Section 2: Estimate CategoriesAnchor: #i1004210
The estimate submitted in support of the agreement will set forth the items of work to be performed, as broken down into the following categories:
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- Materials and supplies Anchor: #BLRALGFO
- Labor Anchor: #OPRRDEHS
- Overhead Anchor: #MLBUMRGN
- Transportation and equipment Anchor: #GNQVWYAA
- Traffic control Anchor: #XJAXARMJ
- Right of way Anchor: #JDFLNVNY
- Salvage, Abandoned Facilities, and Removal of Materials Anchor: #ULVBQMVK
- Credits Anchor: #DIMBFWPF
- Betterments Anchor: #WNONYGDO
- Items to be paid in highway contract or directly to the utility.
All of the above items must be sufficiently detailed to provide TxDOT with a reasonable basis for analysis.
The estimate should allow comparison with the actual records of cost accumulation. It should contain a summary of all costs for the major accounts and should reflect all credits in order to indicate the net cost of adjustment. If contract work is to be utilized, the estimate should distinguish between the work being performed under contract and the work to be accomplished by utility force account.
Justification for all items and amounts in the estimate should be provided by the utility so that the reviewer can properly assess them. When estimates are prepared on a construction unit basis, a copy of the utility’s current specification sheet for each construction unit will be required.Anchor: #i1004302
Materials and Supplies
Major items of materials must be itemized. Unit costs, such as assembly units of property (i.e., Rural Utilities Administration (RUA) construction specifications), may be used for estimating purposes if the utility uses such units in its own operations.
The estimate may be prepared by construction units and quantities to support any item included in any account. Where construction units are used, it is required that TxDOT approve the estimating and/or billing procedure. The factors that will be included in the utility’s construction overhead account must be clearly shown.
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- Materials should
be shown by items and price:
- Lump sum estimates should list major items of material and supplies by item, with a description and proper indications of the specific quantity required, and the unit price and extension. Anchor: #ONMTKVYV
- Items of materials and supplies should be shown as assembly units with unit prices. Anchor: #TICKKCNF
- All materials subject to Buy America compliance must be identified.
NOTE: All projects subject to Federal-Aid funding will be required to comply with 'Buy America' provisions described in section 3-2. Any utility work accomplished as a part of the project and eligible for reimbursement will need to comply with these rules, particularly work which includes iron and steel products.
A unique example of an adjustment cost is assembly units used primarily for adjustments involving RUA facilities. Specifications, sheets, or booklets, like those used in RUA Form Books 803, 804, and 805, itemize the components of each assembly. A copy of the current specification sheet for each unit itemized in the estimate should be included in the agreement assembly to support the estimate. No specification sheet will be required for poles, since the symbols for these items are obvious.Anchor: #i1004346
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- For lump sum estimates, wages and salaries anticipated on a particular adjustment must be representative of actual rates per hour or average rates on the actual amount paid to individuals for productive time incurred under the agreement. Anchor: #IMTWAMXC
- The estimate must show person-hours by the rate for the job title. Additionally, unit costs for labor will be acceptable when the utility’s system of accounts provides for this method of estimating. This type of cost estimating is usually done by cooperatives involving RUA facilities. Anchor: #HOBFLLVU
- However, if items of overhead are included in the unit cost for labor, these items are detailed separately to be analyzed to assure the costs were incurred after execution of a Utility Agreement. The utility should also include in the estimate the amount of time anticipated for supervisory labor, costs incidental to the preparation of the plans, estimates, and agreement documents, and expenses that will be paid to individuals directly engaged in the proposed adjustment. Anchor: #VGAYXFPE
- All labor charges and expenses shown must be in conformity with similar charges that are reflected in the accounts of the utility and incurred in its normal operations. Anchor: #ORWXLPMV
- When construction assembly units are used in estimating the cost of the work, labor costs may be shown on an assembly unit basis.
