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Section 4: Change Orders

COs must be reviewed for all federal-aid projects. The DCO assists the AO with the CO description and reason coding, if necessary, and coordinates with the District or Construction Division (CST) FHWA Liaison to confirm federal participation. The AE and /or DCO also coordinates with the District Transportation Planning and Development (TP&D) Financial Manager to procure funding for COs.

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Federal-Aid Projects

A TxDIPs S&O Plans are project specific and will dictate the requirements for TxDIP Change Orders. All TxDIP projects and Statewide Management have a S&O (Stewardship and Oversight) plan.

S&O Plans may state the coordination, communication and review/approval requirements for COs on TxDIP projects on Major, Minor, or all change orders. If S&O states approval/review contact your FHWA Area Engineer. FHWA does not require notification, review or approval of change orders on TxDIP projects unless specifically stated in the S&O Plan.

COs on TxDIPs are categorized as either major or minor, as defined in the table below. Confirm verbal approval with written correspondence and retain in project files.

Use the following table to determine if the CO is major or minor.

Anchor: #i1050425Major/Minor Change Orders for FHWA Oversight Projects

Type of Change

Scope of Change

Major
  • Reduces the geometric design or structural capacity below project design criteria (any reduction in geometric design that would normally have required a design exception)
  • Increases the cost of the contract by 25% of the original cost or by $300,000, whichever is less
  • Changes project limits
  • Any change in the TCP that reduces the capacity as shown on the plans for the through traffic or the traffic on major cross streets
  • Settlement of a dispute
  • Changes the access on a controlled access highway
  • Waives or modifies contract specification requirements

Minor

Everything not described above


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Non-TxDIP Federal-Aid Projects

TxDOT assumes all project oversight responsibilities for all Federal-Funded projects unless otherwise stated in the TxDIP S&O Plan, or 2015 Stewardship and Oversight agreement. Use the FHWA Contract Administration Core Curriculum (CACC), related federal regulations, and Department policy to determine federal participation for TEs and COs. Approve CO work on Federal-Aid projects in accordance with the CO Approval Policy given in Chapter 7.

Federal Participation

The Federal Project Authorization and Agreement (FPAA) must reflect accurate project limits. For COs that change project limits, include detailed drawings showing the new project limits.

Federal-aid funds may be used to participate in COs that all:

Federal-aid participation may be granted if all:

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  • the work on the CO did not adversely affect the public
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  • the Department acted in good faith and did not willfully violate a federal requirement
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  • the work was performed in full compliance with federal and state laws
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  • the federal participation does not exceed the cost that would have been incurred had full compliance been achieved
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  • the work was performed according to the contract.

Federal Non-Participation

Examples of COs not eligible for federal participation are:

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  • work performed prior to the “effective date” provided in the Federal Letter of Authorization;
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  • work performed outside the project limits and/or involves a significant change in scope, unless the additional work is an emergency, is to provide a transition at the existing project limits, and is covered by a CST-reviewed and concurrence provided Public Interest Finding determination; 
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  • routine maintenance items that are the responsibility of either the contractor or the Department. Examples: graffiti removal, culvert cleaning, worksite maintenance, etc.

Examples of individual contract items not eligible for federal participation are:

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  • work performed by state forces or other “non-competitively bid” work;
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  • significant changes in contract scope, unless covered under an approved Public Interest Finding determination;
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  • completed work that is determined not to be in substantial compliance with the contract;
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  • materials that do not meet specifications (Federal participation may be allowed for the reduced price of materials determined to serve the intended purpose of the contract. Accept for federal participation minor deviations at the full price of materials.);
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  • additional time or cost caused by un-acquired Right of Way (ROW) or incomplete utility adjustments;
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  • purchase of unused contractor materials placed in state stock (If the material is subsequently used on another federal-aid project, charge the material cost to that project.);
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  • negotiated prices that are determined to be unjustified;
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  • work done for the convenience of the contractor (may be eligible for participation depending on specifics and adequate justification);
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  • unaudited claim settlements, unless the audit requirement is waived in writing;
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  • contract work paid through another means, such as Incidental Construction.
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  • anything involving rework;
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  • State-furnished materials not included in the original contract and not supported by a PIF.
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Change Order Reason Codes

Change order checklist Form 2146 provides a key list of items to consider when developing a change order and includes a list of reason codes to choose from, both federally participating and non-participating.

The following table shows CO reason codes that have been classified as mandatory federally non-participating.

Anchor: #i1055322Mandatory Non-Participating CO Reason Codes

Category

Reason Code

Description

1. Design Error or Omission

1D

Design error or omission that resulted in delay, rework or inefficiencies (TxDOT Design)

1E

Design error or omission that resulted in delay, rework or inefficiencies (Consultant Design)

2. Differing Site Conditions (Unforeseeable)

2G

Unadjusted utility (unforeseeable). Used when unknown utilities impact the project.

3. TxDOT Convenience

3A

Dispute resolution. Occurs at the district level and involves delays, inefficiencies; etc.

3K

Addition of stock account. Buying material purchased by the contractor and not incorporated into the project.

4. Third Party Accommodation

4A-D

Third Party failure to meet commitment, request for additional work, or other accommodations.

6. Untimely ROW/Utilities

6A-D

ROW/Utilities not clear. Used for contractor impacts.


These are indicated with an asterisk by the reason code number on Form 2146. Other reason codes may be associated with federally non-participating change orders depending on the circumstances for the change order.

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Extending or Adding Project Limits to the Contract and/or Significant Change in Contract Scope

Submit to CST for review and concurrence any CO, with accompanying PIF, that extends or adds project limits and/or that includes any significant change in contract scope that does not meet the criteria given in Chapter 7. Once reviewed and concurrence received, the District will complete the CO Approval Process. Include a note in the CO explanation regarding PIF submission and concurrence received.

Communicate with FHWA regarding the proposed changes for TxDIP.

Exception for Allowing Federal Participation Related to Added Limits and Significant Changes in Contract Scope

An exception may be made when CST determines the added limits and/or change in contract scope CO is in the public interest. To seek the exception, coordinate with CST, in advance, and submit a Public Interest Finding request with justification along with the CO to the CST Division Director.

Submission Requirements Related to Added Limits and/or Significant Change in Contract Scope

Approval of added limit and/or significant change in contract scope change orders require the following.

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