Do state DOTs still fine slow moving contractors?

[roadman65]

I remember at one time construction contractors would be paid bonuses if they completed a major project ahead of time. On the same token the states would impose heavy fines if the work goes over the completion date from the contractors to the state.

Yet we often see construction projects take much longer these days constantly. Projects like the I-295 and NJ 42 interchange and the I-4 Ultimate in Orlando, FL who seem to be working on them for decades. You would figure the contractor would be broke delaying the work by years, but they are not.

[SkyPesos]

If they still do, imagine how much the contractor that's in charge of the Circle Interchange project in Chicago is being fined for 

[roadfro]

I still see the bonus and fine structure for early/late completion mentioned in relation to some NDOT projects. I think they tend to use it more on larger urban projects under a traditional bid process (those that are expected to result in significant long-term travel delays, like extended lane or road closures). But I don't tend to see this as much on projects with alternate construction delivery methods (such as design-build). Although this is all anecdotal.

[jeffandnicole]

I remember at one time construction contractors would be paid bonuses if they completed a major project ahead of time. On the same token the states would impose heavy fines if the work goes over the completion date from the contractors to the state.

Yet we often see construction projects take much longer these days constantly. Projects like the I-295 and NJ 42 interchange and the I-4 Ultimate in Orlando, FL who seem to be working on them for decades. You would figure the contractor would be broke delaying the work by years, but they are not.

If the contractor moves slowly on their own accord, then there are usually subject to fines or reduced payments as specified within the contracts.

However, if the issue isn't the fault of the contractor, then fines shouldn't be imposed.  Using the 295/42 project, while there's a done of prep work done by the state prior to the project's letting, unforeseen issues crop up that require changes.  As Dan mentioned in another thread, one issue with the current contract is that there wasn't enough room provided to prepare a temporary overpass.  Apparently lengthy negotiations with the adjoining property owner took place to acquire what amounted to less than a few thousand square feet of space.

In a public meeting about the 295's retaining wall collapse, the NJDOT commissioner very publicly called out an issue like this.  The contractor working on this phase of the project works on many other NJDOT projects, and they have a good working relationship.  Everyone wants to understand who is at fault for the wall's collapse, but the state isn't going to fine and withhold payment unless it's an outrageous act of failure to adhere to the blueprints, policies, guidelines, whatever.

The other issue:  There's really only so many contractors qualified to work on projects.  If states continuously imposed fines for delayed work, the contractors either will quit bidding on projects, or will simply increase their bids on subsequent projects.  There's a lot of give and take here...yeah, a contractor may be delayed, but the state is probably only going to impose fines on the worst of the worst of violations. 

[JoePCool14]

If they still do, imagine how much the contractor that's in charge of the Circle Interchange project in Chicago is being fined for 

And if they aren't, imagine how much they should be fined for! Or whoever is making the process take an entire decade.

[kalvado]

I remember at one time construction contractors would be paid bonuses if they completed a major project ahead of time. On the same token the states would impose heavy fines if the work goes over the completion date from the contractors to the state.

Yet we often see construction projects take much longer these days constantly. Projects like the I-295 and NJ 42 interchange and the I-4 Ultimate in Orlando, FL who seem to be working on them for decades. You would figure the contractor would be broke delaying the work by years, but they are not.

If the contractor moves slowly on their own accord, then there are usually subject to fines or reduced payments as specified within the contracts.

However, if the issue isn't the fault of the contractor, then fines shouldn't be imposed.  Using the 295/42 project, while there's a done of prep work done by the state prior to the project's letting, unforeseen issues crop up that require changes.  As Dan mentioned in another thread, one issue with the current contract is that there wasn't enough room provided to prepare a temporary overpass.  Apparently lengthy negotiations with the adjoining property owner took place to acquire what amounted to less than a few thousand square feet of space.

In a public meeting about the 295's retaining wall collapse, the NJDOT commissioner very publicly called out an issue like this.  The contractor working on this phase of the project works on many other NJDOT projects, and they have a good working relationship.  Everyone wants to understand who is at fault for the wall's collapse, but the state isn't going to fine and withhold payment unless it's an outrageous act of failure to adhere to the blueprints, policies, guidelines, whatever.

The other issue:  There's really only so many contractors qualified to work on projects.  If states continuously imposed fines for delayed work, the contractors either will quit bidding on projects, or will simply increase their bids on subsequent projects.  There's a lot of give and take here...yeah, a contractor may be delayed, but the state is probably only going to impose fines on the worst of the worst of violations.

I wonder how many delays (and costs overruns) are already baked in into the estimates to make things more feasible politically...

[Scott5114]

In Oklahoma fines for delays and bonuses for fast work are still standard. I hear of contractors claiming the bonuses more often than they get fined, though.

[Great Lakes Roads]

Yes, as far as some major projects in Indiana like the I-69 Section 5 project (which was a mess in its own right).

[hbelkins]

Kentucky uses liquidated damages for delays far more often than bonuses for early completion.

[rower155]

Every state DOT has some form of standard liquidated damages (LD's) in their specifications for contractors who exceed their contract time. LD's are not a fine per se, they essentially recoup the additional administrative costs incurred by the DOT as a result of finishing late, unless the contractor demonstrates that their delay (or portion thereof) was excusable as defined in their contract. Some very late projects have LD's applied in the 7 figures.

Many projects, particularly those with higher traffic volumes, will have higher rates set which factor in the economic impact to the traveling public as a result of being late. This often referred to as Road User Cost (RUC).  Some projects use a lane rental type of specification. Lane rentals are typically based upon RUC and usually applied in short timeframes. For example, a lane closure may be allowed at night on a busy highway and the contractor must have the lane open by 5am or they will pay the RUC for every 15 minutes late.

Ironically, I did some of the original study and design work on the "missing moves" project at I-295/76/Route 42 for NJDOT in the late 90's.  Yes, it takes a while to design and build some projects (particularly in the most densely populated state in the US). Often projects that take "decades" are more than 1 contract, primarily due to funding reasons. That one has many contracts to complete the whole project. 

[jeffandnicole]

Ironically, I did some of the original study and design work on the "missing moves" project at I-295/76/Route 42 for NJDOT in the late 90's.  Yes, it takes a while to design and build some projects (particularly in the most densely populated state in the US). Often projects that take "decades" are more than 1 contract, primarily due to funding reasons. That one has many contracts to complete the whole project. 

You're referring to the "Direct Connection" project with 295/76/42, which is 4 contacts.  While the first contract was slightly behind schedule and the 2nd was a bit more behind schedule, the current contract - #3 - is going to be nearly 10 years in length, after proposing to be about a 4 year contract.

The "Missing Moves" project is just 1 contract, and only involves 295 & 42.  Per an online public meeting, this one is actually ahead of schedule.

[sbeaver44]

PennDOT is in a huge battle with the contractors of the I-83 exit 18 over delays and penalties.  Maybe by the time my 4 year old is in College it will finally be done.

[Roadgeekteen]

IDK but they should

[GCrites]

A buddy of mine's house is having street work that was supposed to be done in late June being performed and the contractor's past due date fine is $900 a day. While the street is also a state route (OH-316) I don't know if it is ODOT or the village collecting the fine. Or if they are splitting it.

[J N Winkler]

It's also worth noting that contracts typically have what are called "prosecution and progress" provisions, which outline the owning agency's expectation that the contractor will actually do work on the project on days that are suitable for construction activity (the contractor is not held to account for weather delays, winter closures, and other factors outside his or her control).  But, as already noted, there are tradeoffs to enforcing these aggressively, since it is also in the agency's interest to maintain a competitive bidding environment by not squeezing contractors out of business.