MITA Guidance Bulletin: MDOT Moves to “Final Out” Projects Impacted by OE 324 Lockout

MITA has learned that MDOT recently provided guidance to their field offices on how they should proceed with the “finaling out” of their construction projects impacted by the lockout of the Operating Engineers, Local 324 (OE 324) last September.

It is MITA’s understanding that MDOT’s statewide guidance addresses the following subjects: prevailing wage, extension of time, Dispute Review Boards, and local agency projects.

MITA’s guidance on these subjects is as follows:

Prevailing Wage

We expect your MDOT project engineer will be requesting that you provide some documentation that the fringe benefits contributions for your OE 324 employees have been submitted and accepted by the OE 324 Fringe Benefits Fund Office. The MDOT guidance cites cancelled checks, correspondence from the OE 324 Fringe Benefits Funds Office, or a notarized affidavit from the contractor as the acceptable methods for documenting the submittal and acceptance of your OE 324 fringe benefit contributions.

MITA and MDOT have agreed that once you provide the requested fringe benefits contributions confirmation via one of these methods, you will be considered compliant with the prevailing wage requirements as it relates to your OE 324 employees on the impacted project.

Extension of Time

You should recall that (in an early October 2018 MITA guidance bulletin) we suggested that you submit a Request for Time Extension when the time impacts of the OE 324 lockout were fully quantified on your project. That guidance bulletin further cited an anticipated response by the MDOT Engineer that would include the following key points:

· A statement that based on current information the request for XX days is approved

· A statement that liquidated damages (LDs) will be assessed for the extension of time

· A statement that the assessment of LDs is subject to re-evaluation at final acceptance of the project

· A statement that they will consider all labor dispute claims and associated extension of time request claims to be timely filed if they are filed per subsection 104.10.D.2 of the Standard Specifications. (i.e. within 60 days final acceptance)

As a follow-up step to the Engineer’s response, that guidance bulletin suggests that you submit your Notice of Intent to File Claim for the assessment of LDs. This step was perhaps premature at that time, as no Contract Modification had yet been generated. However, we suggested the step solely to protect and preserve your rights to file a claim to challenge the Engineer’s communication indicating that LDs would be assessed.

Under the recently issued MDOT guidance, we anticipate your Engineer will soon issue to you a Contract Modification formally granting your request for an extension of time related to the OE 324 lockout. We understand this Contract Modification will include the assessment of LDs for the approved extension of time.

Attached to this Contract Modification will be a letter (and waiver document) in which MDOT will present that they are willing to waive the assessed LDs for the approved extension of time related to the OE 324 lockout, if the contractor agrees to waive and release all claims on the project that have been filed, or may be filed, for additional compensation or costs related to the OE 324 lockout.

MDOT leadership has informed us that the terms and scope of the waiver are non-negotiable.

If you sign and return the waiver document within the required timeframe, it is our understanding that the LDs related to the approved extension of time related to the OE 324 lockout will be waived. A revised Contract Modification (i.e. without LDs) will be generated and returned to you for further processing.

If you choose not to sign and return the waiver document within the required timeframe, it is our understanding that the offer to waive the LDs will be withdrawn and that the Engineer will process the Contract Modification in its current form.

If you don’t sign MDOT’s waiver document, we assume it would be your intent to pursue a claim or claims for additional costs and/or time related to the OE 324 lockout. If that is your intent, we suggest you pursue your claim(s) in accordance with subsection 104.10 of the Standard Specifications and any supplemental or special provisions that may be incorporated in your contract documents.

We suggest you immediately submit your Notice of Intent to File Claim specifically describing and detailing your claim(s) in the context of and as they relate to the OE 324 lockout.

You should remember (and confirm with your Engineer) that per your Engineer’s prior communication, they will consider all labor dispute claims and associated extension of time request claims to be timely filed if they are filed per subsection 104.10.D.2 of the Standard Specifications (i.e. within 60 days final acceptance).

Dispute Review Boards (DRB)

MDOT has decided that the OE 324 lockout was a statewide issue that warranted a consistent statewide action, such that it is not considered a project related issue for DRB consideration. If your project includes any version of the Special Provision for Dispute Review Board, claims for entitlement related to the OE 324 lockout will not be considered by the DRB. Your Engineer should formally communicate to you that all claims related to the OE 324 lockout will be processed in accordance with subsection 104.10 of the Standard Specifications.

Local Agency (LA) Projects

For MDOT let LA projects, the LA Engineer will receive the same MDOT guidance that is being provided to MDOT’s own trunkline project Engineers. We are hopeful these LA Engineers will apply and execute the MDOT guidance consistent with MDOT’s application and execution. If you have an MDOT let LA project where the LA Engineer is not applying the MDOT guidance consistent with our understandings as described within this bulletin, or as you are experiencing it on an MDOT trunkline project, we suggest you contact the MDOT LA Engineer at the appropriate MDOT TSC who has oversight responsibility for your LA project to engage their involvement.

You may have the situation on an MDOT let LA project where the LA Engineer believes they have incurred additional construction engineering or inspection costs as a result of the OE 342 lockout. The LA typically would recover those additional costs through the assessment of LDs. It is our understanding that these situations will be evaluated on a case-by-case basis by MDOT’s Construction Field Services Division.

For non-MDOT let LA projects, the LA Engineer will not receive the MDOT guidance as MDOT would have no legal basis for providing that guidance or even intervening on the project. However, we would suggest that, if you have a non-MDOT let LA project that was impacted by the OE 342 lockout, you could provide the LA Engineer a copy of this bulletin and copies of documentation MDOT is utilizing, making the case that the LA adopt the same processes and procedures for moving their OE 324 lockout impacted projects to final acceptance.

If you have any questions, please contact Mike Nystrom, Executive Vice President, at 517-896-1493 or Glenn Bukoski, Vice President of Engineering Services, at 517-256-0741. They can also be reached via email at mikenystrom@thinkmita.org or at glennbukoski@thinkmita.org.

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