Meeting Contract Requirements - Guide to Successfully Completing ADOT Projects

Prime Consultant

Major Requirements

This tab discusses the various concepts and requirements you are likely to encounter while working as the prime consultant on an ADOT project.

Post-Award Instruction Package

ADOT design contracts are managed by the Engineering Consultants Section (ECS). Detailed instructions for the administration of the professional services contract are outlined in the ECS Consultant Contract Manual. The ECS Contract Specialist may also schedule a post-award meeting to discuss any special instructions.

You will also need to enter all subconsultants, DBEs and direct expense vendors into the ADOT DBE System before submitting the first payment report. 

For more information, you should read sample contracts and become familiar with contract requirements. Sample contracts for different types of design contracts are available for review in the Engineering Consultants section of the ADOT website. 

Adding/Removing Subconsultants

Changing subconsultants after winning an award requires approval from ADOT. Any change, including an addition, removal, or substitution of subconsultants must be submitted to and approved by ADOT prior to making the change. In order to get approval, you must submit an “Add or Remove Subconsultant Request Form” to ECS, which can be found in the Engineering Consultants section of the ADOT website.

Dispute Escalation Process

Sometimes a dispute arises and must be resolved. When a dispute does arise, ADOT attempts to resolve it at the lowest management level possible. Ideally, the dispute is discussed and resolved between the ADOT Project Manager, the consultant’s project manager, and the ECS contract specialist. If they are unable to reach a satisfactory agreement, the dispute may escalate to include more senior personnel such as the ECS Contract Manager or ADOT Section Manager. Serious disagreements may escalate all the way to the State Engineer and ECS Manager. 

See Section 4.09 of a sample design contract for a complete description of the Dispute Escalation Process. Sample design contracts are available form the Engineering Consultants section of the ADOT website.

Monthly Progress and Work-Hour Reports

You will be required to submit progress reports at regular intervals (generally monthly) while completing the project. The form of these reports may vary by project, but will generally include an accounting of work-hours expended to date organized by labor category and design elements. ADOT will provide the method for submitting these reports.

Monthly Progress Payment Reports/Invoices

In order to invoice ADOT at the specified interval (usually monthly) you must submit a Progress Payment Report (PPR). This will need to include a monthly summary of costs billed by category or subcategory and whatever back-up documentation ADOT specifies. Failing to submit PPRs in a timely manner might result in sanctions up to and including termination of your contract. Moreover, ADOT does not have to pay invoices that are submitted more than 60 days after the end of the fiscal year in which the cost was incurred, so you need to be especially prompt with PPRs around the end of the fiscal year. Incomplete or incorrect PPRs will be returned.

Sample Payment Report forms for various types of contracts are available in the Engineering Consultants section of the ADOT website.

Subcontractor Payment Reporting

ADOT is required by law to collect consultant, subconsultant, and tier subconsultant payment information (a tier subconsultant is a company that subconsults to a subconsultant). This means that a prime consultant must enter all subconsultants’ payment information into the ADOT DBE System website.

Once ADOT has signed a contract with your firm, no later than 15 calendar days later, you must enter your project into the ADOT DBE System and add all of your subconsultants and tier subconsultants to the project. When adding a subconsultants and tier subconsultants to the project, you will need to input some information about its role in the project and whether they count towards the DBE goal. After having added all subconsultants and tier subconsultants, you must wait until your project is under way before reporting any payments.

After receiving your first payment from ADOT (and every month thereafter while the project is ongoing), you must submit information on the payments you have made to each of your subconsultants during the previous month into the DBE System by the 15th day of the current month (e.g., information for payments made in April must be submitted by May 15th).

To help you with this process, ADOT has created a DBE Contract and Labor Compliance Management System User Manual, which is available under Disadvantaged Business Enterprise (DBE) Program in the Engineering Consultants section of the ADOT website. A video is also available to guide you through this process.

Failure to report payments each month will result in sanctions for the prime contractor.  For each subcontract on which the contractor fails to submit timely and complete payment information, ADOT will retain $1,000.00 as liquidated damages, from the monies due to the contractor.  Liquidated damages will be deducted each month for each subcontract on which the contractor fails to submit payment information until the contractor provides the required information.  After 90 consecutive days of non-reporting, the liquidated damages will increase to $2,000.00 for each subsequent month, for each subcontract on which the contractor fails to report until the information is provided.

Once a project is complete and all payments have been made and confirmed, the prime contractor must submit a Certification of Payments form for each DBE they utilized on the project. This form certifies that all payments have been made to the DBE subcontractor, and both the prime and subcontractor must sign the form. The Certification of Payments form can be found in the BECO section of the ADOT Website.