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- Payroll additives and other overhead factors should be shown individually, with a statement of what is included in each account and an explanation of the method used for accumulating such costs. Anchor: #SDJGVAVB
- On lump sum estimates, the reviewer should verify overhead costs to ensure that all items are eligible, and the rates are not established arbitrarily. Anchor: #AOGDCBWN
- Common ineligible costs that may not be
claimed in the utility’s overhead account are:
- advertising and sales promotion; Anchor: #OKFOWBBC
- interest on borrowed funds (allowance for funds used during construction (AFUDC); Anchor: #QGLPBHAO
- charges for the utility’s own funds; Anchor: #SYNJQCVS
- resource planning and research programs; Anchor: #LAMNMDFK
- stock and stockholder’s expenses; Anchor: #LFLBSIXV
- Federal and State income taxes; Anchor: #OLTNBUFO
- provisions for contingent reserves; Anchor: #QSPGHURY
- directors’ salaries; Anchor: #TFPVTUXX
- special management studies; Anchor: #AOBBPNCR
- bad debts; Anchor: #VTGQBCKK
- sales and rate studies; Anchor: #SSEAYNEA
- contributions; Anchor: #KTAKPNBB
- fines and penalties; Anchor: #YAKFPWPB
- entertainment; Anchor: #BBHSGTKM
- lobbying; and Anchor: #BGYPAOPJ
- revenue loss (not to be confused with product loss during construction).
Transportation and Equipment
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- Charges should have sufficient documentation and explanation of necessity.
- Personal expenses
- Expenses may include meals and lodging required by use of the utility’s forces in remote areas. The costs should be in keeping with those normally incurred by the utility.
- Type, size, and rate should show equipment. Anchor: #VHANGXED
- The charges should reflect the utility’s normal accounting procedures. Anchor: #UNCSJJND
- Rentals should also be shown by type, size, and rate. Anchor: #IKVULATP
- Published equipment rates, instead of actual rate, are not allowable, (i.e., Petroleum Motor Transport Association (PMTA) rates).
Right of Way
Right of way costs for replacement or damages should be in accordance with the utility’s normal methods.
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- "Right of way costs" are defined as those instances where there is an interest in land acquired. Anchor: #AUONRDGU
- “Replacement right of way” may be defined as the land and interests in land acquired outside existing highway right of way for or by the utility. These costs may include salaries and expenses of utility employees engaged in the valuation of and negotiation for right of way, amounts paid to independent fee appraisers for appraisal of the right of way, recording costs, deed fees and similar costs normally paid that are incidental to land acquisition. These costs must never be lumped together, but should be broken down as separate line items in the estimate with estimated quantities and units.
A valuation of the replacement right of way must be conducted before the initiation of negotiations.
Payment of property damages necessary for a utility adjustment is reimbursable when properly documented. Losses to improvements such as crops, timber, fences, and gates caused by utility construction will be considered as damages and properly chargeable by the utility as a construction or adjustment expense. No reimbursement is permitted for damages caused by negligence on the part of the utility or its employees.
An affidavit and existing record documentation affirming a utility’s property interest at the present facility location needs to be submitted to the District. Upon completion of the utility adjustment, the utility’s prior property interest will be quitclaimed to the State.Anchor: #i1004575
Develop a TMUTCD-compliant traffic control plan, to include:
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- Appropriate signs, markings, and barricades per the traffic control plan Anchor: #GDHMVBJR
- Safety equipment, such as: Anchor: #AHNKSHME
- Clear zone protection devices, such as:
Salvage, Abandoned Facilities, and Removal of Materials
The estimate must contain appropriate credits for salvage and accrued depreciation value, if applicable.
