Most transportation project construction is delivered by contractors.
Transportation agencies are responsible for supervising the work
and ensuring it is performed as agreed under the contract.
But how might your role change
if your project unearths contaminated soil that requires specialized disposal?
Or what if your project begins to pose a significant environmental risk to a waterway?
In situations like these,
where the scope of work changes due to field conditions or to mitigate unforeseen risks,
agencies may recognize that the contractor has insufficient information
to agree on unit prices and quantities.
They may choose, as a last resort to get the project completed,
to expand their traditional role of oversight to include task management of a contractor’s work.
Using this approach to contract management, called contractor force account,
agency personnel direct the use of a contractor’s resources and pay the contractor
for time and material—the actual cost of labor, equipment, and materials furnished.
Contractor force account can provide a practical resolution to problems encountered in the field.
However, prior to its use, agencies working on federally funded transportation projects
must develop an independent scope, schedule, and estimate of the work
and obtain advance approval from the oversight agency.
Furthermore, prior to making progress payments, agencies must also track the project activity
and verify that it aligns with the contractor’s accounting record.
As we’ll see, tracking does require additional time and effort.
Let’s look at a small project to signalize an intersection.
This example will illustrate the appropriate use of the contractor force account
when developing the plans, specifications and estimate package called PS&Es,
and when developing change orders, as well as the method of tracking contractor activity.
First, when developing the PS&E,
agency personnel found they could not accurately estimate the project-specific needs
for erosion and sediment control because other nearby projects will affect these needs.
To account for the likelihood of additional erosion and sediment control costs during construction,
the agency personnel develop an independent cost estimate to hold funds outside the contract
and create an item of work that will be paid for as “contractor force account”.
In this case, the work is not a contract bid item,
but payment will be made in accordance with the contract specifications for “Force Account Work”.
Then as excavation progresses, the contractor exposes a leaking underground fuel storage tank
and requests a change order to remove it.
Because the agency and contractor do not know the extent of contaminated soil,
they cannot negotiate the cost of removal.
Therefore, as a final option,
the agency and the contractor agree to use contractor force account methods for this change order work.
Our project to signalize an intersection now has two incidents of contractor force account,
one for erosion and sediment control and the other to remove an underground storage tank.
Contractor force account activity must be tracked
in addition to the required quality assurance project inspection activity and material testing.
To assist with the tracking, agency personnel use a contractor force account tracking sheet
that is developed by their State department of transportation, or State DOT.
The tracking sheet provides space to record labor,
equipment, and material quantities.
Using the tracking sheet, agency personnel record the names of workers,
the type of work each performed, and actual hours they worked. They also record the make,
model, and size of equipment and materials used.
Prior to paying the contractor for the work, agency personnel compare the contractor’s invoice
with the data on the tracking sheet and verify that the labor and material surcharges are reasonable.
The Federal Highway Administration, the FHWA, requires that Federal-aid project administration
include methods to track and verify records for contractor force account activity.
As you can see from our example, when using the force account payment method,
your agency can expect additional time and effort to fulfill this contract administration responsibility.
Your State DOT’s construction manual provides details on the appropriate use of contractor force account,
including proper tracking methods.
Review the construction manual to ensure you properly account for directed work on Federal-aid projects.