Question 1

What is an allowable mark-up on my subcontractor usage for a project?

Accepted Answer

QUESTION

What is an allowable mark-up on my subcontractor usage for a project? Should I follow the guideline under 10.0 Force Account?

COMMENT

GC 10.1.1 (4 suggest a markup of 10% on actual subcontractor costs to cover all overhead and profit.

Question 2

What happens when a Contractor breaches the contract?

Accepted Answer

Delay, workmanship, may be covered in General Conditions clauses, such as: GC 4.13 Rejected Work; GC 13.2 Delay by Contractor; GC 15.3 Termination; GC 23.1 Reimbursement for Wrongful Act or Neglect and others.

It is important to document all communications.

This situation may require legal advice...but check the GCs for sections relevant to the alleged breach

Question 3

Can the CA use 200% of the value of defects and deficiencies to prevent Substantial Performance from being achieved?

Accepted Answer

QUESTION

I also feel there should be changes to the wording in the current MMCD Platinum Edition volume II to clarify and change the requirements for deficiencies be included in the substantial performance calculations. Can the Contract Administrator use defects and deficiencies to prevent Substantial Performance from being achieved using 200% of the value of the deficiencies?

COMMENT

The definition of Substantial Performance in GC 1.67.1 is:

GC 18.4.3 says

Question 4

Quality Assurance & Quality Control: Does the contractor need to provide testing to confirm they have met the applicable standard or does the owner have to pay for this under General Condition 4.12?

Accepted Answer

QUESTION

I understand is compaction is covered under sections 31 23 01 and 31 24 13 and 33 11 01 1.0 & 1.1 for water main installations. Compaction needs to be to 95% Modified Proctor.

COMMENT

Check out the “Contract Considerations” video “Quality Assurance and Quality Control Testing” on the MMCD website mmcd.net.

Question 5

The sole bid received is over the approved budget. Can the Owner negotiate with the bidder?

Accepted Answer

QUESTION

The client received only one bid in response to the tender that is over the approved budget for the project.

COMMENT

Where there is only one compliant bid, the issue of violating conditions of Contract A with other bidders does not exist. The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.

Then if the municipal bylaws permit negotiation without competition, the Owner can proceed to adjust the design and requirements to negotiate a price both can live with. Once a deal is reached, the documents are adjusted to suit and Contract B commences just as it would if there had been a normal process. I don’t think there is any violation of MMCD GCs or ITs if it is done this way. More likely the problem will be purchasing rules and restrictions.

Question 6

Does encountering a concealed condition meet the intent of GC 13.1 Delay by Owner, or GC 13.5 Delays for Additional Instructions?

Accepted Answer

QUESTION

I would like some clarification on the General Conditions of a MMCD contract as they relate to delay claims for encountering concealed or unknown conditions. Specifically the time period from encountering the condition to the Contractor making the decision to move to another area of the job site and the lost production time in mobilizing / de-mobilizing. The remediation of the condition I fully understand is a Change and can be dealt with accordingly.

My question is, does encountering a concealed condition meet the intent of GC 13.1 Delay by Owner or GC 13.5 Delays for Additional Instructions?

My interpretation would be a concealed condition meets both but if so, which one governs for payment of delay costs?

COMMENT

GC 11.1.1 gives three criteria for “Concealed or Unknown Condition”:

GC 13.1.1 says that a delay to the Contractor by the Owner must be caused by a specific act or omission by the CA the Owner, employees and agents.

Question 7

Can the Owner act as the Contract Administrator?

Accepted Answer

QUESTION

On a project under $200,000, can the owner act as the Contract Administrator?

COMMENT

The owner can appoint a Contract Administrator from their staff, but since the CA is in an inherent Conflict of Interest, (they have to be fair to all parties), there may be a shortage of volunteers!

However, because the CA is in a decision-making role, one should be appointed, and they should consult the GCs for the duties and procedures that are embedded in MMCD contracts.

Question 8

CCA benefits: Why should my company / municipality use a Certified Contract Administrator?

Accepted Answer

A Certified Contract Administrator is an MMCD contract administration expert. Certified Contract Administrators (CCAs) voluntarily undertake a rigorous certification process through MMCD Association, which includes providing proof of education, practical experience, and professional references, a 16-hour training course, and writing a certification examination – all to ensure a fair process for all parties involved in completing your contract.

Owners hire CCAs to:

Reduce management time commitments, leading to lower direct and overhead costs;
Minimize disputes and unwarranted claims for extra money and time to completion;
Improve good will among owners, Contract Administrators and contractors;
Reduce contract costs through widely accepted and efficient techniques, fair to all concerned and legally robust.

Contractors hire CCAs because they:

Show fairness and timeliness in dealing with all site related, compensation and other issues;
Guarantee certainty and consistency in administrative procedures during the contract and consistent fair treatment in each contract

Question 9

On a unit rate contract what is the percentage of Overhead and Markup to be given when an item is deleted for the contract and a credit is required?

Accepted Answer

QUESTION

Some of the items of the MMCD contract have been removed or not shown. We need to know on a unit rate contract what is the percentage of Overhead and Markup to be given when an item is deleted for the contract and a credit is required? Currently we are working with 10% and 5 % on all contract revisions for extra work being done.

COMMENT

GC 9.4.6 applies. Either the Owner or the Contractor may request a revised unit price. The revised unit price is subject to 9.4.3(1)b. Check out the Contract Considerations Video “Cost Types and Reimbursability”.