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- If existing materials are to be removed from the project as part of the adjustment or relocation of the utility’s facilities, a credit must be given for their value against the net cost of the adjustment. Anchor: #YKBXKYMU
- If materials are to be re-stocked, the credit should be in an amount comparable to the prices charged for similar materials when issued from the utility’s stock. Anchor: #ARDJIGTA
- If the salvaged materials are to be sold as junk or for scrap value, that amount should be credited to the net cost of the adjustment. Anchor: #EJGDNXHR
- If the salvaged materials are deemed to have no value and are disposed of with no value being returned to the utility, then a credit does not need to be applied to the adjustment’s net cost. Justification should be provided to substantiate removal. Anchor: #SHBFIPST
- The State or LPA should verify the disposition of salvage materials in their construction diary and a statement as to the disposition should accompany the billing for the adjustment.
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- Abandoned lines are the responsibility and property of the abandoning utility owner. Abandonment does not relieve the owner of financial responsibility. Anchor: #OMACQHKE
- Utilities may request that their abandoned lines be left in the ground; such request must be reviewed and approved by the District, which will notify ROW Division of its decision. Anchor: #GBSSUEMV
- Without valid justification, all abandoned facilities shall be removed. Anchor: #URWUMAPJ
- Utilities must maintain an inventory of all abandoned facilities on State right of way.
- Required Removal of Materials
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- Environmentally sensitive material should be removed if there is a direct construction conflict. Anchor: #ENEPRKAK
- If abandoned materials are to be removed by the utility, the cost must be reflected in the estimate. A description of the removal work performed must be detailed in the scope of work narrative.
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- General Federal and State regulations require that, in most cases, credits to the utility adjustment project must be given. Generally, these credits will fall into one of the following categories:
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- Betterment credits due to electiveincreases in functional capacity, improvement of utility service, or superior and improved materials in the replacement facility that are not required because of the highway project. Anchor: #YANRRQSB
- Capital Improvements. There may be occasions
when, to clear right of way for highway construction, the cost of
any required adjustment of buildings and other similar structures
of a utility used primarily for the production, transmission, or
distribution of the utility’s products is eligible for reimbursement.
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- switching stations Anchor: #FNHGMTHB
- power substations Anchor: #DIWMYKBW
- pumping stations Anchor: #YYSLEVWO
- metering and regulatory stations Anchor: #PLRMNGKE
- lift stations Anchor: #ORNUKIKM
- storage tanks Anchor: #PESEFERO
- field offices Anchor: #LLRSBIRQ
- garages, and Anchor: #LAQBFPWY
- other similar structures.
When it is not necessary to retain the existing building and/or facilities in service until a replacement is constructed, reimbursement will be limited to the most economical method of adjustment.The reimbursement estimate should indicate the method of work to be accomplished on the building and/or the facilities, to the extent of listing major items of materials, if applicable, and should be limited to the most economical method of adjustment. This will enable the reviewer to determine if any credits should be applied to these costs.Credits to the utility project should be set forth separately and in sufficient detail to show the method used for establishing the amounts. In addition, credits should be included in the summary of costs to arrive at the net cost of adjustment.
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- Accrued Depreciation
requires credit for accrued depreciation of a utility facility being replaced, See
computation of credit formula below, (i.e., Handy Whitman Index).
Credit for accrued depreciation is not required
when any of the above-described facilities are only being relocated
and not replaced.
Equation 7-1.Computation of Credit Formula
The information for determining the required credit must be furnished by the utility and based on its own records and depreciation schedule.
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Betterments incorporated into utility work will fall into one of
the following categories:
- Forced betterments: also known as non-elective betterments; those necessitated by transportation project construction, as shown below; this type is usually a reimbursable cost item. Anchor: #XYHJBGBX
- Elective betterments: those constructed at the election of the utility and are not attributable to the transportation project, i.e., increased service capacity or service improvements; this type is always a non-reimbursable cost item. Credit will be required and must be indicated in the estimate for elective betterments.
