104.13 Construction Inspection Guidance for Sec 104

Additional Information

Construction Value Engineering Change Proposal (C-104)

104.13.1 Site Conditions and Changes in the Work (Sec 104.2 through Sec 104.6)

Sec 104 establishes conditions under which alterations in the contract may be made.

104.13.2 Value Engineering Proposals (Sec 104.6)

Value Engineering (VE) is a systematic, organized approach to obtain the optimum value for each dollar spent. It is the application of recognized techniques to identify the function of a product or service, establish the value of that function, and then to provide that function at the lowest actual cost. Ideas that merely cost less initially, but add to the future costs of maintenance and operations, are usually unacceptable. For more information, refer to EPG 130 Value Engineering.

Specification Provision

VE is a provision of Sec 104.6 that provides contractors with a monetary incentive to participate in these cost saving techniques. MoDOT personnel should be knowledgeable of this provision and encourage contractor participation. All VE submissions must be processed as quickly as possible in order to prevent construction delays and provide the greatest savings. The following steps are needed for evaluation and/or approval of a contractor's VE proposals and changes:

Figure 104.13 Construction VE Flow Chart

This process describes the review and evaluation of Value Engineering Proposals (VEP). It includes Value Engineering Change Proposals (VECP) and Practical Design Value Engineering Change Proposals (PDVECP).

Concept Proposal

• Contractor proposes idea to reduce cost or time to the resident engineer. This is an optional approach that will allow the contractor to determine whether the concept is acceptable before committing a large design effort to developing specifics of the proposal.

• Contractor develops initial written proposals (including Form C-104) and submits to the resident engineer who sends advance copies to the District Construction and Materials Engineer, the project manager, the Division of Construction and Materials the Engineering Policy Administrator and FHWA (for full oversight projects). The proposal including all supporting information may be distributed electronically.

• Resident engineer submits written recommendations on C-104 form to the District Construction and Materials Engineer and the project manager within 2 days of receipt.

• The district engineer recommends approval or rejection and submits the C-104 form to the Division of Construction and Materials within 5 days of receipt.

• The Value Engineering Administrator and FHWA forward recommendations to the Division of Construction and Materials.

• The Division of Construction and Materials will forward the C-104 form to the FHWA for their signature. The resident engineer notifies the contractor in writing within 10 days of original submittal whether the concept was approved or rejected. If rejected, reasons will be included.

Contractor initiated Value Engineering Change Proposals (VECPs) and Practical Design Value Engineering Change Proposals (PDVECPs) are handled in accordance with Sec 104.6.

VECPs provide a product of equal or improved quality by reducing the project’s total cost, improving the project’s safety, or decreasing the time required to complete the project. This proposal is initiated by the contractor (using the VE Change Proposal) who receives 50% of the savings associated with the proposal should it be approved by MoDOT.

A PDVECP may provide a product of lesser value, use an existing item in place, or underrun contract items. The PDVECP shall not adversely affect safety or function of the final product. This proposal is initiated by the contractor, using the VE change proposal who receives 25% of the savings associated with the proposal should it be approved by MoDOT.

On Federal Projects, if the VECP or PDVECP will reduce the total DBE dollar amount as stated on the DBE Identification Submittal form in the contract, the contractor shall indicate how this amount will be replaced with other DBE participation. If DBE replacement is not possible, the contractor should submit Good Faith Effort documentation to the Construction and Materials Division.

All reasonable documented engineering costs incurred by the contractor to design and develop a value engineering proposal shall be reimbursed and subtracted from the savings of the construction costs. All costs incurred by MoDOT to review and implement the VECP will be at the Commission’s expense. For example, a contractor submits a VECP with a reduction in construction costs of $100,000. The documented engineering costs for the proposal total $20,000. The actual net savings are determined by subtracting the engineering costs ($20,000) from the reduced construction cost ($100,000). In this example, the net savings is $80,000 that is split between MoDOT and the contractor using either the 50/50 or 75/25 ratio dependent upon the type of VE approved.

For any questions or to request a VE study, contact ValueEng@modot.mo.gov

Final Proposal

• When the contractor submits the final proposed change, it must include all items required by Sec 104.6.1. It should be submitted to the resident engineer who then sends advance copies to the district, the Value Engineering Administrator, FHWA (for full oversight projects) and the Division of Construction and Materials. The proposal including all supporting information may be distributed electronically.

The contractor may submit a concept proposal (Form C-104) to the resident engineer with copies to the district office

• The resident engineer will coordinate all arrangements for review of the proposal. After evaluation, the resident engineer will submit to the district construction and materials engineer a recommendation for approval or rejection by the district engineer on the C-104 form.

• The Division of Construction and Materials will forward the C-104 form to the FHWA for their signature. The Division of Construction and Materials makes final written decision regarding approval of VEP. A signed VEP is returned back to the resident engineer. A copy of the final VEP is kept by the Division of Construction and Materials and is logged into the VEP database.

• The resident engineer will notify the contractor within the proposed change deadline and will prepare and submit the necessary change orders. If the proposal is rejected, the resident engineer notification to the contractor must include the reasons for rejection and copies sent to the District, the Division of Construction and Materials and the Value Engineering Administrator.

• Change orders will include a copy of the approved change proposal (C-104 form), supporting cost savings data, any applicable engineering cost data and all applicable review recommendations.

• Acceptable construction VE changes will be utilized in the design of future applicable projects and applicable standards. It will be the responsibility of the Value Engineering Administrator to initiate applicable specification and design standard changes.

• Payment will be made in accordance with Sec 104.6.

• To formally close out the VEP, all involved parties (Bridge, Design, Field office, etc) should be notified of the outcome and results. The proper amount should be entered into the database maintained by the Division of Construction and Materials.

104.13.3 Maintenance of Traffic Operations During Construction (Sec 104.7)

Sec 104 establishes the contractor's and MoDOT's obligations with respect to maintenance of traffic.

Be alert to special problems involved in traffic handling. Make recommendations to the district engineer when changes appear to be justified.

The engineer mentioned in Sec 104.7 shall be the district engineer. All requests under this specification shall be referred to the district engineer with the resident engineer's recommendations.

104.13.4 Rights in Use of Materials Found on the Work Site (Sec 104.9)

Standard Specification Sec 104.9 permits the contractor, under certain conditions, to crush rock encountered during grading with the resulting crushed material to be used as aggregate for the project.

The district may normally grant written approval to the contractor without consultation with Construction & Materials. A copy of the approval letter should be sent to Construction & Materials for informational purposes. If unusual conditions or circumstances are involved, or if the contractor proposes to produce crushed material for ultimate use off the project, the district's recommendation should be sent to Construction & Materials for review before granting approval.

The following provisions should be considered in granting approval for requests to crush material:

a. The shape and extent of removal and the condition in which rock slopes are to be left if approval is given to remove rock outside normal slope lines.

b. Replacement material generally is to come from outside right of way limits and out of sight of the roadway if at all possible. If the areas can be seen by traffic on the roadway, they must be left in a neat, workmanlike and pleasing condition so that no future beautification work will be necessary to hide an unsightly condition.

c. Excess excavation material may also be used for replacement purposes.

d. Back slopes should be flattened to obtain replacement material only if resulting slopes will serve the roadway as well as plan slopes. Additional seeding, fertilizing and mulching which results from use of flattened slopes must be at the contractor's expense.

e. There should be no additional payment for overhaul as a result of the contractor's proposal.

f. The contractor should furnish satisfactory lease agreements to cover any area outside the right of way limits that is proposed for securing replacement material.

g. All work under the proposal is to be done at no additional cost to the state or federal government.