Chapter 4A: Division of Construction-Administered Contracts

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• 4A-1  Introduction
  • 4A-1-1  Contract Award
  • 4A-1-2  Contract Types
• 4A-2  Construction Projects paid through the Contract Administration System
  • 4A-2-1  Overview
  • 4A-2-2  Before the Work Begins
  • 4A-2-3  Procedures for Payment through Contract Administration System
  • 4A-2-4  Project Closeout
• 4A-3  Emergency Contracts
  • 4A-3-1  Overview
  • 4A-3-2  Procedures for Payment on Invoices
  • 4A-3-3  Project Closeout
• 4A-4  Minor B Contracts
  • 4A-4-1  Overview
  • 4A-4-2  Before Work Begins
  • 4A-4-3  Procedures for Payment
  • 4A-4-4  Project Closeout

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4A-1 Introduction

4A-1-1 Contract Award

For Division of Construction-administered contracts, the following groups are involved in the contract award process:

• The Division of Engineering Services-Office Engineer (DES-OE) is responsible for awarding capital construction contracts.
• The Division of Procurement and Contracts (DPAC) is responsible for awarding Minor B and emergency contracts.

4A-1-2 Contract Types

The Division of Construction Labor Compliance unit is responsible for the monitoring and enforcement of capital construction, emergency and Minor B projects administered in the Division of Construction. A resident engineer will be assigned to administer these projects.

4A-2 Construction Projects paid through the Contract Administration System

4A-2-1 Overview

Capital construction projects are those with contracts greater than $333,000. These contracts are paid through the Contract Administration System (CAS) by progress pay.

4A-2-2 Before the Work Begins

Before the start of the work on a capital construction project, the Labor Compliance officer (LCO) at the district must establish to whom the contractor will submit certified payroll records. Each district may have different procedures. Before the start of work, the Labor Compliance assigned staff must review the contract and work to be performed, including by any subcontractors listed at the time of bid, and hold a pre-job meeting. See Chapter 8, “Prejob Conference Requirements and Posters,” of this manual for additional details on this pre-job meeting.

If the resident engineer has questions or requires guidance, they may contact their district Labor Compliance office for assistance.

4A-2-3 Procedures for Payment through Contract Administration System

Capital construction contracts are paid by progress pay estimates. In accordance with contract provisions and Standard Specifications, all payroll records must be submitted to the Labor Compliance office by the close of business on 15^th of each month for the previous month’s work.

Labor Compliance staff should date stamp any received paper payroll records. The web-based payroll management system will automatically date and time stamp receipt of electronic filings.

Labor Compliance staff must review payroll records and identify any delinquent or inadequate records. The prime contractor is sent a Notice of Delinquent or Inadequate Records. The district processes a withhold of as much as $10,000 of the progress pay estimate.

All of these items must be documented in the district’s designated tracking mechanism.

The window of time from when payroll documents are received to when payments are made on all construction projects for a given month is very short. Be sure to reference and adhere to your district’s payment calendar date to assure enough time for payroll records to be reviewed, violation letters sent, and all withholds initiated before the payment date.

4A-2-4 Project Closeout

The resident engineer must verify the work is satisfactorily completed and submit the following documents to the Labor Compliance office for payroll reviews:

• Contract acceptance
• Daily and weekly status reports
• Form CEM-2402(S), “Final Report - Utilization of Disabled Veterans Business Enterprises (DVBE),” for state funded projects
• Form CEM-2402(F), “Final Report - Utilization of Disadvantaged Business Enterprises (DBE), First-Tier Subcontractors,” for projects that contain federal funds
• Certified payrolls, including fringe benefit statements, and apprentice agreements
• Employee interviews

4A-3 Emergency Contracts

4A-3-1 Overview

Caltrans uses emergency contracts when services or goods are needed to immediately respond to “a sudden, unexpected occurrence that poses a clear and imminent danger requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services” as provided by Public Contract Code Section 1102.

The district Maintenance unit has the responsibility of obtaining a director’s order for emergency work. DPAC prepares and executes these emergency service contracts.

Emergency contracts exceeding $333,000 may be paid through CAS. If so, see Section 4A-2-3, “Procedures for Payment through Contract Administration System,” of this manual. If emergency contracts are paid by invoice, follow the procedures in Section 4A-2-4, “Project Closeout.”

4A-3-2 Procedures for Payment on Invoices

Emergency contracts are paid in arrears and follow a receiver and invoice payment process. 

Emergency contract invoices must be paid within 45 days of receipt, or Caltrans becomes liable for interest. The LCO can withhold money for missing payrolls or payroll discrepancies. When payment is withheld, assigned district staff must immediately complete and file Form STD 209, “Invoice Dispute Notification,” to stop Caltrans from accruing interest payments. Tracking logs are kept to prevent unnecessary interest payment from accruing.

