§109-06 CONTRACT PAYMENTS

September 2017 New York State Department of Transportation Page 1 Contract Administration Manual

I. GENERAL Contract payments will be made monthly when the amount of work completed equals 5% of the contract amount or $1,000, whichever is less. This limit applies to any contract payment, not just the initial one. At the Contractor's request, semimonthly (biweekly) contract payments may be rendered provided the value of the work performed in a two week interval is in excess of $50,000. Semimonthly contract payments should be made when the amount of work completed meets the dollar amount threshold on a consistent basis, not just on a single payment. A. Progress Payments A progress payment is a payment made for a portion of the work under a contract pay item when the specification identifies portion(s) of work to be accomplished, and provides for progress payments to be made as identified phase(s) are completed. A monthly contract payment is not a progress payment. Review contract pay item specifications with progress payment provisions included under Basis of Payment. Special specifications or contract Special Notes may add, delete or modify provisions for progress payments. Do not make any payment until the work under a contract pay item is complete, except when progress payment provisions are included in the contract pay item specification. B. Lump Sum Items Lump sum (LS) items pay for work which may extend over multiple contract payment periods. The specifications for some LS items include specific schedules for making progress payments. Only make progress payments as in accordance with the specification. C. Certified Payrolls Review Certified payrolls prior to processing a payment. Because the Contractor must prepare the certified payrolls after they actually have been paid, certified payrolls are generally received from the Contractor at least a week after their payroll period end date. This lag period, coupled with the possibility that the Contractor and all subs do not have the same payroll end date, would unreasonably delay contract payments if the receipt of all certified payrolls for the contract payment period was required from the Contractor and every subcontractor prior to processing the payment. Owner/Operators are not employees of the Contractor (they are a business with no employees) and are not required to submit certified payrolls. Owner/Operators may be listed on payrolls (Contractor or others) for the purposes of capturing hours for civil rights reporting. In order to not unreasonably delay contract payments:

• Ensure that receipt of certified payrolls lags not more than 2 weeks behind the payroll end date, and the lag in receiving certified payrolls remains consistent. As long as the Contractor is submitting certified payrolls regularly with a consistent lag period, continue to process contract payments.

• Resolve delays or growing problems in receiving certified payrolls by holding a contract payment until all the certified payrolls are received.

• If the Contractor has made documented, reasonable efforts, but is having difficulty getting certified payrolls from subcontractors, withhold the work by the subcontractor from the contract payment and do not process payment for the subcontracted work until the certified payrolls are received. This may require a correction DWR to reduce authorized quantity of the subcontracted contract pay item(s) for the current payment, and another correction DWR to re-authorize the quantity.

• If necessary, meet with the Contractor and/or subcontractor to discuss the need to provide certified payrolls and determine if Regional Construction Group or Office of Construction assistance is needed.

D. Material Certifications The Contractor must provide material certifications for all items prior to payment of the item in an Estimate. Items that are missing material certifications are termed Status “B” in Site Manager.

§109-06 CONTRACT PAYMENTS

September 2017 New York State Department of Transportation Page 2 Contract Administration Manual

E. Force Account Estimates A payment can be made on an a Force Account Estimate item, provided that a Weekly Labor Summary (MURK 21) or other appropriate MURK documentation that verifies costs has been submitted, and the records have been reviewed. Estimated payments should not be made on the basis of approximated percentage of completion. II. PROCESSING CONTRACT PAYMENTS SiteManager generates, tracks and records approvals for contract payments. Establish a contract payment schedule with the Contractor at the beginning of the contract. Consider the Contractor’s payroll period and the timing required to provide weekly certified payrolls. Contract payments may be delayed at the Contractor’s request if significant work is scheduled to be completed or a payment milestone will be met in a few days. A Contractor’s request to delay a contract payment should be requested in writing, or documented in the Engineer’s Contract Diary. Contract payments should not be delayed more than a few days for semi-monthly payments nor more than a week for monthly payments. Contract payments will not be delayed to facilitate a Contractor’s avoidance of taxes or other judgments. A contract payment is termed an Estimate in Site Manager. The Begin Date of Estimate 1 is the contract award date. The Begin Date of each subsequent Estimate is the day after the end date of the previous Estimate. Mobilization is paid in the first contract payment for any item of work other than mobilization. A. Contract Payment Preparation Prepare and check the contract payment documentation, and submit the Estimate within 7 days of the close of the period. If the Contractor does not provide all documentation (material certifications, payrolls, etc.) required to make a payment, notify the Contractor immediately. Refer to Site Manager QRG 109-06 Estimate (Generate/Review/Process) for detailed instructions on running Estimates. During the contract payment period, work completed by the Contractor is recorded on DWRs. Verify that all DWRs needing to be included in the Estimate have been authorized. Create a Payment DWR (typically generated by the Office Engineer or EIC) to record LS percentages, WZTC, corrections, progress payments, etc. Do not authorize the Payment DWR until the Estimate has been generated and issues resolved. Ensure any partial payments (stockpiles in SiteManager) made were entered into Site Manager and saved. They will show as a line adjustment (previous payment) on the CONR 22. Review Fuel, Asphalt and Steel Price Adjustments to determine if payment is warranted. If payment is warranted, record amount on Payment DWR. Check for quantity overruns (Status “A”) and determine if the FCP item can be used to pay for Status “A” quantities. Determine if additional material certification(s) are needed to pay for Status B quantities. Check BO Report CONR 22 to ensure that a biweekly payment is greater than $50,000. If an individual category is negative (even if the total Estimate is positive), contact the Office of Construction for assistance before submitting the Estimate. B. Statement of Quantities Used, Form CONR 22 Form CONR-22 (Exhibit 109-06A) is produced by BO Reports, and contains a tabulation of all contract pay items, partial payments and charges to the Contractor, grouped by Category (fiscal share) and listed in sequence number order within each fiscal share, together with the quantities and dollar value reported during the contract payment period and the totals completed to date. Provide a copy of the CONR 22 to the Contractor for review of quantities. C. Explanation of Charges to the Contractor A "Charge to Contractor" is a payment deduction, assessed against the Contractor for failure to fulfill a contractual requirement.

