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Section 4: Invoices

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Reviewing Invoices

With some noted exceptions below, districts are responsible for reviewing, approving, and disputing progressive and final invoices from railroad companies to be paid by TxDOT. When reviewing, the following guidelines are given:

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  • Compliance with agreement:
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    • Read and understand the terms in the agreement with the railroad company to verify when invoices may be paid.
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    • Verify if any cost participation is required by the railroad company, and if so, that this has been deducted on the invoice.
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  • Verify the project location, railroad milepost and CSJ in the invoice match the project. In some cases, an invoice may have been charged to the wrong project.
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  • Check the dates for work performed on the invoice. The dates shown should be on or after the date shown on the applicable agreement or letter authorizing the labor or materials. If the work was performed prior to the proper authorization from TxDOT, contact RRD on how to proceed. In some cases, there may be provisions in the agreement for partial payment to be made to the railroad company.
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  • Common project steps include:
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    • Systemwide Preliminary Engineering Agreement (Section 130 Projects): Also known as the Diagnostic Study Authorization Letter Agreement, this provides authorization to the railroad company to perform diagnostic inspections and be reimbursed for labor and other preliminary activities.
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    • Maintenance Projects: An executed agreement authorizing the railroad company to provide flagging with each agreement stating the estimated number of days of flagging expected.
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    • Preliminary Engineering (Section 130 and Construction Projects): These letters of authority authorize the railroad company to attend project meetings, provide preliminary engineering, and develop cost estimates and wireline diagrams. On construction projects, the agreement also authorizes the railroad company to perform real estate services.
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    • Authority to Order Materials (Section 130, Construction, and Replanking Projects): On Section 130 projects, Authority to Order Materials is typically given when RRD issues the Exhibit B. Depending on the terms the railroad company may need to sign the Exhibit B. On construction projects, the district issues a signed letter to the railroad company authorizing the railroad company to order materials prior to installation at the project site. Alternatively, Authority to Order Materials may be provided within the C&M Agreement or as separate letter issued by RRD. On replanking projects, Authority to Order Materials is typically issued by RRD as part of a Project Notice or Force Account Agreement for the replanking work.
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    • Work Order (Section 130, Construction, and Replanking Projects): The Work Order authorizes the railroad company to provide necessary labor for installation. On construction projects, the C&M Agreement will state if a Work Order is required to authorize flagging or inspection work. A Work Order may be provided in the transmittal letter to the railroad company with the fully executed C&M Agreement.
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    • Project Completion Letter (Section 130, Construction, and Replanking Projects): The Project Completion Letter is issued to the railroad company by the district to verify the project passed final inspection, and the railroad company should submit a final invoice within a specified time frame. The letter serves as justification to pay the final invoice and close the project with FIN.
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  • Track the overall amount invoiced by the railroad company against the estimate in the railroad agreement. If the amount invoiced exceeds the amount in the estimate, one of the following scenarios may be occurring:
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    • The estimate provided by the railroad company did not properly account for all labor or materials. In this case, a revised estimate will be needed from the railroad company or payment may be withheld until a resolution is reached.
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    • The scope of work needed by the railroad company was not sufficiently accounted for during design of the project. In this case, invoices need to be approved when total cost to the railroad company significantly exceeds what was shown the estimate. Written notification from the railroad company describing the reason must precede invoice submittal.
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    • Construction change orders may have impacted the services needed from the railroad company. In this case, invoices need to be approved if total cost to the railroad company significantly exceeds the estimate. Written notification from the railroad company describing the reason must precede invoice submittal.
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  • Check progressive invoices against previous invoices submitted for the same project to verify the railroad company is not double invoicing. Verify that labor provided does not match dates from previous invoices and that the same materials has not been previously invoiced.
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  • Various rates shown on the invoice do not need to be verified. These rates may be audited by the FHWA or other entity and are not the responsibility of the district to verify. Some of these rates may include:
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  • Profit should not be charged by the railroad company, but is acceptable for a railroad contractor. If a profit rate is included, verify it matches what was shown in the project estimate.
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  • A maximum 5% overhead rate may be charged for a contractor or railroad company that does not have an audited rate.
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  • Invoice clerk charges should not be disputed unless the hours shown seems unreasonably high. Typically, only a few hours should be shown per invoice.
