the CONTRACT DOC-
UMENTS wi thin
calendar days after the date of the NOTICE TO PRO-
CEED and will complete the same within
calendar days unless th! period
for completion is extended otherwise by the CONTRACT DOCUMENTS.
4. The CONTRACTOR agrees to perform all of the WORK described in the CON-
TRACT DOCUMENTS and comply with the terms therein for the sum of $
or as shown in the BID schedule.
5. The term "CONTRACT DOCUMENTS" means and includes the following:
(A) Advertisement For BIDS
(B) Information For BIDDERS
(C) . BID
(D) BID BOND
(E) Agreement
'_~\.\i
4-33
Document No.5
Agreement: Page 1 of 3
-------
(F) General Conditions
(G) SUPPLEMENTAL GENERAL CONDITIONS
(H) Payment BOND
(I) Performance BOND
(J) NOTICE OF AWARD
(K) NOTICE TO PROCEED
(L) CHANGE ORDER
(M) DRAWINGS prepared by
numbered through
:
, and dated
19
(N) SPECIFICATIONS prepared or issued by
dated
,19
(0) ADDENDA:
No.
,dated ,19
, dated ,19
...
, dated , 19
, dated ,19
, dated , 19
, dated , 19
No.
No.
No.
No.
No.
6. The OWNER will pay to the CONTRACTOR in the manner and at such times as
set forth in the General Conditions such amount~ as required by the CONTRACT
;
DOCUMENTS.
7. This Agreement shall be binding upon all parties hereto and their respective
heirs, executors, administrators, successors, and assigns.
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed
by their duly authorized officia!s, this Agreement in (
. (Hum- of Coplal
which shall be deemed an original on the date fi(st above written.
) each of
Document No.5
Agreement: Page 2 of 3
4-34
-------
~
(SEAL)
ATTEST:
Name
(P1eu8 Type,
Title
(SEAL)
ATTEST: .
Name
(P18u8 Type,
OWNER:
BY
. Name
(PI- Type,
Title
CONTRACTOR:
BY
Name
(P18u8 Type,
Address
. ,.
'",
4-35. .
Document No.5
Agreement: Page 3 of 3
-------
PAYMENT BOND
KNOW ALL MEN BY THESE PRESENTS: that
IName 01 Contractorl
(Addre.. 01 Contractor)
a
(Corporation. Partnership or Individual I
, hereinafter called Principal,
~
and
IName 01 Surety)
(Acldr818 01 Surety)
hereinafter caned Surety, are held and firmly bound unto
IN- 01 0....,1
IAddr818 01 0..,.,)
hereinafter caned OWNER, in the penal sum of
Dollars, $(
in lawful money of the United States, for the payment of which sum well and truly to
be made, we bind ourselves, successors, and assigns, jointly and severally, firmly by
these presents. .
THE CONDITION OF THIS OBLIGATION is such that whereas, the Principal entere~
into a certain contract with the OWNER, dated the - day of I
19 , a copy of which is hereto attached and made a part hereof for the construe.
tion of: .
NOW, THEREFORE, if the Principal shall promptly make payment to all persons. firms,
SUBCONTRACTORS, and corporations furnishing materials for or performing labor in
the prosecution of the WORK provided for in such contract, and any authorized exten-
sion or modification thereof, including all amounts due for materials, lubricants, oil,
gasoline, coal and coke, repairs on machinery, equipment and tools, consumed or used
in connection with the construction of such WORK, and all insurance premiums on said
WORK, and for all labor, performed in such WORK whether by SUBCONTRACTOR or
otherwise, then this obligation shall be void: otherwise to remain in full force and
effect.
.,
~-3u
Document No.6
Payment Bone!: Page 1 of 2
-.
.'
-------
PROVIDED, FURTHER, that the said Surety for value received hereby stipulates and
agrees that no change, extension of time, alteration or addition to the terms of the con-
'r ct or to the WORK to be performed thereunder or the SPECIFICATIONS accom-
ying the same shall in any wise affect its obligation on this BOND, and it does here-
waive -notice of any such change, extension of time, alteration or addition to the
terms of the contract or to the WORK or to the SPECIFICATIONS.
PROVIDED, FURTHER, that no final settlement between the OWNER and the CON-
TRACTOR shall abridge the right of any beneficiary hereunder, whose claim may be
unsatisfied. ~
IN WITNESS WHEREOF, this instrument is executed in
counterparts, each
(numberl
one of which shall be deemed an original. this the
19
day of
ATTEST:
Principal
(PrincIpal! Secr.tary
(SEAL)
By
(s)
(Addr"'1
lil...as .. 10 Principal
(AdOr.as'
Sur.ty
ATTEST:
By
Anorney-in-F.CI
(AClClr...,
Wil..... .. 10 Sur.ly
(AClClr...,
.~~';. .
.
NOTE: Date of BOND must not be prior to date of Contract.
U CONTRACTOR is Partnership, all partners should execute BOND.
IMPORTANT: Surety companies executin~ BONDS must appear on the Treasury De-
partment's most current list (Circular 570 as amended) and be authorized to transact
business in the State where the PROJECT is located.
..
--".. , ;.'-";-"'
'~-37
Document No.8
Paymem Bond: Page 2 of 2
-------
PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS: that
(Name of Contractor)
1AdG'r... of Contractor,
a
(Corporation, Partnership, or Incliviclual)
, hereinafter called Principal, and
("- of Surety)
(Addr... of Surely)
hereinafter called Surety, are held and firmly bound unto
(Name 01 -...,
(A4cIr... of 0....)
hereinafter called OWNER, in the penal sum of
Dollars, $(
in lawful money of the United States, for the payment of which ~um well and truly to
be made, we bind ourselves, successors, and assigns, jointly and severally, firmly by
these presents.
THE CONDITION OF THIS OBLIGATION is such that whereas. the Principal entered
into a certain contract with the OWNER, dated the day of ,
19_, a copy of which is hereto attached and made a part hereof for the construction
of: 0"
,
" ...~
'.~~
:
NOW, THEREFORE, if the Principal shall well, truly and faithfully perform its duties,
all the undertakings, covenants, terms, conditions. and agreements of said contract dur-
ing the original term thereof, and any extensions thereof which may be granted by the
OWNER, with or without notice to the Surety and during the one year guaranty period,-
and if he shall satisfy all claims and demands incurred under such contract, and shall
fully indemnify and save harmless the OWNER from all costs and damages which it
may suffer by reason of failure to do so, and shall reimburse and repay the OWNER all
outlay and expense which the OWNER may incur in making good any default, then this
obligation shall be void; otherwise to remain in full force and effect.
4'-3U
Document No.7
Performance Bond: Page 1 of 2
-------
PROVIDED, FURTHER, that the said surety, for value received hereby stipulates and
agrees that no change, extension of time, alteration or addition to the terms of the con-
!'act or to WORK to".be performed thereunder or the SPECIFICATIONS accompanying
. same shall in any wise affect its obligation on this BOND, and it does hereby waive
ice of any such change, extension of time, alteration or addition to the terms of the
contract or to the WORK or to the SPECIFICATIONS.
PROVIDED, FURTHER, that no final settlement between the OWNER and the CON-
TRACTOR shall abridge the right of any beneficiary hereunder, whose claim may be
unsatisfied. ~
IN WITNESS WHEREOF, this instrument is executed in
(Hum-I
counterparts, each
one of which shall be deemed an original, this the
19
day of
ATTEST:
Principal
(Principal) S8c:t...,
By
(II
(SEAL)
(AcIcIr...,
(WltMII .. 10 Principal,
(Acldr...,
Surety
.TEST:
(Surety, S8c:rewy
( SEAL)
Wil/l8l1 .1 10 Surety
By
Anorney.;ftoF.ct
(AcIcIr...,
(Addr...,
NOTE: Date of BOND must not be prior to date of Contract.
If CONTRACTOR is Partnership, all partners should execute BOND.
IMPORTANT: Surety companies executing BONDS must appear on the Treasury De-
partment's most current list (Circular 570 as amended) and be authorized to transact
business in the state where the PROJECT is located.
;
Document No.7
Performance Bond: Page 2 of 2
. 4-39
-------
NOTICE OF AWARD
To:
PROJECT Description:
The OWNER has considered the BID submitted by you for the above described
WORK in response to its Advertisement for Bids dated , 19
and Information for Bidders.
You are hereby notified that your BID has been accepted for items in the amount
of $ .
You are required by the Information for Bidders to execute the Agreement and fur-
nish the required CONTRACTOR'S Performance BOND, Payment BOND and certifi-
cates of insurance within ten (10) calendar days from the date of this Notice to you.
If you fail to execute said Agreement and to furnish said BONDS within ten (10)
days from the date of this Notice, said OWNER will be entitled to consider all your
rights arising out of the OWNER'S acceptance of your BID as abandoned and as a for-
feiture of your BID BOND; The OWNER will be entitled to such other rights as may be
granted by law. .""
You are required to return an acknowledged copy of this NOTICE OF AWARD to
the OWNER. .
Dated this
day of
, 19
Owner
By
Title' ,
ACCEPTANCE OF NOTICE
Receipt of the above NOTICE OF AWARD is hereby acknowledged
by
this the
day of
,19
By
Ti tIe
4-[~O
Document No.8
Notice of Award: Page 1 of 1
-------
. .
Bid Protests
"~.<":
.'
4-41
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(IV) BIDDING
MODULE:
(16) Bid Protests
ESTIMATED TIME: 60 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand different grounds for bid protest
o Distinguish between State-lead and Federal-lead
procedures
o Understand ways of avoiding protest
o Learn of some case examples of bid protests.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
't~
4-42
protests
~.
copy"' of
:
-------
~
BID PROTESTS
GROUNDS FOR PROTEST
. Unduly restrictive specifications
. Defective specifications
. Failure to follow solicitation
. Improper evaluation
;
. Responsiveness issues
. Impropriety or irregularity
. Violation of law or reg.
4-43
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PROTEST AVOIDANCE
1. Maximize competition by adequate advertising of
contracts ;.
2. Do not include in bidding documents any specification
which is unduly restrictive, i.e., is not necessary to the
minimum needs of the project
3. Use performance based specifications rather than
design specifications or "brand name or equal
specifications" whenever practicable
",.
PROTEST AVOIDANCE (Continued)
4. Whenever using "brand name or equal specifications,"
list the salient characteristics of the named brand that
must be met
5. If use of MBE/WBE firms are part of IFB, solicitation
should state whether the issue is a matter of
responsibility or responsiveness
.
tj:. 44 :
-------
.~0
:
4-45
-------
"....'"
-,.
:
4-46
-------
DECISION
THE COMPTROLLER GENERAL
Oil THE UNITEa STATE.
WASI-4INGTON.
O.C. :aO!!l4S
FILS: 8-212033
OATE: December 13, 1983
~
MATTER OF:
Slurry Systems
OIGEST:
The protester has not shown that the Corps
of Engineers improperly specified an
"excavated trench" construction method
using a 30-inch"soil-bentonite" wall to
contain wastes at a landfill in New Jersey
or improperly prohibited use of an alter-
native construction method involving a
"vibrated beam."
Slurry Systems, a division of Thatcher Engineering
Corporation (Slurry), protests the award of a contract to
C'Appolonia Waste Management Services, Inc., under Army
Corps of Engineers (Corps) invitation for bids (IFB)
No. CACW4l-83-B-0183, which was issued for the construction
of a "cutoff wall" at the Lipari Landfill (Lipari) waste
site, Lipari, New Jersey. Slurry alleges that the Corps
arbitrarily excluded the "vibratory beam" method of con-
structing the wall.
The purpose of the cutoff wall is to isolate hazardous
wastes at the site and thereby keep them from contaminating
the surrounding water. The solicitation requires that the
wall must be constructed using the "excavated trench" method .""
with "soil-bentonite" backfill and excludes the vibrated
beam method. The required method involves digging a trench
and filling it with a soil mixture to produce a JO-inch
wall: the prohibited method involves driving a beam into the
ground and injecting "Aspemix" into the void which is left
when the beam is extracted. The vibrated beam method
produces a wall approximately 2-6 inches thick.
.
.
.
A number of preliminary engineering studies were
conducted in the case of Lipari. Three studies were con-
ducted by R.E. Wright Associates (Wright): these studies.
concluded that the construction of a cutoff wall was the
best method for implementing remedial action there. Two of
the studies did not recommend as to how the wall should be
constructed. The third wright report recommended that the
wall be constructed using Slurry's vibrated beam method with
Aspemix as backfill. A cost analysis performed by Radian
Corporation (Radian) found that building the wall with the
vibrated beam method would cost $161,600 less .than building
it with the excavated trench method.
.
.
.
.
4-47
-------
CH2M Hill (Hill), a consultant to EPA, performed the
final study and recommended the excavated trench method with
soil-bentonite backfill. Hill also concluded that the
vibrated beam method should not be used to construct the
cutoff wall. The EPA, the Corps, and the state of New
Jersey reviewed Hill's report and agreed with Hill's con-
clusions. Hill was then instructed to develop final plans
and specifications for the solicitation based on the recom-
mendations in its report. .
Slurry protested to Hill about the feasibility of using
Slurry's vibrated beam method. Hill reviewed additional
technical data supplied by Slurry, but refused to. revise its
initial recommendations. The Corps also refused Slurry's
request to postpone issuing the solicitation. The solicita-
tion, which was issued on May 31, 1983, required bidders to
submit bids to construct a 30-inch wall using the excavated
trench methQd and soil-hentonite as backfill material. The
Corps reports that 10 bids were received.
Slurry first protests that the Corps had no authority
to exclude the vibrated beam method from the specifica-
tions. Slurry stresses that the EPA Administrator issued
her decision to take remedial action at Lipari based on
reports which were in existence at the time the decision was
made. Slurry notes that these reports were prepared pursu-
ant to EPA's plan. Therefore, Slurry argues that the
Administrator's decision incorporated Wright's recommenda-
tion that the vibrated beam method be used to construct the
cutoff wall. slurry concludes that the Corps did not have
authority to exclude the vibrated beam method from the
specifications based on the Hill report which did not exist
when the Administrator decided to take remedial action.
The Corps contends that in her determination the
Administrator adopted a containment strategy for remedial
action, but she did not specify the method or materials to'
be used in implementing that strategy. The Corps further
contends that it was not required to rely on the Wright
reports because they were preliminary studies. Finally, the
Corps questions the accuracy of Radian's cost analysis by
noting that the analysis assumed an average wall depth of.30
feet when, in fact, the depth may be up to SS feet in some
locations.
We find that the Corps had authority to issue
specifications which excluded the vibrated beam method.
We have reviewed the Administrator's determination.
This document specifies that the Administrator reviewed
various listed reports, including the wright report. She
found, as noted above, that containment and treatment is an
efficient and cost-effective method for remedial action.
However, the determination does not expressly state what
method or materials are to be used in building the
containment wall, and it does not expressly state that the
conclusions of any particular study were adopted.
.
.
.
4-43
-------
We find that the EPA-Corps' actions did not violate the
requirements of the plan. As noted above, the plan
establishes a series of evaluation steps which Dust be
completed before remedial action can be ordered and reim-
bursed under superfund. In particular, as impleDented by
EPA, the evaluation steps include preliDinary engineering
studies to determine if remedial action at a site is feas-
ible and warranted, the development of alternative methods
for remedial action, and the selection of the best alternate
for remedial action at -that site. 2!! generally, 47 Fed.
Reg. 31,217 (1982). Nowhere, however, does the plan require
that the remedial action finally ordered be based on any
particular study. Moreover, the plan, as implemented by .
EPA, specifically provides that the project may be modified
based on later findings. See 47 Fed. Reg. 31,216 (1982), at
section 300.68(d)(2) and (iT\2).
Finally, EPA's plan did not require the Corps to
specify that the remedial plan which would cost the least
amount of money. The plan does require a detailed cost
analysis of all possible remedial alternatives: however,
the plan does not mandate that the least costly alternatives
be selected. Instead, it provides for the elimination of
alternatives whose cost is much greater than other alterna-
tives when the alternatives do not provide substantially
greater benefit to the environment. 47 Fed. Reg. at 31,217
(1982), at section 300.68(h)(1». Thus, the EPA-Corps was
not required to exclude the ex~avated trench method, which
is allegedly higher in cost, once it was decided that only
this method would provide adequate protection to the envi-
ronment. In any event, the Corps questions the accuracy of
Radian's cost analysis: moreover, EPA, in fact, did allocate
"enough money" to construct the wall using the excavated
trench method.
Slurry next protests that the elimination of its method
unduly restricts competition. When a protester alleges that
specifications unduly restrict competition, the issuing
agency must establish that the restriction is reasonably
related to the agency's minimun needs. Amray, Inc.,
8-208308, January 17, 1983, 83~1 CPD 43. Here, the Corps
states that its minimun need is to protect the public health
and welfare and the environment from the hazardous wastes.
The Corps therefore contends that it needs the containment
wall which wilL most effectively keep the wastes from
migrating into the surrounding environnent. The Corps
states that a wall built by the excavated trench method
meets its needs because the excavated trench method is the
proven and traditional method for building containment
walls. It believes that exclusion of the vibrated beam
method is justified because the vibrated beam method is,
allegedly, new and unproven. We find this explanation
demonstrates that specifying the excavated trench method is
reasonably related to the Corps' minimum needs. Slurry now
must affirmatively prove that the Corps' specification is
unreasonable. Amray, Inc., supra.
.
.
.
4~49
-------
To the extent Slurry alleges that the facts demonstrate
that Hill did not do a complete analysis, it is within the
purview of the contracting agency to determine the adequacy
of the technical data upon which it bases its decisions.
!!! Joseph Pollack Corporation, B-209899, December 23, 1982,
82-2 CPD 573. Therefore, we cannot question the Corps'
decision to accept that study. as one reason for excluding
the protester's method.
The Corps also has advanced specific reasons for its
decision to exclude the vibrated. beam Method from the speci-
fications. The Corps states that there may be gaps in a
wall built by the vibrated beam method owing to vibrations
during construction, the possibility of the Aspemix injec-
tion apparatus clogging, and the thinness of the resulting
wall. In addition, the Corps is concerned because there
are, at best, only indirect methods to insure that the wall
is properly placed into the soil. Concerning Aspemix, the
material which Slurry desires to use for the wall, the Corps
states that while Slurry's own testing indicates that
Aspernix will meet the specifications' requirements, this
material has not been. subjected to independent testing, and
there is no technical data to indicate the effects which
.Lipari leacheates and organic solvents will have on an
Aspemix wall. The Corps therefore states that Over the long
term, the integrity and thickness of an Aspemix wall will be
reduced.
.
.
.
Both Slurry and the Corps have supplied our Office with
numerous reports and studies to support their views.
Essentially, these documents evidence to us that a technical
dispute exists concerning the benefits and disadvantages of
each system. This, however, does not show that the Corps'
technical judgment, based on data justifying exclusion of
the vibrated beam system, is arbitrary.
Finally, we cannot conclude that the Corps should have
stated the specifications in terMS of performance character-
istics rather than in terms of design requirements. Our
decision in North American Reporting, Inc.: Ace-Federal
Reporters, Inc., B-198448, November 18, 1980, 80-2 CPD 364,
cited by Slurry to support this argument, is inapplicable
here. In that decision, we questioned the Federal Energy
Regulatory Commission's exclusion of the "monitored"
electronic recording method of stenographic reporting since
there was no indication that the method was defective in
itself. By contrast, the Corps has stated that the problems
with the vibrated beam method are problems inherent in that
method. Moreover, the protester does not allege that it was
prevented from bidding on the excavated trench method, and
there is no indication that any other company was prevented
from competing under the IFB. Slurry has not shown that the
Corps' position is arbitrary. Thus, the Corps' specifica-
tions do not unduly restrict competition merely because they
are stated in terms of design requirements.
We conclude that Slurry has not affirmatively shown
that the specification for a 30-inch soil-bentonite wall
built by the excavated trench method and the exclusion of
the vibrated beam method is unreasonable.
Therefore, we deny the protest.
~G'~
~.IcomPtroller General
o-r of the United States
4-50
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CSCIBlaN
TH8 COMPTAOLLI!I=I QI!N.I=IAL
OF' TH. UNIT8a STAT..
WASHINGTON. O.C. 20~4B
~L.,
MATT." O~:
8-214408
CAT.: April 9, 1984
Hydro-Dredge Corporation
. . .
Hydro-Dredge Corporation protests the rejection of
its bid under invitation for bids (IF8) No. DACW45-83-
8-0129, issued by the U.S. Army Corps of Engineers,
Omaha District, for removal of hazardous waste material
from the Re-Solve Inc. Superfund site near Dartmouth,
Massachusetts. The protester contends that the Corps
improperly determined that its bid bond was defective.
We deny the protest.
- . . The bid
was accompanied by a bld bond on Standard Form 24 naming
Hydro-Dredge as principal and The Aetna Casualty and
Surety Company as surety. The bond indicated that the
penal amount was 20 percent of the bid price and was
signed on behalf of Aetna by Louise J. Calandro, who was
identified as .Attorney-in-Fact.. There was no indication
on the face of the bond that Aetna's commitment as surety
was limited to a specific amount. Attached to the bond,
however, was an Aetna power of attorney form indicating
that Ms. Calandro only had authority to sign on behalf of
Aetna bonds not exceeding $100,000. The Corps determined
that the bid bond was not sufficient because the power of
attorney did not indicate that Ms. Calandro had authority
to bind Aetna on a bond for 20 percent of Hydro-Dredge's
bid price ($848,630). The Corps therefore proposes to
reject Hydro-Dredge's bid as nonresponsive and to award
the contract to Cecos Environmental, Inc. at a price of
$4,561,026.
The protester contends that despite the apparent
$100,000 limitation on Ms. Calandro's authority to sign
bonds on behalf of Aetna, that company in fact would be
liable on the bond as written since Ms. Calandro had
actual authority to bind Aetna on a bond for a full 20
percent of Hvdro-Dredqe's. bid price. y.
. . .
A bid bond is a type of security that assures that
a bidder will not withdraw its bid within the time speci-
fied for acceptance and, if required, will execute a writ-
ten contract and furnish payment and performance bonds.
~ Defense Acquisition Regulation (CAR) S 10-101.4. The
purpose of a bid bond is to secure the liability of a
surety to the government in the event the bidder fails
to fulfill these obligations. ~omery Elevator Co.,
8-210782, April 13, 1983, 83-1 CPC 00. Thus, the suffi-
ciency of a bid bond will depend on whether the surety is
clearly bound by its terms; when the liability of the
surety is not clear, the bond properly may be regarded as
defective. Truesdale Construction Co., Inc., 8-213094,
November 18, 1~83, 83-2 CPD 591. The underlying principle
is that, under the law of suretyship, no one incurs' a
liability to pay the debts or to perform the duties of
another unless that person expressly agrees to be bound.
Andersen Construction Co.; Rapp Constructors, Inc.,
8-213955; 8-213955.2, March 9, 1984, 63 Compo Gen.
84-1 CPC_.
4-51
-------
responsiveness of a bid, the determination as to whether
a bid bond is acceptable must be based solely on the
bid documents themselves as they appear at the time of
bid opening. See Central Mechanical, Inc., 8-206555,
August 18, 198~82-2 CPD 150. It is not proper to con-
sider the reasons for the nonresponsiveness, whether due
to mistake or otherwise. A.D. Roe Company, Inc., 54 Compo
Gen. 271 (1974), 74-2 CPD 194.
In this case, reading all of the bid documents
together, we believe the attached power of attorney at best
created uncertainty with respect to the attorney-in-fact's
authority to bind the surety on a bond for a full 20 per-
cent of the protester's bid price, at worst, the power of
attorney indicated that the surety's attorney-in-fact was
acting in excess of her authority. Even if the bond were
binding on Aetna for the maximum $100,000 of Ms. Calandro's
authority to sign--and we express no view with respect to
this possible construction of the bid documents--the bond
was nevertheless insufficient since the difference between
the protester's and the next low bid was greater than
this amount. See DAR S 10-102.5(ii). Under these circum-
stances, the agency properly rejected the protester's bid
based on the submission of an inadequate bid bond. -
. . .
We recognize that Ms. Calandro may in fact have had
actual authority to bind Aetna on a bond for the full
required amount. This circumstance is not helpful to the
protester, however, since the issue here is not the actual
scope of Ms. Calandro's authority, but whether it appeared
from the face of the bid documents that Ms. Calandro's
signature on behalf of Aetna was authorized. 8ased solely
on those documents, it seems that it was not. In order to
establish otherwise, cooperation from the surety--the very
party to be bound--is required. In any event, since the
responsiveness of a bid must be determined solely from the
bid documents, the fact that extrinsic evidence--even
though in existence at the time of bid opening--may estab-
lish that the attorney-in-fact's signature was authorized,
is of no consequence. For the same reason, the surety's
post-bid opening assurances that the bond as issued was
authorized are likewise irrelevant.l
Finally, in arguing that the power of attorney sub-
mitted with the bid bond may be -reformed- to reflect the
true intent of the parties, the protester essentially is
requesting that it be allowed to correct a mistake in its
bid. Mistake in bid procedures may not be used, however,
to make responsive an otherwise nonresponsive bid. See
8.K. Instrument, Inc., 8-212162, November 30, 1983, 83-2
CPD 627.
We deny the
protest.
. Md A...~ ,
~ Comptrol! : ~e:~~
,-- of the United States
4-52
-------
DECISION
PILE:
B-214408.2
DAn: June 8. 1984
MAftBR OP:
SCA Chemical Services, Inc.
DIGBST:
Assuming that a protest concerning an
alleged impropriety apparent in an invita-
tion for bids was timely filed with the
agency before bid opening, a subsequent pro-
test to GAO filed more than 10 days after
both the-opening of bids and receipt by the
protester's attorney of a copy of the
agency's formal denial of the protest is
untimely. .
SCA Chemical Services, Inc. protests the provisions
of invitation for bids (IFB) No. DACW45-83-B-0129, issued
by the U.S. Army Corps of Engineers, Omaha District, for
the removal of hazardous waste material from the Re-
Solve Inc. Superfund site near Dartmouth, Massachusetts.
We dismiss the protest as untimely.
SCA did not submit a bid in response to the IFB.
Rather, by letter dated November 22, 1983, the date bids
were opened, SCA filed a protest with the Corps contend-
ing that it effectively was prevented from submitting a
bid because, under the terms governing the operation of
its landfill, it could not accept the type of material
found at the Re-Solve Inc. site. The protester suggested
that the agency amend the solicitation to allow for dis-
posal of the material by incineration. The agency denied
the protest by decision dated February 9, 1984. SCA filed
its protest with this Office on May 1.
Our Bid Protest Procedures provide that a protest
based on an alleged impropriety apparent in an invitation
for bids must be filed with either the contracting agency
or this Office prior to bid opening. 4 C.P.R. S 21.2(b)(1)
(1984). If a timely protest has been filed initially with
the agency, any subsequent protest to this Office filed
within 10 days of actual or constructive notice of initial
adverse action on the agency protest will be considered.
.~ S 21.2(a).
4-53
-------
8-214408.2
It is not clear from the protester's submission
whether its protest to the agency was filed before or
after the time set for bid opening. Since the protest
concerns an alleged, apparent solicitation impropriety,
however, if the protest to the agency was filed after
bid opening, it was untimely, and so too is the pro-
test here. See Jarrett S. 8lankenship Co., 8-213270,
Oct. 25, 198~83-2 CPD '504. On the other hand, if
the protest to the agency was timely, the opening of
bids without amending the solicitation constituted ini-
tial adverse agency action on the protest. King-pisher
Company, 8-209097, July 29, 1983, 83-2 CPD '150. Any
subsequent protest here should have been filed within
10 days of bid opening. Id.
In any event, the protest to this Office comes well
after the agency formally denied the protest by decision
of Pebruary 9. Although the protester states that .SCA
did not receive actual or constructive notice of the
adverse protest decision until very recently,. the agency
informs us that it sent a copy of its decision to SCA's
attorney by certified mail and that the return receipt
indicates receipt at the attorney's office on March 26.
Thus, it appears that at least by March 26 the protester
had notice of the agency's denial of its protest. The
May 1 protest to this Office, filed more than 10 days
after March 26, is obviously untimely and will not be
considered. Radix II, Inc., 8-212718, March 1, 1984,
84-1 CPD , 256.
The protest is dismissed.
,J~ Q d... C&v---
Harry R. Van Cleve
Acting General Counsel
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION I
IN RE:
)
)
)
)
)
)
)
)
Report and Recomnen-
dation of the Regional
Counsel to Assistant
General Counsel for
Grants
NEW HAMPSHIRE WATER SUPPLY
AND POLLL~ION CONTROL COMMISSION
E.P.A. project No. CX809736-01
Protest of Catamount Construction,
Inc.
I.
2ACKGRCUND
On November 3, 1983, the New Ham~shire Water Supply and Pol-
lution Control Commission (.Commission.) opened bids for
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construction of groundwater treatment facilities at the Gil-
son Road Hazardous Waste Site ~ashua, New P.a~pshire.
Tr.e
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apparent low bidder for the project was Catamount Construc-
tion, Inc.
("Catamount").
peabody N. E. ("Peabody") was
the apparent second low bidder.
Ey letter dated ~ove~cer 10, 19~', the Ccr.!~issio~ notifi~~
Catamount of its rejection of the Catar.tount bid as nonrespon-
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s i ve .
The ~omrnission initially rejected the Catamount bid
.... -
because of Catamount's failu~~ to provide or properly fill
out the following items: (1).. the financial statement: (2)
the list of intended subcontractors, (3) the list of equip-
ment manufacturers, (4t the filter press equipment manufac-
turer form; and (5) the minority business enterprises (MBE)/
women business enterprise (WBE) documentation. On Nove~er 14,
'.
1983, Catamount filed a protest of the Commission's initial
decision to reject its bid.
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IV.
DISCUSSION
The Advertisement for-Bid. CAFB) for this contract included
the following language concerning the list of equipment
manufacturers I
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~he Bidder shall list on the forms supplied as part
of the Bid the names of intended princi~al succon-
tractors to be used on the project and the na~es of
manufacturers of each na or aiece of e ui rnent in-
tended for use on the ro'ect. There sha 1 be only
one su contractor name -or each part of the work
to be subcontracted. There should be only one na~ed
~anufacturer for each piece of e~uipment to be useo.
When more than one na~e 1s listed for a particular
piece of equipment, it shall be interpreted that the
Contractor ~rar.ts the Owner the riqht to choose the
manufacturer from the names listed.
* * *
::ilure tc cort'let~ A!"'. "10:' ~':'l (';f ti:c ::,,':
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The Commission decided to award the contract to Peabody, the
apparent second lowest bidder even though Peabody ha~ failed
to provide a list of subcontractors and did not include cer-
tain financial inforcatiori with its bid.l/
. . .
As a general rule, sub~ittal of equipment lists is a matter
of responsibility not responsiveness.
City of Los Angeles,
(EPA Region IX, June 6, 19B3) (Protest of Advanco Construc-
tors, Inc.).
EPA has consistently maintained that in order
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for an equipment listing to become a matter of responsiveness,
the bidcinq docu~ents cust clearly and unequivocably state
that a bidder's failure to submit an equipment list shall be
considered nonresponsive and cause its bid to be rejected.
.
.
.
Generally, if the language of the bid documents indicates
that failure to provide an equipment list or M.B.E. inform-
ation may result in the rejection of the bid, the require-
I
./
ments have been found to be equivocal and non-mandatory
because of the permissive nature of the language and the
possibility that the bid may not be rejected.
.
.
.
.,
In applying this standard, EPA detercinattons have gone be-
yond the specific language in the bid form or the advertise-
Dent and examined all areas of the bid docuDents to detercine
the clarity of the bid documents.
If the language is suffi-
ciently clear in one ~ortion of the bid docuMents, and the
l3~C,ju.:tge which a;..pears el~~\.;ter~ in the r-i-: dc.c:.;ner.t~ r; i'!f=s
a different meaning to the requirement, the requirement is
considered a matter of responsibility.
. . . 4.-:-57
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In the instant case, the language of the bid form states
.
that 8failure to complete the equipment manufacturers form
shall be grounds for rejection of his bid as nonrespon-
s ive..
That language fails to pass either portion of the
test set forth above.
Having the grounds to do something
.
and actually following through are two separate and distinct
matters.
Here there is no automatic mechanism for rejection
of the bid.
upon examination of the bid docu~ents as a whole the lack of
a mandatory requirement that the equipment manufacturers be
listed becomes more apparent.
The language which appears
'I
in the AFB, cited above, which provides that a failure to
list equipment, -may render ~he bid as nonresponsive- is
clearly permissive.
Tte lar.quage does not r.ake clear to
the bidder the consequences of such a failure., Any argument
that there is a distinction if the permissive language
appears in the general instructions rather than specific
, }
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instruction is not persuasiv~.
. . .
For the above reasons, I recommend that you find that the
Commission does not have a rational basis for finding the
Catamount bid. to be nonres~onsive.
Accordingly, the Conr,is-
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sion should accept the bid as responsive.
rotert ~. ci~iccaro
Acting Reg ional Counsel
~-h.
-
Date.' -
Ib~
. lJ.J-
_&-
Ey:
ames T. Owens, III
. ssistant Regional Cour.~l
4-53
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In reI
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) REPORT AND RECOMMENDATION I
) or THE REGIONAL COUNSEL I
) TO THE REGIONAL ADMINISTRATOR I
) . .
~ !
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) I
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION I
Maine Department of
Environmental Protection
EPA project No. V001702010
Protest of Metcalf' Eddy, Inc.
Protest No. 01-84-BP06
.
.
.
On July 16, 1984 the DEP issued the Request For Proposals
to conduct a Remedial Investigation and Feasibility Study
for the Saco Tannery Uncontrolled Hazardous Waste Site in
Saco, Maine (RFP).
Seven firms responded to the RFP. On September 28,
1984, the DEP project officer recommended that the Contract
Administrator for the State of Maine award the contract to
E.C. Jordan, Co. (Jordan) based on an evaluation of the bids
by the DEP Contract Review Committee. M'E submitted a proposal
which was $100,000 lower in costs than the proposal submitted
by Jordan.
By letter dated OCtober 12, 1984, M'E notified the
contract Administrator protesting the award of the contract
to Jordan. The basis for M'E's protest were (1) the method-
ology used for scoring costs was inappropriate, and (2) that
"'E's low rating with respect to methodology portion of the
RFP. The Contractor Administrator, by letter dated November
6, 1984, restated the DEP's intent to award the contract to
Jordan and further explained that the proposed award to
Jordan was based on the qualitative judgment of the selection
committee in accordance with pre-established criteria.
. . .
EPA regulat10ns concerning competitive negotiations pro-
vide as follows:
(A) recipients must uniformly and objectively evaluate
all proposals submitted in response to the request
for proposals.
(B) recipients must base their determinations of qualified
offerors and acceptable proposals soley on the
evaluation criteria stated 1n the request for pro-
posals [40 C.r.R. S 33.515)
x x x
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The recipient must award the subagreement to the
responsible offeror whose proposal is determined to be
the most advantageous to the recipient taking into
consideration price and other criteria set forth in the
requests for proposals. [40 C.F.R. S 520(b»)
The RFP stated that the proposals will be reviewed by a
selection committee using the following evaluation criteria:
1.
Methodology to perfo~ the required tasks
Personnel qualifications
30'
25'
2.
. 3.
Company experience
Project costs
20'
4.
25'
.
.
~
EPA review of the determination. of a recipient's
award of an engineering contract is limited to a determination
,of whether the recipient complied with the provisions
of 40 C.r.R. Part 33 concerning competitive negotiations and
otherwise conformed to fundamental federal procurement ~rin-
. ciples. !!!, McHenry County Board, Illinois, (EPA Region V,
March 16, 1981) {Protest of Pio Lombardo' Associates) 1
Southwest Florida Re ional Plannin Council, (EPA Region IV,
December 3, 980 (protest 0 Jones, E un s , Associates)
The RFP clearly stated the criteria that would be con-
sidered in evaluating the proposals. As evidenced from the
written determinations of the DEP Selection Committee, the
selection Committee used the criteria set forth in the RFP
to evaluate the proposals. "5E does not provide any convincing
evidence that DEP failed to follow the process established
by the RFP. The RFP required that each proposal address the
methodology for conducting a bedrock depth survey. In its
proposal, M'E failed to specifically address the survey
methodology. "5E now asserts that the survey was not
appropriate because it would not be cost-effective. The
appropriateness of the bedrock depth survey is not within the
scope of EPA review of recipient ~rocurement action.
. . .
Having determined that DEP complied with EPA regulations
concerning procurement by competitive negotiation, the focus
of this determination then becomes whether the costs factor
evaluation of the proposals violates any fundamental federal
4-60
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procurement principles. Although, DEP was not required to
consider costs alone in evaluating the proposal., "'E'S
questioning of the appropriatne.. of DEP's method of evaluating
costs is also one of EPA's concern.. EPA regulations clearly
state that price is an important criteria in evaluating pro-
posals. ~ 40 C.P.R. part 33.
I
In its review of the costs for the proposal, DEP utilized I
a linear method of evaluating costs. The following methodology I
was used to evaluate the costs portion of the proposals:
,
The lowest cost shall receive - 25 points I
Next lowest cost shall receive- 23 points I
Next lowest cost shall receive - 21 points I
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Next lowest cost shall receive - 19 points - !
Next lowest cost shall receive - 17 points
Next lowest cost shall receive 15 points
-- Next: lowest cost shall receive - 13 points
Next lowest cost shall receive - 11 points
Next lowest cost shall receive - 9 points '
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DEP's rationale for selecting a linear cost scale was
that the rating system assumed that the bids would be in a
fairly narrow range. This supposition was based on the fact
that t~e cost figures from the EPA study were available to
anyone and that the scope of work in the RFP was fairly
strictly defined. Although it was not communicated to the
community, the rating system was developed before the bids
were received.
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The criteria contemplated the submission of 8 bids
within the competitive range. Although, "'E has gone to
great lengths to show how this method of scoring costs could
become distorted, its arguments do not establish a violation
of fundamental federal procurement principles. The Comptroller
General allowed a similar scoring method where the method
was consistent with the RFP. Francis' Jackson, Associates,
57 Comp. Gen. 244 (1978). The RFP states very clearly that
costs is only considered to be 25' of evaluation criteria
for the proposal. The grantee's linear price evaluation was
not inconsistent with the stated evaluation criteria. The
record indicated that DEP considered further discussion
with "&E because of the favorable price submitted by M'E.
If anything, DEP gave "'E more consideration than the RFP
required.
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4-61
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The Comptroller General decision. cited by "'S do not
support "'S's arguments concerning cost methodology. Grou~
Operations, Inc., S5 Comp. Gen. 1315 (1976), Genasys Corpo-
ration, 56 Comp. Gen. 83S (1977). Although, as "iE argues,
these decision. were critical of similar cost evaluation
criteria, the reason these procurement actions were upheld
was because the evaluation of costs was consistent with the
respective requests for proposals, not because the result
would not have changed. The thrust of these decisions is
summarized more accurately by the following.
We believe that the predetermined distribution
of points could have lessened the weight accorded
cost in the evaluation scheme and that a more
rationally founded method of evaluating cost
should have been employed by GSA rather than
mechanically ranking the cost proposals against
a predetermined scoring scheme. However, we
do not find it to have been so improper as to
require disturbing the award. Here, since the
RFP clearly indicated that technical consider-
ations were of more importance than cost, and
Genasys received the most points awarded under
'the cost evaluation, we do not believe it was
so preJudicial as to render improper the
award ... (Emphasis added) Genasys at 839-840
In its RPP, DEP clearly stated that costs were considered
secondary to the other criteria. Therefore the fact that
"'E's proposal was lower in costs does not justify disturbing
this award of the proposal by Jordan. Based on the record,
the DEP decision was rationally based and in accordance with
fundamental federal procurement principles. The DEP Selection
Committee chose the firm that submitted the best proposal in
accordance with the criteria set forth in the RFP.
Based on the record of this proceeding, DEP has demon-
strated a rational basis for finding the proposal of Jordan
the most beneficial to the recipient. "'E has provided no
factual or legal basis for reversing DEP's determination.
Accordingly, the determination of DEP should be sustained,
and "'E's protest denied.
PATRICK A. PARENTEAU
REGIONAL COUNSEL
By ~... V~ ,
' ~e. T. OWene, III
Assistant Regional Counsel
11I!:
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,.:0 '0.",
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
, "EGION VI
'NTE"F'IRST TWO BUIL.DING. 1201 EL.M ST"EET
DAL.L.AS. TEXAS 75270
In Re:
*
*
Reg; onal Aduli nistrator 0 s
Review (Decision)
in accordance with
40 C.F.R. S30.121S
Docket No. 06-84-AD09
OKLAHOMA WATER
RESOURCES BOARD
(No. V-006449-01-07)
111
111
*
*
Date: OCT 16 9)4
--------
. . .
We have received and acted .promptly on your request for my review in accord-
ance with 40 C.F.R. S30.121S of a final disputes decision from the Director,
Air I Waste Management Division. Following our receipt of your letter of
October 10. an ad-hoc panel of my staff held a brief conference by telephone
with your attorney and OWRB's Director. ,Water Quality Division, on Friday,
October 12th. While the Oklahoma State Department of Health (OSDH) is the
cooperative agreement entity in the instant matter, No. V-006449-01-07, we
have continued to correspond directly with OWRB as its agent for this (well-
plugging) phase of the Tar Creek/Superfund agre~ment, and as the real party
in interest in this dispute.'
Your request presents two issues for our review: (1) whether this procure-
ment of well plugging services through a central state procurement agency 'is
subject to 40 CFR Part 33; (2) whether your application of post-hoc estima-
ted quantities, not available to bidders, renders the procurelnent fatally
flawed due to inadequate bidding documents, violating 40 CFR S33.420(c}.
For the reasons which follow, I find that the procurement is subject to Part
33 requirements, but that the ambiguities of bid documents do not appear
to have prejudiced any bidder, so that there is nu compel1fng reason to
disapprove the proposed contract for well plugging. '
Procedural Background
Ef'A has executed a cooperathe agreement with the OSDH for remedial action
in the .Tar Creek. area of northeast Okl ahoma [and, southeast Kansas], to
plug wells and dhert stormwaters which contribute to the severe acid mine
water probl ems identi fied in that area. This cooperathe agreement incl.udes
special conditions requiring procurement to comply with 40 CFR Part 33.
Pursuant to a state inter-agency agreement, the Oklahoma Water Resources
Board (OWRB) is carrying out this project, and the OWRB sought the assistance
of its State public procurement agency, the Office of Public Affairs (OPA),
in seeking contractors for plugging sixty-six abandoned wells in the two-state
project area with acid-resistant cement.
4-63
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On September 7th, OWRB requested EPA approval of its proposed contraci,
as a part of contract award. The procurement regulations did not require
the State to submit the entire procurement package before the invitation for
bids (IFB) was issued by OPA. Following EPA inquiries and O~RB clarification,
by letter of September 28, 1984 the EPA Region 6 project officer disap~roved
the award of contact because of apparent flaws in the procurement process (no
extension of unit prices). Following an OWRB request on October 3rd, a final
dispute decision was issued on October 5th, consistent with 40 CFR S30.1200,
affirming the decision of the project officer, and this review followed.
Procurement Regulations Apply
40 CFR S33.260(b) provides that .all procurements under intergovernmental
agreen1ents 'are subject to the requirements in this part except for procure-
ments that are: (1) Incidental to the purpose of the assistance agreement,
~ (2) Made through a central public procurement unit..
While admitting that this procurement is under in intergovernmental agreement,
OWRB has argued that this procurement is not subject to 40 CFR Part 33 because
it was through a central public procurement unit, the OPA, and because the
procurement of well-plugging services in only .incidental. to the broader
pollution control purposes of the cooperative agreement. We do not agree.
This cooperative agreement for remedial action has followed an extensive
remedial investigation and feasibility study (RIfFS) funded under the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA
or Superfund), 42 U.S.C. 6901 et seq. Having been selected as feasible and
cost-effective al ternative courses of acti on, well pl uggi ng and diversion
actions are cited as the purposes in the cooperative agreement documents,
and are not, as alleged by OWRB, merely incidental to the broader purposes
of preventing further surface and subsurface water pollution. While the OPA
is without question a central state procurement agency, 74 ORS S61 et seq.,
this procurement of well-plugging services, originally estimated to cost up to
Sl ,400,000, is certi i "1y not a IIi nor, secondary, dependent or appurtenant
action. OWRB also deemphasizes the earlier language of 40 CFR S33.260(a),
that procurement through intergovernmental agreements is given special
treatment .to foster greater economy and efficiency. through such agreements
.for common procurement.8 Such language seems directed at office supplies
and other common use items, rather than the unique major procurement of
well-plugging services with CERCLA assistance, an action which is clear.ly
more primary and central than merely incidental to our cooperative agreement.
See also 61 ORS S136 on preemptive application of federal requirements to
federally assisted projects in Oklahoma.
.
Procurement Defects: Nonprejudic1al Error
The only portion of 40 CFR Part 33 at issue here is 40 CFR S33.420(c)
which requires adequate bidding documents to include
A clear explanation of the recipient's method of bidding and the
method of evaluating bid prices, and its basis and method for
awarding the subagreementi .
4-64
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in addition to other requirements for complete statement of work and tenr.s
and conditions of the agreement. In the view of our project officer and
disputes official, the absence of any estimate of extended quantities from
the unit price procurement was per se a fatal flaw in the procurement action
which required EPA to withhold its approval of the contract which had been
proposed for award.
OWRS argues that it originaliy had no fonnalized estimate of the quantities
involved for the several items of the unit-price contract [e.g., drilling
hours, stand-by hours, pipe and tubing, drill bits, tons of sand, etc.], but
that it discovered upon receivi ng bi ds that estimated quanti ties had to be
appl1 ed in order to reasonably compare the bi ds received from (eight) bidders
for the several items. It then convened a panel of state technical personnel
to derive a best estimate of quantities needed, and applied these post hoc
estimates to the bids received, resulting after extension in bid totals which
could be compared.
While this initially seemed to be a violation of the requirement for stating
in the bidding documents how the bids would be evaluated, OWRS argues very
persuasively that no original estimates were available to any bidder, and that
all avail abl e i nfonnati on was shared in the IFB on well 1 ocatio"s, depths-,
pipe diameters, etc. Further, all interested bidders were required to attend
both pre-bid conferences and site visits to the Tar Creek area. While the IFB
states only that .Selection of the contractor will be according to applicable
laws and Rules and Regulations of the State of Oklahoma's Office of Public
Affairs,. these bidders received extensive infonnation on the extent of the
Job to be done, and may well have been. as a class, better qualified than
the State officials to estimate the quantities needed for plugging the wells.
OWRS also relies upon Hero Inc., 63 Compo Gen. 117 (1983), for the legal
proposition that, in a PUblIc procurement, the procuring agency may be unable
to provide precise estimates. In such a situation, the procuring agency.
must give bidders sufficient det~il in the IFS to enable them to compete
intelligently and on a relatively equal basis. and the mere presence of a
risk factor does not make a solicitation improper. Here. the contract is on
a unit-price basis, reducing the risk when compared to a fixed-price contract
as in Hero, Inc., and the State agency has made an effort to provide 111 of
the Ivailable infonnation to the interested bidders. Further. IS in Hero.
Inc.. bidders have received sufficient information. enabling them to be on
notice of the size of the Job It hind Ind to employ business judgment in
setting prices to cover In operation of this size. While the procurement is
certainly flawed by the failure to include some estimate in the IFS, however
raw. of the quantities needed. the flaw seems to be nonprejudicial error here.
In demonstrating its good faith with regard to the post hoc application of
estimated quantities. OWRB has a1so provided I computerized Inalysis of. the
bids which shows that reduction by 50S or expansion beyond 300S of the best-
guess used to evaluate bids received wourd not change any position in the
order of bidders derived from its initial bid evaluation. Further. neither
OWRS, OPA nor EPA has received any pr~test of the bid evaluation method, and
informal feedback to OWRS. according to our conference call on October 1~th,
, indicated that several bidders had used broad estimates quite similar to
OWRS's. There is no indication that any bidder was prejudiced by the State's
4-65
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requirement to use his own estimate of the Job size in formulating unit prices,
and the State's analysis of bids received provides persuasive evidence that
the lack of estimated quantities has no effect on evaluation of t~e several
bids actually received here.
In this situation. given the apparent lack of prejudice to any bidder and
the need to procure these services 1n a timely manner this fall. there is no
compelling reason for EPA to intervene and require a more ideal procurement
process here. wi th the attendant risks of discouragi ny competiti on through
the public disclosure of bids without award and possible 'auction' atmos-
phere. Even though the specifications contain an ambiguity. the government
will receive the services wanted and we find no indication of prejudice to any
bidder. American Mutual Protective Bureau, 62 Compo Gen. 354 (1983); see
also MAC Services, Ltd.. 61 Compo Gen. 205 (1982). The State agency has
exerted its best efforts. has identified where it might have done better (and
will do so) 1n future procurements. ~nd is satisfied with the responsibility
of the proposed contractor. including his ability to provide what the State
requires at the offered price. . .
Therefore. EPA Region 6 withdraws its earlier objection to the apparently
fl awed procuremen.t process employed here and issues this approval of the
proposed procurement. allowing OWRB to award its contract to the lowest
responsive and responsible bidder [Hilyard Drtlling Co.] as requested.
If we may provide any further assistance in this matter. please contact
CERCLA project officer Paul E. Sieminski at (214) 767-9762 or attorney
Paul M. Witthoeft at (214) 767-6552.
ct)~ l
Dick Whittington. P.E.
Regional Administrator
cc: H. A. Caves. Chief
Industrial and Solid Waste Service
Oklahoma State Department of Health
P.O. Box 53551
Oklahoma City, Oklahoma 73152
Eugene MCNenney. Director
Engineering Office
Office of Public Affairs
State of Oklahoma
50 N.E. 23rd Street
Oklahoma City. Oklahoma 73105
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JUOGMENT FOA CIVIL. ~ iES
I .. ~=tnitt~ ~t:1tC9 Eistrid ~aurt I~SUI~" 01
: ,..aU ilT~i .-- - UNITED STATES OF AMERICA ClCC:KCT ",,,,l1li8&"
ENSCO ENVIRONMENTAL UNITED STATES OF AMERICA
SERVICES, INC. V DEPT. OF THE ~~; JOHN
" '0. "MARSH JR., Secty of tli~A""'ICI~~lcel".I..J"'Clcoec."'.s."ACO'S
Atmy; and COLONEL ROBERTI Elmo B. Hunter
M. AMRINE.
o Jury Verdict. This action came blfore tn. Court and a jurv with me above n.med judge (magiStrate) grlSlding.
The issues "IV' been duly ui.d and tn. jury nas duly rendered iu verdict.
~Oecision by Court. This action came to trial (hearing) blfor. mt Court with mt aoove listed judge (mag1nrne:
presiding. The issues hlV' been duly tried (heard) and a decision l'Iu OMn duly rendered.
IT IS OROERED AND ADJUDGEO
Judgemnt is entered for the Defendants, with costs to the Plaintiff.
.
~ vCt:
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1:n~e~"c\ ~_..
R. F. CONNOR
QATe
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\ December 18. 19
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IN THE UNITED STATES DISTRICT COURT FOR T
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
ENS~O ENVIRONMENTAL SERVICES, INC.,
Plaintiff,
v.
U~ITED STATES OF AMERICA:
UNITED STATES OF AMERICA,
DEPARTMENT OF THE ARMY: JOHN
o. MARSH, JR., Secretary of the
Army: and COLONEL ROBERT M. AMRINE,
Defendants.
No. 86-l264-CV-W-3
MEMORANDUM A8D ORDBR
Engineers'
The controversy in this case centers around an Army Corps of
Jersey.
Plaintiff
contract to clean up a hazardous waste site in New
Ensco
Environmental
Inc.
Services,
( II EES
Inc.") was low bidder on the contract, but was not awarded the
contract.
The
Corps
of
Engineers
felt
its
bid
that
was
was
invalid.
unresponsive to the bid specifications because its bid guarantee
EES
Inc.
then
filed
this
action
seeking
an
injunction preventing the Corps of Engineers from allowing the
second lowest bidder to proceed and a declaration that EES Inc.
is to be awarded the contract.
was
held
whether
determine
to
preliminarr
relief.
At
the hearing,
counsel
on both
sides
On December 1, 1986, a hearing
Plaintiff
entitled
to
was
future.
indicated a willingness to go forward on the merits in the near
Giv~n
the urgency in beginning the clean up of the
hazardous waste at the project site and since very few important
facts seemed to be in dispute, the Court agreed to hold a full
trial on the merits during the following week if the parties
n C~ r r' : !, i ''., !
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4-60
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would attempt to stipulate to as many facts as possible.
The
parties agreed to do so.
The trial was held on December 9, 1986.
JURISDICTION AND VENUE
This Court has jurisdiction pursuant to 28 U.S.C. i 1331 and
S
u.S.C.
f
702.
Likewise,
venue
is
proper
in the Western
District of Missouri under 28 U.S.C. i 139 (e).
BACKGROUND
The Army Corps of Engineers, Kansas City District,
issued
invitation for bid No. DACW41-86-B-0121 on April 22, 1986.
The
invitation sought bids from companies interested in working on a
project described as "The Tank Farm Demolition, Bridgeport Rental
Oil Services Site,
Logan Township,
New Jersey."
( ." Tank Farm
Project").
The Bridgeport Rental Oil Services site consists of
over 90 tanks and process vessels, drums and trucks and a twelve
acre waste oil and waste water lagoon.
The lagoon and many of
the
tanks
contain
significant
quantities
of
polychlorinated
biphenyls ("PCBs") and a number of other hazardous substances.
The site is listed as number 3S on a list of 703 hazardous waste
cites
prioritized
for
cleanup
under
the
Comprehensive
Environmental
Response
Compensation
and
Liability
Act
("CERCLA"),
42 U.S.C. f 9601 ~.!.!,g,.
~ 40 C.F.R. f 300 app. B
( 1986 ) .
The work to be done on the Tank Farm Project includes,
inter ali-a; the removal and demolition of all tanks and other
structures on the site and the removal of hazardous wastes stored
on the
site.
The Corps
of Engineers became
involved
in the
project under an interagency agreement between the EPA and the
Corps.
.
4-\)g
-------
Sealed offers to bid on the project were to be delivered to
the Army Corps of En~ineers office in Kansas City, Missouri, by
3:0~ p.m. Local Time on _September 10, 1986.
Each bid was to be
accompanied by a bid guarantee.
The bid solicitation provisions
provided that failure to . furnish "a bid guarantee in the proper
form and amount, by t~e time set for opening of bids, may be
cause for rejection of the bid."l Tank Farm Project solicitation
Provisions at SP-8.
EES Inc. and three other companies submitted
bids for the project.
When the bids were opened on September 10,
1986,
it was announced that EES In~. had submitted the apparent
low bid.
At
the
bid
opening,
all
bids
were
given
a
cursory
examination by the Bid Opening Officer, Mr. Ralph E. Yaple, and
by
an
Assistant
District
Counsel
for
the
Corps,
Mr.
Mark
Collins.
They found that EES Inc. had submitted an irrevocable
letter of credit as its bid guarantee.
Both Mr. Yaple and Mr.
Collins considered this to be a somewhat unusual form for a bid
1
The soliciation provision further provides:
The offerer (bidder) shall furnish a bid
guarantee in the form of a firm commitment,
such as a bid bond, postal money order,
certified check, cashier's check, irrevocable
letter of credit, or, under Treasury
'Department regulations, certain bonds or
notes of the United States. . .
Tank Farm Project Soliciation Provisions at SP-8. The guarantee
ensures that the government is protected in the event the
successful bidder fails to execute the. necessary contractual
documents or fails to give the bond(s) required for the project
within the specified time. If either occurs and the successful
bidder is held in default, the bidder is liable for the excess
cost to the government of having someone else do the work.
4-70
-------
guarantee since bidders generally used bid bonds,
ra ther than
letters of credit as guarantees.
Because of this, Mr. Collins
late.r examined the letter of credi t
in more
detail.
He found
that the applicant of the letter of credit was a company named
Environmental Systems Company of Little ROCK, ArKansas ("ESC"),
not EES Inc.
The bid listed EES Inc. as a New YorK corporation2
located in North Tonawenda, New YorK.
ENSCO, Inc. ("ENS CO" ) of
Little
ROCK,
ArKansas,
was
listed
as
EES
Inc. 's
parent
corporation in the bid document.
Thus, ESC, the applicant on the
letter of credit was a third company, not otherwise referred to
in the bid documents submitted by EES Inc.3
On September 15, 1986, Mr. Yaple called the office of EES
Inc. in New YorK to find out the relationship, if any, between
EES Inc. and ESC.
He testified that he attempted to talK to Mr.
Frederic
M.
Schwartz,
the
person
who
had
signed
the
bid
solicitation for EES Inc.
However, Mr. Yaple did not reach Mr.
Schwart z and
instead talKed with another person whose name he
could not recall.4
Hr. Yaple testified that the person he talKed
2 Mr. Frederic Schwartz, Vice President of MarKeting at EES Inc.
tesitifed at trial that this was a mistaKe. He said that EES
Inc. is an Arkansas Corporation that is registered to do business
in New York.
3 However, the letter of credit listed ESC's address as 1015
Lousiana, Little Rock, ArKansas. The bid documents listed this
as ENSCO's address.
4 Plaintiff objected to Hr. Schwartz's testimony regarding the
phone call to EES Inc. on heresay grounds. The Court sustained
the objection, but let the testimony in for the limited purpose
of showing the state of mind of Col. Robert H. Amrine, the
Contracting Officer, when he determined that the letter of credit
was not a valid bid guarantee.
4-71
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with confirmed that EES Inc. was a New York corporation and that
ENSCO of Little Rock was the Parent company of EES Inc.
He
.further testified that the person told him that ESC and ENSCO
were one and the same company.
On September lS,
1986, Mr. Collins contacted MBank Dallas
(IMBank"), the Bank th~t issued the letter of credit, in order to
determine if the applicant on the letter of credit (ESC) and the
bidder (EES Inc.) were the same legal entity.
He spoke wi th a
Mr. Regan Stewart who informed him that he should contact a Mr.
Jim Dawson.
The next day, Mr. Collins spoke with Mr. Dawson who
informed him that ESC was his customer and that the letter of
credit was issued at ESC'. re~uest.S
.
Mr. Dawson also told him
that ESC was a Delaware corporation headquartered in Little Rock,
Arkansas.
Mr. Collins further testified that Mr. Dawson told him
that he did not know of and was not
familiar wi th a company
called ENSCO Environmental Services, Inc. of New York.
On September 18, 1986, Mr. Collins issued a legal opinion
recommending that EES. Inc.' s bid be rejected as
nonresponsive
because the applicant on the letter (ESC) of credit was not the
same entity as the bidder (EES Inc.).
In essence, his opinion
stated that when the applicant and bidder are different entities,
the bid guarantee would not De effective as against the applicant
should the Didder de faul t .
He cited several decis ions of the
Comptroller General of the United States which supported this
S Again, the telephone conversation Detween Mr. Collins and Mr.
Dawson was allowed into evidence only to show Colonel Amrine's
state of mind in rejecting EES Inc.'s bid guarantee. ~.supra,
note .
4-72
-------
position.
In re S&S Constructing, Compo Gen. No. B-214927, 84-1
CPD t670
( 1984 ) ;
In re Future Electric Co.,
Comp Gen. No. B-
2129.38, 84-1 CPD .216 (1984);
In re A. D.
Roe Co . ,
Inc., Compo
Gen. No. 8-181692, 74-2 CPD '194 (1974).
On September 19, 1986, the Corps received an organizational
chart from the bidder.
The chart showed that ENSCO, Inc. was the
parent company of EES
Inc. and ESC was the parent company of
ESC.6
It
is unclear whether Mr.
Collins had access to this
information prior to issuing his legal opinion.
However,
the
legal opinion ma1ces clear that his recommendation would be the
same
whether
the
applicant
and bidder were
parent-subsidiary
corporations or entirely independent entities.
On or around September 23,
1986, the Contracting Officer,
Colonal Amrine, signed an internal document entitled
"Determination and Findings..7 which stated that he had determined
that EES
Inc.' s bid
was nonrespons ive because
the
let ter of
credit "was not made in favor of the principal which submitted
the bid."
Thereafter '.
on September
30,
1986,
the Tank Farm
contract was awarded
to Rollins
Environmental Services,
F.S.,
Inc., the second lower bidder.
EES Inc. telephoned the Corps on October 1, 1986, to inquire
about the status of the contract and was informed that Rollins
6 This information was sent to show that Mr. Schwartz, who
signed the bi~ for the Plainitff, had authority to legally bind
the Plaintiff. Apparently, there was some question of this on
the face of the bid documents.
7 The document was not dated, but Mr. Yaple who prepared the
document for Col. Amrine's signature stated that to the best of
his knowledge the Colonel signed it on September 23, 1986.
4-73
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had been aAoJarded the cor-i t"o. (t. 8
On October 2,
1986, EES Inc.
filed a formal ~ro':est C'~ i:"'c CQrps' decision with the General
Accounting O~'ice (GAO) aski~5 the GAO to either waive the error
or ~o allow :, t~ sUbmit-a corrected letter of credit.9
The Comp,. (I ller Gent!ral
issued a decision on October 9,
1986,
which dis (-..sed. the Plaint i ff' s protest as being without
".
merit.
In re ENSCO Environmental Services, Inc., Compo Gen. No.
8-224266
(Oct.
9,
1986) .
The
decision
stated
that
a
bid
guarantee which names a principal different from the bidder is
materially deficient and cannot" be waived as a minor error or
corrected after opening.
Id.
Plaintiff then filed a request for
reconsideration
with
the
GAO.
On
October
24,
1986 ,
the
Comptroller
General
denied
the
Planitiff's
request.
for
reconsideration of its earlier decision.
The Comptroller noted
that the letter of credit indicated that MBank Dallas agreed to
be bond "only on behalf of [EES Inc. 's] parent company. II
.In re
ENSCO
Environmental Services,
Inc. ,
Compo
Gen.
No. 8-224266.2
(Oct. 24, 1986).
Relying on suretyship principles, the decision
stated:
"it
is doubtful whether the Corps could enforce the
letter
of
credit if [EES Inc.] failed to carry out its
(and] as a result, the letter of credit is
Id. Thereafter, on November 26, 1986, Plaintiff
obligations
deficient."
filed the instant action.
8 EES Inc. received a letter dated October 3, 1986, formally
notifying it that its bid had been rejected.
9 An amendment to the letter of credit, changing the applicant's
name to EES Inc., was received by the Corps on October 3, 1986.
[~-74 ,..
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STANDARD OF REVIEW
It should first be noted that the Court
is reviewing the
actions of the Contr~cting Officer, not those of the Comptroller
General.
This is because the officer IS action is considered the
Ilfinal action" within the meaning of the Administrative Procedure
Act.
5 U.S.C.f 500.
~ Simpson Electrical Co. v. Seamans, 317
F.Supp. 684, 686 (D.D.C. 1970).
The parties se~m to be in agreement, and the Court concurs,
that the Contracting Officerls decision should not be overturned
unless it was "arbitrary, capricious, an abuse of discretion or
otherwise not
in accordance with law. It
5 U.S.C. f 706(1) (A).
See H. Steinthal & Co. v.' Seamans, 455 F.2d 1289, 1301 (D.C. Cir.
1971).
This is a narrow standard of
review:
"agency action is
arbitrary and capricious only where it is not supportable on any
rational
basis. II
Brotherhood
of
Ry.
&
Airline
Clerks
v.
Burlington Northern,
Inc. ,
722 F.2d 380,
381
(8th Cir.
1983).
Under this standard the Court may not substitute its own judgment
as that of the agency.
Id.
ANALYSIS
I
The preliminary issue is whether the letter of credit issued
by HBank was legally valid so as to bind the bank to pay the
Corps of Engineers in the event that EES Inc. defaulted.
As m-en t i oned,
the Corps of Engineers relied on suretyship
principles
in
finding
the
letter
of
credit
invalid:
the
Defendants' base
their
argument herein
on the same rationale.
They argue that MBank was only obliged to pay on the letter of
4-75
-------
credit if the applicant, !!£, defaulted on the beneficiary, the
Corps of Engineers.
And, since EES Inc. was the bidder, the bank
would not have to pay if EES Inc. defaulted.
There fore, they
argue the letter of credit is not a valid bid guarantee.
.
This is
the
rationale
used by . the Comptroller
General
in In
re SOlS
Contractinq, supra,
which held that a letter of credit
was an
invalid bid guarantee if the applicant was not the bidder.
In re
SOlS Contractinq, adopted i~s analysis from Comptroller decisions
which hold that a bid bond that names a principal different from
the bidder is not a valid bid guarantee.
See In re A. D. Roe
Co., Inc.,
S4 Comp. Gen. 271, 74-2 CPD '194 (1974): In re Future
Electric Co., B-212938, 84-1 CPD '216 (1984).
The Defendant's (and Comptroller General's) reliance on b~d
bond cases to "analyze the enforceability of a letter of credit is
misplaced. .
The legal operation of a letter of credit is distinct
from that of a bid bond.
A bid bond is a surety agreement.
In a
surety or guarantor situation, the surety is not primarily liable
to the beneficiary.
Its liability is governed by the liablity of
the principal on the underlying
transaction.
Associacion de
Azucareros de Guatemala v. United States National Bank, 423 F.2d
638, 641 (9th Cir. 1970).
Thus, it is logical to hold that a bid
bond
is
an
insufficient
guarantee
when
it
has
a principal
different from the bidder.
If the principal owes no liability to
the
benefi-ciary,
then
the
surety
does
not
either
and
the
beneficiary is not protected by the bid bond.
However, a letter of credit,
unlilce a bid bond,
is no t a
surety agreement.
See J. White' R. Summers, Handbook of the law
4-76
-------
. -:dar
The Uni form Commercial Code,
~ 18-2 (1985).
A letter of
:~dit is "an engagement by a bank.
. . made at the request of a
~3tomer . . . that the (bank] will honor drafts or other demands
;: payment upon compliance with the conditions specified ~n the
.- :d it. "
U.C.C.
~
5-130(1)(A).
A
letter
of
credit
is
,::zpendent of
the underlying transaction.
See Bossier Bank'
:'.lst v. Union
Planters National Bank,
550 F. 2d 1077, 1081 (6th
. . .... .
1977 )
Appendix
A.
(Memorandum Opinion Honorable
Bailey
. ';~"n ,
Chief Judge W.D. Tenn.).
The bank, upon issuance of the
:ter of credit, becomes primarily liable to the beneficiary of
~ credit.
Republic National Bank v. Northwest National Bank,
} S.W.2d 109, 114 (Tex. 1979).
The beneficiary of the credit
entitled
to
payment
upon
compliance
with
the
terms
and
:ditions of the credit.
~ee East Girard Savings Association v.
.: i zens Nat ional Bank' Trust Company,
593 F. 2d 598, 602 (5th
-
1979) .
With
narrow
exceptions,
the bank must honor the
'...::t drawn
on the
let ter unless the documents
requi red to be
';.J.:!nted are
inconsistent
on their
face.
U.c.c.
~ 5-109(2).
bank is not to maKe reference to the rights and obligations
~ha parties to the underlying contract in deciding whether to
See Reoublic National Bank, 578 S.W.2d at 114.
- -
From the
"f.:! discussion,
it is abundantly clear that the principles of
.- :::tyship are not pertinent
;=~t of ~.letter of credit.10
to an analysis
of the
force and
Given this, the Court rejects the Com?troller General's
~:sion in S&S Contracting, supra, insofar as it applies surety
,~ciples to letters of credit.
4-77
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Unfortunately,
because
the
credit
in
this
action
was
somewhat
unique,
the case
law on letters of credit does not
.prov.ide an easy
answer
to the question of whether MBank was
obligated
to honor
the
letter
if
the
Plaint i ff breached
its
agreement with the Corps.
The typical lette~ of credit involves three parties (issuer,
customer/applicant,
and
beneficiary)
and
three
separate
transactions:
(1) the contract between the bank and its customer
to issue a letter of credit:
(2) the letter of credit in which
the
issuing
bank
agrees
to
pay
the
beneficiary
when
the
conditions contained in the letter are complied with: and (3) the
underlying contract between the customer and the beneficiary for
which
the
letter of. credit was obtained.
.!!!. Barclays Bank
D.C.O.
v. Mercantile National Bank,
481 F.2d 1224,
1239 n. 21
(5th Cir. 1973), cert. dismissed, 414 U.S. 1139 (1974).
This
case is unique because it
involves 4 parties:
ESC,
(applicant/customer),
MBank
(issuing
Bank) ,
the
Corps
of
Engineers (beneficiary), and EES Inc.
.
(the entity that used the
letter of credit as a bid guarantee.)
No case was
found by
either the Court or the parties which addressed the question of
whether such a credit is valid.ll
However, the Court is of the
opinion
that
a
"four
party"
let ter of
credit
is not 2!!. .!!.
11 It is not unusual for a bank to issue a letter of credit at
the request of a "fourth party", with the bank looking to the
"fourth party" for reimbursement if it pays a draft drawn on t~e
letter. In such cases, however, the person who needs the credlt
for his dealings with the beneficiary is usually listed as the
applicant on the letter of credit. See, ~., East Girard
~~~~n~~~;~~i~~;~nl;79~~tizens National Bank' Trust Co., 593
4-73
-------
invalid.
Nothing
in
the U.C.C. precludes the validity of ci .
credit
simply because
the
applicant
is
not
involved
in
the
underlying
contract
or
otherwise
in
privity
with
the
beneficiary.
In fact, the prim~ry purpose for using a letter of
credit
is
to
maKe
payment
from
the banK
independent
of
the
underlying contract.
~ generally White & Summers, supra, ~l8-
1.12
As mentioned, this is accomplished by maKing the issuer of
the
credit
primarily liaole
without
regard
to the underlying
contract.
Republic BanK, 578 S.W.2d at 114.
Since the four party nature of the credit does not preclude
its enforceaoility,
the next quest ion is:
Could the Corps have
legally required MBanK t~ honor the letter of credit?
A beneficiary of a letter of credit must strictly comply
with
its
terms
in order
to receive payment under the credit
Consolidated Aluminum Corp.
v. BanK of Virginia,
704 F.2d l36,
12
Letters of credit were originally used to
facilitate international transactions
involving sales of merchandise oy assuring
payment for the goods. In a typical
transaction, a seller in a distant country
might wish to sell some goods to a buyer
whose credi t he did not trust. In order to
ensure that the goods would be paid for, the
seller could require the buyer to procure a
letter of credit which would provide that
upon presentation of certain documents--
normally bills of lading or air freights
receipts--evidencing title to the goods, the
~ S'eller could draw on the letter of credit.
The issuing oanK would then taKe a security
interest in the goods and deliver the title
documents to the ouyer, who would be
obligated to repay the amount drawn on the
letter of credit.
East Girard Savings Ass'n" 593 F.2d at 601 (citations ommitted).
'4-79
-------
168 (4th Cir. 1983): Insurance Co. of North America v. Heritage
Bank,
595 F. 2d 111,. 113
(3d Cir.
1979) .
Without such strict
comp,liance
the bank
is not. requi red to pay.
For example,
if
MBank's letter of credit had stated that it would only be paid if
the applicant, ESC, breached its agreement with the Corps on the
Tank Farm Project Bid,
the government could not have received
payment on the letter, because ESC did not bid on the project,
EES Inc. did.
MBank's letter of credit provides in pertinent part:13
We hereby issue our Clean Irrevocable Standby
Letter of Cred~t in your ,favor available by
your draft on us at sight bearing the clause
"Drawn under MBank - Dallas, N .A. Letter of
Credi t No, 2596968-215 dated September 10,
1986," accompanied by. this original Letter of
Credit.
Special Instructions:
restricted to MBanJc - Dallas,
DRAWINGS ARE NOT PERMITTED.
Negotiations
N .A. PARTIAL
This Letter of Credit is for Fed. tDACW 41-
86-B-0121.
On its face, it only requires that a draft, accompanied by
the original letter of credit, be presented to MBank.
"However,
the terms
"Clean", "Irrevocable" and "Standby" are terms of art
which may imply additional conditions on payment.
In essence, "irrevocable" means that once a letter of credit
is
sent
to the beneficiary it
cannot be
modi fied or
revoked
without the consent of both the applicant and the beneficiary.
u.C.C.
~ .5-106(1)
and
( 2 ) .
A "clean"
let ter of credit
"is
13 The entire letter of credit is reprinted in full in the
Appendix.
4-CO
-------
payable merely upon presentation of a draft with no accompanying
documents. II
Cir.. 1985).
Apex Oil Co. v. Archem Co. 770 F.2d 1353, 1355 (5th
Clean letters of credit are distinguishable from
"documentary"
letters of credit which require presentation of a
document of independent legal significance, such as a certificate
of title or an invoice, in order to receive payment. Id.
A "standby" letter of credit is one that is only to be
called upon if there is a default in the underlying contrac:t.
First Empire Bank v.
Federal Deposit Insurance Corp.,
572 F.2d
1361, 1367 (9th Cir.) cert. denied, 439 u.s. 919 (1978): Temtex
Produc:ts, Inc. v. Capitoi Bank' Trust Co., 623 F.Supp. 816 (D.La
1985)
aff'd,
788
F.2d
1563
(5th Cir.
1986) .
"Therefore, . a
standby letter of credit will often be a documentary letter of
credit since the issuer will require some kind of acc:ompanying
documentation to
indica te or
establish that
there has been a
defaul t, making it liable to pay. II .
Apex Oil Co.,
770 F. 2d at
1356.
A letter of credit not expressly labeled as suc:h c:an be
treated as a standby letter because of other conditions contained
in the letter.
Id.
MBank's letter states that it is a "clean letter" and on its
fac:e it requires no explicit proof of notice of any default on
the underlying obligation.
One could argue that by labeling it
standby and referring to the bid by number, the letter required
documentation of default.
And, the Corps c:ould not doc:ument that
ESC had defaulted, sinc:e it was not a bidder.
A Fifth Circ:ui t
case, United States v. Sun Bank of Miami, 609 F.2d 832 (5th Cir.
1980), .indicates otherwise.
4-81
-------
In Sun Ban~, the Ban~ issued a letter of credit which stated
that the -funds are to be used and disbursed by (the beneficiary)
~s supplement funds to complete Camino Real Condominiums
..
. . .
.!.2.. at 833.
The beneficiary drew a draft on the letter of credit
payable
to
the
United
States
Department
of
Treasury
to pay
delinquent taxes.
The ban~ refused to pay the draft because it
felt that "payment would contravene the designated purpose of the
letter of credit."
Id.
The Court stated:
"Because the letter
of credit in this case did not expressly require that the draft
show
the
funds'
intended
use' or
that
supporting
documents
accompany the letter of credit, the ban~s ought to have honored
the otherwise unchallenged draft."
Id.
The Court emphasiud
. .
that the letter clearly did not require any documentation showing
that the funds were used for a specific purpose.
The language in
the credit which referred to the intended use of the funds, at
best, created an ambiguity which had to be construed against the
ban~ as drafter of the letter.
Id.
MBan~' s letter clearly does not require any documentation
that
the
applicant
defaulted.
The
use
of
"standby"
merely
indicates that it is not expected to be used unless there is some
sort of default.
At best, the use of "standby" in conjunction
with
the
reference
to
the
Tan~
Farm bid
number
creates
an "
ambiguity.' as to whether documentation of default on the project
is needed.
And, as mentioned in Sun Bank, any ambiguity is to be .
construed against the drafter, MBank.
.!.2.: see also East Girard
593
F.2d
at
602:
Bossier
Bank
&
Trust,
550
F.2d
at
1082:
Venizelos,
S .A. v.
Chase Manhattan Bank, 425 F.2d 461, 466 (2d
..
4-02
-------
Cir. 1970).
Thus, the Court finds that the letter of credit was
enforceable by the government.
If the government had presented a
prop.er draft drawn under the letter of credit upon EES
Inc. ' s
default, MBank could not have legally refused to honor it."
II
The
final
issue
which
must
be addressed
is whether
the
Contracting Officer's decision that the letter of credit was not
a valid "bid guarantee" was arbitrary and capricious.
The fact that this Court would find the letter valid in a
lawsuit between the Corps and MBank is a fact or to be considered
~
in this inquiry, but it "does not answer the question.
The bid
soliciation required each bidder to -furnish a bid guarantee ~n
the proper
form
and amount."
Soliciation Provisions at SP-8.
