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Section 2: Change Order Approval Authority

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Policy

A CO is approved only after signed with the signature authority listed in the following table ‘Change Order Signature Authority’ (signature authority for highway improvement contract COs detailed in the Contract Management Manual, "Contracting Authority").

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Change Order Category:

Signature Authority:

Bilateral CO less than $50,000

Area Engineer (AE)

Bilateral CO less than $300,000

District Engineer (DE), Deputy District Engineer, District Director of Operations, District Director of Construction, Construction Division Director, Construction Section Director

Unilateral CO less than $300,000

DE

Interim adjustment CO less than $300,000

DE

CO $300,000 or greater

Assistant Executive Director (AED), Engineering Operations (EO)

Interim adjustment CO $300,000 or greater

AED, EO

CO changing project limits, regardless of amount

AED, EO

CO that resolves termination cost to contractors

AED, EO

CO that changes limits or roadways on district-wide CSJ projects (i.e., CCSJ: 09xx-00-xxx)

AED, EO



Follow the signature authority in 'Change Order (CO) Signature Authority' for COs that settle disputes. While the signature authority listed above may not be delegated further, the district delegation allowed is at the discretion of the DE. Adhere to district policy and procedures in the review and approval of COs that may be approved at the district level.

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Federal Letter of Authority (FLOA) Federal-Aid Projects

Time extensions (TEs) on FLOA projects must be approved by the Federal Highway Administration ( FHWA) for the determination of federal participation. Verbal concurrence (documented) from the FHWA is satisfactory.

COs on FLOA projects are categorized as either major or minor as defined in the table below. Major COs on FLOA projects are not approved for federal participation until the CO is signed by the FHWA. Identification of the funding source is needed in order to properly request reimbursements from the FHWA.

Minor COs on FLOA projects do not require FHWA approval, either written or verbal, prior to beginning of work. However, FHWA does require approval of minor COs (i.e., signed CO) before the project is completed.

Work on all FLOA COs should be discussed with the appropriate FHWA Area Engineer prior to approval.

Use the following table to determine if the CO is major or minor:

Anchor: #t070004Major/Minor Change Orders for FHWA Oversight Projects

Type of Change

Scope of Change

Major

  • reduces the geometric design or structural capacity below project design criteria (any reduction in geometric design which would normally have required a design exception)
  • increases the contract by 25% of the original contract or by $300,000 whichever is less
  • changes project limits
  • any change in the Traffic Control Plan ( TCP), which reduces the capacity as shown on the plans for the through traffic or the traffic on major cross streets
  • settlement of a dispute* or
  • changes the access on a controlled access highway

Minor

Everything not described above.

NOTE: *For additional information see Chapter 8, Disputes and Claims.



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State Letter of Authority (SLOA) Federal-Aid Projects

Assume FHWA oversight responsibilities on State Letter of Oversight Authority (SLOA) projects. Use the Federal-Aid Policy Guide to determine federal participation for TEs and COs. CO work on SLOA projects is approved in accordance with Policy.

Federal Participation

The Federal Project Authorization and Agreement (FPAA) must reflect accurate project limits. For COs that change project limits, include detailed drawings showing the new project limits.

Federal-aid funds may be used to participate in COs which are:

  • in conformance with federal and state laws and
  • allowed by the Federal-Aid Policy Guide (CFR-23) or
  • in compliance with an FHWA policy or procedure.

Federal-aid participation may be granted if:

  • the work on the CO did not adversely affect the public and
  • the department acted in good faith and did not willfully violate a federal requirement and
  • the work was performed in full compliance with federal and state laws and
  • the federal participation does not exceed the cost that would have been incurred had full compliance been achieved and
  • the work was performed according to the contract.

Federal Non-Participation

Examples of COs not eligible for federal participation are:

  • work performed prior to the “effective date” provided in the Federal Letter of Authorization.
  • work performed outside the project limits, unless the additional work is an emergency, is to provide a transition at the existing project limits, is covered by an approved "Public Interest Determination" and is approved in writing by FHWA prior to beginning work.

Examples of individual contract items not eligible for federal participation are:

  • work performed by State forces or other “non-competitively bid” work unless covered under an approved "Public Interest Determination."
  • completed work that is determined not to be in substantial compliance with the contract
  • materials that do not meet specifications (federal participation may be allowed for the reduced price of materials determined to serve the intended purpose of the contract. Accept for federal participation minor deviations at the full price of materials.)
  • additional time or cost caused by unacquired right-of-way or incomplete utility adjustments
  • purchase of unused contractor materials placed in State stock (If the material is subsequently used on another federal-aid project, charge the material cost to that project.)
  • negotiated prices that are determined to be unjustified
  • work done for the convenience of the contractor
  • unaudited claim settlements, unless the audit requirement is waived in writing
  • contract work paid through another means, such as "Incidental Construction."
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State Funded Projects

COs on state funded projects are approved in accordance with the signature authority provided under Policy. CO work may not begin until either written or verbal approval is obtained.

Extending or Adding Project Limits to the Contract

Districts may extend or add project limits without administrative approval only if all of the following conditions are met:

  • transition or tie-in work is less than 1,500 feet
  • the work has a value of less than $50,000
  • no changes made to unit bid prices
  • the scope of work remains the same
  • the funding category remains the same
  • no new CSJs are required.

If all the above conditions are not met, a change order must be submitted for administrative approval, regardless of amount.

Use the following procedure to add CSJs to the contract through a contract change order:

How to Add CSJs to the Contract

Responsible D/D/O

Action Required

District

notifies (email is acceptable) CST, Transportation Planning and Programming Division (TPP), Design Division (DES), and Finance Division (FIN) there is a need to add a new control section job (CSJ) to a project.

TPP

  • assigns a CSJ number and
  • updates the “Remarks” field on the P1 screen in DCIS.

CST

  • obtains ADM approval
  • notifies the district, TPP, and DES of ADM approval and
  • updates SiteManager/CIS.

DES

  • obligates funds with FHWA and
  • updates “Contract CSJ” field in DCIS.

FIN

adds the CSJ to FIMS upon receipt of the change order.



Federal Participation

The Federal Highway Administration (FHWA) will participate in the following types of added limit change orders:

  • emergency work and
  • transition work at the end of projects requiring a change order.

State Participation

Use state funds, non-participating,

  • when the conditions, referenced in ‘Federal Participation,’ are not met and
  • when both of the following conditions are met:
    • imminent needs (i.e., when delaying the work would cause accelerated deterioration to the pavement or bridge, significant loss in service to the public will be seen if the work was not performed, etc.) and
    • the public will see clear savings by not reletting the project (i.e., the cost of reletting the project exceeds the cost of the change order).

Exception for Allowing Federal Participation Related to Added Limits

An exception may be made when FHWA determines the added limits change order is in the “public interest.” A public interest finding must be approved by the FHWA for all federal participants, state or federal oversight.

If an exception for allowing federal participation is sought, coordinate with the FHWA, in advance, and submit a request with justification along with the change order to the Construction Division, Construction Section, for federal approval.

Submission Requirements Related to Added Limits

The approval of added limit change orders will require:

  • statement of environmental clearance status
  • Notice of Intent threshold impacts
  • Texas Department of Licensing and Regulation review for Texas Accessibility Standards (TAS) compliance
  • explanation of the reason(s) this change order is needed
  • justification, such as a description of:
    • emergency work
    • transition end work
    • explanation of cost saving over cost to reletting or
    • discussion on imminent need
  • request for federal participation
    • discussion notes on change order coordination, to date, with the FHWA including the FHWA contact
    • request for public interest finding (if required)
  • funding source category and
  • status of verbal approval.
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