Overview
Chapter 25 of the Acts of 2009 (An Act Modernizing the Transportation Systems of the Commonwealth), as amended by Chapter 26 of the Acts of 2009, required the integration of various state transportation agencies (including the Executive Office of Transportation and Public Works and its divisions, the Massachusetts Turnpike Authority, the Massachusetts Highway Department, the Registry of Motor Vehicles, and the Massachusetts Aeronautics Commission) into a newly created Massachusetts Department of Transportation (MassDOT).
MassDOT is administered by the Secretary of Transportation, who is appointed by the Governor to serve as the department’s chief executive officer. MassDOT currently has five divisions: the Highway Division, the Rail and Transit Division, the Aeronautics Division, the Registry of Motor Vehicles, and the Massachusetts Bay Transportation Authority. During our audit period, MassDOT had an 11-member board of directors (including the Secretary), the members of which have expertise in transportation, finance, and engineering. The board of directors is appointed by the Governor.
MassDOT Highway Division
MassDOT’s Highway Division is responsible for the operation, construction, and maintenance of all state bridges and highways. The Highway Division is separated into six district offices, located in Lenox, Northampton, Worcester, Arlington, Taunton, and Boston. Each district office supervises all road and bridge construction and maintenance in its jurisdiction and provides engineering support to cities and towns. The Millbury roadway reconstruction and bridge replacement project reviewed in this audit was overseen from the Worcester office. According to MassDOT’s website,
Through September 1, 2018 the MassDOT Accelerated Bridge Program has advertised 200 construction contracts with a combined construction budget valued at $2.43 billion.
Millbury Roadway Reconstruction—Contract 86774
Project 605964 was for the replacement of a bridge at Route 146 over West Main Street and road improvements on Route 146 at Elm Street, Elmwood Street, and West Main Street in Millbury. The project was part of the statewide Accelerated Bridge Program, which had a goal of reducing the state’s backlog of structurally deficient bridges to fewer than 450 by September 30, 2016. According to the terms of the awarded Contract 86774, project construction was to be performed by J.F. Lynch as the general contractor. The project’s construction was overseen by MassDOT’s Highway Division, with MassDOT paying J.F. Lynch as work was completed.
The original bid price of the contract was $20,444,070. However, the construction budget provided for additional costs not included in the general contractor’s bid price. Accordingly, the overall construction budget totaled $23,995,411, which included the general contractor’s bid price of $20,444,070, contract contingency funds of $2,849,342, and police details totaling $702,000.2 Part of the project (85.7%) was financed by the Commonwealth, 11.8% by the federal government, and 2.5% by the town of Millbury. The contract’s notice to proceed for the project was dated September 3, 2015, the first day of our audit period. The contract’s completion date was to be June 19, 2020.
Invoicing
As construction takes place, MassDOT’s resident engineer maintains records of the amount of work completed at a given interval (usually two weeks) and prepares a document called a contract quantity estimate (CQE)3 at the end of each interval. The resident engineer reviews the CQE with the general contractor; after they agree on the amount of work completed during the period, they both sign the CQE. Next, they send the CQE to the MassDOT district highway director for approval; then the director sends the approved CQE to the MassDOT business office for payment through the Massachusetts Management Accounting and Reporting System.
Extra Work Orders
During the construction phase of the project, changes or unforeseen circumstances may occur, necessitating additional work outside the original contract scope. This is referred to as extra work. MassDOT’s Standard Operating Procedure CSD 25-12-1-000 states,
“Extra Work” is defined as work which:
- Was not originally anticipated and/or contained in the contract, and
- Is determined by the Engineer to be necessary for the proper completion of the project, and
- Bears a reasonable subsidiary relation to the full execution of the work originally described in the contract; i.e. is work that is reasonably similar in type and character to the work originally described in the Contract.
MassDOT prepares an extra work order (EWO) to describe the scope of significant extra tasks needed, the rationale for the additional work, and the cost to complete it. The resident engineer completes the EWO and sends it to the general contractor for approval; then the MassDOT district construction engineer reviews and approves it. These costs are not included in the original bid costs but are budgeted as estimated contingency costs.
Police Details for Traffic Control
As of June 30, 2020, MassDOT had incurred $850,622 in police detail work for traffic control for the project. This work was performed by the state police and the Millbury and Sutton town police. The number of police officers needed each working day is determined a week in advance based on the construction phase. Each working day, MassDOT’s resident engineer, or his/her designee, records in the daily field inspection reports (FIRs) the name/s of, police department/s of, and number of hours worked by the police officers who have provided traffic control services.
Each police department bills the general contractor for police details, and then the general contractor forwards the police detail invoices to MassDOT to approve them for payment. The resident engineer compares the hours on the police invoices to those on the FIRs for each police officer. After receiving approval from the resident engineer, the general contractor pays the police departments and MassDOT reimburses the general contractor.
Commodity Price Adjustments
According to Section 38A of Chapter 30 of the Massachusetts General Laws,
Contracts for road and bridge projects awarded as a result of a proposal or invitation for bids under section 39M [of the General Laws] shall include a price adjustment clause for each of the following materials: fuel, both diesel and gasoline; asphalt; concrete; and steel.
Rates for commodities are specified in the original contract. When the general contractor uses or purchases commodities, MassDOT reprices them according to the current market prices in federal pricing reports. If current prices differ from the contract prices by more than 5%, MassDOT calculates a price adjustment and records the new price in the CQE.
| Date published: | October 19, 2021 |
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