The
purpose
of
the
bid
guarantee
was
to
ensure
that
the
successful bidder executed all necessary contractual documents
and timely furnished the bonds required by the solicitation.
The
Contracting
Officer
had
a
duty
to
make
sure
that
the
bid
guarantee furnished -full and complete protection" to the Corps
in the event of such default.
It is against this background that
his actions must be evaluated.
The Contracting Officer made his decision on the advice of
the counsel who had recommended that the bid be rejected because
the bid guarantee was invalid.
Mr. Collins, the Corps' counsel,
based his recommendation on a Comptroller General decision, In re
S&S Contracting, supra.
That decision,
while based on dUbious
analysis, addresses the precise issue in question and holds that
such a letter of credit is not a valid bid guarantee.
While
L!.-03
-------
Comptroller decisions are not absolutely binding on the Corps,
they are rightfully given great weight by the agency.
The fact
tha t. the
Contracting Officer
relied
on
the
Corps'
counsel's
recommendation and that the counsel's recommendation was based on
a Comptroller
jecision directly on point
weighs
in
favor of
finding the decision rational and not arbitrary and capricious.
This is not to say that a Contracting Officer can blindly
follow counsel's advice (and Comptroller's decisions) in awarding
contracts when the advice is clearly incorrect and contrary to
establish case law.
However, that is not what happened here.
As mentioned, neither the Court nor the parties could find any
case law which directly answered. the questi~n of whether the
letter of credit was enforceable by the government.
The above
analysis demonstrates that
the answer was neither obvious nor
easy to arrive at.
It is not inconceivable that another court
may
have
found
the
letter
to
be
unenforceable
by. the
. government.
A Contracting Officer
is
not required to
II buy a
lawsui t" by accepting a bid guarantee that mayor may not be
enforceable.
In fact, the contrary is true: he is to ensure that
the bid guarantee fully and completely protects the government in
the event of default by the successful bidder.
Given this, the
Court find. that the Contracting Officer's decision that the bid
of EESInc: was nonresponsive because of its bid guarantee was
not arbitrary and capricious.
. It is, therefore, ordered that Judgment be entered for the
Defendants, with costs to the Plaintiff.
4-84
-------
SO ORDERED.
Da te J:~x~e~t'\.. /8 q&;
) I
4-U5
t:/~ /$ LI
Senior US'. /"'r- . ~,
. . Dlstrlct J
udge
-------
APPENDIX
(MBank Dallas Letterhead)
IRREVOCABLE STANDBY LETTER OF CREDIT NO. 2596968-215
DATE
9/10/86
LR
'BENEFICIARY
APPLICANT
u.S. Army Engineer Dist.
757 Federal Bldg.
601 E. 12th St.
Kansas City, MO 64106-2896
AMOUNT $1,600,000.00
(One Million Six Hundred
Thousand and 00/100 U.S.
Dollars)
Environmental Systems Company
1015 Louisiana
Little Rock, Arkansas 72202
EXPIRY
DecemQer 9, 1986
At our counters
Gentlemen:
~e hereQY issue our Clean Irrevocable Standby Letter of Credit in your
'lavor available by your draft on us at sight bearing the clause "Drawn ,
under MBank - Dallas, N.A. Letter of Credit No. 2596968-215 dated September
10, 1986," accompanied by this original Letter of Credit.
Special Instructions: Negotiations restricted to MBank - Dallas, N.A.
PARTIAL DRAWINGS ARE NOT PERMITTED.
This Letter of Credit is for Fed. 'DACW 41-86~B-0121.
We hereQY agree with you that the draft drawn under and in compliance with
the terms of this credit shall be duly honored on due presentation to us.
Except as otherwise expressly stated herein, this Credit is subject to the
Uniform Customs and Practices for Documentary Credits (1983 Revision)
International Chamber of Commerce, Publication 400.*
Very truly yours,
/s/
Authorized Signaturer:sr
MBank - DALLAS, N.A.
* The Court examined the Uniform Customs and Practices for Documentary
Credits and found that none of its provisions resolved the controversy in
this case.
4~86
-------
. "5&1
~~
~
.
..!!!!I
~
-
=-
Monday
September 8, 1986
Part IV
Environmental
Protection Agency
Protest Appeals' of Recipients' .
Procurement Actions Under Federal
Assistance Agreements; Subject Index
Ust of EPA Regional Administrator
Protest Appeal Determinations Issued
During 1985; Notice
4-87
-------
32038
Federal Register I Vol. 51. No. 173 I Monday, September 8. 1986 I Notices
ENVIRONMENTAL PROTECTION
AGENCY
(fRL-307S-3)
Prote.. Appeal. 01 Recipients'
Procurement Action. Under Federal
Assistance Agreements; Subject Index
Ust 01 EPA Regional Administrator
Protest Appeal Determination. Issued
During 1985
This notice publishes the subject
index list of bid protest appeal decisions
issued by EPA Regional Administrators
during 1985. These determinations were
made pursuant to the EPA protest
procedures set forth at 40 CFR 35.939
(assistance awarded prior to May 12.
1982). 40 CFR Part 33. May 12. 1982
Interim Final Rules (assistance awarded
between May 12. 1982 and March 28.
1983) and 40 CFR Part 33. March 28. 1983
Final Rules (assistance awarded after
March 28. 1983). .
This is the Eighth EPA subject index
which lists only the decisions for the
year stated. The fU'st index. listinl
Regional Administrator protest appeal
determinations issued during the period
197'4 through 1971. was published at 43
FR 29086-95 (July 5. 1978). This wa.
supplemented by the index of 1978
determinations published at 44 FR
25812-18 (May 2. 1979). the index of 1979
determinations publiahed at 45 FR
58770-74 (September 4. 1980). the index
of 1980 determinations published at 48
FR 30476-60 (June a. 1981). the index of
1981 and 1982 determinations published
at 49 FR 36004 (September 13.1984). the
index of 1983 decisions published at 50
FR 4148 (January 29. 1985) and the index
of 1984 decisions published at 50 PR
23061 (May 30. 1985).
The index lists 71 appeal
determinations and 6 reconsideration
request determination. issued by the
EPA Regional Administrators in 198$.
The determinations are cited
informally with the names of the
assistance recipients and protestors
shortened and abbreviated for
administrative convenience. Each entry
begins by identifying the year the appeal
was decided and the sequential
determination number for the year. This
number is not part of the preferred
citation which should state the .
following: Grantee. State. (EPA Region
- date of determination) (Protest
of ).
The issues have been divided into two
major subject headings and then
alphabetized. Procedural protest issues
are listed under the headin8 "Protest
Appeals:" substantive procurement
issues are listed under the headin8
"Procurement."
Copies of specific protest appeal
de&erminations may be examined at or
obtained from the EPA Offices of
Regional Counselor from the Office of
General Counsel in EPA headquarten.
FOR FURTHER INFORMATION CONTACT:
. Kent Holland. r.. Esquire: Gran...
Contracts. an neral Law Divisivn
(L&-132G). Office of General CounaeL
United States Environmental Protection
Agency, Washington. DC 20480; (2m)
382-5313.
Dated: AlJ8Ult Z9. 1988.
Gerald H. Yamada,
Actif18 General Counsel
Bid Protest Appeals-Procedural
Mauers
Burden o( Proo(
85:12 Orlando. FL (IV. ~) (DnmI
Owen Valve Co.) (burden shUts
throughout proceedings where unduly
restrictive specifications alleged).
85:49 Frederick. MD (m. ~17-8S) (RDP
Co.) (shifting burden-where pmtester
alleges unduly restrictive specification
and shows that its equipment was
eliminated. grantee must show the
.pecification I. necessary for
minimum performance needs and
.how rational basis for rejectint
protester's equipment). .
Choice 0' Law (See Procurement
Index-"State and Local Law")
Exhaustion 01 Administrative Remedy
85:14 Lake Accotink Park. Fairfax. VA
(IlL 2-22-35) (Lyons Const.) (protester
cannot raise Dew i,sue on appeal
which was not raised in original
protest to grantee).
8&19 Kankakee. n. (V, 3-28-85) (Mehta
8' Assoc.) (issue not raised durinl
initial protest cannot be raised cna
appeal).
Harmlt!N Error
No entrie..
Jurisdiction
84:52 POSSWD Valley Sewer District
(m. 2-14-65) (U-Max Engineeri-m
(Reconsideration) (where EPA mview
would require decision on collateral
issue pendin8 in State Court, pmtest
may be considered inappropriate for
EPA review) (cf. Jordan. ML Region V,
10-21-M).
85:08 Milwaukee. WI (V, 1-31-35J
(Kari-Kool Transports. Inc.) (reliance
on incorrect oral advice given.. pre-
bid conference is not protestable).
85:11 Austin. TX (VL ~) (Turbo
Blowel'B. Inc.) (where no federaJ funda
are involved. procurement i8 nat
protestable).
4-88
85:31 Bradenton. FL (IV. 6-4-85)
(Lakeside Equipment Co.)
(subcontractor substitution made by
independent decision of prime
contractor is not protestable).
85:32 Warren. OH (V. 6-6-85) (RAM
Engineering Inc.) (substitution of .
subcontractor is matter of contract
administration and Is not protestable).
85:43 Troup. TX (VI. 9-4-85)
(McKiMey S- Moore. Inc.) (basic
design decision Is not protestable).
85:48 Frederick. MD (III. ~17-85)
(Dresser Industries] (subcontractor
.ubstitution is contract administration
issue and Is not protestable).
85:54 Anne Arundel. MD (III. 9-27-85)
(Roberts Filter Manufacturing Co..
Inc.) (If owner anticipates receiving
EPA funding. procurement actions
prior to grant award are protestable).
85:57 Pueblo. CO (VIII. 10-11-85)
(WesTech Engineering. Inc.)
(subcontractor substitution is matter
of contract administration and not
protestable).
85:58 Pueblo. CO (VUI. 10-11-85)
(Tenco Hydro. Inc.) (independent
action of prime contractor is not a
grantee decision and is not
protestable).
85:59 Georgetown. MN (V. 10-1&-65)
(Robert f. Roberts S- Associates. Inc.)
(unless contract will receive EPA
funding. procurement regulations do
not apply and issues are not
protestable).
85:81 Jordan. MI (V. 10-21-M) (Veit S-
Company) (protest appeal may be
decided by EPA even though there Is a
pendin8 law suit in State court) (cf.
PoeSWD Valley. W. 2-14-85).
85:63 State of New Jersey. NJ (n. 12-2-
85) (Marvec All State. Inc.] (where no
EPA grant participation is anticipated.
EPA will not hear a protest appeal).
85:70 Modesto. CA (IX. 12-2D-85)
(Industrial Pump Supply] (equipment
supplier may protest prime contractor
rejection of Its equipment where prime
contractor's decision was directed by
the recipient. However. technical
disputes concerning performance are
matters of contract administration
which are not reviewed by EPA) (cf.
New York. U. 3-5-34).
Parties to Appeal
No entries.
Procedures
84:52 Possum Valley Sewer District
(nI. 2-14-85) (U-Max Engineering)
(Reconsideration) (where EPA review
wCluld require decision on collateral
issue pending in State Court, protest
may be considered inappropriate for
review).
-------
. ,;
Federal Resister I VoL 51. No. 173 I Monday. September 8. 1988 I Notices
32039
85:01 Maine Dept. of Enviromnental
Protection (L 1~) (MetaUf ,.
&ldy) [where failure of protester to
notify other interested parties of
proteat caused DO prejudice, the
appeal will be COD8idered).
85:09 Carthage. MO [VII. 1-31-85)
(LaForge IT Budd ClJnsL Co.) (grantee
il not required to prepare. memo or
rationale to accompany ita written
protest determination~
85:15 Lake Accotink Park. Fairfax. VA
(DL 2-2Z-85) (Lyons ConsL) (only
those matters railed before grutee on
protest can be railed during appeal).
85:19 Kankakee. n. (V. 3-za-as) (Mehta
8' Assoc.) (issue not raised during
initial protest cannot be raised on
appeal).
85:25 Shubuta. MS [IV. 4-29-35) (Video
Pipe Services. Inc.) (letter addressed
to recipient instead of EPA II not .
proper appeal).
85;35 Willoughby, OH (V. 7-1~) . .- . .
(Quasar ConsL. Inc.) (letter addressed
to City II not proper appeal to f,J)A~
85:47 Sioux City,1A [VII. &-13-85)
(Industrial and Municipal
Engineering, Inc.) (protest may not be
denied on procedural grounda where
grantee failed to notify bidders that
the procurement wu subject to EPA
regulation).
85:50 Loraia. OH (V. &-17-85) (Mosser
ConaL. Inc.) (where grantee decides
protest in favor of protester. other
partiel to the protest may appeal to
EPA without first filing a protest)
(where bid rejected as nonresponsive'.
f,J)A will not consider argumenta that
bidder could be rejected as
nonresp0D8ible) (ef. Anne ArundeL m.
&-27-85). .
85:54 Anne ArundeL MD em, &-27-85)
(Roben Filter Manufacturins Co.. Inc.)
(although Interelted parties must be
notified of protest. failure to give
notice will not justify rejection of
protest where no prejudice resulfedT
(EPA may rely on aU information
available and it not restricted to the
arguments raised by the parties).
85;61 Jordan. MI (V, 10-21-85) (Veit,.
Co.) (protelt appeal may be decided
by EPA although there il . pending
law suit in State court) (ef. POlSwn
Valley. m. 2-14-a5).
85:8Z Broomfield. CO (VID. It-a-85)
(Summit ConaL. lDc.) (where project
engineer recomm.Med rejection of
low bid. it was reuonable for grantee
to accept a protest directly from that
decilion).
85:67 Monterey. CA (IX. 12-17~)
(Dillingham ConaL. Inc.) (where third.
low bidder failed to participate in
protest proceedinga initiated by the
sec:oDd-iow bidder and had notice of
the basis for ita proteno it improperly
waited until EPA issued appeal
determination ud then protelted
award that grutee made in
accordance with the EPA
determination).
85:70 Modesto. CA (IX. (12-20-85)
{Industrial Pump Supply} (it it no' a
conflict of interest far the project
engineer who rejected equipment to
decide the lubsequent bid protest for
the grantee.
Rational Bcu;is Test (See also
EnJlineeringludgment)
85:09 Carthage. MO [VII. 1-31-85)
(lAForge IT Budd CoIUIL) (EPA refers
to other appeal decisionl ud GAO
decisional (EPA will DOt revene
grantee deciaion concerning who i8
low bidder under State law unlesl
clear showing of violation of State law
or federal regulation).
85:12 Orludo. FL (IV. ~) (Drum
Owen Valve Co.) (no EPA deference
to engineer' I technical judgment
where inaccurate information used ar
where City'l reason far rejection wal
speculative in nature). .
85:49 Frederick. MD (III. &-17-85) (RDP
Co.) (EPA defers to technical
judgment of engineer provided there is
rational balis for specirlCation).
85:50 Lorain. OH (V. &-17-85) (Mosser
ConsL. Inc.) (potential lavings must
be material before rejecting bid
becaule it exceed8 engineer'l
estimate).
85:62 Broomfield. CO (VID.11-26-85)
(Summit Const.. Inc.) [grantee lacked
rational basil for finding bid
nonrespOD.llve ud bidder
nonresponaible ).
Reconsideration
84:52 Possum Valley. PA em. 2-14-85)
(U-MQ}( Engineering) (limited review
does not permit rearguing points
previously discussed and determined).
85:39 l.ewes. DE (III. a-za-as) (Mixing
Equipment Co.. Inc.) (denied where no
factual mistake or error of law).
85:54 Anne Anmdel. MD em. 7-18-85)
(Robert8 Filter) (EPA did not err in
looking beyond the arguments made
by the parties).
85:60 Westborough. MA (I. 12-10-85)
(Dorr-Oliver. Inc.) (denied) (where no
newly dilcovered evidence. issue of
law, factual misteke or error of law.
the decision will Dot he reconsidered).
Rellulation.
85:42 Glenwood ud Long Beach. MN
(V, 8-8-85) (J "S Contracting)
(grantee elected to follow Part 33
regulationl Instead of Part 35 which
wal in effect on date of grant award)
(appeal decisiona interpreting certain
Part 35 requirements continue to be
followed and applied by EPA).
.4-89
85:59 Georgetown. MN (V. 1~18-85)
(Roben of Roberts IT Associates. Inc.)
(explanation of whether Parts 33 and
35 apply).
85:68 Monterey, CA (IX. 1.2-17-85)
(Fluor Constructors. Inc.) (EPA may
rely on protest appeal determinations
issued under Part 35 regulations and
principles Itated In those regulations.
Review by EPA
85:07 Maine Dept. of Environmental
Protection. MA (L 1-30-85) (Metcalf IT
Eddy) (review of competitive
negotiations is limited to whether bid
evaluation was based on RFP
criteria).
85:09 Carthage. MO (W. 1-31-85)
(laForge IT Budd Const.) (EPA refers
to other appeal decisions and GAO
decisions) [EPA will not reverse
grantee decision concerning who is
low bidder under State law unless .
clear showing of violation of State law
or federal regulations).
85:45 Newberg, OR (X. ~tt-85)
(Contractors. Inc.) (deference.given to
grantee'l responsibility
determination).
Sua Sponte Review
85:27 Lansing. MI (V. ~17-85)
(Acrision. Inc.) (where protest was
untimely. EPA lummarily dismissed
appeal but reversed the merits).
84:52 Possum Valley, PA (W, 2-14-85)
(U-Max Engineering). - .... . ,... _..
[Reconsideration) (where no blatant
violation of f,J)A regulations. EPA will
not exercise discretion to review).
85:47 Sioux City, lA (VU. &-13-85)
(Industrial IT Municipal Engineering. .
Inc.) (protests were defective but
brought to EPA'I attention serious
defects in grantee procurement. EPA
reviewed merits of protests).
85:51 Rantoul, n. (V. ~18-85)
(American Surfpac Corp.) [EPA has
authority to Independently review
grantee procurement actions).
85:53 Anne Arundel County. MD (III.
&-27-85) (A//ied Contractors. Inc.)
(EPA may review late protest on its
merits).
Standinll
85:19 Kankakee. n. (V. ~zs...as) (Mehta
IT Assoc.) (subcontractor may not ..
protest prime', method of evaluating
its equipment).
85;39 !.ewes. DE (nI, 7-19-85) {Mixing
Equipment Co.} (supplier has standing
to protest specifications on
prequalification but if protester can
meet specifications it cannot
challenge them as unduly restrictive).
85:48 Frederick, MD (m. &-17~)
(Dresser Industries) (subcontractor
-------
32040
Federal Register I Vol. 51. No. 113 I Monday. September 8. 1988 I Notices
substitution is not protestable)
(subcontractor lacka standiJts to
chaUenge grantee's evaluation of
responsiveness of competitor
supplier's equipment).
85:58 Westchester County. NY (II. 10-
&-85) (Crouse Combustion Systsms.
Inc.) (bidder who withdrew bid before
contract award lacks standiJts to
protest award to another bidder).
85:51 Pueblo, CO (WI, 10-l~~). - -. -
(WesTech Engineerill8. Inc.)
(substituted subcontractor cannot
protest prime's decision to substitute
firms). .
85:60 Westborough. MA (I. 10-21~)
(Dorr-Oliver, Inc.) (where supplier
was able to compete but chose not to.
it lacks standing to protest the later
approval by recipient of another
supplier's equipment).
85:68 Monterey, CA (IX. 12-11~) (IX.
12-17~) (Fluor Constructors Inc.) (a
nonresponsive bidder has no
adversely affected direct financial
interest and. therefore, law
standing).
85:70 Modesto, CA (IX. 12-20-85)
(Industrial Pump Supply) (equipment
supplier may protest prime contractor
rejection of its equipment where prime
contractor's decision WIn directed by
the recipient However, technical
disputes concerning performance are
matters of contract administration
which are not reviewed by EPA).
Summary Disposition
85:08 Milwaukee, WI (V, 1-31-85)
(Kari-Kool Tronsports. Inc.) (reliance
on incorrect oral advice given at pre-
bid conference is not protestable).
85:33 Milwaukee, WI (V, &-19-85)
(Staff Electric Co.) (where grantee
waives failure to notarize bid as a
minor irregularity and gives legal
opinion that State law permits the
waiver, EPA will not review the
matter where there is no overriding
federal interest).
85:35 Willoughby, OH (V, 7-1~)
(Quasar Canst. Inc.) (protest
challenged the waiver of minor bid
irregularities of a competitor such as
signature and seal) (where bidder i8
not next in line for award. EPA will
not review).
Time Limitations
84:52 Possum Valley, PA (III. 2-14-35)
(U.Mox Engineerill8)
(Reconsideration) (timeliness of
protest is of paramount importance).
85:02 New York. NY (II. 1-11~)
(Schiavone Canst Co.) (appeal clock
starts when protest determination
received by address listed on
protester's letterhead even if not
received by main office at that time).
85:05 Carson City, NV (IX. 1-1&-85)
(Nevada Canst IJo Mining) (protest
untimely where filed more than '1 days
after protester had notice that
contract was awarded to another
bidder).
85:25 Shubuta, MS (IV. 4-29-85) {Video
Pipe Services, Inc.} (appeal received
by EPA 1 days after protester receives
grantee detennination is untimely).
85:2'1 Lansing. MI (V. ~11~)
(Acrison. Inc.) (appeal of
prequalificatfon rejection dismissed
because not filed within '1 dayt of - . .
notice of rejection). But See Chelan.
W A (X. &-~). which permits
prequalification protests filed more
than" days after receipt of decision if
the protest chaUenges the
specifications and is 6Ied before
prime contract bid opening.
85:30 Pittsylvania. PA (ID. ~Z4-85) U 6-
D Constructors, Inc.} (where
contractor was delault terminated for
failing to provide performance bonds.
its protest was untimely for being not
filed within '1 days).
85:35 WiUoughby, OH (V. 1-1-85)
(Quasar Canst. Inc.) (appeal untimely
where filed more than '1 days after
receipt of grantee's determination).
85:41 Red Oak, IA (VU, &-s-M) (E//iott
Equipment Co.) (protest was untimely
because it challenged specifications
and was not filed belore bid opening).
85:42 Glenwood and Long Beach. M."l
(V. 8-9-a5) {J 6- S Controctiflg. Inc.}
(protest was untimely because it
challenged specifications and was not
filed belore bid opening).
85:50 Rantoul, U. (V, ~1&-85))
(American Surfpac Corp.) (protest
alleging improprieties in specift.~J:i9!\
is timely where filed belore bid
opening) (this is generally so if
protester knew of the improprieties for
more than" days before filing. See
Chelan, W A (X. &-~)).
85:54 Anne Arundel. MD (m, ~27~)
(Roberts Filter Manufacturing Co.,
Inc.) (unduly restrictive specifications
must be challenged prior to bid
opening-protester cannot wait until
equipment is rejected after bid
opening to me its protest). (See also
Southbridge, L 1-~)
85:55 Little Blue Valley. MO (VII. 10-1-
85) (Roots Division of Dresser
Industries) (where brand name or
equal specifications exclude supplier's
equipment. protest must be filed.prior
to bid openin8-tupplier cannot wait
until equipment is rejected to 6Ie
protest).
85:62 Broomfield. CO (VID. 11-2~)
{Summit Construction, Inc.} (where
protest was based on action of project
engineer rather than grantee, grantee
may consider it).
4-90
85:64 Augusta, GA (IV, 12-&-85) (Beiler
Equipment Co.. Inc.) (where aUeged
improprieties in specifications were
clearly apparent in the IFB, protest
was not IDed prior to bid opening).
85:61 Monterey. CA (1X.12-11~)
(Dillingham Canst. Inc.) (where the
third-low bidder did not participate in
proceedings initiated by the second-
low bidder, bidders' subsequent
protest of the award was untimely
where It had adequate notice of basis
for protest),
85:71 Binghamton. NY (n, 12-2&-85)
(American Bio Tech) (telegraph
appeal notice was timely but
subsequent submittal of detailed
supplemental statement was
untimely).
Waiver (See Procurement Index-
"Waiver'1
Procurement
AlE Service.
85:0'1 Maine Dept. of Environmental
Protection (I. 1-30-85) (Metcalf 6-
Eddy) (EPA will not review grantee's
judgment of what specific services are
required for remedial action).
85:10 Lake County Sanitation District
(IX. 2-5-85) (Peak 6- Assoc.) (bid.
evaluation of technical proposal is
matter of procurement discretion and
. will not generally be disturbed by
EPA). .
A ward Prime Contract
85:14 Washington Suburban Sanitary
Commission (ill. 2-22-65) (Hycon and
Professional Services Group)
(although state law gives grantee
discretion in matters ol contract
award. that discretion is limited by
fundamental federal procurement
requirements),
Bid ShoDDilfV
85:31 Bradenton, FL (IV, &-f-85)
(Lakeside Equipment Co.)
(subcontractor substitution is not
protestable). .
85:50 Frederick. MD (m, ~11-85)
(Dresser Industries) (EPA regulations
do not prohibit bid shopping and EPA
views equipment listing as
informational only unless IFB clearly
makes it a matter of responsiveness).
85:57 Pueblo. CO (VII. 10-11-85)
(WesTech Engineerill8, Inc.) (bid
shopping not prohibited unless state,
local law or the bidding documents so
provide ).
85:58 Pueblo. CO (VIII, 10-11-85)
(Tenco Hydro, Inc.) (bid shopping nut
prohibited by EPA).
85:65 Jacksonville, AR (VI. 12-12-85)
(Tenco Hydro, Inc.) (EPA neither
-------
Federal Register I Vol. 51, No. 173 I Monday, September 8. 1986 I Notices
32041
prohibita nor requires bid shopping-
see EPA Report to Congreu:
Wastewater Treatment Contracting
and Bid Shoppins. June 1978).
Bidders iT Offerors
85:56 Westchester County. NY (U..1O-.
9-85) (Crou.e Combustion System£
Inc.) (grantee may obtain caet
concessions from lowest bidder after
bid opening). .
.JJiIJJ.
--...-..---.- ..
Acceptance Period"'-
No entries.
Addendum
85:38 Clarence, NY (n, 7-18-85)
(Hydro-Group. Inc.) (faihue to sign
Cormal acknowledgment of receipt of
IFB addendum may be waived as
minor irregularity where bidder
included a quotation for the additional
item in ita bid and specifically
referred to addendum).
Alternates
85:61 Jordan. MI (V,lo-21~) (Veit iT
Co.) (where bidders were required to
list unit prices for several alternates
but Curther required to choose one
alternate to base ita lump SUID bids, a
bid it- nonresponsive if the bidder fails
to list a unit price for one of ita
alternates).
85:37 Bradenton. FL (IV, 7-1~)
(ICOSIHycon) (where failure to
comply with bid terms reflect on
responsibility rather than
responsiveneu they may be waived)
(in order to be responsive on one
alternate it was not necessary to
submit bid on other alternate).
Ambiguity
85:40 Johnson County, KS (VU. 7-2S-
85) (Martin Eby Canst.) (where
contrary to terml of IFB. bid was
conditioned upon grantee approving
proposed "or equal" equipment before
award, this caused ambiguity
concerning bidder's obligation if
equipment substitution was later
required and made bid
nonresponsive).
Base Bids
No entries.
Cancellation of Solicitation
85:47 Sioux City, IA (VU, 9-13-35)
. (Industrial iT Municipal Engineering.
Inc.) (EPA reversed grantee and
directed solicitation be cancelled and
readvertised).
Evaluation
85:07 Maine Dept. of Environmental
Protection (1. 1-3()-85) (Metcalf iT
..- ..
Eddy) (where lU1'.st!lted cost was of
secondary importance. grantee may
award coatract to more expensive
proposal).
85:10 Lake County Sanitation District
(IX. ~) (Peak (; Assoc.) (AlE
procurement-where RFP did not
provide that proposer's failure to
respond adequately to one of the
evaluation facton would result in his
rejection. grantee's affirmative
evaluation was reasonable).
85:12 .. .orl!U1d~. FL (IV, -~) (Drum
Owen Valve Co.) (performance based
reason for rejection mUlt be based on
more than speculation of problems).
85:18 Mission. TX (IV. 3-1~)
(Evirondyne Inc.) (evaluation cannot
be based on undisclosed. subjective
criteria) (data submission requirement
must he based on underlying need for
considering data).
85:24 Chelan. W A (X. 4-26-85)
(Walker Process Corp.) (AlE
improperly rejected equipment for
failing to meet design features which
were not specified).
85:29 San Antonio. TX (VL S-~)
(Pollution Control, Inc.) (may not
reject equipment on basis of criterion
not disclosed in IFB) (1FB clause
requiring "experience" in making
"similar" equipment cannot be used to
require experience in making exactly
the same equipment).
85:40 Johnson County. KS (VII. 7-25-
85) (Martin Eby ConsL) (by reviewing
bidder's alternate equipment proposal
before awarding contract. grantee
failed to evalua te the bids in
accordance with IFB criteria which
stated "or equal" equipment would
only be evaluated after award).
85:48 Frederick. MD (m. 9-17~)
(Dresser Industries) (subcontractor
lacks standing to challenge grantee's
evaluation of ita competitor's
equipment).
Extension
85:62 Broomfield. CO (VUL 11-28-85)
(Summit Constructors, Inc.) (active
participation In protest proceeding
evidences Intent to extend bid).
Late
-
85:38 Chemung County. NY (D. 7-W5)
(Tougher Ind.. Inc.) (bid
nonresponsive where IFB stated late
bids would not be accepted and bid
wa..2 minutes late) (grantee has
discretion in applying GAO strict
treatment of late bids).
~
85:08 Carthage. MO (VI. 1-31~)
(LaFol'8e iT Budd Canst.) (extrinsic
evidence may be used to show
intended bid where no bid
4-91
displacement) (words over numbers
reconciliation clause will not be
strictly enforced where intended bid
is clearly apparent).
85:17 Mackinac Is.. MI (V, 3-13-35)
(Barton-Malow Co. iT Omega Canst.)
(mistake in bid on entire project did
not aCfect bid on individual pump
station).
85:66 Newport. RJ (L 12-17-85)
(Peabody N.£.. Inc.) (bid displacement
allowed where mistake and intended
bid are apparent on the face of the
bid-extended amount price was put
in unit price column).
Preparation Costs
No entries.
Public Notice
85:47 Sioux City. IA (VII, ~1~5)
(IndlAstrialiT Municipal Engineering.
Inc.) (where grantee failed to
advertise in newspapers and journals
of general circulation and only
allowed 17 days from notice to bid
opening, EPA required resolicitation).
Qualified
85:40 . Johnson County. KS (VII. 7-25-
85) (Martin Eby Canst.) (bid that was
conditioned on grantee approving "or
equal" equipment beCore award is
nonresponsive where IFB provided for
post award equipment evaluation
only.
Reiection of all Bids
85:47 Neenah-Menasha, n. (V, 3-2&-85)
(Flour Bros. Canst. Co.) (where low
bid had to be rejected Cor being late
and other bids were deemed too
expensive. grantee had rational
business reasons for rejecting all
bids).
85:02 Lowell, MA (I, 1-n~) (Gioiosa
IT Sons. Inc.) (not justified by
unbalanced bidding) (recipient does
not have unfettered discretion).
85:22 Detroit. MI (V, 4-1~5) (ETS
Towers. Inc.) (IFB failed to specify
experience evaluation criteria
necessary for determining which bids
satisfied requirements-harm to
bidder required readvertising the
project). .
SiRTtature
85:33 Milwaukee. WI (V, &-1~)
(Staff Electric Co.) (failure to notarize
bid as required by state law may be
waived as minor irregularity).
85:35 Willoughby. OH (V. 7-1~5)
(Quasar Canst., Inc.) (failure to
notarize bid waived as minor
irregularity).
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32042
Federal Register I Vol. 51. No. 173 I Monday. September 8. 1986 I Notices
Time to PreDare
85:47 Sioux City. IA (VU. 9-13-85)
(Industrial" Municipal Engineering.
Inc.) (advertising 17 days in advance
of bid opening was inadequate)
(adequate notice must be placed in
newspapers and journals of general
circulation).
Unbalanced
85:02 Lowell. MA (I. 1-11-85) (Gioroso
6- Sons. Inc.) (Penny bidding is not
contrary to federal principles unless it
causes bid to be materially
unbalanced making it impossible to
detennine the low bid).
85:35 Willoughby. OH (V. 7-1-85)
(Quasar ConsL. Inc.) (whether
unbalanced bid can be accepted
depends on whether it is reasonably
certain to result in lowest price).
Unit. Pricing
No entries.
Bonds
85;:\0 Pittsylvania. PA (III. ~24-8S) (f 6-
D Constructors. Inc.) (failure to
provide perfonnance bonds within 10
days of contract award was rational
basis for grantee to reject bidder as
nonresponsible).
85:51 Rantoul' IL (V. 9-1&-85)
(American Surfpac Corp.)
(perfonnance bond which ensured
pcrfonnance for 3 years was
reasonable where suppliers had no
similar equipment in service)
(inability of one supplier to obtain
bond does not prove undue burden
where other suppliers did obtain
bond) (EPA no longer requires grantee
to accept bond in lieu of experience).
Buy American Act
85::!8 Osage Beach. MO (W. ~22-85)
(Marley Pump Co.) (because grantee
demonstrated that foreign components
comprised under 509L total value of
the product. the preference did not
apply).
85:55 Little Blue Valley. MO (VU. 10-1-
85) (Roots. Dresser) (until prime
selects supplier. compliance with the
Act cannot be detennined) (See also.
Chelan. Washington. X. ~24-68).
Conflict of Interest
85:19 Kankakee. IL (V. 3-28-85) (Mehta
6- Assoc.) (no evidence of conflict. .
presented. appeal dismissed as
without merit).
85:70 Modesto. CA (IX. ( 12-20-85)
(Industrial Pump Supply) (it is not a
conflict of interest for the project
engineer who rejected equipment to
decide the subsequent bid protest for
the grantee).
Engineering Judsment
85:13 Dothan. AL (IV. Z-21-85)
(American Bioreactor Co. ,. Fluid
Svstems.lnc.) (rational basis for
experience requirements).
85:42 Glenwood and Long Beach. MN
(V. 8-9-aS) (f ,. S. Contracting. Inc.)
(rational performance based reasons
for requiring single material Is given
deference by EPA.) (when EPA defers
to engineer It does not mean it
believes the specifications reflect the
best engineering judgment and 110 .
opinion is offered regarding relative
merits of the material or equipment or
their auitability for particular
engineering applications). .
85:49 Frederick. MD (In. 9-17-85) (RDP
Co.) (protest appeal sustained where
design features were not ,upported by
rational perfonnance based n8i!ds).
85:S5 Little Blue Valley. MO (VU. 10-1-
85) (Roots. Dresser) (performance
reasons for design features).
Experience Requirements
85:13 Dothan. AL (IV. Z-Zt-85)
(American Bioreactor Co. and Fluid
Systems. Inc.) (City was justified in
rejecting equipment which
manufacturer had never before
fabricated or designed to the size
needed). .
85:18 Mission. TIC (VI. 3-1-85)
(Envirodyne. Inc.) (experience clause
was ambiguous where it did not
define applicable period of experience
to be objectively applied).
85:22 Detroit. MI (V. 4-1&-85) (ETS
Towers. Inc.) (experience
requirements must be objectively
stated evaluation criteria). .
85:29 San Antonio. TX (VI. 5-23-85)
(Pollution Control. Inc.) (where IFB
required bidders to have experience
manufacturing "similar" equipment. a
bidder cannot be rejected for not
having manufactured "exactly" the
same equipment).
85:37 Bradenton. FL (IV. 7-15-85)
(ICOS/Hycon) (where IFB states
experience requirement was for
purpose of determining bidders
ability. it is a matter of responsibility
not responsiveness and can be cured
after bid opening).
85:45 Newberg. OR (X. 9-11-85)
(Contractors. Inc.) (experience of key
persoMel was a matter of
responsibility not responsivenes8 and
the affirmative finding of
responsibility is a discretionary
decision which will not be reviewed
in the absence of fraud or bad faith). .
85:70 Modesto. CA (IX. 1Z-20-85)
(Industrial Pump Supply) (where
bidder was rejected for lack of
experience. EPA found the IFB
4-92
adequately defined experience and
recipient had rational basis for
rejecting bidder) (grantee may require
proven product rather than newly
designed one).
Innol..otive Technology
84:43 Troup. TX (VL 9-4-85)
(McKinney" Moore. Inc.) (more
restrictive specifications are
permissable).
Invitation for Bids (IFB)
G.!!!!!al
85:08 Milwaukee WI (V. 1-31-85)
(Kari.KooJ Tronsports. Inc.) (bidder
unjustifiably relied on oral' .
representations made at pre-bid
conference).
Ambiguity
85:22 Detroit. MI (V. 4-1&-85) (ETS
Towers. Inc.) (requirement that
experience be documented failed to
state how experience would be
objectively evaluated).
85:45 Monterey. CA (IX. 9-12-85)
(Mortenson/Natlcin) (no ambiguity
where IFB clearly states that failure to
Ust subcontractor renders bid
nonresponsive and adds no other
language delcribing rejection or
pennitting acceptance of
nonconforming bid) (explanation of
"two prong" test applied in other EPA
decisions).
85:67 Monterey. CA (IX. 1Z-17-85)
(Dillingham Const.. Inc.) (City
correctly found bid responsive where
bidding documents did not clearly and
unequivocally put bidders on notice
that failure to comply with .
requirements that typically concern
responsibility would render a bid
nonresponsive) (EPA will examine not
only the language in relevant portions
of lFB but consider the bid documents
in their entirety to determine overall
clarity).
Defective
No Entries.
License Requirement
85:05 Carson CitY. NV (IX. 1-1&-85)
(Nevada Canst. ,. Mining) (EPA would
not consider whether state licensing
law requiring license prior to bidding
unreasonably restricted competition.
since bidder's delay in applying for
the license contributed to his inability
to obtain it in time).
l,istinfl Subcontractors
85:08 Addison. IL (V. 1-25-85t(So/h'tt
ConsL Co.) (where IFB clearly
required bidders to list manufacturers.
.,
-------
, ,
Federal Register I Vol. 51. No. 173 I Monday. September 8. 1988 I Notices
32043
bid was properly rejected for failing to
comply).
85:08 Addison. D. (V. :'-11H55) (Sollitt
ConsL Co.) (Reconaideration) (bid wa,
nonresponsive becauae it named
.everal .ubcontractofl but did not
identify which wa. to be uaed).
85:11 Mackinac I.,. MI (V. :'-13-85)
(Barton-Malow Co. ,. Omega ConsL)
(where IFB is ambiguoua.
subcontractor listing is matter of
responsibility rather than
responsiveneSl).
85:20 Leesburs. V A (In. 4-2-85) Uames
Federline and MCI ConsL. Co.). "
(failure to li.t subcontractors did not
render bid nonresponaive).
85:32 Warren. OH (V. 6-6-65) (RAM
Engineeri1l8. Inc.) (MBE subcontractor
substitution is not protestable because
it is a matter of contract ,
administration. not procurement).
85:31 Braden ton. FL (IV. 1-15-65)
(ICOS/Hycon) (bid cannot be rejected
for failure to list subcontractors where
IFB did not expre..ly require it as a
matter of responsiveness).
85:45 Newbel"8, OR (X. ~11-a5)
(Contractors. Inc.) (bid cannot be
rejected for failure to list
subcontractors where IFB did not'
expressly require it as a matter of
responsiveneSl).
85:46 Monterey, CA (IX. ~12-a5)
(Mortenson/Natkin) (bid failins to list
equipment manufacturer must be
rejected where 1FB clearly stated
listins wa. a matter of
responsivenesa-under Part 33
regulation IFB need not state that bid
will be rejected. provided it clearly
states bid will be nonresponsive and
contains no conflictinS lansuase
suggestins srantee may he permitted
to accept nonresponsive bid).
85:85 Jacksonville, AR (VI. 12-12-85)
(Tenco Hydro. Inc.) (where IFB did
not state that failure to list
subcontractors would render bid
nonresponsive. grantee may award
contract to bidder that did not
accurately list its subcontractors)
(listinS a supplier in its bid did not
obligate prime to award subcontract
to that supplier).
85:61 Monterey. CA (IX. 12-11-85)
(Dillingham ConsL Inc.) (failure of
listed equipment to meet the
specifications does not render prime's
bid nonresponsive where IFB required
that equipment be listed but did not
require that bids be rejected for listins
unqualified equipmenL)
85:68 Monterey, CA (IX. 12-11-85)
(Fluor Constructors. Inc.) (same
analysis al Monterey. Dillinsham. IX.
12-11-a5. this subject index).
Minoritv Business and WDmen~
Business Entemrise fMBEIWBEI
85:14 Washington Suburban Sanitary
Commiuion (ID. 2-22-85) (Hycon ,.
Professional Services Graup)
(documentation was matter of
responsibility. not responsiveness).
85:15 Lake Accotink Park. Faidax VA
(m. 2-22-85) (Lyons C01l8L)
(documentation 8 matter of
relponlibility).
85:18 Lake Geneva. WI (V. 3-18-85)
(CamOBY ConsL) (MBE documenta-
tion Is matter of responsibility where
IFB did not clearly .tate otherwise).
85:19 Kankakee. D. (V, :'-28-85) (Mehta
,. Assoc.) (prime may rely on MBE's
seU certification) (prime', evaluation
of subcontractor fa not protestable).
85:23 Unalaska. AL (X. 4-2&-85)
(Rockford Corp.) (failure to include
documentation did not render bid
nonresponsive where IFB did not
clearly rec1iire it).
85:28 Scale. Mound. D. (V. 5-14-85)
(Smith ,. Andrewa ConsL Ca.) (EPA
policy il to treat MBE documentation
as matter of responsibility but grantee
made it matter of responsivenesl and
rejected nonconforming bid
accordinsly).
85:32 Warren, OH (V, 6-6-65) (RAM
Engineeri1l8. Inc.) (subcontractor
.ubstitution is not protestable)
(unsubstantiated aUesation that prime
nesotiated in bad faith does not meet
burden of proof needed for protest)
(WBE firm has no standins to
challense the soal established by
grantee).
85:34 CaMon Falls. MN (V. &-28-85)
(Lysne ConsL. Inc.) (bid responsive
where it documented positive efforts
and reasons for not meetins MBE
goal).
85:50 Lorain. OH (V. ~11-a5) (Mosser
Const.. Inc.) (grantee caMot reject bid
as nonresponsive when bidding
documents contain contradictory
languase and. when read as a whole
make documentation a matter 01
responsibility).
85:51 Rantoul. D. (V. &-18-85)
(American Surfpac Corp.) (bondins
- requirement did not violate SBE/MBE
policy where several firms obtained
the required bonda).
85:53 Anne Anmdel County. MD (III.
~21-85) (Allied Contractors. Inc.)
(bidder am meet requirement' by
either meetins soal or showfns sood
faith efforts) (documentation a matter
of responsibility) (EPA affirmed
grantee determination of sood faith).
85:51 Pueblo. CO (VID. 1~11-85)
(WesTech Engineering. Inc.)
(substitution of firml for busine"
reasons doel not violate EPA policy)
4-93
(prime's busine.. decision to place
one larse order instead of dividing
into smaller orders will not be
reviewed by EPA).
85:58 Pueblo. CO (VIU. lo-11~)
(Tenco Hydra. Inc.) (prime's'
substitution of fmns does not violate
EPA resulation and is not protestable)
(substitution does not violate
affirmative steps) (protester lacks
. .tandins to challense the way grantee
calculated MaE participation).
85:85 Jacksonville. AR (VI. 12-12~5)
(Tenco H}'dro. Inc.) (MaE policy does
not prohibit bid shoppins) (prime did
not bid shop but rather substituted the
MBE based on a reconsideration of
previous offers which were less
expensive-prime did not negotiate
prices with subcontract offerors after
bid opening and was not required to
do so) (no violation of the policy that
total projects be divided into small
tasks where it is not economically
feasible to do 10).
85:68 Newport. RI (I. 12-17-85)
(Peabody N.E.. Inc.) (bid documents
when read as a whole did not make
submission of certificates a matter of
responsiveness).
NeRolialed Procurement
85:01 Maine Dept. of Environmental
Protection, MA (I. 1-30-85) (Metcalf 8-
Edd}') (review of competitive
nesotiations is limited to whether bid
evaluation was based on RFP
criteria).
85:10 Lake County Sanitation District
(IX. 2-5-65) (Peak" Assoc.) (AlE
pror.urement-where RFP did not
provide that proposer's failure to
respond adequately to. one of the
evaluation factors would result in his
rejection, grantee's affirmative
evaluation was reasonable.
Preaualification
85:01 Ft. Lauderdale, FL (V, 1-8-85)
(Compost Systems Co.) (City changed
deadline for prime contract bid
submittal but enforced the orisinal
deadline for lubmittins
pre qualification packases thereby
incorrectly rejectins package
submitted after that deadline but more
than 30 days before the revised bid
openins date). .
85:13 Dothan. AL (IV. 2-21-85)
(American Bioreactor and Fluid
. Systems. Inc.) (rejection of proposed
compos tins system which
manufacturer had never before
desisned and fabricated to the
required dimensions was affirmed).
85:18 Mission. TX (IV, :'-1~)
(Envirodyne Inc.) (must be based on
specifications, not on undisclosed
-------
32044
Federal Reafster I Vol. 51, No. 113 I Monday, September 8. 1986 I Notices
subjective criteria) (data nbmfl8iaa
requirement moat be rationally baNd
on underlying need for coaaiderin&
data). .
85:24 Chelan. WA (X. f-a..I5)
(Walker Proceu CoI'p.) (where aaJy
manufacturer could prequalify. it wu
unjustified sole source Procurement).
85:27 Lansing. Ml (V. ~17-1&)
(Acrison. Inc.) (equipment rejected for
prequalification because insufficieDt
data submitted-protester did not
show grantee lacked rational basia for
equipment design features) (time
limitations for filins protest). (But ..
Chelan. W A (X. 6-~)).
85:39 Lewes. DE (llL 7-19-85) (Mbci".
Equipment Co.) (requiring submission
of working drawings that describe
project modifications that will be
required by use of equipment does DOt
unduly restrict competition) (failure to
submit informafion gives rational
basis ror rejectins equipment) (IFB
authorizing only general contractora
to submit equipment for
prequalificatioD unduly restricts
competition).
85:44 Chari ton. fA (VII. ~)
(Electrical Control Systems. Ltd.)
(proposal may be rejected as
nonrespunsive for not providing
required infonnation needed for
determining responsiveness to
specifications).
85:48 Frederick. MD (UI. ~17-as)
(Dresser Indll.'ltries) (sur:cessful
bidder permitted to substitute a
nonprequalified supplier for .
prequalified supplier named in fts
bid).
85:49 Frederick. MD (III. 9-17-35) (RDP
Co.).
Res/Jonsibilitv
85:14 Washington Suburban Sanitary
Commission (III. 2-22-85) (Hycon and
Professional Services Group) (MBE
documentation is matter of
responsibility unless bid documents
unambiguously state it to be matter of
responsiveness ).
85:15 Lake Accotink Park. Fairfax VA
(III. 2-22-85) (Lyons Canst.)
(documentation a matter of
responsibility).
85:17 Machinac Is.. MI (V. ~13-85)
(&rton-Malow Co. 8* Omega Const.)
(where IFB ambiguous. subcontractor
listing is matter of responsibility
rather than responsiveness).
85:18 Lake Geneva. WI (V. ~18-85)
(Camosy Canst.) (MBE documentation
is matter of responsibility where IFB
did not clearly state otherwise).
85:20 Leesbul'8. V A (m. 4-Z-85) flames
Federline. Inc. 8- MCI COMt. Co.)
(grantee determination of
nonresponsiuility based on prior poor
contract performance we. rationally
basedUfailure to li8tre&istered .... ...
contract number in bid i8 matter of
responsibility DOt responaiveneu)
(subcontractor liatin8) (indusion of
"experience. equipment and financial
s&atement" iI matter of reaponaibility.
not responsiveness).
85:22 Detroit. MI (V. 4-16-85) (EIS
Towers. Inc.) (documentation of
experience is a matter of
respol18ibility rather than
responsiveneu where bid documents
did not clearly make it
responsiveness).
85:%8 Scales. Mound. L; (V, ~14-85)
(Smith ". Andrews Canst Co.) (EPA
policy to treat MBE documentatioD as
matter of responsibility).
85:30 Pittsylvania. PA (m. ~24-85) 08'
D Constructors. Inc.) (responsibility
detenuination is discretionary grantee
decision which will not be reversed
unless it lacks rational basis or is
made in bad faith) (grantee found
bidder nonresponsible because it
failed to obtain performance bonds
within required time after contract
award).
85:34 CaMon Falls. MN (V. 6-28-85)
(L;'sne Canst. Co.) (MBE compliance
demonstrated after bid opening).
85:37 Bradenton. FL (IV. 7-15-85)
(ICOS/Hycon) (experience
requirement. could be cured after bid
opening since IFB made it a matter of
responsibility).
85:45 Newb4!1lIo OR (X. ~11-85)
(Contractors. Inc.) (afrumative finding
of responsibility will not be reviewed
in the absence of fraud or bad faith)
(manufacturers listing and experience
of key personnel were matters of
responsibility).
85:52 Seneca. n. (V. ~16-85) (Mehta 8-
Associates. Ltd and Shafer
. Engineerins) (where grantee found
bidders nonrespoDsible due to lack of
. experience and adequate manpower.
EPA will not reverse determination
absent showing of clear error or lack
of rational basis).
85:53 Anne Arundel County, twID (III.
9-27-85) (Allied Contractors. Inc.)
(EPA affirmed grantee fmding that
bidder made good laith MaE efforts).
85:62 Broomfield. CO (Vm. 11-26-85)
(Summit Canst.. Inc.) (information
developed post bid opening involves
responsibility. not responsiveness)
(bid may be rejected where owner
determines bidder does not intend to
comply with specifications) (grantee
rejection of bidder lacked a rational
basis and was reversed by EPA).
85:66 Newport. RI (I. 12-17-85)
(Peabody N.E.. Inc.) (bid documents
when read as a whole did not make
. submission of certificates a matter of
responsiveneas ).
4-94
85:89 Anne Arundel. MD (ID. 1~)
Uohnson Can't Co.) (documentation
wu a matter of responsibility rather .
thaa responsiveness) (where grantee
had rational basis for rejectin8 bid for
failing to meet MBE requirements.
EPA apheld the decision).
Res/Jonsiveneu
85:06 Addison. n. (V. 1-25-85) (Sol/itt
Can,t. Co.) (bid was nonresponsive
lor failing to list equipment
manulacturers when IFB clearly
required it).
85:06 Addison. n. (V. ~1~) (Sollitt
ConsL Co.) (Reconsideration) (Iailure
to identify intended subcontractor
rendered bid nonresponsive).
85:%3 Unalaska. Ale (X. 4-28-M)
(Rockford Corp.) (bid that failed to
include MBE/EEO documentation was
responsive since IFB did not clearly
require documentation with the bids).
85:26 Scale. MOWld. n. (V. ~14-85)
(Smith 8- Andrews Co.) (bid properly
rejected lor failing to include MaE
documentation).
85:37 Bradenton. FL (IV. 7-15-85)
(ICOS/Hycon) (where lailure to
comply with bid terms reflect on
responsibility rather than .
responsiveness they may be waived)
(in order to be responsive on one
alternate it waf not necessary to
aubmit bid on other alternate).
85:40 Johnson County. KS (VIL 7-2.5-
85) (Martin Eby Canst.) (where bid
conditioned upon prior approval of
"or equal" equipment and IFB
specified it would be evaluated post
award only. bid was nonresponsive).
85:43 Troup. TX (VL 9-4-85).
(McKinney 8* Moore. Inc.) (bid
offering equipment that failed to
conform to the specifications was
nonresponsive).
85:44 Chari ton. IA (VU. &-9-85)
(Electrical Control System,. Uti.)
(under prequalification procedure.
equipment was rejected for railure of
bidder to submit required information
and data with its proposal).
85:45 Newberg. OR (X. 9-11-85)
(Contractors. Inc.) (defined as a bid in
exact accord with the material terms
of the IFB) (manufacturer's listing was
not a matter of responsiveness).
85:46 Monterey. CA (IX. ~12-85)
(Mortenson/Natkin) (where IFB
clearly states that failure to list
subcontractors will render bid
. nonresponsive and IFB does Dot add
language describing bid rejection. a
bid which fails to comply is
nonresponsive and must be rejected).
85:54 Anne Anmdel. MD (III. ~27-85)
(Roberts Filter Manufacturins Co..
Inc.) (bid offering clay instead of
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Federal Register I Vol 51. No. 173 I Monday. September 8. '1988 I Notices
32045
specified plastic underdraina was
nonresponsive).
85:55 Little Blue Valley. MO (VU. 1~1-
85) (Roots Divi.ion 01 DtrI88er
Industria) ("or equal" equipment
must be rejected where it does not
meet specified design features).
85:61 Jordan. MI (Y. 1~21~) (Veit 6-
Co.) (bid wa,nonresponsive because
it failed to bid on one of the required
alternative unit itema). '
85:62 Broomfield. CO (YID. 11-2&-85) ,
(Summit ConsL. Inc.) (bid
responsiveness must be determined at
time of bid opening based on . ...
Information submitted in bid)
(information developed subsequent to
bid opening cannot be used to '
determine responsiveness) (by
submitUns responsive bid. bidder
agrees to supply equipment meeting
specifications and may be required to
provide different equipment if that
listed in ita bid fa determined not to
meet the specifications) (absent
prequalification requirement. grantee
need not evaluate equipment listed by
low bidder prior to contract award)
(rejection of prime bidder because one
item of equipment will not qualify as
"or equal" was not proper).
85:64 August. GA (IV. 12--5-85) (Beiler
Equipment Co.. Inc.) (equipment
failing to meet specifications fa
properly rejected and bidder caMot
rely on grantee's oral statement that
led him to believe the nonresponsive
equipment would be accepted).
85:68 Monterey. CA (IX. 1Z-17~)
(Fluor Constructors. Inc.) (failure of
equipment listed in bid to meet the
specifications does not render prime
bid nonresponsive where by its bid.
bidder has committed to meeting the
specifications and substituting other
equipment if necessary).
85:69 AMe Anmdel MD (ID. 12-2G-86)
(Johnson Const. Co.) (MBE
documentation is not a matter of
responsiveness unless the IFB clearly
so states) (documentation was a
matter of responsibility rather than
responsiveness) (where grantee had
rational basis for rejecting bidder for
failing to meet MaE requirements.
EPA upheld the decision).
Small Business (SBE)
85:51 Rantoul. n. (Y, ~18-35)
(American Surfpac Corp.) (bonding
requirement did not violate SBE/MaE
policy where several firms obtained
the required bonds) (grantee
adequately di\'ided its procurement
requirements to comply with EPA
policy).
SpecilicotioM.- ",.'. " "..,
Ambiguous (See Invitation for Bid (IFB))
Brand Name or Equal .'
85:39 Lewes. DE (III. 7-1~) (Mixing
Equiment Co.) (improper to use brand
name or equal specifications unless it
is impractical or uneconomical to use
other t)'Pes of specifications)
(specifications defective for Dot
identifying salient requirements).
85:39 Lewes. DE (!D, ~2&-65) (Mixing
Equipment Co.) (Reconsideration)
(listing aU the specifications of named
brand i8 not a proper listin8 01 salient
features).
85:40 Johnson County. KS (VU. 7-~
85) (Martin Eby Canst.) (where IFB
stated that "or equals" would only be
evaluated after contract award.
grantee improperly accepted 8 bid
that was conditioned on preaward
approval of equipment).
85:49 Frederick. MD (III. ~17~) (RDP
Co.) (where IFB was ambiguous
concerning what salient features were
required. a supplier would be unable
to determine or demonstrate that its
product is "equal").
85:55 Little Blue VaUey. MO (VUL 1~
18-35) (Roots. Dresser) (permitting
award to supplier whose equipment
does not meet specifications would
prejudice responsin bidders).
85;87 Monterey, CA (IX. 12-17~)
(Dillingham Canst.. Inc.) (failure of
equipment listed in bid to satisfy ,
specifications does not render prime
bid nonresponsive where. by its bid.
bidder had committed to meeting the
specifications and substituting other
equipment if necessary).
Competition
85:4% Glenwood and Long Beach. MN
(Y. &-&-85) (J It S Contracting)
(specification limiting competition is
not Improper unless supplier would be
unable to determine or demonstrate
that ita product is "equal").
85:44 Charlton. IA evn. ~)
(Electrical Control Systems. Ltd.)
(requiring equipment supplier to be a
manufacturer unduly restricts
competition).
85:51 Rantoul. n. (Y. ~18-35)
(.4merican Surfpac Corp.) (bonding
requirement did not violate SBE/MaE
policy where several rums obtained
the required bonds) (grantee
adequately divided its procurement
requirements to comply with EPA
policy).
85:58 Pueblo. CO (VIU. 1~11~)
(Tenco Hydro. Inc.) (prequalilied
supplier cannot protest that
independent decision of prime to
substitute another firm hanned ita
ability to compete).
4-95
Design
85:43 Troup. TIC (VI. 9-4-35)
(McKinney 6- Moore. Inc.) (basic
design decision is not protestable).
Local Preference
No Entries.
Minimum Needs (See Performance
Based and Unduly Restrictive)
No Entries.
Nonrestrictive (See Unduly Restrictive)
No Entries.
Oral Statements
85:08 Milwaukee. WI (V, 1-31-85)
(Kari-Kool Transports. Inc.) (reliance
on incorrect oral advice given at pre-
bid conference is not protestable).
85:18 Lake Geneva. WI (V, 3-18-35)
(Camosy Const.) (Grantee's oral
statements at pre-bid conference do
not have force of law and CaMot be
basis for protesting City's subsequent
responsibility determination).
85:64 Augusta, GA (IV. 12~) (Beiler
Equipment Co., Inc.) (a bidder who
relies on oral statements regarding
bidding documents does so at its own
risk).
Performance Based
85:24 Chelan. W A (X. 4-26-85)
(Walker Process Corp.) (EPA funds
minimum performance needs. not
ideal or best design-the
specifications improperly focused on
design features instead).
85;44 Chariton. IA (VU. ~)
(Electrical Control Systems, Ltd.)
(EPA rejects arguments that extra
safety and economic stability factors
that a manufacturer can provide are
justified by the minimum performance
needs of the project).
85:49 Frederick, MD (Ut ~17~) (RDP
Company) (for engineer to specify
particular equipment he must show
what is unique about a project that
justifies it) (must compare operational
efficiency of various equipment
performing same task but having
different configurations) (no rational
performance based reasons given for
design features).
~ent feQUirements (See Brand Namp
~)
No Entries.
Sole Source
85:24 Chelan. WA (X. 4-26-85)
(Walker Process Corp.) (it was.
improper to formally advertise for
procurement where only one offeror
was able to effectively compete) (City
. ,
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32046
Federal Register I Vol. 51. No. 113 I Monday, September 8. 1988 I Notices
failed to justify need for IOle lource
and failed to perform COlt analysia).
85:42 Glenwood and LoDgbeac:b. MN
(V, 8-9-65) (] t; S ContractintJ, Inc.)
(specification aDowins . 8iDIIe
material which can be obtained from
leveral 10urcel il not "Iole lOurce"
Ipecifica tion).
85:43 Troup. TX (VL 9-4--85)
(McKinney t; Moore. Inc.) (equipment
available from a lole louree mUit be
procured through negotiation not
formal advertising) (grantee Ihould
probably find out whether there are
two equipment loureel before .
deciding to procure al lubContract
items under formally advertiaed prime
bids) (if only one suppUer can be ued
by all primes there ia potential for
unreasonable bid pricel by the
lupplier).
Und\dv Restrictive
85:24 Chelan. W A (X. f-28-65)
(Walker Proceu Corp.) (grantee'l
delcription of requiremenll focuaed
on design features rather than
performance characteriatiCl)
(specification would require
manufacturers to duplicate
competitor' I design).
85:42 Glenwood and Long Beach. MN
(V, 8-9-65) (f t; S Contracting) .
(specification limiting competition 18
not improper unlels ill reltrictive
features are not necesury to the
minimum project needs) (grantee
explained rational performance balil
furreq~s~ema~riU).
85:44 Chari ton. IA (VII. 9-&-85)
{Electrical Control Syste11Ul. Lid.} .
(requiring supplier to be a
manufacturer is unduly restrictive-
EPA rejects arguments that extra
safety and economic stability factors
that a manufacturer can provide are
justified by the minimum performance
needs of the project).
85:49 Frederick, MD (III. 9-t7~) (RDP
Company) (where protelter shoWl ita
equipment was eliminated. eqiDeer .
. must justify why particular project
needs particular equipment-cannot
require more than ia necelaary for the
minimum performance needa)
(specification that require,
manufacturer to duplicate
competitor's design places a premium
on design rather than performance)
(even where manufacturer can
dupUcate competitor', design.
competition fa discouraged).
Statll and Loco} Low
85:14 Washington Suburban Sanitary
Commillion (III. ~Z2-65) (Hycon and
Profes,ional Service. Group)
(although Itate law gives grantee
discretion in matters of contract
award, that discretion ia limited by
federal procurement requirements).
85:20 LeesbW'1J, V A (III. 4-2-85) (James
FtKlerlin~, Inc. and MCr Const. Inc.)
(in determining questioDl of State law. .
EPA reUet on State authoritiet and .
wiD accept. srantee's iDterpretation
of State law unless it law. ration.l
basil).
85:33 Milwaukee, WI (V, ~19-85J
(Staff Electric Co.) (where grantee
waivel failure to notarize bid .s 8
minor irTegu1arity and stves le8al
opinion that State law permita the
waiver, EPA will not review the
matter where there II DO overridina
federal interest).
Subcontract Award
85:44 Chariton. IA (VII. 9-&-85)
{Electrical Control S~telM. Ltd.}
(requiring equipment lupplier to be a
manufacturer unduly restricll
competition).
85:48 Fredericlc. Me (nI, ~17~)
(Dresser Industries) Cluceellful
bidder wal permitted to substitute 8
nonprequalified supplier for 8
prequalified supplier named in ill
. bid).
85:57 Pueblo. CO (VID. 1~t1-85)
(WesTech Engineering. Inc.)
4-96
(subcontract substitution is matter of
contract administration. not
protestable).
85:58 Pueblo. CO (VID. t~t1-65)
{Tenco Hydro, Inc.} (prime
contractor's decision conceming
subcontract award, substitution of
firms. ia not proteltable) (EPA policy
not to interfere In business judgments
of primes) (no EPA restriction of prime
requiring subcontractors to meet
additional experience, bonding,
warranty requirements).
Waiver
-
85:t6 Million. TX (IV, ~1-85)
(Envirodyne, Inc.) (grantee oed
unduly re8trictive lpecificatioDl and
attempted to waive them to accept a
nonrelpoDlive offeror).
85:21 Wheatfield. NY (0. 4-t2~)
(Milhent Con.t, Inc.) (grantee could
waive IFB requirement that bicla on
two aectiona of. project mUit contain
Identical unit pricas linee it had a
DeSliIible effect and no wair
advantap occurred).
85:33 Milwaukee. WI (V. ~19-85)
(Staff Electric Co.) (failure to notarize
bid as allegedly required by State law
may be waived al minor irregularity).
66:37 Bradenton. FL (IV, 7-15-85)
(ICOS/Hycan) (failure to comply with
tenos of bid such .1 certificatet and
forma may be waived and cured after
bid opening where i~, reflect on
respoDlibility rather than
responsivenell).
85:36 Clarence. NY (U. 7-t&-a5)
(Hydro-Croup. Inc.) (lailure to aign
lormal acknowledgment of receipt of
IFB addendum waived as minor
Informality where bidder included a
quotation for the additional
addendum item in ita bid and referred
to the addendum).
[FR Doc. .20191 Filed 1-6-88: 8:t5 am)
IIWNQ COOl .. . II .
-------
Fraud
4-97
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(IV) BIDDING
MODULE: Fraud
ESTIMATED TIME:
Reading Assignment
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the different potential opportunities/occasions
for fraud to occur in the bidding process
o Understand the criminal, civil, administrative and
contractual remedies for-fraud.
INSTRUCTIONAL MATERIALS:
o "Hard copy" of viewgraphs for participants.
4-98
-------
FRAUD
CONTRACT FRAUD
. Collusive bidding
. Price fixing
. Bid rigging
. Bid rotation
. Kickbacks
. Intentional delivery of inferior goods
. Product substitution
. Deliberate mischarging of costs
. Market division
. Complementary bidding
l:-99 ..
-------
CORRUPTION OF PUBLIC OFFICIALS
. Bribery
. . Gratuities
. Conflicts of interest
ORGANIZATIONAL CONFLICTS
OF INTEREST
. Subsidiary
. Competing clientele
. Disclosure
.'1:-100
-------
REMEDIES
. Criminal
- Prove beyond reasonable doubt
. Civil
- Takes 3-5 years
- Cancel contract
- Recoup monies paid
. Administrative
- Against own employees
. Contractual
- Most impact on contractor
- Contract clause remedies
- Denial of claims
- Suspension and debarment
4-101
-------
HIGHLIGHTS OF EPAIS ANTI-BID RIGGING EFFORTS
o
EPAHAS AN ONGOING PROGRAM TO PREVENT AND DETECT BID RIGGING.
o
Bid rigging contributes to INFLATION, destroys PUBLIC CONFIDENCE in
the country's economy, and UNDERMINES a free enterprise market.
o
Bid rigging is any arrangment between competitive contractors that
does not provide for open, free competition.
o
Bid rigging can violate several Federal statutes:
The Sherman Antitrust Statute
The False Claims Statute
The False Statements Statute
- The Mail Fraud Statute
- The Wire Fraud Statute
o
A contractor found to be involved in bid rigging may be:
Debarred, that is blacklisted from participating in any EPA
funded project.
o
Bid riggers are also liable to pay damages to those they have.
~
cheated.
EPA can obtain double damages
Recipients of cooperative agreements can obtain triple damages.
o
EPAls own efforts to detect and stop bid rigging involve:
Obtaining bid tabulation data on all contracts
Working with the Department of Justice to prosecute bid riggers
Using legal resources to pursue civil recovery on rigged
projects.
4-10l
-------
1.
What Actions Can Minimize Bid Rigging?
o
Require a non collusion statement from the contractor as well as
a certification statement that the contractor has or has not been
----
debarred or suspended.
o
Request the names of owners and officers
subcontractors, and joint ventures.
for all
prime,
o
Advertise widely.
o
Maintain good project documentation;
and envelopes.
keep all bidding documents
o
Spread the word that EPA is serious about stopping bid rigging.
2.
What Can Be Done To Detect Bid Rigging?
o
Look for drop in bid prices when a new bidder appears.
o
Watch for the failure of original bidders to rebid.
o
Be mindful of contractors who frequently bid but rarely win.
o
Examine frequent claims of a mistake in bid by the same
contractor.
o
Do a price analysis of projects with fewer than three
bidders; examine the bids and ask why so few bidders?
o
Ask yourself if the differences between bids are reasonable?
o
Compare percentage differences between the engineer's
estimate and bidders to see if there is a pattern.
4-103
-------
o
Check subcontractors to see if they are capable of bidding
the project themselves.
o
Look for bid rotation by geographical
or type of customer.
area, size of project,
o
Examine up-front payment items, unbalanced bids and lump ~
items.
o
Satisfy yourself that the bids are valid and reasonable and
that deviations are explainable.
4-104 .
-------
Organizational Conflicts of Interest
EXAMPLE 1
Situation:
Contractor A
o Contractor operating a mobile incinerator
for EPA at a dioxine site.
Company B
o A major responsible party at the site
as a pesticide manufacture who produced
dioxine waste.
o Party to a consent decree with EPA to
control their waste.
Conflict:
Unknown to EPA, Contractor A was providing technical
advice to Company B at the same time they were advising
EPA regarding the site.
A Contractor A employee/consultant who briefed the EPA
Administrator concerning the dioxine site was later
discovered to be representing Company B concerning the
same issues.
Effects:
o Questionable objectivity of Contractor A advice to
EPA in view of the relationship with Company B.
o Possible compromise or confidential Agency information
relevant to potential future Agency actions concerning
Company B.
o Great potential for embarrassment to EPA and damage
to the credibility of any Agency decisions based on
Contractor A's advice.
4-105
\
-------
0:-:
,al Conflict of Interest
EXAMPLZ
S i ~:
-:ternational -
Under contract with EPA to perfo":",'
a technical analysis/ evaluation
of alternative land disposal
technologies. Field work to be
done at SECO sites.
COI -
-2 contract was awarded, EFA ~ersonnel were
:ce that SECD International is a subsidiary
one of the country's largest waste disposal
_::s.
E E -= '
2L stories in Cincinnati understandably
,ed whether an objective analysis could be
j from SECD in view of the re~ation~hip with
:ch clearly has a vested interest in promoting
disposal technologies.
4-~06
-------
Organizational Conflicts of Interest
E)(;...;- ..
Situation:
KVD, Inc.
o Under contract with EPA to collec~
evaluate specified pollution cont~:
o KVD had no conflict of interest w~
tract was awarded.
Conflict:
o During performance, KVD became exclusive licens
process similar to one of the processes being e
o This licensing development was not disclosed tc
Effect:
The objectivity of KVD's analysis is clearly broc
into question by KVD's license interest in a com;~
process.
4-107
-------
"
4-103
-------
United States
Environmental Protection
I9ncy'
July 1986
~EPA
Indicators of Fraud
in EPA Procurement
Committee 011 Integrity and
Management Improvement
4-109
-------
4-11 0
-------
PREFACE
FRAUD IN EPA PROCUREMENT
Each EPA employee has the responsibility to report any indications of
fraud, waste, or mismanagement promptly to their supervisor or directly to
the Office of the Inspector General. The Administrator of EPA encourages
the support and ass i stance of all agency personnel, part i cu 1 ar ly those in
the procurement process, to take all reasonable steps to detect and elimi-
nate fraud, waste, and mismanagement. An initial step is learning to
recognize indicators of the presence of fraud or of the potential for it.
This publication is designed to assist EPA personnel to identify circum-
stances where fraud is likely to take place, or indicate that fraud has
already occurred. It describes actions that can be taken when fraud is
found. This publication is based on a similar document issued by the
Inspector General for the Defense Department and includes actual examples
of fraud at EPA~
The first chapter discusses the potential for fraud in the procurement
process through the contract award stage of a procurement. The next eight
chapters discuss specific categories of fraudulent activities which may
be applicable to EPA programs. The final chapter covers available actions
that can be taken by us to protect programs from future frauds, to recover
resources lost through fraud, or to punish those who have perpetrated such
frauds. .
If Government interests are to be protected, fraud and illegal activity
in Government procurement must be addressed by criminal, civil, administrative
or contractual remedies, or a combination of these. Selecting remedies must
be done not only by criminal investigators and prosecutors, but also by
contracting officers, technical representatives, managers, personnel officers,
legal counsel, internal and contract auditors, and suspension and debarment
authorities.
Remember that eliminating fraud, waste, and abuse requires cooperation
from all employees. The EPA hotline (toll free 800-424-4000 or FTS 382-4977)
provides employees with a convenient and confidential means of reporting
improprieties. Achieving this goal depends on the alertness and sound
'judgment of F.PA employees in using the tools and knowledge provided in
publications like this one. .
c.~~
John C. Marti n
Chairman
Committee on Integrity and Management
Improvement
Environmental Protection Agency
i
4-111
-------
4-1l2
-------
Index
Page No.
Chapter I Fraud in EPA Contracts 1
Chapter II Bribery, Gratuities and Conflicts
of Interest 8
Chapter III Crimes Involved in Contract
Fraud 13
Chapter IV Defective Pricing 15
Chapter V Antitrust Violation: Co 11 us he
Bidding and Price Fixing 19
Chapter VI Cost Hischarging 23
Chapter VII Product Substitution 29
Chapter VI I I Progress Payment Fraud 31
Chapter IX Fast Pay Fraud 33
Chapter X Civil, Contractual, and Administrative
Remedies for Fraud 34
4.-1.13
-------
4-114
-------
CHAPTER I:
FRAUD IN EPA CONTRACTS
A.
Introduction
The contract award process can and does take various courses to meet
an. end. result; i.e., delivery of goods and services. This chapter discusses
factors which may indicate the presence of or enhanced potential for fraud
at various stages in the contract award process. The indicators included in
this chapter are not intended, each taken by themselves, to establish the
existence of fraud. Rather, the presence of any of these indicators, when
taken in the context of the particular procurement action being conducted,
should cause employees to be alert to the possibility of impropriety and
take appropriate actions to ensure the integrity of the process. Three
later chapters will discuss in more detail the concepts of: 1) collusive
bidding and price fixing; 2) defective pricing; and 3) bribery, gratuities,
and conflicts of interest. These activities are present in some of the
indicators presented in this chapter and should be considered in light of
the later explanations.
The motives and methods for fraud in the contract award process
are varied. There may be instances where fraud is perpetrated to obtain
a contract in order to create the opportunity to later engage in such
activities as theft or embezzlement, product substitution, cost mischarging,
fast payor progress payment fraud. In some instances the fraud may be
perpetrated to obtain a contract at a higher price or with better terms
than would have occurred in an award untainted by fraud. Still others may
commit fraud merely to get EPA contracts because they need the business to
keep their companies in operation when private sector activity is low.
B. Fraud in the Identification of EPA's Need for Goods or Services
Normally, procurement actions are initiated by general requirements.
These requirements consist of a brief description of the types and amounts
of goods and services needed. Fraud may result here from intentional
decisions to buy goods and services in excess of those actually needed or
possibly not needed at all. Excessive purchases of items such as laboratory
equipment or chemicals may be indications of other ensuing criminal acts
such as collusion, illegal commissions, theft or diversion of supplies.
Further, potential for fraud is created where the needs assessment is
not adequately or accurately developed. A Government agency which, wit~
or without collusion, continually changes its mind about what it wants,
will make it possible for a contractor to substantially increase the
contract price through frequent change orders.
1
4-115
-------
Contractors may also charge EPA .for "proprietary" data the Government
already owns because it paid .for the development on another contract, charge.
several agencies for doing the same job, or charge for "fixing" products or
software which were deliberately made to meet de.fective or inadequate
definitions of what was needed.
With respect to fraud in defining requirements the general fraud
indicators include:
1. Requiring excessively high stock levels and inventory requirements
to justi.fy continuing purchasing activity from certain contractors.
2. Declaring items which are serviceable as excess or selling them
as surplus while continuing to purchase similar items.
3. Purchasing items, services, or research projects in response to
aggressive marketing efforts (and possible .favors, bribes or
gratuities) by contractors rather than in response to valid
requirements.
4.
Defining needs improperly in ways that can be met only by certain
cont ractors .
5. Failing to develop usecond-sourcesu for items and services being
continually purchased .from a single source.
C. Fraud in the Development of Statements of Work and Specifications
Bid specifications and statements of work detailing the types and
amounts of goods or services to be provided are prepared to assist in the
selection process. They are intended to provide both potential bidders "
and the selecting officials with firm basis for making and accepting bids.
A well-written contract will have specifications, standards and statements
of work which make it clear what EPA is entitled to. Sloppy or carelessly
written specifications make it easy for a contractor to fraudulently claim
that it is entitled to more money for what EPA later defines as what it
really wants.
Fraud indicators include:
1. Defining statements of work and specifications to .fit tHe products
or capabilities of a single contractor.
2. Advance or selective release by EPA employees o.f information
concerning requirements and pending purchases only to preferred
cont ractors .
2
4-116
-------
3. Using statements of work, specifications, or sole source
justifications developed by or in consultation with a preferred
contractor (institutional conflict of interest).
4. Allowing architect-engineers, design engineers or other firms
participating in the preparation of bid packages to obtain those
same construction or production contracts or to be subcontractors
to the winning contractors.
5. Release of information by firms participating in design and
engineering to contractors competing for the prime contract.
6. Designing "pre-qualification" standards or specifications to
exclude otherwise qualified contractors or their products.
.7. Splitting up requirements so contractors each get some of the
work and can rotate bids (See Chapter V). '
8. Splitting up requirements to get under small purchase require-
ments ($25,000) or to avoid prescribed levels of review or
approval, e.g., to keep each within the contracting authority of
a particular person or activity.
9.
Bid specifications or the statement of work not consistent with
the items included in the general requirements.
10. Specifications so vague that reasonable comparisons of estimates
would be difficult.
11. Specifications not consistent with past similar type procurements.
D. Fraud 1n Pre-Solicitation Phase
Fraud indicators include:
1.
Falsified statements to justify sole source procurement.
