Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

America's driving public understands that roadway 

construction is part of everyday life and a 

necessary component of improving our roadways. 

However, excessive construction periods due to 

inefficiencies and avoidable delays can frustrate 

drivers and prolong their exposure to the hazards 

of driving through work zones. 

Project delays increase agency administration and 

the overall construction costs. On Federal-aid 

projects, it is essential for agencies to establish 

contract deadlines and control schedules. 

Let’s look at how agencies do this.

During the preparation of the plans, specifications, 

and estimate package, or PS&E, agencies should 

follow an approved process for setting the contract 

time, which is the maximum time allowed to 

complete all work in the contract. Typically this 

process is set by the State department of 

transportation, or State DOT.

After the construction contract is awarded, most 

agencies require the contractor to submit for 

approval an initial schedule for completing the 

project within the allotted contract time. A reviewer 

might ask:

• Does the schedule include all contracted 

work and time for agency action? 

• Does it reflect the appropriate sequence of 

tasks and how each task affects others? 

• Does the schedule meet all milestones and 

the completion date?

Project Construction and Contract 

Administration Contract Administration

Contract Time and Schedule Management

Federal requirements must be met regarding managing 

schedules and completing projects on time
Federal-aid Essentials for Local Public Agencies

Once the project is underway, the focus shifts to 

maintaining an updated schedule for managing the 

work. Agencies determine if a schedule needs

updating by looking at the controlling items of 

work—also referred to as critical path items. Some 

activities can be delayed without negatively 

affecting the schedule, but the contractor must 

complete controlling items as scheduled or the 

project will be delayed. At the earliest indication 

that the critical path schedule might be in trouble, 

agencies will request an updated schedule from 

the contractor showing the plan for delivering the 

project within contract time.

Agency personnel continue to manage the 

schedule by evaluating and authorizing time 

extension requests in coordination with the State 

DOT. 

Some project delays are outside the control of the 

contractor—such as extraordinary weather events, 

additional work, labor strikes, or agency-ordered 

suspensions of work. If the delay affects a 

controlling item of work, a time extension is 

justifiable. 

However, agencies are entitled to deny time 

extensions for unacceptable delays resulting from 

events within the contractor’s control— such as 

lack of attention to the project, unscheduled 

maintenance, insufficient labor, or delayed 

shipment of materials or supplies.

Agencies need to promptly address requests for 

time extensions and enforce all time-related 

contract provisions, including the Federal 

requirement for establishing liquidated damages. 

Liquidated damages are charges assessed to 

recover an agency’s additional costs when projects 

go beyond the approved contract time. If liquidated 

damages are not recovered according to the the 

contract, an agency’s Federal funds could be 

reduced.

Let’s see how schedule 

management works in practice. Our 

example involves a road resurfacing 

project that will be conducted in 

phases to minimize impact to area 

businesses.

According to the contract, the work must be 

completed in 75 calendar days, or liquidated 

damages of $1,500 will be charged for each day 

the project is late.

The agency awards a contract and approves a 

schedule that shows completion of the project in 75 

days. The schedule includes 10 days for 

anticipated weather-related delays.

The controlling items of work include:

• Mobilization of equipment

• Traffic control set up

• Paving 

• Striping.
Federal-aid Essentials for Local Public Agencies

All work progresses according to schedule until 

the sixth and final phase of work. At this point, five 

days are lost when the contractor’s equipment 

breaks down, and an additional seven days are 

lost when asphalt tests fail, requiring rework. 

Since paving is a controlling item of work, the 

project is likely to be completed beyond the 75-day 

contract period. The agency has requested an 

updated schedule. The contractor is unable to 

make up the time, and requests a 10-day 

extension.

In a meeting with the contractor, its confirmed that 

the delays were within the contractor’s control. 

Therefore, the project manager does not approve 

the contract time extension. 

The project is completed 10 days late, and 

liquidated damages of $15,000 are deducted from 

the final payment. No reimbursement is requested 

from the Federal Highway Administration (FHWA) 

for its portion of the liquidated damage. 

As this example illustrates, agencies need 

procedures to set appropriate contract times and 

evaluate the reasonableness of contract time 

extensions. When determining reasonableness, 

agencies may also benefit from discussion with 

the contractor.

In addition to regulatory requirements, some 

agencies may elect to use additional contract 

provisions to encourage timely project completion 

such as: 

• The withholding of progress payments 

when projects fall behind schedule

• Incentive and disincentive payments for 

schedule management.

Review the schedule-related 

contract provisions for your State 

DOT. 

The provisions are generally found in the standard 

specifications, along with associated schedule 

management procedures. For clarification or 

additional assistance with schedule management 

techniques, contact your State DOT.
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number

DTFH61-11-D-00025 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This companion resource 

is the script content for 

the video production of 

the same name. 

Web Resources

• FHWA Construction Program Guide covering contract time-related 

regulations, policies and guidance.

http://www.fhwa.dot.gov/construction/cqit/time.cfm

• Federal regulations dealing with various time-related construction 

requirements (Sect. 109, 120, 121, 124, 127)

http://www.ecfr.gov/cgi/t/text/textidx?c=ecfr&tpl=/ecfrbrowse/Title23/23cfr635_main_02.tpl

• FHWA guidance on handling contract time-related requirements (Sections 

III.A.6,8; III.B.5,7)

http://www.fhwa.dot.gov/programadmin/contracts/coretoc.cfm

• FHWA technical advisory providing guidance on construction contract time 

determination procedures

http://www.fhwa.dot.gov/construction/contracts/t508015.cfm