Force account situations are quite common in DOT projects, however, despite their predominance in the industry, there is still quite a bit of confusion about what a force account is exactly. This confusion could be made worse especially when force account requirements can differ across state lines. Getting acquainted with force accounts can be helpful should you find yourself doing extra work.
First things first, what is a force account anyway? It’s an agreement to get supplemental or extra work which goes beyond what’s established in an original bid completed and paid for. The process is incredibly transparent and mitigates any financial risk for those involved. For example, if working with a DOT, you can usually find detailed instruction on how this is handled in publicly available standard specifications documents. Though, this can be tedious to research. For that reason, we are going to break down everything you need to know. Overall, force accounts allow for the reimbursement of labor, material, and equipment costs and often extend to cover other items, such as bonds and insurance fees. Let’s take a closer look at these costs starting with those associated with labor.
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Labor is usually the first expense mentioned in DOT specifications and first cost to be recorded in required reporting. Contracting entities are usually on the hook for the costs of all personnel. These employees are to be paid their normal hourly wage for every hour worked. Overtime rates are to be paid after 40 hours in a week. All of this is heavily monitored and justification must be provided before and during a force account scenario. It’s recommended to make sure your payrolls are up to date and accurate before starting extra work. Additionally, keeping track of what employees are on site, their classification, and how they spend their time is useful, as this information is likely required.
Additional materials may be needed for the extra work and should be eligible for compensation. It’s worth noting that you may be asked to shop around for the best material prices even after you submit an estimate of your costs. As a precautionary measure, it would be wise to procure quotes from several suppliers in case you’re asked to present them prior to starting force account work. Reporting requirements are likely and you may be obligated to provide descriptions and quantities of all materials used. It’s also common to include invoices from suppliers, so make sure these are readily available when submitting costs. What if you have necessary materials already in stock? For these materials, invoices may be difficult to produce. In these situations, an affidavit may be used declaring costs in lieu on an actual invoice.
Of course, no extra work can be performed without the use of equipment. Because of this, force accounts are designed to allow the recovery of equipment ownership and operating costs. This is where your subscription to EquipmentWatch is a necessity, especially if working with DOTs—most of which specify the use of the Rental Rate Blue Book. Reporting equipment’s hours along with respective FHWA rates is often required and must include detailed descriptions. So, it’s useful to have current record of your machinery and rates to save time in getting the necessary information to those holding the purse strings.
Force accounts also provide contractors the option to expense equipment on a standby basis. That is, you can get paid for equipment on-site but not powered on and engaged in work. Naturally, you can’t bill this equipment the same way as actively engaged machines, therefore, their recoverable rates are lower. In most states, standby equipment is reimbursed at a rate of 50% of the hourly ownership cost.
If you don’t own equipment, DOTs allow you to expense rented equipment as well. Documentation will be required along with an invoice from the rental house. Force account work usually allows you to include operating costs for rented equipment, most commonly by billing for them on an hourly basis. To effectively document these operating costs, it’s often suggested to include relevant information from the Rental Rate Blue Book.
Labor, materials, and equipment seem straight forward enough, but what about other costs? DOTs also reimburse costs that may not fit into standard categories. Often, recoverable items include, but are not limited to, bonding, insurance, transportation, and subcontracted or specialty work and require recording along with supporting documentation.
It’s safe to say that you’ve been in a force account situation at some point and if you haven’t already, it’s likely you will. Given their commonplace in the industry having some sort of familiarity with their requirements is paramount in saving time and getting reimbursement faster and with more confidence. So, if it’s your first time doing force account work or if it’s been a while since your last, remember that you will be able to get compensation for your labor, materials, and equipment, not to mention other costs. Be prepared to document these costs before you start extra work. Although this guide isn’t exhaustive, it should at least help you get started in getting paid for your force account work.