2. Justifications for sole source procurement signed by
officials without authority or the deliberate by-passing of
required levels of review.
3. Placing any restrictions not related to the legitimate needs
in EPA in the solicitation documents which would tend to
restrict competition.
4.
Providing any advance information to contractors or their
representatives on a preferential basis by technical or
contracting personnel.
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E.
Fraud in Solicitation Phase
Fraud indicators include:
1.
Restricting procurement to exclude or hamper any qua1fied contractor.
Limiting time for submission of bids so only those with advance
information have an adeq~ate time to prepare bids or proposals.
2.
Revealing any information about procurement to one contractor which
is not revealed to all (from either technical or contracting
personnel).
4. Conducting bidders conference in a way which invites bid rigging or
price fixing or permits improper communications between contractors
(See Chapter V). .
3.
5.
Failure to assure a sufficient number of potential competitors are
aware of the solicitation. (Use of obscure publications, publishing
in holiday season, providing a vague or inadequate synopsis to
Commerce Business Daily, etc.)
Vague bid solicitation as to the time, place, or other requirements
for submitting acceptable bids.
6.
7.
Improper communication with contractors at trade or professional
meetings or improper social contact with contractor representatives.
~
8.
EPA personnel involved in a particular procurement or their families
acquiring stock or a financial interest in a contractor or sub-
contractor associated with that procurement.
EPA personnel involved in a particular procurement discussing possi-
ble employment for themselves or family member with a contractor or
subcontractor associated with that procurement.
9.
10. Special assistance to any contractor in preparing his bid or proposal.
11.
12.
"Referring" a contractor to a specific subcontractor, expert, or
source of supply. (Express or implied that if you use the referred
business, you will be more likely to get the contract.) .
Failure to amend solicitation to include necessary changes or
clarifications. (Telling one contractor of changes that can be made
after award.)
13. Repetitive recommendation of sole source contracts to a firm or an
individual.
14. Recommendation of sole source contracts to former EPA employees for
an extended period of performance.
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F. Fraud in the Submission of Bids and Proposals
Fraud indicators include:
.. 1. Improper acceptance of a late bid.
2. Falsification of documents or receipts to get a late bid accepted.
3. Change in a bid after other bidders prices are known. This is
sometimes done by mistakes deliberately "plantedll in a bid.
4. Withdrawal of the low bidder who may become a subcontractor to the
higher bidder who gets the contract.
5. Collusion or bid rigging between bidders.
6. Revealing one offeror's price to another.
7. False certifications by contractor.
a. Small business certification.
b. Certification of independent price determination.
c. Buy-American Act certification.
8. Falsification of information concerning contractor qualifications,
financial capability, facilities, ownership of equipment and
supplies, qualifications of personnel and successful performance
of previous jobs, etc.
Fraud in the Evaluation of Bids and Proposals
G.
Fraud indicators include:
1. Deliberately discarding or "losing" the bid or proposal of an
"outsider" who wants to participate. (May be part of a conspi racy
between a Government official and a select contractor or group of
contractors. )
2.
Improperly disqualifying the bid or proposal of a contractor.
3. Accepting nonresponsive bids from preferred contractors.
4. Seemingly unnecessary contacts with contractor personnel by persons
other than the contracting officer during the solicitation, evalua-
tion, and negotiation processes.
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5. Any unauthorized release of information to a contractor or other
person.
6. Any exercise of favoritism toward a particular contractor during
. the evaluation process. .
7. Using biased evaluation criteria or using biased individuals on
the evaluation panel. .
H. Fraud in the Award of a Formally Advertised Contract
Fraud indicators include:
1. Award of a contract to a contractor who is not the lowest responsi-
ble, responsive bidder.
2. Disqualification of any qualified bidder.
3. Allowing a low bidder to withdraw without justification.
4. Failure to forfeit bid bonds when a contractor withdraws improperly.
5. Material changes in the contract shortly after award.
6. Advance information concerning who is g01ng to win a major compet1-
t10n can give advantages to persons trading in the stQck of both
winning and losing companies.
7. Awards made to contractors with a documented h1story of poor
performance.
. 8. Awards made to the lowest of a very few bidders without readvertising
considerations or without adequate publicity. .
9. Awards made that include items other than those contained in bid
specifications.
10. Awards made without adequate documentation of all preaward and
postaward actions.
11. Award of a sole source contract to a firm or an individual when there
has been more than adequate time to follow competitive procurement
procedures.
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I. Fraud in the Negotiation of a Contract
There are a number of abuses which can occur in the negotiation of a
contract. The first stems from the assumption of many personnel that once
it ha~ been detennined that negotiated procurement procedures can be used
that procurement on a sole source basis has also been justified. Whether a
contracting officer is making the decision on a small dollar contract or a
fonnal detennination is being made by higher authority, competition is
required unless specific justifications exist and are documented.
Fraud indicators include:
1. ABack-dated. or after-the-fact justifications appear in the contract
file or be signed by persons without the authority to approve sole
source or other than full and open competitive procurement.
2.
Infonmation given to one contractor which is not given to others
which give it a competitive advantage.
Improper release of infonmation (e.g., prices in proposals, techni-
cal proposals or characteristics of proposals, identity or rank of
competing proposals, proprietary data or trade secrets, and EPA
price estimates) to unauthorized persons.
3.
4. Contractor misrepresentation as to costs during negotiations
(See Chapter IV).
5. Failure of EPA personnel to obtain and rely upon a Certification of
Current Cost. or Pricing Data.
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CHAPTER II:
BRIBERY, GRATUITIES, AND CONFLICTS OF INTEREST
A.
Introduction
This chapter is dedicated to the discussion of integrity awareness. It
will inform managers and employees about their responsibilities to be alert
for bribe offers, to avoid the acceptance of gratuities, and to recognize
conflicts of interest. It calls attention to the relationship and impact of
these issues on the procurement process. Further, the chapter discusses the
existence and significance to the procurement process of bribery and kick-
backs between non-Government entities; e.g., prime contractors and sub-
contractors.
B.
Bribery
In addition to being a crime, as discussed below, the use of bribery
and gratuities in obtaining or doing business changes the nature of EPA's
relationship with a contractor or potential contractor. It certainly bears
upon the issue of contractor responsibility. How much reliability can be
placed in later assertions made by someone who has attempted to bribe a
Government employee or an employee of another firm? How can, in good
conscience, such a person/company be certified as having the necessary
business integrity to be a responsible bidder? It should be remembered
that contractors using such methods to do business are usually doing so
with the intent to further some form of procurement fraud they are com-
mitting or trying to commit. The Government should avoid business with
contractors who must re~ort to kickbacks or bribery to obtain contracts.
1. Manager Responsibilities
Managers have many responsibilities in the area of integrity
awareness. They must set examples, not only of personal integrity and high
ethical standards, but also of a willingness to participate in the referral
and investigation process. Too often employees are discouraged from paying
attention to or reporting possible bribe situations because it is thought
that subsequent actions are time-consuming and disliked by managers because
of the work involved. Instead of giving any impressions that they are
. unsympathetic to this process, managers should actively encourage their
employees to be acutely aware of potential bribe overtures, encourage them
to report bribe attempts immediately and indicate to their employees that
they will have full support from management in any efforts to assist
investigators in obtaining evidence of the offense.
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The tendency to treat less blatant attempts at bribery as ordinary
occupational hazards or as routine innuendos which can easily be ignored or
dismissed is another reason that many bribe attempts are not reported. Another
reason might include the sentiment that refusal of a bribe offer is deterrent
enough. It is part of tbe manager's job to ensure that these conditions are
not impediments t~ rapid, timely, and efficient reporting of attempted bribes.
2.
Employee Responsibilities
There are some primary areas that should be focused on in discuss-
ing bribery awareness with employees. These areas of concern can be grouped
into several questions.
a. What constitutes a bribe? A bribe is an offer to an employee of
something of value to [i) do something they should not do or (b) fail to do
something they should do, in their official duties. The something of value
need not be money, it can be anything of value.
b. When is a bribe being offered? People who offer bribes are
generally astute and aware individuals. A blatant offer is a rarity.
Generally, the party offering a bribe will make subtle overtures in a con-
ventional fashion. They may begin by discussing the employee's life-style,
family, or salary. They are looking for a vulnerable area where they can
exploit the employee. They may seek to establish that the employee has
college age children and begin discussing the high cost of education. They
may learn that the employee is a new homeowner and discuss high mortgage
payments and the expenses of fixing up a new home. If unable to detect an
area in which the employee is particularly vulnerable, they may move to more
glamourous and alluring areas; cash, cars, and travel. In summary, if the
employee feels that the individual is getting beyond mere civility and the
professional purpose for the meeting, the employee should be alert to the
possibility of a bribe attempt.
The preliminary conversation may be an attempt to feel the employee
out. The person attempting the bribe knows that bribe offers are illegal.
They also know that a strong employee has an obligation to report the
attempted bribe. Most importantly, the offeror of the bribe does not want
to get caught. If the employee is not receptive to subtle overtures and
alternative attempts fail, the person may not make any overt bribe offer.
. An employee has an obligation to determine the nature of the person's remarks.
The very subtlety of these preliminary overtures makes the employee's job of
detecting a bribe offer a delicate one. .
c. What should be done if a bribe is offered? The first goal is to
establish the nature of the person's remarks. The employee should not accept
anything; simply indicate a willingness to consider the offer. After equivo-
cating on acceptance, the employee should immediately remove himself from the
area and call the EPA DIG and his supervisor. At the time contact is made, the
employee will receive further information on how to handle the situation. In
many cases the EPA DIG may depend upon the employee to recontact the subject
and obtain an explicit statement on a secreted recorded or make a controlled
acceptance. It is imperative that EPA DIG be contacted within hours of this
original offer.
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d. Why not accept a bribe? The clear answer to this question is
that the acceptance of a bribe is a criminal act which can result in prose- .
cution, dismissal, fines and embarrassment to the employee and the family
and friends of the employee. Is anyone's future and family worth the small
amount they may receive, no matter how much the amount may seem at the time?
In addition, accepting a bribe leaves one always at the mercy of the
person who paid it. There is no such thing as a one-time favor for one who
accepts the bribe. Since the employee has committed a crime, the briber can
ask anything later on under the threat of reporting the bribe, claiming it
was solicited and threatening exposure.
e. Why not just refuse a bribe without reporting it? When an
employee rejects a bribe, the offeror of the bribe may become concerned that
the employee will report the attempt. They may decide that the best way to
deal with the situation is to report that the employee tried to solicit a.
bribe and offer to cooperate in having the employee prosecuted or dismissed
for it. If the employee has not reported the attempt, it would give
credence to the offeror's allegation. Even though the employee has done
nothing wrong, the allegation would have to be investigated and could cause
undue problems and time to resolve.
Furthenmore, since the attempt to bribe a Government official is in
itself a crime, failure to report an attempted bribe, as well as other crimes,
leaves the employee open to possible prosecution.
The failure to report a bribe attempt also leaves the offeror free
to try again with another employee of the Government. The next employee may
not be able to resist ,the offer. Further, there is no deterrent effect in
refusal of the attempt. The offeror is free to try again without fear of
the potential consequences. Investigation and prosecution of those who
would try to corrupt our. employees and our system of Government is the only
way to deter others from believing that this is the way to do business with
the Government. .
Bribery Example
The vice president of a finm seeking an EPA contract was found guilty
of offering a bribe to two EPAemployees by offering them jobs in return
for their assistance in obtaining a $3 million contract.
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3. Commercial Bribery and Kickbacks
There are times when payments of bribes and kickbacks do not involve
Government employees but still impact on the procurement process. Employees
or.officers of a prime contractor.may solicit or be offered and accept pay-
ment of bribes or kickbacks. in connection with the award or performance of
subcontractors. Subcontractors may initiate such payments to prime contractor
employees to obtain competitors' bid or technical data to gain an unfair
competitive advantage. Such activities may impact on the procurement process
in several ways. The price paid for the product or service may be higher
because the subcontractor passes the cost of bribes and kickbacks through to
the prime. In extreme instances, the kickbacks may be so significant that
the subcontractor cannot perform the work in conformance with specifications
or fails to perform at all due to underfunding. In these cases deliveries
are delayed or prevented and the ultimate user is deprived of the item con-
tracted for. .
In addition, to the contractual impact of commercial bribes and kick-
backs, there is a statutory prohibition regarding such activities involving
a negotiated Federal contract. The statute, known as the Anti-Kickback Act
(41 USC 51-54), makes it a crime for a subcontractor to make a payment to a
prime contractor in order to get the award of a subcontract.
C. Gratuities
Gratuities are generally distinguished from attempted bribery in that
there is usually no request for specific improper action in exchange for
what is being given. Gratuities are generally given to assist in enhancing
the "relationship" between the offeror and the Government employee. This
"more favorable atmosphere" in which to do business may later move the
employee to "lean" in the contractor's favor if needed. . Some co~tract9rs
have gone so far in providing gratuities as to actually budget substantial
sums (in excess of $150,000 for a project in one case) to create a favorable
atmosphere for their dealings with Government employees.
. Dealings with those who seek to and who do business with the Government
should be conducted in ~n objective manner above reproach, and avoiding even
the appearance of favoritism or other impropriety. Acceptance of gratuities
of any kind should be avoided in order to maintain both the form and the
substance of objectivity in official dealings. It should also b~ remembered
that the offer or acceptance of a gratlJity violates (40 CFR 3.400). Furthermore,
the provision of a gratuity is prohibited by a standard clause in contracts
(40 CFR 33.1030(11)}, and (FAR 52.203-3).
Gratuity Examples
1. A few days before Christmas, a package arrives at your office. Inside is
a card from the vice-president and general manager of a large waste managememt
corporation. The company has never done business with EPA. The card says,
"You are doi ng a great job for our count ry and we wanted you to know that we
appreciate it. We hope you will accept this token of our gratitude."
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You open the package and find a crystal vase which you estimate to be
worth $100. ~ou accept the vase? No. Although the company has not done.
business with~A, it conducts activities that EPA regulates, and therefore
acceptance would violate (40 CFR 3.400). .
2. An EPA employee often meets with an industry association. The association
sometimes has sandwiches and soft drinks brought into the conference room at
lunchtime. However, one such meeting lasts until 7:00 p.m., and the group
goes to a restaurant for dinner. The association president signs the tab and
everyone leaves. The employee points out that EPA regulations at 40 CFR 3.400
authorize acceptance of meals or refreshments in connection with activities
where the employee officially represents EPA or where there is an obvious family
or personal relationship between the employee and the donor. The employee has
known the association president for years and their spouses were roommates in
college. What, if anything is to be done?
Although accepting the sandwiches was proper, the dinner may not be
accepted. The restaurant dinner was not in connection with a "widely-attended
gatheringU nor was it a "public ceremony or similar activityU where the
employee was officially representing EPA. See 40 CFR 3.400(b). Moreover, the
circumstance did not clearly show that the employee's personal relationship.
with the association president was the "motivating factor" of the gift. The
employee should have made sure that the association members understood the
necessity of his paying for his own dinner beforehand.
D. Conflicts of Interest
EPA employees are generally prohibited by both criminal laws and standard
of conduct requirements from taking official actions dealing with businesses
in which they or their spouses or dependent children have a direct financial
interest. Employees should be alert to situations in which they suspect a
possible conflict of interest and report these to appropriate authorities.
The following hypothetical examples are reflective of situations to which all
EPA employees should be sensitive.
1. An EPA contracting officer, along with his wife and sister-in-law,
formed a company to represent various construction companies in their efforts
to obtain contracts with EPA. On numerous occasions, the contracting officer,
who was responsible for bid solicitation and price determination, recommended
awards of EPA contracts to these same companies. As an EPA emp10yee, he
personally participated in the award of these contracts to his own company.
No disclosure of his interest in this company was made to EPA.
2. A laboratory director recommended that EPA procure an item of equip-
ment on a sole source basis from one company. At no time did the laboratory
director disclose that he was an officer and major stockholder in the company.
When EPA agreed to the recommendation, the director sought to recapitalize
the company in anticipation of receiving a large amount of new orders. When
the director learned that he was suspected of conflict of interest, he denied
his ownership in the company, and had the company prepare false and backdated
documents to show that he had no involvement with the company.
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CHAPTER III: CRIMES INVOLVED IN CONTRACT FRAUD
When EPA and its programs have been defrauded or corrupted, Federal
investigators and prosecutors will usually. find that one or more Federal
statutes have been violated. It is their job to develop conclusive evidence
that each of the elements of a specific crime exists. The most frequently
violated statutes include:
A. 18 U.S.C. 1001 - False Statements. Anyone of three different"
types of actions can be covered under this statute if .under the
jurisdiction of any agency:
1. Falsifying, concealing or covering up a material fact by any
trick, scheme or device;
2. Making"false, fictitious, or fraudulent statements or
representations; or
3. Making or using any false document or writing.
B. 18 U.S.C. 287 - False Claims. This includes making any false,
fictitious or fraudulent claim against any agency of the United
States. (In a related civil statute, 31 U.S.C. 3729, the United
States can aJso recover double damages and $2,000 per false claim.)
C. 18 U.S.C. 1341 - Mail Fraud and 18 U.S.C. 1343 - Wire Fraud. These
statutes make it illegal to engage in any scheme to defraud in
which the mails or wire communications are utilized. (Even the
Government's mailing of a payment check to a contractor can bring
the scheme under this statute.)
D. 18 U.S.C. 201-209 - Bribery, Gratuities and Conflicts of Inter~st.
.These sections prohibit anyone from offering or giving a bribe to
a Federal employee or agent and prohibit an employee from receiving
either a bribe or gratuity. They also prohibit conflicts of
interest during and after Federal employment. (New authority
delegated by the President in November 1983, under 18 U.S.C. 218,
permits agencies to rescind any contract tainted by bribery, graft,
or conflict of interest after conviction.)
18 U.S.C. 1905 - Trade Secret Act. This prohibits unauthorized
release of any confidential business information a Federal employee
receives in the course of employment. (Advance procurement infor-
mation, prices, technical proposals, trade secrets or proprietary
information, etc.)
E.
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F. 18 U.S.C. 641 - Theft, Embezzlement or Destruction of Public Money,
Property or Records. This prohibits the theft, embezzlement or
destruction of any money, property or records of the United States
or the receiving or concealing of such.
G. 41 U.S.C. 51, 54 - Anti-Kickback Act. This prohibits the payment
of any fee, compensation, gift or gratuity from a subcontractor to
a prime contractor on any negotiated Government contract.
H. 15 U.S.C. 1 - Sherman Antitrust Act. This prohibits any agreement
to restrain trade in interstate commerce and includes price fixing,
bid rigging or bid rotation schemes.
I. 18 U.S.C. 371 - Conspiracy. This section prohibits any conspiracy
to defraud the United States or to violate any Federal law or
regulation (any offense against the United States). It prohibits
either an unlawful objective or an unlawful means.
Addendum - page 14
J. 18 U.S.C. 666 - Theft or Bribery Concerning Programs Receiving Federal
Funds. Prohibits embezzlement and bribery by agents of State and
local governments or private organizations that receive Federal funds.
This section is designed to facilitate prose~ution of persons who steal
money or otherwise divert property or services from State and local
governments or private organizations.
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CHAPTER IV:
DEFECTIVE PRICING
A.
Introduction
Congress amended the Federal Property and Administrative Services Act
(41 u.~.C. 254) to require contractors and subcont~actors to submit and to
certify cost or pricing data. This enabled the Government to avoid excessive
contract costs that result from contractors having in their possession
accurate, complete, and current information when the Government does not
possess the same data. EPA, in 40 CFR 33.1030, requires grant recipients to
include, when appropriate, a clause regarding price reduction for defective
cost or pricing data 1n contracts.
B. Cost or Pricing Data Provision:
41 U.S.C. 254
The cost or pricing data provisions are contained in 41 U.S.C. 254,
Section (d). It provides, in part, that a prime contractor or any
subcontractor shall be required to submit cost or pricing data, and shall
be required to certify that, to the best of his knowledge and belief, the
cost or pricing data he submitted was accurate, complete, and current,
under the following circumstances:
1. :~~~~ ~~ ~~~e~~:~dt~fe=~~e~~~6~~~g.pr~:~c~~n~~:c~r~~:~~r~~eare
not applicable to contracts or subcontracts awarded under sealed
bid procedures.
2. Prior to the pricing of any contract change or modification for
which the price adjustment is expected to exceed $100,000 or
such lesser amount as prescribed by the head of the agency.
Hence, the requirement applies to all prime contracts, negotiated
or sealed bid.
3. Prior to the award of a subcontract at any tier, where the prime
contractor and each higher tier subcontractor have been required
to furnish such a certificate, if the price of " such subcontract
is expected to exceed $100,000. .
4. Prior to the pricing of any contract change or modification to a
subcontract covered by 3 above, for which the price adjustment
is expected to exceed $100,000, or such lesser amounts as may be
prescribed by the head of the agency.
The law further requires that any prime contract or change or modifi-
cation requiring a certificate of current cost or pricing data shall contain
a price reduction clause, permitting the Government to adjust prices by the
amount they were increased as a result of cost or pricing data that was
inaccurate, incomplete, or not current.
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Prime contracts, changes and modifications which fall within the
mandatory requirements of the statute may avoid the above requirements of
the statute if the price negotiated was:
1.
2.
Based on adequate competition;
Established catalog or market prices of commercial items sold .in
substantial quantities to the general public;
3.5et by law or regulation; or,
4. Where the head of EPA in exceptional cases waives the requirements.
- NOTE: Despite the presence of any or all of the above four exceptions,
EPA can still insist-upon submission of cost or pricing data if a certificate
is required.
C. Price Reduction for Defective Cost or Pricing Data:
40 CFR 33.1030
A model cost or pricing data clause is contained in 40 CFR 33.1030.
The clause applies to (1) any subagreement negotiated between the recipient
and its contractor in excess of $100,000; (2) negotiated subagreement
amendments or change orders in excess of $100,000 affecting the price of
formally advertised, competitively awarded, fixed price subagreement; or
(3) any lower tier subagreement or purchase order in excess of $100,000
under a subagreement other than a fonmally advertised, competitively awarded,
fixed price subagreement.
The contractor and subcontractor, where appropriate, ensure that the
cost and pricing data submitted for evaluation with respect to negotiation
of prices for negotiated subagreements, lower tier subagreements and change
orders is based on current, accurate and complete data supported by their
books and records. If the recipient or EPA detenmines that any price
(including profit) negotiated in connection with this subagreement, lower
tier subagreement or amendment thereunder was increased by any significant
sums- because the data provided was incomplete, inaccurate or not current
at the time of submission, then such price or cost or profit shall be
. reduced accordingly and the recipient shall modify the subagreement in
writing to reflect such action.
D.
Regulatory Requirements: Federal Acquisition Regulations (FAR)
.,
Section 15.801 of the FAR defines cost or pricing data and specifies
the form and language for the certificate of current cost or pricing data.
The clauses at FAR 52.214-27,52.215-22, and 52.215-23, which are required
contract clauses when the certificate is required, give the Government a
contract right to a reduction in contract price to what it would have been
if the contractor had submitted accurate, complete, and current data.
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Cost or ~ricing data is submitted on the SF-1411, Contracting Pricing
Proposal Cover Sheet. Along with that form the contractor (or offeror, if .
no contract award has yet been made) is required to provide a breakdown of
his/her costs, disclose his/her basis for pricing these items of costs and
submit supporting documentation such as vendor quotes or invoices. The
cont ractor is requ i red to submi t the fo 11 owi ng cert i fi cat i'on as' soon as
practicable after agreement is reached on the contract or modification price:
CERTIFICATE OF CURRENT COST OR PRICING DATA
This is to certify that, to the best of my knowledge
and belief, the cost of pricing data (as defined in
Section 15.801 of the Federal Acquistion Regulation
(FAR) and required under FAR subsection 15.804-2),
submitted, either actually or by specific identifi-
catton in writing to the contracting officer or to
the contracting officer's representative in support
of ................. are accurate, complete, and
current as of (day) (month) (year) ...........
This certification includes the cost or pricing data
supporting any advance agreements and forward pricing
rate agreements between the offerer and the Government
which are part of the proposal.
Firm......................
Name......................
Title.....................
Date of Execution.......~........
Note that, in accordance wi~h FAR 15.801, the term cost or pricing data
used in the certification specifically includes vendor quotations.
E. Defective Pricing Indicators
The following was offered as guidance by the Defense Contract Audit
Agency (DCAA) in the area of defective pricing. When indicators of fraud
are found, the case should be referred to proper investigative agencies.
These indicators include:
1.
Persistent defective pricing.
2. Repp.ated defective pricing involving similar patterns or conditions.
3. Failure to correct known system deficiencies.
4.
Failure to update cost or pricing data with knowledge that past
activity showed that prices have decreased.
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5. Specific knowledge, that is not disclosed, regarding significant
cost issues that will reduce proposal costs. This may be reflected
in revisions in the price of a major subcontract, settlement of
union negotiations that result in lower increases on labor rates,
etc.
6. Denial by responsible contractor employees of the existence of
historical records that are subsequently found.
7. Utilization of unqualified personnel to develop cost or pricing
data used in estimating process.
8.
Indications of falsification or alteration of supporting data.
9. Distortion of the overhead accounts or base information by the
transfer of charges or accounts that have a material impact on
Government contracts.
10. Failure to make complete disclosure of data known to responsible
contractor personnel.
11. Protracted delay in release of data to the Government to preclude
possible price reductions.
12. The employment of people known to have previously perpetrated fraud
against the Government.
These"indicators should be applied as well by contracting officers and
others involved in the procurement process. Particular note should be made
in defective pricing cases that the "intent" of the contractor will be criti-
cal to a determination of whether a criminal act occurred. Tne deliberate
concealment or misrepresentation of a single significant cost element could
constitute a prosecutable crime. The establishment of intent should be the
function of trained criminal investigators; auditors and contracting officials
should make no assumptions that defective pricing results from unintentional
conduct.
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CHAPTER V:
ANTITRUST VIOLATIONS:
COLLUSIVE BIDDING AND PRICE FIXING
A. Introduction
Collusive bidding, price fixing or bid rigging, are commonly used
interchangeable terms which describe many forms of illegal anticompeti"tive
activity. The common thread throughout all of these anticompetitive
activities is that they involve any agreements or informal arrangements
among independent competitors which limit competition. Schemes which
allocate contracts and limit competition can take many forms and are only
limited by the imagination of the parties. Common schemes, which will be
discussed in more detail later include bid suppression or limiting,
complementary bidding, bid rotation and market division. Competitors can
also violate the law by making any agreements among themselves as to the
prices they will charge. This does not mean that all competitors have to
agree to charge the same price for a violation to occur. Agreements among
competitors which would violate the law include but are not limited to:
1) agreements to adhere to published price lists; 2) agreements to raise
prices by a specified increment; 3) agreements to establish, adhere to, or
eliminate discounts; 4) agrp.ements not to advertise prices; and 5) agreements
to maintain specified price differentials based on quantity, type, or size of
product.
B.
Impact on the Procurement Process
One of the cornerstones of the Federal procurement system and assistance
agreements is the requirement that EPA contracts should be awarded, to the
greatest extent possinle, on the basis of full and open competition. The
preference for competition in the procurement of goods or services on behalf
of the United States was first set by statute in 1809. This preference still
remains and has been specifically expressed in statutes concerning purch~ses
and contracts. .
Further evidence of the importance of competition in the procurement
process is provided by the requirement for IICertification of Independent
Price Determination,1I FAR 3.103-1. This regulation requires contractors to
certify that they have not engaged in certain specific activities which
constitute what can generally be described as collusive bidding or price
fixing.
It should be obvious that collusive bidding or price fixing among
competitors completely undermines the Government1s efforts to use competitive
purchasing and contracting methods. The harm in this situation, however, is
not limited to the mere circumvention of the important Government policies
that encourage full and open competition. In fact, collusive bidding and
price fixing result in increased costs, destroy public confidence in the
country1s economy and undermine our system of free enterprise.
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It has been shown time and time again that collusive bidding and price
fixing schemes cause the Government to pay much more for goods or services
then it would have if true competition existed. Even though this is the
case. the bids involved will often appear to be fair and reasonable. This
should not mistakenly be accepted as proof that collusive bidding'and price
fixing are not occurring or that a violation of law does not exist because
the harm in terms of monetary loss is not apparent. In fact, when such
conduct is criminally prosecuted, the defendants are prohibited from
introducing a"y evidence to justify their conduct or to demonstrate its
reasonableness.
C.
Indicators of Collusive Bidding and Price Fixing
The following list of indicators is intended to facilitate recognition
of those situations which may involve collusive bidding or price fixiny.
In and of themselves these indicators will not prove that illegal anti-
competitive activity is occurring. They are, however, sufficient to
warrant referral to appropriate authorities for investigation. Use of
indicators such as these to identify possible anticompetitive activity is
important because schemes to restrict competition are by their very nature
secret and their exact nature is not readily visible.
Practices or events that may evidence collusive bidding or price.
fixing are: .
1.
Ridders who are qualified and capable of perfo.rming but who
fail to bid with no apparent reason. A situation where fewer
competitors than normal submit bids typifies this situation.
(This could indicate a deliberate scheme to with~old bids.)
2. Certain contractors always bid against each other or conversely:- -
certain contractors do not bid against one another.
3. The successful bidder repeatedly subcontracts work to companies
that submitted higher bids or to companies that picked up bid
packages and could have bid as prime contractors but did not.
4. Different groups of contractors appear to specialize in Federal,
state or local jobs exclusively. (This might indicate a market
division by class of customer.)
5.
There is an apparent pattern of low bids regularly reoccurring,
such as corporation "XU always being the low bidder in a certain
geographical area or in a fixed rotation with other bidders.
Failure of original bidders to rebid, or an identical ranking of
the same bidders upon rebidding, when original bids were rejected
as being too far over the Government estimate.
6.
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7. A certain company appears to be bidding substantially higher on
some bids than on other bids with no logical cost differences to
account for the increase, i.e., a local company is bidding higher
prices for an item to be delivered locally than for delivery to
points farther away. '
8. Bidders that ship their product a short distance bid more than
those who must incur greater expense by shipping their product
long di stances.
Identical bid amounts on a contract line item by two or more
contractors. Some instances of identical line item bids are
explainable, as suppliers often quote the same prices to several
bidders. But a large number of identical bids on any service-
related item should be viewed critically.
10. Bidders frequently change prices at about the same time and to
the same extent.
9.
11. Joint venture bids where either contractor could have bid
individually as a prime. (Both had technical capability and
production capacity.)
12. Any incidents suggesting direct collusion among competitors, such
as the appearance of identical calculation or spelling errors
in two or more competitive bids or the submission by one firm of
bids for other firms.
13. Competitors regularly socialize or appear to hold meetings, or
otherwise get together in the vicinity of procurement offices
shortly before bid filing deadlines.
14. Assertions by employees, former employees, or competitors that
an agreement to fix bids and prices or otherwise restrain trade
exists.
,15. Bid prices appear to drop whenever a new or infrequent bidder
submits a bid.
16. Competitors exchange any form of price information among them-
selves. This may result from the exi stence of an "i ndust ry
price list" or "price agreement" to which contractors refer in
formulating their bids or it may take other subtler forms such
as discussions of the "right price."
17. Any reference by bidders to "association price schedules," "industry
price schedules," "industry suggested prices," "industry-wide
prices," or "market-wide prices."
18. A bidder's justification for a bid price or terms offered because
they follow the industry or industry leader's pricing or terms.
This may include a reference to following a named competitor's
pricing or terms.
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19. Any statements by a representative of a contractor that his company
IIdoes not sell in a particular area" or that "only a particular
finn sells in that area."
20. Statements by a bidder that it is not their turn to receive a job
. or conversely that it is another bidder's turn.
D. Collusive Bidding and Price Fixing Examples
The following sections describe common collusive bidding and price
fixing schemes which EPA personnel may be able to recognize. These schemes
relate to one another and overlap. Frequently an agreement by competitors
to rig bids will involve more than one of these schemes.
1. Bid Suppression or Limiting
In this type of scheme one or more competitors agree with at least
one other competitor to refrain from bidding or agree to withdraw a previously
submitted bid so that a competitor's bid will be accepted. Other forms of
this activity involve agreements by competitors to fabricate bid protests
or to coerce suppliers and subcontractors not to deal with nonconspirators
who submit bids.
2. Complementary Bidding
"Complementary bidding" (also known as .protective" or .shadow"
bidding) occurs when competitors submit token bids that are too high to be
accepted (or if competitive in price, then on special terms that will not be
acceptable). Such bi~s are not intended to secure the buyer's acceptance,
but are merely designed to give the appearance of genuine bidding.
3. Bid Rotation
In "bid rotation," all vendors participating in the scheme submit
bids, but by agreement take turns being the low bidder. In its most basic
form bid rotation will consist of a cyclical pattern for submitting the low
bid on certain contracts. This rotation may not be as obvious as might be
expected if it is coupled with a scheme for awarding subcontracts to losing
bidders, to take turns according to the size of the contract, or one of the
other market division schemes explained below.
4. Market Division
Market division schemes are agreements to refrain from competing
in a designated portion of a market. Division of a market for this purpose
may he accomplished based on the customer or geographic area involved. The
result of such a division is that competing firms will not bid or will
submit only complementary bids when a solicitation for bids is made by a
customer or in an area not assigned to them.
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CHAPTER VI:
COST MISCHARGING
A.
Introduction
Cost mischarging is one of the abuses which is common because of the
fact that many large EPA contracts are cost type contracts. Because EPA
reimburses all costs which are allowable, allocable and reasonable, the
contractor may increase profit by mischarging. If labor costs are mis-
charged, they may be multiplied by 100-300 percent in indirect cost
allowances. Sometimes a contractor is doing similar work for different
agencies on fixed priced and cost type contracts. Any work which can be
billed to the cost type contracts will be advantageous to the contractor.
Sometimes these costs are shifted into indirect cost pools.
Frequently work that is being done by low level technicians is billed
as being done by senior scientists or engineers at much higher rates.
Some work may be billed to several contracts or indirect cost pools. The
Government may be billed for the highest cost items by a contractor and
these items may be diverted to its commercial work or the contractor may
beget "discounts" which are not passed on to the Government or which are
applied to its commercial accounts.
The issue as to whether a mischarge was a IImistakell or a crime often
depends on the issue of intent. Investigator should examine the issue of
intent. Prosecutors are likely to pursue cases where intent is established
even though no substantial loss occurs particularly where the contractor
has actively sought to conceal costs.
B. Allowable Costs.
Under cost type contracts, EPA reimburses the contractor's costs which
are all owab 1 e, all ocab 1 e to the cont ract, and reasonable. These types ."of
contracts include cost plus fixed fee, cost plus incentive fee, cost plus
award fee, cost reimbursable and cost sharing contracts. Cost mischarging
occurs whenever the contractor charges EPA for costs which are not allowable,
not reasonable, or which cannot be directly or indirectly allocated to the
contract.
FAR 31.205 identifies costs which are allowable and those which cannot
be charged to Government contracts. Such costs may be direct costs, such as
labor and materials used on one contract and no other, or. indirect costs,
which contribute to a number of different contracts. Indirect costs are
placed in "cost pools" which are then allocated to contracts on some agreed
basis (such as total cost or labor hours). "
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Section 30.410 of 40 CFR defenses how EPA determines allowable costs. To
be allowable, costs must meet applicable statutory provisions and Federal cost
principles. EPA uses the following cost principles in determining allowable
costs for all EPA assistance agreements and subagreements under them, except
as otherwise provided by statute or this subchapter. Regardless of whether
the organization is the recipient o( the award or is performing services for
the recipient, the nature of the organization is the sole criterion for
determin1ng applicable cost principles.
1. State and local governments must use OMS Circular A-87 to
determine allowable costs;
2. Educational institutions must use: (a) OMS Ci~cular A-21 cost
principles for research and development, training, and other
educational services under grants, cooperative agreements, and
subagreements, and (b) OMS Circular A-88 which provides principles
for coordinating the establishment of indirect cost rates and the
auditing of grants, cooperative agreements, and subagreements; and
3. Other non-profit institutions must use OMS Circular A-122, as
revised.
Unallowable costs include:
1. Advertising costs (except to' obtain workers or scarce materials
for a contract or to sell surplus or by-product materials);
2. Bid and proposal costs in excess of a set limit;
3. Stock options and some forms of deferred compensation;
4.
Contingencies;
5. Contributions and donations;
6. Entertainment costs;
7. Costs of idle facilities except in limited circumstances;
8.
Interest;
Losses on other contracts;
9.
.,
10. Long-term leases of property or equipment and leases from related
parties are limited to the costs of ownership;
11.
Independent research and development costs beyond set limits; and
12. Legal costs related to a contractor's unsuccessful defense against
charges of contract fraud.
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C.
Accounting Mischarges
A type of fraud frequently encountered is called an accounting mischarge.
An accounting mischarge involves knowingly charging unallowable costs to EPA,
concealing or misrepresenting them as allowable costs, or hiding them in
accounts (such as office supplies) which are not audited closely. Another
common variation involves charging type of costs which have their limits
(such as bid and proposal costs or independent research and development
costs) to other cost categories.
D. Material Cost Mischarges
Material costs are sometimes mischarged. Numerous cases have been
discovered where EPA owned material was used on a similar commercial contract
but the material accountability records showed that the material was used on
an EPA contract. Also, there have been cases where EPA owned materials were
stolen and the thefts were concealed by showing the materials as being issued
to and used on EPA contracts. In other situations, materials have been
ordered from EPA, but upon receipt the materials were stolen and to conceal
the theft, entries were made to show that the order was cancelled.
Mischarges of materials are infrequent because the nature of the
material items limits their use on other contracts. Material mischarge is
usually limited to raw materials such as aluminum sheets, steel, etc., which
can be used on many different contract products.
E.
Labor Hischarges
Labor costs are mOre susceptible to mischarging than material costs
because the employee's labor can readily be charged to any contract. The
only way to assure that labor costs are charged to the correct contract is
to actually observe the work of each employee to determine which contract
he/she is working on and then determine from the accounting records that the
employee's cost is charged to the proper contract.
1.
Transfer of Labor Cost
This mischarge is usually made after the contractor realizes that
. he has suffered a loss on a fixed priced contract. To eliminate the loss, a
journal entry is made to remove the lahor cost from the fixed priced contract
cost and put it on the cost type contract. This type of mischarge is very
easy to detect but is difficult to prove. The contractor will contend that
the labor charges to the fixed price contract were in error and the journal
entry, transferring the cost to the cost type contract, was made to correct
that error. Frequently the dollar amount of the transfer is estimated.
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2. Time and Charges Do Not Agree with Contractor Billing to EPA
a. This accounting mischarge method is probably the easiest to
detect and prove. It is a simple matter of totaling the time and hours
expended on the cost type contract and comparing them to the hours billed.
For example, the time cards may show that 1,000 hours have been expended
on the cost type contract when, -in fact, the contractor has billed EPA
for 2,000 hours of labor. The difference is obvious and the accounting
records (time cards) will not support the billings.
b. Contractor labor billings to EPA are normally supported by two
accounting records. The source record is the individual employee time card.
The other record is the labor distribution. The labor distribution is
usually a computer printout that summarizes by contract the individual time
card entries. Usually the contractor will use the labor distribution to
support his EPA billings. It is relatively easy to falsify a labor distri-
bution but it is necessary to corrupt the entire work force to falsify the
time cards. Hence; the individual time cards should be totaled and
reconciled to the labor distribution at least on a test basis.
c. Contractor claims for overtime costs for salaries employees
even though payroll records show that employees were not paid for overtime
worked. Federal regulations prohibit contractors from claiming compensa-
tion for personal services rendered unless the compensation is paid to
employees.
3. Original Time Cards are Destroyed/Hidden and New Time Cards
are Prepared-for EPA's Benefit .
This is a very successful method of concealing a labor mischarge.
Mischarges of this nature are very difficult to detect. They are detect.ed
when:
a. The hidden time cards are inadvertently given to the auditor.
b.
finds them.
All of the old time cards are not destroyed and the auditor
c. Employee's signature on the time cards is a carbon .copy because
the employee's original signature has been traced.
d. Time card entries are compared to time records maintained by
individual employees (copies of time c~rds, logs, etc.).
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4. Changes are Made to Individual Time Cards
A frequent labor fraud encountered by auditors is where changes are
made to the original contract charge numbers on employees' time cards. Some
of the charges are so well done that it is difficult to tell that a change
has been made. In one instance, the change was made so expertly that the.
auditor could not tell that a change had been made just from looking at the
time sheet. The auditor detected the change by running his finger across
the ent~ and noticed a difference in the "feel." Under magnification, the
"white out" material used to cover the original entry could be seen. The
auditors used a "light box" to determine what the original charge had been;
i.e., by placing a light underneath the time sheet the auditor could read
through the "white out" to determine the original charge. Just because
changes are made on time cards, it does not necessarily mean that a fraud is
. being perpetrated. Many times innocent errors are made and corrected. In
determining the possibility of fraudulent activity, one should:
a. Determine the magnitude of the changes. If only a few changes
have been made then, in all probability, the changes were made to correct
errors. However, if a significant percentage of the charges have been
changed, the probability of fraudulent activity is increased.
b. Make comparison of the original charge number to the revised
charge number. If the net effect of the changes is to increase the charges
to cost reimbursable contracts, the likelihood of fraud is further increased.
c.
Make a review of the sequence of events.
d. Identify the employee who made the changes, find out why the
changes were made, and 'what was the employee's source of information for the
changed charge number.
5.
Time Card Charges are Made by Supervisors
One should be especially skeptical of timekeeping systems where
time card labor charges are posted by supervisors. Management can exert
pressure and influence on supervisors to accomplish certain goals. The
presSure may influence the supervisor to falsify time charges in order to
keep higher level management satisfied with his performance. An even more
, serious situation occurs when senior level management requires the supervisor
to record time charges in a manner most profitable to the company. Management
might even go so far as to provide supervisors with "budgets" of how to charge
the time for each job. However, if individual employees post their time cards
it would be difficult to corrupt the entire work force.
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6.
Impact of labor mischarges
When a labor cost is mischarged, so is the associated overhead and
general and administrative (G&A) expenses. Overhead costs. are allocated to
labor costs based upon an overhead rate or percentage. Therefore, any mis-
charging on labor rates also impacts upon overhead charges, which ultimately
results in a greater than double'loss to EPA. The same is true for G&A
rates. In computing the dollar amount of the fraud, one must add the overhead
and G&A cost because applied overhead and G&A will probably be more than the
labor cost involved. .
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CHAPTER VII:
PRODUCT SUBSTITUTION
A.
Introduction
The term product s~bstitution generally refers to attempts.by
contractors to deliver to EPA goods or services which do not conform to
contract requirements, without informing EPA of the deficiency, while seeking
reimbursement based upon alleged delivery of conforming products or services.
It is the policy of EPA that goods and services acquired must conform to the
quality and quantity required in the contract. Goods or services which do
not conform in all material respects to contractual requirements are to be
rejected. It is essential that this policy be strictly adhered to, as failure
to do so can result in providing substandard, untested and possibly defective
material to our personnel.
When a contract calls for delivery of an item produced by the original
equipment manufacturer (OEM), then the contractor must furnish that item.
This rule excludes even items that may be identical in all respects but are
not produced by the OEM. If the contract requires the delivery of end products
produced in the United States, then the contractor is obligated to supply items
manufactured in the United States. This is required, even though comparable
or identical items are available from foreign sources at lower costs to the
contractor. Further, if the contract requires that certain tests be conducted
to ensure that an item is suitable for its intended use and can be relied upon
to perform as expected, those tests must be conducted. The contractor's ability
to produce an item that will perform within acceptable limits regardless of
whether actually tested is not relevant.
Contractors frequently argue that substituted goods or services
delivered to EPA were -just as good" as what was contracted for even if
specifications are not met, and that, therefore, no harm is done to the
Government. There are several important fallacies to be noted when con-
sidering this argument. First and foremost, the substitute is usually not
as good as what was contracted for. In cases of product substitution
investigated to .date, the substitute is usually one of inferior quality or
the workmanship is extremely poor because it was done by lesser qualified
and cheaper labor. Secondly, while the immediate harm that the substitute
might cause or may have in fact caused is sometimes difficult to determine,
its introduction into supply channels undermines the reliability of the
entire supply system. If, for example, a microchip were in use in larger
components which failed, the cause of the failure might not be directly
traceable to the inferior quality of the microchip. Third, even if the ite~
is as good, there is harm to the integrity of the competitive procurement
system which is based upon all competitors offering to furnish the item
precisely described in the specifications.
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8. Fraud Potential
. There is a wide variety of fraudulent schemes that may involve what is
termed product substitution. Many of the recent product substitution fraud
allegations involve consumable or off-the-shelf items. .
Product substitution cases sometimes involve EPA employees. For example,
gratuities and bribes have been paid to Government inspection personnel to
accept items which do not conform to contract requirements.
The potential for a product substitution case is greatest where EPA
relies upon contractor integrity to ensure that EPA gets what it has paid
for. For example, fast pay procedures apply to small purchases. EPA pays
contractors for goods based on certification of shipment. Quality assurance
is frequently limited in scope and is performed after payment has been made.
Thus, small purchases such as these are particularly susceptible to
unscrupulous contractors.
In large dollar value procurements, EPA quality control personnel often
rely upon testing performed by the contractor. Falsification of the test
documents may conceal the fact that a piece of equipment has not passed all
the tests required by contract or has not been tested at all. False entries
may also conceal the substitution of inferior or substandard materials in a
product. When EPA personnel actually witness or perform tests themselves,
there is always the possibility that what they are seeing is a specifically
prepared sample not representative of the contractor's actual production.
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CHAPTER VIII:
PROGRESS PAYMENT FRAUD
A. . Introduction
Progress payments are payments made as work progresses under a contract
based upon the costs incurred. the percentage of work accomplished. or the
attainment of a particular stage of completion. They do not include payments
for partial deliveries accepted by the Government.
Fraud in progress payments occurs when a contractor submits a progress
payment request based on falsified direct labor charges. on material costs
for items not actually purchased. or on falsified certification of a stage
of completion attained/work accomplished.
When a contract contains one of the progress payment contract clauses,
a contractor may submit monthly progress payment requests and is entitled
to receive a contractually specified percentage (95 percent if the
contractor is a small business concern. 90 percent if the contractor if
not small) of its "total costs." There are two definitions for "total
costs." one for small businesses and the other for concerns which are not
small. These costs include direct and indirect labor as well as material
costs. For our limited purposes, the. only significant difference between
the two definitions concerns materials costs--a concern that is not small
must have actually paid for the materials for which EPA is being billed--
while a small business need only have incurred an obligation to pay for
the materials (although it must have acquired title to the materials).
The purpose of progress payments is to provide contractors with a
continuing source of revenue throughout contract performance and to ensure
that a contractor will have the necessary financial resources to. meet its'
contractual obligations. Although some progress payment requests are audited
before payment. for the most part, EPA relies solely upon a contractor's
integrity in making these payments. When a contractor requests payments for
costs not actually incurred. EPA is harmed in many ways: (1) the contractor
has .the interest free use of money to which it is not entitled and which EPA
itself may have had to borrow from the public; (2) EPA may lose its advances
if the contractor goes out of'business and there are no materials or completed
products against which EPA may assert an interest; and (3) honest contractors
lose their faith in' the system and others. who are less scrupulous. are
encouraged to take advantage of the system.
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B. Progress Payment Fraud Indicators
Finns with cash flow problems are the most likely to request funds in
advance of being entitled to them. Progress payments which do not appear to
coincide with the contractor's plan and capability to perform the contract
are suspicious. This could indicate the contractor is claiming payment for
work not yet. done.
Another type of contractor fraud in this area is to submit a progress
payment claim for materials which have not been purchased. The contractor
may be issuing a check to the supplier, then holding it until the Government
progress payment arrives. One way to confirm this irregularity is to check
the cancellation dates on the contractors checks. If the bank received the.
check about the same time or later than the contractor received the progress
payment, the check was probably held.
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CHAPTER IX:
FAST PAY FRAUD
A. Introduction
There are specific FAR regulations regarding fast pay. In general, the
fast pay procedure is limited to contract orders that do not exceed $10,000
for civilian agencies or $20,000 for DoD. The fast payment procedure spelled
out in FAR 13.3 is designed to -reduce delivery times and to improve EPA's
relations with its suppliers by expediting contract payments. The procedure
"provides for payment based on the contractor's submission of an invoice.
That invoice is a representation by the contractor that the supplies have
been delivered to a post office, common carrier, or point of first receipt.
Fraud in fast pay occurs when a contractor submits an invoice requesting
payment for supplies which have not been shipped or delivered to EPA. If
the supplies are not in transit or actually delivered at the time the con-
tractor submits his/her invoice, a criminal violation has occurred. It does
not matter if the supplies are subsequently delivered to EPA.
The fast pay procedure benefits both the contracting community and the
Government. However, contractor integrity and honesty is essential.
Payments are made before EPA is in a position to verify that it has received
what it bargained for. In many cases, especially where overseas deliveries
are involved, it may be weeks or even months before the activity which
actually issued the fast pay order is advised of either a nonconforming
delivery or a nonreceipt. By that time an unscrupulous contractor may have
had an opportunity to bilk EPA out of thousands of dollars and to drop out
of sight. Because of the potential for large losses and the effect that
such losses could have on continued use of the fast pay procedure, immediate
detection of those who have abused the system is necessary.
B.
Fast Pay Fraud Indicators
How can personnel dealing with fast pay identify possible fraud? The
most obvious, and sometimes most difficult thing to do, is check for the
correlation between the claim for payment and the delivery of goods. Since
the" claim for payment and receipt of goods occur at different locations this
will require communication between paying and receiving points. An employee"
who becomes suspicious should check with the receiving point to verify that
the goods have arrived. Some important things to check for incl~de: not
receiving the goods at all, receiving the goods later than would be expected
if they were mailed when claimed, and receiving nonconforming goods. The
latter sometimes occurs because the contractor has lost the incentive to
perform fully to contract specifications after he/she has been paid.
Personnel should also be alert for indications that the
submitted by the contractor is forged or altered in some way
appear that the goods were sent. Information on the invoice
questions such as shipment on a weekend or holiday.
invoice
to make it
may raise
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CHAPTER X:
CIVIL, CONTRACTUAL, AND ADMINISTRATIVE REMEDIES FOR FRAUD
A.
Introduction
Traditionally, EPA contracting officials have relied upon the criminal
justice system to police fraud by contractors. This reliance has included
forebearance from certain administrative and contractual actions until the
criminal case is completed. However, this reliance is often misplaced for
a number of reasons. First, a 1981 GAO report determined that two-thirds
of all fraud cases which were referred to the Department of Justice (OOJ)
for criminal actions were declined. The majority of cases were declined
because the DOJ did not have adequate resources to prosecute the cases, and
not because there was insufficient evidence to conclude that a fraud was
committed upon the United States.
Second, criminal cases must be proven beyond a reasonable doubt. While
there may be insufficient information to warrant a criminal conviction,
contracting officials do not need that level of evidence in order to take
administrative and contractual action.
Third, even if criminal action is taken many serious cases are plea
bargained down to minor offenses. This tends to confuse many people into
incorrectly thinking that there was no proven serious offense. In one
documented case, four nonappropr1ated fund officials pled guilty to accepting
bribes from a contractor. The contractor, however, pled guilty only to a
misdemeanor - trespassing o~ a Federal reservation. Contracting officials
believed the misdemeanor was an indication that the contractor1s action was
not serious. In fact, the actual evidence revealed the significant nature
of this criminal conduct, despite the nature of his plea.
Finally, contracting officials and not the DOJ are responsible. for the
integrity of the contracting process. The FAR requires contracting officials
to take positive action on any evidence of contractor impropriety and non-
responsibility. It 1s, therefore, necessary for managers and contracting
officials to be aware of and utilize the civil, administrative, and contract-
ing powers which are available to protect EPA, to prevent further loss to
EPA, and to recover EPA funds lost thro.ugh fraud.
B.
Coordinated Approach to Remedies
".
Because EPA officials are responsible for the integrity of contracts,
these officials must be prepared to take immediate action to protect the
Government. This often includes positive action while a criminal investiga-
tion is under way, and before an indictment or a conviction has been obtained.
Criminal cases often take years to complete and can take many contractual
and administrative actions on evidence less than that necessary for an
indictment or conviction. Often, timely action by a contracting official,
such as a preindictment suspension or a contract default termination, will
aid EPA by precluding a contractor from continuing to benefit from fraudulent
"conduct while an investigation is under way.
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Furthermore, by taking a coordinated approach to criminal, civil,
contractual, and administrative actions EPA is often able to induce guilty
contractors into pleading guilty more quickly. Simultaneous consideration
of all the remedies available also enables EPA and the court to fashion a
single comprehensive remedy package which will punish the contractor, prot~ct .
the EPA, and make EPA whole from any losses suffered.
C. Civil Actions
1. Civil False Claims Act
EPA has the right to take civil action against fraudulent contractors
based upon a number of statutory grounds. These civil actions are filed by
DOJ and may be filed in conjunction with, after, or instead of a criminal
prosecution.
The submission of a false claim to EPA can make a contractor liable
to the government both criminally and civilly. The Civil False Claims Act,
31 U.S.C. 3729-3731, establishes civil liability for false claims. The act
provides for a civil penalty of $2,000 per false claim and double the damages
suffered by EPA. For example, if a contractor falsely certifies small
business status in order to get a small business set-aside contract, every
claim submitted on the contract is a civil false claim, even if the contractor
performs satisfactorily. EPA may recover double the value of the contract,.
plus $2,000 for every invoice submitted.
2. Contract Disputes Act
Under the Civil False Claims Act, EPA may only recover double damages
when the Government has actually suffered damages; i.e., when a false claim
is paid. If an audit or investigation determines that a claim is false and
payment is not made, EPA is limited to the $2,000 penalty. However, under
the Contract Disputes Act, 41 U.S.C. 604, a contractor is liable to EPA .for
the amount of any unsupported claim, if the claim is based on fraud or mis-
representation of fact. Under this statute EPA does not have to pay the
claim in order to recover.
D. Contract Actions
Under contract law and principles, EPA has the right to insist upon
certain standards of responsibility and business integrity from its contrac-
tors. Any indication that a contractor has violated these principles gives
EPA the right to take a variety of actions. These actions may be taken in
conjunction with, after, or instead of a criminal prosecution.
35
4-149
-------
1. Termination for Default
The submission of false claim or statement on a contract is clear
evidence of a contractor's nonresponsibility and failure to perform on a
contract. The contracting officer has the right and obligation to terminate
the contract for default. Terminations for convenience are never appropriate
when fraud is present on a con~ract.
Furthermore, certain improper actions also give rise to a right to
terminate for default. EPA has the right to terminate any contract for
default whenever a contractor offers a gratuity to an EPA employee.
2. Denial of Claims
In addition to terminating a contract for default, contracting
officials also have an obligation not to pay claims which are tainted by
fraud. Under the Contract Disputes Act, 41 U.S.C. 605, EPA is not authorized
to "settle, compromise, payor otherwise adjust any claim involving fraud.1I
Therefore, whenever fraud is detected on a claim, contracting officials
should not take any further action on any portion of the claim without co-
ordination with the DOJ.
3. Findings of Nonresponsibility
Under FAR 9.1, contracts may only be awarded to responsible
contractors. Contractors are required to affirmatively demonstrate their
responsibility, including a satisfactory record of integrity and business
ethics. Any evidence of fraud by a contractor is clearly a matter which
. should be considered by contracting officers in making responsibility
dete rmi nat ions.
4.
Suspension and Debarment
Under 40 CFR, Part 32, contractors may be precluded from doing
business with EPA for the commission of fraud or for various other actions
indicating a lack of business integrity. Suspension is an interim measure
designed to protect the Government while a criminal investigation or trial
is under way and evidence of.fraud is present. A contractor may be suspended
for up to 18 months while legal proceedings are under way, and once an
indictment or civil suit is filed, the contractor remains suspeRded until
the- completion of all legal proceedings.
.,
36
1;;...15Q
-------
Debarment is an action taken by a debarring official for one of the
regulation's enumerated causes, to exclude a contractor from Government con- .
tracting for a specified period. A contractor can be debarred, based upon a
conviction of a crime, or upon sufficient evidence that a contractor has
repeatedly failed to perform properly or has committed acts which indicate a
lack of business integrity and honesty. Debarment can be in effect for up to
three years.
In order for the suspension and debarment procedures to be effective,
it is essential for contracting officers to forward reports of improper
contractor activity to the cognizant Chief of the Contracting Office at the
earliest opportunity. Reporting procedures are set forth in EPA Acquistion
Regulations, Supplement 1509.4.
5. Disallowance of Legal Costs
Contractors who have engaged in fraud on cost type contracts are not
entitled to recover legal and administrative costs relating to their defense
against Government action (FAR 31.205-47). It is important for contracting
officers to take prompt action to require contractors to identify such costs
while an investigation is under way and to deny claims for such costs in all
appropriate cases.
E. Personnel Actions
EPA has a variety of remedies to take against EPA employees who have
colluded with contractors in fraudulent conduct or when an EPA employee has
engaged in improper actions such as receipt of bribes or gratuities or has
been engaged in conflict of interest. These remedies include, but are not
limited to:
1. Termination. The receipt of a bribe or gratuity, or actions
indicating a personal conflict of interest, can justify the
immediate termination of a Federal employee.
2. Revocation of a contracting officer's warrant. Contracting
officers who engage in improper conduct can lose their right
to contract on behalf of the Government.
3. Recoupment of funds lost. Whenever a contractor gives a bribe
or gratuity to an EPA employee, both the contractor and the
employee are jointly liable to EPA for an amount equal to the
value of the bribe or gratuity.
37
4-151
-------
If you knovv or suspeC1:. . .
FRAUD,
:.WASTE OR
ABUSE
ofEPA
resources
. call the
INSPECTOR GENERAL
HOTLINE
.,
. INFORMATION IS CONFIDENTIAL
. CALLER CAN BE ANONYMOUS
800 424-4000 or 202 382-4977
. ft~
u.s. INYIAONMENTAl PRon;CTION AGENCY. OFFICE OF THE INSPECTOR GENERAL. 401 M STRHT S W WASHINGTON. DC. 20460 o~
4-152
-------
&EPA
Integrity and Management Improvement
86-2
September 1986
Indicators of Fraud in EPA Procurement
This Awareness Bulletin is intended to heighten the
awareness of EP A managers to the potential for fraud
in EPA.funded projects. This bulletin indicates practices
which could help you identify circumstances where fraud
is likely to take place or indicate that fraud has already
occurred.
Each EP A employee has the responsibility to report any
indications of fraud. waste. or mismanagement promptly
to their supervisor or directly to the Office of Inspector
General. Even the best designed systems can be
penetrated; and with relatively simple schemes. unless
participants in those systems exercise their assigned
duties in an honest and responsible manner. and those
reviewing the systems are alert to these fraud indicators.
Why is There Fraud?
. Fraud may be perpetrated to obtain a contract at a
higher price or with better terms than would have
occurred in an award untainted by fraud.
. Fraud may be perpetrated by potential contractors to
get EP A contracts because they need the business to keep
their companies in operation when private sector activity
is low. .
. Fraud may be perpetrated to obtain a contract in order
to create the opportunity to engage later in such activities
as theft or embezzlement. product substitution. cost
mischarging. fast payor progress payment fraud.
Procurement Fraud Indicators
Included below are some schemes by which procurement
frauds can be perpetrated as well as some actions that
management. can take to prevent or discourage their
occurrence.
t
Indicator No.1: Change Order Abuse
How Perpetrated
A company bidding on a contract. in collusion with
personnel from the requesting organization. submits a
low bid to assure receiving the contract award. However.
the company has been assured that change orders will be
issued during the life of the contract to more than
compensate it for the low bid. After the contract is
awarded. the contractor and the procuring official then
I share in the excessive reimbursement resulting from the
numerous and!or high dollar value change orders issued
against the contract.
How to Detect
. Analyze contract change orders for the addition of new
items and for significant increases in scope. quantities.
and price of existing contract items.
. Look for such indicators of change order abuse as:
- an employee directly involved in determining
requirements as well as procuring the item, or taking a iob
with the contractor: and
- request for change order signed at a higher level than
the original procurement request.
Suaested Preventive Actions
. Managers should be alert to contracts where numerous
. and/or high dollar value change orders are proposed or
issued.
. Management officials should carefully review all
proposed change orders involving price increases to
assure that the additional monies are for the necessarv
additions to the work scope of the contract and not merel}'
to increase the contractors' profits. .
. The contracting officer should determine the
reasonableness of excessively low bids through anal~'sis
of indepe~dent estimates and cost and pricing data.
Indicator No.2: Rigged Specifications
How Perpetrated
In developing specifications. the requesting organization
tailors them to meet the qualifications of one particular
company. supplier. or product. This applies mostly to
procurement of special equipment and fixtures.
How to Detect
. Compare specifications established for a particular
procurement with the contractor's description of its
product or service. Nearly identical matches would
indicate the possibility of rigged specifications.
'. Other indicators of rigged specifications include:
- receipt of only one bid:
- one bid significantly lower than others:
. - sole source procurement: and
- protest filed by bidders either with EPA or with tht'
General Accounting Office.
4-153
-------
Suggested Preventive Actions
. Reviews should be made by managers of the requesting
organization to determine the validity of procurement
requirements and specifications and that adequate
consideration has been given to alternative products.
features. processes. etc. The contracting officer 'should
carefully review bids and maintain close coordination
with the requesting organization to assure that all bids are
properly considered.
. Reviews of bid protests (formal and informal) by the
contracting officer would also provide possible
indications of problems.
Indicator No.3: Co-Mingling of Contracts
How Perpetrated
A company is awarded separate contracts for various
efforts, e.g., partition contracts, ceiling contracts.
electrical contracts, painting contracts. flooring contracts.
etc. Each contract has provisions to allow for items which
are in the other contracts. Through collusion, the
contractor can bill for the same work on each of the
contracts. The requesting organization would write
similar work orders under each contract. thus facilitating
the duplicate billings.
How to Detect
. Identify contracts awarded to the same company and
determine whether they run concurrently and if each
provides for the same efforts.
. Review documentation supporting contractors'
billings for similar efforts performed under more than one
contract by the same contractor.
Suggested Preventive ActioDS
. The approving official in the requesting organization
should review contracts prior to award to assure that
statements of work to be performed are not duplicated in
other procurements. If more than one location is involved.
the amount and type of work to be performed at each
location must be clearly specified.
. . The contracting officer should identify contractors
.,.with more than one contract with similar or same work
statements. Billings on contracts, so identified. should be
especially monitored by the contracting officer and the
project officer to disclose duplicate payment possibilities.
Inspection reports should be required 10 accompany
billings to assure that work is acceptable dnd conforms to
specifications.
Conclusion
This bulletin is only a beginning point. The Committee on
Integrity and Management Improvement has published a
booklet. "Fraud in EPA Procurement." to assist EPA
personnel in identifying circumstances where fraud is
likely to take place or may have already occurred. It
describes actions that can be taken when fraud is found
and includes actual examples of fraud at EPA. Copies of
this publication can be obtained by calling the Office of
Inspector General on ITS 475-8960.
Remember that eliminating fraud. waste. and abuse is
the responsibility of all employees. The EPA hotline (toll
free 800-424-4000 or ITS 382-4977) provides employees
.with a convenient and confidential means of reporting
improprieties.
'4-154
-------
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Introduction to Construction
5-1
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(V) CONSTRUCTION
MODULE:
( 17)
Introduction
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the parameters of construction
o Understand different remedial actions including surface
water, and gas controls
o Understand construction considerations for various remedial
actions.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
5-2
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INTRODUCTION
TO
CONSTRUCTION
CONSTRUCTION
Building, erection, alteration, remodeling, painting, repair,
improvement, extension (including dredging and
excavation) of buildings, structures or other real property
Also remedial actions
5-3
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REMEDIAL ACTIONS
. Surface Water Controls
- Capping
- Floating covers
- Grading
- Revegetation
- Surface water diversion and collection
REMEDIAL ACTIONS (Continued)
. Air Pollution Controls
- Control of gaseous emissions
- Gas collection and recovery
- Dust suppressant
- Wind screens and fences
- Water spraying
5-4
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REMEDIAL ACTIONS (Continued)
. Ground Water Controls
- Pumping
- Subsurface drains
- Subsurface barriers
REMEDIAL ACTIONS (Continued)
. Gas Control
- Passive perimeter gas control
- Active perimeter gas control
- Active interior gas control
5-5
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-------
REMEDIAL ACTIONS (Continued)
. Disposal
- Excavation and removal
- Off-site disposal
-On-site land disposal
. Contaminated Sediments
- Dredging
- I n-situ control
REMEDIAL ACTIONS (Continued)
. In-Situ Treatment
- Bioreclamation
- Chemical treatment
- Physcial methods
5-6
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REMEDIAL ACTIONS (Continued)
. Direct Waste Treatment
- Aequeous waste treatment
- Solids treatment
- Solidification/Stabilization
- Gaseous waste treatment
- Thermal destruction
. Water supply and wastewater disposal
. Treatment or replacement of water supply
- Central
- Point-of-use
. Replacement or rehabilitation of pipes
CONSTRUCTION CONSIDERATIONS
. Layout and quantity surveys
. Clearing and grubbing
. Earthwork
. Underground pipe systems
. Pavi ng
. Grassing, planting and erosion control
. Concrete for structures
. Structural steel
. Welding
5-7
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CONSTRUCTION CONSIDERATIONS
(Continued)
. Masonry
. Carpentry
. Plumbing
. Electrical
. Equipment procurement
. Inst~lIation of equipment
. Pile construction
. Levees and earth embankments
. Drilling
5-B
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NOTICE TO PROCEED
To:
Date:
Project:
You are hereby notified to commence WORK in accordance with the Agreement
dated , 19 , on or before , 19 , and you
are to complete the WORK within consecutive calendar days thereafter.
The date of completion of all WORK is therefore , 19
0-
By
Title
ACCEPTANCE OF NOTICE
Receipt of the above NOTICE TO PRO-
CEED is hereby acknowledged by
this the
day
,19-
of
By
Title
.5-9
Document No.9
Notice to Proceed: Page 1 01 1
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5-10
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Preconstruction Conference
5-11
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-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT: . (V) CONSTRUCTION
r10DULE:
(18) Preconstruction Conference
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand
the
issues involved
in
the preconstruct ion
conference
o Outline a proposed agenda for a preconstruct ion conference.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard
copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
\
5-12
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-------
PRECONSTRUCTION CONFERENCE"
(After notice to proceed)
. Owner
. Project manager
. Construction contractor
. Design Engineer
. Resident engineer
. Others
PRECONSTRUCTION CONFERENCE"
ISSUES
1. Points of contact for all parties
2. Lines of authority and responsibility
3. Interrelationships among the Engineer, Contractors,
others
4. Periodic progress meetings
5. Access to work for inspections
" 6. Construction schedules and notification for delays
7. Flow of documents such as payment requests, change
orders and inspection reports
5-13
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-------
PRECONSTRUCTION CON FERENCE
ISSUES (Continued)
8. Change order review and approval
9. Payment process
10. Contractors' compliance with plans and specifications
and regulations
11. Need for adequate documentation for project costs
12. Labor standards
13. Laboratory and testing requirements
5-14
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AGENDA - PRE-CONSTRUCTION CONFERENCE
1.
2.
Introduction of attendees
3.
Authority of participants
Compliance with local, state and federal laws such as OSHA, EEO, Minority,
Women's and Small Business, Davis Bacon.
4.
The names and titles of all persons authorized by the Contractor and
Sub-Contractor to represent and execute documents, with samples of all
authorized signatures.
The names, addresses and telephone numbers of all those authorized by the
Contractor and Subcontractors to act in emergencies.
5.
6.
Construction plans, progress schedule, and schedule of values submitted by
Contractor.
7.
8.
Communication procedures between the parties.
Construction permit requirements, procedures, and posting.
9.
or private
10.
Procedures concerning the installation of Work on public
property not owned.
Review of construction schedule as it pertains to the interfacing of work
by others.
11.
12.
Access and rights-of-way furnished by the Owner.
Forms and procedures for Contractor's submittals.
13.
14.
Change Order - form and procedures.
Payment application forms and procedures and the revised progress schedule
reports to accompany the applications.
15.
16.
Designation of the Contractor's Safety Officer and qualifications.
First-aid and medical facilities to be furnished by Contractor.
17.
Contractor's provisions for barricades, traffic control, utilities,
sanitary facilities, and other temporary facilities and controls.
Project sign for Owner per the Specifications.
18.
19.
Inspector's duties and relationship with Engineer.
20.
Constructions surveyor and initiation of surveying services.
5-15
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21.
22.
. . -'.' '. . '-.~ ."
Testing laboratory or agency, and testing procedure.
Construction equipment and methods proposed by the Contractor.
23.
24.
Procedures for payroll and labor cost reporting by the Contractor.
Other administrative and general matters as needed.
25.
26.
Field office location.
Forms to be used.
27.
28.
Contractor's responsibility for quality control.
Shop Drawing and as-built plans and specs; literature for O&M Manual.
29.
30.
Safety is responsibility of contractor.
Control and supervision of subcontractors, insurance, etc.
31.
Access to site, storage areas, landfill
concerns.
and records,
and environmental
32.
Site cleanup, haul roads to be used, and access road restoration after and
during construction.
Contractor performance in accordance with progress and payment schedules.
33.
34.
Accounting records to be maintained by the contractor.
Responsibility for coordination between contractors.
35.
36.
Minimum wage-posting of wage rate determinations.
Contractor shall install the outside bulletin board, OSHA poster, EEP
poster, company EEO policy, federal wage rates and Notice to Labor Unions
or other organizations of worker's nondiscrimination in employment.
37.
38. . Issuance of Notice to Proceed.
39.
Small, Women, Minority and Labor Surplus Area Businesses:
The following will be needed by the Owner and Engineer on a monthly basis:
PRIME CONTRACT:
- Total dollar amount of Prime Contractor.
- Total dollar amount of SWMLSAB Participation.
- Proposed percentage of SWMLSAB Participation.
5-1()
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FOR EACH SWMLSAB SUBCONTRACT:
- Name of SWMLSAB.
- Address.
- Phone Number.
- Dollar of Contract.
- Work actually performed
to date.
5-17
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5-18
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Schedules
5-19
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-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN. THE SUPERFUND PROGRAM
UNIT:
{V} CONSTRUCTION
MODULE:
{19} Schedules
ESTIMATED TIME:
30 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand the necessity of optimal scheduling
o Understand critical path planning/scheduling
o Understand principles of PERT and CPM
o Understand methods of administering revisions
schedules.
to project
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants
o Exercise: "CPM"
- Handout for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
5-20
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-------
SCHEDULES
WHY KEEP A SCHEDULE?
1 . Ti me is money
2. Tool for discussing contract with other parties, i.e. EPA
3. Principal tool for control of contract progress:
A. In initial development of schedule
B. In monitoring on-going performance
4. Basic documentary and analYtical tool for negotiation
and settlement of:
A. Request for equitable adjustments
B. Claims and disputes
C. Termination
5-21
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KEY PHASES OF SCHEDULING
. Preconstruction schedules
. Create contract schedule provisions
. Monitoring, updating and progress reporting
. Administration of schedule revisions
ROLES AND RESPONSIBiliTY
. Drafting schedule provisions
- Qualified personnel
- Establish basic guidelines
- Legal review .
. Enforcement of the provision
- Owner's role
- Explicit approval or rejection
- Contractor sanctions for non-compliance
5-22
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-------
ROLES AND RESPONSIBiliTY (Continued)
. Control of the schedule
- Exclusive responsibility of contractor
- Handling unforeseen conditions
- Interface impacts
- Timely response to contractor submittals
. Revisions to the schedule
- Owner imposed
- Contractor engendered
- Approval
PRECONSTRUCTION SCHEDULES
. Establish overall contract durations
. Establish key milestones
. Identify critical interface points
. Supports engineers cost estimate
5-23
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CREATE GOOD SCHEDULE PROVISIONS
INCLUDe
. Type of schedules
-CPM
-Barchart
. Level of detail
- Duration limits
- Types of activities
. Type of progress reports
. Updating frequency
CREATE GOOD SCHEDULE PROVISIONS
(Continued)
. Cash flow requirements
- Payment from schedule (if used)
. Change progress
. Float control
. Use of shift work
. Computerization requirements
5-24
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MONITORING, UPDATING AND
PROGRESS REPORTING
. Updating frequency
. Updating progress against plan
- By activity
- Percent complete
- Forecast work remaining
- Activities complete and started
- Identify delays and causes
- Identify problems
. Progress reporting
- Formats
- Progress photos
- Exception reports
ADMINISTRATION OF SCHEDULE
REVISIONS
. Contractor's replanning
- Contractor implements self-directed changes in sequence
- Owner must ascertain impact on others
. Schedule compliance
- Who initiates revision if delay is apparent
- Contractor increases effort
- Reschedule to maximize concurrency of accomplishment
. Incorporation of changes
- Owner or contractor
. Approval of change
5-25
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-------
SCHEDULING SYSTEMS
. Milestone Charts
. Bar Charts
. Critical Path Method Diagrams
. Complete Project Management (CPM)
MILESTONE CHARTS
. Tracks major events
. Useful to owner for tracking overall remedial response
5-26
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-------
SCHEDULE LISTING
PROJECT SCHEDULED ACTUAL
NUMBER DECRIPTION START END START END
DATE DATE DATE DATE
J31 D01 DESIGN 6/10/83 6/10/84 7/15/83
ACTIVITY 1
J31 D02 DESIGN 10/01/83 5/01/84
ACTIVITY 2
J31 G01 CONSTRUCT 9/01/84 3/15/86
ACTIVITY 1
BAR CHARTS
. More detail than milestone chart
. Useful to owner for overall management and control
5-27
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-------
BAR
CHARTING
PROJECT DESCRIPTION
NUMBER
1983
1984
1985
1986
J31 D01
DESIGN
ACTIVITY 1
J31 D02
DESIGN
ACTIVITY 2
J31 G01
CONSTRUCT
ACTIVITY 1
CRITICAL PATH METHOD
Associated General Contractors of America
. GSA and Corps of Engineers
Plan, schedule and control projects in which the activities
in the projects, and their dependency relationships are
relatively easy to define.
. One duration estimate
. Activity oriented
. Network analysis technique
. Valuable tool for contractor (if used)
5-28
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-------
CRITICAL PATH METHOD ADVANTAGES
. Large/complex projects
- Manual analysis: less than 100 tasks
- Computer analysis: Greater than 100 tasks
. Defines
- Task interrelationships
- Critical activities
. Critical path is a part of procedure
. Plan and schedule, in sequence, the details to complete
the job
CRITICAL PATH METHOD ADVANTAGES
(Continued)
. Systematic organization of the flow of work and materials
. Save time and money
. Predict when activities will occur
. Revise and i"mprove based on actual job conditions
. Aids in maintaining control
5-29
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-------
CRITICAL PATH METHOD DIAGRAMING
. Planning phase
- Diagram activities and relationships
- Manual operation
- Personnel with construction experience
- 60 percent effort
. Estimating phase
- Provide activity durations
- Provide activity cost estimates
. Scheduling phase
- Network calculations
- Early/late - start/finishes
- Float identified
- Critical path identified
- Project duration established
- Personnel with scheduling experience
HIERARCHY OF SCHEDULES
TOTAL PROGRAM
MAJOR SUB-SYSTEMS
(MULTIPLE CONTRACTS)
INDIVIDUAL CONTRACTS
SCHEDULED BY MANAGEMENT
1111111"'''''''''''''''''''''''''''''''''''''''''''''''
SMALLER WORK ELEMENTS
SCHEDULED BY CONTRACTORS
.5-30
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NETWORKING (C.P.M.)
A
B
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NETWORKING (C.P.M.)
