Background
When working with an alternative delivery contracting method (Progressive Design Build, Design Build, P3, CMGC, etc.) a “working” or Shadow Contract is created to allow the managing office to accurately track materials for the contract. The “real” contract (the actual let contract) often only has a handful of very large value lump sum (or dollar) items. These large, lump sum items do not allow the granularity of material tracking that is still required for the contract.
For example, the contract 82194-214269, I-75 over Rouge River and Fort St Epoxy Overlay and Substructure Repairs, has only two pay items.
| Item Description | Units | Item Num | Initial Qty | Unit Price | Auth Amt |
|---|---|---|---|---|---|
| _ Provisional Sum | Dlr | 1027060 | 3440768.840 | $1.00 | $3,440,768.84 |
| _ Guaranteed Maximum Price (GMP) | Dlr | 1027060 | 37825291.400 | $1.00 | $37,825,291.40 |
| Total | $41,266,060.24 |
Each pay item on a contract, within AASHTOWare Project Construction & Materials (APCM), carries the materials for that item. When the item quantity is posted on a daily work report, so are the material quantities along with other material information.
For example, a standard pay item of 8020001 - Curb, Conc, Det E1 is made up of the following materials:
- Bar Reinforcement (Epoxy Coated)
- Bituminized Fiber Joint Filler
- Concrete, Grade P1
- Membrane Curing Compound, White
Each of the above-mentioned materials needs to be tracked individually. Including the quantity of each, source, and acceptance status, etc. The information tracked for each material is used to determine MDOT’s acceptability of the contractor's work and to ensure proper compliance with material specifications and testing frequencies (if the material acceptance method is testing).
Generally, traditional design-bid-build contracts have hundreds of items, and when taking the materials for each pay item into account, there are thousands of data points to be tracked. In alternative delivery contracts, all the same materials are compressed under a single handful of pay items.
In the above contract example, the one single item of “_ Guaranteed Maximum Price (GMP)” could carry with it, hundreds or thousands of materials for that work. Posting material quantities and attempting to track hundreds or thousands of materials under one single pay item would be troublesome and confusing. Tracking materials within the real contract is infeasible. Thus, a shadow contract is created.
The shadow contract contains the traditional breakdown of the pay items. The item list often comes from a Schedule of Values (SOV) provided by the Contractor or QBS/pay item list provided by the Designer. The items in the shadow follow the standard pay items used in design-bid-build contracts and this allows for material tracking just like any other traditional contract.
For the above example contract, 82194-214269, a shadow contract was created with 145 pay items that represented the work to be done on the contract. Below is a subset of those shadow items:
| Item Num | Item Description | Units | Initial Qty | Unit Price | Auth Amt |
|---|---|---|---|---|---|
| 1077051 | _ Relocation and Site Cleanup | LSUM | 1.000 | $0.01 | $0.01 |
| 1080005 | Critical Path Method Schedule | Dlr | 15000.000 | $0.01 | $150.00 |
| 1100001 | Mobilization, Max | LSUM | 1.000 | $0.01 | $0.01 |
| 2010001 | Clearing | Acre | 0.100 | $0.01 | $0.00 |
| 7120098 | Flushing Cracks, Water | Ft | 422.000 | $0.01 | $4.22 |
| 7120099 | Structural Crack, Repr | Ft | 422.000 | $40.95 | $17,280.90 |
| 7120112 | Patching Conc, C-L | Cyd | 635.000 | $905.00 | $574,675.00 |
| 7122005 | Bridge Joint, Strip Seal Gland Replacement | Ft | 47.000 | $225.00 | $10,575.00 |
| 7137050 | _ Structural Steel; Temp Support; Spec; Type 3; 40'-60' | Ea | 1.000 | $95,000.00 | $95,000.00 |
| 7137050 | _ Structural Steel; Temp Support; Spec; Type 3; +60' | Ea | 1.000 | $120,000.00 | $120,000.00 |
| 8120026 | Pedestrian Type II Barricade, Temp | Ea | 10.000 | $135.00 | $1,350.00 |
| 8120027 | Pedestrian Type II Channelizer, Temp | Ft | 980.000 | $30.00 | $29,400.00 |
| 8120035 | Channelizing Device, 42 inch, Fluorescent, Furn | Ea | 20.000 | $28.00 | $560.00 |
| 8120036 | Channelizing Device, 42 inch, Fluorescent, Oper | Ea | 20.000 | $0.01 | $0.20 |
| 8507060 | _ Railroad Protection; CSX Transportation | Dlr | 50000.000 | $1.00 | $50,000.00 |
| NOTE |
|---|
| Because payment is not made from the shadow contract, the managing office may choose to make all unit prices $0.01 or they may chose to include the unit prices provided by the Contractor. Some managing offices prefer to process a payment estimate in the shadow contract as a means to determine the rough cost estimate that should be paid out through the active contract.
|
The managing office uses the shadow file to complete postings and daily work reports as they would on other traditional contracts. This allows a more organized and discrete tracking of the materials for the contract.
Shadow Contract Creation Process
Due to the security model use by APCM and the complexity of creating a contract, the ability to create a contract without going through the letting process is limited to system administrators. Shadow contracts cannot be created by the Office Technician, Construction Engineer, or other general user roles. The Construction Help Desk has developed tools to quickly create shadow contracts for use by field offices. These tools clone the real/live contract to create the shadow contract. Below is a general outline of the workflow for requesting and getting access to a shadow contract.
