The nation’s infrastructure is in dire shape. Roadways are disheveled and full of potholes, bridges are crumbling and airports struggle to handle increased traffic. In fact, according to the U.S. government, 70,000 bridges—one out of every nine—are classified as structurally deficient. Recent government forecasts indicate a strategy for $1.5 trillion in infrastructure spending.
With increased construction budgets looming down the road, construction and engineering divisions will be busier than normal. To help increase success during busier times, organizations are encouraged to develop or revisit their construction procedure manuals. This manual should be shared with and incorporated into construction contracts, including subcontractors, as a contract amendment.
Basic elements of the construction procedure manual should include:
A policy indicating who can approve capital construction project budgets and budget additions, including change orders
A bidding policy indicating three bids are to be obtained before hiring a contractor and before authorizing self-performed work
Procedures outlining the approval process for monthly payment applications and/or construction invoices, including an authorization matrix
Copies of all forms to be used on each construction project, such as request for information (RFI) forms, lien waivers, labor and labor burden breakdowns, equipment rental price sheets, invoice templates, change order forms and many others
A policy on approving change orders, including an authorization matrix
The change order policy process, indicating change orders are to be approved in writing within 10 business days
Implementing solid policies and procedures will help your municipality succeed and allow you to make better use of public dollars.
Want to know more about construction contract best practices? Contact Adam, leader of BKD’s construction contract team, or your trusted BKD advisor.