DAY 1
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5-31
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REVIEW OF CPM PROVISIONS
. Deficient/ambiguous provisions
. Difficult to price provisions
. Failure to provide feedback
. Absence to known sequencing conditions
. Failure to address float ownership
. Threat of adverse actions
5-32
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BAR CHART ANALYSIS PROBLEM
GIVEN:
1. Project Planned Progress Bar Chart shown on next page.
2. Contractors Actual Progress as of 30 April 19XX is as follows:
ACTUAL PROGRESS
ESTIMATED
ITEM COST WIP EARNED WIP ERECTED
$ % $ %
Technical Shop $247,000
Foundation & Slab (35,000) (35,000)
Struct & Misc Steel (28,000) (25,000)
Masonry & Bucks (37,000) (1 9 , 000)
Roofing & Deck (20,000) ( 0 )
Millwork & Finish (49,000) (39,000)
Mechanical & Elec (78,000) (20,000)
Administrative Bld~ $300,000
Foundation & ab (33,000) (33,000)
Struct & Misc Steel (39,000) (35,000)
Masonry & Bucks (54,000) (27,000)
Roofing & Deck (1 5 , 000 ) ( 0 )
Millwork & Finish (76,000) (43,000)
Mechanical & Elec (83,000) (20,000)
Exterior Utilities $ 53,000
Walks (3,000) 0 )
Curbs (6,000) 0 )
Paving (24,000) 0 )
Utilities (20,000) 0 )
TOTAL CONTRACT $600,000
3. Contractor's progress through April includes masonry block delivered (but
not laid) because of non-delivery of window and door bucks due to delay-rn
drawing approval. Also contractor has purchased and stockpiled (but not
installed) all millwork materials. Engineer allows contractor customary
80% of the value of non-installed materials, paid for by the contractor
and available on the site.
5-34
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4.
Contractor's prior accumulated actual
follows:
progress completion totals were as
MONTH
PROGRESS EARNED
PROGRESS ERECTED
January
February
Ma rc h
10%
20%
30%
2%
5%
10%
REQUIRED:
1.
Graph contractor's pay WIP including item and total bar percentages and
IISII curve.
2.
Determine true status of job as of 30 April
completion date.
For your analysis plot both progress pay and erected work curves against
the planned progress curve.
and forecast probable
3.
4.
In this example what are the principal influences on the contractor's
progress?
5-35
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CPM PROBLEM
To illustrate how the three planning steps of activities, job logic,
and network go together, consider a simple project consisting of only a
few steps, such as the construction of a heavy reinforced concrete slab on
a grade. Let us assume the job to be subdivided into eight activities as
listed in Figure 1. The activity "Procure reinforcing steel II will be
recognized as a job restraint.
The job logic or the time-sequence relationships among the activities
of the CPM Problem must now be determined. The sequence of operations
will be the following:
The procurement of reinforcing steel, the excavation, and the
building of forms are all opening activities that can proceed
independently of one another. Fine grading will follow excavation, but
forms cannot be set until both the excavation and form building have been
completed. The placing of reinforcing steel cannot start until fine
grading, form setting, and steel procurement have all been carried to
completion. Concrete will be placed after the steel has been placed, and
finishing will be the terminal operation, proceeding after the concrete
placement.
.j
CPM PROBLEM:
REINFORCED CONCRETE SLAB ON GRADE
Acti vi ty
Excavate
Buil d Forms
Procure Reinforcing Steel
Fine Grade
Set Forms
Place Reinforcing Steel
Pl ace Concrete
Finish Concrete
Figure 1:
Symbol
Activity
Immediately
Following
EX
BF
PS
FG
SF
PR
PC
FC
FG, SF
SF
PR
PR
PR
PC
FC
CPM Problem Job Logic
G-37
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20 50
~ Excavate ---- Fine I--
- grade
(EX) (FG)
10 30 ... 60 L.,. 70 80 90
Start Build ~ Set Place Place Finish
forms forms ... steel concrete concrete
(BF) (SF) (PR) (PC) (FC)
40
... Procure
steel
(PS)
Figure 2 CPM Problem, precedence diagram.
In elementary form, this is the kind of information generated as a
project is talked through.
As has already been mentioned, the diagram is normally drawn
concurrently with the development of the job plan, and the operational
sequence is not otherwise recorded or listed. There are occasions,
however, when it is useful to list the job logic.
Job logic can be listed in several different ways, no one procedure
necessarily being any better than another. A common way of expressing the
necessary activity sequence is to list for each activity those following
activities that can start immediately after, and only after, the given
activity is finished. This is a sufficient system for enumerating job
logic and will be used herein. Figure 1 presents the job logic of the CPM
Problem. The precedence diagram describing the prescribed sequence of
activities is shown in Figure 2. .
Figure 2 is a complete project plan in graphical form. It shows what
is to be done and in what order it will be accomplished. The diagram
serves as the construction flight plan and points the way on a daily
basis. A precedence network of the project is an extraordinarily
efficient medium for communication among owner, architect-engineer,
contractor, subcontractors, and other members of the construction team.
5-38
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-------
Float Ownership-
Some Recommendations
Dr. Gui Ponc~ de Leon, P.E., Senior Principal
Project Management Associates, Inc.
With increasing use of Critical Path net-
works. project controls practitionefS are
faced with deciding whether or not delay of
a non-critical activity should justify a time
extension. While proper management of
the critical activities is a must in order to
complete the project within a scheduled
time. just as important is the management
of non-critical activities and their float time.
In a CPM network. total float denotes
the amount of time an activity may be
delayed without extending the network
finish. This definition. simple in theory. is
much more difficult to administer in prac-
tice. This IS so because an activity's total
float is but an aggregate of the lIoats of the
actIVIties that follow it. For instance. in the
network below. the lIoat of activity E, really
originates at activity 51,
TF '0
CPM Network
I This is to say that if E, is delayed by
either five or ten days. then both C3 and 52
would lose as much float. This implication
is particularly significant in construction
networks where E, could represent work by
the engineer. and C3 and 52 could repre-
sent work by contractors. Theoretically. a
ten-day delay would not delay the project.
However. total :;onsumption by the engi-
neer of the float available could. in reality.
force a delay due to other factors. such as
manpower constraints.
Controversy over how much float an
activity owns without undue benefit~
detriment to others-has reached new
heights due to the escalation of delay
claims. The arguments are many. One
position. which is based upon CPM theory,
proposes that an activity only "owns" the
free-float portion of its total float, i.e. the
numbers of days it can be delayed without
impacting any immediate successors. This
claim is somewhat counterproductive in
that it assigns the float to the last activity in
the chain (52, for instance). Yet. float con-
sumption may be more of an issue earlier
in the project. Also. it lends itself to some
manipulation. in that one can arrange for
the "right" activity to end the chain.
~:D
iD
1-1
~m
o
n
~
m
In
Z
n
An opposite viewpoint is that an activity
should be assigned all of its float regard-
less of whether or not it has any free float.
For instance. in the network below. C3
could be assigned all of its float (ten days).
In this case. a five-day delay in E, would
produce a five-day delay in the network.
and C:. should be considered to still hold a
ten-day float. In construction. contractors
tend to recommend that float be fully
allocated only to contractor activities.
Conversely. owners support the entirely
opposite view. or at least. advise some
form of float sharing.
Perhaps the position which stands best
when tested is that in which float ends up
belonging to those actlvlhes which use it
first. Traditionally. the courts have held that
a delay in an activity within its total float
will not delay the project,
even though. of course.
its successors lose as
much flexibility.
T"'''-
\
In our example,
C3 would enjoy as much
float as not used by E,. and 5~ would
have whatever amount is not used by E,
orC].
A compromise position. supported by
this author. calls for allocating float to ac-
tivities in a shared way. In essence. an
activity would be allocated a percentage
of the float available to the chain it belongs
to. In CPM theory. a chain is defined as a
series of activities of identical total float
connected by links of zero lag (or leeway).
In our example. for instance. activities E..
C3 and 51. and activities 5, and 5] make
up two chains.
The simplest application of this formula
would prorate floats based on the ratio of
activity to chain durations. E.. for instance,
would receive 15/(15 + 60'~ 25) - 15% of
ten days. or approximately two days of
float. A small modification to this procedure
would assign weights to certain activities.
Still, in our network. weights of 50% to
activities E, and 5~. and 100% to activity
C3. would yield a percentage of (15x.5)/
(7.5 + 60 + 12.5) - 9.4% to activity E, or
one day. In applying this formula. one
must consider only the float that belongs to
VOLUME I. ISSUE NO. t
OCTOBER 1982
5-39
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-------
VieWPOinT
In these financially depressed times,
cost control is the key to survival of a
corporation or an individual project. In
the dynamic construction industry. the
successful control of project costs must
include the integration of all project
activities. In this author's experience. this
can be achieved only with an integrated
controls program. which automatically
links all decisions to changes in scope.
cost. schedule. and ultimately. financial
positions.
The various departments of the project
cannot be autonomous-understanding
little of how their actions affect other
project activities. Simply creating a cost
and planning department does not ensure
an integrated controls program. Further-
more. establishing some cross reference
between purchasing. accounting and
others by procedure. might result in a dia-
logue. but not real integration. To achieve
-''!Qration. management must impact
ject attitudes. the project information
systems. and the organization.
ProJect management must fully endorse
this integrated approach. If engineering
must design in certain work packages. or
purchasing must buy in a prescribed
grouping. or if construction workers must
report their activity in more detail to
achieve an integration. management must
enforce these criteria. Typically. as deci-
sions are made about the purchase of
components. design changes. sequencing
of construction. weather conditions. and
-
The Case For
Integrated Project Controls
Ron A. May, Principal, Project Management Associates, Inc.
project staffing, top management must in-
sist that these decisions are all reported in
terms of scope. cost and schedule factors.
In this manner, an improved forecast of
project financial trends can be developed
on an ongoing basis.
The backbone of the project information
system is the work breakdown structure
that allows for the scope. costing and'
scheduling of all project activity to be up-
dated under a common coding structure.
Use of this structure forces all project
functions to collect data at a minimum level
of detail to allow for automatic integration.
With a common structure, the scope of the
project. including non-manual functions,
can be broken down into units that facilitate
cost and schedule tracking and analysis.
For instance. the bid items of a contractor
can be related to the budget estimate. or
as design changes are implemented. the
impact to the scope. schedule and cost
automatically can be reviewed. Anyone
decision will automatically produce an up-
dated forecast of the final scope. cost and
completion.
An integrated controls program is not
likely to be successful unless a proactive
organization is assembled. The controls
manager must be a member of the man-
agement team and directly report to the
project manager. The control reporting re-
sponsibilities must be segregated into a
project-oriented breakdown. such as a
system or area, as opposed to a functional
breakdown. such as cost and schedule
activities. Controls staffing may be as-
signec:lto assist other project departments,
such as purchasing and material control.
to facilitate scope. cost and schedule inte-
gration. However. all activity by all
personnel must be fed automatically into
the system. Analysis and forecasting then
can be reported upon by the controls per-
sonnel. and decisions can be made by the
management team.
The benefits of an integrated controls
approach are many. Communication be-
tween diverse departments. such as field
engineering and accounting. are improved.
As-built cost and schedule data can be
traced directly to changes issued. The
deferral of critical or non-critical path work
to enhance the cash lIow picture is easily
determined. Expediting purchase activities
in order to finish construction prior to
adverse weather conditions or a labor
strike can be achieved. Management thus
can deal with the changed conditions.
equipped with a more accurate knowledge
of the financial impact of their decisions.
Construction industry practitioners are
well aware of the importance of cost and
schedule control. A number of organiza-
tions have even implemented some lies
between scope. cost and schedule data.
But in the 1980's. the more progressive
organizations will increase their efforts to
develop the integrated controls program
discussed here. Those who achieve it will
best manage the trade-offs between the
direct and indirect costs inherent in con-
struction. and they will stand a better
chance of survival. indeed. success.
Float Ownership Continued
the chain. For instance. activity C2 would
receive a lIoat of five days. since it is the
only lIoat solely available to this (one-
activity) chain.
The planner should refrain from using a
formula of this type until other more signifi-
cant aspects of lIoat ownership have been
resolved. To begin with. one must consider
whether or not the schedule to be used
. .r ~lIocating lIoat has been "approved"
L Approval of a network signifies that
.e parties have agreed that its configura-
, tion may be used to assess the impact of .
6
. '''.'~ . ~ '-.~ ~~~ ..' .'~"~ .' .......-.,.: .~. '0', '" .,- :
. . .r..-; . ~. - . ~" .
delays and/or float consumption. In ad-
dition. one must recognize whether the
network includes only pure (must) logic or
working logic (want relationships) as well.
Working logic networks already allocate
quite a bit of lIoat. and a simple duration
proratio may be justifiable. Finally. atlen-
tion must be given to the weights used
when the chain being examined is the
critical path. In principle. if the network
critical path includes float with respect to
the required finish. lIoat could be prorated
much as proposed before. In this case.
however. a delay bv an engineering activity
5-40
.. .' ". ~
will extend the critical path and thus extend
costs to the contractor.
Above all. the controls engineer should
ensure that the ownership of lIoat is ad-
dressed in the contract documents. If lIoat
is not to be used exclusively for the benefit
of the owner. engineer or contractors. then
the specifications should so state it. II
delays within an activity total lIoat. or allo-
cated lIoat. will not yield a contract exten-
sion. then this condition also should be
expressed. II a formula can be used to
allocate lIoat. then such a formula should
be included in the scheduling specifications.
." ","
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-------
oU
Project Monitoring and Control
. f ~
5-41
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-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UN IT:
(V) CONSTRUCTION
MODULE:
(20) Project Monitoring and Control by RPM
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o List the parameters of a successful project
o List 4 types of reporting systems and understand their
purposes and components .
o Distinguish between reporting and control
o Understand the application of performance measurement and
cost accounting charts
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
o Discussion
5-42
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-------
THE SUCCESSFUL PROJECT
. Achieves scope objective
- Remedy consistent with ROD
. Is completed on time
. Is complet~d within budget
MONITORING AND CONTROL OF
CONSTRUCTION WORK
. Inspection by owner
- Contractor performs to specifications
. Contractor performs to approved schedule
- Changes approved by owner
. Contractor paid for Yiork performed
- Approved payment requests
- Timely processing of cost changes
- Review of all change orders
5-43
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-------
REPORTING SYSTEMS
. Cost reports
- Current expenditures
- Forecast future costs
- Contract changes
- Budget comparisons
- Cash flows
. Schedule reports
- Percent complete
- Projected schedule problems
- Milestone date forecasts
- Critical path analyses
. Cost/schedule integration report
- S curves
. Exception reports
- Negative float
- Forecast vs budget variance
REPORTING VS. CONTROL
. KNOW WHAT HAS TO BE DONE
. KNOW WHAT HAS BEEN DONE
. KNOW WHAT REMAINS TO BE DONE
. KNOW WHAT'S WRONG EARLY AND WHY l
. TAKE CORRECTIVE ACTION j
5-L!-4
SCHEDULE
REPORTING
SCHEDULE
ANAL YSIS
AND
CONTROL
/
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-------
EXCEPTION REPORTING
. Validated data
. Current or timely data
. Brief
. Corrective strategies
These reports deal only with activities that show a negative
trend.
PERFORMANCE MEASUREMENT
ACTIVITY 1983 1984 WT
WT 'I. '/,
WT 'I. COMP COMP
I " I I I /
MOBILIZE 6 6 6
- ~ If' 18 8 100 8
811
SITE WORK 8 8 8 8 7 / 39 18 100 8
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2 4 4 6 6 6 6 j 34 16 100 16
EXCAVATE 60 /
FOUNDATION 4 4 5 5 3 3 3
27 13 40 5
on
STRUCTURE .0 / 888888 8 8 8 72 34 0 0
.0
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FINISH ;on ....- V
....... ~ 24 11 0 0
4 4 4 4 4 4
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6 6 14 8 1012 11 6 6 6 10 4 1313 11 11 11 8 12 12 12 4 4 4 100 37
26 56 79 99 136 166 202 214
5-45
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1000
800
800
700
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300
200
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CONTRACT TARGET CO'T
BUDGETED COST FOR WORK
PERFORMED IB~I
CACTUAL ACCOUPLIIHMENTI-
" " I
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L// 1COST VARIANCE
7-1~j
SCHEDULE VARIANCE
IDOLLARSI
REPORTING
CUT.OFF
DATE
BUDGETED COlT FOR
WORK SCHEDULED CICWII ~
IPLANNED ACCOMPLlIHMENTI ---- ..
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BUDGETED COST
AT COMPLETION
}PROJECTEO
UNDER RUN
PROJECTED
ADVANCE IN
SCHEDULE
Cost Performance Reporting
!j-46
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Inspections
6-1 .
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UN IT:
(VI) INSPECTIONS
MODULE:
( 21)
Inspections
ESTIMATED TIME:
45 Minutes
OBJECTIVES:
THE PARTICIPANT WILL BE ABLE TO:
o Distinguish among different types/times of inspection
o Become familiar with the uses of engineering services during
construction stage
o Become" familiar with roles and responsibilities of resident
engineers and resident inspectors
o Understand the purpose and conduct of a Construction
Management Evaluation
o Understand the purpose and conduct of a prefinal construction
conference
o Understand the purpose and conduct of a prefinal inspection
o Understand the purpose and conduct of a final inspection.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
6-2 "
-------
INSPECTIONS
TYPES OF INSPECTIONS
1. General inspection (by design AlE)
2. Detailed inspection (resident)
3. RPM/SPO construction inspections (interim)
4. Construction Management Evaluation (CME)
5. Prefinal construction conference
6. Prefinal inspection
7. Final inspection and certification
6-.3
-------
1. GENERAL INSPECTION (BY DESIGN AlE)
(BASIC ENGINEERING SERVICES
DURING CONSTRUCTION)
. Advice on what is intended
. Prepare sketches to resolve field conditions
. Check construction drawings and shop and erection
drawings submitted by contractors for compliance with
design concept
. Periodic visits to site
. Final inspection and report
2. DETAILED INSPECTION (RESIDENT)
(SPECIAL ENGINEERING SERVICES
DURING CONSTRUCTION)
. Inspect work for compliance with contract documents
. Review and approve requests for monthly payments
. Issue certificates of completion
. Provide record drawings
6'-4
-------
RESIDENT INSPECTOR CAN:
. Have access to all work areas for inspections
. Require contractor to furnish labor and materials needed
for inspections and tests on work of questionable nature
.- Advise owner, through appropriate channels, of right to
stop work under certain conditions
. Conduct inspections and tests
RESIDENT INSPECTOR CANNOT:
. Deviate from contract documents
. Interfere with or assume responsibility for contractor
work
u-5 --
-------
RESIDENT INSPECTOR CANNOT:
(Continued)
. Advise or direct contractor regarding construction
- Means
- Methods
- Techniques
-Sequences
- Procedures
. Assume responsibility for safety procedures
. Stop work without written authority of owner
3. RPM/SPO CONSTRUCTION
INSPECTIONS (INTERIM)
TO INSURE THAT
1. The contracting party
2. The resident engineer
3. The inspector
4. The contractor
are fulfilling their respective
responsibilities
6-6
-------
INTERIM INSPECTION ACTIVITIES
1. Project files
2. Cost accounting procedures
3. Staffing and organization
4. Construction quality and quantity
5. Contract administration and change order management
6. Schedules
4. CONSTRUCTION MANAGEMENT
EVALUATION (CME)
. Conducted on selected projects
. Comprehensive onsite review of the entire project
. Typically ranges from 3 to 5 days
. Conducted by a multidisciplined team
G-7 -
-------
CME INCLUDES:
. Formal entrance briefing
. Detailed evaluation of construction management
procedures
. Formal exit briefing
. Preparation of a CME report
CME CONSTRUCTION CHECKLIST
. General project information
. General construction information
. Plans, specifications and contracts
. Conformance with plans and specifications
. Resident engineer and inspector organization
. Contractor organization
. Work performance
6-8
-------
CME CONSTRUCTION RECORDS
CHECKLIST
. Working papers
. Job records
. Docu mentation
5. PREFINAL CONSTRUCTION
CONFERENCE
To discuss procedure and requirements for:
. Final O&M submission
. Cleanup responsibilities
. Demobilization activities
. Security requirements for project transfer
. Prefinal inspection schedule
. Facility start up and testing
. Operator training
. Project completion and closeout
. 6-9
-------
6. PREFINAL INSPECTION
OBJECTIVES:
. Insure the project was constructed in accordance with
the approved plans, specifications and change orders
. Insure all equipment is operating satisfactorily
. Identify outstanding work items
PREFINAL INSPECTION REPORT
CONTENTS
. Outstanding construction items
. Actions required to resolve items
. Completion date for items
. Date for final inspection
-
6-10
-------
7. FINAL INSPECTION
AND CERTIFICATION
OBJECTIVES:
. Inspect outstanding items identified in Prefinal
Inspection Report
. Insure contractor demobilization complete (except
where required to complete outstanding items).
. Confirm resolution of all outstanding items
If any outstanding items remain, consider this Prefinal and
repeat Final Inspection
FINAL CERTIFICATION
REPORT CONTENTS
. Resolution of punch list items
. Certify completion of SOW
. SOW mOdifications/justifications
. Certify remedy is operational/functional
. NPL deletion documentation
6-11
-------
EPA
ACCEPTANCE OF COMPLETED PROJECT
. Construction com plete
. Yet to be administratively completed
6-12
-------
RESIDENT INSPECTOR RESPONSIBILITIES
In preparation for and during the construction phase, the Resident
Manager should proceed as follows:
o Establish onsite offices and equipment as required.
o Arrange for the installation of a phone.
o Obtain
names;
persons
numbers
mailing addresses and have a complete directory of
addresses, phone numbers .of all parties, firms or
involved during the work; and a list of emergency
displayed at each phone.
o Check that the required construction permits have been
obtained and copies are available at the field office.
o Obtain and be familiar with
addenda.
the Contract Documents and
o Supply a complete set of Contract Documents to each Inspector
and review the contents with them.
o Have onsite a copy of all codes and standards which govern or
affect the construction.
o
Obtain from the design engineer's
Design Manager, clarification on
found in the Contract Documents.
staff through the Project
potential discrepancies
o Receive, send, record, distribute,
following:
route and approve the
- Communications and correspondence
- Shop drawings submittals
- Samples of materials
Operation and maintenance manuals
- Daily log book for inspectors
- Daily inspection diary
- Accident reports for resident staff
- Progress reports for specific periods
etc.)
Progress payment file
- Modification File
- Cost reimbursable file
- Substitutions file
- Tests and inspections file
- Field feedback to design
- Site conferences file
- Record drawings and information.
(weekly,
monthly,
6-13
-------
o Comply with requirements of agencies having jurisdiction over
the inspection and submit required reports. Remind the
contractor of inspections required by agencies.
o Tour the project before construction,
conditions on the plans and take photos.
o Make a photographic history of the project during
construction and properly reference each photo, including
dates and locations.
record
existing
o Set up record drawings and record changes from the inspection
staff and the contractor.
o
Identify Construction Contract surveying requirements and
make sure surveying is accomplished according to the Contract
Documents.
o Maintain a Progress Profile
projects).
record (on sewer construction
o
If performed, get and review the soils investigation report
from the Geotech Coordinator.
o Obtain a progress schedule of the work and have the
contractor keep it updated.
o Select a testing lab and schedule tests if required.
o Review with the Contractor sequence of operations and
controls and use of utilities as stated in the GENERAL
REQUIREMENTS.
o Keep in mind that approved shop drawings and submittals are
part of the Contract Documents and serve to clarify or show
more detail.
o Obtafn a cost breakdown from progress payment evaluation.
Review progress payment applications and recommend payment.
o Keep quantity records for progress payment review.
o Keep in touch with the design engineering staff through the
Project Design Manager. Notify them about all phases of the
work and meetings that may require their presence at the
site.
o Keep ahead of the work being performed. Anticipated items
that might tend to interfere with the progress of the
construction.
.~U
-------
o Conduct onsite inspections of the work in progress as a basis
to determine compliance with the Contract Documents.
o Report deficiencies observed in the construction to the
Contractor's superintendent and the Project Design Manager.
o Obtain from the design engineering staff through the Project
Design Manager, further details or information required for
the proper execution of the work.
o Help the Contractor's superintendent understand the
Documents. Request the design engineering
interpretation or decision, in writing, on all
needing clarification.
Contract
staff's
matters
o Verify that the testing laboratory performs all tests and
inspections required. Keep a record of the types and
locations of tests. Review test results and notify the
Contractor's superintendent and the Project Manager of
deficiencies.
o Consider suggestions or recommendations made
Contractor and refer them to the Project Manager.
by
the
o Notify the Project Manager of material
out of sequence.
deliveries that are
o Observe actual progress in comparison with estimated
progress. Record and report conditions that may cause a
delay in completion of the work.
o Keep an accurate
reimbursable work.
record of time
and materials
on cost
o Plan and coordinate delivery of Owner supplied equipment,
fixtures and materials with the Contractor.
o Regarding job site safety, review whether the Contractor is
maintaining safety requirements as stated in the Contract
Documents for which they are responsible, requirements of the
Owner on their property and the requirements of agencies
involved with the project.
o Assist in the final inspection of the project.
6-15
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AUTHORITY
For each contract, the authority of each participant is defined in
the GENERAL CONDITIONS of the Contract Documents. The following defines
the specific authority for the onsite inspection staff. The onsite
inspection staff:
o Has access to all areas of the facility under construction
for the purpose of performing their work.
o Has the authority to require the Contractor to promptly
furnish labor and materials needed to perform any inspections
and tests required on work of a questionnable nature.
However, prudence must be exercised in directing the
Contractor to remove or dismantle any work already comQleted
to facilitate an inspection. Removal or dismantling of such
completed work may be claimed as an additional cost by the
Contractor if the inspection reveals that the work was
installed in accordance with the Contract Documents.
o Has the obligation to advise the Owner through the Project
Design Manager, regarding their right to stop work under
specific conditions.
o Has the authority to conduct inspections and tests during any
phase of the project, including offsite inspections of those
items or products being shop fabricated.
LIMITATIONS
The authority of the onsite inspection staff is limited by several
stipulations. The onsite inspection staff:
o May not authorize deviations from the Contract Documents.
o May not interfere with the work to be performed by the
Contractor nor assume any responsibility for the performance
of the work.
o May not take instructions from persons other than immediate
supervisors.
o May not advise on or issue directions to the Contractor
relative to any aspect of construction means, methods,
techniques, sequences or procedures.
o May not assume responsibility
Should hazards be observed,
for any
report
safety procedures.
conditions to the
6-!C
-------
Contractor's superintendent and record them in the daily
log. If an emergency situation arises, contact the Project
Manager and the Owner.
o May not stop the work without written authority of the Owner.
o May not sign the Contractor's material delivery tickets.
RELATIONSHIPS
The onsite inspection staff is a key element in the successful
construction job. Suggested relations for a more successful project are
as fo.ll ows:
RELATIONS WITH THE PUBLIC
During the construction phase of the project, the onsite inspection
. staff will find it necessary to deal with numerous, interested persons
related to the project. Strained relations with any of these persons may
seriously affect the day-to-day activities of the project. Maintaining
good public relations is one of the most important aspects of the onsite
inspection staff's job.
Effective communication is the basic foundation of good public
relations. The onsite inspection staff should endeavor to keep all
parties involved in the project, including the Owner, members of the
Owner's staff and the Contractor, informed on the progress of the project
and planned future actions that may affect them. Statements to homeowners
in the area, the news media and civic groups must only be made after
instructions from the Owner.
At the start of projects, particularly pipeline projects that
directly affect a large number of homeowners, have the Contractor write a
form letter explaining the project and how it will affect each
individual. It may be advantageous to show a small area map on the back
of the form letter and give an address and phone number where the
Contractor can be reached to answer questions.
Contracts with the Owner's management and the Contractor are the most
frequent and directly affect the actual construction. A main goal of the
onsite inspection staff is to keep the Owner's management informed. A
procedure should be maintained whereby progress reports, on a periodic
basis to keep the Owner's management informed, will be submitted.
Required changes, information pertaining to extra work or any arising
circumstances which materially affect the terms of the Contract should be
reported immediately to the Owner. In substance, a job performed well
creates good public relations.
As far as the Contractor is concerned, public relations are
principally geared to the confidence placed in the onsite inspection
staff.
6-17. .
-------
CONTRACTOR RELATIONS
As long as the requirements of the specifications are fulfilled, the
Contractor is entitled to complete the work at the lowest possible cost.
By cooperating with the Contractor in every way consistent with the
Owner's interests, the inspection staff will aid in reducing the cost of
construction and will in return secure the Contractor's cooperation.
Inspections must be made promptly when requested. Conditions that will
apparently lead to unsatisfactory work should be anticipated whenever
possible. and should be pointed out to the Contractor at the earliest
opportunlty to avoid waste of materials and labor. The inspection staff
must not delay the Contractor unnecessarily, nor interfere with the
Contractor's methods unless it is evident that acceptable work will not be
produced. No demands should be made on the Contractor that are not in
accordance with the specifications.
The inspection staff must maintain an impersonal, agreeable and
helpful attitude toward the Contractor and the Contractor's employees.
However, familiarity must be avoided and personal favors must not be
accepted from the Contractor. By dealing fairly and by recognizing an
commending good work that is in conformance with the Contract Documents,
the inspection staff can usually secure the friendly cooperation and
respect of workmen. The inspection staff should emphasize that any
suggestions regarding bringing the work into conformance with,
specifications are for the benefit of the work and not merely to show
authority. They should refrain from knocking the Contractor's
organization or boasting of mistakes discovered.
Instructions must be given only to the authorized representatives of -
the Contractor, usually the superintendent or foreman. However, in minor
and routine matters and to an extent agreeable to the Contractor's
organization, instructions may be given directly to workmen. These
instructions are given in the form of a caution that the faulty work will
not be acceptable under the specifications. For example, if it appears
that faulty work will result from bulging or lightly braced forms,
caution may be given the Contractor in advance; but do not actually order
the forms to be braced. Do not inadvertently waive the Owner's rights by
telling the Contractor or the Contractor's employees how to do a certain
piece of work. The inspection staff must not attempt to run the job but
must watch the various operations carefully. Important instructions that
may be the subject to controversy must be issued in writing.
Before issuing instructions, the inspection staff must be sure that
their judgment is sound and fair. The decision must then be firmly
supported. Potential arguments must be avoided and observed disputes
referred promptly to the inspection staff's supervisors.
If departures from the letter but not from the spirit of the
Specifications are proposed by the Contractor and appear to be necessary,
the inspection staff may accept the work tentatively, making it understood
that the matter is being referred to superiors for a final decision. To
foster a good relationship, it is necessary that the Resident Inspector
provide a firm, fair decisions that are rendered promptly.
~m
-------
A good start is important; firmness at the beginning of the job will
tend to eliminate bickering throughout the later work. An incorrect
method is more easily corrected the first time it is practiced than after
it has been in use.
A general principle of inspection often overlooked is that the
persons inspecting must form no habits of procedure that might be
anticipated by the workmen. Inspection of the various details and
operations must be at irregular intervals. (However, the inspection staff
must not feel they are detectives and get into the frame of mind of
constantly trying to uncover some dishonesty.)
6-19
-------
6~20
-------
DAILY INSPECTION DIARY
C1I DAY:
DATE: I
I A.M. AM
WORK PERIDD- ".M. TO_":M:
REPORT NO.
WEATHER
TEMP. MAX _oF:
MIN_OF:
PRECIPITATION
/2INUMBER AND CLASS OF PERSONNEL EMPLOYED:
/3
I MAJOR EQUIPMENT ON PROJECT AND AMOUNT OF USE
. NO. DESCRIPTION SIZE/CAPACITY HRS. OPER.
:4IWORK ACCOMPLISHED TODAY:
/
(51
6-21
".SIC.NT .NGIN.."'. SIGNATU".
CAT.
-------
MONTHLY SUMMARY
OF CONSTRUCTION ACTIVITIES
DATE:
-.
PROJECT:
PROJECT NO.
CONTRACTOR:
CONTRACT AMOUNT:
AMOUNT THIS PERIOD:
AMOUNT TO DATE:
" COMPLETE
WORK PROGRESS:
.CURRENT -
PROJECTED -
DELIVERY PROBLEMS ANDIOR DELAYS. CORRECTIVE ACTION TAKEN:
POTENTIAL MODIFICATIONS:
POTENTIAL CLAIMS:
-.
6-22
-------
NONCONFORMANCE REPORT
DATE:
ATTACHMENT TO DAILY LOG NO.:
SHEET_OF
PROJECT:
CONTRACTOR:
PROJECT NO.
OBSERVED NONCONFORMANCE:
CORRECTIVE ACTION REQUIRED:
CONTRACTOR HAS BEEN NOTIFIED BY:
DYES
ONO
o VERBALLY
o IN WRITING
DAILY LOG NO.:
DATE:
DEFICIENCY HAS BEEN CORRECTED
DAILY LOG NO.:
BY:
DATE:
CORRECTIVE MEASURES ARE ACCEPTABLE
BY:
OAILY LOG NO.:
DATE:
COMMENTS:
ATTACHMENT IDENTIFICATION:
PREPARED BY:
6-23
-------
DELAY RECORD
DATE:
ATTACHMENT TO OAILY LOG NO.:
DAY:
PROJECT:
PROJECT NO.
CONTRACTOR:
NOTE THE FOLLOWING: What occurred to cause delay; work trades and number of employees affected;
reason for delay (general strike, labor walkout); start (time) of delay; transportation delay; weather inter-
. vention; power outage; action by others. (DEFINE)
DATE ITEM DESCRIPTION ACTION REQUIRED
~
-
PREPARED BY:
6-24
-------
SHEET_OF-
MEETING NOTES ISSUED
DATE: INITIALS:
I SUBJECT:
DATE: LOCATION
ATTENDANCE:
TOPICS DISCUSSED
ACTION
6-25
-------
PHOTO RECORD FILE INDEX
PROJECT:
PROJECT NO.
PREPAREO BY:
DAILY PICTURE NEGATIVE
CONTRACT CONTRACTOR LOG NO. DATE GENERAL LOCATION NO. FILE NO.
4
t
-
6 26
-------
CONSTRUCTION INSPECTION MANUAL
APPENDIX A
INSPECTOR'S BASIC TOOLS
Contract Documents
Supply of Daily Inspection Dairies and Test Forms
Surveyor Field Books
Rain gauge and maximum-minimum thermometer
First aid kit
Hard hat
Safety glasses
12 to 16-foot steel tape
Lumber crayons
Folding ruler
50 to 100-foot steel tape
50-foot cloth tape.
Scale (engineer's)
Scale (architect's)
Rock pick.
Mirrors for lamping
Soil probe
Pocket knife
Flash light
Camera
Hand level
Surveying equipment as needed
Soil testing equipment as needed
Slump cone, rod, and scoop
Cylinder molds, and 5-gallon buckets for concrete
Asphalt thermometer as needed
6-27
-------
PUNCH LIST
DATE:
PROJECT:
PROJECT NO.
CONTRACTOR:
CONSTRUCTION CooRDI... TOR:
COM.
ITEM DESCRIPTION (LOCATION, PLAN SHEET, SPEC. SHEET) ACTION REQUIRED PLETED
BY DATE
6-28
-------
CONSTRUCTION MANAGEMENT EVALUATION
MANUAL
Federal-Lead Projects
Supe,"fund Remedi al p,"og,"am
1986
S tat e and Reg ion a 1 COO," din a t ion B '" a n c h
Hazardous Site Control Division
Office of Emergency and Remedial Response
U.s. En vi," 0 n men tal P '" 0 tee t ion Agency
Washington. D.C. 20460
6-2~'
-------
6~jO
-------
CONSTRUCTION MANAGEMENT EVALUATION
AND
PROJECT MANAGEMENT CONFERENCE
MANUAL
State-Lead Coop~r"ative Agr"eements
Sup e I" fun d Rem e d i alP I" 0 9 '" am
1986
S tat e and Reg ion a 1 Coo I" din a t ion B '" a n c h
Hazal"dous S1te Contl"ol D1v1s10n
Office of Emergency and Remedial Response
u.s. Environmental Protection Agency
Washington, D.C. 20460-
6-31
-------
6-32
-------
CHAPTER I.
CHAPTER II.
CHAPTER I I I.
CHAPTER IV.
CHAPTER V.
GENERAL
CONTENTS
A.
B.
C.
1-1
1-1
1-1
1-1
PURPOSE
REFERENCES
OISCUSSION
PROJECT MANAGEMENT CONFERENCE
I 1-1
A.
8.
COOPERATIVE AGREEMENT MANAGEMENT
CONSTRUCTION MANAGEMENT
I 1- 1
I 1-1
CONVENTIONAL CME
A.
B.
C.
111-1
111-1
111-2
111-7
COOPERATIVE AGREEMENT MANAGEMENT
CONSTRUCTION MANAGEMENT
RECIPIENT EXIT BRIEFING
EXTENDED CME
A.
B.
C.
o.
I V-I
I V-I
I V-I
I V- 2
I V- 5
GENERAL
COOPERATIVE AGREEMENT MANAGEMENT
CONSTRUCTION MANAGEMENT
RECIPIENT EXIT BRIEFING
THE REPORT
V-I
A.
B.
C.
D.
E.
F.
GENERAL
INTRODUCTION
COOPERATIVE AGREEMENT MANAGEMENT
CONSTRUCTION MANAGEMENT
ACTION ITEMS
CONCLUSION
V-I
V-I
V-I
V- 2
V-2
V-3
APPENDICES
Appendix A - Recipient Notification Package
Appendix B - Typical Report Outline
Appendix C - Financial Management Checklist
Appendix 0 - Const,'uction Ct).;~~list.
Appendix E - Constr'uction R~.'Checklist
6-33
-------
. IJ- 34
-------
1.
GENERAL
A.
PURPOSE
The pu"pose of this manual is to p,'ovide detailed
guidance on conduct of P,'oject Management Confe,'ences (PMC)
and Construction Management Evaluations (CME). These site
vis its are i n ten d e d toe n h a n c e E P A 0 v e ,. s i g h tan dim pro v e
con s t ,. u c t ion man a g em e n t .
R.
REFERENCE
1.
2.
4 n C F R P a ,. t s 2 2, 2 3, 3 n, 3 3, 3 4, 3 7 and 3 0 0 .
State Participation in the Superfund Program Manual.
Superfund State-Lead Remedial P,'oject Management
Handbook.
3.
4.
Sup e ,. fun d Rem e d i a 1 0 e s i g n and Rem e d i a 1 Act ion
Guidance.
C.
DISCUSSION:
The PM C sa,' e con d u c t e d aft e ,. a wa ,. d 0 f the coo p e ,. a t i v e
agreement fo,' design. The PMC is intended to enhance the
S tat e 's cap a b i 1 i t Y to com p 1 e t e the p ,. 0 j e c tin a c cor d a n c e
with the cooperative agreement and applicable regulations.
Typically, this conference will include guidance to States
on ,'eco"d-keeping ,'equirements, const,'uction management
techniques and ove,'all coope,'ative agreement management
p ,. 0 c e d u res.
The duration of the PMC should not exceed 2 days and be
conducted on vi,.tually all remedial projects. This confe,'ence
may b e con d u c t e d by 0 n eo,. m 0 ,. e p e ,. son s, d e pen din g 0 nth e
. s i z e and com p 1 ex i t Y 0 f the p ,. 0 j e ct.
A con v en t ion a 1 C M E s h 0 u 1 d b eat h ,. e e day" e vie w con d u c t e d
d u ,.; n g con s t ,. u c t ion by the Reg ion a 1 0 f f ice s, pre fer a b 1 y a t
the 40-60.percent completion stage, to evaluate the State's
management p,'ocedu,'es, and th,'ough this p,'ocess gain insight
into' ove,'all p,'og,'am management. The CME shoul d be hel d
d u ,.; n g the 20- 4 0 p e ,. c e n t com p 1 e t ion s tag e, i f a PM C was not
conducted.
An extendedCME could be a five day in-depth review
conducted on large multi-contract projects. These reviews
s h 0 u 1 d g en e ,. all y b e i nit i ate d by the Reg ion a 1 0 f f ice s . Tea m
members should be experienced in this type of review and
fully knowledgeable of EPA regulations and policies.
6-35
-------
Typically, the on-site CME should be conducted by two
0" t h ,. e e me m be,' s com p 0 sed 0 f P e ,. son n elf I' 0 m the E PAR e 9 ion a 1
Off 1 c e . It i s imp 0 ,. tan t t hat the tea m 1 e a de,' b e f ami 1 i a ,.
w 1 t hall ,. e q u 1 ,. em e n t san d ,. e 1 e van t E P A ,. e 9 u 1 at ion s . Th e
team 1eade,' should be ,'esponsib1e fo.,' ,"eviewing ,"ecor"ds,
P r" 0 C u ,. em e n t p ,. 0 c e d u '" e s d n d man age men t p r" 0 c e d u ,. e sin the
,"ecipient's office. The other" team member"s w111 concentr"ate
on the pl'oject field r"eco,'ds, const,"uction management
p r' 0 c ~ d u '" e s, and p h y s 1 c a 1 con s t '" u c t ion.
p ,. 1 0" tot h e C ME, the Tea m 1 e a de,' s h 0 u 1 d b e r' e s p 0 n sib 1 e
for" not i f 1 cat ion and COO," d 1 n a t ion wit h the S tat e . . The Tea m
1 e a de,' i s a 1 so,. e s po n sib 1 e f 0" all log i s tic a,'," a n gem e n t s .
F 0 1 low i n 9 the sit e v 1 sit, the Tea m 1 e a de,' s h 0 u 1 d I) e r' e s p 0 n sib 1 e
fo,' the p,'epa,'ation and dfst,'ibutfon of the CME Repo'"t. The
Tea m 1 e a de," a 1 soh a s the ,. e s p 0 n s 1 b f 1 f t Y t 0 ass u '" e t hat all
act ion f tern s h a v e bee n d p P r' 0 P ,. 1 ate 1 y '" e s po n d e d to.
6-36
-------
II.
PROJECT MANAGEMENT CONFERENCE {PMCt
The PMC is held after the award of the cooperative agreement
f 0 ,- des i 9 n . The p u ,- po s e i s top ,- 0 v ide d eta i 1 e d 9 u i d a n c e and
instructions to the recipient in overseeing and managing the
con s t r- u c t ion.
The PMC begins with a briefing in the State's office attended
by members of the State staff, rep'-esentatives of the al'chitect-
en gin e e ,- 0 ,- 9 ani z at ion and 0 the rap p ,- 0 P I- i ate m em bel's 0 f the con-
stl'uction management team.
. The Team leader will explain the statutory r-equirements and
,- e 9 u 1 a t ion s, I' e po r tin 9 and ,- e co ,- d - k e e pin 9 ,- e qui rem e n t s, con s t " u c t ion
man a gem e n t fun c t ion s, 0 v e ,- all coo p e ,- a t i ve a 9 ,- e em e n t man a 9 em en t
p,'ocedur'es and any special coope,-ative ag,-eement conditions.
The sea rea S a ,- e d i s c u sse din d eta i 1 i nth e s e c t ion s 0 f t his man u a 1
un d e ,- C ME's. Howe v e '-, i no" de ,- top I' 0 v ide a I' e a d y ref e r- e n c e for
those who will be conducting PMC's, they are also listed below.
F 0" a de t ail e d d i s c us s ion 0 f man y 0 f the sea c t i vi tie 5, ,- e fer e n c e
should be made to the CME sections.
A.
1 .
2.
3.
4.
5 .
6.
7.
B.
COOPERATIVE AGREEMENT MANAGEMENT
S tat u t 0 ,- y and Reg u 1 a t 0 ,- Y R e qui ,- em e n t s
Coo p e ,- a t 1 v e a 9 ,- e em e n t ,- e qui rem e n t s, i n c 1 u din 9 s P e cia 1
conditions
P,-ocu,-ement p"ocedures
P " 0 per t y con t ,- 0 1
Res ide n t s e ,- v ice s ,- e qui ,- e d d u ,- i n 9 con s t r u c t ion
R e co ,- d - k e e pin 9 s y s t em
a . P ,- 0 v ide a c 1 e a ,- a u d i t
b . Sub sid i a ,- y 1 e d gel- f 0 ,-
c. Allowable/Unallowable
s e 9 ,- e gat ion
FOl-ce account wOl-k documentat i on
Sma 11 p u ,- c has e doc u men tat ion
C h a n 9 e 0 ,- d e ,- s, com p 1 e t e doc u men tat ion
Request fOl- payments, documentation and back-up
,- e q u 1 I' e d
Claims, complete record of all actions taken by
all pal- tie s
1 . Co ,- ,- e s po n den c e con t I' 0 1 - com p 1 e t e, c h r 0 n 0 log i c a 1
Project closeout and project pel-formance ce,.tificate
t ,. ail
each site
and di,-ect/indirect cost
d.
e.
f .
g.
h.
CONSTRUCTION MANAGEMENT
1-
~:
4.
S tat e ,- e s po n sib i 1 i tie san d aut h 0 ,- ; t y
A./ E ,- e s po n sib 11 it i e san d aut h 0 I' it Y
Con t ,- act 0 ,- ,- e s p 0 n sib i1 i tie san d aut h 0 ,- i t Y
A/E resident organization
6-37
-------
5.
~ .
7.
R.
9.
1(').
11-
12.
13.
14.
15.
Construction conformance with Plans and Specifications
Inspectors daily log
Material testing requirements
Construction schedule
Progress payments
Davis Bacon. Copeland. EEO
Change order procedures
Claims procedures
Shop drawings. procedures and documentations
As built drawings. keep current
Correspondence (chorono10gica1 file)
b.;.3t:
-------
III. CONVENTIONAL CME
Th e C M E beg ins w 1 t h an en t I' a n c e b f'1 e f 1 n gat t he I' e c i P 1 en t ' s
off 1 c eat ten d e d by the f' e vie w tea m, S tat e 0 f f ; c e and f ; e 1 d
f' e p f' e s e n tat 1 v e s, a f' e p I' e s e n tat 1 v e 0 f the a f' chi t e c t - e n 9 1 nee I'
o f' 9 ani z a t 1 0 n, a con t f' act 0 f' f' e p f' e s e n tat i v e and 0 the I' s, a s des; I' e d
by the S tat e . The Tea m 1 e a del' wi 1 1 beg 1 nth e me e t ; n 9 by I' e vie win 9
the " e a son f 0 I' the e val u a t i I) n and e x p 1 a 1 nth e s cop e and 9 0 a 1 s 0 f
the e val u a t ion. Aft e I' a b I' i e fin t I' 0 d u c t ion 0 f the tea m 111 e m bel's
and a des c I' ; p t ion 0 f the; I' fun c t ; 0 n s, ate f1 tat; ve s c h e d u 1 e 0 f
tea m act i v i tie s w ill bed; s c u sse d t 0 ins u f' e t hat key pel's 0 n n e 1
f r' om the S tat e 's 0 f f ice and ° (i e 1 d s t a f f s w 11 1 b e a v a 11 a b 1 e f 0 I'
coof'd1nation w1th team membef's at mutually convenient times. The
team membel's w111 try tl) work al'ound the State's established
s c h e d u 1 e s a s m u c has po s s 1 b 1 e tom 1 n 1 m i z e any d 1 s I' U P t i v e e f f e c t s
that the CME might have. ° The Team leader should also schedule
the e x i t b f' 1 e f 1 n 9 b e f 0 I' e a d j 0 U I' 1 n 9 t his m e e tin 9 .
The State f'epf'esentative should bf'1ef1y descf'1be the1f'
01' 9 an 1 z at ion a 1 s t f' u c t u f' e, the p f' 0 j e c t 's s tat usa n d wo f' k s c h e d u 1 e ,
the con t I' act 0 f' 0 f' 9 a n 1 z a t 1 0 n, the con s t f' U c t 1 0 n 0 v e f' s 1 9 h tan d
1 n s p e c t 1 0 n p I' 0 9 f' a m s . W 0 f' k spa c e and key p e f' son n elf 0 f' con t act
by tea m me m b e f' s w 11 1 be des i 9 n at e d at t h 1 s t i me by t he S tat e .
Aft e f' com p 1 e t 1 0 n 0 f the e n t f' a n c e b f' 1 e f 1 n g, the C MEt e a m \II ill
tOUf' the State's office, locate the fil1ng system and be introduced
to the 1nd1vidua1 contact for each part of the team's review.
The team wi11 thenbe shown to the if' designated work af'ea in the
S tat e 's 0 f f ice. F 011 0 win g t his 0"; en tat ion, the S tat e I' e p f' e s e n tat i ve
wi 1 1 a c com pan y the C MEt e am 0 n a vis i tot 0 the s 1 tea n d the f' e sid e n t
eng1neer's office. During this time, the team will have a chance
tog eta b I' i e f 0 v e " vie w 0 f the con s t f' U c t ion i n p " 0 g f' e s s . F 0 1 low i n g
this, the team will "etu,'n to thei,' designated wOl'k area to begin
the i f' i n d i v i d u a 1 t ask s .
A.
COOPERATIVE AGREEMENT MANAGEMENT
The Tea m 1 e ad e f' wi 1 1 e val u ate the S tat e 's com p 1 i a n c e
with the coope,'ative agf'eement I'equil'ements, the Pl'ocuf'ement
procuedures and the State's record keeping system.
1.
COOPERATIVE AGREEMENT REQUIREMENTS
The Team leader will specifically check on the
State's compliance with special conditions 01' requirements
which have been made a pal't of 1ndividua1 coope,'ative
ag "eement s.
The Team leader must carefully scrutinize the role
the State plays in seeing that these requirements are
met. This is particularly true when States rely on
other parties to assume these responsibilities. This
can lead to serious problems, such as withheld payments
when ce,'tain f'equif'ements a,'e not meOt 0" al'e not met on
a timely basis~
(;-39
-------
3.
ACCOUNTING SYSTEMS
The Team leader will make a thorough review of the
State's accounting system. There are four major problem
areas which should be giv~n special attention. The
four problem areas are: .
( a )
Failure to separate ~ligible and ineligible costs
and/or allowable and unallowable costs.
( b )
Failure to segregate project costs between different
sites and/or activities.
( c )
Failure to develop written procedures for handl ing
accounting, and
( d )
Failure to adequately justify and record total Federal
reimbursements. .
Other ar~dS of concern include force account work, poor
or missing records, and the lack of-documentation
relating to ti~e and compensation for construction
inspectors.
R.
CONSTRUCTION MANAGEMENT
This phase of the CME will be conducted primarily by
the team me~bers with assistance from the Team leader. The
Team leader will help review construction records after the
cooperative agreement requirements and procurement procedures
have been reviewed. The team will spend most of their time
evaluating construction management rather than the actual
construction work. A CME is not intended to be a thorough
review of construction. Rather, it provides EPA with an
insight into the way States are handling cooperative agreements
and construction management, not with detailed knowledge as
to the quality of construction being performed. The EPA
interim inspections should monitor and safeguard the quality
of constr~ction.
The following listed items are typical problem areas.
These areas are also closely related to the fiscal aspects
of the project, as well as the progress of construction.
They should, therefore, be given close scrutiny during the
review.
1 .
Change Orders
The chang~ order review begins with an evaluation
of the number of change orders that have been issued
and their relative costs. Most large changes plus a
few small changes should be selected for detailed
~-40
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,- e vie w . It i s not e d t hat the n u m b e ,- 0 fc h a n g e 0 ,- d e ,- s
that can be expected at the time fOl- the CME depends on
the status of construction, size of project, complexity
o f des i g n, the qua 1 i t Y 0 f the con t ,- act p 1 a n san d
s p e c i f i cat ion san d the con t ,- act 0 ,- s p e ,- f 0 ,- man c e . The
c h a n g e 0 ,- d e ,- sse 1 e c t e d f 0 ,- ,- e vie w s h 0 u 1 d bee h e eke d t 0
dete,-mine if they a,-e suppol-ted by the following:
a.
Evidence of the need for change
b.
s c ,- e e n i n g p ,- 0 c e s s
( 1 )
( 2)
( 3 )
( 4 )
( 5 )
( 6 )
(7)
Change order request is documented
Fun din g i s P ,- 0 P e ,- 1 y c e ,- t i fie d and aut h 0 I' i zed
P,.; 0 ,- a p p ,- 0 val, i f a p p ,- 0 p ,- i ate
Desc,-iption of change
Justification for change
Change to contI-act p,-ice, time of completion
A p P ,- 0 val s
c.
Reasonableness of the method of accompl ishing the
objective
d.
Eligibility of the change
Allowab1lity of costs
e.
f.
S P e c i f 1 c doc u men tat ion 0 f the act u ale h a n g e 0 ,- d e ,-
( 1 )
(2)
An 1 n d e pen den t en g 1 nee ,-1 n g est i mat e s
( a )
(b)
( c)
P I- e p a I- e d by the con s u 1 t 1 n g e n gin e e ,- wit h
Reasonable accurate estimated of
quant1t1es, and
Detailed cost and pI-icing data
A sum m a ,- y 0 f n ego t 1 at ion, i n c 1 u din g the
( a )
(b)
( c)
(d)
Bas i s f 0 I- the
the
Ba s i s f 0'- the
including
independent estimate and
con t f- act 0 ,- I S est i mat e ,
( 1 )
(2 )
( 3)
Steps taken in review
Explanation of differences, and
Adequacy of the estimate
Results of price negotiation
Basis for the method of payment
6-41
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4.
2.
Claims
It is very important that the State provide timely
acknowledgement of claiMs and that all known facts
concerning claims be well documented. A spot check
should be made to determine the val idity of the claims.
The probab;1ity of the contractor suces~fully pursuing
the claims, possible amounts of such claims, and reasons
for such claims should be evaluated. The State's
position in any claim action that is not well documented
is weakened because memories can fade, personnel can
change, and facts can be more easily disputed than can
timely, well-documented, written records.
3.
Progress payments
Review of progress payments for larger projects is
usually limited to an explanation of procedures by the
State and a review of monthly payments to insure that
these procedures are being followed. The standard"
procedure used for processing progress payments begins
with a submittal from the contractor containing an
estimate of work completed during the previous month.
Such an estimate is usually divided into many line item
entries for various phases of work and includes any
invoices or other documentation that are required. The
inspector for the State who is most familiar with a
certain line item entry will then make an independent
rev i e w 0 f wo r k a c c 0111 P 1 ish e d . The ins p e c tor s h 0 u 1 d be
able to verify quantities of work performed or materials
consumed by referring to the daily inspection reports.
If the contractor's estimate and the inspector's review
agree, the contractor is paid the mutually agreed upon
amount for that particular line item. Any disagreement
on estimates is negotiated, with the burden for justifyinl
estimates falling on the contractor. When a project
nears completion, the State should estimate how much
money is required to complete the job, and then insure
that the amount needed, plus a reasonable contingency,
is retained to cover future work and any known
deficiencies.
Progress Schedules
Progress schedules and their appropriate updating
are important on every project, in order that both the
contractor and the resident engineer are aware of the
contract status. In the event a project falls behind
schedule, early recognition of this fact is essential
so that the Contractor and Resident Enginee~ can plan
any additional effort that may be required to regain
the schedule. .
6-L.2
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6.
5.
It would appeal' that the no,'mal p,'ovision that
allows the State to assess liquidated damages against
the can t ,- act 0 ", i f t ~ e con t "a c t a ,- doe s not com p 1 e t e the
job ant i me, '110 u 1 d P ,- 0 v ide t ~ e i n c en t ; ve f 0" the
con t " act 0 " t of; n ish 0 n s c h e d u 1 e. U n fort una tel y t
'II hen a p ,- 0 j e c t doe s f all b e h i n d s c h e d u 1 e t the " e a" e
u sua 1 1 y man y f act 0 " s t 0 con sid e,' t hat can bet her e s u 1 t
o f bot h con t ,- act 0 ,. and g" ant e e act ion s t m a kin 9 i t
d iff i c u 1 t too b t a i n a c 1 e a" de term i n a ton 0 f ,- e s po n sib i 1 i t Y
f 0'- del a y . Th e "e f 0 ,- e, the ,- e sid e n ten gin e e ,. m u s tin s i s t
o nap p " 0 P 1'1 ate s c h e d u 1 e u p d a tin 9 and d 0 all t hat i s
con t " act u all y po s sib 1 e toe n co u " age the con t ,- act 0" t 0
m a i n t a i nth e s c h e d u 1 e . U n 1 e s s s u c hac 0 U " s e i s p u " sue d t
the S tat e ,- i s k s null i f Y i n 9 the II t i me i s 0 f the e sse n ce"
and 1 iquidated damages cl auses.
Inspection Reports
Ins p e c t ion "e po,' t s a ,- e 0 f the m 0 s t imp 0 ,'t a n ceo n
any con s t ,- u c t ion p " 0 j e c t b e c a use the y " e p " e s e n t the
o b s e " vat ion s 0 f the p e "S 0 n c 1 0 s est tot he '110 ,- k and a ,- e
timely documentations that do not rely on memory.
They are essential to the State in sttling disputes
'II i t h the con t ,- act 0 ,- . A 1 SOt the " e po,' t can b e a n
e f f e c t i vet 0 0 1 a s a bas i s f 0'- p " e p a ,- i n 9 d e f i c i e n c y
1 i s t s 'II hen the p " 0 j e c t 0 I' m a j 0 I' P has e s. 0 f the p " 0 j e c t
a "e n e a " i n 9 com p 1 e t ion. Asp 0 t c h e c k 0 fin s p e c t ion
I' e pOI' t s s h 0 u 1 din c 1 u de. v e,.; f i cat ion t hat d ail y log s a I' e
being maintained, day-to-day deficiencies and problems
a " e b e i n 9 not ed, d i s c u s s ion s 'II i t h con t " act 0 I' P e " son n e 1
a I' e b e i n g " e co,' d ed, and not a t ion s a I' e b e i n 9 mad eon any
follow-up action taken on p,'evious comments. The daily
ins pee t ion " e po,' t s s h 0 u 1 d a 1 S 0 con t a in,' e fe,' e nee t 0
qua n tit i e s 0 f '110" k pel' f 0 I'm e d and mat e I'i a 1 s con sum e d .
The s e I' e pOI' t sma y the n be use d to com put e p" 0 9 I' e s s
"epo"ts. The CME team should dete,'mine if noted
deficiencies which could be concealed by future work
are being corrected in a timely manner and properly
documented.
Shop Dr'awi ngs
A spot-check of the technical adequacy of shop
drawings, compared to contract documents, is made as a
part of the construction review by the team. The team
should also check the method of processing, 'iling and
distribution of drawings to assure that construction
delays have not been caused by deficiencies in the
system.
~:-~3
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10.
11.
7.
As-Built or Record Drawings
An evaluation of the as-built drawing procedures
should be made to assure that the as-builts are kept
current. This can be done by comparing known changes
with as-bui1ts to see if the changes are, in fact,
being added to the drawings. Particular attention
should be given to those items which are changed and
are concealed by future work, such as underground
utilities. .
8.
Correspondence
It is important that any correspondence from the
contractor be answered in a timely manner and that any
decisions by the resident engineer concerning problems,
clarification, discussions with the contractor, etc.,
be documented. The correspondence file and resident
engineer logs should be spot-checked to obtain a general
idea of how well the resident engineer is documenting
management of the contract. It is suggested that any
documentation that addresses decisions involving
significant items of work be in the form of a letter to
the contractor. The general fi li ng system shoul d al so
be reviewed to assure that a logical and usable system
is being employed.
9.
Labor Requirernents
As inspection of the contractor's facilities should
be made to determine that normal requirements for
posting certain information are being met. Such items
as the applicable wage poster and wage determinations,
. equal employment opportunity notices, and OSHA regulation
must be posted in such a manner as to afford any employee
the opportunity to review such material.
Organizational Requirements
The team has the responsibility of evaluating the
adequacy of the resident engineer's organization as
well as that of the contractor. The record keeping of
both should be reviewed. Other areas in which problems
may occur are staff and organizational structure.
Material Testing & Certificates
A check into the resident engineer's material
testing file should be made to determine if adequate
testing records and documentation are being kept.
Special emphasis should be placed on soils, pipe, rebars
and welds.
5-41
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C.
RECIPIENT EXIT BRIEFING
The CME concludes with an exit briefing at the State's
off ice. Th e b r' i e fin g s h 0 u 1 d be at ten d e d by the sam e per son n e 1
who we r' e p r' e s e n tat the e n t ran c e b r' i e fin g, m i nus the con t ,. act 0 r
r' e p r' e s en tat i v e . Th e tea m 1 e a d e r' beg ins t his me e tin g by
discussing the findings, recommendations, and conclusions of
the C ME. Aft e r' the tea m 1 e a d e j' has fin ish e d the C M E sum mar' y ,
the parties involved will be given an opportunity to discuss
the findings, recommendations, and conclusions with the
i n d iv i d u a 1 C MEt e am me m b e r' S .
The team 1 e a de r' s h 0 u 1 d c 1 a ,. i f Y t hat the C M E fin din g s
p r' e s e n t e din t his me e tin g w ill i n c 1 u d e the s i g n i f i can t
com men t s t 0 a p pea r' i nth e w r' i t ten r' e p 0 r' t . Howe v e r', add i t ion a 1
d eta i 1 sma y b e add e d tot h e fin a 1 C MEr' e p 0 r' t a sap p r' 0 p r' i ate.
The ex i t b r' i e fin g i san 0 p p 0 r' tun i t Y for' the S tat e t 0
benefit fr'om the experience and knowledge of the CME team,
asking questions and commenting on the CME findings. Ideally,
this meeting should be conducted in such a manner as to
pr'omote a positive and open atmosphere which will stimulate
con s t r' u c t i v e c r' i tic ism fro mall i n t e r' est e d par' tie s . All C M E
team member's must be pr'epar'ed for' this meeting by having, at
least a rough draft of their findings. These findings need
not be in final form, but they must be s~fficiently complete
so that the final r'epor.t can be easily pr'epa,'ed fr'om them.
By d i s c u s sin g the s e fin din g s wit h the g r' ant e e, any
inconsistencies or' omissions will be co''''ected. The exit
b ,. i e fin g w ill a 1 s 0 ass i s t the S tat e by P ,. 0 v i din g a n 0 p po,' tun i t Y
to go into the actual details behind the findings and
,'ecommendations.
6-45
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6-46
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IV.
EXTENDED CME
A.
GENERAL
The extended CME is intended fo.,. large multiple contf'act
p I' 0 j e c t s des i 9 n ate d by aRe 9 ion a 1 0 f f ice a sap pro p I' i ate f 0 I'
ani n - d e p t h rev i e w 0 f con s t f' u c t ion man a 9 em e n t p f' 0 c e d u res.
These five-day reviews are conducted by a fOUf' to five membef'
team fully experienced in on-site review techniques and
knowledgeable of EPA f'egulations and policies. The designated
team leadef' will be ff'om the EPA Regional office. Each team
membel- will have specific assignments and the team"leader'
will det~rmine the amount of time allocated to complete
. these assignments. The team leader assumes complete
,- e s po n sib i 1 i t Y f 0 I' con t r 0 1 0 f the tea m .
The scope of Review Team's actions in the field will
i n c 1 u d e a n e n t I' a n c e b I' i e fin 9 f 0 ,- the S tat e, a f- e vie w 0 f the
S tat e 's 0 f f ice, a fie 1 d I' e vie w 0 f con s t f' u c t ion 0 pel' a t ion s
and wOI'k in place, a I-eview of the constl-uction management
system and confel'ence with the State. In addition to those
t h i n 9 s des c ,.; bed u n d e f' a con v e n t ion a 1 C ME, the f 0 1 low i n 9
wi 11 be I'evi ewed.
B.
COOPERATIVE AGREEMENT MANAGEMENT
The elements of the State's financial management system
s h all bed i s c us sed f,' 0 m the vie w poi n t 0 fit SOl' 9 ani z at ion,
the pl'ocuI'ement system, the pI'opel.ty contl-01 system, the'
S tat e s h are fun din 9 p I' 0 C e d u f- e san d a c co u n tin 9 s y s tern and
the State's I'ecoI'ding-keeping system. The financial manage-
ment system will be reviewed by the Team leader and the
audit representative using the "Financial Management Check-
list", Appendix C of this manual.
1.
'State Or-ganiztion descI'iption shall include
address and official telephone number and a
des c ,. i P t ion 0 f the 0 I' g ani z a t ion s 1 s t I' U c t u " e
of key personnel.
the name,
s hOl't
with names
2.
Procur'ement S,stem of the State fo,' al'chitect-engineel-ing
s e r' v ice s s h a 1 bed e s c ,'1 bed, i n c 1 u din g com men t a "y 0 n
its effectiveness. The State's PI'ocuI'ement system fOl'
construction contracts shall also be described with an
analysis of the State's policy regarding conformance to
procurement procedures as required in EPA regulations.
The following documents, as a minimum, should be
reviewed: Advertisement for Bids, Bid Tabulations, Low
Bid, and Notice to proceed.
6~47
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c.
3.
PI' 0 pel' t y Con t I' 01 Sf stem f 0 I' the S tat e 's rea 1 pI' 0 per t y
5'Fi"a11 bel' e v , ewe dOl' its ex i s ten c e and its a p p 1 i cab i 1 i tJ
t 0 bot h e a s em e n t san d fee tit 1 e pro pel' t y . The tea m '
shall discuss whether the State has the right of eminent
d 0 m a in, w he the " i t has the cap a b i 1 i t Y tom a k e " e a 1 i s tic
appraisals to negotiate with landowners effectively,
w h e the,' doc u men tat ion i S com p 1 e tea n d 1 e gall y f i 1 ed, a s
"e qui "e d, and the 1 0 cat ion 0 f the f i 1 e d doc u men t s .
4.
State Shal'e Funding shall be identified as
being available, 01' having been obtained.
out 1 a y s c h e d u 1 e san d cas h f low p I' 0 j e c t ion s
fun d s f 0" 1 0 c a 1 s h a ,'e 0 b 1 i gat ion s s h all be
being planned,
Budgets,
which contain
discussed.
The Repo"t shall note
basis upon which each
the auditors shall be
reason for each shall
the f,'equency of audits ~nd the
one i s per f 0 I'm e d . n i s c 1 aim e " s by
P a I't i c u 1 a" 1 y men t ion e d. and the
be justiffed.
5.
~~f:"~~~e:f~n:g~::~:~t~e:~:wo:~:~ld~~~~~~~a~~:nP~~~~c~s
a d v e ,'t i s em e n t s, b f d tab u 1 at ion s, p " 0 p e,' fed e I' a 1 a p p " 0 val s ,
" e com men d a t ion for a wa ,'d, ex e cut e d con t " act s, val i d
bon d s, " e qui ,'e din s u " a n c e co v e " age and 0 the,' " e qui "e d
documentation. The ,'eview of pe,'iodfc payment estimates
and change order descriptions shall include completeness
of documentation, pI' opel' fOl'mat and compl iance with EPA
" e 9 u 1 a t ion s .
D i I' e c t p u " c has e san dot he,' c h a "g est 0 the p" 0 j e c t
s h all b e a n a 1 y zed f 0" the i I' allow a b i 1 i t Y and the p " 0 p e "
estab1 ishment of theil' value. The t"ack of EPA payments
s hall be" e vie we d t h "0 ugh the S tat e 's a c co U n tin 9
documents to determine if proper controls have been
applied to each stage.
The tea m 1 e a deI's h all h a vet he,' e s po n sib i 1 i t Y t 0
review the State's cost accounting system. However,
should an audito,' be a membel' of the team, the auditor
will be assigned this task.
No e f f 0 ,'t w il 1 b e mad e top e " f 0 "m a f 0 "m a 1 f i sea 1
audit of the State's I'ecor'ds. The pUl'pose of this
rev 1 e w 1 s t 0 c h e c k f 0" a n a u d i t t,' a 11 and d e t e "m 1 net hat
a proper usable accounting system is in place and being
properly used and mainta1ned.
CONSTRUCTION MANAGEMENT
The construction records are the source documents for
the history of the project and all act10ns that have been
taken dur1ng the course of 1ts construction. These records
should be reviewed to the extent deemed necessary by the
team. A list of typ1ca1 construct10n records is conta1ned
1n Appendix E.
6-48
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6.
7.
8.
9.
1 0.
1.
Plans and Spec1ficat10ns w11l be reviewed so that the
tea m b e com e s f am i 1 i a,' w i t h the con s t I' U c t ion asp e c t s 0 f
the pI' 0 j e ct. T his k now 1 e d g e w 11] be use d t 0 de t e "m i n e
t hat the p " 0 j e c tis b e i n g con s t I' U c t e d 1 n a c co I'd a n c e
w1th the approved plans and specifications.
Com p 1 1 a n c e wit hAp P " 0 v e d ROD - The R e cor d 0 fOe cis ion
should be I'eviewed to assuI'e that the pI'oject is in
compliance with it. If it is not, an explanation and
jus t i f i cat ion m u s t b e p I' 0 v 1 d e d by the S tat e .
2.
3.
4.
S h 0 ~ 0 " a w 1 n ~t del 1 vel' y and s t 0 I' age s y s t ems s h all b e
revlewed. T e Repo"t shall comment on the checking
p I' 0 C e d u I' e sin c 1 u d 1 n g the me c h ani s m f 0" i n f 0 "m i n g the
con t I' act 0 I' and 0 wn e I' 0 f a p p" 0 v a 1 san d d 1 sap p "0 v a 1 s .
5.
Con s t I' U c t 1 0 n S c h e d u 1 e " e qui "e men t san d I' e qui I' e d for mat
shall be discussed. The ,'espons1bility fOl' CI'eating,
updating and using the schedule to control construction
p I' 0 g " e s s s h all bee m p has i zed.
Correspondence Control shall be evaluated from the
cop1es ,'etained in the f1eld office. Mention should be
mad e 0 f the co I'" e 1 at ion bet we en 1 eve 1 0 f aut h 0 I' i t Y and
the sub j e c t 0 f e a c h p 1 e ceo f co 1'1' e s po n den c e . S to,' age
fa c 11 i t 1 e san d a con t "01 s y stem s u c has a co,',' e s po n den c e
log shall likewise be evaluated. .
!!1 Est i mat e Doc u men tat 1 0 n s hall bel' e vie wed, s p e c 1 a 1
attention should be given to the method of preparation
and the work bas1s for establishing quantities and
~rices by which the work 1s paid.
Inspection Reports discussions shall center on the
1 n s p e c to,' I S d a 1 1 y " e po,' t san d any 0 f f i c 1 a 1 d 1 a " i e s
which may supplement them. They shall be analyzed for
compl eteness and t 1meli ness. Thei,' use fo,' job cont"ol
shall be described.
~::~,eb~r:~~~0~~~1~h~e:~~~::~t:~~~~d~~9S~~:1:::~~d~h;:r
negotiating change orders. Procedures for handling
change orders over $100,000 shall be separately analyzed.
Materials Testing Documentation shall be reviewed
1ncluding the types of tests, the record of tests, the
schedule of quotas for materials testing, the use of
outside materials testing laboratories and the use of
tests to reject materials and work. Special attention
should be given to corrective action.taken when tests
fail. This act' ion must be completely documented.
6-49
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11.
o a vis - B a con, Cop e 1 and, E E 0 I' e qui I' em e n t s t 0 be met a t
the constl'uction site shall be I'eviewed and any violations~
shall be noted.
12.
Other TO~iCS to be mentioned in the Report include
copies 0 OSHA regulations available on the site, the
po s tin g and en f 0 I' C em e n t 0 f pI' 0 pel' em erg en cy pI' 0 C e d u I' e s ,
the posting of emel'gency telephone numbers and the
Pl'esence of the required tl'ade pel'mits.
D.
RECIPIENT EXIT BRIEFING
B I' i e fin 9 s h all b e a s des c r 1 bed u n del' Con v e n t ion a 1 C ME.
The fOI'mat fOI' the briefing is included as a part of Appendix
A.
6-51J
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V.
THE REPORT
A.
GENERAL
Up 0 n com p 1 e t ion 0 f the 0 n - sit e e val aut ion, a f 0 ,- mal
,- e p 0 ,- t w ill b e p ,- e p a ,- e d . A fin a 1 d ,- aft s h 0 u 1 d b ere a d y
wit h i non e we e k aft e ,- 1 e a v i n 9 the sit ~ . The fin a 1 r- e po r t
should be issued within one month. The repo,-t will be a
self-contained document which details the evaluation and its
,- e s u 1 t s . Th e tea m 1 e a del- i s res po n sib 1 e f 0 ,- w,- i tin 9 and
i s sui n 9 the fin a 1 ,- ~ p 0 r t . A t Y pic a 1 ,- e po r t co u 1 d a v e ,- age
10 to 20 pages.
It i s s u g 9 est e d the ,- e pOI- t bed i v ide din t 0 f i v e m a j 0 I-
. pa,-ts and necessa,-y appendices. These five parts are the
Intl-oduction, Coopel-atfve Ag,-eement Management, Construction
Management, Action Items and Conclusion. Any backup
info I-mati on needed to cla,-ify 01- SUPPOl-t the main body of
the ,- e pOI- t s h 0 u 1 d b e i n c 1 u d e din the A p pen d ice s .
B.
INTRODUCTION
The i n t ,- 0 d u c t ion p ,- 0 v ide san 0 p p 0 ,- tun i t Y t 0 des c ,- i b e
the S tat e 0 ,- 9 a " i z a t i 0", the p u ,- po s e 0 f the C MEa n d the s cop e
oft h e e val u a t ion. A ,- e a d e ,- s h 0 u 1 d b e a b 1 e t 0 u n del- s tan d
the whole C M E p ,- 0 g ,- am by ,- e a d i "g the i n t ,- 0 d u c t i 0" t 0 any
individual CME report. The descriptio" of the State must be
ins u f f i c i e n t d eta i 1 f 0 ,- a ,- e ad e ,- t 0 com p a ,- e the p a ,- tic u 1 a ,-
State being evaluated with other States. As such, the
description must include all pertinent items regarding the
State, including the physical layout of the site, the type
of management system utilized, the numbel- of conti-acts as
well as the dollar value of each and the project status at
the time of the CME.
C.
COOPERATIVE AGREEMENT MANAGEMENT
This part of the ,-epo,-t can gene I-ally be divided into
f 0 u ,- see t ion s : p ,- 0 j e c t ,- e co ,- d con t ,- 0 1, ace 0 u n tin 9 s y s t em,
cooperative agreement requirements, and recommendations. In
some cases a sepal-ate sect i on on p,-ocu,-ement p,-ocedul-es may
bed e s 1 I- a b 1 e .
The sect10n on coopel-ative ag,-eement I-equil-el11ents may
be set up in a tabulated fashion. All the requirements that
are checked should be discussed in the tabulation. If the
State failed to meet any of these requirements or if there
is a strong possibility that the State w111 be unable to
meet requirements in the future. then this fact and the
problem behind it should be discussed 1n this portion of the
C M E I- e POI- t .
6-51
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The recommendations section is intended to benefit and
provide guidance to the State. The recommendations must be
specific, detailed, and tailored to the needs of the individua
State. If the recommendations are acted upon by the State,
they should remedy problems that t~e State may be having
with cooperative agreement management. Recommendations will
be viewed as advice while the ACTION ITEMS part of the CME
report will be viewed as a manadate.
~
o.
CONSTRUCTION MANAGEMENT
This part of the report is best separated into three
sections: construction management, construction r~view. and
recommendations.
The constructio~ management section be divided into
subsections such as change orders, progress payments, progress
schedules and the like. F.ach of the subsections will
summarize the team findings with respect to that area and
1 ist any deficiencies noted. These subsections should not
be clutted with unnecessary detail. They need to be short
and to the point, but still detailed enough to allow a reader
to find the grantee's strength or weaknesses in a given area.
The construction review section should give a brief
description as to the quality of work being performed. If
any problems were observed with respect to the quality of
construction work, then the team engineer should note these.
When such a situation occurs, the team leader should include
extra documentation in a separate appendix and provide
greater detail than usual for this section.
The recommendations section should be designed in the
same way as the grant management part of the report.
E .
ACTION ITEMS
This probably is the most important part of the written
CME report. It outlines actions to be taken, which if
followed, will correct deficiencies noted as a result of the
CME. The action items should be divided into three distinct
sections.
The first section will include all action items required
of the State, and will be divided into two subsections: (1)
those actions which the State must themselves implement, and
(2) those actions which the grantee will have consultants or
contractors implement. An example of the former would be a
change in the State's accounting system. An example of the
latter would be requiring the contractor to update or revise
a construction schedule.
n-~?
-------
The second section will include all action items which
need to be taken by the Regional EPA Office. An example
might be a ,'-equi,'ement fo,' a "eview of the letter of credit
p " 0 c e d u " e s .
F.
CONCLUSION
The con c 1 u s ion i s ash 0" t fin a 1 s tat em e n t wit h I' e s p e c t
tot h e p " 0 j e c t a saw h ole. Its h 0 u 1 d s tat e a con c 1 u s ion a s
to the ove,'all qual ity of the State's management. The team
leader should be given disc,'etion in deciding what should be
included in this section.
G-G~
-------
u-!i4
-------
APPENDIX A
NOTIFICATION PACKAGE
FOR
CONSTRUCTION MANAGEMENT EVALUATIONS
. The items listed below make up the notification package to
the State. Samples of these documents are included as a part of
. this appendix. They should be tailored to each individual State
and s e n t tot h eSt ate a t 1 e a 5 t two wee k s p r i 0" tot h e 5 c h e d u 1 e d
datp. of the CME.
