Construction Closeout: Retention Release. November 4, 2004

Transcription

1 Construction Closeout: Retention Release November 4,

2 Training Objective Provide guidelines for the closeout of construction contract and the release of retention Introduce revised policies and procedures 2

3 Why revise the Policies and Procedures? Assessment of current Contract Closeouts: Release of retention not occurring within mandated legal timeframes Unresolved Change Orders are delaying Release of Retention and recording of Notice of Completion Pending Change Order amounts CANNOT be considered disputed items withheld from retention 3

4 Why revise the Policies and Procedures? OARs unclear about resolution of Change Orders during Contract Completion process Delays due to additional Change Order Work not yet completed No resolution of outstanding Punchlist items 4

5 Procedure Revisions Contract Closeout Procedures New Forms Revised procedures for Release of Retention Guidance for resolving Change Orders and completing outstanding Punchlist Items DRAFT procedures. Additional Tools Construction Closeout Checklist 5

6 Policy Change #1 Per Public Contract Code section 7107 (c): Sixty (60) days after completion, the retention shall be paid, except for onehundred fifty percent (150%) of any amount in dispute and/or which the Owner otherwise has a right to withhold. *Owner pays penalty of 2% per month on unpaid retention AND If Contractor sues, Owner pays all legal fees incurred 6

7 Policy Change #1 Completion previously defined as the recording of the Notice of Completion... is now defined as Substantial Completion Therefore, Release of Retention must occur within 60 days from Substantial Completion 7

8 Policy Change #2 Contractor submits last Application for Payment for 100 % of the Work at Substantial Completion (unless billing for completed Change Order work) In lieu of the Contractor submitting an Application for Payment for Final Payment (Retention Release), the OAR completes: Release of Retention Authorization Report of Completion & Recommendation of Acceptance 8

9 Change Order Policy Clarification ALL Change Orders must be resolved, prior to the Final Completion Pending Change Order amounts CANNOT be considered disputed items withheld from retention For the purposes of these procedures, a Pending Change Order is defined as any Change Order that is NOT yet Approved. 9

10 Contract Completion Process 30 days Substantial Completion Release undisputed retention End Contract? Report of Completion & Recommend. of Acceptance Final Completion 100% Work completed Release of Certificate of Substantial Retention Completion Completion of all requirements Authorizationper Contract and Construction Closeout Checklist Legally required to release retention within 60 days from date of Substantial Completion Process payment for 100% of the Work completed FCC issues Contract Completion Memo Records Notice of Completion with County 10

11 Contract Completion Process 30 days Substantial Completion Release undisputed retention End Contract? Report of Completion & Recommend. of Acceptance Final Completion Release of Retention Authorization FCC issues Contract Completion Memo Records Notice of Completion with County Legally required to release retention within 60 days from date of Substantial Completion 11

12 Release of Retention Authorization 12

13 Release of Retention Authorization Releases undisputed retention following Substantial Completion, prior to Final Completion Completed by the OAR no later than 30 days from date of Substantial Completion Acts as an invoice submitted to FCIU to process a warrant/check for undisputed retention amount Followed by Report of Completion and Recommendation of Acceptance 13

14 Release of Retention Process 1. Completes Release of Retention Authorization a. Denotes values for items in dispute b. Calculate Release if Retention amount c. Obtains required signatures d. Attaches requires documents: Withhold/Release Notices List of pending COs and Claims Documentation to support other assessments (liquidated damages, etc.) 14

15 Release of Retention Process 2. Process Release of Retention Authorization a. Attach Encumbrance/Payment Request form b. Submit two (2) original packages + (2) additional copies to FCIU* c. Distribute additional copies 3. Check (Warrant) issued to Contractor *Submit to Facilities Construction Contracts (FCC) if Escrow Account 15

16 Release of Retention Process If Final Completion occurs within 30 days from the date of Substantial Completion Then a Report of Completion and Recommendation of Acceptance can be immediately completed and processed. 16

17 Report of Completion & Recommendation of Acceptance 17

18 Report of Completion & Recommendation of Acceptance Establishes Final Completion date Releases remaining retention Recommends acceptance of Contract Completion by the Board Initiates recording of Notice of Completion Acts as an invoice submitted to FCIU to process a warrant/check for undisputed retention amount 18

19 Contract Completion Process 1. OAR verifies Contractor completes all items precedent to Final Completion (per contract GC 14.20) 2. Completes Report of Completion and Recommendation of Acceptance a. Denotes values for items in dispute; & calculates retention release amount b. Obtains required signatures c. Attaches required documents: Punchlist (assessed values) Contractor Unconditional Waiver and Release Withhold/Release Notices List of pending COs and Claims Consent of Surety to Release of Retention 19

20 Contract Completion Process 3. Obtains signatures and Submits Report of Completion and Recommendation of Acceptance to FCIU 4. Submits documents to FCIU 5. Warrant/Check issued to Contractor 6. FCC prepares Contract Completion Memo for Board Acceptance of contract completion 7. FCC records Notice of Completion with County 20

21 Contract Completion Process Substantial Completion Release undisputed retention End Contract? Yes Report of Completion & Recommend. of Acceptance Final Completion Release of Retention Authorization Punchlist Items (disputed) Pending Change Orders (additional Work not completed) Yes Additional work required? Determine separate contracting method(s) No 21

22 Resolving Change Orders If Change Order Work completed: OAR negotiates and settles cost/time adjustments PRIOR to Final Completion, Contractor submits an Application for Payment to invoice for COs AFTER Final Completion and Acceptance: Change Orders will be resolved through Settlement Agreements issued through Facilities Contracts Services 22

23 Resolving Change Orders For Change Orders requiring additional scope Of Work to be completed: OAR estimates cost of the work Determines separate contracting options to complete work 23

24 Optional Contracting Methods OAR meets with Facilities Contract Services to determine separate contracting options: Sole source contract with same Contractor Separate party contracts B Letter Job Order Contracting (JOC) M&O Work Order 24

25 Web Access to Procedures Access to procedures and documents via the web page at: for a listing of procedures Access Forms Log to download electronic copies of latest versions of all forms 25