Project Delays Due to a Utility Company

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The Michigan Department of Transportation (MDOT) separates utility delays into two categories.

  1. Public Act 174 Delays - Utility delays caused by Public Act 174 of 2013, commonly referred to as the MISS DIG law.
  2. Changed Condition Utility Delay - Utility delays and/or extras resulting from the department’s design phase utility coordination efforts certifying utility issues are identified, addressed, and resolved prior to construction.

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Category 1 Delays – Public Act 174 Delays (MISS DIG)

Public Act 174 requires contractors to await a positive response from notified utilities before excavating, with the assessment of penalties by the Michigan Public Service Commission for non-compliance. Subsection 108.09.B of the Standard Specifications for Construction defines compensable delays. Although this section includes utility or railroad interference within the project limits, the delays caused by Public Act 174 are caused by the non-responsive utility(s), rather than the department. In addition, subsection 107.01 of the Standard Specifications for Construction requires the contractor to determine and comply with all applicable laws.

Subsection 108.06.C.4.b of the Standard Specifications for Construction states that work days will not be charged for suspensions of controlling operations for delays resulting from utilities not moved out of the contractor’s work area. For calendar day or date contracts, subsection 108.08 of the Standard Specifications for Construction discusses time extensions. Engineers should grant an extension of time for utility delays that a contractor could not reasonably foresee, which are no fault of their own, that affect controlling operations as noted on the progress schedule or original/revised critical path network.

If a contractor is delayed while waiting for a positive response from a utility(s) after submittal of a dig notice to MISS DIG it is recommended that a non-compensable extension of time be granted without the assessment of liquidated damages. Non-compensable extension of time approvals should only be granted if the controlling operation is delayed due to the lack of timely response by a utility(s). It is the contractor’s responsibility to provide satisfactory evidence that a controlling work operation/item was delayed.

MISS DIG issues and delays are non-compensable. Non-compensable in this case means no compensation for the contractor and the department. Examples of contractor costs that are non-compensable are as follows, but not limited to temporary traffic control, minor traffic devices, flag control, and idled equipment during the approved extension of time. These costs are not to be considered for reimbursement. Examples of department costs that are non-compensable are liquidated damages, which are not to be assessed to the contractor in these instances.

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Category 2 Delays – Changed Condition Utility Delay

Utility delays and the associated requests for compensation resulting from a plan error or unforeseen field condition will be evaluated on a project by project basis. The engineer will complete the following in cooperation with the department’s Transportation Service Center (TSC) utility coordinator and project designer when a delay becomes apparent:

  • Provide a documented notice to the utility stating the utility may be responsible for the cost of a project delay, if the conflict is not resolved by a specific date.
  • Convene a meeting with the appropriate and authoritative utility personnel to discuss the utility conflict, the utility’s prior commitments, and the potential project delay claim and associated costs. Ensure there is a clear understanding of the established timeframe for the utility conflict resolution before project delay charges accumulate.

If the utility is municipally owned, the department or local agency may be responsible for cost incurred. In these cases the department’s Guidance Document 10087, Distribution of Cost – Municipally Owned Utilities, is to be reviewed.

When a project is delayed as a direct result of a private utility or a municipal utility (operating outside of its corporate boundary and within the public right-of-way) and the above requirements have been completed, additional project costs will be assessed to the utility though the following process initiated by the engineer:

  • Process a contract modification using the following pay item. The pay item must be established as a 100 percent utility cost (state funding) with no federal participation. Include a description of the delay, utility contact name and address within the contract modification.
    • 1080010, Dlr, Utility Relocation Adjustment
  • Provide a copy of the final authorized contract modification and all supporting documentation to the Development Services Division, Utility Coordination and Permits Section. The supporting documentation must provide specific responsibilities, commitments, timeframes, and notifications. Documentation from the utility coordination efforts during the design phase should also be included. Thorough documentation is essential for recovering project delay costs due to a utility.

The Development Services Division, Utility Coordination and Permits Section is responsible for recovering project delay costs from utilities. In addition, the Utility Coordination and Permits Section may be contacted at any point during construction operations for assistance with documentation guidance, attendance at meetings, or questions.

This procedure does not include railroad issues and associated delays which should be directed to the Office of Rail.

Project costs due to utility delays on local agency projects are the responsibility of the Local Agency and are not reimbursable through Federal or State funding participation. It is recommend that local agencies follow the procedure described herein to document their utility coordination and any delay costs with the following exceptions. The pay item noted above is to be processed on a contract modification with 100 percent local funding. It is the responsibility of the local agency to recover utility delay costs. Local agencies should be advised to pursue cost recovery directly from the respective utilities after processing the contract modification.

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