S c h e d u 1 e f 0 /' Rev i e wan d 8 /'i e fin 9 s
A-2
.~- 3
Sample Notification Letter
Outl ine of Construction Management Evaluation
Review Topics
Documents and Facilities Required from State
A-4
A-S
Out 1 i n e 0 fEn t /' Y B /'i e fin gat S tat e I s Of f ice
Out 1 i n e 0 f Ex i t 8 t' i e fin gat S tat e ISO f f ; c e
A-5
A-7
6-55.
-------
SAMPLE NOTIFICATION LETTER
( Ad d res s )
Dear .:.-
This is to confirm that there will be a Construction Management
Evaluation (CME) of your remedial action project from (date) to
(date) inclusive.
The following enclosures havp. been attached to assist in
your preparation for the field visit:
Schedule for Review and Briefings
Outline of CME review topics
Outline of Entry Briefing at State's Office
Documents and Facil ities Requi red from State
Outline of Exit Briefing at State's Office
The primary purpose of the visit is to provide an overview
of the management of the construction phase of the remedial
program. It should be emphasized that this project has been
selected because it is part of a sampling of projects representing
a cross-section of the remedial program. No suggestion of
improprieties can be inferred from its selection.
Your assistance in providing access to project documentation
and working space for the Review Team will be appreciated. It is
anticipated that team members will require consultation with your
staff, your AlE's field personnel and construction contractor
personnel. These interviews will be scheduled during the Entry
Briefing. Your cooperation during the field visit will be
appreciated and the Review Team has been instructed to respect
your normal working schedule insofar as possible. .
Questions should be directed to (name), Remedial Project
Manager, at {telephone number}.
Sincerely yours,
(signature)
6-56
-------
SCHEDULE FOR REVIEW AND BRIEFINGS
(Day and date)
10: :()O AM -
Entry Briefing with State at State's Office
1:00 P~
Escort of Team by State. Orientation Tour of
Construction Sites. Storage Site(s). Work
Spaces. Introduction/Arrangements with
Conferences
(Day and date)
A:OO AM
Team Members Begin Concentrated Effort on
Assigned Areas
(Day and date through Day and date)
8:00 AM
Team Members Work on Assigned Areas
(Day and date)
8:00 AM
Team Members final Preparation for Exit
Briefing
(Day and datet
9:00 AM
Exit Briefing with State
PM
Team Travel
6-57
-------
OUTLINE OF CONSTRUCTION MANAGEMENT EVALUATION REVIEW TOPICS
1.
a.
b .
c.
<1 .
e.
f .
g .
2.
Cooperative Agreement
State Organization
Procurement System
Property Control System
State Share Funding
Record-keeping System
Record of Decision
Cl aims
Construction Monitoring
a.
b.
c.
d.
e.
3 .
Prel imi nary Work
Work Quality Assurance (Summary)
Resident Engineer and Inspector Organization
Con t r act 0 r 0 r g ani z a t. ion
Work Per'formance
Construction Records
a.
h.
c.
d.
e.
f .
g .
h.
i .
j .
Plans and Specifications
Shop ~rawings
Construction Schedule
Correspondence Control
Pay Estimates nocumentation
Inspection Reports
Change Orders
Material Testing nocumentation
navis-Bacon, Copeland, EEO
Ot he r
6-~G
-------
2.
1.
a.
b.
c.
d .
~.
f.
C] .
h.
i.
j .
k .
1 .
m.
n.
o.
p .
q.
r.
s.
DOCtJMENTS AND FACILITIES REOUIREn FROM STATE
nocuments to be Furnished by State
Contract nrawings
Specifications
Change Order File
Claims File
Payment File
AlE Contract{s)
Construction Contr~ct{s)
Cooperative Agreement
Organization Chart with Telephone Numbers
AlE and Contractor Organizdtion Charts with Telephone
Numbers
Project Schedule
Resident Engineer{s) Reports
Shop Drawings
r. 0 r '" e s p 0 n den c e F i 1 e
Records of Testing
Payroll Records
Permits and Certificates
Operat"ion and Maintenance Manual (if prepared)
Shop Dr "a wi ngs
Team Facilities Required
a .
b.
Work space in AlE site office{s) accessible to field files
Work space in State1s office accessible to State files
(:-59
-------
B.
C.
ENTRY BRIEFING WITH STATE
State IS Offi ce
A.
Attendees
State
Project Officer
Principal Staff Engineer
Principal Staff Financial
Other (State option)
Representatives
A/E
Project Manager
Project Resident Engineer
Chief Inspector
Other (State option)
Contractor -
Construction Superintendent
R.O.
Remedial Project Manager
CME Team
Tentative Agenda
CME Team Leader - Introduction, Purpose/Objective, Schedules
- Team Member
State
Oiscuss the following:
o
Oescription of Construction Inspection
and Supervision Arrangements
Briefing of Institutional Arrangements,
Statutory Authority, Agreements
Overview of Project Status, Financing,
Schedule
Designate Principal Contacts, Work
Spaces
o
o
o
State Escort of Team on Orientation Tour, PM
Construction Site(s)
Storage Site(s), stockpiles, and Off-site
Field offices
Ot her
Plants
u-6u'
-------
B.
A.
Attendees
EXIT BRIEFING WITH STATE
State's Offi ce
Same as Entry Briefing, Except:
Minus Construction Superintendent
Tentative Agenda
CME Team Leader
St ate
Highlights of Favorable Findings
Highlights of Unfavorable Findings
Recommendations
Probable Thrust of Final Report
Observation on Exit Briefing
Comments, Ouestions, Oiscussion of any
findings or observations of the review
team
U-(;:. .
-------
6-62
-------
PART I
PART I I
Int,.oduction
A.
~.
C .
Pu"pose
Scope
St ate
1.
?.
3 .
APPENDIX B
TYPICAL REPORT OUTLINE
() " 9 ani z a t ion
Coope"ative Ag,'eement
Con s t " ~ c t f 0 n P " 0 j e c t
Coo p e " a t i v e A 9 " e em en t
A.
B.
R e co,' d Con t ,. 0 1
1.
2.
P,'oject Filing System
Man n e,' 0 f 0" 9 a n f z a t f 0 n
P " 0 c u " erne n t P " 0 c e d u "e s
2.
1.
c.
d.
b.
E n gin e e " i n 9 S e " v f c e s
a.
b.
Maxfmum Open Technical Competition
Types of Cont,.acts
( 1 ) Co s t P 1 u s P e " c e n tag e 0 f co s t
( P " 0 h f b f t e d )
( 2 ) P e " c e n tag e 0 f con s t " u c t ion co s t s
( p" 0 h f b f t e d )
(3) Cost Reimbu,'sement
( 4 ) Fix e d P ,'i c e
( 5 ) P e,' Diem
Res po n sib 1 e E n gin e e,' Cap a b 1 e 0 f P e " f 0 ,. m i n 9
Con t " act C 1 e a I' 1 y De fin i n 9 S cop e 0 f S e " v ice
Con t ,'a c t C 1 a use s p e,' 4 0 C F R P a " t 3 3
e.
Con s t "U c t ion Con t "a c t s
a.
Sealed Bidding w/Public
Adequate Time
T y p e 0 f Con t " act
(1) Lump sum
(2) Unit p,'ice
(3) Combination
Notice and
15-63
-------
C.
o.
E.
PART III
A.
c.
8idding Documents
(1) Statement of wo,"k
(2) Te'"ms and Conditions of Contl"act
(3) Explanantion of Method of Bidding
( 4 ) Bid E val u at ion R e qui '" em e n tan d
C I" i t e '" i a .
(5) Sealed Bids
Lowest Responsive, Responsible Bidder
EPA AppI"oval s (i f requi ,oed)
Eligible/Ineligible Items
d.
e.
f.
Cost Accounting Systems
Coope,"at ive Ag,"eement Requi '"ements
Recommendations
1-
2.
Listing of Specific Recommendations
R e com men d a t ion s S h 0 u 1 d bel m p e '" son a 1
Construction Management
Con s t '" u c t ion R e co I" d s - 0 vel' all S tat em en t
1.
2.
Plans and Specifications
a.
b.
Comprehensiveness of Review
Plans - Some significant Points
( 1 ) Sit e Lay 0 u t com p a '" e d toT 0 u I" 0 f Sit e
( 2 ) S u '" f ace and Sub s u '" f ace Con d i t ion s
( 3 ) S t '" u c t u '" e s Com p a '" e d t 0 Sit e Lay 0 u t
(4) Equipment
Specifications - some Significant Points
(1) Liquidated Damages
(2) As-built Drawings
(3) Time of Completions
(4) Construction Schedule
( 5 ) Con t ,. act P '" ice B ,. e a k d 0 w n
(6) Payment estimates
( 7 ) C h an g eO,. de,. S
Co
Construction Schedule
a.
b.
c.
d.
Types of Schedules
Primary Concern - On Schedule or Not?
Seconda~'y Concer'n - Will Const,"uction Remain
on Schedule?
In d i cat 0 r' 5 0 f Fu t u r' e T,' 0 u b 1 e
(1) Construction Schedule Ha~ Not Been
Updated Recently
(2) Little Evidence of Contractor's Advance
Planning.
( 3) . S hop D r' a win g Sub m i t tal I s S low
(4) Numerous.Scheduling Conflicts
6-:':.~~
-------
4.
e.
Reason for Slow Construction Progress
( 1 ) Po 0" Bid din g
(2) Poor Planning
(3) Acts of God
(4) Financial Expedience
Behind Schedule Actions
( 1 ) Wa " n i n g Not ice t 0 Con t f' act 0 I'
(2) Requil'ement fo,' Intel'im '~ake-up Schedule
(3) Liquidated Damages Reminder
Con s e que n c e s 0 fIg nor i n 9 Con s t "u c t ion S c h e d u 1 e
f.
9 .
3.
Payment Estimates
Me tho d 0 f p" e p a "a t ion
( 1 ) Sub m i t t e d by Con t " act 0 " toR e sid e n tEn gin e e f'
(2) Reviewed and Adjusted by Resident Engineer
( 3 ) N ego t i ate d wit h Con t " act 0 I'
( 4 ) Est i mat e C e I' t i fie d by Res ide n tEn gin e e "
(5) Estimate Submitted to Recipient
Documentation Required
( 1 ) Un; t P ,'i c e Con t " act
( 2 ) L u m p Sum Con t "a c t
( a ) Con t r act 0 I' I S B I' e a k d 0 w n
(b) Resident Engineer Quantity Records
( c ) S t 0 I' e d Mat e I' i a 1 R e c 0 I' d s
C h a n g e 0 I' de,' s
a.
b.
a.
Reviewed Individually.
(1 ) T y P e 0 f C h a n 9 e 0 r del'
(a) Unit PI'ice PI'eviously Ag,'eed
(b) Unit Price Negotiated
(c) Agreed Lump Sum
( d ) Co s t Rei m b u " s em en t
( 2 ) P u I' P 0 s e
(3) Justification of Need
Management Elements
(1) Independent Engineering Cost Estimate
( a ) PI' e p a "e d by Con s u 1 tin g En gin eel'
(b) Reasonably Accurate Estimate of
Quantities
(c) Detailed Cost and Pricing Data
(d) Published Estimating Handbook
( e ) I n f 0 I'm alL 0 c a 1 Quo tat ion s
( f ) Ad v ice f " 0 m Ex pel' t s
(2) Summary of Negotiations
(a) Basis for Independent Estimate
(b) Basis for Contractor's Estimate
(c) Steps. Taken to Review
(d) Explanation of Differences
(e) Adequacy of Estimates
(f) Results of Price Negotiations
. (g) Basis fo,' Method Payment
b.
6-~~
-------
6.
7.
8.
{ 3 }
Time Extension
{ a } A p p " 0 v a b 1 e f 0" Ext" a W 0 " k Imp act i "g I
Critical Path
{ b } Not A P p "0 v a 1 f 0" F loa t Tim eEl em en t s
{ c } Doc u men tat ion R e qui "e d
i. Independent Cost Estimates
i i . Sum m a "y 0 f N ego t i a t ion s
i i i . Jus t i f i cat ion f 0" Tim e Ext ens ion
5.
S hop D " a \II i n g s
a.
P " 0 c e s s Rev i e w
{ 1 } Del i v e " y
{ 2 } Con t " 0 1
{3} Checking
{ 4 } A p P " 0 val
P"ocess Del ays
{ 1 } Sub m i t tal - I n d i cat i v e 0 f Po 0 "
{ 2 } R e c i pie n t Rev i e w - Bas i s f 0 "
Time Cl aim
Schedule
Extension of
b.
As - B u i 1 t D " a win 9 s
En gin e e " i n gAg " e em e n t R e qui "e men t s
Specification Requirement
P " e p a ,'a t ion
{ 1 } W hat t 0 L 00 k F 0 "
{a} Currently Posted
{b} Sufficiently Detailed
{c} Contained in a Bound Set
{2} How to Evaluate Sufficiency
{a} Difficult
{b} Compliance with Specifications Provision
In~pection Reports
a..
b.
c.
a.
b.
Fo "m
Detail
{ 1 } We at he,'
{2} Wo,'k Pe,'fo,'med
{3} Wo,'k C"ew
Rema ,'k s
Quantities for Payment
Estimate Documentation
c.
d.
Testing and Certificates
a.
Specification Requirements
6-66
-------
B .
C .
PART IV
A.
B.
9.
Labor Requirements
a.
b.
Davi s-Bacon Act
Copeland Act
EEO
OSHA
c.
d .
Construction Work - Overall Statement
1.
2.
3.
Inspection Organization
Contractor's Organization
Work Performance
Recommendations
1.
2.
Listing of specific Recommendations
Recommendation shoulrl be Impersonal
Act i on It ems
St ate
Regional Office
G-~7
-------
6-6:3
-------
A.
1-
2.
3.
4.
5.
6.
7.
8.
9.
10.
B.
1.
2.
3.
4.
5.
6.
7.
8.
APPENDIX C
FINANCIAL MANAGEMENT CHECKLIST
fo '"
CONSTRUCTION MANAGEMENT EVALUATION
G e n e '" alP '" 0 j e c tIn f 0 I'm a t ion
Region
Coo pe r"a t i v e Ag '"eeme nt Numbe I'
St ate
Review Date
Offi ce Add'"es s
M ail i n g Ad d '" e s s
Telephone
Designated Cont~ct (Name & Title)
Pl'oject Location
p '" 0 j e c t Des c I' i P t ion
Recipient's Management Ol'ganization
Type of Ol'ganization
Pl'incipal Manage'"
a. Title
b. Name
c . A," e a san d L i m i t 0 f Res po n sib i 1 i t Y and
Au tho," it y
p '" i n c i pal Fin a n cia 1 Man age '"
a. Title
b. Name
c. Areas and Limits of Responsibility and
Autho,"i ty
p," i n c i pal En gin e e,.; n g Ma nag e '"
a. Title
b. Name
c . A," e a san d L 1 m i t 0 f Res p 0 n sib i 1 i t Y and
Au tho," i t Y
P ,. 1 n c i pal Leg a 1 C 0 u n s e 1
a. Title
b. Name
c. A,'eas and Limit of Responsibil ity and
Au tho ,. it y
o r 9 ani z a t ion a 1 C h a '" t
P ,. i n c i pal A 9 ,. e em e n t s
a. Other Agencies
b. Special Ag,"eements
(1) Federal/State
( 2 ) I n d u s t ,. Y
(3) Municipal
Bonding of employees
6-ti9
-------
0.
E.
C.
2.
P,'ocu"ement System
1.
A / ESe ''v ice s
a. P,'ocu"ement policies and p"ocedul'es
b. Ty pes 0 f con t "a ct
c . Sub - con t ,'a c t p " 0 c u " em e n t
d . Sub - con t " act a d van c e a p p " 0 val
e . q e vie W 0 f con t ,'a c t s
?.
Con s t ,'u c t ion Con t "a c t s
a . P " 0 c u " em e n t pol i c i e san d p" 0 c e d u I' e s
b. S tan d a ,'d g" ant c 1 au s e s
c. Time fol' completion/penalties
d. qeview of contracts
e . E x c 1 u s ion a " y 0 I' Res t " i c t i v e Bid din g
Requ i "ement s
P,'opel'ty Cont"ol System
1.
Acquisition System
a. Easements
b. Titled Prope,'ty
2.
3.
4.
S.
6.
7.
8.
9.
Right nf Eminent Domain
A p P " a i s a 1 s
Negotiations
W h e f' e F i 1 e d
Copies of Deeds Available
P f' 0 p e f' t Y Ins u f' a n c e I T y pes I Am 0 u n t s
F 1 0 0 d H a z a f' dIn SUI' a n c e
Property Reporting to EPA R.O.
S tat e S h a f' e Fun din 9
1 .
Bond Issues
a. Bond Counsel
b. A/E for Engineering Report
c. Marketing Method-Experience
d. Current Issues, G.O.? Rev.?
e . Co v e f' age
f. Trustees-Tf'ust Agf'eements
g . R e po sit 0,'1 e s
h. Investments
1. Debt Service Schedule
j. Special Funds
Short-term Financing
a . P u ,. po s e
b. Terms-Source
c. Special Funds
6-]CJ
-------
F .
3.
4.
5.
6.
Synops; s of All Spec; al
a . P u J- po s e s
b. Restr;ctio~s
c . T ran s f e J- s
Funds
Annual Budget
a . Ope J- a t ion sSe c t ion
b. Debt Service Section
c. at her
Annual Financial Report
Audit
a . Au d i to J-
b. FJ-equency
c. Basis
d . R e p 0 J- t
RecoJ-d Keepi ng System
1 .
b.
c.
d.
e.
f.
g.
h.
i .
j .
k.
1 .
m.
n.
o.
P r- 0 j e c t F i 1 e s
a. Cooper-ative AgJ-eement/Amendments
(1) RI/FS
(2) Oesign
( 3 ) Con s t J- U c t ion
Bidding Fne
(1) Advertisement
(2) Tabulations
( 3 ) Fed e J- a 1 Ap p J- 0 val s
Acceptance-Notic~ to Proceed
Con t J- act s - Bon d s - Ins u J- a n c e
Construction Schedule
Con s t J- U c t ion CO JT e s p 0 n den c e Con t r 0 1
PeJ-iod;c Payment Est;mates
(1) Ample Backup of Costs of Wor-k
. Accomplished
(2) Retentions
(3) Payment Records
Change OJ-der-s
( 1 ) B a c k u P 0 f C 0 s t P J- 0 d u c e d
(a) Change Notice
(b) Change Estimate
(c) Authorizations
(d) Regional Actions
(e) Cost plus percent-of-cost (Prohibited)
o i "e c t Pur' c has e
Force Account 8y Recipient
Other' Char'ges to Pr'oject
Tr'ack of EPA Payment
Prompt Transmittal/Filing-shop Orawings, etc.
Wage Rates - Furnished and Checked
EEO
6-71
-------
2.
Cost Accounting System
a . Au d i t T " ail - co s t t,' a c k top " 0 j e c t f i 1 e
b. Identifiable eligible/ineligible cost
c. Identifiable allowable/unallowable cost
d . Ide n t i f i a b 1 e d i "e c t / i n d i "e c t co s t
e. Payments made-Retentiorts-P"omptness
f. Coope,'ative Ag,'eement Payments received
IJ . 0 i "e c t P u " c has e s
h . Con t "0 1 s
i. Et c.
6-72
-------
A.
1.
2.
3.
4.
5.
" 6.
7.
8.
9.
10.
8.
APPENOIX D
CONSTRUCTION CHECKLIST
fo,'
CONSTRUCTION MANAGEMENT EVALUATION
G e n e " alP " 0 j e c tIn f 0 "m a t ion
Region
Cooperative Ag,'eernent Numbe,'
St ate
Review Date
Offi ce Add"ess
M ail i n gAd d ,'e s s
Telephone
Designated Contact (Name & Title)
P " 0 j e c t L 0 cat ion
p" 0 j e c t Des c,' i P t ion
Gene,'al Const,'uction Info,'mation
1.
.2.
3.
C.
P " i n c i pal Ins p e c t ion Man age "
a. Tft1e
b. Name
c. Areas and Limit of Responsibility and
Au tho" it Y
Telephone
d.
Inspection Staff
a. Tit1 e
b. Name
c. Areas and Limit of Responsibility and
Autho,'i ty
Telephone
d.
G e n e ,. a 1 Con t ,. act 0 " Sit eRe p ,. e s e n tat i v e
a. Title
b. Name
c . A,. e a san d L i m i t 0 f Res po n sib i 1 i t Y and
Aut h 0 ,'i t Y
Telephone
d.
Plans Specifications and Contracts
The engineer will first thoroughly study the plans and
specifications to become familiar with the project" and to
a ,. ,'i v eat a nun de,' s tan din g 0 f the " e s po n sib i1 i tie san d d uti e s
of the contractor.
The engineer will study the AlE contract to develop a
c 1 e a,. un de,' s tan din 9 0 f the ,. e s po n sib i1 i tie s 0 f the 0 wn e ,. t "
the AlE and the contractor. The relationship and authority
of the three princi~a1 parties must be clearly understood by
the engineer. .
6-73
-------
Ooes the cont,'acto,' appea,' to be well organized and
e f fie i en t 1 Y P u,' sui n g the wo,' k?
00 est he,' e sid e n tin s pee to,' e x h i bit tee h n i c a 1
competency, initiative; is he well organized and
a b s e " van t ?
Is s toe k p i 1 i n g of mat e " i a 1 sad e qua tel y p" 0 tee t ed,
p " ope " 1 Y i n v e n to,' i e san d. "e a d i 1 Y a c c e s sib 1 e? .
Doe s the qua 1 i t Y a f mat e " i a 1 s, bot h s t a c k p i 1 e d and
i n - p 1 ace me eta p p " a p ria t est and a r d s ?
Has the wo,' k 1 n p 1 ace bee n p " 0 p e ,'1 y ex e cut e d and i s
it v1sua11y acceptable?
A" e h e a 1 t h and s a f e t y mea sur e sad e qua t e ?
1st est i n g b e i n 9 a c com p 1 ish e d as" e q u 1 " e d by the
contract documents?
A" e the,' e p" ace d u " e s fa" p " ope ,'1 y can t " a 1 1 1 n g ri1 e a s u " e d
quant1t1es?
Is the over'a1l const,'uction 1n confo,'m1ty w1th the
plans and specif1cations?
Res ide n tEn gin e e,' and Ins pee to,' 0 " g ani z a t ion
O.
. 5.
6.
7.
8.
9.
E.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Conformance with Plans and Specifications
Th e en g 1 nee,' s h all vis i t the can s t " u c t ion sit e and
physically inspect both the completed work and the wo,'k in
p,'og,'ess. The following points will be emphasized:
1.
2.
3.
4.
Name
Em p lay e "
Ap P a" e n t qua 1 i f 1 cat ion s
St a f f
P " ace d u " e s
Attendance at site
C h a n g eo" de,' can t " a 1
S c h e d u 1 e can t " a 1
P.E. opinion of contract drawings and
specifications
I) e g " e e 0 f de d i cat ion top" a j e c t
P " ace d u " e s fa" not i f i cat ion s toe ant " act a ,.
Relationship with Oesign Engineer
Authority (documented, to ~act for~ grantee,
limitations, etc.)
Cont,'actor'-Enginee,' ,'elations (fl'iendly, fai,',
firm, businesslike and cooperative)
Inspector(s) personally knowledgeable, good
judgement, responsible)
P 1 a n san d S p e c i f i cat ion s (,' e fe,' e n c e set, m a " ked -
up. amendments, changes)
Progress Schedules (changes, slippages)
As - b u f 1 t d " a win g s (s e t k e p t CUlT e n t f a I' " e c a I' d )
Inspectors guidance (formal)
0-74
-------
G.
F.
Cont,"acto," O'"ganization
1.
2.
Name and Qualifications
Equipment (appear adequate in number" and si ze fa,"
schedule and/or safety)
Personnel (sufficient for safe and efficient
p r" a s e cut ion oft he wo r" \( ) .
Sup e '" vis a '" y per" son n e 1 (0 I' g ani z at ion s 1 a b i 1 i t Y )
Field Office and Shops (well placed, without
s a f e t y a r" h e a 1 t h h a z a '" d, a d e qua tel y s i zed)
Sto'"age area (well or"ganized, protected)
3.
4.
5.
6.
wo,"\( Perfor"mance
2.
3.
4.
5.
1.
Wo '" \( i n p 1 ace (p '" ope ,"1 y ex e cut e d )
a. Site
( 1 ) A P pea '" a n c e .
(2) Safety - security
( 3 ) P '" a j e c t S i g n
( 4 ) Mat e r" i a 1 s S tor age
(5) Dewatering - Drainage
S t '" u c t u '" e s
Me c h ani c a 1
E 1 e c t '" i c a 1
Pi peli nes
b.
c.
d.
f.
Safety (pel"sonne1, equipment
Site drainage (adequate)
Oust control (maintenance of
a I" e as)
Erosion pr"otection (in place
and site)
I" a ads, s t 1"1 P P e d
and planned)
6-75
-------
6-76 -
-------
A.
1.
2.
3.
4.
5.
6.
7 .
$3.
9.
10.
11.
B.
C.
APPENDIX E
CONSTRUCTION RECORDS CHECKLIST
fo,'
CONSTRUCTION MANAGEMENT EVALUATION
Ge n e " a 1
P,. 0 j e c tIn f 0" mat ion
Region
Coo p e " a t i v e A 9 ,. e em e n t N u m be"
St ate
Review date
Office add,.ess
M a j 1 i n gad d " e s s
Telephone
Oesignated contact (Name & Title)
P " 0 j e c t 1 0 cat ion
P " 0 j e c t des c " i P t 1 0 n
Rev i ewe,'
G e n e " a 1 Con s t " u c t 1 0 n I n f 0 " mat ion
1.
P " 1 n c 1 pal 1 n s p e c t ion 111 a nag e "
a. Title
b. Name
c. A,.ea and Limit of Responsib1l1ty and
Autho,'i ty
Telephone
d.
~.
Inspect10n staff
a. Title
b. Name
c. Area and L1mit
Au th'o 1'1 t Y
Telephone
of Responsibil ity and
d.
3. Gene,'al k con t " act 0" site " e p I' e s e n tat i v e
a. Title
b. Name
c. ""ea and Limit of Responsibil ity and
Authol'ity
d. Telephone
Resident Engineer and/or Inspector Information
1.
2.
3.
4.
Employer'
First arrived at project
W 0 r' k h 0 u r' s
.a. ~or'mal
b. Authorityh to Work
Communications
a . ToE m p 1 0 y e r'
b. On-Site
0-77
-------
I).
2.
3.
5.
6.
Inspection equipment furnished
Office security
a. Me tho d -
b. Evidence of tampe,'ing
Ins p e c to,' 's 1 i b ,. a ,. y
a. On-site office
b. Manual s
7.
W 0 ,. kin 9 Pap e ,. s
1.
Con t ,. act d raw i n 9 san d s p e c i f i cat ion s
a. Does i nspecto,' have app,'oved set?
b. Is sup e ,. i n ten den t wo ,. kin 9 form a p p ,. 0 v e d set?
c . A,. e c h a n 9 e s b e i n 9 k e p t cur r e n t by bot h
p a ,. tie s ?
A,. e the y sup po,' t e d by wo ,. kin 9 s k e t c h e s ?
(1) Source
(2) Completeness
( 3 ) Ad m i n i s t ,. a t ion
Dos u b con t ,. act 0 ,. s h a v e s u f f i c i e n t set s ?
A,. e all con t ,. act 0 ,. sob 1 i gat e d t 0 f u ,. n ish
a s - b u i 1 t d ,. a win 9 s ?
(1) In what form?
(.2) If not, who furnished?
S hop I) ,. a win 9 s
a . 0 e 1 i v e ,. y pro c e c1 u ,. e
b . S to,' age and f i 1 i n 9 s Y s t em
c. Approval system
(1) Who has responsibility?
( 2) Me c h ani sm
(3) Tu,'n-a,'ound time
(4) Substitutions
(5) Log
( 6 ) A h e ado f del i v e ,. i e s ?
d.
e.
f .
Con s t ,. u c t ion S c h e d u 1 e
a . Iso n e ,. e qui "e d ?
b. Who prepares?
c. Fo "mat
d. Date furnished
e. Conforms to specified completion?
f. Obvious conflicts
g. Who updates?
h. Ag,'ees with pa,'tial payment ,'equest?
i. Up to date?
j. Reaction to delays
(I) Inspector's actions
(2) Superintendent's actions
(3) Current status
Reflects stop orders, approved delays?
k.
6-78
-------
E.
6.
7.
4.
5.
R e que s t s for P a" t i alP a ym e n t s
a . F ,'e que n c y
b. Who prepares and verifies
c. Fo,'mat
d. T,' e a tm e n t 0 f wo,' k 1 n p" 0 9 res s
e . All owa n ce f 0" ma t e ,'1 a 1 son sit e
( 1 ) p" 0 t e c t ion I' e q u 1 ,'em e n t s
( 2 ) 0 e t e "m 1 n 9 val u e
Sub t " a d e doc u men tat 1 0 n
f.
F 0 " c e A c c 0 u n t R e co,' d s
a . F 0 " c e a c co un t use don w hat e 1 em en t s 0 f
P " 0 j e c t ?
I s RAp" e a p p " 0 val doc u men t e d ?
Fo "ma t
How a" e qua n t 1 tie s k e p tan d vel' 1 fie d ?
(1) labor
( 2 ) Mat e " i a 1 s
(3) Overhead
b.
c.
d.
Co,' " e s po n den c e
a . W hat 1 eve 1 0 f co,' "e s po n den c e can be i n 1 t 1 ate d
by P " 0 j e c ten 9 1 nee" f 0 " con s t ,'u c t 1 0 n ?
Wit h " e c 1 p 1 e n t
W1th utilit1es
III i t h 9 e n e " a 1 con t " act 0 "
(1) Reasons
( 2 ) Act 1 0 n so,' de,' e d
( 3 ) Con t " 0 1 p " 0 c e d u "e s
( 4 ) S top wo r k 0 I'd e,' s
(5) at he,'
b.
c.
d.
C u " " e n tOe f 1 c 1 e n c i e s
a. Immediate act10n 1tems
b. p" e li m 1 n a,' y pun c h 1 i s t
(1) Is one being created?
(2) Mechanism for adding an item
( 3 ) I sit c u ,.,. e n t ?
Job R e co,' d s
1.
Inspector's Daily Reports
a. Is set complete to date?
b. 00 assistants have separate reports?
c. Fo,'mat
(1) Complete heading
( 2 ) R e co,' d 0 f con s t " u c t ion act i v i t Y
(3) Record of quantities
( 4 ) S p e cia 1 ins t " u c t ion s
(5) Basis for change orders
(6) Re~arks on progress
(7) On-site tests
(8) Demonstrate method~ of quantity control
and measurements?
Co,, " e 1 ate s wit h p a ,'t i alp a ym en t. " e que s t
Stop wo,'k o,'de,'s
d.
e.
u-7CJ
-------
4.
5.
2.
o i a ,'i e s
a . A" e the y k e p t ?
b. Can we inspect?
c . Dot hey" e co,. d mea s u " e d
quantities?
3.
C h a n 9 eO" de,. s
a. NUlTlbe,'
b. Total value
c . I s n ego t 1 a t ion com p 1 e t e p " 1 0" t 0 i nit i a t ion
of change work?
p " 0 c e d u ,. e f 0 " c h a n 9 eo" de,' 0 v e '" S 1 00 , 000
Am 0 u n t by t,' a des
( 1 ) Tot ale a c h t,' a d e
(2) Relationship to subbids
Fo "ma t
Specification basis
Completness of documentation
p " ace d u " e s f 0" c ,. eat ion
App,'op,'1ateness fa" costing method
Ref 1 e c t ion 0 f qua lit Y a f con t " act d,' a win 9 s
and specifications
( 1 ) I n t e " p " eta t ion a f jus t i f 1 cat ion fa"
each?
( 2 ) I s val u e " e a lis tic?
( 3 ) 1st he" e a con t " act p " a vis ion f 0 "
u n 11 ate,' a 1 0 ,'d e I'i n 9 0 f c h a n 9 e s ?
(4) Quality of A/E documents
0" - e qua 1 vi 01 at ion s
M i no,. c h a n 9 est ,'a d e - off f i 1 e
( 1 ) 1st he,' eon e ?
( 2 ) I sit f 0 " mal/ i n f 0 ,. mal ?
( 3 ) A " e t" a des con s i s ten t ?
(4) A,'e t,'ades shown on as-built d,'awings?
R e co,' d s 0 f T est
a . R e qui '" em e n t s c 1 a use sin A/ E can t " act and / 0 ,.
specifications?
List from specifications
Confo,'mance to schedul e
Who pay for testing?
Names of testing laboratories/certification
p ,"ocedu "es
Test results indicate need to inspect
d.
e.
f.
g.
h.
1-
j .
k .
1 .
m.
b.
c.
d.
e.
f.
Operation and Maintenance Requirements
a. 00 manufacturer's manuals arrive at same time
as equipment?
A" e man u f act u " e " 's " e p " e s e n tat i v e s a vail a b 1 e
during installation?
b.
0-\30
-------
G.
F.
5.
Documentation
1.
Cer't i fi cates
2.
D a vis - B a con and Wag e H 0 u I' Law R e qui ,'e men t s
a. Secreta"y's deter'mination.
(1) Posted
(2) CorTect r'ates
EEO Notice Posted?
a. Weekly payr'oll s
( 1 ) Cop i e s del i v e r' e d
( 2 ) Con f 0 ,. m t 0 ins pee tor' IS,' e p 0 r t s
(3) Co,'r'ect ,oates
(4) Complaints about wage payments
3.
4.
Erner'gency P,'ocedur'es
a. Are signs posted?
(1) Electr-fc
(2) F1 ammab1 e
(3) Ventilation
(4) Oangerous liquids
(5) Eme,'gency showe,'s
(~) First aid equipment
(7) Firefighting equipment
(8) B,'eathing equipment
Telephone number's posted?
( 1 ) Fir' e De p a " t men t
(2) Police
(3) Utfl Hies
(4) Recipient
(5) A/E
(6) Contractor nights/weekends
( 7 ) Ot he ,-
OSHA Regulations
(1) Available on site
( 2) Ace ide n t r' e co,. d s
( 3 ) 0 S H A ins pee tor' com men t s
b.
c.
Oe1ivery Documents
a . T " u c k s 1 ips
b. Copies of invoices
c. Systematic f111ng
d. Verificat10n system
e. De11very control
Remarks
6-81
-------
6-02
-------
MEMORANDUM OF PREFINAL INSPECTION
Prefina1 Inspection Report - CA/Contract #
Site
From:
Inspector
To: Files (Copy to State/EPA/COE)
A Visit was made to
( PM ) on
lnspection.
, at
, 19 for the purpose of the
Ihe tol lowlng people were present at this inspection:
(AM)
subject
PEOPLE CONTACTED:
NAME
POSITION
REPRESENTING
Final payment is recommended
Yes
No
The following administrative deficiencies are in need of correction:
sheet, if necessary).
(Add
The following field deficiencies are in need of operation:
lists).
(Attach punch
~-S3
-------
PREFINAL INSPECTION CHECKLISTS
This checklist is to be used when conducting a prefinal inspection.
Proj ect
Address
City
Zip
Phone (
ID Number
Name or
Facility
State
bri ef
description of
To the best of my knowledge, the attached checklist as completed
indicates the current status of the (Facility) indicated as of this date.
Inspector Signature:
COE
STATE
EPA
Da te :
Persons present at inspection
NAME
TITLE
ORGANIZATION
3-8{~
-------
SECTION A - Project Administration (Refer to administrative file review
checklist for references to regulations, guidelines and special
i nstructi ons).
1.
2.
3.
4.
5.
6.
Location of fiscal records:
a.
Where kept:
Address:
b.
Name of custodian:
Address:
Telephone : (
Do the project accounting records distinguish between allowable and
unallowable costs? Are all costs to be claimed supported by receipts
or certified contractor invoices? Yes No
Are accounting records current and in adequate condition to permit a
timely audit? Yes No
Are the following records complete and readily accessible?
a.
Project files (complete, orderly, accurate)
Yes
No
b.
Documentation supporting construction related actions,
letters sent, received? Yes No
copies of
c.
Financial receipt and disbursement
documentation (canceled checks, etc.) Yes
records and back-up
No
d.
Easement, land acquisition, right-of-way permits (on record)?
Yes No
e.
Are payment estimates on file? Yes
No
f.
Force account records (if applicable) properly documented?
Yes No
Has the recipient been advised that all records must be available for
audit and retained for three (3) years? Yes No
Has the recipient established and implemented a personal property
control. system for non-expendable property? (See Item #24, Adm.
Review Checklist) Yes No
;;i-C5
-------
7.
Does the recipient have Flood Insurance Certificates
coverage of applicable portions of the project? Yes
Corrments:
indicating
No
8.
Administrative checklist items
and not covered elsewhere in
necessary. . )
resolved during interim inspections
this report. (Attach sheet if
.- (:.1"
...;-c.u,
-------
SECTION B - Site Construction
Keport)
(Refer to Final
Construction
Inspection
1.
Are the facilities complete? Yes
No
If no, explain.
2.
Was the construction determined to be satisfactory?
Yes No If no, explain. Date of Pre-Final Construction
Inspection
3.
Were all construction related CA conditions implemented? (Special
measures for protection of the environment during construction, etc.)
Yes No (Explain)
4.
Describe any
facilities.
confl i cts
between the approved and constructed
~-t7,'
-------
5.
How long have the facilities been operating at the time of project
closeout inspection? Months Weeks
6.
Are construction inspection records adequate? Yes
no, explain.
No
if
7.
The records are available for future review and are located at
(plant, engineers office, etc.). Yes No
Location:
8.
Is a set of EPA and/or State approved
for recipient's official records fil e?
marked on the plans and specifications?
explain.
(stamped) drawings available
Is EPA eligibility clearly
Yes No If no,
9.
Is a set of lias
Yes No
built" drawings
If no, explain.
available to operating personnel?
6-8~
-------
CERTIFICA TE OF SUBSTANTIAL COMPLETION
OWNER's Project No. """""""""""""'"
ENGINEER's Project No.
..... .....,...... ........
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CONTRACTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . ..
Contract For. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . .
Contract Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
This Certificate of Substantial Completion applies to all Work under the Contract Documents or to the following specified
parts thereof:
To [[["""""'"
OWNER
And To
'0"'" """0'0" """'..0.. .......... '....0.. """"".' "0 ..... """""'0 ..... ............... '0'0"""'0""
CONTRACTOR
The Work to which this Certificate applies has been inspected by authorized representatives of OWNER, CONTRACTOR
and ENGINEER, and that Work is hereby declared to be substantially complete in accordance with the Contract Documents
on
............... ... ....... """""""""""'.""""'." '0'
DATE OF SUBSTANTIAL COMPLETION
A tentative list of items to be completed or corrected is attached hereto. This list may not be all-inclusive, and the failure to
include an item in it does not alter the responsibility of CONTRACTOR to complete all the Work in accordance with the
Contract Documents. The items in the tentative list shall be completed or corrected by CONTRACTOR within days
of the above date of Substantial Completion. .
EJCDC No. 191O-8-D (1983 Edition)
-------
The responsibilities between OWNER and CONTRACTOR for security. operation. safety. maintenance. heat. utilities.
insurance and warnnties shall be as follows:
RESPONSIBILITIES:
OWNER:
CONTRACTOR:
The following documents are attached to and made a part of this Certificate:
This certificate does not constitute an acceptance of Work not in accordance with the Contract Documents nor is it a release
of CONTRACTOR's obligation to complete the Work in accordance with the Contract Documents.
Executed by ENGINEER on """"""""'" . 19 """"''''
...................... ...............,...... """""" "-"'"
ENGINEER
By [[[
CONTRACTOR accepts this Certificate of Substantial Completion on .................................... 19
"0"0" .....
................................ ..... .0.""""""" ..........
CONTRACTOR
By [[[
OWN ER accepts this Certificate of Substantial Completion on ........................................... . 19
. ..... .......
-------
APPLICATION FOR PAYMENT NO.
To
Contract for
OWNER's Project No.
For Work accomplished through the date of
(OWNER)
. ENGINEER's Project No.
CONTRACTOR's Schedule of Values Work Completed
ITEM U nit Price Quantity Amount Quanlity
Amount
$ $ $
.
Total $ $
(Orig. Contract)
C.O. No. I
C.O. No.2
Accompanying Documentation:
GROSS AMOUNT DUE.. .. .. . . .. .. . . . . . . . . . . .
LESS _% RETAINAGE """"""""'"
AMOUNT DUE TO DATE.....................
LESS PREVIOUS PA YMENTS ................
AMOUNT DUE THIS APPLICATION.
$
$
$
$
$
CONTRACTOR'S Certification:
The undersigned CONTRACTOR certifies that (1) all previous progress payments received from OWNER on account of
Work done under the Contract referred to above have been applied to discharge in full all obligations of CONTRACTOR
incurred in connection with Work covered by prior Applications for Payment numbered 1 through inclusive; and
(2) title to all materials and equipment incorporated in said Work or otherwise listed in or covered by this Application for
Payment will pass to OWNER at time of payment free and clear of all liens, claims. security interests and encumbrances
(except such as covered by Bond acceptable to OWNER).
Dated
.19-
CONTRACTOR
By
Payment of the above AMOUNT DUE THIS APPLICATION is recommended.
Dated
.19-
ENGINEER
By
EJCDC No. 191O.8.E (1983 Edition)
Prepared by the Engineers' Joint Contract Documents Commillee and endorsed by The Associated General Contraclors of America.
': t'l"-'
-------
APPLICATION FOR PAYMENT
INSTRUCTIONS
A. GENERAL INFORMATION
This standard form is intended as a guide only. Many projects require a much more
extensive form with space for numerous items. descriptions of Change Orders. identifi-
cation of variable quantity adjustments. summary of materials and equipment stored at
the site and other information. It is expected that a separate form will be developed by
Engineer or Contractor at the time Contractor's Schedule of Values is finalized. Note also
that the format for retainage must be changed if the Agreement permits (or the Law
provides). and Contractor elects. the deposit of securities in lieu of retainage. Refer to
Article 14 of the General Conditions for provisions concerning payments to Contractor.
B. COMPLETING THE FORM
The Schedule of Values. submitted and approved as provided in paragraphs 2.6.3 and 2.9
of the General Conditions. should be copied in the space indicated on the Application For
Payment form. Note that the cost of materials and equipment is often listed separately
from the cost of their installation. All Change Orders affecting the Contract Price should
be identified and include such supplemental Schedules of Values as required for progress
payments.
The form is suitable for use in the Final Application for Payment as well as for Progress
Payments; however. the required accompanying documentation is usually more extensive
for final payment. All accompanying documentation should be identified in the space
provided on the form.
C. ENGINEER'S REVIEW
Engineer must review all Applications for Payment with care to avoid recommending any
payments not yet earned by Contractor. All accompanying documentation oflegal nature.
such as lien waivers. should be reviewed by an attorney. and Engineer should so advise
Owner.
6-92
-------
CONSTRUCTION OVERSIGHT
PRESENTED BELOW IS LANGUAGE THAT MAY BE USEFUL IN PREPARATION OF:
A LISTING OF DUTIES, RESPONSIBILITIES
AND LIMITATIONS OF AUTHORITY OF THE RESIDENT OBSERVER (RO)
Adaption to the peculiarities and
requirements of each Project is essential
A resident observer (RO), assistants and other field staf£
shal~ assist EPA in observing performance of the work of the
construction contractor (constructor).
Through more extensive on-site observations of the work in
progress and field checks of materials and equipment by the RO
. and assistants, the RO shall endeavor to provide further protection
for EPA against defects and deficiencies in the work; and compliance
with the NCPi but, the furnishing of such services will not make
RO responsible for or give RO control over construction means,
methods, techniques, sequences or procedures or for safety
precautions or programs, or responsibility for constructor's
failure to perform the work in accordance with the contract
documents.
The duties and responsibilities of the RO are limited and
described as follows:
A.
Duties and Responsibilities of RO
1.
Schedules: Review the progress schedule, schedule
of shop drawing submittals and schedule of values
prepared by Constructor and consult with EPA concerning
acceptability.
2.
Conferences and Meetings: Attend meetings with
constructor and contracting party, such as pre-
construction conferences, progress meetings, job
conferences and other project-related meetings, and
prepare minutes thereof for EPA.
3.
Liaison: Assist in obtaining from EPA additional
details or information, when required for proper
execution of the work.
4.
Shop Drawings and Samples:
a.
Record date of receipt of shop drawings and
samples.
Receive samples which are furnished at the site
by contracting party, and notify EPA of availability
of samples for examination.
b.
6-93
-------
c.
Advise EPA of the commencement of any work
requiring a shop drawing or sample if the sub-
mittal has not been approved by the contracting
party.
5.
Review of Work, Rejection of Defective Work, Inspections
and Tests:
a.
Conduct on-site observations of the work in
progress to assist EPA in determining if the
work is in general proceeding in accordance with
the contract documents.
b.
Report to EPA whenever RO believes that any work
is unsatisfactory, faulty or defective or does
not conform to the contract documents, or has
been damaged, or does not meet the requirements
of any inspection, test or approval required to
be made; and advise EPA of work that RO believes
shoulu be corrected or rejected or should be
uncovered for observation, or requires special
testing, inspection or approval.
c.
Verify that tests, equipment and systems startups
and operating and maintenance training are
conducted in the presence of appropriate personnel
and that constructor maintains adequate records
thereof; and observe, record and report to EPA
appropriate details relative to the test procedures
and. startups.
d.
Accompany visiting inspectors representing
public or other agencies having jurisdiction
over the project, record the results of these
inspections and report to EPA.
,.
o.
Interpretation of Contract Documents: Report to EPA
when clarifications and interpretations of the
contract documents are needed.
7.
Modifications: Evaluate constructor's and contracting
party's suggestions for modifications in drawings and
Specifications and report with RO's recommendations
to EPA.
8.
Records:
a.
Maintain at the job site orderly files for
correspondence, reports of job conferences, shop
drawings and samples, reproductions of original
contract documents including all work directive
6-94
-------
9.
changes, addenda, change orders, field orders,
additional drawings issued subsequent to the
execution of the contract, clarifications and
interpretations of the contract documents,
progress reports, and other project related
documents.
b.
Keep a diary or log book, recording constructor
hours on the job site, weather conditions, data
relative to questions of work directive changes,
change orders or changed conditions, list of job
site visitors, daily activities, decisions,
observations in general, and specific observations
in more detail as in the case of observing test
procedures; and send copies to EPA.
c.
Record names, addresses and telephone numbers of
all constructors, subconstructors and major
suppliers of materials and equipment.
Reports:
a.
Furnish EPA weekly reports of progress
work and constructor's compliance with
progress schedule and schedule of shop
and sample submittals.
of the
the
drawing
b.
Consult with EPA in advance of scheduled major
tests, inspections or start of important phases
of the work.
c.
Advise EPA as promptly as possible of discharges
and releases which can affect natural resources,
or any endangered or threatened species, or
result in destruction or adverse modification
of the habitat of such species.
d.
Report to EPA on constructor's and contracting
party's compliance with worker health and safety
requirements.
e.
Submit pollution reports to EPA as significant
developments occur.
f.
Review proposed change orders and work directive
changes.
g.
Report immediately to EPA upon the occurrence
of any accident.
6-95
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10.
11.
12.
B.
Payment Requests: Review applications for payment
from constructor for compliance with the established
procedure for their submission and forward copies
to EPA, noting particularly the relationship of the
payment requested to the schedule of values, work
completed and materials and equipment delivered at
the site but not incorporated in the work.
Certificates, Maintenance and Operation Manuals:
During the course of the work, verify that certificate~
maintenance and operation manuals and other data
required to be assembled and furnished by constructor
are applicable to the items actually installed and
in accordance with the contract documents.
Completion:
a.
Before contracting party issues a certification
of substantial completion, submit to EPA a list
of observed items requiring completion or
correction. . .
Attend final inspection in the company of
constructor and contracting party and prepare a
final list of items to be completed or corrected.
Observe that all items on final list have been
completed or corrected and make recommendations
to EPA concerning acceptance. .
b.
c.
Limitations of Authority
Resident Observer:
1.
Shall not authorize any deviation from the contract
documents or substitution of materials or equipment.
2 .
Shall not undertake any of the responsibilities of
constructor, subconstructors or contracting party.
3.
Shall not advise on, issue directions relative to or
assume control ~ver any aspect of the means, methods,
techniques, sequences or procedures of construction.
4.
Shall not advise on, issue directions regarding or
assume control over safety precautions and programs
in connection with the work.
5.
Shall not accept shop drawing or sample submittals
from anyone other than contracting party.
6.
Shall not participate in specialized field or
laboratory tests or inspections conducted by others.
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I»
~
a,:J:1
(I) (1) I
I»!.I
_..'
(1)::J'1
q I
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Health and Safety
7-1
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UN IT:
(VII) CONSTRUCTION
MODULE:
(22)
Health and Safety
ESTIMATED TIME:
120 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Be aware of responsibilities of A/E for
safety plan
o Describe minimum requirements for
specifying a site
hea lth,
safety and
emergency response
o Understand the responsibilities of the general contractor for
development, implementation and enforcement of a site safety
plan
o Understand the procedures to be followed by the contractor
upon observation of an unsafe working condition.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
7-2
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REGULATIONS, CODES, LAWS,
ORDINANCES AND GUIDELINES
. PL 91-596, OSHA 1970
. 29 CFR 1910.120 and 1910.134
. 29 CFR 1926
. ANSI Standard Z88.2-1980
. EPA Orders 1440.2 and 1440.3
. EPA Standard Operating Safety Guides (Nov. 84)
. NIOSH/OSHA/USCG/EPA "Occupational Safety and
Health Guidance Manual for Hazardous Waste Site
Activities" (Oct. 85)
. OSHA/NIOSH/ACGIH Exposure Guidelines
OSHA "SARA" REQUIREMENTS
. Covers CERCLA, RCRA, state and local lead, and
emergency response
. Requires a Safety and Health Program
. Requires "any information" for "each substance known or
expected"
. Requires employers to establish exposure limits
. Requires site control: SOPs, work zones, buddy system,
etc.
7-3
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OSHA "SARA" REQUIREMENTS (Continued)
. Requires 40 hours training and 3 days OJT for workers
- 48 hours training and 3 days OJT for supervisors
- 8 hours annually for refresher
. Requires Medical Surveillance Program
. Requires PPE Program
. Requires Site Safety Plan
OSHA "SARA" REQUIREMENTS (Continued)
. Requires decontamination
. Requires emergency response plan and training
. Requires illumination/sanitation
. Requires air monitoring:
-Initial
- Periodic
- Personal
7-4
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SAFETY
The owner must ensure compliance with OSHA
Regulations, 29 CFR Part 1926, and 1910
SAFETY
. Design AlE responsibilities:
- Developing specifications for site safety plan
- Describing minimum requirements for:
- - Health
- - Safety
- - Emergency response
7-5
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SPECIFICA TIONS
. Degree of Hazard Existing
. Estimate of Increased Hazards
. Minimum Acceptable Standards For:
- Worker Protection "Down Range-
- Other Worker Protection
- General Public
- Monitoring, Reporting and Interpretation
- Emergency Response and Excavation
- Site Control; Decontamination; Clean Up Levels
- Documentation
INSPECTION
. RI Must Have:
- Physical
- Training
- Necessary Equipment
- Complete Understanding of Contract
- Experience
7-6
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INSPECTION
. Limitations
. Responsibilities
. Docu mentation
. Case Studies
- Cape May, NJ
- Battle Creek, M I
- Lock Haven, PA
SAFETY:
CONSTRUCTION CONTRACTOR
RESPONSIBiliTIES
. Development
. Implementation
. Enforcement of site safety plan
7-7
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7-ij
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SITE SAFETY PLAN REFERENCE LIST
o
CERCLA sections 104(f) and 111(c)(6)
o
EPA Order 1440.2 - Health and Safety
Engaged in Field Activities
Requirements
for. Employees
o
EPA Order 1440.1 - Respiratory Protection
o
EPA Occupational Health and Safety Manual
o
EPA Interim Standard Operating Safety Guide
(September 1982)
o
Part 1910 and 1926 of 29 CFR revised 1 July 1982. OSHA Standards for
General Industry
o
NIOSH, (National Institute of Occupational Safety and Health)
Manual of Analytical Methods, Volumes I-VII
o
Threshold Limit Values (TVL) for Chemical Substances and Physical
Agents in the Work Environment with Intended Changes Adopted by ACGIH
(American Conference of Governmental Industrial Hygienists). latest
edition
o
ANSI Z 88.2 - 1980.
Respiratory Protection
American National Standard, Practices for
o
Material Data Safety Sheets
7-9
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&EPA
FACT SHEET
United States
Environmental Protection
Agency
April '9~
LEVELS OF PROTECTION
When response activities are conducted where
atmospheric contamination is known or suspected to
.exist, personnel protective equipment must be worn.
Personnel protective equipment is designed to prevent I
reduce skin and eye contact as well as inhalation or in-
gestion of the chemical substance.
Personnel equipment to protect the body against
contact with known or anticipated chemical hazards has
been divided into four categories:
piece chemical splash suit, disposable
chemical resistant coveralls.)
- Coveralls (under splash suit)..
- Gloves, outer, chemical resistant.
- Gloves, inner, chemical resistant.
- Boots, outer, chemical resistant, steel toe
and shank.
- Boots, outer, chemical resistant..
- Two-way radio communications (intrinsical-
ly safe).
- Hard hat..
1.
Level A protection should be worn when the highest
level of respiratory, skin, eye, and mucous
membrane protection is needed.
. Optional
3.
Level C protection should be selected when the
type of airborne substance is known, concentration
measured, criteria for using air.purifying respirators
met, and skin and eye exposure is unlikely. Periodic
monitoring of the air must be performed.
a. Personal Protective Equipment
a.
Personal Protective Equipment
- Positive-pressure (pressure demand), self
contained breathing apparatus (MSHAI
NIOSH approved).
- Fully-encapsulating chemical resistant suit.
- GlOves, inner, chemical resistant.
- Gloves, outer, chemical resistant.
- Boots, chemical resistant, steel toe and
shank; (depending on suit boot construction,
worn over or under suit boot.)
- Unde~ear, cotton, long-john type..
- Hard hat (under suit). .
- Coveralls (under suit)..
- Two-way radio communications (intrinsical-
ly safe).
. Optional
- Full-face, air-purifying respirator (MSHAI
NIOSH approved).
- Chemical resistant clothing (one piece
coverall, hooded two piece chemical splash
suit, chemical resistant hood and apron, dis-
posable chemical resistant coveralls.)
- Gloves, outer, chemical resistant.
- Gloves, inner, chemical resistant..
- Boots, steel toe and shank, chemical resist-
ant.
- Boots, outer, chemical resistant..
- Cloth coveralls (inside chemical protective
clothing.).
- Two-way radio communications (intrinsical-
ly safe).
- Hard hat..
- Escape mask..
. Optional
2.
Level 8 protection should be selected when the
highest level of respiratory protection is needed,
but a lesser level of skin and eye protection. Level B
protection is the minimum level recommended on
initial site entries until the hazards have been
further identified and defined by monitoring,
sampling, and other reliable methods of analysis,
and personnel equipment corresponding with those
findings utilized.
a.Personal Protective Equipment
4.
Level 0 is primarily a work uniform. It should not be
worn on any site where respiratory or skin hazards
exist.
- Positive-pressure (pressure-demand), self
contained breathing apparatus (MSHAI
NIOSH approved).
- Chemical resistant clothing (overalls and
long sleeved jacket, coveralls, hooded two
Refer to the Office of Emergency and Remedial
Response, Environmental Response Division,
Interim Stlnct.rd Operltlng Safety Procedures for
full details.
7-10
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1/11/85
New Page M-4.
PART 9
SITE SAFETY PLAN
I.
INTRODUCTION
The purpose of the site safety plan is to establish requirements for
protecting the health and safety of responders during all activities
conducted at an incident. It contains safety information. instruc-
tions. and procedures.
A site safety plan must be prepared and reviewed by qualified personnel
for each hazardous substance response. Before operations at an incident
commence. safety requirements must be written. conspicuously posted or
distributed to all response personnel. and discussed with them. The
safety plan must be periodically reviewed to keep it current and techni-
cally correct. .
In non-emergency situations. for example. long-term remedial action at
abandoned hazardous waste sites. safety plans are developed simultane-
ously with the general work plan. Workers can become familiar. with the
plan before site activities begin. Emergency response generally re-
quires verbal safety instructions and reliance on existing standard
operating procedures until. when time permits. a plan can be written.
The plan must contai n safety requ1 rements for routine (but hazardous)
response activities and also for unexpected site emergencies. The
major distinction between routine and emergency site safety planning
is the ability to predict. monitor. and evaluate routine activities.
A site emergency is unpredictable and may occur anytime.
I.
GENERAL REQUIREMENTS
The site safety plan must:
Descri be the known hazards and eva 1 uate the risks associated with
the incident and with each activity conducted.
List key personnel and alternates responsible for site safety.
response operations. and for protection of public.
Describe Levels of Protection to be worn by personnel.
Delineate work areas.
Establish procedures to control site access.
Descri be decontami nat i on procedures for personnel and equi pment.
Establish site emergency procedures.
7-11
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1/11/85.
New Page M-5
Address emergency medical care for injuries and toxicological
problems.
Descri be requi rements for an envi ronmenta 1 survei 11 ance program.
Specify any routine and special training required for responders.
Estab1 ish procedures for protect i ng workers from weather-related
problems.
I II.
SITE SAFETY PLAN SCOPE AND DETAIL
The plan's scope, detail, and length is based on:
Information available about the incident.
Time available to prepare a site-specific plan.
Reason for responding.
Three general categories of response exist - emergencies. character-
izations .nd remedial actions. Although considerations for personnel
safety are generic and independent of the response category. in
scope, detail. and length safety requirements and plans vary consid-
erably.These variations are generally due to the reason for
responding (or category of response) . information available, and the
severity of the incident with its concomitant dangers to the respon-
der.
A.
Emergen'ies
1.
Situation:
Emergenc i es genera lly requi re prompt act i on to prevent or
reduce undesirable affects. Immediate hazards of fire. explo-
sion. and release of toxic vapors or gases are:': prime
concern. Emergencies vary greatly in respect to t ~.es and
quantities of material. numbers of responders. type of work
required, population affected, and other factors. Emergencies
last from a few hours to a few days.
Information available: Varies from none to much. Usually
information about the chemicals involved and their associ-
ated hazards is quickly obtained in transportation-related
incidents. or incidents involving fixed facilities. Deter-
mining the substances involved in some incidents. such as
mysterious spills, requires considerable time and effort.
Time available: Little time. generally requires prompt
action to bring the incident under control.
.
Reason for response:
To imp1 ement prompt and immedi ate
7-12
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1/ 11/a 5
New Paqe M-6
actions to control dangerous or potent;ally dangerous sit-
uations.
2.
Effects on Plan
B.
In emergencies, time is not available to write lengthy and
detai led safety plans. Decisions for responder safety are
based on a continual evaluation of changing conditions.
Responding organizations must rely on their existing written
standard ope rat i ng safety procedures or a generi c plan. and
verbal safety instructions adapted to meet site-specific
conditions. Since heavy reliance is placed on verbal safety
instructions an effective system to keep all responders
informed must be established. Whenever possible, these inci-
dent-specific instructions should be written.
Incident Characterization
1.
Situat ion:
In non-emergency responses,for example, preliminary inspec-
tions at abandoned wastes sites or more comprehensive waste
site investigations the objective is to determine and charac-
terize the chemicals and hazards involved, the extent of
contamination, and risks to people and the environment. In
general, initial inspections, detailed investigations, and
extent of contamination surveys are limited in the activities
that are required and number of people involved. Initial or
preliminary inspections generally require 1-2 days. Complete
investigations may last over a longer time period.
Information available: Much background information. Gener-
ally limited on-site data for initial inspection. On-site
information more fully developed through additional site
visits and investigations.
Time available: In most cases adequate time is available
to develop written site-specific safety plan.
Reason for response: To gather data to verify or refute
existing information, to gather information to determine
scope of subsequent investigations, or to collect data for
planning remedial action.
2.
Effects on Plan:
Sufficient time is available to write safety plans. In scope
and detail, plans tend to be brief containing safety require-
ments for specific on-site work relevant to collecting data.
As information is developed through additional investigations,
the safety plan is modified and, if necessary, more detailed
and specific requirements added.
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1/11/85
New Page M-7
c. Remedial Actions
1.
Situation:
Remedial actions are cleanups which last over a long periOd
of time. They comnence after more imnediate problems at an
emergency have been controlled, or they involve the mitigation
of hazards and restoration of abandoned hazardous waste
sites. Numerous activities are required involving many people
a logistics and support base, extensive equipment, and more
involved work activities. Remedial actions may require months
to years to completely accomplish.
Information available:
Much known about on-site hazards.
- Time available: Ample time for work planning.
- Reason for response: Systematic and complete control,
cleanup, and restoration.
2.
Effects on Plan:
Since ample time is available before work comnences, site
safety plan tends to be comprehensive and detaned. From
prior investigations much detail may be known about the ma-
terials or hazards at the site and extent of contamination.
IV. SITE SAFETY PLAN DEVELOPMENT
To develop the plan ~s much background information as possible should
be obtained, time permitting, about the incident. This would include,
but not be limited to:
Incident location and name.
- Site description.
- Chemicals and quantities involved.
- Hazards associated with each chemical.
- Behavior and dispersion of material involved.
- Types of containers, storage, or transportation methods.
Physical hazards.
- Prevailing weather condition and forecast.
Surrounding populations and land use.
- Ecologically sensitive areas.
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1/11/85
New Page M-8
Facility records.
Preliminary assessment reports.
Off-site surveys.
Topographic and hydrologic information.
The information initially available or obtained through subsequent
characterization provides a basis for developing a site-specific safety
plan. Information is needed about the chemicals and hazards involved.
movement of material on and off the site. and potential contact with
responders or the public. This type of information is then used along
with the reason for responding (and work plan) to develop the safety
plan. The plan is tailored to the conditions imposed by the incident
and to its environmental setting. As additional information becomes
available the safety plan is modified to protect against the hazards
discerned and to provide for site emergencies that may occur.
ROUTINE OPERATIONS
Routine operations are those activities required in responding to an
emergency or a remedial action at a hazardous waste site. These ac-
tivities may involve a high degree of risk. but are standard opera-
tions that all incident responses may require.
Safety practices for routine operations closely parallel accepted in-
dustrial hygiene and industrial safety procedures. Whenever a hazard-
ous incident progresses to the point where operations become more rou-
tine, the associated site safety plan becomes a more refined document.
As a minimum. the following must be included as part of the site safety
plan for routine operati~ns.
Describe the Known Hazards and Risks
This must include all known or suspected physical, biological, rad-
i 01 ogi ca 1. or chemi ca 1 hazards. It is important that all hea lth
related data be kept up-to-date. As air. water. soil. or hazardous
substance monitoring and sampling data becomes available. it must
be evaluated. significant risk or exposure to workers noted, poten-
tial impact on public assessed, and changes made in the plan. These
evaluations need to be repeated frequently since much of the plan
is based on this information.
list Key Personnel and Alternates
The plan must identify key personnel (and alternates) responsible
for site safety. It should also identify key personnel assigned to
various site operations. Telephone numbers. addresses, and organi-
zations of these people must be listed in the plan and pasted in a
conspicuous place.
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1/11/85
New Paqe M-9
Designate Levels of Protection to be Worn
The Levels of Protection to be worn at locations on-site or by
work functions must be designated. This includes the specific
types of respirators and clothing to be worn for each level. No
one shall be permitted in areas requiring personnel protective
equipment unless they have been trained in its use and are wearing
it.
Delineate Work Areas
Work areas (exclusion zone, contamination reduction zone, and
support zone) need to be designated on the site map and the map
posted. The size of zones, zone boundaries, and access control
points into each zone must be marked and made known j all site
workers.
List Control Procedures
Control procedures must be imp1 emented to prevent unauthori zed
access. Site security procedures - fences, signs, security pa-
trol sand check-i n procedures - must be estab1 i shed. Procedures
must also be established to control authorized personnel into work
zones where personnel p~otection is required.
Establish Decontamination Procedures
Decontamination procedures for personnel and equipment must be es-
tablished. Arrangements must also be made for the proper disposal
of contaminated material, solutions, and equipment.
. .
- Address Requirements for'an Environmental
Survei llance Program
A program to monitor site hazards must be implemented. This would
include air monitoring and sam--ing, and other kinds of media
sampling at or around the si: that would indicate chemicals
present, their hazards,possib1~ -1gration, and associated safety
requirements. .
Specify Any Routine and Special Training Required
Personnel must be trained not only in general safety procedures and
use of safety equipment, but in any specialized work they may be
expected to do.
Establish Procedures for Weather-Related Problems
Weather conditions can affect site work. Temperature extremes,
high winds, storms, etc. impact on personnel safety. Work prac-
tices must be estab1 ished to protect workers from the effects of
weather and she1 ters provi ded, when necessary. Temperature ex-
tremes especially heat and its effect on people wearing protec-
t he c1 othi ng, must be cons i dered' and procedures estab1 i shed to
monitor for and minimize heat stress.
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1/11/85
New paqe M-10
VI. ON-SITE EMERGENCIES
~.
The plan mu~t address site emergenci es - occurrences that requi re
imediate actions to prevent additional problems or harm to respon-
der's, the public, property, or the environment. In general, all
responses present a degree of risk to the workers. Duri ng rout i ne
operations risk is minimized by establishing good work practices and
using personnel protective equipment. Unpredictable events such as
fire, chemical exposure, or physical injury may occur and must be
anticipated. The plan must contain contingencies for managing them.
- Establish Site Emergency Procedures
-- List the names and emergency funct i on of on-site personne 1
responsible for emergency actions along with the special
training they have. .
-- Post the location of nearest telephone (if none at site).
-- Provide alternative means for emergency communications.
-- Provide
needed.
posted.
be made
a list of emergency services organizations that may be
Names, telephone numbers, and locations must be
Arrangements for using emergency organizations should
beforehand. Organ i zat ions that mi ght be needed are:
- Fire
Police
tiea 1 t h
- Explosive experts
- Local hazardous material response units
- Civil defense
- Rescue
-- Address and define procedures for the rapid evacuat ion of
workers. Clear, audible warnings signals should be estab-
lished, well-marked emergency exits located throughout the
site, and internal and external convnunications plans devel-
oped. An example of codes that could be used for emergency
operations based on direct-reading instruments is contained in
Annex 7.
-- A complete list of emergency equipment should be attached to
the safety plan. This list should include emergency equipment
available on-site, as well as all available medical, rescue,
transport, fire-fighting, and mitigative equipment. -
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1/11/85
New Pacre M-11
Address emergency medical care.
-- Determine location of nearest medical or emergency care
facility. Determi.ne their capability to handle chemical
exposure cases.
Arrange for treating, admitting, and transporting of injured
or exposed workers.
Post the medical or emergency care facilities location, travel
time, directions, and telephone number.
Determine local physician's office location, travel directions,
availability, and post telephone number if other medical care
is not available.
Determine nearest ambulance service and post telephone number.
L-:t responding organization's physicians, safety officers, or
. icologists name and telephone number. Also include nearest
p. son control center, if applicable.
-- Maintain accurate records on any exposure or potential exposure
of site workers during an,emergency (or routine operations).
The minimum amount of information needed (along with any
medical test results) for personnel exposure records is con-
tained in Annex 8.
Advise workers of their duties during an emergency. In particular.
it is imperative that the site safety officers, standby rescue
personnel, decontamination workers, and emergency medical techni-
cians practice emergency procedures.
Incorporate into the plan, procedures for the decontamination of
injured workers and for their transport to medical care facilities.
Contamination of transport vehicles, medical care facilities, or
of medical personnel may occur and should be addressed in the
plan. Whenever feasible these procedures should be discussed with
appropriate medical personnel in advance of operations.
Establish procedures in cooperation with local and state officials
for evacuating residents who live near the site.
VII. IMPLEMENTATION OF THE SITE SAFETY PLAN
The site safety plan, (standard operating safety procedure or a
generic safety plan for emergency response) must be written to avoid
misinterpretation, ambiguity, and mistakes that verbal orders cause.
The plan must be. revi ewed and approved by qualified personnel. Once
the safety plan is implemented, its needs to be periodically examined
and mod i fi ed, if neces sa ry, to refl ect any changes ins i te- ~ork and
conditions.
7-18
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All agencies and organizations which have an active role at the incid-
ent must be familiar with the plan. If possible the plan should
be written in coordination with the organizations involved. Lead
personnel from these organizations should sign the plan to signify
they agree with it and wf11 fo11 ow its provisions.
All personnel involved at the site must be familiar with the safety
plan, or the parts that pertain to their specific activities. Fre-
quent safety meeting should be held to keep all infonmed about site
hazards, changes in operating plans, modifications of safety require-
ments and for exchanges of information. It is the responsibility
of personnel involved at- the site as workers or visitors to comply
with the requirements in the plan.
Frequent audits by the incident manager or the safety designee should
be made to determine compliance with the plan's requirements. Any
deviations should be brought to the attention of the incident manager.
Modifications in the plan should be reviewed and approved by appropri-
ate personnel.
VIII. SAMPLE SAFETY PLANS
Annex 9 and 10 are two examples of Site Safety Plans. Since no one
sample plan or plan format can adequately address all safety require-
ments for the variety of incidents that occur, they should be used
as a guide to help develop an incident-specific plan. They can also
be used, with necessary adaptation, as generic plans for emergency
response.
In some incidents, the sample plans contained in Annex 9 and 10 might
be satisfactory to use by themself. Filling in the blanks provi~es an
effective safety plan. In many incidents they should only be consid-
ered as a check list. Since they do not exhaustively cover every
condition which may need addressed, users of these sample plans and
any other type examples must realize their application to anyone
incident may not be acceptable. Therefore they must be used with
discretion and tempered by professional judgement and experience.
They are not meant to be all inclusive but examples of considera-
tions, requirements, and format which sh.ould be adapted for inci-
dent-specific conditions.
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EXHIBIT B-2
Suggested Outline for Site Safety Plan
1. The purpose of this section is to describe the information that should
be addressed in each SSP and tailored, to the extent information is
available, to each site.
2. Describe the site and known hazards and risks
[same as existing discussion]
identify general quantities
emphasize the importance of site description
3. Delineate work areas
designate where work functions occur narratively and with site map
define limitation to work areas
(i.e. tools, equipment that is not approriate for use in IDLH
atmospheres)
Identify site control procedures
4.
identify procedures to control site access for non-work party
members
describe (include map) work zones
5. Describe air surveillance procedures
describe procedures and instrumentation use to monitor for worker
safety
[air surveillance strictly for site characterization should be
described in I site study plan] .
6. Designate levels of protection
describe it for each specific work function
explain why level selected
describe any modifications, supplements to selected levels
7. Describe decontamination procedures
for people, sample bottles, field equipment, cars/drill rigs
describe what will be done with spent decon solutions
7-20
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EXHIBIT B-2 (Cont'd)
8. Discuss procedures. arrangement for weather-related problems
discuss provisions for dealing with heat. cold. storms etc.
discuss provisions fo~ shelters. rest areas. fluid rejuvenation etc.
9. Describe action plan for a site emergency
persons to contact
location and map. if necessary. to nearest phone
location and map. if necessary. to nearest hospital or doctor
.
phone numbers of emergency contacts
(rescue. police. fire. explosive experts. etc.)
how to rapidly evacuate workers.
, how to rapidly evacuate nearby residents.
situation when emergency procedures become applicable [include here
a reference to the example in threshold for response]
10. Identify responsibilities 'for implementing SSP
contractor's responsibilities
construction inspector's responsibilities
7-21
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7-22
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..... -
J::XHIBIT A Generic Site Safety Plan
.--
This attachme~ proo1.desageneric plan based on a plan developed by the
O.S. Coast Guard for responding to hazardous chemical r8lea.es.1 This
generic plan can be adapted for designing a Site Safety Plan for hazardous
vaste 8ite cleanup operations. It is not all inclusive and 8hould only be
u8ed a. a guide, not a standard.
A.
SITE DESCRIPTION
Date
Hazards
Area aft ected
Location
Surrounding population
'1'opog raphy
Weather conditions
Additional information
B.
ENTRY OBJ!CTIVES - The objective of the initial entry to the contaminated
area i. to (describes actions, tasks to be accomplished: i.e., identify
contaminated soil: monitor conditions, etc.)
C.
ONSITE ORGANIZATION AND COORDINATION - The folloving personnel are
designated to carry out the 8tated job functions on aite. (Note: One
person may carry out .ore than one job function.)
PROJECT TEAM LEADER
SCIENTIFIC ADVISOR
SITE SAFETY OFFICER
PUBLIC INFORMATION OFFICER
SECURITY OFFICER
RECORDItEEPER
FINANCIAL OFFICER
FIELD TEAM LEADER
FIELD TEAM MEMBERS
lU.S. Coast Guard. Policy Guidance for Response to Hazardous Chemical
Releases. USCG Pollution Response COMDTINST-Ml646S.30.
7-23
-------
PEDERAL AGENCY REPS
(i.e., !PA, NIOSS)
STATE AGENCY REPS
LOCAL AGENCY REPS
CONTRACTOR(S)
All personnel arrivin9 or departin9 the site should 109 in and out with the
Recordkeeper. All activities on site ~ust be cleared throu9h the Project Team
Leader.
D.
ONSITE CONTROL
(Name of individual or agency has been desi9nated to coordinate
access control and security on site. A safe perimeter has been established
at (distance or description of controlled area)
No unauthorized person should be within this area.
The onait. Command Post and sta91n9 area have been established at
The prevailin9 wind conditions are
from tHe Exclusion Zone.
.
This location is upwind
Control boundaries have been established, and the Exclusion Zone (the
contaminated area), hotline, Contamination Reduction Zone, and support Zone
(clean area) have been identified and desi9nated as follows: (describe
boundaries and/or attach map of controlled area)
These boundaries are identified by: (marking of zones,
tape - hotline: traffic cones - Support Zone: etc.)
i.e.,
red boundary
7-24
-------
I.
HAZARD EVALUATION
The following substance(s) are known or suspected to be on site.
bazards of each are identified.
substances Involved
Concentrations (If Known)
(chemical name)
The following additional hazards are expected .on site:
qround, uneven terrain, etc.)
The primary
Primary Haza rds
(e.q., toxic on
inhalation)
( i . e., sli ppe ry
Hazardou8 substance information form(s) for the involved substance(l) have
been completed and are attached.
r.
PERSONAL PROTECTIVE EQUIPMENT
lased on evaluation of potential hazards, the following
protection have been designated for the applicable work
Location
Job Function
Ixclusion Zone
Contamination
Reduction Zone
levels of personal
areas or tasks:
Level of Protection
A B C D Other
A B C. D Other
A B C D Other
A B C D Other
A B C D Other
A B C D Other
A I C D Other
A I C D Other
Specific protective equipment for each level of protection is as follows:
Level A
Fully-encapsulating suit
SCBA
(disposable coveralls)
Level C
Level B
Splash gear (type)
SCBA
Level D
Other
Splash gear (type)
Full-face canister resp.
7-25
-------
The following protective clothing materials are required for the involved
8ubstances:
Substance
Material
(chemical name)
(material name,
e.g. ,
Viton)
If air-purifying respiratora are authorized,
appropriate canister for use with the involved
A competent individual has determined that all
re.piratory protection have been .et.
(filtering medium) 18 the
substances and concentrations.
criteria for uaing this type of
NO CHANGES TO THE SPECIFIED LEVELS OF PROTECTION SHALL BE MADE WITHOUT THE
APPROVAL or THB SITE SAFETY-OFFICER AND THE PROJECT TEAM LEADER.
G.
ONSITB WORlt PLANS
Work party(.) consisting of ---- persona will perform the folloving tasks:
Project Tea. Leader
(name)
(function)
Work Party U
Work Party .2
Rescue Teu
(required for
entriea to IDLH
environment.)
Decontamination
Teu
The work partyCs) vere briefed on the contents of this plan at
7-2(j
-------
B.
COMMUNICATION PROCEDURES
Cbannel ---- has been designated as the radio frequency for personnel in the
EXclu8ion lone. All other onsite communications vill use channel ----'
Personnel in the Exclusion lone should remain in constant radio communication
or vithin sight of the Project Team Leader. Any failure of radio
communication requires an evaluation of vhether personnel ahould leave the
Exclusion lone.