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  • For materials invoiced, if an area office inspector, district railroad coordinator, or TxDOT contractor was present, a journal entry should verify approximate quantities of materials used. Smaller items such as ballast, wire, etc. do not need to be verified for quantity. Larger items such as foundations, gates, LEDs, cantilevers, mast flashers, cabins, etc. should be verified with journal entries and against the original estimate. If an inspector was not present, and the railroad company had a valid Work Order, a field visit after receiving the invoice may verify materials.
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  • For materials invoices, inspected materials on the job site serves as justification for payment. However, if materials are invoiced prior to being shipped to the job site, the invoice should be paid provided Authority to Order Materials was given to the railroad company. If materials fail inspection at a future date, payment can be withheld on future invoices until the issue is resolved.
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  • For labor invoiced, verify the number of laborers shown on the invoice matches what is shown in a construction diary if available. It is not necessary to verify labor hours as this is not realistic, and the total hours shown may not match actual due to railroad union rules.
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  • Actual labor is paid, not what is shown in the estimate. Rates may have increased since the agreement was executed, or the flagger may have been required to work overtime or on a weekend.
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  • Travel will be invoiced when the railroad company employees must travel to and from a job site. This will include per diem, lodging, and travel costs such as mileage, parking fees, toll fees, etc. Lodging invoices should be at a location within 1 hour of the project site.
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  • Some invoices may include credit card, lodging, and meal expenses for an entire month. However, this does not mean all the expenses are being charged to the invoice. Check the invoice details to verify which travel expenses are being charged to the project.
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  • For preliminary engineering invoices, communication with the railroad, a cost estimate and/or wireline diagram serves as justification for payment. In many cases, other labor may be charged to preliminary engineering such as a local manager’s time for attending project meetings, performing site visits, etc. If an invoice for preliminary engineering is received prior to receiving an estimate and/or wireline diagram from the railroad company, the invoice should be paid provided the total charges for preliminary engineering are in accordance with the PELOA. If the estimate and wireline diagram are not received in a timely manner and a preliminary engineering invoice has been paid, contact RRD for resolution. Section 130 preliminary engineering invoices are reviewed and approved by RRD.
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  • Project flaggers may be governed by railroad union or dispatching rules. This means even if a flagger was not on the project site for 8 hours, 8 hours might still be invoiced. Keep in mind a flagger must arrive at a job site before work begins and stay after the work for the day ends to install and remove warning devices along the railroad to warn oncoming trains of downstream construction work. Time is also charged for travel to and from the job site. If a flagger is needed for 30 days or longer, and it is determined the flagger is not needed, the flagger will still need to be paid even when the contractor is not working. In the event the flagger is not needed when scheduled, the area office will need to determine if TxDOT will be reimbursed by the contractor for flagging charges due to a problem created by the contractor.
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  • A contractor or railroad employee flagger may still charge to the project if sufficient notice is not given to cancel the flagging. Common examples are when no construction work is done, but the railroad flagger was not given a 24-hour notice to cancel. This should be brought up at the pre-construction meeting.
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  • On replanking projects, RRD has Master Agreements with some of the railroad companies authorizing a cost per track foot (currently UPRR and BNSF). On these invoices, verify that the correct amount is included on the invoice and that work was completed.
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  • On larger construction projects, the railroad company may create multiple internal work orders for track work, signals work, inspection, etc. The district will confirm with the railroad if the final invoice is for the entire project or only an internal work order.
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  • Some construction projects may require a real estate fee to be paid to the railroad company. These invoices are reviewed and approved by the district as covered in Chapter 8.
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  • On Section 130 projects designated as crossing closure projects, TxDOT is invoiced by the local entity. These invoices are reviewed and approved by the districts. Invoices are to be paid after the work to close the crossing and any additional work identified in the Crossing Closure Agreement on adjacent streets has been completed by the local entity and verified by the area office. The invoice is paid in accordance with the amount shown in the Crossing Closure Agreement between TxDOT, the railroad company, and the local entity.
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  • Contractor Right of Entry fees are reviewed and approved by the district in accordance with the fee shown in the Right of Entry Agreement.
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Invoice Process

Invoices are sent from the railroad company to FIN and forwarded to the appropriate district railroad coordinator. Invoices are subsequently approved, disputed with appropriate justification, or forwarded to RRD depending on the type of invoice. Only employees with invoice signature authority can approve invoices by sending an appropriate email to Finance Division Voucher Processing Section.

Invoices are paid or disputed within 30 days of submittal. If an invoice is disputed, the district contacts the railroad company directly with an e-mail copy to FIN and RRD. For questions regarding invoice reviews or disputes, districts are encouraged to contact RRD.

All approved invoices are tracked and processed through OnBase.

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