- The real/live contract is let and awarded.
- Upon award, MDOT Letting staff transition the real/live proposal from AASHTOWare Project Preconstruction to AASHTOWare Project Construction & Materials to create the real/live contract. They also assign the office overseeing the contract and activate it.
- The managing office requests a shadow contract for their live contract by emailing the help desk, [email protected]
- The help desk clones the live contract to create a shadow contract and will reach back out to the requestor to ensure the contract is correct and work with them on the loading of items and timing of activation so that the field staff can begin working on the contract.
If the real/live contract is awarded and already in APCM, a shadow contract request can generally be processed within a business day.
A shadow contract utilizes the CS-JN format in Preconstruction but adds a "X" to the end which designates it as a shadow file.
| NOTE |
|---|
| Some emergency contracts do not have a "live" contract to clone. Shadow contracts can still be created for these types of contracts. Please contact the help desk for information about these types of shadow contracts, [email protected]. |
Adding Items
Shadow contracts, when initially created, do not have any items associated with the contracts. They are a blank slate with no items. The handful of large lump sum/dollar items from the real/live contract are not carried over during the cloning process. Items can be added to the shadow contract in two ways:
- Imported by the help desk prior to contract activation. (preferred method)
- Manually via change orders and unattached items after contract activation.
Option 1 - Item import during creation
During the shadow contract creation process, prior to contract activation, the help desk can help import a list of items from the PQS provided by the Designer or schedule of values (SOV), provided by the contractor. The managing office simply needs to populate the Shadow_Items_Template.xlsx file and provide it to the help desk. This file can be provided with the initial request to create the shadow contract or separately. The managing office will be provided a draft of the shadow file to review prior to it's official creation.
| NOTE |
|---|
| It is important to know that the import process for creating items only works prior to activation of the contract and prior to any work being done within the shadow contract. After activation, only Option 2 listed below can be used to add/change items on a shadow contract. |
Option 2 - Manually after activation
After contract activation, field offices can add/modify items on the contract just like any real/live contract by using unattached items and change orders.
Unattached items are items that are unofficially added to the contract. Unattached items can be tracked on daily work reports but are not recognized as contract items by the system and cannot be included in a contract payment estimate until they are formally added to the contract through a change order and the change order is approved. For a shadow contract where pay estimates are not generated, unattached items are less problematic than when used on an active contract.
Change orders allow you to legally change a signed contract, including adding new items of work to the contract, increasing/decreasing quantities of existing items, making time extensions, setting final quantities, and specification changes. The same functions used on real/live contracts can be used on shadow contracts. Change Orders function the same exact way for shadow contracts and they do with real/live contracts.
For directions on how to add unattached items or the creation and processing of change orders, consult the Adding Unattached Items section of this manual.
| NOTE |
|---|
| If you are working on a contract, such as a progressive design build contract, that needs to add several new items to a shadow contract after reaching a new phase of the contract, please reach out to the help desk. The help desk can assist with the loading of many items on a change order similar to option 1 described above. |
System and Policy Considerations
The Construction Help Desk is continuously working to improve workflows and find efficiencies in the management of contracts within APCM. However, it is important to remember that each alternative delivery contract, like traditional design-bid-build contracts, is unique and managed by a field office that has its own resources, staffing levels, and existing internal policies and procedures. The same processes and procedures for tracking items and materials on those other contracts are the same for tracking materials on shadow contracts. No specific policy changes or special workflows have been established for shadow contracts. APCM treats a shadow contract the same as any other contract in the system. All the same system locks and controls are still in effect for shadow contracts. These locks and controls include but are not limited to:
- DWR authors restricted from approving their own DWRs
- Subcontracts must be entered into the system prior to posting items to subcontractors on DWRs
- Multiple draft or pending pay estimates cannot exist on the same contract at the same time
- Material acceptance is entered into the system via Sample Records
- Estimate exceptions are created for insufficient materials, item overruns, missed contract completion dates, etc.
- Insufficient materials calculation process only runs when an estimate is created
As the shadow contract is not the office legal contract nor is it the contract by which payment is made to the contractor ( the real/live contract is), the managing office has flexibility in managing their shadow contract. Some offices prefer to have prices for the items that are part of the schedule of values and some do not. Some offices prefer to fully approve estimates on their contract, while others delete and recreate a single estimate throughout the life of the contract. Some offices add items via the unattached item screen while other process change orders regularly throughout their contract. Managing offices are given this flexibility to match the specific needs of their alternative delivery method contract.
Summary
Shadow contracts serve as a vital tool for managing alternative delivery projects by enabling detailed material tracking that is not feasible under the limited pay item structure of live contracts. By replicating traditional itemized formats, shadow contracts allow field offices to maintain compliance, ensure quality, and streamline reporting within the AASHTOWare Project Construction & Materials system. While not legally binding or used for payment, they are treated with the same system integrity and controls as live contracts. The flexibility in managing shadow contracts empowers field offices to tailor their approach based on project needs, ensuring consistency and accuracy in contract administration across all delivery methods.