(Born blast, siren, etc.) is the emergency aignal to indicate that all
personnel should leave the Exclusion lone. In addition, a loud hailer is
available if required.
Tbe folloving atandard band signals vill be used in ca8e of failure of r~dio
communications:
Band gripping throat ---------------
Grip partner's vrist or ------------
both hands around vai8t
Bands on top of bead ---------------
Thumbs up --------------------------
~humb8 down ------------------------
OUt of air, can't breathe
Leave area i.mediately
Need assi8tance
OK, I am all right, I understand'
No, negaU ve
Telephone communication to the Command Post should be established as soon as
practicable. The phone number i8 .
I.
DECONTAMINATION PROCEDURES
Personnel and equipment leaving the Exclu8ion Zone 8hall be thoroughly
decontaminated. The standard level decontamination protocol shall be
used vith the following decontamination stations: (1)
(2) (3) (4)
(6) (7) (8)
(10) Other
(5)
(9)
lmergency decontamination vill include tbe following atations:
The following decontamination equipment is required:
(Normally detergent and water)
solution.
vill be used as the decontamination
J.
SITE SAFETY AND BEALTH PLAN
1. (name) is the designated Site Safety Officer and is
directly responsible to the Project Team Leader for safety recommendations on
aite.
7-2-7
-------
2.
Emergency Medical Care
(names of qualified personnel) are the qualified EMT8 on .ite.
(medical facility names) , at (address) ,
phone i. located minutes from this location.
(name of person) vas contacted at (time) and briefed on
the 8ituation, the potential hazards, and the substances involved. A map
of alternative routes to this facility is available at (normally Command
Post) .
Local ambulance .ervice i8 available from
phone . Their response time is minutes.
Whenever possible, arrangements ahould be made for onsite atandby.
at
Firat-aid equipment is available on aite at the folloving locationa: .
Pint-aid
Emergency
Emergency
(other)
kit
eye vash
shower
Emergency medical information for substances present:
substance
Exposure Symptoms
Pirst-Aid Instructions
List of emergency phone numbera:
Agency /paci 11 ty
Police
Fire
. Boapi tal
. Airport
~ Public Health Advisor
Phone'
Contact
3.
Environmental Monitoring
The following environmental monitoring instruments shall be used on site.
(cross out if not applicable) at the specified intervals.
Combustible Gas Indicator
02 Monitor
Colorimetric Tubes
(type)
- continuous/hourly/daily/other
- continuous/hourly/daily/other
- continuous/hourly/~aily/other
- continuous/hourly/daily/other
- continuous/hourly/daily/other
- continuous/hourly/daily/other
HNU/OVA
Other
7-28
-------
4.
Emergency Procedures (8hould be modified as required for incident)
The following 8tandard emergency procedures will be u8ed by onsite
per80nnel. The Site Safety Officer 8hall be notified of any onsite
emergencie8 and be re8ponsible for ensuring that the appropriate
procedures are followed.
Personnel Injury in the Exclusion Zone: Upon notification of an injury in
the Exclusion Zone, the designated emergency aignal
ahall be aounded. All aite personnel 8hall a8semble at the
decontamination line. The rescue team will enter the Exclusion Zone (if
required) to remove the injured perlOn to the hotline. The Site Safety
Officer and Project Team Leader 8hould evaluate the nature of ~he injury,
and the affected person 8hould be decontaminated to the extent possible
prior to movement to the Support Zone. The onsite EMT 8hall initiate the
appropriate fir8t aid, and contact ahould be made for an ambulance 'nd
vith the designated medical facility (if required). No persons 8hall
reenter the Exclu8ion Zone until the caU8e of the injury or 8ymptoms is
determined.
Personnel Injury in the Support Zone: Upon notification of an injury in
the Support Zone, the Project Team Leader and Site Safety Officer will
assess the nature of the injury. If the cause of the injury or loss of
the injured person does not affect the performance of 8ite personnel,
operations may continue, vith the onsite EMT initiating the appropriate
first aid and necessary follow-up as 8tated above. If the injury
increa8e8 the ri8k to others, the designated emergency 8ignal
8hall be 80unded and all 8ite per80nnel 8hall move
to the decontamination line for further instructions. Activities on site
vill atop until tbe added risk i8 removed or minimized.
pire/Explosion: Upon notification
designated emergency 8ignal
all 8ite personnel assembled at the decontamination
department ahall be alerted and all personnel 80ved
from the involved area.
of a fire or explosion on 8ite, the
ahall be 80unded and
line. The fire
to a aafe distance
Personal Protective Equipment Pailure: If any aite vorker experiences a
failure or alteration of protective equipment that affects the protection
factor, that person and bis/her buddy 8hall immediately leave the
Exclusion Zone. Reentry ahall not be permitted until the equipment has
been repaired or replaced.
Other Equipment 'ailure: If any other equipment on 8ite fails to operate
properly, the Project Team Leader and Site Safety Officer ahall be
notified and then determine the effect of this failure on continuing
operations on site. If the failure affects the safety of personnel or
prevents completion of the Work Plan tasks, all personnel ahall leave the
Exclusion zone until the situation is evaluated and appropriate actions
taken.
7-£s
-------
The following emergency escape routes are designated for use in those
situations where egress from the Exclusion Zone cannot occur through
the decontamination line: (describe alternate routes to leave area in
emergencies)
In all situations, when an onsite emergency results in evacuation of the
Exclusion Zone, personnel shall not reenter until:
1.
2.
3.
4.
The conditions resulting in the emergency have been corrected.
The hazards have been reassessed.
The Site Safety Plan has been reviewed.
Site personnel have been briefed on any changes in the Site Safety
Plan.
5.
Per80nal Monitoring
The following personal monitoring will be in effect on site:
Personal exposure sampling: (describe any personal sampling programs
being carried out on site personnel. This would include use of sampling
pumps, air monitors, etc.)
Medical monitoring: The expected air temperature will be ( .P) . If
it is determined that heat stress monitoring is required (mandatory if
over 70.P) the following procedures shall be followed:
(describe procedures in effect, i.e., monitoring body temperature, body
weight, pulse rate)
Alr site personnel have read the above plan and are familiar with its
provisions.
Site Safety Oficer
Project Team Leader
Other Site Personnel
(name)
(signature)
7-30
-------
ANNEX 7
Emergency Operation Codes
Real-Time Monitor
(suggested minimum action plan)
(Site Name)
CODE DESIGNATIONS
1.
GREEN
A.
Normal operations
2.
YELLOW A
A.
Cessation of specific work activity on-site because of:
(1) Continuous organic readings on direct-reading instrument
of * ppm above background (measured 20-30 ft. from
point of suspected release), and
(2 )
conditions
indicate
a
B.
Current or projected meteorological
probable impact on work activity.
If background readings above * ppm are obtained during
cessation of activity, redesign activity to lower releases and/or
delay that on-site activity until off-site air monitoring
indicates accepted off-site concentration.
C.
Site personnel
condition.
will
immediately
notify EPA/State
of
site
3.
YELLOW B
A.
Termination of all work on-site because of:
(1) Continous organic readings on direct-reading instrument *
ppm above background (measured approximately 1 ,000 ft. from
work area or site property limits), and
(2 )
Current or projected meteorologic conditions
potential impact on inhabited areas.
indicate
a
B. Site personnel wi 11 immediately notify EPA/State of site
conditions.
C. EPA/State will modify off-site air monitori ng to meet the needs
of contingency plan.
7-31
-------
4.
RED
A.
Termination of all work on-site because of:
(1) Continuous organic readings on direct-reading instruments
* ppm above background (measured downwind at the nearest
occupied area off-site, and
(2 )
Current or projected meteorologic
potential impact on inhabited areas.
conditions
i n d i c a te a
B.
Site personnel
conditions.
will
immediately
notify EPA/State of site
C.
Local officials making evacuation/public health decisions will be
advised by EPA/State to:
(1)
Release a public health advisory to potentially affected
areas since on-site control methods will not reduce the
source of contamination; and/or
(2 )
Implement a temporary relocation
activities indicate a potential
background/acceptable readings at
area (s).
plan because on-site
for continuous above
the nearest inhabited
*Concentration should be determined by appropriate response
personnel.
7-32
-------
~
SAFETY
Safety is a personal attitude! Accidents
they are caused! Awareness of hazards on
safety attitude are the best tools to use
dents.
do not happen;
the job and a good
to prevent acci-
PROCEDURE TO INFORM CONTRACTOR REPRESENTATIVES, AND O~mER
ABOUT POTENTIAL UNSAFE ACTS AND SITUATIONS
The Occupational Safety and Health Act of 1970 has become
the principal reference and motivation for safety programs
for industry. The goal of the Act is to nassure safe and
healthful working conditions for working men and women.n
Enforcement of OSHA regulations and standards is based on
the employer-employee relationship, i.e., regardless of
other intervening circumstances, the employer is ultimately
responsible for providing a safe working condition for each
employee.
~
On a construction site, the general contractor normally is
designated as the party responsible for general safety
conditions and for compliance with safety standards. OSHA
follows this concept and looks to the general contractor to
maintain the necessary safety controls. However, if persons
working on the site are employed by ~ther persons or agencies,
~
7-33
-------
such other employers are expected to coordinate their safety
programs with that of the contractor. They should satisfy
themselves that conditions are such that their employees are
adequately protected, because ultimate responsibility for
safety belongs to the employer.
Effective December 15, 1981, OSHA's policy for citations on
multi-employer worksites is that citations will normally be
issued only to employers whose employees are exposed to
hazards. When these employers have a valid defense to
citation, however, the employer with responsibility for
correcting the hazard may be cited instead. A legitimate
defense to citation must meet all of the following criteria:
A.
The employer did not create the hazard;
B.
The employer did not have the authority or the
ability to correct the hazard;
C.
The employer made an effort to persuade the
controlling employer to correct the hazard;
D.
The employer has instructed, and where necessary,
informed employees how to avoid or minimize the
dangers associated with the hazardous conditions
and, where feasible, has taken alternative means
of protecting employees from the hazard short of
walking off the job (except when special circum-
stances require such extreme action}.
In the absence of meeting all four criteria, the exposing
employer will be cited.
Correction Procedures
Questions frequently arise as to the procedure to be fol-
lowed by the design consultant, Construction Management, or
resident inspection personnel upon observing an apparent
unsafe working condition at the construction site. Stan-
dards provided by OSHA, the enforcement agency in the field
of construction safety since 1970, state emphatically that
the employer shall be in control of and responsible for
providing a safe place of work for his employees. Since the
Contractor is the principal employer at the site, and has
physical control of the area and the authority to correct
nonconformance, the construction contract will place respon-
sibility for safety on the Contractor. The Engineer has no
practical means of supervising construction personnel or of
7-34
-------
controlling physical facilities, and should include in any
agreement by the Engineer to perform services, a specific
denial of responsibility for safety at the construction
site.
There are no clear-cut instructions that can be given to
ensure a totally risk-free method of dealing with apparent
unsafe conditions at the construction site. Individuals
must remember the contractual circumstances involved and use
good judgment in determining actions to be taken. Although
there will not be an answer to all questions, the following
are two examples that commonly arise and the suggested
procedures to be followed:
o
Example 1 - The Resident Engineer has several
inspectors working at the site. The employer of
the Resident Engineer and inspectors are responsi-
ble for providing a safe working place for their
employees. However, the responsibility for
implementation and control of the site safety
program has been contractually delegated to the
Contractor. If an apparent unsafe condition
exists, such as a deep trepch, un shored or at an
unsafe angle, the Resident Engineer should take
the following steps:
Inform the Contractor's site representative
that the Resident Engineer has noticed an
apparent unsafe condition (the trench), and
this apparent unsafe condition may preclude
the Resident Engineer and/or his staff from
performing their jobs. Do not make any
recommendations for corrective action.
Factually record the discussion with the
Contractor's site representative in the daily
diary. .
In the event the Contractor makes no effort to
correct the apparent unsafe condition, notify the
owner. A second conversation then shall be held
with the Contractor.
Repeat the first two steps, and state that since
the inspectors cannot perform their duties, the
Resident Engineer cannot certify applicable
progress payments and com~ensation will not be
made to the Contractor for the affected portions
of the work.
7-35
./
-------
o
Example 2 - One or more members of the design.
staff, on a site visit, observe an apparent unsafe
condition. The following steps should be taken:
Inform the contractor's site representative
that the design staff are not safety experts
and have no contractual responsibility for
inspecting the site for safety or for main-
taining safe conditions at the site.
Inform the Contractor that the design staff
have noted an apparent unsafe condition
(describe). Do not make any recommendations
for corrective procedure.
Factually record the discussion with the
Contractor's site representative in the daily
diary (notes made of the visit).
Do not make any obvious revisit to check on
remedial efforts. If field personnel or a
second visit again draw attention to the
obvious, apparent unsafe condition, inform
the Owner of the circumstances and the
potential liability (danger as concerns
obligations to the employees, if any, or by
reason of a third-party suite by an injured
contractor's employee).
If all else fails, consider notifying the
appropriate OSHA or governmental safety
inspection agency. Be aware that this may
strain some relationships.
Liabilities
The correction procedures as outlined are to be used to
lessen the potential for liability in any specific situa-
tion. Remember there is always the possibility to become
involved from a liability standpoint if a serious accident
takes place on the site, regardless of whose employee.
Follow the guidelines to decrease the risk, but remember the
maintenance of a safe site is the prime concern, and the
Contractor's responsibility.
7-35
-------
ACCIDENT REPORT
DATE:
NOTE: TO BE COMPLETED ONL Y FOR REPRESENTATIVES OF CH2M HILL. INC.
PROJECT:
PROJECT NO.
INJURED EMPLOYEE:
EMPLDYEE NO.
DATE INJURED:
TIME
A.M. P.M.
DATE REPORTED:
LAST DAY WORKED:
DID EMPLOYEE RETURN TO WORK:
DATE RETURNED:
WHERE ACCIDENT OCCURRED:
WITNESSES:
WORK PERFORMING WHEN INJURED:
KIND AND EXTENT OF INJURY:
NAME. ADDRESS OF DOCTDR. HOSPITAL:
DESCRIPTION OF ACCIDENT:
WAS THERE EQUIPMENT MALFUNCTION?
DYES
DNO
DESCRIBE DAMAGE TO EQUIPMENT OR PROPERTY:
UNSAFE CONDITION OR ACT CAUSING ACCIDENT:
ACTION TAKEN TO PREVENT SIMILAR ACCIDENT:
ADDITIONAL RECOMMENDATIONS OR ACTION:
SUPERVISOR:
o PHOTOISI TAKEN
7-37
FORM 308
-------
NOTICE OF UNSAFE CONDTIONS
DATE:
PROJECT:
PROJECT NO.
CONTRACTOR:
This notice is to advise you, the prime Contractor on the above Contract, that an unsafe condition has been
observed on your Project by this representative of the Owner of the above mentioned project. These conditions
are listed as follows:
!
ITEM: CONDITION
I
-'-.
~
i
-
By this Notice, the Owner or its Representatives, shall not assume any responsibility under the GENERAL
CON DITIONS or assume any liability for the existence or correction thereof, for the unsafe conditions, or
any others that may have been unnoticed.
These conditions shall be remedied as soon as possible within a safe working period. If these corrections are
not made, the Owner will be forced to remove all field staff from the job. No payment shall be made for
any work installed after this date without first examination of work in accordance with the GENERAL
CONDITIONS.
REPRESENTATIVE OF THE OWNER:
TITLE:
DATE:
RECEIVED BY:
TITLE:
DATE:
7-33
c
FORM 309
-------
RECORD OF SAFETY MEETING
FOR ENGINEERING/INSPECTION STAFF
PROJECT:
DATE:
SHEET_OF
PROJECT NO.
LOCATION:
PURPOSE:
ATTENDANCE:
TOPICS DISCUSSED
7-39
ACTION
n. .:<:~,
'"'
...,
PREPARED BY:
(CONTINUED REVERSE SIDE)
FORM 310
-------
RECORD OF SAFETY MEETINGS (cont)
SHEET - OF
I
TOPICS DISCUSSED
ACTION
cc:
PREPARED BY:
7-40
-------
EMERGENCY PHONE NUMBERS
------
POLICE DEPARTMENT
--------
FIRE DEPARTMENT
--------
PARAMEDIC
-------
FIRE REPORT
-------
AMBULANCE SERVICE
-------
WATER DEPARTMENT
-------
GAS UTILITY
-------
ELECTRIC UTI LlTY
-------
TELEPHONE UTILITY
------
LOCAL SANITARIAN
-------
HOSPITAL
------
OWNER
------
------
------
------
------
------
THIS NOTICE IS LOCATED AT:
PHONE
-------
-------
-------
-------
------
------
------
------
------
------
------
------
------
------
-----
-----
-----
ADDRESS
------
------
------
------
------
------
------
-----
------
-----
-----
-----
-----
-----
-----
-----
----
7-4],
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
ATTN:
CONTRACT
FOAM 311
-------
DALTON
DALTON
.
\
..
NEWPORT
Safety Alert
Project: StronRsville WW'l'P's "B" & "c"
(Nam,)
Plant B: 14600 Mill Hollow Lane
Plant C:(L~~r49 Sprague Road
Owner. City of Stronuville
10: The Gibbons-Grable ComDanv
(Contractor)
4150 Belden VillaRe S~~~~-
P.O. Box 8580
----Canton. Ohio 44718
Attention: Mr. Charles Johnson
~~*****) Project Manager
Date of Issuance: December 11. 1984
How Issued:
~~4."~ First Class Mail
Dalton Job Number. 8211500
Grant No. C390724-03
Architect I engineer.
DALTON. DALTON. NEWPORT (Dalton)
Dalton is not responsible for safety on the subject Project. nor is Dalton an expert on safety. The Contractor is
responsible for all safety on the Project site. Nevertheless, Dalton hereby alerts the Contractor as to a safely
;tem.
appears there may be a safety violation or problem which the Contractor should check and correct or
(emedy. if required. as soon as possible. In case of a significant violation. or in case no action is taken, copies
of this notice may be sent to the Contractor's home office and the Owner.
Any further observation of this matter by Dalton will not take place other than during the normal Dalton
visitation. Dalton is not assuming any responsibility for this safety violation or problem or for Its correction.
The specific item cited is as follows:
Per Corps of Engineers November 5, 1984 Report:
1)
Some trucks and heavy equipment are still being operated without
backup alarm systems.
2)
Barricades are not inplace around open excavations and along
structures under construction.
Also. at Plant "C". the site fence is down allowing unimpeded access to
the construction site.
)piea to: _.lob Mas~.~DN
_~Bernot '. DDN
'''''II r ,
...... ,,,,,",,
""'" "t'",1
Clvde WalJ~~&. Gib~QD~GxAble
Elmer Tope, Gibbons-Grable
,
\
~//~
L. Vercell!
7-42
'5
-------
c
Attachment I-I
SITE SAFETY COORDINATOR QUALIFICATIONS
All
Sites
o
Satisfactory completion of the S-day
basic Field Investigation Team (REM/
FIT) course
x
o
Satisfactory completion of and
current certification in cardiopul-
monary resuscitation (CPR) and multi-
media first aid
x
o
Demonstrated proficiency and experi-
ence in the selection, use, limitations
and calibration of field monitoring
instruments (e.g., OVA, HNU, 0 meter,
explosimeter, personal moni torfng
pumps, indicator tubes, radiation-
alert mini, moni-tox monitor)
x
o
Satisfactory completion of HNU training
o
Satisfactory completion of OVA training
8urvey mode
gc mode
o
Demonstrated proficiency and experience
in the correct selection, use, mainte-
nance, and limitations of NIOSH/HSHA
approved respiratory protection equip-
ment, to include:
the self-contained breathing
apparatus with and without the dual
purpose requlator
the full-faced air purifying respira-
tor and associated cartridges and/or
canisters
the powered air purifying respirator,
filter cartridges, recharging units,
and battery packs
cascade system for refilling
breathing tanks
air line respirators
7-43
Leve 1 B
x
*
*
x
x
*
x
x
Level C Level D
x
*
*
x
*
*
*
*
.
-------
All
Sites Level B Level C Level D
o Demonstrated proficiency and experi- X
ence in the correct selection, use,
and limitations of the variety of
protective clothing used during
hazardous materials/waste work, to
include:
Tyvek 1422A, 1443CS, 1445A, P.E.,
Saranex
Neoprene, nitrile, butyl, vi ton,
PVC elastomers
Weather conditions and heat
stress considerations
0 Demonstrated proficiency in defining X
decontamination procedures, and
solution requirements based on the
types of chemicals encountered for
personnel, field instrumentation,
heavy equipment, and sampling equip-
ment
0 Demonstrated good general knowledge
-- of hazard evaluation techniques and
.-
interpretation of the chemical, physi-
cal, and toxicological properties of
onsitematerials so as to be capable
of making the appropriate decisions
onsite reqarding personnel safety
as site conditions change
0 Demonstrated thorough knowledge of X
emergency preparedness techniques
and considerations, to include:
onsite accidents/exposure
MED-TOX procedure
heat stress, frostbite preven-
tion, symptomology, and treatment
0 Demonstrated knowledge of personnel X
equipment listed in 29 CFR 1910,
Subpart I and EPA Interim Safety
Guidelines
(
7-44
-------
All
Sites
o
Demonstrated experience in working
on a variety of sites (site charac-
terization, drum opening and
sampling, subsurface investi-
gation, soil sampling, etc.) and
at least:
30 days onsite experience, with
at least 5 days in Level B
10 to 30 days onsite experience on
at least 3 sites wearing Level B
or C
experience on one or more hazardous
waste sites or the current site or
extensive field experience
o
Demonstrated experience with the
types of activities (drilling, tank
sampling, soil sampling, etc.) which
will be conducted at the site.
~
~
(*) Site-specific criteria apply.
WDR7l/l8
7-45
Level B
x
x
Level C Level D
x
x
-------
\\t ''; ')....~
- 'r
...' ~ "
" .- k
\~ ~12}
ioI"-s,,,. ,,,...'
l XIO
MEMORANDUM
SUBJECT:
FROM:
TO:
UNITE::;' STA,E:) G.vlf~rN~ENTAL PROTECTION AGENCY
WASH i Nt; TON, D,C, ZQ460
1/11/85
New Page M-3
NOV I 9 1984
CFI'I('f OF
~OLID WASTE AND e'''~ ~G~NC;'" HlSP')N~'
Standard Operating Safety Guides, November 1984
William N. Hedeman, Jr., Directo~~l.-rJ J J\ ';
Office of Emergency and Remedial ReJP0ris~~\~~~~J
Regional Office Actdressees
The enclosed Standard Operating Safety Guides, November
replaces the Interim Standard Operating Guides, Revised
September 1982. The Guides have been updated and revised to
reflect additional experience EPA personnel have gained in
responding to environmental incidents involving hazardous
subs tance s.
1984
The Standard Operating Safety Guides are in accordance and
consistent with the procedures for employee health and safety
contained in EPA's occupational Health and Safety Manual,
Chapter 9, Hazardous Substances Responses, (1440 TNl2),
May 5, 1984.
The guides are not meant to be a comprehensive safety
manual for incident response. Rather, they provide information
on health and safety to complement professional judgement and
experience, and to supplement existing Regional office safety
procedures. '
If you have any questions or comments concerning the
guides, please contact Mr. Stephen Lingle, Director, Hazardous
Response Support Division or Mr. J. Stephen Dorrler, Chief,
Environmental Response ream.
Enclosure
Addressees
Director,
Director,
Di rector,
Director,
Director,
Director,
'--
Ofc. of Emergence & Remedial Resp., Region II
Hazardous Waste Mgmt. Div., Region III
Air & Waste ~anagement Division,
Regions IV, VI, VII. VIII
Waste Mgmt. Div., Regions I & V
Toxics & Waste Mgmt. Div., Region IX
Air & Waste Division X
cc: Gene Lucero, OWPE
John Skinner, OSW
1-46
-------
ANNEX 8
RESPONSE SAFETY CHECK-OFF SHEET
1/11/85
New Po -:e [.!- 1. '::
(minimum required data)
1.
3EFORE RESPONSE
-----
Emp: v.'" ;';;
1.
Incident: Site
a. Response Dates
City
~.~te
--- .--
2. Type of Response:
Spill
Fi re
Site
1 ra in
Other
3.
Incident Safety Plan:
Region
ERT
Not DEveloped
4. Suspected chemical(s) involved:
(c)
(a)
(d)
B
(b)
5. Protective level(s) involved: A
(a) If level C - 1. Identify Canister
C
D
2. Describe air monitoring source{s)
(b) If level D JUSTIFY (in comments section at bottom of pagej.
. "
6.
SCBA-Identify Buddy: Name/Organization
7. last Response:
(a) level Used: A
B .
C
D
(b) Medical Attention/Exam Performed:
Yes
No
---
II. AFTER RESPONSE
1.
Protective level Used:
A
B
c
D
..~I
a. level C - identify cannister: b. level D (comment below)
c. level B or C skin protection: Tyvek/Saran ---- Acid/Rain ---- Other
2. list possible chemical exposure:
(b) (c)
Same as above: (a)
1d)
3. Equipment Decontamination:
Disposed:
Cleaned:
No Action:
(a) clothing
(b) respi rator
(c) monitoring
4. Approximate time in exclusion area:
hours per day for
days
5.
Was medical attention/exam required for this res~onse: Yes
No
Part
I: DATE PREPARED:
Reviewed by
Date
Part II: DATE PREPARED:
COMMENTS:
Reviewed by
Date
7-47
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7-48
-------
ANNEX 9
1/11/85
New Paqe M-16
(Suggested format for minimum site safety plan)
SITE SAFETY PLAN
(Name of Hazardous Waste Site/Spill)
General Information
1.
As a minimum, all personnel involved with emergency response, waste
site cleanup, drum handling and opening, sampling, site investigations,
etc., will follow the applicable Federal/State rules and regulations. In
addition, all site personnel will follow, as a minimum, U.S. Environmental
Protection Agency, Office of Emergency and Remedial Response, Hazardous
Response Support Division's, Standard Operating Safety Guides and Chapter
9 Hazardous Substance Response, from the EPA Occupation Health and Safety
Manual.
In the event of conflicting plans/requirements, personnel must imple-
ment those safety practices which afford the highest personnel protection.
If site conditions change and it is necessary to modify Levels of
Protection A, a, or C the safety designee on-site shall notify the On-Scene
Coordinator before making recommendations to site personnel.
11. APPROVALS
(SIGNATURE)
On-Scene-Coordinator [OSE)
DATE
(SIGNATURE)
Safety Officer
DAiE
(SIGNATURE)
REVIEW COMMITTEE
DATE
(SIGNATURE)
OTHERS
DATE
III. Summary of Minimum Requirements
A.
The safety officer/designee shall:
Describe chemicals, hazards, and risk involved
1.
2.
List key personnel
a.
Response manager (OSC}/alternate
Safety officer(s}/alternate
b.
c.
Other responsible site personnel/alternate
Prescribe Levels of Protection
3.
4.
Designate work zones:
area, exclusion area.
Support area, contamination reduction
5.
Implement procedures to control site access.
7-4S
-------
1/11/85
New Page M-17
I. Def1nl decontamination procedures.
7. Delineate Intry and Istape routes.
8. Identify/contact 8ed1cal facility, ItC.:
a. Fire
b. Ambulance
. c. 'o11cI
d. Hlalth
I. Etc.
9. Lfst responsfble parties and emergency contacts:
a. Flderal 50vernment
b. Stlte tioVirnment
EPA/uSCG/CDC/OSHA
Environmental/Health Agency
c. County/City &overnmlnt
10. Estlblfsh personnel air monitoring.
r
11. Specify routine and special training needed
12. Establish procedures for 8Inlg1ng weather-related problems.
8. Levlls of Protection
1. level C protection should be used for those Job functions
11sted below where there 1s no potential for personnel
contlct with either hazardous materials or glses, vapors, or
plrticulat.s Ixceeding requirements for wearing air-purifying
respi rators.
(Ident1fy job functions 1n this paragraph:
8.g. - 8Onitoring/surveilllnce, supervisors,
obs.rvers, ItC.)
(Identify specific type of respirator 1n this paragraph:
I.g. - approved respirltor and type of canister.)
(Identify skin protection fn this parlgraph:
8.9. - double boots, double gloves, tyv.k/saran hooded,
disposable coveralls, etc.)
'-
7-~:;
-------
1/11/S5
New Page M-lS
2. level B protection should be used for those Job functions
11sted below Wh1Ch based either on potential or known
site conditions and/or vapor Ind gas concentrations.
level C is unsatisfactory.
Identify Job functions in this paragraph:
(e.g. - Heavy equipment operations. samplers. equipment/
drum handlers. etc.)
Identify specific respiratory protection in this paragraph:
(e.g. - self-contained breathing apparatus (SCBA). air-line
respirator)
Identify skin protection in this paragraph:
(e.g. - double boots. double gloves. type of chemical re-
sistant garment. etc)
3. If level A protection is applicable. write I paragraph in
plan listing where and when it 15 to be worn. .
4. level 0 is not Idequate protection for Iny work on-site
where potential for exposure is possible.
5. levels C and B may be modified based on 80nitoring and
sampling data collected on-site. Safety designee should
not make any modification to the level of Protection
without discussing it with the On-Scene-Coordinator.
C. Air monitoring - Refer to. Standard Operating Safety
Guides. Part 8. Air Surveillance.
D. Training
Personnel w1'l hive either formal training or prior on-the-
job-training for those tasks they are assigned to It the
incident. All unfamiliar activities will be rehearsed
beforehand.
E. Respiratory Protection Program
All contractor and government personnel involved in on-site
activities shall have I written respiratory protection pro-
gram. All personnel wearing air-purifying respirator on-site
art requ1rtd to be fit-tested. All personnel wearing respir-
ators must have been properly trained in their use. All
respirators are to be properly decontaminated at the end of
each workday.
Persons having beards or facial hair must not wear a respir-
ator if a proper mask-to-face-seal can not be demonstrated by
a fit test. A log of all individuals wearing personnel
protective equipment shall be maintained including~ime in
the exclusion zone.
7-51
-------
1/11/85
New Page M-19
F. All contractor and government personnel who ar. Ixposed to
hazardous levels of chemicals must be enrolled in a medical
80nitoring program.
6. 61neral Saflty Rulls and Equipment
1. There will be no lat1ng, drinking, or smoking in the ex-
clusion or contamination rlduction lone.
2. All plrsonnel 8USt pass through the contamination reduc-
tion 10nl to Intlr or Ix1t the Ixclus10n lone.
3. As I ~inimum, emergency eye washls will be on the hot side
of the contami nat ion reduct ion lanl and/or It thl worle
stlt1an.
. . .
4. As I 8inimum, In emergency dlluge showlr/spray clns Ire to
be located on the clean side of the contamination reduc-
tion Irl..
5. At the Ind of the work day, III personnel working in the
Ixclusion Irel shall take a hygienic shower. .
6. All supplied breathing lir shall be certified as grade D or
blttlr.
7. Wherl practical, 111 tools/equipment will bl spark proof,
Ixplos1on resistant, Ind/or bonded Ind grounded.
8.
f1rl .xt1ngu1shers wi11 bl on-site for use on Iqu1pment
or smil1 fires only.
9. S1ncl site lvacultion 8IY be nlcesury if In Ixplosion,
f1rl, or ,..lelsl occurs, an individual shall be assigned
to sound In Illrt Ind notify the responsible public
offitlls tf requtred. For eXlmple, the evacuation signal
8IY be two 10ng blasts Ivery 30 seconds until 111 person-
nel Ire IVlculted and accounted for.
10. Art Idequltely stocked first-aid kit w111 be on-scene It
.11 times during operational hours. It is suggested that
In oxygen inhllltor respirator be ayailable and I quali-
fied operator present. The location of these items and
the operator shall be posted.
H. Morning Safety Meeting
A morning safety meeting will be conducted for al1 site per-
sonnel and they wil1 sign a daily Ittendance sheet and should
sign I ..ster sh~t indicating they have read the site safety
phn Ind w111 comply. The ufety procedures, Ind the day' S
planned operations should be discuSSld. .
'-
7-~:~
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Part 1926
PART 1926-SAFETY AND HEALTH
REGULATIONS FOI CONSTRUC-
TION
SubptMt A a."....
Sec.
1926.1 Purpose and 8COpe.
1926.2 V&J1ancea from wety and he<h
atandards.
1926.3 Inspectlona--rtcht of entr'J.
1926.4 Rulea of prac:tlce for adm1n1Itratlve
adjudications for enforcement .f wety
and he&1th atandarda.
Subpart' alne'" ......,.....-.
1926.10 Scope of lubpart..
1926.11 Coverace under aec:tlon 103 of the
act dlsttneulahed.
1926.12 Reorpnlzatlon Plan No. 14 of
1950.
1926.13 Interpretation of statutory terma.
1926.14 Feder&! contrac:t.l for "mixed"
types of performance.
1926.16 Relationship to the Service Con.
trac:t Act; Wa1ah.Hea.1ey Public Con.
tracta Act.
1926.16 Rules of construction.
'"
I
(J"I
W
Subpart C a.ne'" s.fety ..... HMIth
Prevhleft.
1926.20 Oener&! wety and health provl.
alons.
1926.21 Safety tralnlni and education.
1926.22 Record1ni and reportlnl of lnJu,
rlea. [Reserved)
1926.23 Firat &ld and medical attention.
1926.24 Fire protection and prevention.
1926.25 Houaekeeplnl.
1928.26 lliuminatlon.
1928.27 Sanitation.
1926.28 Pel'8Onal protective equipment.
1926.29 Acceptable certlllcatlona.
1926.30 Shlpbulldln, and .hlp repa1rln,.
1926.31 Incorporation by reference.
1926.32 Deflnltlona.
Subpart D-Occup"""" HeeIth 81M!
Envlrofl_ntel c:.ntr.Ie
1926.50 Medlc&1 aervtce8 and fint &ld.
1926.51 Sanitation.
1926.52 Occupational nolae upolure.
1926.53 10nlzlna radiation.
1926.54 Nonlonlzlna radiation.
1926.55 Oasea. vapora. fumea. duata. and
mists.
1926.58 lIlumlnatlon.
1926.57 Ventilation.
29 CFR Ch. XVII (7-1-85 Edition> -
Bee.
Subpart E~_I ,retectfy. ..... Ute s.w.. - l
tq.llp..nt I
1926.100 Hud protection.
1926.101 Hearlna protection.
11126.102 Eye and face protection.
11126.103 Respiratory protection.
1926.104 Safety belta. lifelines. and Ian.
Y&fda.
11126.105 Safety neta.
11126.106 Worklna over or near water.
11126.107 Definitions applicable to thJa IUb-
part.
Subpert .-fIN 'r.'ect- .... 'rev""""
11126.150 Fire protection.
11126.151 Fire prevention.
11126.152 Flammable and combustible liq-
uids.
11126.153 Liquefied petroleum ru (LP-
Ou).
11126.154 Temporary heatlna devices.
11126.155 Definitions applicable to thJa 1Ub-
part.
Sultpart G-Slen', 1Iv-h. ..... I."".....
11126.200
tap.
11126.201
11126.202
11126.203
part.
Accident prevention I~ and
SIII11&1In1.
BarrIcades.
Definitions applicable to thlllUb-
Subpart H-Metertel. ......... S..,.... Ute.
.nd 01""'"
11126.250 Oener&! requlrementa for ltorace.
11126.251 Rlartna equipment for material
handllna.
11126.252 Dlapoaal of wute materta1a.
Subpart I-Teoia-HeM end '.wet
11126.300 Oener&! requlrementa.
11126.301 Hand tools.
1926.302 Power operated hand toola.
11126.303 Abrulve wheell..nd toola.
11126.304 Woodwork In, toola.
11126.305 Jacu-Iever and ratchet. ICrew
and hydraulic.
Subpart J-W.1cI1ne .nd Cutfl",
11126.350 Ou weld1ni and cuttlna.
11126.351 Arc weldlna and cuttlna.
11126.352 Fire prevention.
1926.353 Ventilation and protection In
weldlnlJ. cuttlnIJ. and heatlnIJ.
11126.354 WeldlnlJ. cuttlna and heatln, In
way of preservative coatlnas.
Subpart K-ilectrk.1
1926.400 Oeneral requirements.
16
Part 192,
~tIonal So~ and HHlth Admin., Labor
Bee. I
1828.401 Oroun41Dl and ~ndlnl.
11126.402 Equipment InItaIlatlon and main.
tenance.' .
11128.403 Battef'J rooms and battery chari-
In&. .
1828.404 B.uardouI ~IoDl.. .
11128.401 DelInlUoni .app1k:ab1e to t.hll1Ub-
paR.
....... 1.4....,"... '-If.wln,
182Uao
11128.4111
1826.4&2
part..
l.&dden. .
8caffold1n1.
Dellnitlona appUcable to thJa 1Ub-
....... M ........... w.. 0,.-... M4
. . """-Y' .
Ouardra\1l, b&ndral1I. and covel'L
St.a1nr&ya. .
DellnltlonaappUCab1e to thla 1Ub-
1828.500
182UO 1
182U02
part.
APnIf1)IX A '10 SVaPAJI1' "-Roor Womu
....... N C--. DenIcb, ...... ...".....
.... c-v.yen
1828.lIao Cranea and derrtcka.
1828.11111 BellcopteJ"l.
182UII2 Material holltl, pel"lOnnel' hollt8
and elevatoJ"l. .
182UU BuHDounted drum ho&ata.
1828.,1164 Overbead hoilt&.
11126.666 . CoDveJoJ"l.
11126.&68 . Aerial Wta.
Sub,tert 0 ....., YeIIIdn, Mechenb...
. I...,....., M4 M8IM Opef.""'.
1828.800. EqulpmenL
1826.601 Motor YMldea. .
111211.602 . Matertal handlin, equtpmenL
11126.601 PUe drtvina equipment.
11128.8M Bite c1~.
1828.606 M&rtne Operat!oDl and equip.
ment. .
1828.600 Deltnitlona appUcable to tbJI 1Ub-
part.
....... ,-Ix......... '......... .....
......
1826.110 Oenenl protection requlrementa.
1826.661 8pec1t1c excavation requlrementa.
11128.8112 8pecWc trench1nl requlrementa. .
1826.1161 , DeIJ,nJUooa applicable to thJa IUb-
part.
SuIt,.rt Q-Cencr.te, c-.te r.na.. 8841
IheMt
11128.700 Oener&! provlllona.
11126.701 Forma and monn..
11126.702 Deflnltlona app11cable to thJa IUb-
. part.
Bee.
WIper -- II INdIen
1828.7ao Floonna requlrementa.
1828.761 Structur&!lteel uaembly.
1828.7&2 Boltlna. riveUni. flttlna.uP. an,
plumblna'up.
~ S-T"""'" ..... SIMrfta. CeII-..
ee.......... ..... c..,...- All
11126.800 Tunnell and lhalta.
1828.801 Calalona.
1828.802 Correrdama.
1826.803 Compreued air.
11126.804 Deflnitlona applicable to thll .ut
paR.
APnnIIt A '10 8UU&llT 8-DIicOIIPU8IIO
Tuua
.......' D.........
1828.110 Preparatory operatlona.
1828.8111 8t.a1n. puu,cewaya. and ladden.
1826.8112 Chutes.
11126.8113 Removal 01 materlala throul
noor 0pen1np.
1828.864 Removal '01 walJa. muonry Ie<
tlona. and ch1mneya.
1828.8611 Manual removal 01 noon.
1828.8M Removal of walla. noon. and D1J
terlal with equipment.
1828.8117 Storace.
11126.868 Remov&l of lteel conatructlon.
1826.8611 Mechanical demolition.
11128.880 Selective demolition by expl,
alvea.
...... u-IIatlltt ..... Ute .. ..,...","
1828.IlOO Oenenl provtalona.
1828.1101 Bluter quaWlcatloDL
1828.1102 Surface tranIportaUon 01 expl<
alvea.
1828.1103 Undeqround &nnaportaUon (
uplo8lvea.
1828.804 Storace 01 eKplo8lvea and blutln
aaenta.
1828.1106 I"oadIna 01 eJrplO8lvea or blutlI1
aaenta.
1828.1IOe lntUatlon 01 eJrplOl1ve chU'lea.
electr1c blutlnl.
1826.1107 Uae 01 wet, tuae.
1828.1108 Ute 01 detonaUni cord.
11128.eoe P'trtna the bluL
1828.1110 lnapectton alter bluUnl.
18:aUll 141aI1rea.
1828.812 Underwater blutlna.
1828.813 Blutlna In eJrcavatlon wort und,
compreued air.
11128.814 Deflnitlona applicable to thll IU
part.
Sultpart Y~.Wet 're""',"'" .n41
DI.trtltutleft
11128.IIao Oener&! requlrementa.
17
-------
~ 1926.1
Sec.
1926.951 Tools and protective equipment.
1926.952 Mechanical equipment.
1926.953 Material handllnl.
1926.954 Ground1n8 for protection of em.
ployees.
1926.955 Overhead lines.
1926.956 Underlfound lines.
1926.957 Construction In eneralzed substa.
tlons.
1926.958 Extema110ad helicopters.
1926.959 lJneman's body belts, safety
straps. and lanyards.
1926.960 Def\n1t1ons applicable to this sub-
part.
"
I
en
->
. kbpart W-IoIlo.., '~v. Shvdur811
Ov.rt.eocI Pmect\oft
1926.1000 Rollover protective structures
(ROPS) for material handlln8 equip.
ment.
1926.1001 Minimum perfonnance criteria
for rollover protective structures for des-
hrnated scrapers. loaders. dozers. arad.
ers, and crawler tractors.
1926.1002 Protective frame
-------
"art 1901S,Note
(c) C. ,.rformancl'. (I) Statl' Ac.
til'av. t... ~ shall establish and main.
tain a ani1.ed consultant pprformance
monltorln~ system under thl' a~reement:
(i) The system shall be establishpd \Ioithin
60 days of the execution of the contracl. or
\/.ithln 60 days from Ihe dale the Assislant
Sl'cretary publishes a program directive on
Ihe design of the performance monitoring
syslem. Whichever occurs later. Operation
of the system shall conform to all require.
ments established by the Assistant SeerI"
lary. The system shall be approved by the
RA before It Is placed in operation.
(ii) A performance evaluation of each Indl.
\'Idual State consultant perfonnlng on-site
consultalion for employers shall be pre-
pared annually. All aspects of a consultant's
performance shall be reviewed at that time.
Recommendation for remedial action shall
be made and acted upon. The annual eval.
uatlon report shall be a confidential State
personnel record and may be tlml'd to coin-
cide with regular personnel evaluations.
(III) Performance of Individual consultants
shall be measured in tenns of their ability
to Idenlify hazards In the workplaces which
they have visited; their ability to detennlne
employee exposure and risk, and In particu-
lar their perfonnance under 11908.5 (e) and
...., (f); their knowledge and Rppllcatlon of ap-
I plicable Federal or State statutes, regula.
~ lions or standards; their knowledge and ap-
plicalion of appropriate abatement tech.
niQues and approaches; and their ability to
errectively communicate their findings to
employers.
(iv) Accompanied visits to observe consult-
ants during on.slte consultative visits shall
be conducted at least semiannually for each
consultant. The State may also conduct un.
accompanied visits to workplaces which re-
ceived on-site consultation, for the purpose
of evaluating consultants. A written report
of each visit shall be provIded to the con-
sultant. These visIts shaH be conducted only
with the upresaed permission of the em-
ployer who requested the on-site consulta-
tive visit.
(v) The State 90'111 report quarterly to the
RA on system operations, Including copies
of accompanied vIsit reports (without Identi-
fication of the employer) completed that
Quarter.
(2) Federal actfvftll. State consultant per-
formance monitoring as set out In
, 1908.71cH I) shaH not preclude Federal
monitoring aclivlty by methods determined
to be appropriate by the Assistant Secre.
tary.
(d) Siall' reporll"g. For Federal monitor.
in~ and evaluation purposl's, the State shall
compile and submit such factual and statis-
tical data in the format and at thl' frequen-
cy rl'Qulred by the Assistant Secretary. Th('
Slate shaH prepare and submit to the RA
any narraU\'e reports. includln~ copies of
Title 29-Labor ,
\/,'fillen r('ports 10 l'mpIOYNS I \/..it hout
tlfication of the f'mploYl'r) as may b
Quirf'd by the Assistant Secretary.
~ t90K.9 Aj(rHm.nl.,
(a) Who mall ma~e agrel'ml'n/s. Th(' As.
slstant Secretary may make an a~re('ml'nt
under this part with the Go\"ernor 01 .
State or with any State aRency desi~nall'd
for that purpose by the Governor.
(b) NI'90tfatlons, (I) Procedures for neRO'
tiatlons may be obtained through thl' RA
who 90'111 neRotiate for the Assistant Secre.
tary and make final recommpndations on
each agreement to the Assistant Secretary.
(2) States with Plans approved under sec.
tlon 18 may Inltlale negotiations In antlcipa.
tlon of the withdrawal of federally fundl'd
on-site consultation servlcn to private.
sector employers from the Plan,
(3) Renegotiation of existing agreements
funded under this part shall be initiated
within 30 days of the effective date of these
revisions.
(c) Cont~"Ls oJ agr~em~"L (1) Any agree.
ment and sUbsequent modifications shall be
In writing and signed by both parties.
(2) Each agreement shall provide that the
State 90'111 conform Its operations under the
agreement to:
II) The requlrementa contained In this
Part 1908:
(II) All related fonnal directives subse.
quently Issued by the Assistant Secretary
Implementing this regulation.
(3) Each agreement shall contain an ex.
pllcit written commitment for each major
lettf'red paragraph In 111908.4, 1908.5,
1908.6. 1908.7, and 1908.8. with particular
emphasis placed on the foHowlng elements:
II) Consultation inanagement structure
separate from enforcement;
(II) Consultant numerical llmltatlon and
safety and health obJective:
(III) Assignment of Qualified personnel;
(Iv) Submission of a plan for upgrading
consultant Qualifications:
(v) Advertisement of consullatlon services;
(vI) Early notification to employers of the
scope of services provided and their obliga-
tions;
(vII) Employee participation In on-site
visIts;
(vIII) Employee protection requirements;
(Ix) Provision of written report to employ-
ers; and
(x) Monitoring and evaluation procedures;
(4) Each agreement shall also Include a
budget of the State's anticipated expendl.
tures under the agreement. In the detail and
format required by the Assistant Secretary.
(d) Locatio" oJ sample agret'ment, A
sample aRreement Is available for Inspection
at all Regional OHl('t's of the Oct'upatlonal
Safety and Health Administration or thl'
U.S. Ot'partml'nt of Labor.
80
O t' I Safety and Health ~clmIMIS'lra;IOrJ
,ter XVII- ccupa Ion a
.. Action upon r,.qursts. Thl' Slate wi~1 bf' ~~~O.23 Guarding floo.wall . .-I'nin~s
lDIilied within a rf'a.~onable tlml' of an~ dl" and holl's.
!islon connrnin!: ils r('Quest for an a!:rf'.~i 1910.24 Fi x('d industrial stairs.
IItn!. H a reQu('sl is dt'nled, thl' Statl' WI 1910.25 Portable wood ladders.
w informed in II.' rit inR of th(' rl'a.~ons SUI~: 1910.26 Portable metal ladders.
rUng the dpcision. If an agrel'ml'nt IS 111 d
1101' led the I'nl'tl'al funding will spPclfy th(' 1910.27 Fixed lad t'rs. r Id
10 1& r d 1910.28 Safety requirements for scaf 0 .
Pfriod f~r the a!:r('('mt'nl. Additional un s
be added at a later time pronded thl' ing. bll ladder
~IYV'lty .,s SatisfactorilY carried out and ap- 1910.29 Manually propelled mo e
.... Th St t(' mav stands and scaffolds (towers).
propriations arl' a\'allable. (' a If' 1910.30 Othpr working surfaces.
.I.ft be reQuir('d to ampnd the a!:rpempn or
...... 1910.31 SOllrc('s of r:andards.
eontlnued support. . d izatlOns
II) Ttrminatlon. Either party may terml' 1910.32 Standar s organ.
IIIte an agreempnt undt'r this part u.pon 30
days written notice to the other part~. Subpart E-Means af Egre..
119OM.10 r.ulu~ion.. .'.
An agreement under this part will not rc-
strict in any manner the authority and r('-
nslbllity of the Assistant Secret an-
:der sections 8. 9.10,13. and 17 o.f ~he Act.
or any corresponding State authorlt).
'ART 1910-0CCUPATIONAl SAFETY
AND HEALTH STANDARDS
Subpart A-General
Sec.
1910.1 Purposp and scope,
1910.2 Definitions.
1910.3 Petitions for the issuancp,
ment. or repeal of a standard.
1910.4 Ampndments to this part.
1910.5 Applicabilit Y or standards.
1910.6 Incorporation by reference.
Subpart a-Adoplion and bten.ion of
Eatabli.hed Federal Standard.
am('nd-
1910.\1 ScOpl' and purpose.
1910.12 Construction w'ork.
1910.13 Ship repairing.
1910.14 Shipbuilding.
1910.15 Shipbrl'akin!:. <). '-
1910.16 Lon~shoring and maran(' I!'rmmals.
1910.17 EH('cti\'(' datcs.
1910.18 Chan~l's in ('stablishl'd F..dl'ral
standards. .
1910.19 Special pro\'isions for air conlaml'
nants.
SubP~rt C-General Safety and Health
'rov;.;on.
1910.20 Acc,'ss 10 ,'mployf'" ,'xposllrt' and
ml'dicRI rt'coros.
Subpart O-Wa'''ing-War''ing Su,fa,,"
1910.21 IkfllllllOlIS.
1910.:.!2 (;"111'1:11 n''lIln'1I11'lIls
1910.35 D('rinitlons.
t910.36 G('neral requirements.
1910.31 Means of egress, general.
1910.38 Employee .emergency plans and
fire pr('n'ntlon plans.
1910.39 Sources of standards.
1910.40 Standards organizations.
ApPElfDIX-MEAlfS or EGRESS
Subpart F-Powered "atfo""s, Manu"s, and
V8f\lcle-Mounted Wark "atfa""s
1910.66 power platforms for exterior build-
ing maintenance.
1910.67 Vehlcle.mounted elevating and roo
latlng work platforms.
1910.68 Manlifts.
1910.69 Sources.of standard~.
1910.70 St andards organizations,
Subpart G-Occupatlonal Health and
Environmental Control
1910.94 Ventilation,
1910.95 Occupational noise exposure.
1910.96 Ionizing radiati~n.
1910.97 Nonionizing radiation.
1910.98 Errectivl' dates.
1910.99 Sources of standards.
1910.100 Standards organizations.
Subpart H-Haaardous Material.
1910.101 COl11pressed gases (general reo
Qulr('mt'nts).
1910.102 Acptylt'ne.
1910.103 HydroRl'n.
1910.104 Oxygpn.
1910.105 Nitrous oxldp,
1910.106 Flammablp and combustible liQ'
lIids. . bl
1910.101 Spra)' rinishing .usan~ flRmma I'
and combustibll' mat('rl~ls.
tan" flammabh'
1910.108 Oip lanks conaan ..
or combustible liquids. .
1910 109 F.xplosi\'l's and bla.~tin~ ai:,:nts. .
1;1\0:110 Slora!:1' and handlini: of hQulfll'd
III't roh'um !:a.~I'S.
81
-------
. ""' . I . '"
Sf'e.
1910.111 Storallc and handllnR
drolls ammonia.
1910.112-1910.113 [Rf'sf'rved)
1910.114 Errf'ctive dates.
1910.115 Sources of standards.
1910.116 Standards organizations.
Subport I-'e"onol 'rotectlve Equlp",ent
1910.132 General requirements.
1910.133 Eye and face protection.
1910.134 R('splratory protection.
1910.135 Occupational head protection.
1910.136 Occupational foot protection.
1910.137 Electrical protective de\'lces
1910.138 Effective dates. .
1910.139 Sources of standards.
1910.140 Standards organizations.
of anhy.
Subport J-Generel Envlron",entol Control.
1910.141 Sanitation.
1910.142 Temporary labor camps.
1910.143 Nonwater carriage disposal sys.
tems. [Reserved]
1910.144 Safety color code for marking
physical hu.ards.
1910.145 Specifications for accident pre-
vention signs and tags.
1910.146 (Reserved)
....., 1910.147 Sources of standards.
I 1910.148 Standards organizations
0'1 1910.149 Effective dat('s .
0\ .
Subport K-Medlcol ond FI"t Aid
1910.151 Medical services and first aid
1910.152 [Reserved) .
1910.153 Sources of standards.
Subpart L-Flre 'rotectlon
1910.155 Scope. application and definitions
applicable to this lIubpart.
1910.156 Fire brigades.
PORTABLE FIRE SUPPRESSION EQUIPMENT
1910.157 Portable fire extinguishers
1910.158 Standpipe and hose syste~.
FIXED Flu SUPPRESSION EQUIPMENT
1910.159 Automatic sprinkler systems
1910.160 Fixed extinguishing systems' gen-
('ral. .
1910.161 Fixed extinguishing systems dry
chemical. .
1910.162 Fixed extinguishing systems gas-
f'OUS aRenl. .
1910.163 Fixed extinguishing systems.
wal('r spray and foam.
OTHER FIRE PROTECTION SYSTEMS
1910.164 Firc detection systems
J 91 0.165 Employ('(' alarm Syst('~s.
Title 29-Labor
Sl'c.
ApPENDICr.S TO SUBPART L
ApPENDIX A-FIRE PROTr.CTION
ApPENDIX B-NATIONAL CONCENSUS STAI'~
ARDS
ApPENDIX C-FIRE PRoTECTION RErERENCQ
FOR FuRTHER INFORMATION
ApPENDIX D-AvAILABILlTY or PuUICATIOI'S
INCORPORATED BY REFERENCE IN SECTIOR
1910.156 FIRE BRIGADES
ApPENDIX E-TEST METHODS FOR PROTECTIVl
CLOTHING
Subport M-Co",p,...od Go. ond Co"'pr."H
Air Equlp",.nt
1910.169 Air recelv('rs.
1910.170 Sources of standards
1910.171 Standards organlzatl~ns.
Subpart N-Mot.rloh Hondll"9 ond Storog.
1910.178 Handling materials-general
1910.177 Servicing multi-piece and ~fnglt
piece rim wheels.
1910.178 Powert'd Industrial trucks
1910.179 Overhead and gantry c~es
1910.180 Crawler locomotive and't k
cranes. rue
1910.181 Derricks.
1910.182 Effective dates.
1910.183 Helicopters.
1910.184 Slings.
1910.189 Sources of standards.
1910.190 Standards organizations.
Subport O-Mochln.ry ond Modllne Guordlng
1910.211 Definitions.
1910.212 General requirements for all ma.
chines.
1910.213 Woodworking machinery require.
ments-
1910.214 Cooperage machinery.
1910.215 Abrasive wheel machinery.
1910.216 Mills and calenders In the rubber
and plastics Industries.
1910.217 Mechanical power presses.
1910.218 Forging machines.
1910.219 Mechanical power.transmlsslon
apparatus. .
1910.220 Effective dates.
1910.221 Sources of standards.
1910.222 Standards organizations.
Subpart '-Hond ond 'ortobl. 'owered Tool.
ond Oth.r Hond-H.ld Equlp",.nt
1910.241 Definitions.
1910.242 Hand and portable powered tools
and eQuipmf'nt, general.
1910.243 GuardlnR of portable po1l.'('rl'd
tools.
1910.244 Other portable tools and ('Quip.
ml'nl.
1910.245 EHecll\'f' dates.
1910.246 Sources of slandards.
82
~
,'.I,U
.... XVII-Occupatianal Safety and Health Administration
IlL
..un Standards organizations.
,....,. Q-W.lding. Cu"ing. ond 8roling
inn51
1111.252
811.253
II1US4
Oennit ions.
WeldlnK. cuttinK. and brazinl!.
Sourcf's of standards.
Slandards Organi7.ations.
Subpart I-Spftlollndu.tri..
.11.281 Pulp, paper. and paperboald
mills.
1110.282 Textiles.
1110.263 Bakery equipment.
1110.264 Laundry m:lC'hlnery and oper.
allons.
1110.265 Sawmills.
1110.266 Pulpwood logging.
1110.267 Agricultural operations.
1110.268 Telecommunications.
1110.274 Sourcf's or standards.
1110.275 Standards organizations.
<)
Subpart S-Eloctricol
GENERAL
1110.301 Introduction.
DEsIGN SArETY STANDARDS FOR ELECTRICAL
SYSTEMS
1110.302 Electric utilization systf'ms.
1'10.303 General rf'Qulrements.
1110.304 Wiring design and protection.
1110.305 WirinK methods. componf'nts. and
eQulpmenl ror Keneral use.
1'10.306 Specific purpose equipment and
Installations.
1'10.307 Hazardous tclasslfled) locations.
1910.308 Special systems.
1910.309-1910.330 (Reserved)
SArETY-RELATED WORK PRACTIcES
1910.331-1910.360 (Reserved]
SUETy-RELATED MAINTENANCE
REQUIREMENTS
1910.361-1910.380 [Rl'servedl
SAFETY REQUIREMENTS rOR SPECIAl.
F:QIJIPMr.NT
1910.381-1910.398 [Rl'served]
DEFINITIONS
1910.399 Ddinlliuns applicabh' to lhis sub.
parI.
ApPENDIX A--Hnr.RENCE DocUMt:NTS
ApPENDIX R-.ExPLANATORY DATil I Ht:Sr.Rvt:ol
ApPENDIX C -- TABl.t:S. Non:s. ANO CltllRTS
(Rr.Sr.RVr.D)
~
S,'('.
. Sub port T -Co",,,,erciol Diving Op.rotion.
GENERAL
1910.401 Scope and application.
1910.402 Definitions.
PERSONICEL REQUIREMENTS
1910.410 Qualifications of dive team.
GENERAL OPERATIONS PROCEDURES
1910.420 Safe practices manual.
1910.421 Pre-dive procedures.
1910.422 Procedures during dive.
1910.423 Post.dlve procedures.
SPECIFIC OPERATIONS PROCEDURES
1910.424
1910.425
1910.426
1910.427
SCUBA diving.
Sur(ace.supplied air diving.
Mixed-gas diving.
Liveboating.
EQUIPMENT PROCEDURES AICD REQUIREMENTS
1910.430 Equipment.
RECORDKEEPING
1910.440 Recordkeeplng requirements.
1910.441 Effective date.
ApPENDIX A-ExAMPLES or CONDITioNS
WHICH MAY RESTRICT OR LIMIT EXPo,
SURE TO HYPERBARIC CONDITIONS.
Sub port. u- Y (I...rved I
Sub port I-Toxic ond Hozordou. Sub.tonc..
1910.1000 Air contaminants.
1910.1001 Asbestos.
1910.1002 Coal tar pilch volatiles: Interpre-
tation o( tenn.
1910.1003 4-Nltroblphenyl.
1910.1004 alpha-NaphlhylB.mlne.
1910.1005 (Reserved]
1910.1006 Methyl chloromethyl ether.
1910.1007 3.3'-Dlchlorobenzldlne (and Its
salts).
1910.1008
1910.1009
1910.1010
1910.1011
1910.1012
1910.1013
1910.1014
1910.1015
Sl'c.
1910.1016
1910-1017
1910.1018
1910.1025
1910.1029
1910.1043
1910.1044
1910.1045
1!l10.1047
83
bls.Chloromethyl ether.
beta-Naphthylamlne.
Bfnzldlne.
4-Amlnodlpheny1.
Ethylenelmlne.
bf'ta- Proplolaclone.
2- Acetylamlnofluorene.
4 - Dlmethylam Inoazobenzene.
N -Nltrosodlmf'lhylamine.
Vinyl chloride.
Inorganic arsenic.
Lf'ad.
Cokf' o\'en emissions.
Cotton dust.
1.2-dibromo.3-chloropropanf'.
Acrylonitrile.
Ethylene oxide.
-------
~ 1910.1
51'r. E
1910.1200 d rommunlcatlon.
1910.1499 ourre 01 slandards.
1910.1500 Siandards organizations.
SUBJECT INDEX YOR 2t CPR IIIIO-OcCUPA'
TlONAL SAYETY AND HEALTH STANDARDS
AUTHORITY: Sees. 61al, 81gl, 84 Stat. 1593.
1598: 29 U.S.C. 655, 657, unless otherv..ise
noll'd.
SOURCE: 39 PR 23502, June 27, 1974, unlt'ss
olht'rllo'ise noted.
Subpart A-General
Ii 1910.1 Purpose and IleOpe.
(a) Section 6(a) of the Williams.
Steiger Occupational Safety and
Health Act of 1970 (84 Stat. 1593) pro.
\'ides that "without regard to chapter
5 of title 5. United States Code, or to
the other subsections of this section,
t he Secretary shall, as soon as practi.
cable during the period beginning with
the eHective date of this Act and
ending 2 years after such date, by rule
promulgate as an occupational safety
...., or health standard any national con.
I sensus standard. and any establlshed
~ Federal standard, unless he deter.
mines that the promulgation of such a
standard would not result In improved
safety or health for specifically desig.
nated 'employees," The legislative pur.
pose of this provision is to establlsh, as
rapidly as possible and without regard
to the rule-making provisions of the
Administrative Procedure Act, stand.
ards with which industries are general.
Iy familiar, and on whose adoption In-
terested and affected persons have al.
ready had an opportunity to express
their views. Such standards are either
( 1) national concensus standards on
whose adoption aHected persons have
r('ached substantial agreement, or (2)
Federal standards already established
by Federal statutes or regulations.
(b) This part carries out the direc-
tive to the Secretary of Labor under
section 6(a) of the Act. It contains oc.
cupational safely and health stand-
ards which have been found to be na.
tional consensus standards or estab-
lished Federal standards.
!i 1910.2 UerinitionN.
As used in this part. unless the con.
t('xt clearly requires otherwise:
(a I .. ACI" mrans the William
Stdg('r Orcupational Safety an
Health Act or 1970 (84 Stat. 15901.
(bl "Assistant S('('retary of Labor"
means till' Assistant Secretary of
Labor for Occupational Safety and
Health:
(c) "Employer" means a person en.
gaged in a business aHecting com.
merCl' who has employees. but does
not inl'ludl' the United States or any
State or political subdivision of a
State;
(dl "Employee" means an employee
of an employer who is emplo)'ed in a
business of his employer which aHects
commrrce:
(e) "Commerce" means trade, traffic,
commC'l'ce. transportation, or commu.
nication among the several States. or
between a State and any place outside
thereof. or within the District of Co.
lumbia. or a possession of the United
States lother than the Trust Territory
of the Pacific Islands). or between
points in the same State but through a
point outside thereof;
(f> "Standard" means a standard
which requires conditions. or the
adoption or use of one or more prac.
tices, means, methods, operations, or
processes, reasonably necessary or ap-
propriate to provide safe or healthful
employment and places of employ-
ment;
(g) "National consensus standard".
means any standard or modification
thereof which (I) has been adopted'
and promulgated by a nationally rec.
ognized standards-producing organiza.
tion under procedures whereby it can
be determined by the Secretary of
Labor or by the Assistant Secretary 01 (
Labor that persons Int8llested and af.
fected by the scope or provisions 01
the standard have reached substantial
agreement on its adoption. (2) was for.
mulated in a manner which aHorded
an opportunity for diverse views to be
considered, and (3) has been designat.
ed as such a standard by the Secretary
or tht' Assistant Secretary. after con.
sultation with other appropriate Fed.
eral agpncies: and .
(h) "Established Federal standard"
means any operative standard estab-
listH'd by any al:ency of the United
Statl's and in eHect on April 28, 1971,
or containrd in any Act of Congress In
84
, 'tel' XVII-Occupational Saf.ty and Health Administration S 1910.5
" on the date of enactment 01 the gate as a standard aL-_i con.
Williams-Steiger Occupational Safety sensus standard and"'" established
and Health Act. Federal standard, pursuant to and in
accordance with section 6(a) of the
Act.. and. In addition, may modify or
revoke any standard In t.hls Part 1910.
In the event of conflict. among any
such standards, t.he Assistant. Secre-
tary of Labor shall take t.he action
necessary to eliminate the conflict., In.
cludlng the revocation or modification
of a st.andard In this part, so as to
assure t.he greatest. protection of the
safet.y or health of the affected em.
ployees.
111910.5 Appllnbility or ltandardL
(a) Except as provided In paragraph
(b) of this section, the standards con.
talned In t.hls part shall apply wlt.h re-
spect to employments performed In a
workplace in a State, t.he District. of
Columbia, t.he Commonwealt.h 01
Puerto Rico, t.he Virgin Islands, Amer.
Ican Samoa, Guam, Trust. Territory of
the Pacific Islands, Wake Ialand,
Outer Continental Shelf lands de lined
In the Outer Continental Shelf Lands
Act, Johnston Island, and the Canal
Zone.
(b) None of t.he standards in this
part shall apply to wOfklng conditions
of employees with respect to which
Federal agencies ot.her than the De.
partment of Labor, or State aaencles
actlng under section 274 of the Atomic
Energy Act of 1954, as amended (42
U.S.C. 2021), exercise statutory au.
thorlty to prescribe or enforce stand.
ards or re~latlons affect.inI occupa-
tional safety or healt.h.
(c) (1) If a particular standard Is spe-
cifically applicable to a condition,
practice, means, method, operation, or
process, It shall prevaJl over any dif.
ferent general standard which might
otherwise be applicable to t.he same
condition, practice, means, method,
operation, or process. For example,
11501.23(c)(3) of this title prescribes
personal prot.ectlve equipment for cer-
tain ship repaJrmen working In speci.
fied areas. Such a standard shall
apply, and shall not be deemed modi.
fied nor superseded by any different
general standard whose provisions
might otherwise be applicable, to the
11910.3 Pl'lilions for tM i"U8n~. amend.
ml'nl. or repeal of a standard.
(a) Any Interested person may petl-
lion In writing the Assistant Secretary
of Labor to promulgate, modify, or
revoke a standard. The petition should
set forth the terms or t.he substance of
the rule desired. the effects thereol If
promulgated, and the reasons there.
for.
(b) (1) The relevant legislative histo-
ry of the Act Indicates congressional
recognition of the American National
Standards Institute and the National
Fire Protection As&oclatlon as the
major sources of national consensus
ltandards. National consensus stand-
uds adopted on May 29, 1971, pursu.
ant to section 6(a) of the Act are from
those two sources. However, any orga-
nization which deems Itself a producer
of national consensus standards,
..ithln the meaning of section 3(9) of
the Act, is invited to submit In writing
to the Assistant Secretary of Labor at
any time prior to February I, 1973, all
relevant Infonnatlon which may
enable the Assistant Secretary to de.
termlne whether any of Its standards
Rllsty the requirements of the defini-
tion of "national consensus standard"
In section 3(9) of the Act.
(2) Within a reasonable time after
the receipt of a submission pursuant
to paragraph (b)(1) 01 this section, the
Assistant Secretary of Labor shall
publish or cause to be published In the
PtnERAL REGISTER a notice of such sub-
mission, and shall afford Interested
persons a reasonable opportunity to
present written data, views, or argu.
Dlents with regard to the Question
"hether any standards of the organi-
zation making the submission are na-
tional consensus standards.
"'111.1 Amendment" 10 Ihill part.
(a) The Assistant Secretary of Labor
shall have all of the authority of the
Secretary of Labor under sections 3(9)
and 6(a) of the Act.
(bl Thl' Assistant Secretary of Labor
may at any lime before April 28, 1973,
an his own motion or upon the written
petition of any person, by rule promul.
85
-------
7-58
-------
I.
COVERAGE:
A.
B.
c.
29 CFR 1910.120 - HAZARDOUS WASTE OPERATIONS
AND EMERGENCY RESPONSE
INTERIM RULE - DECEMBER 19, 1986
SCOPE:
1.
2.
3.
4.
CERClA Hazardous Substance Response Operations.
RCRA Major Corrective Actions (Clean-up Operations).
40 CFR 264 & 40 CFR 265 RCRA Storage Facilities
a ) Para g rap h (0) on 1 y .
Hazardous Waste Operations Sites Designated by State or Local
Government.
Emergency Response Operations for Hazardous Substance Releases.
a) Normal Municipal or Sanitary landfills are not
covered.
5.
WORKER POPULATION:
1.
General Industry, Federal Government and the Following 25 State/
Territories and local Government Employees:
a) Alaska, Arizona, California, Connecticut (for state and local
government employees only), Hawaii, Indiana, Iowa, Kentucky,
Maryland, Michigan, Minnesota, Nevada, New Mexico, New York,
(for state and local government employees only), North Caro-
li~a, Oregon, Puerto Rico, South Carolina, Tennessee, Utah,
Vermont, Virginia, Virgin Islands, Washington, Wyoming.
Remaining 27 states without Federal OSHA approved state plans
will follow the final rule promulgated by EPA.
2.
TIME SCHEDULE
1.
Effective date for Interim Rule: December 19, 1986.
a) In OSHA's judgement all provisions can be fully implemented
by March 16, 1987.
OSHA's Final Rule: as soon as possible, but not longer than one
year.
a) EPA will promulgate it's Final Rule not longer than 90 days
after OSHA's Final Rule. This is for those states without
OSHA approved state plans.
1) ERT has a lead role in the EPA standards and a technical
role in the OSHA standards.
2.
II.
GENERAL REQUIREMENTS
A.
B.
Safety and Health Program.
Site Characterization and Analysis.
7-59
-------
III.
C.
D.
E.
F.
Site Control.
Training.
Medical Surveillance.
Engineering Controls, Work Practices and
personal protective equipment.
Monitoring.
Information program.
Material Handling.
Decontamination.
Emergency Response.
III umi nat ion.
Sanitation.
Site Excavation.
Contractors and Sub-Contractors.
G.
H.
I.
J.
K.
L.
M.
N.
O.
SPECIFIC REQUIREMENTS
A.
The following Specific Requirements are Listed by 29 CFR 1910.120
Paragraph Identification:
1. Site characterization and analysis. (1) A "Preliminary Evalua-
tion" shall be done prior to site entry to select initial Per-
sonal Protective Equipment (PPE).
2. During site entry a more detailed evaluation will be conducted
to update PPE.
3. The following shall be obtained by the employer prior to allowing
employees to enter a site (preliminary site evaluation):
(i) Site Location & Size.
(if) Description of Response/Job Function.
(iii) Planned Duration of Employee Activity.
{iv) Site Topography.
(v) Site Accessability by Air & Roads.
(vi) Pathways for Hazardous Substance Dispertion.
(vii) Present Status and Capabilities of Emergency Response
Teams for Employee On-site Emergencies.
(viii) Hazardous Substances Involved or Expected at the Site
and Their Chemical and Physical Properties.
4. Based on "Preliminary Site Evaluation" PPE will be selected for
"Initial Site Entry".
o Escape packs will be worn or located at the work station.
o If "Preliminary Site Evaluation" does not provide enough
information, level B shall be used.
o Monitoring shall be done during "Site Entry" when site eval-
uation procedures show the potential for: ionizing radiation,
IDLH, or site information not sufficient.
o Employer hazard information shall be made available to all
employees prior to beginning work activities.
o Ongoing air monitoring shall be implemented after site char-
acterization has determined the site is safe for start-up
activities.
7-60
-------
5.
Site Control - A site control program must be developed during
the planning stage and consist of:
(1) Site map.
(2) Site work zones.
(3) Use of a buddy system.
(4) Site communications.
(5) SOP's or safe work practices.
(6) Identification of nearest medical assistance.
6.
Training - Employees such as equipment operators and
laborers shall be trained in the following:
(i) Name of site safety and health personnel.
(ii) On-site safety, health and hazards present.
(i i i) Use of PPE.
(iv) Safe work practices.
(v) Safe use of engineering controls & equipment.
(vi) Medical surveillance requirements.
(vii) Site safety plan.
general
a.) Training shall be a minimum of 40 hours plus 3 days of on-
the-job training (OJT) for those employees mentioned above.
b.) On-site management and supervisors shall receive this 40 hours
plus 3 days of OJT, and 8 hours additional training on manag-
ing site activities.
c.) All employees receiving training must receive 8 hours of re-
fresher training annually.
7.
Medical Surveillance - A medical surveillance program for all em-
ployees (including hazmat employees) who may be exposed to haz-
ardous substances at or above the Permissable Exposure Limits
(PEL) without regard to the use of respirators for at least 30
days per year, and/or employees use respirators for at least~O
days.
A. Frequency
1) Prior to assignment.
2) At least once every 12 months.
3) Termination.
a. In addition, as soon as possible after an employee
has developed signs/symptoms from possible exposure.
B. Content - The medical examination shall include:
1) A medical and work history with special emphasis directed
to symptoms related to handling hazardous substance.
2) Fitness for duty including the ability to wear required
PPE.
3) The specific content to be determined by examining physi-
cian.
8.
Engineering controls, work practices and personal protective
equipment for employee protection.
7-61
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A.
Engineering controls, work practices, & PPE shall be used to
reduce and maintain employee exposure to or below the PEL
o Employer shall not implement a schedule of employee
rotation as a means of compliance with the permissable
exposure limits (PEL's).
PPE shall be based on hazards and
o PPE selection guidance - EPA
The PPE program shall address the
(i) Site hazards.
(ii) PPE selection.
(iii) PPE use.
(iv) Work mission duration.
(v) PPE maintainance and storage.
(vi) PPE decontamination.
(vii) PPE training and proper fit.
(viii) PPE donning and doffing procedures.
(ix) PPE inspection.
(x) PPE in-use monitoring.
(xi) Evaluation of PPE program effectiveness.
(xii) Limitations during temperature extremes.
Monitoring - Air monitoring shall be used to identify and
quantify airborne levels of hazardous substances in order to
determine the appropriate level of employee protection.
a.) First step - Monitor for IDLH and other hazards (flam-
mable/oxygen dificient atmospheres, toxic levels, radio-
active materials, etc.).
b.) Periodic Monitoring:
l1l When work begins on a different portion of the site.
(ii) When handling other contaminants then identified.
(iii) When a different type of operation is initiated.
(iv) When handling leaking drums or working in obvious
liquid contamination. .
c.) High risk emplor~ (those close to the source) shall
receive Qersona monitorin~.
Information Programs - The empToyer shall develop and imple-
ment a site safety and health plan and it shall consist of
the f 011 ow i n g :
(A) Name of key personnel, and hea lth and safety personnel.
(B) Task/Operation safety and health risk analysis.
(C) Employee training.
(D) Personal protective equipment to be used.
(E) Medical surveillance requirements.
(F) Frequency and types of air monitoring, personnel monitor-
ing, and sampling techniques.
(G) Site control measures.
(H) Decontamination procedures.
(I) Site SOP's.
(J) Contingency plan.
(K) Confined space entry procedures.
2.
3.
"Potential Hazards".
levels A, B, C, & D.
foll owi ng:
4.
5.
7-62
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6.
Handling Drums and Containers - Drums/Containers shall be
inspected for integrity prior to moving.
o Unlabelled drums/containers shall be considered hazar-
dous substances and handled accordingly. .
o Site operations shall minimize amount of drum/container
movement.
o Prior to moving drums/containers all employees shall be
notified of hazardous substances.
o Where major spills may occur, a spill containment pro-
gram shall be implemented.
o Ground-penetrating system shall be used to locate drums
to locate drums containers.
o Fire extinguishing equipment shall be present to handle
small fires.
a.} The following procedures shall be followed during drum/
container operations:
(i) Airline respirator systems shall be protected from
contamination or physical damage.
(ii) Personnel not directly involved shall keep a safe
distance. .
(iii) If employees must work near or adjacent to drums/
containers being opened, a suitable shield shall be
placed between the employee and drums/containers.
(iv) Operational controls and safety equipment shall be
located behind the explosion resistant barrier.
(v) All tools shall be spark proof.
(vi) Employees shall not stand or work from drums/con-
tainers.
b. The following special precautions shall be taken when
handling drums/containers which are suspected of contain-
ing shock-sensitive materials:
(i) Evacuate non-essential personnel.
(ii) Explosive containment devices/shields shall be
provided.
Employee alarm system shall be used.
Continuous communications shall be maintained.
Pressurized drums/containers shall not be
routinely moved.
(vi) Routine lab packs shall be considered
shock-sensitive/explosive.
(iii)
(i v)
(v)
7.
Decontamination - Decontamination procedures shall be
developed, communicated, and implemented to handle antici-
pated on-site emergencies prior to the start up operations.
o The employer shall develop an "emergency response plan"
for on-site and off-site emergencies.
a.} The "Emergency Response Plan" shall address:
(i) Pre-emergency planning.