§109-06 CONTRACT PAYMENTS

September 2017 New York State Department of Transportation Page 3 Contract Administration Manual

1. Contract Pay Item Related Charges An example of an item related charge is a deduction for Basic Work Zone Traffic Control in accordance with Section 619. Record a negative percentage of the LS amount for contract pay item on the Payment DWR equal to the amount being charged the Contractor. Enter "Charge to Contractor" under Remarks. Care must be taken to not inadvertently pay the Contractor the full LS amount at contract completion. If entering a negative percentage of the LS amount is not possible, use a 696 item.

2. Charges

Charges may be assessed against the Contractor. To track these charges, an item number has been created for each. To charge the Contractor, use the appropriate item number below. 696.01 Engineering Charges 696.02 Liquidated Damages 696.03 Credits and Royalties - Other charges not listed above.

D. Verification of Prompt Payment and Civil Rights Reporting The Contractor must make payments to Subcontractors and D/M/WBEs resulting from Estimates must be promptly. Prior to running an Estimate, verify that payments from the previous Estimate were made, and receipt of those payments was acknowledged in EBO. Verify that monthly employment utilization data for the Prime and any Subcontractors that worked in a given month were entered into EBO by the 10th of the subsequent month. Verify that monthly Training Progress Report for any Apprentice/Trainee paid under Section 691 was submitted. Do not make further payments if payments to Subcontractors and D/M/WBEs from the previous Estimate have not been made and entered into EBO. If a payment has been entered, but the Subcontractor or D/M/WBE has not acknowledged the payment, contact the Regional Compliance Specialist for assistance. E. Approving Estimates The Office Engineer/Resident (Asst PM role) will approve the estimate, followed by the EIC (PM role) will approve the estimate. The Estimate is then automatically transferred to Main Office Accounting for processing and approval. Main Office Accounting will send the payment request to the Office of the State Comptroller (OSC). State payments to contractors on a construction contract are subject to interest (paid to the Contractor) when not made within 30 calendar days after "receipt of an invoice". Because the Department prepares the contract payments for construction contracts, and does not receive an invoice, the Estimate generation date is the Merchandise/Invoice Received (MIR) date. The next Estimate cannot be generated until the previous one is approved by OSC. An Estimate CANNOT be run for an estimate period ending after the current contract completion date. F. No Payment on Contractor's Non-Compliance A contract payment may be withheld for non-compliance with contract requirements. (Non-compliance with safety and health, EEO, D/M/WBE, environmental or any other contract provisions.) This provision may be invoked by ending a contract payment period and holding the contract payment until all non-compliance issues are resolved. If this method is used, delete the Estimate in SiteManager, if necessary, and regenerate the Estimate in order to correctly define the MIR date as the date the non-compliance issue is resolved. SiteManager defines the MIR date as the date the Estimate is generated. If the Estimate is generated, held, and then released later, the Contractor may inappropriately receive interest on the contract payment amount, based on MIR date established in SiteManager when the Estimate is generated. This provision may also be invoked by not ending a contract payment period until all non-compliance issues are resolved. If this method is used, it may be more difficult to release payment when the non-compliance issue is resolved, as the contract payment period will have to be ended at a logical point, such as the end of a work week, and then the payment processed.

§109-06 CONTRACT PAYMENTS

September 2017 New York State Department of Transportation Page 4 Contract Administration Manual

G. Pending Change Orders If a change order is still pending on the Contractors last day of work, or on the current contract completion date, process a contract payment to make payment for work included in the CO as soon as the CO is approved. If a time extension has been approved by the DCEC on behalf of the Commissioner, but the CO is still pending with OSC at the end of a contract payment period, end the payment period on the current contract completion date and process an Estimate for the work completed. H. Administrative Time Extensions The last day of the contract payment period cannot be after the current contract completion date. Each Estimate must have a unique date in SiteManager, later than the previous Estimate. In order to process an Estimate after the current contract completion date an Administrative Time Extension must be approved, as a SiteManager work-around. (See CAM §104-02.VIII.A.) III. CREDITS OR ROYALTIES BY CO Work item credits or royalties from the Contractor will be shown by replacing the existing contract item(s) with new item(s) at agreed prices. This substitution must be accomplished through the processing of a Change Order. When a credits or royalty has no relation to an individual pay item or unit of measurement, the Office of Construction should be consulted as to the procedure to obtain the credit. ASSOCIATED SITEMANAGER QUICK REFERENCE GUIDES QRG 109-06A Estimates (Generate/Review/Process) QRG 109-06B Fuel and Asphalt Price Adjustments EXHIBITS A Sample CONR 22 Status A-B B Sample CONR 22 Statement of Quantities Used

September 2017 New York State Department of Transportation Exhibit 109-06A1 Contract Administration Manual

September 2017 New York State Department of Transportation Exhibit 109-06A2 Contract Administration Manual

September 2017 New York State Department of Transportation Exhibit 109-06B1 Contract Administration Manual

September 2017 New York State Department of Transportation Exhibit 109-06B2 Contract Administration Manual

September 2017 New York State Department of Transportation Exhibit 109-06B3 Contract Administration Manual

September 2017 New York State Department of Transportation Exhibit 109-06B4 Contract Administration Manual