Section 3: Force Account and Interim Adjustments to the Contract

Change Orders Involving Contractor Force Work Account

Create unique CO items as described in Section 1 for payment of force account work. Use
Form 316
, “Daily Report of Force Account Work,” to capture the actual time, equipment, labor, and materials used for the work. CO documentation should include but is not limited to:
  • Equipment rates established in accordance with Article 9.7. Verify rates utilizing
    Equipment Watch
    ,
  • All
    payrolls
     classifications with applicable wage rates (Refer to Chapter 15, “Contractor Workforce,” for more information.)
  • Material invoices
     associated with the force account work
  • Contractor’s invoice
  • Time needed to complete the work, and
  • Any additional information necessary to support the CO.
COs for force account work less than $30,000 may be prepared based on the contractor’s estimated costs for labor, equipment, and materials. Refer to Special Provision (SP) 009-0001 FA
. Obtain cost justification as necessary. Subsequent to the completion of the force account work, obtain from the contractor a certified invoice listing the total cost for labor, equipment, materials, incidentals, and additional compensation provided in
the
Standard Specification
,
 Article 9.7, “Payment for Extra Work and Force Account Method Force Account.” Agree to the labor, equipment, and material rates used for the force account work prior to beginning work.
A 5% markup
can
 be added to the subcontractor’s submitted price for the prime contractor’s administrative cost, superintendence, and profit. Request a price breakdown of equipment, labor, and materials when a price submitted by a subcontractor is not fair and reasonable. Cost incurred by the state need to be justified.

Taxes

TxDOT is not required to pay taxes on services and materials fully incorporated into its projects, nor is it required to provide a certification to prove tax exempt status per the Texas Administrative Code,
Title 34, Rule 3.322
(c)(4). Refer to the
Contractor Manual
on the Texas State Comptroller website.

Change Orders Involving Interim Adjustments

If an agreement cannot be reached with the contractor regarding the basis of payment for the CO, work may proceed by making an interim adjustment to the contract. Subsequent to performance of the work, consider modifying compensation to the contractor based on actual work performed. Interim adjustment is an adjustment made in the contract that has not been finalized by a
CO
.

Unilateral Change Orders

Do not use a unilateral
CO
 for work that is outside the scope of the project or for dispute resolution. Work outside the limits, excluding end of project transition areas or added work outside the original intent of the project, should not be forced on a contractor through the use of a unilateral
CO
. Should a unilateral
CO
 be needed coordinate with CST. The DE will approve and sign all unilateral
COs
.

Change Order Audit

CST will perform quarterly audits of COs. CST will request executed COs from the district along with supporting documentation.