Construction Program Guide
The FHWA's policy for Federal-aid participation in construction contract claims requires a examination of the specific facts of the claim and the contract basis for payment. Federal-aid participation is not automatic in any claim.
- Title 23 U.S.C. 315 provides very broad authority for the Secretary of Transportation to prescribe regulations to carry out the Federal-aid highway program. However, there are no specific statutes dealing with construction contract modifications other than the required use of standardized changed conditions clauses as required by 23 USC 112(e).
- Title 23 C.F.R. 635.102 - Definitions
- Title 23 C.F.R. 635.109 - Standardized changed condition clauses prescribes the standardized contract clauses mandated by the 1987 Surface Transportation and Uniform Relocation Assistance Act. These contract clauses include the following:
- Differing Site Conditions,
- Suspensions of work ordered by the engineer, and
- Significant changes in the character of work
- Title 23 C.F.R. 635.109(c) address the unique use of changed condition clauses for design-build contracts. The FHWA encourages but does not require the use of such clauses in design-build contracts.
- Title 23 C.F.R. 635.120 - Changes and extra work describes the FHWA approval procedures for the review and approval of change orders and extra work. Paragraph (c) discusses the need to address contract time impacts when developing a contract change document.
- Title 23 C.F.R. 635.121 - Contract Time and contract time extensions describes the FHWA approval procedures for the review and approval of time extensions.
- Title 23 C.F.R. 635.124 - Participation in contract claim awards and settlements describes the basis for determining Federal-aid participation on any claim.
The above regulations provide the FHWA's regulatory policy regarding construction contract modifications. However, please note that these regulations were last updated on August 2, 1991 and do not include revised stewardship, oversight, and applicability requirements resulting from the 1991 ISTEA and the 1998 TEA-21. See the discussion in the FHWA Contract Administration Core Curriculum Manual for a summary of current FHWA policy).
- FHWA Contract Administration Core Curriculum Manual (see "Policy" above).
- FHWA Form 1365 - Record of Authorization to Proceed with Major Contract Provision is a form that can be used to document the FHWA's advance approval of change orders.
- Transmittal of Geotechnical Engineering Notebook Issuance GT-15, Geotechnical Differing Site Conditions, May 2, 1996 (.pdf, 100 kb) provides guidance on the use of differing site condition clauses for geotechnical applications
- FHWA Non-Regulatory Supplement to 23 CFR Part 635 - #5 Changes and Extra Work; # 7 - Contract Time and Contract Time Extensions and #9 - Participation in Contract Claim Awards and Settlements
- Construction Project Cost Escalation Factors, J. Mgmt. in Engrg. Volume 25, Issue 4, pp. 221-229 (October 2009)
- NCHRP Synthesis 105, “Construction Contract Claims: Causes and Methods of Settlement” (1983)
- National Cooperative Highway Research Program, Selected Studies in Transportation Law, Construction Contract Law, Chapter 5 - Contract Modifications and Delay, Chapter 6 - Construction Claims and Litigation.
- NHI 134037A - Managing Highway Contract Claims: Analysis and Avoidance
- NHI 134049 - Use of Critical Path Method (CPM) for Estimating, Scheduling, and Timely Completion
- NHI 134060 - Partnering: A Key Tool for Improving Project Delivery in the Field
- NHI 134077 - Contract Administration Core Curriculum (Course Description)