Construction hot topics
By: Rollin Larson, State Aid Construction Specialist
It is shaping up to be a challenging year of construction due to several issues, including cost escalation and supply chain issues. Here is some brief guidance on three areas that the construction support staff are getting a lot of questions on.
- Why were monetary price adjustments removed for grading and base Items?
- Can we use precast concrete products from non-certified suppliers?
- 1910 Fuel Escalation
1. Why were monetary price adjustment removed for grading and base items?
Monetary price adjustments were not included in the 2020 Standard Specifications for Specification 2211 for the following reasons:
- Issues of failure were not always dealt with in a timely manner. A change in loading, blending, or stockpile management can often bring material back into specification. Conversely, errors in sampling and testing have also occurred. These changes or errors need to be immediately employed or investigated soon after a failing test result.
- Grading and base materials are unconsolidated and are more easily modified once they arrive on a project, unlike bituminous or concrete.
- The engineer already has authority under 1603 to accept or reject non-compliant materials.
- Often, a predetermined monetary price adjustment did not fit the circumstance. For example, often a dense graded base may have provided a firm foundation for bituminous of concrete was getting dinged for a slight gradation failure, or conversely a permeable material, such as Super Sand, was not draining properly, even though it met the specification (probably due to a high clay content in the material passing the #200 sieve).
If you have any further questions, please contact MnDOT’s Grading and Base Engineer, Terry Beaudry at 651-366-5456.
2. Can we use precast concrete products from non-certified suppliers?
With supply chain issues causing significant delays in many areas, the most significant delay seems to be in precast concrete items such as box culverts, manholes, and storm pipe. Per the Schedule of Materials Control, these items must come from a qualified supplier on the Approved/Qualified Products List.
This should be enforced if the project has any federal or state funds on it, whether the item in question is using those funds or not. Failure to use certified materials on any part of a project can put your federal or state funding at risk.
We have heard of contractors finding some “out of state” sources for these items, but if those sources are not on the Approved/Qualified Products List, they cannot be used.
There is a process in place for new plants or sources to become certified. If a contractor wants to work towards this option, they should contact the MnDOT Materials and Road Research section, http://www.dot.state.mn.us/products/precastconcrete/index.html.
3. 1910 Fuel Escalation
The rising costs on projects has caused a lot of questions about how and when to apply fuel escalation recently. Here are the basics:
- If your contract does not include the special provision “1910 Fuel Escalation Clause” from the State Aid Electronic Proposal library or MnDOT Boiler Plate library, no price escalation should be paid on the contract.
- If your contract does include the “1910 Fuel Escalation Clause” as part of the contract, each week that work is done on the contract the engineer will have to review Fuel Index Values to determine if that week’s ratio is eligible for a cost adjustment.
- When an adjustment is warranted for a week, the engineer should compute the fuel adjustment per the terms of special provision 1910. The excel form titled “Current Fuel Escalation Worksheet” on the State Aid Construction webpage is a helpful tool for this.
- Generally, only items in the 1910 Fuel Escalation Clause are eligible for price adjustment. Many items on a project may not be covered, and per the contract, these fall under normal contractor risk and are not eligible for fuel cost escalation.
- When 1910 Fuel Escalation Clause is part of your contract, fluctuating fuel costs can cause either credits or debits to the contract. The intent of the contract is to be consistent and compute adjustments whether they are in favor of the owner or the contractor.
Hopefully this helps keep you on track for figuring out price adjustments during these times are fuel and price escalation. If you have questions or need any help with this process, reach out to your State Aid Construction support staff.