Prompt Payment and Retainage

Prime consultants are required to pay their subconsultants within seven days of receiving payment from ADOT. Similarly, prime consultants are required to make final payment to a subconsultant of all monies owed within seven days of receiving payment from ADOT. Prime consultants are required to enter payments made to all subconsultants in the ADOT DBE System each month in order to track prompt payment and so that ADOT can track and report awards, commitments and payments made to DBE and non-DBE subconsultants to federal funding sources.

If partial and final payment (including any retention) is not made or not reported by the prime consultant within 7 days from the date ADOT pays the prime consultant, ADOT will retain two times the dollar amount not paid to each subconsultant. If full payment is made within 30 days of ADOT’s payment to the consultant, the amount withheld by ADOT will be released. If full payment is made after 30 days of ADOT’s payment to the consultant, ADOT will release 75 percent of the funds withheld. ADOT will retain 25 percent of the monies withheld as liquidated damages.

If the consultant fails to make prompt payment for three consecutive months, or any four months over the course of one project, or if the consultant fails to make prompt payment on two or more projects within 24 months, ADOT may, in addition, invoke the following remedies: Withhold monthly progress payments until the issue is resolved and full payment has been made to all subconsultants, terminate the contract for default, and/or disqualify the consultant from future bidding, temporarily or permanently, depending on the number and severity of violations.

ADOT typically does not hold retention from prime consultants. However, if the prime contract allows for retainage, then prime consultants may hold retention against a subconsultant. If the prime contract provides for retention, the prime consultant and each subconsultant of any tier must not retain a higher percentage than ADOT may retain under the prime contract.

Furthermore, if a subconsultant is performing work on multiple contracts for the same consultant or subconsultant of any tier, the consultant or subconsultant of any tier shall not withhold or reduce payment from its subconsultants on the contract because of disputes or claims on another contract.

Contract Modifications

ADOT can unilaterally issue contract modifications, or they can result from a discussion between you and ADOT. One common reason for a contract modification is if ADOT finds there is a need to add Post-Design Services (PDS). PDS services may be required by the client during the construction phase of the project.

The specific documents required for contract modifications can change from contract to contract. See the Consultant Contract Modification Checklist in the Engineering Consultants section of the ADOT website for details of what consultants are expected to include in a contract modification submittal. 

Extension of Contract Time

Time extensions are treated as contract modification. A contract time extension may be granted for a number of reasons, as determined by ADOT. The ADOT project manager will notify you of the expiration date for the contract in a timely manner, and work with you to determine if a time extension is needed. ECS must be informed of a need for a time extension within ten calendar days of the expiration of the contract. For more information, see the Contract Award and Administration Rules, section 4.13, on the ECS Policies, Procedures and FAQ page.

On-Call Task Order Assignments

ADOT often selects multiple on-call consultants to conduct on-call services for various projects.  ADOT currently makes on-call task order assignment among those consultants through a task rotation process so that funds can be distributed as equally as possible among consultants, but this is not always reasonable or feasible. New rules recently mandated by the federal government will require ADOT in the future to create a competitive process for task order assignments among selected consultants. There is no guarantee that having an on-call service contract will result in any work at all.  For more information, see the Contract Award and Administration Rules, section 4.12, on the ECS Policies, Procedures and FAQ page.

Task orders are legally treated by ADOT as a contract modification. When a project requires the services of an On-Call service contract, the ADOT project manager contacts the firm and provides a task order number and a specific scope of work for the project. The consultant will respond with a proposal and cost for the needed service, which is then negotiated with ADOT through ECS and the Project Manager.  Once the scope and cost of the task order is negotiated with ADOT, ECS will create and submit a contract modification to the consultant for signature.  A notice to proceed to begin work on the task will be issued by ECS to the consultant once the consultant signs and returns the contract modification to ADOT.   

Change of Consultant Project Team

The composition of your project team is a strong part of the reason your SOQ submission was selected for the project. If you find for some reason that you need to replace a member of your team, you must provide at least ten days’ notice to ADOT in writing. The notice must include both the credentials of the leaving team member and the credentials of the proposed replacement. ADOT has the right to reject any proposed replacement. Should your project team change due to a change in subcontractor, you must submit an “Add or Remove Subconsultant Request Form”, which can be found on the ECS Forms and Templates page.

There are additional requirements related to replacing DBE subconsultants. See the Substitution/Termination of a DBE section of the Requirements for Contracts with DBE Goals tab for more information on these requirements.