(ii) Personnel roles, authority, training, and com-
munication.
7-63
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(iii)
(iv)
(v)
(vi)
(vi i)
(viii)
(ix)
(x)
(x i )
Emergency recognition and prevention.
Safe distances and place of refuge.
Site security and control.
Evacuation routes and procedures.
Decontamination.
Emergency medical treatment and first aid.
Emergency alerting and response procedures.
Critique of response and follow-up.
PPE and emergency equipment.
8.
9.
b.) In addition to the IIEmergency Response Planll the
following elements shall be included for IISite Emer-
gency Response Plans II:
(i) Site topography, layout and prevailing weather
conditions.
(ii) State, local, and Federal reporting procedures
for specific incidents.
c.) The IISite Emergency Response Planll shall be a separ-
ate section of the site safety and health plan, and
shall be rehearsed regularly as part of the overall
training program.
d.) Off-site emergency response. The senior officer
responding to an incident involving a hazardous
substance shall establish an IIIncident Command
Systemll (ICS), and implement the appropriate correc-
tive action.
o The individual in charge of the ICS shall desig-
nate a "Safety Officerll, who has knowledge in
fire fighting, rescue operations and hazardous
substance handling.
Ilumination - Work areas shall be lighted. Refer to
Table H in the standard.
Sanitation at temporary workplaces.
a.) Potable water - an adequate supply of potable water
shall be provided on-site and clearly marked for
drinking only (dipped containers, etc. not permitted).
b.) Non-potable water - outlets for non-potable water for
industrial/firefighting use.
c.) Toilets facilities - toilets shall be provided for
employees under temporary field conditions unless
mobile crews have transportation to nearby facilities.
1.) Requirements: 20 or fewer employees - one toilet;
more than 20 but fewer than 200 - one toilet
seat and one urinal per 40 employees; mor than
200 employees - one toilet seat and one urinal
per 50 employees.
d.) Washing facilities shall be provided near proximity
to worksite, within controlled access zones.
7-64
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10.
Certain operations conducted under the resource conserva-
tion and recovery act of 1976 (RCRA). Employers conduct-
ing operations such as hazardous waste storage, disposal,
and treatment as covered by RCRA shall:
a.) Implement a hazard communication program.
b.) Implement a medical surveillance program.
c.) Develop and implement a safety and health program.
d.) Develop and implement decontamination procedures.
e.) Develop and implement a training program. Twenty four
hours plus eight hours annual refresher.
IV.
Appendices
A. Appendix A (Non-mandatory): Personal Protection Equipment test
methods.
B. Appendix B - General description and discussion of the levels of pro-
tection and protective gear.
C. Appendix C - Compliance Guidelines.
D. Appendix D - References.
7-G5
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7-~6
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s:
00
0.0
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Cost and Price
8-1
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(VIII) CONTRACT MODIFICATIONS
MODULE:
(23) Cost and Price
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand and differentiate between the concepts of cost and
price
o Understand principles for evaluating cost.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
3-2
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COST AND PRICE
. Federal cost principles
. Direct costs
. Indirect costs
. Profit
. Cost and price analysis
COST
Individual units of monetary value which make up the price
"Incurred Expenses"
8-3
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COST ANALYSIS
Review and evaluation of each individual element of the
contract, proposed change order or claim to determine
reasonableness, allocability, and allowability
REASONABLE - "If, in its nature and amount (the cost) does
not exceed that which would be incurred by a prudent
person in the conduct of competitive business."
ALLOCABLE - "If it is incurred specifically for the contract;
benefits both the contract and other work; or is necessary
for the overall operation of the contractor's business."
ALLOWABLE - Consistent with the limitations and
exclusions of Federal cost principles (FAR Part 31, OMS
Circular A-87, etc.)
COST ANALYSIS
. Direct cost (labor materials)
. Indirect cost (overhead: rent, utilities)
. Comply with Federal cost principles
. Fair and reasonable profit (relate to risk, geographic
area, etc.)
. Evaluate tasks, manhours, skills required, level of effort
C-4
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PRICE
Total of costs for specific item or element of contract
"Cost + Fee (Profit) = Price"
PRICE ANALYSIS
The process of evaluating a prospective price without
regard to the contractor's separate cost elements and
proposed profit.
Price analysis determines the reasonableness
of the proposed price based on adequate price
competition, previous experience with similar work,
established catalog or market price, law or regulations.
8-5
-------
8-6
-------
Contract Clauses
8-7
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(VIII) CONTRACT MODIFICATIONS
MODULE:
(24) Contract Clauses
ESTIMATED TIME:
15 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
p
o Understand and interpret basic contract language
o Understand some of the more basic elements
clauses
o Understand the respective
the contractor.
of contract
responsibilities of the owner and
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
8-8
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CONTRACT CLAUSES
CLAUSES
. Basic provisions
- Nature, scope and extent of work
- Timeframe for performance
- Total cost
- Payment provisions
8-9
-------
CHANGES CLAUSE
DIFFERING SITE
CONDITIONS CLAUSE
8-10
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SUSPENSION OF WORK
CLAUSE
TERMINATION CLAUSES
. EPA termination clause
. Standard Federal Form 23A Termination for Convenience
clause
. Standard Federal Form 23A Termination for Default:
damages for delay: time extension clause
Q-11
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DELAY/TIME EXTENSION
CLAUSES
. Standard Federal Form 23A Clause
. State Clauses
OTHER CLAUSES RELATED
TO CONTRACT MODIFICATIONS
. Audit: access to records clauses
. Price reduction for defective cost or pricing data clauses
. Variation of quantity clause
. Disputes/remedies clauses
8-12
-------
CONTRACT INTERPRETATIONS
. Surrounding circumstances
- Prior cause of dealing - similar interpretation with same
contractor as in past
- Customs and trade usage - party using trade practice
must substantiate practice is clear and recognized
. Analysis of contract language
- All parts of contract must be read together and
harmonized
- No provision to be rendered meaningless
. Rule of contraproferentem (latent ambiguity)
- Term is ambiguous or susceptible to two different
interpretations. Meaning which operates against the drafting
party is preferred
G-13
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"
3-14
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PROBLEMS
1.
SHOWER PROCEDURES
Place Shower Curtain in the Tub Before Taking Shower
2.
REQUESTS FOR DESIGN CHANGES
Cost incurred by the owner as a request for approval of changes in
design initiated by the Contractor shall be to his own account regardless
if the request is denied, granted or modified.
Such item is, but not limited to, reviews, investigations, design
calculations, drawings, tests and the like that are deemed necessary for
evaluation of the request and for implementation, if the request is
granted or modified, shall be considered as accountable costs to the
Contractor.
3.
ENGINEER
The Engineer will not be responsible for and will not have control or
charge of construction means, methods, techniques, sequences or procedures
or for safety precautions and programs in connection with the Work, and he
will not be responsible for the Contractor's failure to carry out the Work
. in accordance with the Contract Documents. The Engineer will not be
responsible for or have control or charge over the acts or omissions of
the Contractor, Subcontractors, or any of their agents or employees, or
any other persons performing any of the work.
4.
CONTRACTOR
The Contractor shall not be relieved of responsibility for any
deviation from the requirements of the Contract Documents by the
Engineer's approval of Shop Drawings, Product Data or Samples in
accordance with Subparagraph 2.2.14 unless the Contractor has specifically
informed the Engineer in writing of such deviation at the time of
submission and the Engineer has given written approval to the specific
deviaton. The Contractor shall not be relieved from responsibility for
errors or omissions in the Shop Drawings, Product Data or Samples by the
Engineer's approval thereof.
G-IS
-------
PROBLEMS (Continued)
5.
WORK BY OWNER OR BY SEPARATE CONTRACTORS
Upon receiving written notice from the Contractor that a separate
contractor is failing to connect, fit or coordinate his work with the Work
of this Contract, as directed by the Engineer, the Engineer will promptly
investigate such notice and take such necessary action as the situation
may require. The Owner shall not be liable to the Contractor for damages
suffered to connect, fit or coordinate as directed by the Engineer, or by
reason of another separate contractor's default in performance. The Owner
expressly makes no warranty or guarantee as to the responsibility,
ability, facilities, skill, integrity, past experience, financial
resources or any other status of another separate contractor.
If the Contractor suffers any damage, injury or
negligent or tortious act or omission of such
Contract shall have no claim against the Owner.
have the right to recover from the other contractor
of the contractor's contract with the Owner.
loss by reason of any
other contractor, the
Such Contractor shall
under the provisions
If any other contractor, having a contract with Owner for the
performance of work upon the Site of the Work to be performed under the
Contract, suffers any damage, loss or injury through the negligent or
tortious act or omission by the Contractor or through any negligent or
tortious act or omission of any Subcontractor of the Contractor, the
Contractor will reimburse, pay and otherwise provide restitution to such
other contractor for all such damages. If such separate contractor sues
or initiates any arbitration proceeding against the Owner on account of
any damage alleged to have been caused by the Contractor, the Owner shall
notify the Contractor who shall defend, indemnify, save and hold harmless
the Owner during such proceedings. If any judgment or award against the
Owner arises therefrom, the Contractor shall payor satisfy it and
reimburse the Owner for any and all attorney, expert witness or consultant
fees, as well as court or other costs which the Owner has incurred.
6.
MISCELLANEOUS PROVISIONS
No action or failure to act by the Owner, Engineer or Contractor
shall constitute a waiver of any right or duty afforded any of them under
the Contract, nor shall any such action or failure to act constitute an
approval of or acquiescence in any breach thereunder, except as may be
specifically agreed in writing.
8-16
-------
PROBLEMS (Continued)
7.
WAIVER OF IRREGULARITY
The Owner reserves the
proposal or to reject any and
interest.
right
all
to waive any irregularity in any
proposals it deems to be in its best
8.
LIQUIDATED DAMAGES
The amounts of liquidated damages which will be assessed for failure
of the Contractor to fulfill the requirements for performance by the Date
of Substantial Completion within the time specified shall be $1,000.00 for
each consecutive calendar day that substantial completion of the Work
extends beyond the Date of Substantial Completion.
Each and every liquidated damages provision of the
separate and distinct from each other. The Contractor will
assessment of liquidated damages for each of the types and
such liquidated damages simultaneously and cumulatively.
Contract are
be subject to
categories of
9.
BULLETINS
Bulletins will be mailed or delivered to each Bidder recorded as
having received a complete set of Bidding Documents.
C-17
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10.
PROBLEMS (Continued)
REJECTION OF PROPOSALS
The Owner will have the right to reject any and all Proposals and to
reject a Proposal not accompanied by a required proposal security or by
other data required by the Bidding Documents, or to reject a Proposal
which is in any way incomplete or irregular. The Owner reserves the right
to reject any and all Proposals and to waive any minor irregularity in any
Proposal should it be deemed for its best interest to do so. Without
being limited thereto, in addition to the provisions of Article 5 herein,
a Proposal may be rejected as non-responsive if:
11.
1.
The Proposal does not strictly conform to the Bidding Documents
and the law;
2.
The Proposal contains unit prices which, in the judgment of the
Engineer are unbalanced;
3.
4.
The Proposal is conditional;
The Bidder conceals, misrepresents,
fact in his Proposal; or
or misstates
any material
5.
The Bidder fails or refuses to promptly furnish the Owner with
information requested as to his qualifications, Minority
Business Enterprise efforts, and responsibility including, but
not limited to, failure or refusal to appear for a preaward
meeting after due notification thereof and to answer any and all
inquiries, whether or not such be under oath, relating to the
knowledge of the Bidder concerning the provisions of the Bidding
Documents and proposed Contract as well as his recognition and
understanding of his duties and responsibilities set forth
therein.
GENERAL CONDITIONS
If any dispute regarding the determination of rights of the Engineer
or the Contractor arises as to the retainage or interest on retainage due
to a claim of delay or unacceptable delay that cannot be resolved in an
agreement within ten (10) days, the Engineer and the Contractor agree to
submit the dispute to an agent, to be selected by the Owner, for a
decision resolving the dispute. The decision of the agent shall be final
and binding upon all of the parties.
3-13
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PROBLEMS (Continued)
12.
SUPERFUND CONTRACTS
Nothing provided in this Article 9 or the Contract shall impair,
hinder, impede or damage the Owner's right to delay payment until receipt
of adequate funds from a governmental agency without penalty or interest,
if the Contract is to be funded, in whole or in part, from the receipt of
federal or state grant funds.
13.
SURFACE MAINTENANCE AND RESTORATION
All existing surfaces including but not limited to, pavements,
sidewalks, driveways, shoulders, ditches, grassed and landscaped areas or
undeveloped areas, which become obliterated, rutted, cracked or otherwise
disturbed by the Contractor's operations, shall be properly maintained,
restored, repaired or replaced to the satisfaction of the Owner.
8-19
-------
PROBLEMS (Continued)
14.
DURATION OF WORK ACTIVITY
Work activity durations shall be in working days in accordance with
the Owner's Standard Calendar. A copy of such standard calendar, day one
(1) being January 2, 1976, will be furnished for the Contractor's use at
the Pre-Construction Meeting.
Unless approved by the Engineer, the duration of any Work activity
shall not exceed twenty-five (25) Working Days except for submittal and
delivery activities and other non-construction activities. Where the
duration of continuous Work exceeds twenty-five (.25) Working Days, Work
activities in the CPM Schedule shall be subdivided by location,
approximate stationing or sub-elements of the Work.
Supporting data shall
shall include:
be submitted
in the form of a narrative and
1.
The proposed number of Working Days for each week of the
Contract, although the CPM Schedule shall assume a five (5) day
work week in accordance with the Owner1s Standard Calendar;
2.
The holidays to be observed during the duration of the Contract
(by day, month, year). The Owner's Standard Calendar observes
six (6) holidays.
3.
4.
The planned number of shifts per working day for each week; and
The planned number of hours per shift for each shift each day.
3-~O
-------
ANSWERS
1.
Brillant~~
2.
Requests for Design Change: This paragraph would obligate the
contractor to pay the Owner's engineering costs for correction of a
design deficiency, which is clearly not the responsibility of the
contractor.
3.
Engineer: This paragraph absolves the engineer of all responsibility
in performance of the contract work.
4.
Contractor: This paragraph makes the contractor responsible for
errors or omissions in Shop Drawings, Product Data or Samples even if
they are approved by the engineer.
5.
Work by Owner or by Separate Contractors: These paragraphs place the
responsibility for the actions of contractors on the other contractor
for this contract. The Owner must assume responsibility for other
contractor's actions sifice only the Owner has contract authority with
the other contractors.
6.
Miscellaneous Provisions:. This paragraph
clearer rejection clause is needed.
is
poorly worded.
A
7.
The wording of the paragraph, concerning the Owner's right to waive
any irregularity in any proposal, should be clarified to indicate the
type of irregularity (mathematical, etc.) that could be waived. As
stated, potential bid protests could arise if major irregularities
were waived.
8.
This paragraph indicates that there is more than one liquidated
damages clause applicable to this contract, which is in conflict with
another paragraph which indicates that there is only one liquidated
damages clause applicable to this contract. Therefore, this
paragraph should be deleted to avoid confusion.
3-l1
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9.
14.
ANSWERS (Continued)
Only one mechanism for delivery of Bulletins should be used. Use of
Certified Mail with Return Receipt could be used to assure each
bidder receives a copy of the Bulletin.
10.
This indicates that the Owner reserves the right to reject any and
all proposals. The Owner may reserve the right to reject all bids,
but unless all bids are rejected for good cause, award shall be made
to the low, responsive, responsible bidder. If the award is made to
a contractor other than the low bidder, the Owner must document why
low bidders were deemed nonresponsib1e or nonresponsive and maintain.
the documentation in their grant files.
11.
This paragraph binds the contractor to the decision of an "agent",
who is not identified and is selected by the Owner, for resolving a
dispute regarding engineer and contractor rights concerning claims of
delay or unacceptable delay. A mechanism should be provided for
selecting an agent acceptable to both parties.
12.
This paragraph should be deleted since the Owner is responsible to
pay the contractor for actual work completed.
13.
This paragraph requires the contractor to properly maintain, restore,
repair or replace existing surfaces to the satisfaction of the
Owner. The paragraph should be modified to indicate that restoration
shall be in kind to the satisfaction of the owner.
These paragraphs make
working days, while
days. A consistent
confusion.(l)
reference to activity duration in terms of
the contract completion time is in calendar
measure of time should be used to avoid
8-22
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50
~'IE MUNICIPAL ENGINEERS JOURNAL
I
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Paper 263
PRESENTEO APRIL 2R, 1954
--
"IT AIN'T NECESSARILY SO"
By MAX E. GREENBERG
~
I
N
CJ.I
nal~k in the days whl'n the City Puhlic Works DI'par1n1l'nt was
first or~ani7.ed, I hall occasion tn visit one of the Commissioners.
After talkin~ to him for awhile, it first ot'curn~11 to him Ihat I w;~s
a lawyer. When I told him f was, he saill he lihd to talk to ard\l-
tects, en~inet'rs and huild('rs, hut not lawyers. My presence hen'
toni~ht, I am happy to note, indkah's that you do not I'IISSI'SS Sll
fine a sense of discrimination.
I have always enjoyed hein~ with en~in('ers. They have tau~l~t
ml'ml1ch. I I'arti('ularly :ulmire tlll'ir ahility to or~aniz(' a ('01\lI'h-
cated mass of facts into simple component itl'lllS, for ('asy and clear
presentation-a faculty which lawyers are presumed to have but
few possess. . . .' ,
There is a hasic difference in the trallllllg and thlllklllg of lawyers
and engineers. It is a difference which you must understand, if you
want to comprehend how and why lawyers-which includes. ju~l~es
-arrive at conclusions which may appear to you to be entIrely
contrary to the clear and express provisions of a contract.
Engineers deal hasically, with the immutahle laws ~f n~ture.
You are taught to look a fact in the face and to accept .It wIthout
el(uivocation. Steel has certain CJualities. It. has ('ertalll defined
stresses a 111 I strains, and while you may devIse means to employ
its II"alities to your purpose, you can't chan~e it. ~ o.u acce~t it for
what it is. Jt is a fact. Wood has certain fluahtles wluch )'O~I
employ, hut can't change. Jt.s a fact. The varyi~lg. types ~f ~OII
have rlefinite qualities. You may employ them wltllln the 11I11Ita-
tions of thoSI~ I(ualities. YOII cannot chan~e it. It's a fac~,
I.awyers, however, deal with va~aries of the 11tllllal~ mlllc!. ",,!e
sl'('k all indefinable, (,Iusive somethill~, caliI'd JustIce. JustIce
dt'pl'11Ils I1ll'rdy Oil our sense of fairness. It may ml:an different
thin~s in different a~es, or different thil.1gS in the .same age. under.
dirkrent cirl'lllllstancl's; it mOl)' mean (hIT('n'nt tlllngs to <\lfTerellt
people in the same age and circumstances,
i
t.
I
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r
,
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"IT AIN'T NECESSARII.Y SO"
"}
I n a situation where transportation may mean survival ~._..e
sole means of transportation is a horse, the stealing of a horse may
have serious cons('l(uences amI hau~in~ may ht' considrrecl just.
However, in a sllcic.t)' dep('11Iling primarily on auto1\l0hiles, tractors
and power equipment, the same act of stealing a horse, does not
have serious consequences; hanging would not be considered jus~.
In a community where its t'conomic life depends on the ready
transferrability of title to lumher, it may he considered just that
the title to stolen lumher conveyed to an innocent purchaser be
d('ell1ed valid, altholl~h ill alllltlwr ('lIlIIlI1l1l1ity, ill which hlll1hrf
docs not form tll(' basis of its I'COllomic lifl', th(' transfer of title to
stol('11 IlImb('r lIIay lIot Ilc~ elc'c'lI\('d valiel.
Now wh(,11 you, as ell~inl'l'rs, re.1I1 a cont ract which in plain
undrrstallclahll' EII~lish stah's the City shall not he liah'" for elalll-
a~('s for eldays, n'sllltill~ from any ('ausl' whatsocvl'r all
-------
52
TIlE MUNII'II'AL EN(;JNEEHS JOUHNAL
cc
I
'"
.t:>
delays, That provisioll mllst yic.:ld whell it l"Oliflicts with a hasic,
though )wrhaps 1I0t I'xpressed, ruk of law which ililplil's that IIII'
OWlIl'r will do its shan' towanl ~l'ltill~ tIll' 1'0lltral'l cOII'pll'll'll
within the time specili('(1. Every COlltral"l imposl's ohligatiolls Oil
hoth silks, The Cit}', whl'u it n'quin's a l"lIlIt ractor to pafonll
within a set periud, hy that fact alone, itself assulllcs Ihe ohligation
to give the contractor the site on time3 to approve drawings or
samples withill tIll' time OIlC ought lIormally I'XPI'Ct Ihl'lII 10 hc
appro\'l'd,~ to let its othcr indl'J>clldenl l'olltracts ill sllch lilllc alld
to n:quire the perfofll1ance thereof ill s\ll:h periods as will ellahk
all the co-onlillatl'd l'OlItrarls to hI' l'OlIlplcted withill thl' time sJlcd-
licd ;~' to have adeljltatl' fUllds availahle tu procc<:d with the workll
In other words, we as lawyers, do not consider it fair, that silllJlly
hl'cause it is providl'd that thl' OWII<:r shall lIot he liahle for dda}'s,
that it call th<:r<:hy t:d,a' all uufair :lIlvalllag(' of IIIl' silllalioll allcl
ther!:hy illlpOS!: ('Xpl'nM' Oil th!: l'olltractor dUl' lothl' OWIII'r's failllre
to diligcllily alld fairly lIIailltaill its sharc of thc hargaill,
Wherc, as in N cw York, it is required that scparatc prime Cull-
tracts he let for general construction and the mechallical trades,
it is frequently provided, that the owner shall not he respuusihle
for delays, defaults or acts of one independent contractor which
may cause harm or damage tu another; that the contractor damaged
shall have a cause of aclion, not agaillst the OWllcr, hut solely
ag-.1inst the party causing the damagl'. To you, as ellgincers, this
IIIl':IIIS what il says, IIlIt to liS as lawYl'rs, "It aiu't lII'cl'ssarily :-'0,"
()IIC cOlltr:u:lor has all:>olull'ly 110 l'IJlllrol OVl'r thl' actiolls of
illlotlll'r Oil thc sallll~ sih'. Thc parly that has slll'h I'olltrol is Ihc
OWlu'r, II is thl' OWII('r :11011(' who has IIII' 1"IWI'r 10 illsisl Oil IIII'
co-onlillatioll of thl' work of all till' l'Olllraclors: it is Ihl' oWlIl'r
allllll' who call (It-dan' a l"IJiltraclor ill default for failllrt' to ade-
'Iuately proccl'd or tu pruCt'clI ill such SCljlH'nce as will not dcstroy
the lIormal cycle of operations which will result in an efficient
el'olH>lHical performance for all the contractors.
\\'1', as lawycrs, fed it would hl~ ulljllst if thl' 1I\\'II('r fails to
('xercis(' the powI'rs giVl'1I it to klTp thc sqlarall' cOlltraclors ill
lilil'; if it l'l'\'IlIith'd thl' law of till' jllllgk 10 prl'\'ail 1111 a pl'tljert
fur thl' hellclit of 011<: l"lIlItractor and with resullillg harlll to the
ollll~rs. \VI1l're, th<:refon', harm is done thl'tlugh thl' ilCts or lIl'g-
:I S'llUc/,u'ci I mp"LI'l,.'lIIf'uls \', ";/llll)e' ../ ,-,,'d,\/.,),. :!xs N, \'. li4j.
f N.'h'IUU" &- Cfl,e'.V v, (';t.\', 2(,1 N. Y. S-I~.
6 M~)','r /I,,,,}: v. lId. "I li,lucali".., 305 N. \'. 119; J"Ii.. W,'il PI:}.
26~ ~.. '>iv. ,247;.45 SIII'I'I. (2.1).456, ",,~I. ,."..1 "/T.I./CH.N,.y.I..
1\ II "III.,,'r I..,', v, /I. .\" III. I'. :'-1111'1'. SI._, (1.11..).
('"..I. v. S'"'~,
"IT AI N'T N Et"ESSAIH LV so"
53
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In.ts of one Cllllt ral'lor to allot her , which lIIight have hl'l'lI pn'-
vI'lItl'd hy Ihl' OWIH'r ill till' ('xI'reis(' of power to l'o-ordillah: or
to dl'dar!: ill rldalllt, 1111'11, ill spill' of thl' l'xl'lIlpatllry provisioll,
WI' hold thl' owllt'r liallll' for thl' damagl' sllstaillt:11 hy ollt' l'IlI1trac-
tor dill' to till' falllt IIf alllllhl'r,7
\Vith rcfl'f('IIl'e to this power to co-ordillalt', thl're is IIsllally
clJlltailwcI an express provisioll ill the cOlltract, that the cOlltractor
willl'o-ordillatl' his work with that of thl' other 1'(Jlltral'\ors Oil Ihl'
sill'; Ihal hI' will pl'dllnll thl' work at sllch timl's alld ill sllch S('-
qUl'nG's as the OWlIl'r IlIaY direct. To )'OU as ellginl'!:rs, this ml'allS
what it says. To liS as lawyers, "It ain't lI<:cl'ssarily so."
\Ve hclil'VI' it would he ulljust to PlTlllit the oWller to lill'rally
I'll force this po WI'!" , possihl Y to I he h,'lwfit of 0111' cOllt rador and
to till' 11:11'111 of allot her, \\'1' tlll'rl'fon', ill spi\l' of this provisioll,
lililil till' right Ilf IIII' ..\\'III'r to din'rl till' S('I(\1('II('I' Ilf "I",ratiolls
III whal, ill trad., prarlin', woulcl III' 1'1I1I:>idl'n'd IIII' lI"nllal, 1'1'11-
IHJlllical S\'(I"CIIC!: of opcratiolls, alld if thc owu!:r imposI's selIspl'lId work IlI'causI' il dOl's 1I0t
h:IVl' fllilds availahh- tll 1'lIlploy illSpl'l'tllrs:u to havl' a1h-l(ual<' fUllds
availa"I., to prol'l'I'cI wilh IIII' wllrk.'" Nc,r Iliay it IllIdlily SU:>III'IIII
w"rl" wlll'l'l' dill' to illlp....p('r origillal plallllillg', it shilly shallys
annlllll ill cktl'nllillillg' if or how il :>hollid lIIakl' challg't's.1I Nor
Iliay it uUl'easollallly stop work causing a loss of labor time.':!
Talking of changes, the contract usually provilll's the OWI1l'r may
mal.:<: l'hallg'!'s in th<: worl,: it may add or omit work and shall llilt
III' liahll' (,XCl'pt fllr IIIIJlliliralioll of till' prir(' ill Ih(' :\llIollnt of thl'
fair vahll' of thl' work :lIlckd or IIllIitll'd. Bul this lillI, "ain't
1lI'l'l'ssarily so,"
I
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1 (;''''jl/jW,' C/lllt!J. lO. V. .\"lIlt', IX] Misl', IO~O, 50! SUI'I', :?d. 1St" IHX; NII.rei'tlut' 6-
So" Co,/,. v. Slal~, ~7H A 1'1'. lIiv, 1)1)1), 10S SliPI'. (2,1\ 71'1.
1I/.\:e': ~f'jll;tllII !~. "/c"Jmw/,1 {','r,'" " (".('.1". MI'), ,,1)4; N,'WIII4IU t:" Carr.y ('Ic, Co.
v. ('t.v, ~1.7 N. ,. S~H.
o JO/UUII" v. City. 14)1 ApI', I)iv, :!uS, IHI SUPI', 137.
.6 N~iss & Wei".,irr I"e. \'. II, .'I., 11'; F, SIII'I'. 562 (Co I'Is.1.
II .-/",},'''',\' P. Mi/kr I..c. v. /I. S.. III C. Cis. 25~; Kirk v. U. S., 111 C. Cis. 55~;
S"J/li" Cmul. Cu. v, SllIt,., :!.If) '\PI" Uiv. .17t., 2'H Sill'''' 2U5,
II Jo""""",,i"/J /I",s. v, II. .'I., lUll ... I 'J., 1".1.
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TilE I\IIINH-:II'AI. ENI;'NEEI!S JOIII!NAI.
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In New York City, the right to make changes is limited hy law
to increases not exceeding- live per Cl'nt of the contract price. ex-
cept with the consent of the Board of Estimate, hut even without
this limitation. in spite of the express granting of what appears to
he an unlimitt'd power, the OWIH"r would 1)(' limited to changes
which arc reasonahll' in amount. Otherwise. a contractor with
limited financial ahility might finll himself in Ildault hy reason of
his inahility to hand II, a ("(Intrad, vastly inerl'asl'd in size hy changl's,
or so reduced in size as not r('asonahly to have heen contl'mplate'\. U
The law consirlers this unfair and would not permit it.
The power to make changes is limited in another respect. The
law docs not consider it fair that the owner he permitted hy reason
of its powl'r to make changrs, to modify the rss('ntial nature of
the work, so that the contractor may therehy have imposed upon
him the fl'I(uirement to Iwrform work different than he contrm-
)llatl'I\.11 Thus it will not in spite of the ('xpn'ss ('ontractual pro-
vision authorizing changes-permit an owner to change from a
stone IHlilcling to a hrick huilding, with stone trim,U nor from
a masonry dam to an earth dam with a masonry core.16
AmI eVt'n where the net change in amount is not excessive. anrl
the characlrr of tl1l' work is not changrll. the law will impose
damagl's on the OWl1l'r, whc're the dwng('s are so 11I\I111'rOllS or
would so sllhstantially delay performancel1 as to reslllt in a rlis-
organized and more expensive performance of the original con-
tract work, or where such changes were ordererl dllring the
last months of the contract so as to unreasonably delay com-
pletion.'8 . .
An express provision that the owner may omit work andoiJtain
credit therefor "ain't necessarily so." That provision pl'rinits
omissions where caused hy necessity, otherwise thr owner hecomes
liahle for the contractor's loss of profits on the omitted work.IO
It is not permitted to omit the work for the purpose of giving it to
S0l111'0l1l' 1.lsI',211 ami on('(' having mll',1 work is 10 hI' ('\iminatI'C1.
it may not he suhsequently n'.instatl'cl ,'x('rpt suhjecl to any in-
crease(1 costs resulting to contractor.:!1
--. ---
n 1.11"""" Cnn,,'. Cnr/'. v. Slll/~. 1111 Mis". 177, IMII 5111'11. 2.111.
.. (.u/~.r v. n.ioo.'. (,4 N. Y. 404.
II MrATII."~'" v. S'II'~. lOR N. Y. ~42.
,. NII/innlll rnn/.nr/inll CfJ. v. ITuthnn (ii,.,. """,,. rll.. 1112 N. Y. 209.
" W,.,'ro" v. Slll/~. 2f04 A (III. !)iv. 4(,.1, J(, 5111111. (2.1) 2J.
.. Clall.ln P. So...on v. SIal'. 5.1 511\111. (2<1) 512.
1.01lIl";lIno v. Slar" I 10 SUN>. (2,1) 9'>.
.. n~1 no/", v. Ci/v. 27H N. Y. IH; T",'~I IInd Cnlln/.V CII./'. v. Slat,. 40 ~III'I'. (2,1)
R'I2.' .
II .'elr,,,,""nllnr' ConJ/. Co. v. '<;1111'. 11(, Mi... 7711. IRII SUIII'. ~(,I).
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"IT AIN'T NECF.SSARII.Y SO" .
You are familiar with the provision found in almost all con-
struction contracts that the Commissioner, or the architect or the
engineer shall interpret the plans and specifications; he shall de-
termine the CJuality and CJuantity of performance; he shall determine
whether the performance complies with contract requirements and
that his findings shall he conclusive and hinding.
\Vell "It ain't necessarily so"-particularly where the person
whose ruling is supposed to he linal, is employed hy one of the
parties to the contract. In that eVl'nt the courts will examine the
findings more carefully to look for signs of favoritism toward the
employer.22 In law we don't think it fair that the findings of per-
sons thus designated he held to he conclusive, where it involves
an erroneous interpretation of the contract,2:t where it involves
damages for hfl'ach of tlw contract,24 where it is grossly erroneous
or arhitrary or unreasonahle, and of course, where it is fraudulent.2!1
Now here' again, the sens,~ of justin' of the Unite'd Stat"s Su-
preme Court, is dilTt'fl'nt from that of our State Courts. The
U. S. Supreme Court has held that the decision of the person
designated is hinding as to facts found with only one exception-
a wilful intention to cheat or defraud.20 However, this decision
was so contrary to tIll' ~eneral understanding of the construction
industry that a loud prote'st ros(' throughout the' cOllntry: a rash
of hills was introduced in Congress to eff,'ctuate a modification
by statute which would require the contract to he interpreted as
previously understood; there was promptly passe'rl legislation pro-
. viding that no funds appropriated for defense contracts might be
. so employed unless the contract expressly provided for an appeal
to the courts from arhitrary, grossly erroneous or similar rulings.
The Government form of construction contract was changed to
provide for such appeals to the courts, and additional legislation
is still pending. The ruling of the U. S. Supreme Court is not of
course hinding on our local state courts.
Thef(' an' furtlll'r limitations on the right (If the t'nginr('r or
otl1l'r persons d(.signate<1 in the contract to make hinding rulings.
The clt-termination must he the uninfluenn'd and unhiased deter-
mination of the person desi~nate(1 in the contract.27 A suhsec)lwnt
enginecr may not disapproVl' work or reverse a ruling of a prior
,
II .'1",,,, v. Mnrrisnn. 1111 N. Y. 19, 27.
II nil." v. MII.vllr. 7 AI'I'. Olv. 12R, 40 5ul'l'. HI; r.~",,,,i"l1 v. V,dlrllm. III. 1',.1. 593.
,. Fobto. v. Cily, 222 N.Y. 255, 261.
.. EIi"lIb~/" So.." & non, C~. v. St. VinUn/'! Jlos";lnI. 241 ApI'. Diy. 751, 270 5,,(>1'.
195; nll.osla v. Rtl. .,,/ Etlurll/"'". 226 ApI'. 0,1'. 249, 2]5 SliPI'. 30.
.. rJ. .'I. v. W..nl/~.Ii(Ia. .142 II. S. IIR.
It Fruin.nll",Ir.ir' Cn. v. "'1. Smi/la '/~. Cn.. 140 1',,1. 4115; MeSIa,,;" v. U. S.. 1M
C. n.. 2RO, 349.]51.
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TilE :llUNICII'AI. ENI;INEEIpruved an item snbmitteu, he may not chan~l' his mind and then
disapproVl' i\.~~1
Every publie l'olliract l'olHaills a provisioll thai bichhors an' n:-
qui 1'('(1 10 visit alld inspl'el Ihc sile of Ih,' proposl'Il worl.;; Ihal I~I~!'
an' 10 IIb~I'I"\'" COlllliliollS a lit I asn'rlain fllr Ihl'IIISI'h'I's Ihl' Ihlll-
cullies which may III' l'nl'CIUnll'l'I'd in Ihe perfoflnanl'l' of 1111: worl.;
and Ihal Ihl' OWlll'r will lllIt III" 1\l'ld rl'~ponsillh- for III\' illcfl'asl:ll
cosls resultillg from sueh Iliflieuities, Hut. "It aill'l 1II"Tss;:rily so,"
Condilions il\llieah'd on plans or in specificalions varyill~ from
actual clJIHlilillns nla',' snl,jl'l'l Ihe oWl1I'r III Ilallla~I'S t:vt:n though
Ihl'v mighl have 111'1'1') obsl'rVl'l1 by all illSpl'Clioli al Ihl' sill', Thus
rec'(lvery was allowed where there was a specific represelltatiun thai
lill was dose 10 Ihe sitl', wher,'as ill fact it was not dose ;:\11 recovery
was allo\V1I1 whl'\'(' I'xaminalion di~dosl'll a hOllse on Ihe sill' whirh
was also indiGtlnl Oil lillI' of the )llalls, sinCl' 11\l' (,(lIItrador \\'as
I'lIlil!clllo a dear sill' ;:11 recovery was allowl'd where Ihe eonlract
re'llliretl th\' n'lIloval of hllllhcr where in fad the material was in
sl'l'tiollS of l.;J\od';l'd dowlI hIlUSl'S, \\'hich eouhl bl' re:lIlily Ili~I'oven'd
hy iuspection at the sill' ;a~ ren,vl'ry was allowl'd where the con-
tracl provilh:d I'xravatl II earth mighl he usell as lill wlll'reas all
inspl'c!ioll al tht, sill' \\'llul(1 have di"dosl'd il \\'as IInKky al\(lcllulil
1101 bl' Sll usell ;:n 1"1'1'0 VI 'I'\' was allo\\'I'd \\'11\'\'('111\' cOlilraCI prll\'i.h-el
that hidders sholllurfacl' re'liditiolls, l'Il'. 11111 "It aill'l 1lI"'I'ssarilv so."
, 1..'01' 111'1'1', 11111.(111)' 111'1)' 1111' 0\\'111'1' Itl' lialtl<-, ill ~pih' of IllI'se pro-
\'bIOIlS, whl'I'!' II Iliadl' all l'rrOlll'oliS rl'pn'sl'lIlalioli as to cOlldi-
liolls,=Ui il is liabh' wilholll ~lIrh n'prl'~I'lIlalillll if il kllcw of a
Clllldit iOIl which il faill'eI to di~:closl',;11 \V I' go I'VI'I1 further thall
Ihal. It is lialtll' 1I0t ollly for failml' 10 disdosl' \\'hal it klll'W Itllt
it is li'lIlh' for hillin' 10 eli~do,,' whal il sho;lId ha\'I' kllll\:'II.a"
~ow \\'hal do WI' IIlI'all Ity "\I'hal il ~hould ha\'I' knowlI?" \\'('
meall kI10\~'ll'dg-I' w.hidl \\'I.'uld ha \'1' ('(I1I\l' 10 it had il illVI'Sli~akd
sourees of IIIfor~lIallllll a\':IIIaI.II' to ii, slIrh as l'I'l'onls ill ils 0\\'11 or
other ell'partllll'lIts, or all..' olhl'r Sllllrl'l'S of illfoflllatioll to whidl
il might havl' access, The courls hav!' ~OIH' so far as 10 hold the
Cily liabk fill' sult~urfan' l'olldiliollS which \\'ould 11'1\'1' bel'lI dis-
rillsI'd by all I'x:llllillatillll of IIld 1!I'\I'..;p:'p;'r rl'ports ill tl\(' Pulilic
l.ibrary,:l1I
. Th,l' City ha~ 1,1'1'11 hdel li:dlll' for illlT,'asl'd costs rl'sultiug from
1(:; fadurl' to propnly IIlaililaili its olhl'r ill"lallatioliS ill tl\(' vidllity
of till' \\'ork,l"
\Vhl'fl' IIlIit prin's a\'(' fixnl ill (,olllral'ls, il is cuslcllllarv to
pn.'vide that in eVl'lIt of changes in the work, the price shall he
ad}ush'd hy ,ulcliliolls ur cll'dlll'tiolis Ity applil'alioll of Ihl' llilil
pfl~es tu the I(lIalililics aeldl'd or ollliltl'.1. But, "'I aill'l nl'cessarily
so,
If Ihl' Iliodifical iOIl oi ell'sig-II is e.f such a lIatml' as 10 dfl'l'\ a
su~)stalltial illcrease ill the ullit costs, tht'll the established ullil
pnces may not hold, Thus wherl' ullit prirl's arc fix,'d per tOil of
s~ecl alld the challge of Iksigll g-n'ally illcfl'ased Ihl' lIumlJer of
IHect's, of sted per tOil. Ilwn'hy g-n'atly incn'asillg till' cost of in-
slall~ltlOn of a tOil of sted, thl'lI the ullit pricl's WI'I"I' held nut to he
apphl'ahll~,H Ullit pril'l'S arl' 1I0t applicabll' wlll'n' dlallgl' ill d('sign
--------
-~~-I-i'-Ct-;;;;.i-"(JiI"'" {.,. S"'OJ Co. v. Tile Sidle, 52 SUJIII. (2.1) (,5, (,~, afr,l. 60 SUJIII.
(2.1) 20(..
2U1'.'/'I' 't', ", S.. 7f~ to, t'b. 1..&; AI.-1:'/;II'" v. S'~I'j'. :!.1f1 A (111. 1)iv. 121, ZX4 Sui'p. (,-1("
,.S~; S"IIU""'U \'. S'II'I', :!'~" "'1'1'. )t'v, xSX, :!t(,J :-;111'1'. ,J.~I.
;AI Alh.'" /0'1 lIflrri,wu luc:. \'. 0. .\;.. 107 l'. Cb, ,!IJ.!. n'rl. ,kll, ].\( lJ. S. till),
~...I. H'. 1I""ko v, S',"t', I~O SUI''', (211) 7:iK, II,.!.
:11 (1. S, V. ',IIII,hh'I'''', I.I'J F. .!,I ]tf.!.
:1:1 /tu/"",il.' /1"..I/..d,( \', ""II't', .!sx AliI'. Div, .!t',I, 17 ~III'''. (211) .IX,
.,,'/U, \', SI",,', 171J l\Ii~l'. 71'S, .'IJ SliPI" C,~II) ~It7, ~tJU,
o.u IU,'dr"'- h"/Ui"",,'ul ('u. I",', \'. SI"I." ISIi Misc. :!.1H, 2M5 SUI'I-, 31'15,
"" l'otlll!J./-"'IIUlllb.,, Pil., C... v. .\',..,... 177 Mi,,'. 211~, 30 SIII'!' (?I) I')')
~7 ~."t".ur I. If/fuLfIlU Cu,.,.. \', (";t.v, 11,2 ~Ii,..;(.'. (~(.5, ~t)S SUPII. 5-17~ -.
;: ~./~'(,o'llt'''' v, (,i..~', :!u.! :\11". I).i,v. ,\17. 1"5 SII"I'. 'US, !\Iud, ~BS N. Y.17.),
N. ~'."h8t Nur,lo".' ("uta. (". v. l.t.v, :!(,I, "\1'1'. Uiv. BUS, 5~J SUI'I" (2.1) 251., ~Ifftl. 295
Sl;~ l'ill.:;IIII,," v. ("it:." :!II '\Plf, U'v. 55x, 2u7 SliPI'. IIX; 1/""1/"" v. A/f',vor, 11,0 N. Y.
u U. 1/. S",illa ('". \.t. ""v. ":,tu N. Y. '11'1.
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TilE MUNICII'AI. ENI;INEERS JOURNAL
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ill\:reasl~1 forlll work and reCJuired a re-design of fl'inforcing
steel. ~~
Sometimes the provisions of contract, specifications or plans are
in cuntlict as to particnlar itl'ms of work. Generally in such case,
the cuntract takt.'s precl'dl'ncl' uver specifications and plans, and
the specil1catiolls take prece,lence over the plans. Dut, "It ain't
necessarily so." The normal urder of precelkllce yidds to the rule
that general provisions arc suhordinate to specific or more detailed
provisions.
TIllis it has heen held that where the contract expressly called
for 3S9 lamp sockt'ts and a sketch showed 319, the sketch was held
to control sinn' it g-ave not only the numher hut the precise loca-
tiuns:'~
Wherl' uUlkr till' heading uf .. Masonry" a IS-inch bond was
spl'l'ilie,l 11111 IIIHkr Ihl' SUhofilillatl: IH'adill~ of "Face Siones" par-
licular IIl\'asu f('IIII'lIts \Wfl' ~i VI'II, Ihc ('onlractor n'cuvefl.d for
IJI'ill~ n'(luin.tl 10 providt, a IS.illdl hOllll.H
WIII'n' 1111' :.III'l'ilil'aliollli for I'oolill~ 1'I'lfllin'" 1II01'I'illK ~,f HYP'
Sllill wilh a~phalt 1.1'1'01'1' layill~ 11111 a sp('\'ial provision for lIIillcral
surfacill~ OIlIiUl'd rdl'n'lIl"t' 10 Ihl' ~l'III'ral provision, lIIoppin~ with
aSl'halt was 1101 J"l'lfliin'tl.llI
A note un plalls indicating tin controls over a general provision
in spl'citicaliolls fl'lflliring copper.~o
A note on plans omitting pews conlrols over a general specifica-
tion provision referring to pews.41
On the other hand, it has becn held that where a sink is dimen-
siuned on the drawings, but is not mentioned in contract or specifica-
tions, it has been held to be an extra,411
Usually, there are provisions in the contract that the contractor
in the performance of his work, will conform with the legal require-
ments of the lluilding Code and that he shall be responsibl~ for con-
forming the work to thl' Bnilding Code, but "It ain't necessarily so." .
Where he f,~lIows the plans and specifications and Ihey are in
conflict with the Building Code, he is not respunsihle. His liahility
is lilllilt'd to inslallin~ till' worl, ill aet'onlanl'l' wlh tht, I'lan, as
sl'ecilied, and in cOllforJllalll'e wilh thl: lIuildilig Code where slIch
work, as plannell and specified, can so cunform.~\1
-"-N-:T:S~;;i;. 2 c, c. F, 111>11, 1177,
., A"l4'rica.. Si/l" Cu, \', Uu,,,lbcJck, 161 SUI'I" 2211.
.. Ryan v. Ci,y, 159 AI'I" Diy, 105; 143 SUPi'. 97~.
.. L. E...il A"d~r,"'" & S,III, 2 C, Co ", I~O~.
"I,""/I.'('i" Y. 11, ,", , 100 C. n., SH,
.. 1'W";'I, 1 L. L. ". ~U,I,
.. Jo'orlyll~ Plu...bi"" Cr JJ~cJ'ili/l Cur/,. Y. Ci,y, N, Y. I.aw Journal, I"cbruary III, 1953,
.. C".n v. Ci,y 0/ New Yor., N. y, Law Journal. Al'ril 30, 1954.
I
l
I
t
I
J.
,
I
,
"IT AI N''I' N t-:C";SSARII. Y SU"
59
Similarly, provisions rel(uiriu~ the wul rartor 10 dll:d: thl' plans
does not make him liable for ddn.ts in Ihl' plans.:'" lit, Gill be
held liable only if the defects are reasonahly discoverahle ur patent
or where he knuws or has reasun to helieve the plans are ddective
and follows them without poillting out the dcfel'ts. ~I
And where the cOlllract ilillicah's in detail mall'rials to be in-
stalled, Ihe dilllcnsions of Ihc installation, etc., even though the
contractor guarantees the result, he is nol liahle where the failuft,
is due to error in plaus or specilirati(llls!'~ Ilowever, where thl'
contract indicates the result to be attained, such as a water tight
fluor, and merely gives dimensious hut not the llIaterials to he used,
then Ilw cOlllraclor is liahle,r.:.
Before dosillg', 1IIl'IIIiOil should lie IIladl' of olle otl...r type of
siluation where ill spill~ of all exprl'SS cOlilrad provisioll. "II aill't
nccessarily so," TIlt' ('ourls sOllll'lilllt'S h"ldlhal Ihollgll IIII' lilt'ral
pruvisions uf the COlltral'! sustaill Iht, "lIgilll'('r. Ihl' cOlilrac: sholiid
IJ(~ illll'rpl"l,lt'd hy 1"lIlllI'rillg' IIII' Id"'r ..III... pr..visillll I,y IIII' spiril
of il~ 1,III'lu,sl',o.
I havt: cill'd caSl'S 10 slislailllllY slall-IIII'lIls 11111 havl' 1101 alll'llIpl('d
I.. rill' all lilt' ('aSt'S on II... various p..illis Iliadl' 011111 1I0t always II...
kading l'aSI'S.
The statellll'uls made may lead you tu ask, .. J low can we know
when thl' ckarly t'xpn.ssed provisiolls Ilf a cOlltrad arc cllfon:eable
and when not?" There is no sure miswer, but the surest I can
think of is to sU~gest-see )'ollr lawyer.
Abuut the Speaker
MAX E. GREENBEI{G
Mr. Greenberg is a graduate of C.C.N.Y., having ohtained his
B,A. at that school, and of New York Universily where he received
his Doctor of Jurisprudcnce, He has Leen praclicin~ law in the
State of New York for ovt'r ,14 years. I It- is a nll'llIher of the
New York alld Federal liars.
IVlr, Gn'enlJ('r~ spI'cializl:s in IIII' tiddor pllhlic worJ(S l'olilrarts,
panirularly 1J\lildillg' cOlisl rllrlioll, MallY wl,lI l\IIowlI ~elll'rall'oll-
structiou finus an' ;nllllllg his diellls, alld he has olle of the largest
construclion COlli ract prad ices.
----- _....
.. u, s. Y. S"~cJri.., :!~II U, S. I.I:!; R,' Al,.....A/urrisu.. Siu.. Co. IlIc., J C. C. F. 992.
.. Rul>i.. V. CO/<'$, H2 Misc, 139, 253 SIII'I" 8011. .
II R,' 1'",.." JH SIII'I', H.I,
II UcJ,l.y Y. (J'JI,i,'", S I :\"", lIiv, St,'I, 1,,\ SIII'I', MK.
.. Jlo'!~"'11a C1'UJ.~"If"';"1I Cu. v. City, .!UII N. V. 149, IS7i ~cc also: ClliUclIllcu l.u,nb"
Co, v. Sdbnblatt 6" LcJsk,'r IlIc., :!KII N, Y. JIJG.
-------
8-28
-------
;' -/_.
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~
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-~ ( ,
's'
~ ~'\
~~ .J." I'\
~'/.'IJ'
-.~/... ..:-h
~ .- ..
"""- :;1:::" .J
<-~;: =~.G;; "I'm afraid I didn't get the
~ ~'""'. -~ change order in time."
-.-.-- I --t;o -----.
:~~~~~~
' "":"f.=;:~.~ '!-?;:-~ ~t. -
...:"t>~~~:~.7~ :=7'~}=':: - .-...-.-.
Change Orders
8-29
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(VIII) CONTRACT MODIFICATIONS
MODULE:
(25)
Change Orders
ESTIMATED TIME:
90 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand what constitutes a change order
o Understand why and when change orders are written, and the
extent of the owner's, engineer's, and contractor's
responsibility in such an order
o Understand how a change is priced and processed
o Distinguish among time, site, design, and construction
changes
o Understand EPA review procedures for change orders.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants
o Exercise: "MAJOR CONSTRUCTION COMPANY"
- Handout for participants.
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
~
8-30
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CHANGE ORDERS
A CHANGE ORDER IS:
. A written order, authorization or directive
. From owner to contractor
. Adding, deleting or revising
- The work
- The cost
- And/or the time of completion
3-31
-------
OWNER'S AUTHORITY
TO ORDER CHANGES
FORMAL CHANGES
. Written change order
. Issued in response to properly submitted request
. To formalize the owner's decision to make a change
8-3t
-------
WHEN IS A CHANGE ORDER NEEDED?
. To change contract cost
. To revise the completion date
. To alter the original contract in any way, regardless of
whether costs or time change
WHAT MAY BE CHANGED?
. Anything within the general scope of the contract
- Specifications (drawings and designs)
- Time, method or manner of performance
- Owner furnished items or services
- Directing acceleration
. Not cardinal changes (changes outside scope)
- Significant change in price
- Change in purpose of contract
- Beyond contractor capability
C-33
-------
TYPES OF CONSTRUCTIVE CHANGES
. Erroneous contract interpretation
. Directing a manner of performance not specified in
contract
. Actions by inspectors
. Defective specifications or impossibility of contractor
performance
. Actual acceleration of performance
. Constructive acceleration
- Excusable delay
. Nondisclosure of technical information
ELEMENTS OF A CONSTRUCTIVE CHANGE
. Work exceeds contract requirements
. Notice provision
. Change actually required by owner
. Time or cost increased
U-34
-------
HOW THE CHANGE J.\
EaUITABLE ADJUSTMENT
. Increase or decrease in price or tL'T' .;
change
. Keep the contractor whole
. Preserve owner's pricing position 1:-:
. Price changes must relate directJ'Y t.:
. Pay difference (+ or -) between 'iln::: .
reasonably cost to perform the ~'10,<:.
required and what it reasonably co.::
as changed
HOW THE CHANGE IS PRJC -:
. Consider contractor's general and::.
(+ or -)
. Consider profit (+ or -)
- Complexity of work
- Risk assumed
. Includes impact to unchanged '/1:::
. Review subcontractor cost and C::. : '
[3-35
:CED
: resu!t of
: 8hange
';)uld have
. ,'jginally
: :;rform the work
~ onrjnued)
.' :trati'l8 cost
.j 3 r:18rXUp
-------
HOW IS A CHANGE ORDER PROCESSED?
. Determine need
. Negotiate scope
. Independent cost and time estimate
. Contractor submits cost and time proposal
. Negotiate full time and cost
- Negotiate on basis of independent estimate
- Negotiate details, not bottom line
- Get full waiver of claim
. Avoid "change order syndrome"
. Handle rapidly, settle quickly, follow through with
paperwork expeditiously
WHAT ARE UNILATERAL CHANGE ORDERS?
. Only if contract contains directed work clause!
. If mutually satisfactory resolution cannot be reached, and
owner determines a change is necessary, owner can
direct contractor, by written notice, to proceed with the
changed work
. Owner should issue order with the time and price the
owner believes is reasonable
. Contractor must perform the work, but can and probably
will dispute the time and monetary aspects of the
unilateral change
J-36
-------
CHANGE ORDER PROCESS:
OWNER RESPONSIBiliTIES
. Establish a formal change order process
. Establish a formal delegation of authority
. Determine if a change is needed or desirable
. Negotiate fair and equitable price and time of
performance
. Maintain complete change order file
. Resolve disputes in accordance with contract provisions
. Notify EPA of potential cooperative agreement/lAG
amendment items
. Rapid and effective decision making
CHANGE ORDER PROCESS:
AlE RESPONSIBiliTIES
. Analyze and provide recommendations on proposed
changes
. Provide justification documents concerning changes
. Prepare independent estimates of time and costs, and
analyze contractor proposals
. Assist owner in negotiations
. Assist owner in maintaining change order files
. Process necessary change order paperwork through
contractor's and owner's process in expeditious fashion
8-37
-------
CHANGE ORDER PROCESS:
CONTRACTOR RESPONSIBiliTIES
. Furnish change order proposals in sufficient detail so
owner and AlE can determine reasonableness
. Provide change order proposals in timely manner
. Enter into meaningful negotiations
. Keep required records
. Maintain current as-built drawings
. Maintain current construction schedule
REASONS FOR CHANGE ORDERS
. Differing site conditions
. Errors and omissions in contract
. Design changes
. Unit quantity over/under runs
. Justifiable delays
. Changes instituted by regulatory agencies
. Emergency conditions
8-38
-------
PREPARING FOR THE
NEGOTIATION CONFERENCE
. Prepare owner's position (cost & time)
. Analyze the contractor's position
. Organize negotiation team
. Rehearse!
MEMORANDUM OF NEGOTIATION
. Identify attendees
. Description of change
. Discussion of alternatives and quality
. Contractor's proposal of cost and time
. Owner's or A/E's independent cost/time estimate
. Explanation of recalculation or disagreement
. Statement of total costs (including secondary) and total
time and completeness statement
. Dated signatures of those attending
8-3Y
-------
CHANGE ORDER
CONTINGENCY FUND FOR EACH PROJECT
. 10% up to $2,000,000
. 80/0 over $2,000,000
CHANGE ORDERS
MAY DELEGATE TO SPO/USACE
. Up to 20% project contingency fund per change order
. Up to 75% project contingency fund total
SPO MUST PERFORM
. Cost or price analysis (40 CFR 33)
. Technical and administrative analysis (State,
Participation Manual, Vol. II)
8-4C
-------
BEFORE APPROVING A CHANGE ORDER
. Conduct cost and price analysis
. Determine
- Accuracy of differences in technical requirements
- Allowability of costs
- Compliance with contractual and regulatory requirements
- Conformance with approved statement of work
CHANGE ORDER DOCUMENT
. Identify technical scope
. Describe change
. Reason for change
. Change in contract price
. Change in contract time of performance
. Impact of change
. Waiver of further claim
. Appropriate signatures
8-41
-------
£-42
-------
1.
CHANGE ORDERS
"ORIGINS" OF CHANGE ORDERS
A.
DIFFERING SITE CONDITIONS (Unforeseen)
Conditions differ from that indicated in contract
- Conditions differ from those normally encountered
e.g. 's - underground obstructions, changed soil conditions,
condition not observable during design, utilities
differing in location/size from "record" drawings
available, water table variation.
B.
SCOPE REVISION/CUSTOMER REQUESTED/CRITERIA CHANGES
Must identify "ContractU scope vs. "ProjectU scope issues
- Revised or New Functional/Operational requirements
- Changes in Criteria (DM's, Codes, etc.)
e.g. 's - user mission change, user equipment change,
increased or decreased loading on facility,
commercial utility requirements change functional
improvements, revisions due to new operational
requirements.
C.
DESIGN
- Plans and Specs ambiguous, inconsistent, or conflicting
- Plans and Specs are deficient (omissions)
- Specified materials unavailable/substitutions
- Submittals cause user to vary thoughts
"Recordu drawings used as basis for design are in error
- A-E liability is being pursued due to recognition that
design is not technically adequate.
D.
GOVERNMENT CAUSED DELAYS
E.
- Work is stopped/suspended due to action/inaction on the part
of the Government
e.g.'s - lack of timely submittal review,
available for contractor's
available or not as indicated,
change/issuance of NTP/improper
TIME FOR EXCUSEABLE DELAYS -
facility/site not
use, GFM/GFE not
delay for design
direction.
- Contractor entitled to time
beyond his control
e.g. 's - material deliveries
acts of God
(only)
due to circumstances
late, unusual weather, strikes,
8-43
-------
F.
ADMINISTRATIVE
- No cost/time, merely to correct or change administrative
data such as funding citation, addresses, assignee, etc.
G.
CLAIMS
- Pending or resolved.
H. PLANNED
- Decision
order in
1. EPA DIRECTED
prior to award that requirement be added by change
lieu of separate contract or IFB/RFP amendment.
- Change implemented based upon EPA specific direction.
J.
OPTIONS TO RENEW
- Extension of the basic contract term for an additional
period as set forth in the option clause, if applicable.
K.
DEFAULTED CONTRACTOR
Issued to reduce the obligations when a contract goes
through default action in accordance with the default
clause.
8-44
-------
A.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
B.
11.
12.
13.
Work
14.
DELAY CAUSE CLASSIFICATION
EXCUSABLE DELAYS:
"NO FAUL T" DELAYS (Time Only)
Acts of God
Unusual Weather
Fires, Floods
Quarantines, Epidemics
Sovereign Acts of Government
Acts of the Public Enemy
Freight Embargoes, Strikes
Vandalism Protected Property
Delays of Vendors and Subs as
Acts of Another Contractor
above
GOVERNMENT CAUSED DELAYS (Time and Dollars)
1. Failure to Provide, Access, Service Restrictions of Work and
Storage Spaces
2. Progress Earnings Delays
3. Client Furnished Materials
a. Late delivery
b. Incomplete, damaged
c. Erroneous installing advice
d. Rework or start up problems
4. Stop Orders for Client Convenience
5. Major or Frequent Change Orders
6. Acts of Another Client Contractor
7. Defective Plans and Specs
8. Improper, Confused, Delayed Instructions, Change Orders, Etc.
9. Unreasonable Delays in Approval of:
a. Shop drawings
b. Materials approvals
c. Quality control tests and inspections of installed work
10. Failure of Client to coordinate:
a. Operations bearing on contract
b. Other contract work
Failure to render adequate information
Inadequate Resident Engineer Administration and Control
Directing, Impacting, Changing Slowing, Rescheduling Contractor's
Delayed Notices to Proceed
C. ASSUMED RISK DELAYS OF THE GOVERNMENT (Time and Dollars)
1. Differing Site Conditions
2. Contingent Risks Specifically Taken by Government
Contract Clauses to Insure Bid Comparability
Under Special
8-45
-------
INEXCUSABLE DELAYS:
A.
CONTRACTOR CAUSED DELAYS (No Time or Dollars)
1.
2.
3.
Slow to Mobilize Project
Failure to Mobilize Subcontractors in Timely Fashion Due to Bid
Stopping
Failure to Marshall Adequate Resources in Terms of:
- Quanti ty
- Qu a 1 i ty
- Availability
Including the following resources:
a. Manpower
b. Money
c. Materials
d. Management and Supervision
e. Machinery
f. Methodologies
g. Lead Times
Poor Planning, Scheduling, and Execution of Operations
Poor Coordination and Administration of Vendor and Subcontractor
Resources, Late or Inadequate Payments to Them, Schedule
Impactions and Conflicts, etc.
Late or Faulty Submittals of:
, a. Documents, drawings, correspondence
b. Time and price schedules, updates
c. Calls for inspection
d. Materials samples
e~ Progress payment claims
f. Other
4.
5.
6.
B.
GOVERNMENT CONVENIENCE DELAYS (No Time or Dollars)
1. . Reasonable Time Reserved for Government to Act When Technical or
Administrative Problems Related to the Contract Occur.
8-46
-------
A.
MAJOR CONTRACT CLAUSES FOR SUSPENSIONS AND DELAYS
c..J
I
~
'-I
CLAUSE DELAYS COVERED COWENSABLE ITEMS
3. CHANGES 1) Increases In Volume or Changes in the Work u 0 po -oJ
1:::1 " LA.!
Q. I;: u :I: I-:I: e
2) Disruption and/or Disorganization of Planned .~ 0 Q. 0 E > )(>
~ .. i=
sequence of Operations ou CI.. 0 ~o <
"EQUIT ABLE
ADJUSTMENT 3) Changes in Gov't. Furnished Items
CLAUSE" 4) NOT delays in ordering changes X X X X X X X
4. DIFFERING SITE 1) Subsurface or Latent Physical Condition (Type I) ~
CONDITIONS 2) Unknown, unusual conditions at the site differing Z
from those normally encountered (Type II) X X X X X X 0
z
s. TIME EXTENSION 1) Unforseen Strikes
2) Unusual Weather
3) Acts of God
4) Acts of an Enemy
S) Unforseeable Material Delays Beyond Control of
Prime, Subs, and Suppliers ~ ~ ~ ~ U.I U.I
6) Acts of Gov't. In Sovereign upacity Z Z Z Z Z z
7) Concurrent GOV'!. and Contractor Delay 0 0 0 )( 0 0 0
Z Z Z Z Z z
17. SUSPENSIONS 1) Unreasonable Time For:
a) Submittals/Material Approval
b) Making Site Available X X X X X
c) Order a Change (NTP) ~ ~
d) Investigating A Change/Providing Information Z Z
e) Gov't or Other Contractor Interference 0 0
Z z
f) Delays Due to Lack of Progress Payments
2) Any Time Lost Due To Defective Specs
3) Stop Orders for Gov't Convenience
-------
---~
GSBCA OUTLINES REQUIREMENTS
FOR RECOVERY OF
CUMULATIVE IMPACT COSTS
EYen il each chan,e
order, tahn by iLlear, ia
lairly prind and paid, con-
tracton olten aUele that
&.here ia a cumulative COlt
impact on the overaJl work,
when a lilnificant number of
chanles are introduud
durinl job performance,
which remain uncompenuted
A recent cue bdore the
GeneraJ Services Board or
Contract AppeaJI(GSBCA)
..tabljshed requiremenu ror
.ucceuru! NCovery of luch
cumulative impact coau.
In order to recover, a
contractor mUit (1) reco,nize
potentiaJ impact coau urly
iD the corutruction rOce",
2 provide notice to the
owner rewrvin, the rilht to
aublequently claim ntra
coau auociated with impact,
(3) me claiml (or luch cOils
U loon u they are identiried,
and (4) provide documented
'proor lupportinl&.he claim.
For many yun, &.he
prevaJent view (i.e. &.he Rice
doctrine) wu that a con.
tnctor could reconr only the
direct COlU 01 chan,ed work
and not the iDcruMd COlU 01
uDChan,ed work, &.hUl a1low.
iD, DO ~overy lor delay or
Impact COlLI. The Govern-
ment'l "Chan,.." daUIe,
amended iD 1868, ellectinJy
aboliahed Lbe IUce doctriDe
in FederaJ cues.
The Armed Services
Board or Contract AppeaJl
(ASBCA), lor one, cunently
reco,nius impact cosls
relultinl Irom "the cumula'
tin impact or chanles, to
distinruilhinl theH Crom
impact costa "arilin, out or
each chanle individually. It
GSBCA, notinl ASBCA's
position, indicated ita view
that chan,el can and do
crute costa beyond those
Itrictly aUribut.able to the
chanles themaelvu GSBCA
placed the burden on the
contractor, however, to
lorftee the economic e(fect
01 cumulative chanles, and to
punue theH impact COlta in a
timely Cuhion.
8-48
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PRACTICAL EXERCISE
MAJOR CONSTRUCTION COMPANY
As a result of an Invitation for Bid,-the Major Construction Company
was awarded a contract on a firm-fixed-price basis. The contract schedule
provided for the fabrication of a concrete platform with upright
stanchions necessary for subsequent installation of a vibration chamber.
The price of the contract was $12,000.
The specifications provided that the contractor would excavate a hole
to encompass a concrete block six feet deep, ten feet wide, and twenty
feet long. Stanchions would be so placed as to form a platform of metal
uprights, six inches apart, as shown on the drawing furnished the
contractor.
Shortly after the execution of the contract, a Project
assigned to the contract to expedite and oversee the work.
Engineer was
After the contractor had excavated the hole to a depth of four feet,
he discovered a large boulder which could not be removed with the
equipment he had at the job site and he so notified the project engineer.
The project engineer advised the contractor to obtain whatever machinery
was necessary to immediately proceed with the job as the vibration machine
was on its way and expeditious action was necessary to forestall any
delays in the construction of the base.
Upon completion of the work, John Minor, President, Major
Construction Company sent an itemized invoice for $1,400 to cover the
extra work. Upon receipt of the invoice the contracting officer called a
meeting to be attended by Mr. Minor, the Project Engineer, the Contract
Administrator, and himself.
The Project Engineer reiterated the fact that he had instructed the
contractor to proceed. In view of the urgency, he felt it would be all
right. The contracting officer stated the contractor had no authority to
proceed without contractual authority.
Mr. Minor stated that he thought he was being a IIgood guy" and that
any extra costs incurred would be recognized and the contract would be
amended accordingly.
1.
Putting yourself in the position of the contracting officer,
what action would you take regarding the contractor's bill for
$1 ,400 extra?
2.
If you were the contractor, on what basis would you submit your
claim?
3.
4.
Has there been a constructive change to the contract?
Did the project engineer act within the scope of his authority?
8-49
-------
SOME THOUGHTS ON SCOPING AND NEGOTIATING CHANGE ORDERS
1.
Project Managers and Resident Engineers
scope of the change, in writing, before
the estimators. Otherwise, you will be
of the contractor.
should thoroughly define the
going to the contractor or
trusting "to the imagination"
2.
A thorough justification of every change order should be made, in
writing, before deciding on the change and before going to the
contractor. Get necessary approvals (designer and owner) first.
Remember, everything in the contract is there for a reason.
Therefore, there must be a better reason to change it.
3.
Avoid getting swept up in the "change order syndrome." This is where
we get so involved in negotiatng the change order that we forget to
go back and ask the most basic question of all. That is, do we
really need this change, and is this change worth this price?
Always be willing (unless the change is an "absolutely have to have
to make the project work" change) to tell the contractor, "forget it,
build it as per spec." There are other ways to effect that change if
the contractor is unwilling to make a reasonable proposal. For
example, have the owner's forces fix it; hire a "clean up contractor"
when this contract is done; assign the change work to a parallel
prime contractor; etc. .
4.
5.
Remember, unless the change is an "absolutely have to have" change,
the contractor needs our change order more than we need his changed
work.
6.
When negotiating the change order, avoid getting wrapped up in the
"bottom 1 i ne syndrome. It Thi s is where we forget to di scuss the
details of the change and start discussing "total cost." This is the
contractor's game, not ours.
7.
When negotiating a change, always negotiate the scope of work, then
the details of the scope (i.e., labor, equipment, materials,
subcontractrs, etc.). on an activity by activity basis. Then,
negotiate the cost of each item of the scope. Discuss and negotiate
"reasonable costs" for overhead and profit. This is becoming more
critical on Federal/State funded projects where the COE or EPA is
involved.
8.
Keep very good negotiating minutes for each session. Have them typed
up at the end of each day. This is the only record you will have
that you have fulfilled your responsibility to the client, and this
is the only record the client will have that they did what was
supposed to be done when they go to the government agencies for
approval.
3-50
-------
9.
Don't let a contractor force you into a "time and materials" or
"force account" situation simply because he is tough to negotiate
with. If he isn't being reasonable, go back to square one and
determine whether we need the change to make the project work. If
not, tell him "no change order."
10.
Insure that there is a disclaimer of future claims, a "mutual accord
and satisfaction" clause on every change order to protect us and the
client from impact or ripple damage claims later on. (Suggested
language is attached.)
~-51
-------
8-52
-------
PREPARING FOR THE NEGOTIATION CONFERENCE
INTRODUCTION
A major distinction between successful and unsuccessful negotiators
rests in the work and quality of the effort which is made in preparation
for the face-to-face conference with the contractor. Well stated is the
axiom that "preparation is eighty-five percent of a successful
negotiation. II Those who perform the hard work required for the
negotiation conference will do a markedly better job for the Owner.
Preparation results in essential knowledge and effective courses of
conference action. Ultimately, it is the means whereby the Owner's
representative gains or loses the contractor's respect.
Preparation for negotiaton consists of these aspects as follows:
l.
2.
A sound preparation of the owner's position.
A searching analysis of the contractor's position.
3.
Intensive self preparation
conclusion of the conference.
for guiding the direction
and
A.
PREPARATION OF THE GOVERNMENT'S POSITION
When the owner enters the conference room he must fully understand
the scope of the change. He can have no doubts about the brick and mortar
aspects of the change. He must be fully prepared to define precisely what
he expects the new or changed work to be -- precise as to quantity,
quality, and definition of all installed materials, equipment, and
construction features. When the contractor raises questions and
alternative solutions during the conference the owner must be prepared to
decide unequivocally what work and what construction he wants. Doubt, if
it exists should be limited to intangible costs such as impact,
acceleration, and extended overhead. But even for these costs, the owner
should have prepared figures which are strong enough and reasonable enough
to enable the owner to assert and sustain a defensible position. The
cardinal sin in negotiation is to enter the conference fuzzy on scope.
The result is a rambling negotiation which wastes time, lowers respect,
and produces inequitable or incomplete settlements.
Owner's Estimate
The fundamental starting point for owner effectiveness at the
negotiating table is an independent estimate, which reliably and fully
accounts for all cost and time values dictated by the scope of the
change. Too often, the contractor's proposal is used as the starting
point with the danger that both the scope and quantum of the change move
beyond the intentions of the owner. Auditors are pleased when they find
that the date of the owner estimate precedes the date of the contractor's
proposal.
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Unless the contractor is hopelessly weak no negotiator can bargain
well from a shaky foundation. The owner's estimate is the cornerstone of
the preparation. It must be complete and reasonably priced. The owner's
negotiator must be entirely familiar with its detail, including all
elements that influence its quantities, unit costs methods, extent, and
character of the work, and all factors of the project environment which
shape the change.
The owner's estimate is neither absolute or cast in stone. It is a
particular contractor and not the owner or some theoretical average
contractor who will do the work. Your contractor's position will be set
forth in his proposal and refined at the conference. Relevant facts for
which the owner's estimator was not, or could not be aware will surface.
The owner's estimate must likewise be refined upward or downward to
account for valid new information, during both the preparation and
conference phases. Corrections are made on reasonable facts, not by
yielding to the energy and persuasion of the contractor.
Eventual agreement will be reached in two dimensions. Sco e and
quantum. e owner s es 1mate 1S matc e aga1nst t e contractor s
proposal to discover differences. If the differences are too great,
meaningful negotiation is impeded, and there should be had a new
contractor proposal or a new owner's estimate or both.
Estimates should be derived from known or corroborative facts and
standards. Unsupported prices are suspect'whether in the contractor or
the owner's estimate. Facts mayor may not be obtainable from the parties
respective job records or obtainable from testimony of those who do or
observe the work. The painstaking labor .of preparation is to find and
recreate these facts in a post-priced change order, or soundly plan
standards for forward priced changes. Facts and standards must then be
carefully analyzed and adjusted in shaping the owner's negotiating
position and objectives. ..
Cost and Price Factor Analysis
The more the negotiator knows about the change and its circumstances
the better negotiator he will be. Basic factors which must be personnally
examined and reviewed are as follows:
1 .
2.
Job size, points and areas of work.
Plans and specifications.
Materials quantity and quality verifications.
3.
4.
Labor and equipment usage and costs.
Idle time, wasted time, dragged out time.
5.
6.
Over-manning and over-equipping.
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7.
Materials, labor, equipment,
diversions into this change.
Contractor diligence and production efficiency.
and overhead over-consumption or
8.
9.
Work environment factors
Dust
- Weather, temperature, wind
- Access and congestion
Quality and availability of labor
- Superintendence
Overhead support
Supplier support
- Government cooperation
- General and local economy
- e tc .
10.
Recognition of any "sole-source" advantages which the contractor
enjoys with respect to the change and discovery of how it is
"loaded" into the contractor's proposal.
Due appreciation of risk and how the contractor has valued,
quantified, and entered it into his proposal.
11.
B.
ANALYSIS OF THE CONTRACTORS POSITION
A negotiation boils down to a deal with a person, not an
administrative robot or anthropological representative of the contractor.
Knowing and treating your opposer as a person, immeasurably reinforces
your technical facts and preparation. The direction which the conference
takes will similarly depend on how well you handle the contractor as a
person.
An important reason for coach Paul "Bear" Bryant's perennial football
success is that he has always learned the strengths and weaknesses of the
opposing team and its coach. His studied preparation consists of
obstructing strengths and exploiting weaknesses of the opponent by tactics
and tailored plays carefully worked out well before the game. No other
coach, anywhere, has earned such a high reputation for "outcoaching" other
coaches. Similarly, the more you know about your contractor and the
pressure on him; the mistakes, errors, or inflated premises of his
proposals; whom he owes, and his relations with subcontractors, vendors;
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where and how he makes his money; his basic motivations, conference manner
and techniques, and etc., the better you will be able to deal with him.
Ignorance concerning your opposer can be fatal. For your first
conference, contact those who deal with him. Call up the others who could
or couldn't handle him. Observe his daily actions and those of his key
personnel beginning with the contract starting events, not later when the
change occurs.
In the end, your best source of information about a particular
contractor will derive from your overall working relationship with him
gained in day-to-day contacts as well as during negotiation. If you have
let the running relationship deteriorate your conference preparation is
automatically handicapped. Unsatisfactory human and administrative
relationships between the owner and the contractor will be reflected in
unreasonable contractor proposals and high settlements. There should be
no IItwo-partll relationships with a contractor, different for his fixed
price daily work situations and then for the changed work situations when
we must depend to a large extent on his fairness and cooperation.
C.
SELF PREPARATION
Lastly, the owner must recognize that he is charged with calling and
conducting the conference and not the contractor. The nature of change
order negot1at10n 1S that, in most instances, the owner causes the change
and the contractor requests and proposes an equitable adjustment.
Largely, the owner is solicited to pay something which the Contractor must
first justify. Even when the owner claims against the contractor, the
contractor seeks to minimize the extent of damages which will be deducted
from his contract price. The bottom line, of course, is that the owner
holds money and that the contractor has to work for it. Perhaps only when
a final price is settled, does the full bilateral nature of the contract
change process emerge. Accordingly, the owner must nQt rely on any
temporary advantage this asker-payer relationship presupposes. The
conference simply will not work reasonably for the. owner unless the
negotiator takes it somewhere by means of an orderly agenda tactically
handled so that the conference is not converted into a runaway, confused,
or combative situation wherein the contractor is never required to justify
or define a reasonable price. The business of'the conference is one of
verifying scope and resolving price differences, through continuous
movement of opening positions, until a final position is reached.
The Conference should be delimited to differences. These are then
dealt with until the different positions of the parties are resolved.
There is also an apparent tactical order in which these differences can be
taken up and settled so that subsequent issues are more easily and more
logically handled. The negotiator must have a ,plan which he can stick
to. This needs to be structured and tested before the conference begins,
with avenues of return when the contractor forces him from it.
He must have clearly in mind his best and highest positions at which
he can settle, both on an item and bottom line basis. These must be
reasonable and studied enough that he can confidently fight for them, or
concede as their value warrants.
