Section 6: Post-letting GuidelinesAnchor: #i1003358
This section includes the following post-letting guidelines:
- Letting overrun justification
- Local participation.
Letting Overrun Justification
The next subsections discuss:
- Overrun justification memorandum guidelines
- Construction Division determination of bid validity
- District review responsibilities.
Overrun Justification Memorandum Guidelines
Accurate estimating is essential in determining the validity of bids. The following are the latest guidelines for overrun justification memorandums for federal aid and state-funded construction projects.
Letting overrun justification memorandums are required for all types of projects where the apparent low bid is 20% or more over the engineer’s estimate and there are two or more bidders, regardless of project cost. Projects with only one bidder require justification when the apparent low bid exceeds the engineer’s estimate by more than 10%. These memorandums are prepared by the district and submitted to the responsible division office for further handling and coordination with the letting management office of the Finance Division. This office submits all memorandums to the Construction Division director for ultimate approval of the recommended bid award or rejection by the Texas Transportation Commission.
For more information, refer to the Project Development Process Manual, Task 6210.Anchor: #i1003432
Construction Division’s Determination of Bid Validity
The aforementioned letting overrun justification memorandums are used by the Construction Division to determine the validity of the bids. The following items are checked:
- Errors in plans or engineering estimate
- Adequate competition
- Indications of collusion among bidders
- Unbalanced bidding.
Once these points have been considered, the Construction Division recommends award or rejection of the bid overruns to be acted on by the Texas Transportation Commission during the same month’s scheduled Commission meeting.
For more information, refer to the Project Development Process Manual, Task 6200.
District Review Responsibilities
For district review projects, the district is responsible to prepare and submit to the Finance Division Letting Management Section the letting overrun justification memo with their recommendation as described above.
See examples of Letting Overrun Justification Memorandum - Division Review Project ( lojmemo1) and Letting Overrun Justification Memorandum - District Review Project ( lojmemo2) for sample project bid overruns on regular review projects and District Review projects, respectively.Anchor: #i1003493
- Update other participation Field on P2C Screen.
As noted in the Additional Payments subsection in Section 4, the district personnel that coordinated the funding agreements with the local entity should update this information. The Contract Services Office (CSO) and the Construction Division uses this information when issuing the construction work order.
- Prepare a Financial Clearance Analysis
Projects with outside funds are conditionally awarded, and contracts are released only after all terms as outlined in the project’s Advance Funding Agreement (AFA) have been met. The responsibility for the financial clearance function has been delegated to the district Engineer (DE). The Notice of Financial Clearance for Bid Opening and Award form signed by the DE needs to be sent to CSO once 30 days prior to bid opening and once prior to award. If a project overruns after letting, the district needs to discuss the bid prices with the local entity or Metropolitan Planning Organization (MPO) participating in the funding of the project and insure that the outside entity concurs with the acceptance of the higher costs. If they do not concur, the contract is not to be recommended to the Commission for award.