Consultant Performance Evaluation

The Consultant Evaluation Program is designed to maintain open lines of communication between the ADOT project manager, ADOT staff, and the consultant. Consultant performance evaluations are conducted at least once a year by ADOT staff to ensure that projects are on schedule, within budget, and being performed well. A poor evaluation score can make it harder to win future contracts because it is taken into account during SOQ evaluation. Subconsultants are evaluated at the same time, and some of the subconsultant’s scores affect the prime consultant’s ultimate score. For more, see the Contract Award and Administration Rules, section 4.15, on the ECS Policies, Procedures and FAQ page. You may also wish to read the Evaluation Program Guidelines, which is available on the Consultant Resources page.

Errors and Omission

If ADOT determines that you, as a prime consultant, have made any errors or omissions in its final product, you are obligated to correct the situation without any additional expense to ADOT.

For more information, see the Errors and Omissions by Consultants Policy document on the ECS Policies, Procedures and FAQ page. 

Post-Design Services

Post-design services are services an architectural or engineering design firm provides during the construction phase of a project, usually to correct an issue or adjust to new circumstances. The ADOT project manager will initiate post-design services through a contract modification if needed. Failure to respond to a request from the ADOT project manager or resident engineer in a timely manner will be considered a breach of contract.

Breach of Contract

ADOT can declare that that you are in breach of contract for any of the following reasons:

  • Failure to address a problem identified by ADOT in the performance of the contract
  • Failure to perform work or satisfactorily submit deliverables as outlined in the Scope of Work
  • Failure to perform work in a timely manner to meet schedule
  • Unsatisfactory technical performance in accordance with ADOT, professional, safety or industry standards
  • Unauthorized key personnel change
  • Untimely notification of a key personnel change
  • Failure to submit Progress Payment Reports, Contract Modifications and other required documents in a timely manner
  • Failure to pay a subconsultant in a timely manner
  • Failure to retain records in accordance with contract provisions
  • Failure to adhere to one or more terms or conditions of the contract

If ADOT believes you are in breach of contract, you will generally have the opportunity to resolve the matter informally first. If that is unsuccessful or breaches continue to occur, ADOT will inform you in writing of the breach, identify the required solution, and establish a deadline for you to act. If you do not respond within ten business days (or another timeframe if the letter specifies one) and/or do not address the matter at hand, ADOT may take punitive action up to and including termination of the contract and disqualification from submitting an SOQ on future projects. See the Dispute Escalation Process section for more details on how to escalate a dispute.

Contract Completion and Closeout

Prime Consultants must submit a Certificate of Final DBE Payments form to ADOT when each DBE subcontractor within 30 days of completion of their work. The Certificate of Final DBE Payments form can be found on the ECS Forms and Templates page. 

When the technical review establishes that all phases of the contract have been completed to ADOT’s satisfaction, the Prime Consultant will be notified in writing of the final closeout procedure. Closeout may include a final Progress Payment Report, various deliverables, and a final audit of your records and those of your subconsultants.

A final or Incurred Cost Audit (ICA) may be required by ADOT to determine contract costs’ allowability, allocability, and reasonableness. Generally, only large, overhead-based contracts require an ICA. For more information on the nature and requirements of the ICA, see the Consultant Audit Guidelines which is also available on the ECS Forms and Templates page.

Record Retention

Following completion of the project and notification of final close-out procedures, per ADOT requirements, you are required to keep all contract files, financial files and other supporting materials for the project for five years from the date that ADOT issues a final acceptance to the contractor of the construction project or the design consultant’s work is complete as defined in the contract, whichever is later.

Contact the Prime consultant for the specific retention requirements for your contract.

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Civil RightsTitle VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA)

Pursuant to Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA), ADOT does not discriminate on the basis of race, color, national origin, age, sex or disability. Persons that require a reasonable accommodation based on language or disability should contact ADOT’s Civil Rights Office at [email protected]. Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

De acuerdo con el título VI de la Ley de Derechos Civiles de 1964 y la Ley de Estadounidenses con Discapacidades (ADA por sus siglas en inglés), el Departamento de Transporte de Arizona (ADOT por sus siglas en inglés) no discrimina por raza, color, nacionalidad, edad, género o discapacidad.  Personas que requieren asistencia (dentro de lo razonable) ya sea por el idioma o por discapacidad deben ponerse en contacto con la Oficina de Derechos Civiles en [email protected]. Las solicitudes deben hacerse lo más pronto posible para asegurar que el equipo encargado del proyecto tenga la oportunidad de hacer los arreglos necesarios.