- Forced Betterments. The following are
reimbursable items and must be properly documented by the utility:
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- non‑stocked items that are uneconomical to purchase; Anchor: #GMOSUVDH
- items to comply with governmental laws and ordinances; Anchor: #DHXEUFFR
- appropriate regulatory commission codes; Anchor: #YPVUHYEI
- published, current design practices regularly followed by the utility in its own work; Anchor: #GOBAEVUI
- installment of replacements of equivalent standard, although not identical; Anchor: #IURWOOTK
- betterments for which there are direct benefits to, and /or are required for, the transportation project.
TxDOT cost participation is based on the cost of providing the most economical replacement facility or restoration of functionally equivalent service to the facility being replaced.
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- Elective Betterments. The costs of elective betterment items are ineligible for TxDOT and Federal participation. Such elective betterments should be depicted on the plan as part of the work proposed. The utility should record all relocation costs on a single work order account. It is impractical for a utility to accurately separate reimbursable and non-reimbursable portions of the relocation cost, particularly labor, overhead, equipment, and transportation. Use the following procedures (below) to determine State cost participation.
Procedures for Computing Elective Betterment Credit
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- Prepare a plan and estimate of cost for replacement of the existing facility in the most economical manner, as required by the transportation construction project: (A). Anchor: #TVDNBYYJ
- Prepare a second plan and estimate including the betterments that the utility elects to build: (B). Anchor: #HCFPPGOY
- Subtract the two (above items) from one another to arrive at the difference between the two: (B) minus (A) = (X) Anchor: #AQGOYXTF
- Compute a betterment credit percentage based upon the ratio of the result (X) in the bullet above to the betterment estimate (B): = Elective Betterment Credit Percentage Anchor: #KLBYBRQF
- Apply the elective betterment percentage
to the final billing of actual costs incurred in building the “bettered”
facility BEFORE deducting accrued depreciation,
if applicable, and salvage credits.
Anchor: #XYSJGJDYTable 7-2: Example Computation of Elective Betterment Percentage
Estimated Total Cost of Relocation:
‑ 700,000 (A)
$ 300,000 (difference) (X)
Elective Betterment Credit Percentage:
$ 300,000 (X)
30% Betterment Credit
Anchor: #SNANCRDSTable 7-3: Estimate Summary*
Total Billing (including betterments)
Less 30% Betterment Credit
Less: Accrued Depreciation (if applicable)
Less: Salvage (if applicable)
Eligibility Ratio (if applicable)
*Actual cost may differ from the estimated cost.
Care should be taken when arriving at the estimated cost of relocation to avoid having to bid.
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- Storm Water Pollution Prevention Plan (SWPPP): The general requirements established by the EPA maintain that the contractor must have a National Pollution Discharge Elimination System (NPDES) permit for certain construction activities. Anchor: #VGCPRUIK
- Security: The utility may contract with a security service to provide security for their on-site equipment and materials during the utility adjustment. Anchor: #HDDOJCLF
- Revegetation: In accordance with the UAR, the utility is responsible for reseeding and resodding to reduce erosion when the utility installation is complete. It is also required to reshape, reseed, or resod the area when, within six months after utility installation, settlement or erosion occurs. Anchor: #FKFAHLUA
- Product Loss (not to be confused with revenue loss): The following 4-step calculation will be used to estimate gas loss when relocating pipelines containing natural gas: Anchor: #SEPFMVMM
(1) FPV = 1 + P2 / 1000 * 0.847(2) V2 = [P1 * [D1 / 12 * D1 / 12/4] * L1 * [[P2 + 14.65] / 14.65] * FPV] / 1000(3) R1 = V2 * 1000 * S1(4) Gas Loss = R1 / 2000.
FPV = Supercompressibility factorP2 = Pressure (PSIG)V2 = Volume of gas in pipeline segment (in MCF)P1 = Original absolute pressureD1 = Internal diameter of pipeL1 = Length of pipelineR1 = Gas release weight in lbs/cfS1 = Sample of gas in lbs/cf.
- Trench Safety Plan Anchor: #ATBYNDRQ
- Testing and Removal of Contaminated Soils