4A-3-3 Project Closeout

The resident engineer must verify the work is satisfactorily completed and submit the following documents to the LCO for payroll reviews:

• Contract acceptance
• Daily and weekly status reports
• Form CEM-2402(S), “Final Report - Utilization of Disabled Veterans Business Enterprises (DVBE),” for state funded projects
• Form CEM-2402(F), “Final Report - Utilization of Disadvantaged Business Enterprises (DBE), First-Tier Subcontractors,” for projects that contain federal funds
• Certified payrolls, including fringe benefit statements, and apprentice agreements
• Employee interviews
• Contractor invoice
• Form FA-1226A, “Receiver - One Invoice (Single or Multi Funding Lines)”

Upon receiving the document package from the resident engineer, the LCO must do all of the following:

1. Date stamp the original receiving record in the lower left-hand corner and initial.
2. Log the date the receiving record and payroll documents are received, and the date they are submitted to be paid, into the labor compliance tracking system.
3. Verify that the receiving record includes the resident engineer’s signature. Return any unsigned receiving record.
4. Make a copy of the receiving record and the invoice to retain in a logbook in a tracking system.
5. Review the payroll records, verify classifications, rates of pay, and hours against the daily reports.
6. Approve the certified payroll records by signing the receiving record and noting that payroll records are approved.
7. Forward the receiving record and invoice to the identified district staff members for processing by Accounting.
8. File all manually received payroll documents in the project file. No filing is necessary if payroll documents have been submitted electronically.

Invoice Dispute Notification

Inform the resident engineer and assigned district staff that they must send the completed Form STD 209, “Invoice Dispute Notification,” to the contractor and to the Division of Accounting, Office of Accounts Payable.

When missing documents are received, or the dispute is otherwise resolved, send the invoice, the receiving record, and a copy of Form STD 209 to the Division of Accounting, Office of Accounts Payable for payment.

This process can also be completed in AMS Advantage directly without hard copies sent to the Division of Accounting. Refer to the AMS Advantage Quick Reference Guide for additional details on this process.

Contact the Division of Accounting, Office of Accounts Payable with any questions.

Partial Payments

The resident engineer can make a partial payment to the contractor during the progress of the work when the number of working days in a contract exceeds 20 days.

4A-4 Minor B Contracts

4A-4-1 Overview

Minor B contracts are usually a minor construction project less than $388,000. This threshold is subject to change. Staff may verify the current threshold at DPAC’s website.

4A-4-2 Before Work Begins

Before the start of the work on a Minor B construction project, the Labor Compliance officer (LCO) at the district must establish to whom the contractor will submit their certified payroll records. Each district may have different procedures to make this determination. Before the start of work, the LCO must review the contract and work to be performed, including any subcontractors listed at the time of bid, and hold a pre-job meeting. See Chapter 8 , “Pre-job Conference Requirements and Posters,” of this manual for additional details on this pre-job meeting.

If the resident engineer has questions or requires guidance, they may contact their district Labor Compliance office for assistance.

4A-4-3 Procedures for Payment

Minor B contracts are paid in arrears and follow a receiver and invoice payment process. 

Minor B contracts must be paid within 45 days of receipt of invoices or Caltrans becomes liable for interest. The LCO can withhold money for missing payrolls or payroll discrepancies. When this happens, assigned district staff must immediately complete and file Form STD 209, “Invoice Dispute Notification,” to prevent Caltrans from accruing interest payments. Tracking logs are kept to avoid unnecessary interest payment from accruing.

4A-4-4 Project Closeout

The resident engineer must verify the work is satisfactorily completed and submit the following documents to the Labor Compliance office for payroll reviews:

1. Contract acceptance
2. Daily and weekly status reports
3. Form CEM-2402(S), “Final Report - Utilization of Disabled Veterans Business Enterprises (DVBE), State-Funded Projects Only” for state funded projects
4. Form CEM-2402(F), “Final Report - Utilization of Disadvantaged Business Enterprises (DBE), First-Tier Subcontractors,” for projects that contain federal funds
5. Certified payrolls, including fringe benefit statements, and apprentice agreements
6. Employee interviews
7. Contractor invoice
8. Form FA-1226A, “Receiver - One Invoice (Single or Multi Funding Lines)”

Upon receiving the document package from the resident engineer, the LCO must do all of the following:

1. Date stamp the original receiving record in the lower left-hand corner and initial.
2. Log the date the receiving record and payroll documents are received, and the date they are submitted to be paid, into the labor compliance tracking system.
3. Verify that the receiving record includes the resident engineer’s signature. Return any unsigned receiving record.
4. Make a copy of the receiving record and the invoice to retain in a logbook in a tracking system.
5. Review the payroll records, verify classifications, rates of pay, and hours against the daily reports.
6. Approve the certified payroll records by signing the receiving record and noting that payroll records are approved.
7. Forward the receiving record and invoice to the identified district staff members for processing with accounting.
8. File all manually received payroll documents in the project file. No filing is necessary for payroll documents submitted electronically into the web-based tracking system.

Invoice Dispute Notification

Inform the resident engineer and assigned district staff that they must send the completed Form STD 209, “Invoice Dispute Notification,” to the contractor and to the Division of Accounting, Office of Accounts Payable.

When missing documents are received, or the dispute is otherwise resolved, send the invoice, the receiving record, and a copy of Form STD 209 to the Division of Accounting, Office of Accounts Payable for payment.

This process can also be completed in AMS Advantage directly without hard copies sent to the Division of Accounting. Refer to the AMS Advantage Quick Reference Guide for additional details on this process.

Contact the Division of Accounting, Office of Accounts Payable with any questions.

Partial Payments

The resident engineer can make a partial payment to the contractor during the progress of the work when the number of working days in a contract exceeds 20 days.