Shadow Contracts

Background

When working with an alternative delivery contracting method (Design Build, P3, CMGC, etc.) a “working” or Shadow Contract is created to allow the managing office to accurately track materials for the contract. The “real” contract (the actual let contract) often only has a handful of very large value lump sum (or dollar) items. These large, lump sum items do not allow the granularity of material tracking that is still required for the contract.

For example, the contract 82194-214269, I-75 over Rouge River and Fort St Epoxy Overlay and Substructure Repairs, has only two pay items.

Each pay item on a contract, within AASHTOWare Project Construction & Materials (APCM), carries the materials for that item. When the item quantity is posted on a daily work report, so are the material quantities and other material information that goes with the materials that make up the pay item.

For example, a standard pay item of 8020001 - Curb, Conc, Det E1 is made up of the following materials:

• Bar Reinforcement (Epoxy Coated)
• Bituminized Fiber Joint Filler
• Concrete, Grade P1
• Membrane Curing Compound, White

Each of the above-mentioned materials need to be tracked individually. Including the quantity of each, source, and acceptance status, etc. The information tracked for each material is used to determine MDOT’s acceptability of the contractors’ work and ensure proper compliance with material specifications and testing frequencies (if acceptance method is testing).

Generally, traditional design-bid-build contracts have hundreds of items, and when taking the materials for each pay item into account, there are thousands of data points to be tracked. In alternative delivery contracts, all the same materials are compressed under a single handful of pay items.

In the above contract example, the one single item of “_ Guaranteed Maximum Price (GMP)” could carry with it, hundreds or thousands of materials for that work. Posting material quantities and attempting to track hundreds or thousands of materials under one single pay item would be troublesome and confusing. Tracking materials within the real contract is infeasible. Thus, a shadow contract is created.

The shadow contract contains the tradtional breakdown of the lager items. The item list often comes from a Schedule of Values (SOV) or item list provided by the Contractor. The items in the shadow follow the standard pay items and this allows for material tracking just like any other traditional design-bid-build contract.

For the above example contract, 82194-214269, a shadow contract was created with 145 pay items that represented the work to be done on the contract. Below is a subset of those shadow items:

From here the managing office uses the shadow file to complete postings and daily work reports as they would on other traditional contracts and the materials are tracked like any other traditional contract.

Summary

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