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The negotiator must also have worked out in advance tactics and
language which will lower the contractor's expectations, and produce
contractor movement toward a fair and reasonable settlement price. He
must carefully prepare and guard that antagonistic and inflammatory
language, actions, and mannerisms not to be introduced by him.
Conference Team Preparation
Should the negotiator include others to assist his side during the
conference they should be briefed concerning what is expected of them, and
of their conduct during the conference. It must be clearly established
that the negotiator will be in control, and that no unasked or volunteered
statements or assertions will be made without prior agreement, and then
when called for by the negotiator. In particular it should clearly be
understood that no price settlements or changes in the owner's position
will be reached without a recess of the owner's side for discussion and
agreement. In general, planned statements from team members assisting the
negotiator should be limited to their area(s) of expertise.
Planning for Fact Finding During the Conference
Since no price bargaining should take place until the negotiator is
certain the contractor u~derstands the scope of the change, and not until
his true time and price positions for each item and/or bottom line are
fully explored and developed, a workable plan for finding new facts and
verifying questionable matters discovered in the preparation phase, is a
distinct requirement of the total preparation. If this amounts to nothing
more than a checklist of questions which the negotiator will ask to
resolve scope differences and establish price differences it will be
enough. The planned questions, however, must be carefully designed to
thoroughly explore, discover, and develop the contractors underlying
motives and intentions.
Preparing For The Bargaining Phase
Only when scope, price, and time positions of the contractor are
understood will real bargaining begin. The negotiator must have planned
an array of tactics and techniques for producing movement of the
contractor's position toward the owner's position. He should have created
in advance, statements, lines of attack, ploys, suggestions, alternatives,
tradeoffs, and concessions for each difference which must be resolved,
buried, or abandoned before there is final agreement.
Planning for the Close
When the bargaining phase has run its course and the parties clearly
understand the Ifina1" positions of each, they will in a1 likelihood still
be apart. The negotiator must provide himself with several techniques for
closing this final difference and wringing out any fat which still remains
in the contractor's price. These are methods usually available only to
the skilled and experienced negotiator. Nevertheless, this is a distinct
phase which the negotiator should be prepared to recognize and patiently
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await. If his plan for this phase consists of nothing more than a "split-
the-difference" boldness he will be well started. And if he can split it
so the owner gets "seventy percent and the contractor thirty," he will be
performing better than a beginning negotiator.
Preparation for Deadlock
Should walkouts or deadlock's occur, standby courses of action must
be available. These can range from skillfully enticing the contractor
back, and face-saving calling of his bluff, if it is a bluff, conversion
to a recess, or a gentlemanly parting. The negotiator must be prepared to
accept both surprise, and best and worst occurrences, and have worked out
in advance suitable personal responses for all possible disruptions, or
severances of the negotiation.
Plan for Confirming the Agreement
Finally, there is the matter of note taking, evidencing the
. agreement, and the outside writing of the record memorandum. In the last
analysis, preparation for negotiation depends on a full understanding of
the negotiation process itself with plans laid on the negotiator for
handling each step of that process in a constructive way.
Planning Conference Phases Summary
Pre-conference planning is shaped by
phases of the conference in its organization.
negotiator should guard that he does not mix,
out of order. His conference agenda planning
the conference to include:
and should match the natural
In doing his planning the
omit, or take these phases
will follow the phases of
Introduction
Fact finding during
Bargaining
Closing
Record agreement.
His assembled notes for the conference should fit these
compartments. They may be as extensive as necessary, but should .consist
of talking points, questions, position responses, and rebuttals to the
contractors proposal and anticipated conference actions.
the conference
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CONDUCTING THE NEGOTIATION CONFERENCE
A.
There are certain general factors that the owner should consider in
preparing for or conducting a bargaining session, as well as some
negotiation strategies, tactics, and techniques that contractors
frequently use, knowledge of which may prove useful to the owner in
the proper circumstances. Obviously, not all of them can be applied
in every situation. Many are interrelated or merely variations of one
another; some are even contradictory. Some can work to the
government's disadvantage if they are employed injudiciously. A few
are dangerous and should be considered only as a last resort.
(Certain techniques that apply only to situations in which the
contractor persists in adhering to a position that is clearly
unreasonable will be discussed therein).
It is not the purpose of this supplement to establish a formal
methodology for the owner to use in communication at the bargaining
table. A good negotiator will constantly change his negotiation
tactics, techniques, and strategies to avoid establishing a pattern of
approach that can be anticipated by the other party. Nor should the
reader infer that all of the techniques mentioned are suggested for
his use or will be employed against him. Rather, we have here
suggested approaches that some negotiators have used successfully in
specific circumstances. When the owner has thoroughly analyzed a
given situation - relative bargaining positions, the personalities of
the contractor's representatives, and so forth - he must then. draw on
his own experience and exercise his own judgement in determining
which, if any, of these approaches may be valuable for him.
B.
General Factors to be Considered by the Negotiator:
1.
The Conference Room. The physical surroundings of the negotiation
proceedings may have as great an effect on the course and final
outcome of the negotiations as does the strength of the
government's bargaining position, the effectiveness of its
strategy, or the persuasiveness of its arguments. A room that is
noisy, too hot or too cold, or chairs that are uncomfortable, can
turn an otherwise rational and harmonious discussion into an
unreasoning, acrimonious debate. The conference room selected
should meet certain basic requirements. It should have proper
lighting, acoustics, and temperature control and should be
furnished with comfortable chairs and a conference table large
enough to seat the government negotiator or negotiation team and
the contractor's representatives. A blackboard and other visual
aids, as well as a desk calculator, may be helpful. Pencils and
paper should be available.
As a courtesy, arranging a proper conference facility is an
important part of the planning process described earlier. During
a long or complex negotiation, the contractor's representatives
should be provlded a separate room whenever possible so that they
may confer in private during recesses in the negotiation.
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2.
Punctuality. There is no such thing as being politely late for a
negotiaton conference. A contractor who has had to travel from a
distance to attend a negotiaton session, only to be kept waiting
by an owner's negotiator whose office is just down the corridor is
likely to be irritated and, understandably, uncooperative. Then,
too, the party who is late may feel obligated to be overly
conciliatory on important matters under negotiation and may
thereby prejudice his own position. If anyone is going to be
late, let it be the contractor, who must then apologize and
perhaps make up for his tardiness.
Avoidance of Interruptions. Outside interruptions can be
irritating and may disrupt progress of the negotiation. It is
lmportant, therefore, that interruptions of the negotiation
session by persons not involved in it be kept to a minimum. For
the same reason, it is essential that the negotiator clear his
calendar of other business during the period set aside for
negotiations. The negotiator's position is weakened if he is
overly concerned with personal affairs or if he has to leave the
conference to attend to other matters.. On the other hand, he may
benefit if the contractor's representative is unable to
concentrate on the negotiations. If the contractor's
representative is hurried or harassed by other commitments, he may
be willing to accept many of the government's demands just to
bring the conference to a close. The owner should always, of
course, retain control of recesses and adjournment. .
3.
4.
1m ortance Direct, Clear, Sim le Language and Use of
ummarles. 00 0 en, lsagreemen s a e argalnlng ta e'
arise from semantics -- not from real differences of opinion. To
avoid misunderstandings, the government negotiator should follow
three rules: (1) use simple sentences, (2) use brief words, and
(3) repeat important points often, employing slightly different
language each time. The negotiator will often find it effective
to use the contractor's phraseology and/or illustrative examples
in developing his own arguments, since this will tend to improve
the contractor's comprehension of the government's point of view.
Frequent summaries of what has been said are valuable aids to
communication. For example, after the contractor has made a,
lengthy speech, the negotiator may wish to summarize it so as to
convey his understanding of it in a technical or tactical way
depending on whether the owner is in fact finding or negotiating
mode. Summaries can be used to advantage as a negotiation
technique. By constructing his summary to emphasize any
unreasonable points that the contractor may have tried to gloss
over, the negotiator may be able to place the contractor on, the
defensive. Or the negotiator may emphasize points raised by the
contractor that the government considers desirable and omit points
that it does not. Then, if the contractor agrees that the
negotiator's summary is a fair statement of position, the
government may have achieved an advantage -- a concession by
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5.
default, so to speak. Finally summaries are useful devices for
maintaining communications control and for ensuring that both
parties fully understand the status of interim agreements during
the conduct of negotiations.
Need for a Calm, Patient, and Tolerant A proach. Satisfactory
agreement is imposs1 e when emot10na 1sm ru es on both sides of
t~e conference table. However, one party can take advantage of
the other's anger to obtain more favorable terms. The negotiator
must be able to control his emotions at all times; he should never
permit himself to be goaded into taking a position that he may
later regret. This does not mean, of course, that he cannot
express annoyance or even anger if the contractor is obviously
lying or cheating.
Sometimes a person who finds himself in an indefensible position
will display anger in an effort to divert attention from his
weakness or to cover it up. If the contractor becomes angry over
the negotiator's line of questioning, it may well be that the
contractor is unable or unprepared to defend its proposal. By
remaining calm and continuing to probe the area that provoked this
reaction, the negotiator may often succeed in winning reasonable.
concessions. The negotiator must be careful, however, not to push
the contractor into a position from which he cannot gracefully
retreat and which the owner cannot accept.
Emotional outbursts may, however, be used effectively in one way
through play-acting. Calculated emotionalism, designed to
impress the contractor with the depth of the negotiator's feeling
on a particular issue, may sometime prove valuable if the
negotiator feels that the contractor is deliberately being
unreasonable. But when this device is used by the contractor the
negotiator must be careful to avoid being trapped into a battle of
emotions and must, instead, return the level of the discussion to
one of calm and deliberation -- perhaps by means of a tactical
recess, a joke, or, simply silence.
6.
Value of Cordial Atmosphere. It is important that negotiations be
conducted in an atmosphere of cordiality, friendliness, and mutual
trust. Each party must respect the other's interests and each
must be willing to evaluate with an open mind the positions and
arguments expressed by the other. And, as has been stressed
before, both parties must be strongly motivated to reach agreement
on the issue in question.
One of the best ways of establishing a propitious atmosphere for
subsequent bargaining is to open the proceedings on an informal
basis - by telling a joke, by conversation on areas of mutual
interest, and so forth. Once personal introductions and other
formalities or housekeeping matters have been disposed of, it may
be advisable for the owner to make a few introductory remarks,
restating the principles and objectives of negotiation. For
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example, he might point out that while each side will be striving
to obtain for itself the most favorable arrangement possible, it
is not in the interest of either party to enter into an agreement
that is obviously unfair or prejudicial to the interests of the
other. He might assure the contractor's representatives that he
will exert every effort to be as objective as he can in assessing
any and all proposals they offer and make it clear that he expects
them to do the same in reviewing his suggestions, since only then
will it be possible to work out a mutually acceptable agreement.
Most important, if the contractor has any grievance or complaints
to make against the owner on matters that are unrelated to the
pending negotiations, these must be disposed of before any
substantive bargaining begins. If they cannot be resolved,
explained away, apologized for, or tabled in some other way to the
contractor's satisfaction, they may unfavorably influence his
attitude during negotiations and reduce his willingness to
compromise.
7.
It is especially important that the owner retain control over the
proceedings at all times. He must not allow the discussion to
become stalled on secondary issues, or let the contractor
sidetrack the proceedings to lengthy consideration of straw issues
that he will eventually concede. Most important, the owner must
avoid being put on the defensive -- being placed in a position
where he is doing the explaining and justifying and the contractor
the asking. The value of an agenda in maintaining control of the
bargaining session is enormous; many of the tactics and techniques
described below will also be helpful in this respect.
C.
Appraising the Contractor's Representatives
In developing his negotiation strategy, the alert negotiator will
consider, whenever possible, the personalities of the contractor's
representative at the bargaining table. Few negotiators keep formal
records of the negotiation personnel of different contractors, their
experience. But the memory and experience of other owner's
contracting personnel in past dealings with the contractor can provide
valuable information.
The personal characteristics of individual company representatives can
provide the negotiator with important clues as to the best negotiation
strategy to use. For example, some people are more willing to
compromise when they grow tired; others become more intractable. Some
are made antagonistic by constant examination and questioning; others
yield to increased pressure. Some raise their voices when they feel
they are arguing from strength; others do so to cover up factual
weakness. To avoid establishing a precedent, some will be willing to
compromise on total dollars, but never on individual item costs;
others will not compromise their firm's initial offer for the existing
requirements but will make major concessions if minor changes are made
to the requirement. Some may react to patriotic or emotional appeals;
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D.
others will not. Some may respond to humor; others may feel that
there is no place for levity in important business matters. Some will
resort to exaggeration, bluff, self-righteousness, sarcasm, and other
tactics as casual negotiation techniques; with others, any visible
emotions may be interpreted as expressions of true feeling. If the
negotiator can recognize and assess the personal characteristics and
idiosyncrasies of the contractor's representatives, he may have'the
key to a successful negotiaton ~greement.
Owner's Strategy
To repeat, it would be impossible to formulate a general negotiaton
strategy that the owner could use to maximum advantage in all cases.
The government strategy must be responsive to such variable factors as
the nature and size of the specific change order, the degree of
difference between the contractor's proposal and the negotiator's
conception of the best overa llpri ce and qual i ty of work for the
government, the relative bargaining positions of the two parties, the
personalities involved, and so forth. Although the negotiation
conference cannot and should not always be conducted in a step-by-step
sequence, the government's strategy should generally permit the
negotiator:
o To determine the contractor's positions on issues that the
owner considers important and to understand clearly the reasons
and justifications for these positions.
o To attempt to determine the relative importance to the
contractor of areas of disagreement between it and the owner.
o On the basis of the above two steps, to adjust the owner's
initial position, if necessary.
o To move the contractor toward the owner's position.
1.
Preparation and Use of an Agenda
It is obvious that effective negotiatons cannot take place until
the issues are clearly set forth. One of the most difficult tasks
of negotiation is to confine the conference table discussion to
what is important and to avoid irrelevant subjects. In many
cases, one of the best ways to promote meaningful discussion is to
use the contractor's proposal cost breakdown as concealed agenda,
which the owner will use to guide and control the conference. The
owner can strategically locate in the agenda framework those
controversial points of view which must be reconciled before any
agreement can be reached and, add such straw points as he might be
able to develop a position on, but which could be conceded to
create an attitude of conciliation on the part of the contractor.
The advantage of the agenda technique is that it points up the
issues to be negotiated, helps put the contractor in a frame of
mind to make concessions, and enables the owner to lead and
control the negotiaton conference.
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2.
Determining the Contractor's Position on Important Issues.
Regardless of how he uses his agenda, the negotiator should first
try to determine and understand fully the reason and
justifications for the contractor's position on all issues.
Naturally, he should try to do this without revealing the owner's
position. If the negotiator is forced to reveal his objectives on
a position taken by the contractor (in order to solicit further
information about it), he should do so in general terms. He
should not indicate a definite stand unless it is on a point on
which he intends to insist. Otherwise, if he backs down later, he
may weaken the government's case.
Perhaps the best way of determining and evaluating the
contractor's position on cost issues is to use the technique of
destructive cost analysis. Specifically, the negotiator should
press the contractor to amplify each questionable cost item in his
quotation or proposal in ever greater detail until a point is
reached at which the cost can be evaluated in the light of
historic fact or judgment estimate.
3.
Contractors will, of course, resist this technique. Some will
argue that they cannot provide the required information without a
good deal of probing back at their home offices and that this will
needlessly delay further negotiations. A few may claim that their
estimating and backup papers are proprietary information. Many
will attempt to parry the negotiator's inquiries with useless
generalities such as, "That's based on our best engineering
estimates," or "You don't seem to realize that this is a highly
complex, technical item whose cost cannot be estimated
precisely. II Methods of combating these tactics will be discussed
below. (Probably the most successful approaches are for the
negotiator to convince the contractor that such information is
essential to justify any a9reement, that they may reach, to higher
government review authorlty and to make the contractor appear
unreasonable in his refusal to provide the desired data.)
Adjusting and the Owner's Position and Persuading a Close.
After he has thoroughly explored the contractor's position, the
government negotiator may find it necessary to adjust his own
position on certain important issues. He can then adopt one, or a
combination, of two different approaches in trying to achieve
total agreement: (1) he may attempt to reach tentative agreement
on each individual issue in turn and thus build up to a total
agreement; (2) he may present a total counteroffer without regard
for individual issues.
a.
Seeking Agreement on Individual Issues.
When he is using this approach, the government negotiator may
raise the issues in question in several different
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chronological sequences. Many people feel that the negotiator
should attempt to reach an agreement on the issues that are
most important to the owner before discussing the less
important matters. If agreement can be reached on these
critical issues, they argue, other contractual terms can
usually be negotiated quickly. If agreement cannot be reached
on the major issues, the negotiator can then proceed to the
secondary points and use them for bargaining purposes. Making
minor concessions will sometimes help the negotiator to obtain
an agreement on major issues.
Other people believe that the negotiator should start with the
issues that appear easiest to resolve and work up to the more
controversial ones. If an atmostphere of agreement is created
early in the negotiation proceedings, they say, the more
difficult issues that come later may be reconciled more
easily. Still other people feel that the negotiator should
start with the issues that are most important to the
contractor and relatively less important to the owner. If it
makes concessions on these issues, the owner strengthens its
own demands for concessions on later issues that it considers
more important. Many negotiators favor the technique of
starting with the first item in the contractor's quotation and
then working through the other costs, in chronological
sequence, to a discussion of profit or fee.
Regardless of the sequence he follows, the negotiator can use
tactics or strategies to good advantage here. First, he
should try to gain bargaining strength by exchanging (if
necessary) concessions on secondary issues, or issues that are
of relatively less importance to the government, for
concessions from the contractor on primary issues, or issues
that are more important to the government. Second, he should
not allow the negotiations to become stalled on a single
issue. If agreement cannot be reached on a subject, the
negotiator should suggest that the parties agree to disagree
for the moment and move on to another issue. It often happens
that if agreement can be reached on all other matters, the
bypassed issue can be quickly resolved at the. end of the
proceedings in the interests of reaching total agreement.
Third, if the parties fail to reach agreement on several
issues in sequence, the negotiator may be wise to change his
entire approach and weight the possibility of achieving total
agreement without considering individual issues. Finally, the
negotiator should be extremely careful, in moving from one
issue to the next, to make sure that both parties fully
understand the status of agreement on the current issue. For
example, is the agreement by both parties final or is it
contingent on successful resolution of subsequent issues? If
possible, of course, the negotiator should strive to secure
positive agreement from the contractor, while presnting any
concessions by the government in tentative or conditional
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terms. Most important, he must avoid making statements or
taking actions which the contractor might mistake for
agreement when this is not the case. In a situation where the
negotiator does not agree with the contractor's position but
decides to move on to another issue, compare the effects of a
negative statement such as, "Well...let's move on..." with a
more positive statement such as, III can It agree with your
position...so let's bypass it for the moment and move on...11
The contractor might read acquiescence on the owner's part
into the first statement, but misinterpretation of its
position would be impossible in the second.
In sum, whenever the negotiator is trying to arrive at total
agreement by settling individual issues in sequence, his
conduct of the interim proceedings is of vital importance. In
many respects, his negotiations are analogous to a chess game,
where, if a player conducts his middle game (the initial moves
after his opening) poorly, he cannot hope to succeed in his
end game (checkmate of his opponent). In contract
negotiations, the negotiator cannot lose on all major
individual issues and hope to reach a total agreement that
will be in the government's best interests. However, when
mutual agreement has been reached on all individual issues and
these cumulatively add up to one position, the negotiator
should not then change the rules and attempt to bargain
further by offering a total position that is less desirable to
the contractor.
b.
Seeking Total Agreement Without Close
Issues.
Individual
Regard for
With this approach, agreement is generally sought by means of
total offer and counteroffer, one of the most important
considerations being the timing of the government's initial
counteroffer. Many feel that the government should avoid
making a counteroffer unless it is absolutely a must. Two
arguments support this view. First, the party that makes the
first counteroffer usually ends up by compromising more than
the other party does. Second, the government's initial
counteroffer may be faulty -- if the negotiator commits
himself to a poor offer, which he must subsequently retract,
he loses stature in the contractor's eyes. (The points raised
here are similar to those mentioned above, in argument against
the negotiator's making flat statements of position in
discussing individual issues.) Others feel that the
government has to make a counteroffer in order to negotiate.
They agree, however, that the counteroffer should only be made
after thorough evaluation and discussion of the contractor's
quotation or proposal-and, if possible, after the contractor
has revised his original offer. In any event, opinion is
fairly unanimous that the government should avoid making a
8-66
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counteroffer too early. Owner counteroffers are tricky to
handle and can go awry, even in the hands of a skilled
negotiator.
As a general rule, the negotiator's counteroffer should be a
total offer. Moreover, it should be as conservative as
possible and permit logical and orderly negotiation to a
mutually acceptable price. In other words, it should
generally be lower than what the owner considers to be the
"lowest reasonable price" for the procurement. The weakness
of using the counteroffer is that the negotiator must always
be able to justify the price of his counter, if necessary.
Otherwise, it will appear unreasonable and arbitrary, which
will frequently lead to his being placed on the defensive by
the contractor. The negotiator should avoid 10ng-drawn-out
discussion on anyone of its elements. He should also refrain
from justifying his position by a cost breakdown, particularly
if the contractor refuses to do so on his counteroffers. (To
avoid establishing a precedent, some contractors will never
compromise on an individual item cost in their original
quotation, but they will make total price concessions without
revealing what they have cut.)
After either the contractor or the owner has made a
counteroffer, subsequent discussion should establish the
arguments for each side. Unless the basis for agreement on
any individual element is obvious, the negotiator should
consider the merit of the contractor's arguments on individual
elements before he makes his next counteroffer. After each
offer or counteroffer, it may be advisable to recess the
conference so that one party may discuss the other's position
with his negotiation team and, if appropriate, come up with a
counteroffer. In fact, as has been said before, whenever a
point of serious difference arises on any issue under
negotiation, the technique of calling a recess often has a
positive effect on the progress of negotiations. While
negotiations are recessed, both teams have the opportunity to
make a realistic appraisal of their respective positions;
after a recess they may be more disposed to make concessions
that will speed final agreements.
If, by the process of offer and counteroffer, the negotiator
can predict agreement on the midpoint of difference between
his last offer and the contractor's best price, he may make an
offer to this effect, provided teh contractor clearly
understands that the offer is not intended to serve as a basis
for further increase in the overall price. In other words,
the negotiator should propose a splitting of the difference
only when he is prepared to state that such an offer is one on
which he intends to take a firm position.
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Once the negotiator has stated his best offer or counteroffer,
he should be tactfully firm about the equity of his position
and hold to it, even though another conference may be
necessary to gain the contractor's acceptance. If the
conference must be concluded at this point, the negotiator
should make sure that the contractor respects the government's
position, though he may not be ready to accept it. In no
event should the negotiator give the impression of being
arbitrary, capricious, or desirous of reducing a price that is
fair and reasonable.
c.
Recording Developments During Negotiations.
The negotiator or someone else must keep records during the
negotiations. If the negotiator has a team at the table, he
should appoint one member to do the bookkeeping. It must be
done correctly or an offer or counteroffer may be given in
error or misunderstood. One of the most heart-stopping
experiences a negotiator can have at the table is to make or
accept an offer only to find out later that the offer or
acceptance was based on use of the wrong figures. Note taking
must not restrict the conduct of a negotiation. Tape
recorders or stenographers are certain to curtail the openess
and cooperation of the other party.
d.
Concluding Negotiations.
e.
The negotiator must be certain that a common understanding has
been reached before he terminates the negotiation conference.
If some important conditions have been overlooked or
misunderstood, the contractor may refuse to sign the contract
and it may become necessary to reopen negotiations at a later
date. It is often desirable to put the essential terms of the
agreement into writing before the negotiation conference
ends. If possible, the negotiator should get the contractor
to dictate the agreement; this will reduce the possibility of
conflict at a later date. He should take notes on the
conference and use them to help the contractor in summarizing
the agreement. Without these measures, misunderstandings may
arise, and the contractor may feel that he is being pressured
into agreement. If the contractor is unwilling to dictate the
agreement, the negotiator should do it. But he should be
careful to do it in the presence of the contractor --
especially if there has been difficulty in reaching an
agreement.
Memorandum of Price Negotiaton.
At the conclusion of each negotiation session the owner should
prepare a memorandum setting forth the principal elements of
the negotiation for inclusion in the file and for the use of
any reviewing authorities. The memorandum should be in
n-68
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sufficient detail to reflect the most significant
considerations involved in the initial or revised price. The
memorandum should include an explanation of why cost or
pricing data were or were not required.
When the Truth in Negotiations Law is applicable, the
negotiator must note the extent to which any required cost and
pricing data were not relied upon in determining the total
price objective for negotiating the modification. The extent
to which the negotiator recognized any inaccurate, incomplete,
or non-current cost or pricing data submitted by the offeror
during negotiation must be noted, including any action taken
by the government or the contractor to rectify the situation.
Explanation of any signficant difference between the total
price objective and the total price negotiated is also of
great importance.
One of the most important tests a negotiator can use during
the pressures of the negotiation session is to ask himself the
following questions:
. 0
If I make this offer and it is accepted, can I write it
up objectively as a fair and reasonable price?
o
If I accept this offer, how will it stand up to any
reviewers, when my memorandum of negotiation is
documented?
E.
A consideration of the questions before giving or accepting an
offer may help to relieve the negotiator of the immediate
pressures of the negotiation session and help him to resolve
negotiation issue more objectively.
Negotiation Tactics and Techniques.
1 .
General Techniques.
Contractors frequently use many of the negotiation tactics and
techniques listed below. The owner's negotiator should be
familiar with all of these and discuss them. He may even find it
desirable, or necessary, to use them himself in certain
situations.
a.
Making the Other Party Appear Unreasonable. A negotiation
technique that one side may frequently use to advantage is to
make the other side appear unreasonable. For example, during
negotiations one representative may make numerous small but
relatively unimportant concessions so that when a major issue
. arises, he can say: "We want to be cooperative, and we've
made a number of concessions; now isn't it your turn?" The
inference is that one party is being eminently reasonable and
the other is not - unless, of course, it is willing to
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compromise on the major issue. Or, when the negotiator asks
for additional information on a particular subject, the
contractor may flood him with irrelevant and unrelated data.
Then if the negotiator seeks further clarification, the
contractor may say: II We I ve gi ven you everyth i ng you asked
for; aren't you being unreasonably persistent with this?"
Using the same tactic when he is seeking additional
information from a recalcitrant contractor, the negotiator may
say: "All 11m trying to do is justify your position. Won't
you gi ve me the i nformati on I need to do So?" If the
contractor refuses the negotiator may argue that he is being
unreasonable.
b.
No contractor likes to go on record as being unreasonable.
Thus, when the negotiator has cumulatively built such a charge
against a contractor, he may be able to capitalize on it by
threatening (1) to take the matter to higher government
authority; (2) to inform the contractor's top management -
president, chairman of the board, and so forth that the
government considers the firm "unreasonable"; or (3) otherwise
to formalize the government's opinion in writing.
Placing the Other Party on the Defensive.
Another common negotiation technique is to place the other
party on the defens i ve. Once it is in a de fens i ve pos i ti on, a
party must either justify its initial stand, compromise, or
leave itself open to the charge of unreasonableness. And a
party that is on the defensive normally has to do most of the
talking. This raises the danger of overexposing one's
position or making a tactical blunder from which the opposing
party -- risking nothing -- may profit.
There are dangers, however, in trying to place the other party
on the defensive. The negotiator must avoid making statements
or taking action will antagonize the contractor or force him
into sustaining an unacceptable position from which he cannot
gracefully retreat. For example, a statement such as, "You're
being unreasonable; you're going to have to back down from
your price or ..." leaves the contractor with no way out of
his position -- has, instead, the effect of making him adhere
to it all the more strongly. Nor should the negotiator accuse
the contractor of bad faith, except as a last resort, since
this, again, will increase the rigidity of his position. Many
times, the negotiator can achieve a similar result by indirect
means for example, by suggesting that the contractor may
wish to take a certain action in order to avoid the possible
imputation of bad faith that others might make and that might
tend to jeopardize his firm's position on future government
contracts. But the negotiator should never fall into the
serious error of making idle threats that he does not intend,
or is not able, to carry out; this could destroy his entire
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c.
strategy. Whenever he is forced to carry out a threatened
action, he should do so-'n the knowledge that his firmness on
this occasion will strengthen his position in subsequent
negotiations.
Throwing the Blame for Inability to Compromise on Third Party.
Contractors frequently attempt to explain their reluctance to
compromise or their objections to a position offered by the
owner with some such statement as IIIld like to do that, but my
management wouldnlt let me,1I or lilt wouldn't be fair to my
stockholders,1I or IIltls against company policy. II To counter,
the negotiator must first determine whether or not the
statement is authentic. If it is, he must then determine
whether the factor that prevents the company from compromising
can and should be changed -- for example, by a direct approach
to top management. If, on the other hand, the contractor's
statement can be exposed as mere bluff, his bargaining
position is materially weakened and that of the owner
correspondingly improved.
The ownerls negotiator himself may use variations on this
technique to advantage under appropriate circumstances. He
may cite procurement regulations or policies that tie his
hands, argue that he does not have enough money to accept a
contractorls offer, or place the blame for his reluctance to
compromise on the contracting officer for the basic contract
by some such statement as, "Held never buy it; he'd simply
reject the whole thing, and weld have to start allover
again. II
One of the best ways for the negotiator to get a recalcitrant
contractor to document his position is to explain that he (the
negotiator) must fully understand this position so that he can
justify it to higher authority. This creates an impression
that the negotiator and the contractor really have the same
interests at heart. Also, in rebutting a pricing position
taken by the contractor, it is generally far better to use an
approach such as II I can justify seventy-five percent of your
figurell than to say 111111 only allow you seventy-five percent
of your fi gure, II or even worse, II 11m goi ng to knock your
figure down by twenty-five percent. II
d.
The Sugar-Vinegar Technique.
A technique that contractors often use and that the government
may also utilize on occasion is the sugar-vinegar approach.
Here, one member of a negotiation team takes an extreme
position, while another assumes the actual position on which
the team hopes to reach an agreement. By contrast, the actual
position appears far more moderate than the extreme position,
and its advocate more conciliatory than his colleague. The
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. .
. .
. . .
.. . ~
conciliatory team member is therefore able to win his
opponent1s confidence, and, since his position seems
comparatively reasonable, the chances of his being able to
secure agreement from the other party are materially
increased.
e.
Appealing to the Emotions.
A negotiation tactic that is frequently employed, with varying
degrees of success, involves an appeal to the other party's
emotions by references to patriotism, national importance, and
so forth. Appeals like this from the government are usually
more effective with a new government contractor than with a
veteran one.
f.
The Straw-Issue Technique.
As has been mentioned before, a common technique among
contractors, and one that may also be used to advantage by the
owner, is raising straw issues and then conceding on them
after lengthy discussion. Some contractors deliberately
inflate their quotations with semivisible soft spots, which
they expect the government to discover and remove -- for
example excessive overhead rates, exorbitant profit factors,
duplicate charges for scrap and salvage, inconsistent
accounting practices between government adn commercial
business, and so forth. After removing the soft spots, the
negotiator may be satisfied that he has accomplished something
and may, therefore, be less disposed to demand further
concessions from the contractor. (He also has something
tangible to show his superiors.) For its part, the company
appears reasonable and conciliatory when it agrees to
negotiate the inflated areas out of its quotation. As a
slight variation of this tactic, a contractor may make a great
to-do during negotiations about an issue which is, in fact,
relatively unimportant to him. He will argue at length, bring
in experts to support his position, recess several times to
consider -- and then finally concede a point that he intended
to concede all along. This approach builds up the
contractor1s claim that he has compromised in an effort to
seek negotiation agreement. Ultimate use is made of the
straw-issue technique when one party is able to trade its
concession as straw issue for the other party's compromise on
a real issue.
The owner's negotiator can counter a contractor's use of the
straw-issue technique by making adequate prenegotiation
preparations which effectively analyze the contractor's
quotation and reveal his true negotiation objectives, by
maintaining effective communications control, and by adhering
to a predetermined agenda during the conduct of actual
negotiations.
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g.
Tactical Use of Walkouts.
Walkouts or threats of walkouts may sometimes be used
profitably during the conduct of negotiations. For example,
if a walkout by the government leads the contractor to believe
that, unless he is willing to compromise, the government will
cancel or change the requirement or issue a unilateral price
determination under the Disputes clause of the contract, it is
certainly a successful technique. But if the walkout fails,
it may make a reconciliation between the parties difficult and
otherwise weaken the government's position because an extreme
negotiation tactic has failed.
When the negotiator feels that a walkout by the contractor is
imminent, it may be advisable for him to attempt to forestall
it. For example, he may suggest a break, with both parties
going back to thinks things over and review their positions.
At other times, however, he may think it better to let the
contractor walk out, to emphasize subsequent allegations of
unreasonableness. In either event, the negotiator should
always remain friendly and express willingness to reopen
negotiations after the contractor had had time to reconsider.
He should never panic, grow angry, or show weakness by making
unwarranted compromises.
h.
Tactical Use of Recesses.
Recesses or breaks may often be used to good advantage during
negotiations. A recess may be used to restore communications
control when a team member gets out of line; it may help to
recreate a cordial and unemotional bargaining atmosphere if
tempers flare; it may make it easier to deal with people who
have become increasingly intractable with fatigue. From the
government's standpoint, breaks may help to divert the
discussion from areas in which it is weak and take it off the
defensive. Experience has proved that after a recess
discussions very rarely start up precisely where they left
off. And, by diligent, postbreak summaries of the discussions
to date, the negotiator can often steer around sensitive areas
or issues.
i.
The Technique of Presenting Alternatives.
The good negotiator will be prepared to present alternatives,
if necessary, in order to secure bargai ni ng' agreement. For
example, alternative combinations of. cos"t.s or prices and
extensions in contract completion dates may be feasible. If
the contractor is offered his choice of $everal alternatives,
the government's position will seem. more reasonable and
flexible, even though anyone of the a-lternatives, considered
singly, may be very much to the gover.nme'i1t' s advantage.
.. .
. .
8-73
'. .,':
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j.
The Technique of Agreement and Rebuttal. The technique of
agreement and rebuttal -- "yes..but" technique -- is often a
valuable approach to negotiations. When he uses it, the
negotiator seems more reasonable and conciliatory than he may
actually be, since he is couching his disagreement with the
contractor's position in terms of agreement. And, most
important, it helps the negotiator to develop arguments that
use the contractor's own words and examples.
k.
Silence as a Technique.
Instead of trying to talk the contractor down, it is sometimes
good strategy for the negotiator to remain silent and let the
contractor do all the talking. If it is handled properly,
this psychological technique may encourage the contractor to
overreach himself or to make concessions he might not
otherwise have made.
1.
The Aside Meeting.
This technique takes place when both negotiators step outside
the busy negotiation room, which may be loaded with pressures
from both the team members and the contractor's demands, and
seek a gentlemen's private agreement either on a separate
issue or on the entire package. This is usually most
effective when both parties have had a long, arduous session
but are not too far apart on a major issue or total price.
2.
Special Tactics
Contractors.
and Techniques
with Recalcitrant
for
Use
After he has determined, through normal negotiation methods, the
best price that can be reached during negotiations, the negotiator
may feel that he now has essentially two choices: to accept the
contractor's price as reasonable or, if he considers the price
unreasonable, to request the contracting officer to issue a
unilateral price determination under the Disputes clause of the
contract. In practice, however, it is highly desirable that the
government have a much greater range of negotiating positions than
this -- if only for the reason that too frequent use of the
disputes procedure will weaken its effectiveness as a potential
negotiation device. Overuse also creates excessive work loads for
owner's personnel at the field office and at the c09nizant
procuring activity, as well as for the contractor sown
personnel. The following sections will discuss some of the
negotiation tactics and techniques that the negotiator may wish to
adopt in cases where he has determined that the contr~'~tor's price
is unreasonable, yet the contractor has refused t~ reduce this
price.
2-74
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a.
Formally Documenting
Unreasonable.
is
the
Fact that the Contractor
If he has not already done so, as a first step in dealing with
a recalcitrant contractor, the negotiator should prepare a
formal written memorandum setting forth so clearly and
objectively his contention that the contractor's cost estimate
for a change is unreasonable that it will be convincing to an
unbiased third party. This memorandum will usually include an
engineering analysis for the work required by the change,
broken down into the basic construction steps involved; the
difference between the government's and contractor's estimates
for these steps should be explained in detail. If the
cognizant auditor has recommended reductions in the
contractor's labor, overhead, or G&A rates, the specific
reasons supporting the government's position in these matters
should be included.
When he has formally documented his belief that the
contractor's estimate for a change is unreasonable, the
negotiator should then make sure that the contractor is fully
aware of the memorandum's existence. (This may be done either
sUbtly or openly and directly; regardless of the approach
used, however, the negotiator should not reveal any aspects of
the government's position that might give the contractor an
advantage in any subsequent negotiations).
This procedure is an end result of the technique of
destructive analysis referred to earlier. Mere knowledge of
the memorandum may cause the contractor to reconsider his
position and make concessions or compromises, since no
organization likes to go on record as being unreasonable. But
even if the contractor stands firm, the memorandum may be used
in connection with the technique outlined below.
b.
Pressure from Higher Authority.
Having the owner's top management convey information to the
contractor's top management (president, chairman of the board)
that the owner considers the firm to be unreasonably high in
its prices whether due to the overzealousness of its
negotiator, or because the firm must be slow and uneconomic in
its field operations, or whatever.
c.
Subtle administrative pressues can be implied related to a
growing 10s5 of faith in the relationship and suggesting a
need for closer monitoring and administering the contractor's
current operations with regard to quality control, adherence
to contract specifications, closer checking of contractors
documents and submittals and the like. Extreme caution must
be used here to insure that it is a genuine deterioration of
the relationship you are talking about and not an
J-75
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insupportable threat of blackmail which if carried out could
be shown as recriminatory and of no direct benefit to the
government.
d.
Reducing the Scope of the Changed Work
Perform.
the Contractor Will
If an equitable adjustment cannot be negotiated in the
contract time or price as a result of the change, it may be
possible to reduce the total scope of the work by deleting all
of it or its controversial parts, or awarding it to another
contractor on. a competitive bid basis, or accomplishing it
later with government or contract forces. Contractors will
argue that they cannot retain control over the changed work or
guarantee its performance if this takes place, but the
technique often is used successfully. (This decision, of
course, is a technical one, and not usually divisible from
contractors work.) The technique has the disadvantage of
increasing the government's administrative burden, but this
disadvantage may be balanced by the fact that it is completely
within the limits of the government1s authority to delineate
what it will not buy. Contractors generally hate the idea,
since it makes their job under the contract more difficult and
eliminates a source of profit for them. Sometime if the
government merely threatens to use this technique, it is
enough to make the contractor reconsider his position.
e.
Pricing the Change Work on an After-the-Fact Basis.
f.
In general, change orders should be priced as soon as possible
after issuance so that the burden of the risk of performance
will be borne by the contractor rather than the government.
But if the contractor insists on an obviously excessive price
for the change and no way of resolving the disagreement (other
than use of the disputes procedure) can be found, the
negotiator may consider allowing the contractor to complete
the change work and then conducting the negotiations on the
basis of the actual experienced costs for the work. This
decision amounts to a de-facto, cost-plus change order, is an
incentive for the contractor to maximize his costs, and
subjects the Navy to all the risks this opportunity affords
the contractor to overload the work with surplus resources.
Unilateral Change Order.
This often results in another style of de-facto, cost-plus
change order. It also has the effect of a walkout and should
be assessed for what it is; a government termination of the
current negotiation. If used or threatened it may prove
effective, but once taken will become an expensive burden on
both parties leading to further claims disputes which, in
8-76
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themselves require new negotiation, or litigation, possibly
involving the entire claims chain. The threat of a unilateral
change order is our should be an added incentive to continue
negotiation on the part of both parties. Often the negotiator
can get to the cheapest net bargain for the owner at his
level. The costly work of settling what the owner could have
settled, or the unpleasant decision of returning the dispute
to an embarrased negotiator to work out as best he can for the
sound reason that too little margin was left for lawyers to
gain anything for the owner by fighting the case. The
unilateral change order burden is, in fact, a two-way street
and contractor's negotiators will weigh the relative
advantages and disadvantages of a delayed versus early
settlement. The owner's negotiator should do likewise, and --
where possible -- in round, rough dollar estimate figures.
Then, should the range of difference between the parties
approximate the added cost burden of processing a unilaterial
change, care should be exercised not to force the contractor
into one.
8-77
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D-78
-------
DISCLAIMER CLAUSES
"This Change Order constitutes full and mutual accord and satisfaction
for all time and all costs related to this change. By acceptance of
this Change Order, the Contractor hereby agrees that the Change Order
represents an equitable adjustment to the Contract, and further, agrees
to waive all right to file any further claim arising out of or as a
result of this change. II
"This Change Order constitutes full and mutual accord and satisfaction
for all time and all costs related to this change, insofar as they are
foreseen at the time of execution of this Change Order. By acceptance
of this Change Order, the Contractor hereby agrees that the change
represents an equitable adjustment to the Contract. The Contractor
waives all right to file further claims arising out of this change
with regard to impact or ripple damages, which includes the cost of
extended overhead, idle labor and equipment, inefficiency, labor and
material escalation, and miscellaneous costs, which costs have already
been included in the cost of this Change Order. It is expressly agreed
that further claims can be filed concerning this change, in the event
that unforeseen events occur, which are beyond the control and without
the fault or negligence of the Contractor or his subcontractors at any
tier, and which demonstrably effect the performance of the work under
this Change Order."
D49
-------
-----.
SIIMPLE CHECKLIST FOR STATE CHANGE ORDER APPROVAL
A.
SCREENING - to deter.ine whether the inforBation and docu.entation provided are aufficient for detailed review.
pcovided. the ~ullentation should be returned to the contractor for additional Information.)
(If insufficient information is
1.
IDBNTIPICATION
5.
OIANGE TO SU8AGREDtENT PR ICE
Project na-
Subagreellent nullber
EPA project nUDDer
State project number
Change order nu~er
SUbagreement date
Change order date
Name. address, and telephone number of contractor
Dollar ~mount of cnange shown (zero for n~ change)
Contractor's cost breakdown adequately documented
Profit entered separately
Independent estim~te from State or it~ agp.nt Including
verification of costs for new Items
Documentation referenced, attached
unit prices in accord~nce with subaqreemp.nt documents and
regulatory requirements
Arithmetic correct
~ 2. PRIOR APPROVAL
I
c..,
0 Required frOli EPA
O>ta Ined trOAl EPA
]. DESCRIPTION OF CHANGE
6.
CHANGE TO SU8/1GREDtENT TIME
Statement of number of iays (or zero days)
Documentation (schedule analysis) referenced and attaened
1.
APPROVALS
Clear, unallblguous scope
Revised plan and specification sneets referenced
and attached
Design data and calculations attached
Change is wi th In project scope
Design Is adequate (conatructlon subagree8ents)
Increases/reduces tille sndVor cost of project
Affect on operation and lIaintenanee costs
Proper approval signatures entered and dated
t.
REASON FOR CHANGE
8.
ATTACHMENTS LISTED ANU INCLUDED
Clear. understandable atateNent
Cause of re..dial change
Reason why not In original subagree8ent
References and attached substantiating docu..ntatlon
Applicable suhagreement provisions cited
Memorandum of Negotiations
COst and pricing data attached and certified by
contractor
Change Order and Notice to Proceed
8.
DETAILED REVIEW - for approval (or d18approval) ot change order. After the recipient determines that a chanq~ ordN file is complete and in
order, the State subjects the change order to a detailed evaluation and review. The result of this evaluation is a rulinq to dflornve t"~ chanq~
order, to deny the change order, or to deny the change order pending receipt of additional information.
-------
CONTRACT
CLARIFICATION/INTERPRETATION REQUEST
DATE:
PROJECT:
PROJECT ND.
CONTRACTOR:
CLARIFICATION/INTERPRETATIDN REQUESTED BY:
REGARDING:
PLAN SHEET _OF- SPEC. SECTION:
DESCR IPTION:
--
PREPARED 8V
DATE
RESPONSE ASSIGNED TO:
o PROJECT MANAGER
o PROJECT DESIGN MANAGER 0
S'GONED
DATE
8-31
FORM 270
-------
CONTRACT
MODIFICATION (CHANGE ORDER)
INITIATION/REQUEST
DATE:
TO:
FROM:
PROJECT:
PROJECT NO.
CONTRACT:
CONTRACTOR:
KEYWORD DESCRIPTION:
IT IS REQUESTED BY OF ,THAT A CONTRACT
MODIFICATION BE INITIATED TO THE ABOVE REFERENCED CONTRACT. THE FOLLOWING INFORMATION 15 PROVIDED
AS BACKUP DATA:
1. SCOPE OF WORK:
2. REASON FOR MODIFICATION:
3. APPROXIMATE COST CHANGE TO CONTRACT PRICE:
4. WILL THE CONTRACTOR NEED ADDITIONAL CONTRACT TIME TO COMPLETE THE CHANGE IN WORK SCOPE?
DYES
DNO
CALENDAR DAYS
5. WILL THE CONTRACTOR NEED ADDITIONAL PERSONNEL TO COMPLETE THE CHANGE IN WORK SCOPE?
DYES
DNO
IF SO, TRADE(SI
NO. OF PERSONNEL
DURATION
(CALENDAR 0,11, YSI
6. HAS THE SCOPE, COSTS, PERSONNEL REQUIREMENTS, AND SCHEDULE BEEN DISCUSSED WITH THE
CONTRACTOR?
DYES
DNO
7. THE CONTRACT MODIFICATION CORRESPONDENCE WILL BE INITIATED BY:
o CONTRACTOR
DOWNER
o DESIGN CONSULTANT
8. ATTACHMENT IDENTIFICATION:
PREPARED BY:
REVIEWED BY:
""O.lI:CT "'AHAGE"
DATE:
DATE:
~'_P?
-------
PRIOR APPROVAL OF
CONTRACT MODIFICATION (CHANGE ORDER)
AND AUTHORITY TO PROCEED WITH WORK
PROJECT
CONTRACTOR
PROJECT NO.
REASON FOR CHANGE
DESCRIPTION OF WORK
METHOD OF PAYMENT (check one)
- NO CHANGE
- AT UNIT PRICE OF CONTRACT
- AT LUMP SUM
AMOUNT
- FORCE ACCOUNT
EST. AMOUNT
TIME ~XTENSION
YES
NO
NO. OF DAYS
REMARKS
APPROVAL AND ACCEPTANCE
OWN E R
DATE
ENGINEER
DATE
CONTRACTOR
DATE
8-03
REV 5/79 FORM 135
-------
CONTRACT MODIFICATION (CHANGE ORDER)
DATE:
CONTRACT MODIFICATION NO.:
OWNER:
PROJECT NAME:
PROJECT NO.
CONTRACTOR:
THE FOLLOWING MODIFICATIONS TO THE CONTRACT ARE HEREBY ORDERED: (USE ADDITIONAL PAGES IF REQUIRED)
CONTRACT AMOUNT
CONTRACT TIME ICAL. DAYS)
ORIGINAL
$
$
ORIGINAL DURATIONS
DAYS
PREVIOUS CHANGE ORDERS IADD/DEDUCT)
THIS CHANGE ORDER (ADO/DEDUCT)
PREVIOUS CHANGE ORDERS IADD/DEDUCT)
THIS CHANGE ORDER IADD/DEDUCT)
DAYS
REVISED CONTRACT AMOUNT
$
$
DAYS
REVISED CONTRACT TIME
DAYS
THE REVISED CONTRACT COMPLETION DATE IS:
. .19-
, OWNER
. .
CONTRACTOR
ENGINEER
ADDRESS
ADDHESS
ADDRESS
BY:
BY:
BY:
DATE:
DATE:
DATE:
.'.
8~a4.
FORM 273
..
-------
FIELD ORDER
DATE:
DAY:
PROJECT:
PROJECT NO.
CONTRACTOR:
CONSTRUCTION COORDINATOR:
DESCRIPTION OF ALTERATION:
REASON FOR ALTERATION:
REFER TO DRAWING SHEETS
SECTION OR DETAIL
REFER TO SPECIFICATION PARAGRAPHS
WILL ADDITIONAL DRAWINGS BE NECESSARY? DYES DNO
ASSIGNED NO. OF DRAWINGS
It is understood and mutually agreed that this form is to be used only to record minor alterations which do
not increase or decrease the contract price or change the intent of a specific provision of the contract. Any
alterations involving change to the contract price or contract requirements must be covered by a formal
Contract Modification executed by the Owner and the Contractor. A summation of these field orders will
be incorporated into a modification(s) prior to contract completion.
CONSTRUCTION COORDINATOR:
CONTRACTOR:
BY:
BY:
DATE:
TITLE:
DATE:
D-85
-:1~';::11( ..,.,rr
-------
8-86
-------
Contractor Claims
8-87
-------
LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(ViII) CONTRACT MODIFICATIONS
MODULE:
(26) Contractor Claims and Remedies
ESTIMATED TIME:
105 Minutes
OBJECTIVES: THE PARTICIPANT WILL BE ABLE TO:
o Understand what constitutes a contractor claim and the most
common causes of claims
o Understand ways of preventing claims and how to manage/
resolve disputes.
INSTRUCTIONAL MATERIALS:
o Viewgraphs/Overhead Projector/Screen
viewgraphs for participants
o Handouts for participants
- Hunt and Peck, Inc.
- Gigantic Corporation
and "hard copy" of
INSTRUCTIONAL ACTIVITIES:
o Instructor Presentation
8-88
-------
CONTRACTOR CLAIMS
AND REMEDIES
A CONTRACTOR CLAIM IS:
. Written demand or assertion by the contractor
. Seeking as a legal right
- The payment of extra money
- An extension of time
- Other adjustment to contract terms
. Arising under or relating to the contract
. Disputed or not acted upon by the owner
8-89
-------
CLAIMS MANAGEMENT
Claims management is more of an art than a science - the
art of the possible rather than the science of the predictable
- and it requires creativity, imagination, and the ability to
view the circumstances and the effects from the other
party's vantage point, as well as your own.
10 COMMON CAUSES OF CLAIMS
1 . Defects in plans and specifications
2. Untimely, unfair addressing of proble.ms
3. Inadequate inspection and construction management
4. Differing site conditions
5. Abnormal weather
8-90
-------
10 COMMON CAUSES OF CLAIMS
(Continued)
6. Ignoring delays to contractor
7. Stri kes
8. Acts of God
9. Ignoring time extensions and delay costs with change
orders
10. Not enforcing scheduling and completion provisions
CLAIMS MITIGATION TECHNIQUES
. AlE ability: CM if needed
. Adequate site/soils investigation
. Completeness of contract documents - biddability/
constructability review
. Construction scheduling
. Construction records/documentation
8-91 .
-------
CLAIMS MITIGATION TECHNIQUES
(Continued)
. Dispute management system
. Proper change order management
. Timely responses
. Knowledge of constructive notice
. Recognition of substantial completion issue
BASIC TYPES OF
CONSTRUCTION CLAIMS
8-92
-------
CHANGES
. Inevitable
. Only owner can approve
. Disputes arising from changes
. Impact/ripple damage claims
CONSTRUCTIVE CHANGES
. Definition
. Most common causes
- Contract language interpretation
- I nspection actions
- Defective contract documents
- Non-disclosure of technical information
- Constructive acceleration
. Elements of proof
- Work required beyond contract minimums
- Notice
- Change actually required
- Extra cost/time incurred
8-93
-------
WHAT IS A DIFFERING SITE CONDitiON?
(1) "FROM INDICATED"
Subsurface or latent physical conditions at the site differing
materially from those indicated in the contract.
(2) "FROM EXPECTED"
Unknown physical conditions at the site, of an unusual
nature, differing materially from those ordinarily
encountered and generally recognized as inhering in work
of the character provided for in this contract.
"FROM INDICATED"
. Latent and not obvious at contract award
. Misled by contract drawings
. Differ materially from conditions indicated
. Expressed or implied
. Contractor reliance on representations must be
reasonable
8-94
-------
"FROM EXPECTED"
. Unusual, unforseeable
. Not misrepresentation
. Differ materially from ordinarily encountered
. Contractor must expect reasonable differences
. Not included: severe weather, flooding, mosquitos,
business conditions
. Sometimes included:
- Variation in quantity
- Conditions encountered subsequent to award
DSC NOTES
Mere difficulty, hardship or financial loss is not an excuse
for non-performance or increased compensation.
The contractor's duty to perform is not discharged by:
. An earthquake that destroys the partially completed
building
. Unusual but not unprecedented rains that make it
impossible to erect a building by usual methods
a-95
-------
TO EVALUATE A DIFFERING
SITE CONDITION
REVIEW
. What do contract documents say?
. Did contractor comply with contractual obligations?
. What subsurface investigations were provided in the
contract?
SUSPENSIONS OF WORK
. Owner can suspend all or part of work
. Should give written order
. Contractor required to comply
. Contractor may not cease working beyond extent of order
. Mandates written order to return to work
. Contractor entitled to adjustment
. Contractor not entitled to profit
3-96
-------
CONSTRUCTIVE SUSPENSIONS
. Definition
. Causation
. Risk allocation clause
. Elements of proof
- "Unreasonable" delay
- On part of owner
- Time or cost impact to job
- No profit
DELAYS
. Most common problem
. Types of delay
- Excusable
- U nexcusable
- Compensable
- Concurrent
. Federal delay clause - risk sharing approach
. Impact of schedule and scheduling specification
. Notice requirement
8-97
-------
ACCELERATION
. Owner can direct under changes clause
. Order should be in writing
. Contractor owed equitable adjustment
. Deceleration
CONSTRUCTIVE ACCELERATION
. Excusable delay
. Time extension request
. Owner denial of all or part of time owed
. Contractor required to complete on schedule
. Notice requirement
. Additional costs incurred
. Equitable adjustment
3-98
-------
TERMINATION
. Termination for convenience
- Full
- Partial
. Termination for default
- Conversion if wrongful
ELEMENTS OF CLAIM ANALYSIS
. Liability
. Causation
. Damages
8-99
-------
CLAIM RESOLUTION SEQUENCE
. Mitigate costs
. Review for merit
. Review for damages
. Attempt to settle
. Third party review.
. Renewed negotiations
. Complete documentation of negotiations
. Settle through bilateral change order
MITIGATION OF COSTS
. Address claim immediately
. Reduce/a.lleviate delay
. Stop activities increasing costs
. No action is costly!
8-100
-------
TIMELY AND THOROUGH REVIEW
WHAT IS TIMELY?
. Immediately
. No one benefits from delay or review
TIMELY AND THOROUGH REVIEW
(Continued)
WHAT IS THOROUGH?
. Identify all issues separately
. Separate meritorious from unmeritorious issues
. Establish merit for each issue
. Develop strategy for each issue
. Thoroughly analyze claimed costs
. When in doubt - audit!
8-101
-------
NEGOTIATION OF ISSUES'
WHEN SHOULD NEGOTIATIONS START?
. As soon as possible
. After analysis is complete
. After facts are ascertained
WHAT SHOULD BE. NEGOTIATED?
. Details, not bottom line
NEGOTIATION OF ISSUES
(Continued)
PREPARE FOR NEGOTIATIONS
. Determine position
. Establish negotiation team
. Formulate groundrules
. Rehearse!
J-102
-------
THIRD PARTY REVIEW
. Claims consultant
- Fresh perspective
- Independent
- Confidential review
. Review merits of each issue, not owner's previous analysis
RENEWED NEGOTIATION
. Make renewed effort to settle meritorious issues
. Use unilateral change order if necessary
8-103
-------
CLAIM FILE
. Initial claim
. Claim analysis and review
. Negotiation records
. Third party review
. Resolution of claim
DISPUTE REMEDIES
. State-lead (40 CFR 33.1010, Clause 7)
- Arbitration, if mutually agreed to
- Court of competent jurisdiction
. Federal-lead (Contract Disputes Act)
- Board of contract appeals
- Federal claims court
8.,.,104
-------
ARBITRATION ISSUES
. Applies to state-lead projects
. EPA only pay for arbitration findings if:
- Findings of fact
- Conclusions of law
- Allocation of each issue
- Basis of award
- Rationale
. To assure this, must be in contract
WHEN IN DOUBT - SETTLE
WHEN UNCERTAIN - SETTLE
WHEN IN THE RIGHT - SETTLE!
8-105
-------
ft~n18'rrcc:n {.\rbftrat~on AS~uciatiori
CONSTRUCTION INDUSTRY ARBITRATION TRIBUNAL
In the Mauer of the Arbitration between
~ If. 11-l&&lH&
-and-
VILLAGE or LYHCBBORG
CASE NUMBER:
52 .110 0035-83
.
AWARD OF ARBITRATOR(S)
I, (WE), THE UNDERSICiNED ARBITRATOR(S). Mvia,. been dnipatcd in accordance wi1h
the Arbitralioa Aareemcat mtered ineo by the above-named Parties. and diieQ-
:lnd haYinl bcca duly sworn and havinl duly heard the prool. and allcptions ollhc Panics, AWARD
II follows:
1. the Village of Lynchburg ahall pay to Douglas N. Riggins
Incorporated the sua of $1,841,593.00,
2. Douglas N. Biggins, Inc., shall receive the amount of $1,135,163.00
of the sum set forth in '1 above as the trustee for the sole use and
benefit of Qualicraft Construction Incorporated, which sum shall be
paid forthwith upon receipt of payment by the Village to 1U.~1naJ
3. Interest on thesuas awarded ahall accrue at the rate of 12 1/2'
per annum from the date of this award until paid, payable as the
interest in the principal shall appear,
4. The Village of Lynchburg has constructively accepted the sewer
systems tendered by Douglas N. Biggins, Inc., and such accept-
ance shall be effective on January 13, 1983. All rights or benefits
accruing as a result of, or extinguished by, the act of acceptance
commence or end, as the case may be, on January 13, 1983, .
5. The administrative fees and expenses of the American Arbitration
Association shall be borne as they were incurred.
6. The expense. and compensation of the ar~itrators ahall be borne
as they were incurred.
7. This decision covers all claims submitted for arbitration except
for two claims specifically excepted between Bi9gins and Qualieraft.
&J~ I?di~~M A:.I-J
WILLIAM P. SCHROEDER, CHAIRMAN
DATED:
SUTE OF
) .. .
I-'
74-.13
E~~ BRU~~~~tHiA~~n~.:t.*P.\tOR
Cousn. OF
On this
day of
Jpp~3rc:d
10 me ~nown ~nd 1;n.:o\\ n to me to be: LIIe ineJi\"idu;l(s) ckscribc:d in :lnd who executed LIIcfon:;oin; insU'v-
m~nl ;lnd he ~dn.\~.lcdJ:cd to me LIIat he c:ueUlt"CI !he gme. .
EXBIBI'!' -B-
J-lUG
-------
D IFF E R I N G SIT E CON D I T ION
A CASE STUDY
CON T R ACT 0 R I S P 0 SIT ION: !BC CAuSED SeTTU NG Q=
DI SCiARG: PI PES fwD CooSEQLENT ilAJ.1AG: To
FffiCE r.'~INS
OwN E R I S P 0 SIT ION: No!BC - CooTRACT~ ~SPCJ.JSIBLE
F~ ~G: To FoRCE ~INS
FIN DIN G S :
No !BC
It-PRCFER BACKFIU. MAIERIAL
BACKFIU. WAS INSUFFICIENTLY CoMPACTED
DISCHARG: PIPING DESIGN ERRoR -
BALl. joINT PIPE INSTEAD OF RG'
RES 0 L UTI 0 N: JUG/ABLE - IN~ED CosT FoR PIPE ~1ATERI~
lNALLGiABLE - ~WffiK
DISRLPTI CJ.J
DELAY
O-lu7
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~iETHOLJS OF CONSTRUCTION
A CASE STUDY.
CON T k ACT 0 R ' S P 0 SIT ION: Ca-tERCIAL INSULATICJi
BLANKETS CAN BE UsED To r14INTAIN CmCRE1E
TEfJPERATURE AT 500 ~ING THE WIN1ER
OWN E R ' S P 0 SIT ION :
UJ.JTRACTOR' S r~1l-IOD WAS
DISAPPROVCD. CcrfrRACTCR WAS
~QUIRED To UsE HEA1ED ENa.CE~S
To ~~INTAIN CmCRE1E TEfJPERATlP£
AT 50 0 fuRING Tt£ WIN1ER
8-1u~
-------
CONTRACTOR'S
METHOD
.: " .'. II
. ..- .
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.. 1> '. -.
.. i. .- ~ ..
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BlAAKEr
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o \J N E R ' S
METHOD
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TARPED
STRUCTURE
2-Eu
-------
CON T RAe T S PEe I FIe A T ION
~ .d~1\1on to 1~e requlr..en, 01 ACI]Ot~
tear.~.ture of fre.hJy placad coacre,. I!!!!
be UlnUUled at SO deln.. '.MaheU a1BSA-
lor I ~.r1od of not 1all 'haD ftva "'1.------
At th11 U.e uapor&1'1 hau -, be 8to'l" bat
thl A"royad CODcrat. ,rot.ettaD .~11 ..
...1nu1nd for tw addhtDDal ..,.. If fen.
work 11 naoved dllrlraa t~11 a.".. '" ,.riot,
concrete prolect1on .Ult ~ raltored v11~t
dehy. (1.::1pl\..11 added.)
A C I
306
The 8Clu.I tl=~tr.1I1r. of concr.,a det~!!!
1he eff~ct1vlne~. of proll(t10D. r'K.r!!!!~
81r te.~er.tur.. or vnether tha ob1act~!!-
~yr.b111ty or Itrenath.
Since 8O.t of the heat of h r.t10n of the
Iwrdan1D concreu 11 dave 0 dur1 tiM-
hU1 3 dl"l. no he.t frGIII ou1l1da ~~i'C"8.:-1.
r.Qu1red to &81D1a10 CODcr.t. at corr.!!-
te.~lrlturl. 1f heat l8ftlratad 1D the CaDLf.te
11 lu1ub})' conurved. 'nIh hut -y ~~
a«r'ved by u.. of l"I,,181tlll blaouu 011 uofof'ed
a"rla(1I aod by 1na,,18ted '01'81 ""'.ra r.,...ted
rl"l. of for&8 18 pou1b1..
B-1l!
-------
SOME POINTS OF CONTRACT ADMINISTRATION
LEARNED FROM CLAIMS
I.
Time is Money
The suspension of work clause, and changes and changed conditions
clause directly translate delay, almost, however slight, into
contractor dollars. To miriimize the. dollar impact the following
are some items which should be considered.
A.
B.
II.
Shop Drawings - and
processed promptly.
other contractor submissions must be
Interpretation Disagreements - If a disagreement arises as to
the requirements of the contract, as soon as our position is
firm, it should be made clear to the contractor that further
discussion to consider liability does not effect the
contractor's obligation to proceed.
C.
Time Extension - Cannot be considered independently of the
suspension of work clause and the changes and different site
conditions or clauses, for extended overhead associated with
the time extension will be an allowable cost. Certain time
extensions will not result in dollar costs to the owner, e.g.,
acts of God (weather) or third parties (strikes). .
~~~~~~~in~ p~~~e p~~~~:~{s ~~r ~~~~~~~~~~e ~~~~~esP~~P~~~~~ ~
necessary procedure when the cost of an optional change may be
a factor in issuing the change or there are dollar
limitations. However, when these factors aren't present it
may be a luxury which will cost the Government. It is
particularly dangerous when there has been a bust in
specifications and the delay in authorizing the contractor to
proceed results in delays in the work. In these cases it is
best to order the change first and decide the dollars later,
unilaterally if necessary.
D.
E.
Interrelationship - Generally the interrelationship of time
extension changes, suspension of work, must be considered in
owner1s unilateral and bilateral actions.
Suspension of Work Clause
A.
Utilize Notice - The notice requirement of the suspension of
work clause should be utilized as an action signal to us to
minimize the suspention and to gather data to evaluate the
amount of dollar liability.
8-112
-------
III.
IV.
B.
Evaluating Dollar Liability - Get detailed records from
Inspectors of equipment and personnel on site and extent to
which it is used. Analyze the effect of limited suspensions
on the remainder of the work. Do both while the suspension is
in effect.
Administration
A.
Advise contractor of chain of
inspectors and staff personnel.
command and
authori ty of
B.
Maintain authority and control over inspectors and staff. Do
not allow inspectors and staff personnel to direct the
contractor.
C.
shop drawings,
D.
Establish effective procedure of handling
material submissions and correspondence.
Attempt to get meaningful schedules from contractor at outset
of the job and have them updated. (An important tool when
"time is money.")
E.
Get, where worthwhile, progress photographs.
F.
G.
Document the record.
Answer all correspondence promptly.
H.
Preserve testimony when disputes are foreseen. List all
potential witnesses and the scope of their knowledge.
Check the final release when late claims are considered and
rely on it if the claim before you is not excepted in the
release.. This is elemntary but it is not done about six times
a year.
I.
Amendment - prebid amendments are often issued to correct
mistakes, but often create them. An objective review of
amendments (counsel may help) may catch the obvious subjective
erro r .
Modifications post award
specifications when disputes
handling. Utilize counsel.
Time Extensions
modifications to
are imminent need
cl arify
careful
J.
A.
Determine entitlement - often a stricly legal question so
consult counsel. Respond to all contractor letters, avoid
evasive replies and requests for unnecessary information.
C-113
-------
VI.
v.
B.
Determining number of days -
1.
A delay on part of the work which does not delay final
completion does not entitle contractor to a time
extension.
2.
Avoid liberality on time extensions arising from changes
and owner caused delay, for time will cost money.
C.
The Complete package - consider time in the context of all
other clauses. If time extensions are reserved in changes,
make it clear that no other dollars under any other contract
provision are still open. If is also usually a mistake to
allow time without a clear statement as to the status of
dollars under all provisions of the contract.
Changes after .original completion date only entitle contractor
for time to complete the work required by the change.
D.
Acceleration claims must be kept in mind when time extensions
are denied and we press for completion.
Accord and Satisfaction
E.
A.
The complete package with trackability of all claims. In the
formal change, exchange of correspondence, or report detail
the full negotiation and liability under all applicable
causes.
Disputes
A.
The owner only knows what you tell them when a Final Decision
is sought.. Submit a complete legible package, with a
chronology that gives the whole story including what you may
think is obvious.
B.
Have all pertinent documents in usable logical order. Have
someone who can tell the story and corroborate it with other
witnesses.
('; - i ' il
(.j -4,
-------
CONTRACT CLAIMS GLOSSARY
ACCELERATION -
Ordered or voluntarily expedited
performance for the purpose of recapturing
project delay. (Advancement of original
contract date is not permissible without
extraordinary authority.)
CHANGE -
Any action that causes a revision, or
addition to the contractor's original
construction requirements.
CHANGE ORDER -
A written order signed by the Contracting
Officer, directing the contractor to make
changes under the power of the Change
Clause which authorizes the contracting
officer to make changes (unilaterially)
without the consent of the contractor, with
which the contractor must comply and
proceed.
CLAIM -
A contractor's demand for increased
compensation because of an alleged
constructive or formal change, an express
contract clause, or both. A claim exists
when the following criteria exists:
2.
A request for an equitable ajustment
has been made including a written
request on behalf of the contractor.
The request for an equitable adjustment
is for money, adjustment of contract
terms, time, or other relief.
1 .
3.
The request is in dispute, or
unresolved after a reasonable
its review and disposition
Government, and
remains
time for
~ ~e
4.
For which a Contracting
decision is demanded.
Officer1s
CONSTRUCTIVE CHANGE -
Contractor accelerates, in the absence of a
direct order to accelerate, under force of
circumstances which have the same impact as
a specific direction to do so.
A change based on owner conduct, including
actions or inactions, which is not a formal
written change order but which has the
CONSTRUCTIVE ACCELERATION -
[-115
-------
effect of
perform work
to, that
contract.
requiring the contractor to
different from, or in addition
prescribed in the original
CONTRACT MODIFICATION -
Any unilateral or bilateral written
alteration of the contract involving
specifications, contract period, delivery
date, price, quantity, method of work, or
provision of an existing contract,
accomplished under proper contract law
authority and/or appropriate contract
clause.
CONTRACTING OFFICER'S -
DECISIONS
End action by Contracting Officer after
informal processes of settling dispute have
been exhausted. Is based on his review of
available facts and the advices of his
legal and technical advisers. Included is
a statement of facts, a statement of
contractor's claim, references to pertinent
parts of the contract, and how the parties
agree or disagree. The decision is a
prompt, clear, complete, and final
statement setting forth the basis on which
it was made including notice to the
contractor of his right to appeal under the
disputes clause.
CONTRACTOR'S APPEAL -
Procedure for seeking relief from adverse
claims decisions from the Contracting
Officer and beyond.
DELAY -
A judgmental or calculated expression of
the severity of disruptive action which
affects or impacts original contract work.
Slippage in the contract completion date or
elements of project operations caused by
action or inaction by the owner, resulting
in added cost for continuing overhead and
the like.
DEGREE OF DISRUPTION -
EXTENDED OVERHEAD -
Disruption is the additional effort in
performance of the basic contract work by
the contractor, resulting from owner or
contractor actions or inactions which
interfere with, or restrict, performance
efficiency causing added cost.
Imprecisely used terminology which attempts
to quantify contractor's idled managerial
DISRUPTION -
8-116
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IMPACT COSTS -
costs for keeping the job or operations
open during compensable delay periods when
full production was not achievable. Should
not include idled direct resource costs
which are compensated separately but does
include contractor's overheads and related
expenses not borne by direct work activity.
Unproductive cost increases in contractor's
original operations attributable to owner
caused changes.
INTEREST EXPENSE -
A contractor's cost
use of contractor's
finance change work.
of borrowing funds or
equity capital to
LIQUIDATED DAMAGES -
Reasonable damanges for possible breach,
preset and agreed on when a contract is
made, where such damages are difficult or
impossible to estimate accurately.
Distinct from unenforceable penalty damages
designed to deter a contractor from
breaching his contract and to punish him
should the determent not prove effective.
Owner must be careful to estimate and set
reasonable damages.
A quantification of the degree of
disruption expressed in additional minutes
or percentage per work-hour. For every
hour of original contract work planned
there would be assigned a certain number of
minutes or percentage as the extra time it
took to do the work because of a change.
RATE OF DISRUPTION -
REASONABLE COST -
An equitable cost which does not exceed
what would be incurred by an ordinary,
prudent contractor performing under normal
conditions. (See Specific Cost.)
REQUEST FOR CHANGE -
PROPOSAL
Solicitation letter asking the contractor
for a price and time submittal which
defines and justifies the magnitude of his
request for equitable adjustment or claim.
REQUEST FOR EQUITABLE -
ADJUSTMENT
Contractor's demands for increases in the
contract price based on events which
allegedly fall within the coverage of
express contract provisions.
3-1i7
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EXERCISES FOR CLAIMS
Hunt and Peck, Inc., entered into a contract with the EPA to
construct an addition to an equipment wash rack at the Worst Site. The
jOb was to be completed within 70 days from the notice to proceed. The
contract contained the liquidated damages clause at the rate of $30 per
day for each day the contract ran over the completion date. The
contractor was required to submit data and secure the EPA's approval.
Hunt and Peck received notice to proceed on September 18, 1975. Pumps
required for the jOb were ordered on November 3. The completion date was
set at November 27, 1975~ Actually the contract was not completed until
January 11,1976, 115 days afterward.
Hunt and Peck produced the following schedule as a defense that some
of the delay was beyond the control of the contractor:
Submission of technical data by the
contractor and approval of submission
Review and approval of technical data
by EPA representatives
27 days
Order two pumps from contractor suppliers
Subcontractor issues order to suppliers
1 6 day s
3 days
Shipping time for delivery of pumps
Extra time for supplier to ship
1 4 day s
35 days*
12 days
Time required to ship, unload at site
and install pumps
8 days
TOTAL TIME ELAPSED
115 days
*12 days was the normal time required, 23 days was due to a strike at the
contractor's plant.
The contractor pointed out that 23 days of the delay were caused by a
strike at the plant of a supplier and, because the pumps were manufactured
to specification, it was too late to go to an alternate supplier. The
contractor also considered the EPA review of the paperwork took too long
in consideration of the short period of time the contract was to run. The
EPA representatives agreed that perhaps 20 days might have been sufficient
for the review of the technical papers.
What damange, if any, must the contractor pay?
J-l1~
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REQUEST FOR PROPOSAL (RFP) -
SPECIFIC COST -
SUPPLEMENTAL AGREEMENT -
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Contractor submitted, owner solicited,
document used for analysis, evaluation, and
negotiation of a contract or modification
to a contract.
An equitable cost incurred by a particular
contractor under the circumstances of his
contract at whatever level of productivity
and economy would be typical for him (See
Reasonable Cost).
A bilateral modification to an existing
contract which is accomplished by the
mutual action of the parties (Compare to
Change Order).
8-118
-------
Gigantic Corporation had a $500,000 firm-fixed-price contract with
the EPA to clean-up a site. When the project was 75 percent completed,
the construction stopped. After 30 days the EPA terminated the contract
for default of the contractor. The contractor appealed to the EPA stating
that an inspector had told him prior to the work stoppage that the EPA was
going to terminate the contract for its convenience because the site was
to be deleted from the NPL. Consequently, Gigantic ceased work on the
project. If this allegation is found to be true, would this be a valid
reason for Gigantic to stop construction?
8-120
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Project Performance
9-1"
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LESSON WORKSHEET
COURSE: MANAGEMENT OF CONSTRUCTION IN THE SUPERFUND PROGRAM
UNIT:
(IX) PROJECT PERFORMANCE
MODULE: Project Performance
ESTIMAT.ED TIME: Reading Assignment
OBJECTIVES: THE PART~CIPANT WILL BE ABLE TO:
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o List 10 elements that must be considered prior to startup
o Understand 3 methods used to optimize performance following
startup
o Assess the components that determine acceptance or rejection
of the project performance
o List requirements for control of continuing O&M activities
INSTRUCTIONAL MATERIALS:
o "Hard copy" of viewgraphs for participants
,INSTRUCTIONAL ACTIVITIES:
o Reading Assignment
9-2
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PROJECT PERFORMANCE
. Startup
. Post startup optimization
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. Acceptance/rejection
. Warranties
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. Operation and maintenance~;
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STARTUP
PRESTARTUP CHECKOUT'
. Completion of critical punchlist items" '.,'.
. O&M manual preparation
. Identification of O&M staff
. Training of O&M staff
- By designer
- By vendor
S-3
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STARTUP
PRESTARTUP CHECKOUT (Continued)
. Manufacturer's certificates of installation
. Equipment setup '"
~ Adju$tments~, " ~
~ Aligmnents . . ~
-:-. Lubrication
...- Functional testing
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pFtESTARTUP CHECKOUT (Continued)
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- Loop checks
- Set points
e" Electrical supply
. Sampling and testing procedures
. Recordkeeping procedures
9-4
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POST STARTUP OPTIMIZATle'N
.
Equipment adjustments
. I&C debugging,
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. Evaluation of equipment performance
- Test burns
- Monitoring of POHC concentrations
- Destruction/removal efficiencies
- Effluent quality (air, water, soil, etc.)
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9-5
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,.-Compliance with plans and specifications
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- Evaluation of system performance
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;J~emANeE/R!EJ ECTI'ON (Continued)
. Comformity to performance and operations requirements
, ,~ applicable to t~f;t, -project
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- If., necessary;,:a,c;.orre~~~ye action...report if the project
. ,Ptitrfqrmance stan~dard~ are not met including:
+"An analysis of the cause of the failure to meet the
"<~'perf()rrnar:1ce standards
..',f:~~timat~. of the nature, scope and cost of corrective action
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9-6
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WARRANTIES
. Equipment to be covered
. Type of warranty
- Expressed vs implied.
- Warranty bonds
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OPERATION AND M~INTF~A~AE
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- Routine r~adings
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! . Maintenance logs
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EaUIPMENT STARTUP & TESTING LOG
PROJECT
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CONTRACT NO.
CONTRACTOR
PAGE - OF -
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EQUIPMENT DESCRIPTiON
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OPERA T9R 'tRAINJ,~G ~EP,ORT
REPORT "'0-----
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PAOJEdr:
DATE
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LOCATION O'F INSTRUCTION
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JOB
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, OA'GIIIIAL to R&COIIIO$ OENTEfII
2 CO".ISRESIO!NT ENGINEER.
REV OCT 82
SF-S.9
9-1()
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