Section 3: Contract Work and Consultants

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Contract Work

Differences between actual cost and lump sum agreements regarding the support required for contract work are as follows:

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  • Actual Cost
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    • When the utility proposes to perform adjustment by using a contractor, it must show the method of solicitation or contracting procedure used by including a completed Form ROW -U-48, Statement Covering Contract Work for Construction, with the agreement.
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    • If all or part of the work is to be accomplished on a contract basis, the estimate must reflect that portion of the work to be performed by contract forces.
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    • A utility may estimate the cost of work to be performed by contract forces without securing bids. However, the utility must include a reasonable basis for estimating the contract work.
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  • Lump Sum
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    • Lump sum over $100,000.00 must be approved by ROW Division.
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    • Actual bids must be secured to support contract work in the estimate.
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    • Reimbursable contract costs are limited to the amount of the low bid submitted by a qualified contractor.
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    • The utility must defer the award of the low bid pending execution of the Standard Utility Agreement.
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    • Copies of bids received should be included in the agreement assembly to document that the amount appearing in the estimate represents the low bid.
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    • If it is not practical to include bids in the agreement submission, the plans, estimates, and other supporting data should be submitted before the agreement itself so that all other charges can be reviewed and their eligibility established.

The estimate should be explicit regarding the work to be performed under contract and the work to be accomplished with the utility’s own forces.

If the work to be accomplished is…

then a copy of the contract need not be included in the lump sum agreement. In such cases, only the current rate schedules included in the continuing contract must be submitted to support the charges in the estimate.

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In addition to the requirements outlined in the Use of Consulting Engineers, the utility should take into account the following in submitting costs for consultants in the estimate:

For assistance in assessing consultant fees in the cost estimate, use the following formula:


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  • F = Consulting Fees
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  • C = Sum of fee factors (see Fee Adjustment Factors Tables 7-6 and 7-7 below for values and ranges)
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  • P = Construction cost in millions of dollars
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  • A = Cost index factor
  • Where:

    A = CCI current/3484.85

    CCI = Engineering News Record construction cost index.

    Anchor: #i1020616Table 7-4: Technical Factors


    Factor Values


    1. Level of information required on plans/drawings

    ‑0.20 to 0.10


    2. Project requirements

    ‑0.20 to 0.33


    a. scope of services

    b. rehab vs. grass roots project

    c. interface with other contracts/consultants

    d. numerous disciplines required

    e. alteration/modification of existing facility

    f. complexity of project

    3. Existing data, e.g.

    ‑0.35 to 0.20


    a. preliminary engineering report

    b. as‑constructed drawings/specifications

    Anchor: #i1020300Table 7-5: Owner Controlled Factors

    Internal Factors

    Factor Values


    1. Risk/liability (base standard of risk limited to fee)

    ‑ 0.10 to 0.10


    2. Time required for owner review/approvals (2 weeks standard)

    0.0 to 0.20


    3. Number of submittals/owner reviews

    Add 0.05 for each submittal in addition to preliminary and final

    4. Schedule for completing work ‑ fast‑track vs. reasonable schedule

    0.0 to 0.20


    5. Payment schedule ‑ 30 days after receipt of invoice

    0.01 for each late 30‑day period

    6. Owner requested subconsultants subcontract

    0.05 to 0.15 of the value of the

    7. Owner participation in project/partnering

    0.0 to 0.20


    8. Construction inspection limiting participation of engineer

    0.05 to 0.20


    External Factors

    Factor Values


    1. Coordination with other entities

    0.0 to 0.12


    2. Environmental regulations

    0.0 to 0.12


    3. Not‑in‑my‑back‑yard"/citizen's involvement

    0.0 to 0.20


    4. Governmental constraints

    0.0 to 0.20


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