The report explored the use of change orders, required to effect minor changes in quantities, a change in design, the addition of pay items, and so on; and the use of supplemental agreements, used to modify plans or specifications necessary as work progresses. To determine the extent to which change orders and supplemental agreements were used, a sample was drawn from construction projects closed out in FY 1972 and FY 1973. Based on findings from examination of the sample construction projects, the PEER Committee recommended that the Highway Department establish and enforce specific guidelines for the use of change orders and supplemental agreements. Also recommended were major changes in procedures for the development of state estimates of construction costs.
A second area of concern was liquidated damages, amounts withheld from the contractor for each day the project falls behind the scheduled date of completion. A study of rates for liquidated damages was recommended, since present rates were inadequate to cover actual costs.
Additional recommendations were to increase the size of the department’s legal staff and to establish standard procedures for collection of overpayments to contractors.
For a paper copy of this report, contact PEER by telephone at 601-359-1226 or by e-mail at reports@peer.ms.gov.