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MDOT Contract Modification Process – GREATLY IMPROVED!

Wednesday, March 7, 2012   (0 Comments)
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With their February 24, 2012, formal issuance of Bureau of Highway Instructional Memorandum (BOHIM) 2012-03 Processing Contract Modifications, MDOT has put into place internal procedures that will significantly expedite the processing and approval of contract modifications on all MDOT let construction projects.


The development and implementation of these procedures was the key requirement of the State Administrative Board’s action, and the pending State Transportation Commission’s action, to remove them from the formal contract modification approval process.  The State Ad Board resigned their approval controls in August 2011, and it is anticipated the State Transportation Commission will follow suit at their meeting later this month.

BOHIM 2012-03 resolves some major structural deficiencies of the “old” contract modification approval process by establishing very specific process steps, document content, approval thresholds and timeframes. 


Some of the key elements of the new procedures are:

  • Approval level based on “net cumulative increase” to contract:
  • Tier I – TSC Approval …. <5%
  • Tier II – Region Approval …. >5%<10%
  • Tier III – Bureau of Field Services Approval …. >10%
  • Engineer and contractor must come to agreement on the content of the contract modification prior to the beginning of the work.
  • Engineer must generate the contract modification within 7 business days of the beginning of the contract revision work.
  • Contract modification for contract revision with payment based on force account method must establish estimated budget for progress payments.
  • Contract modification for revision of the contract work must address contract time impact.
  • Engineer must balance quantities as soon as work items are completed, measured, and checked.
  • Digital electronic signatures are allowed. (see below)
  • Approval timeframes …. 25-100 days depending on approval level.

MITA for years has been aggressive in advocating for these changes and transparency in this bureaucratic process that historically has delayed payments to contractors for work that was approved and accepted by the owner agency, paid for by the contractor, and often “open to traffic” for use by the public.


“These changes are a big deal for the industry.  Contractors will no longer have to wait months, sometimes years, for the lengthy bureaucratic process related to approving contract modifications to play out in order to get paid” said Mike Nystrom, MITA’s Executive Vice President, “MDOT leadership stepped out boldly on this issue and we in the industry appreciate that effort.”


Click here to view MDOT BOHIM 2012-03.


Digital Electronic Signatures

A vital element of the new MDOT procedures for processing contract modifications is the incorporation and acceptance of digitally encrypted electronic signatures.  The obvious advantage of the use of digital signatures is the timeliness experienced in routing, signing, and forwarding an electronic document through the approval chain.


On February 28, 2012, MDOT issued Bureau of Highway Instructional Memorandum 2012-02 Digitally Encrypted Electronic Signatures that outlines their policy and procedures for acceptable use of digitally encrypted electronic signatures.  Digital electronic signatures will now be accepted wherever a signature is required on an MDOT document.


Digital electronic signatures are not scanned copies of handwritten signatures or faxed copies of a handwritten signature, but are a secure electronic “object” that is embedded into an electronic PDF document by the signer with their unique password, identity, and the date/time digitally encrypted into the electronic document.


Per BOHIM 2012-02 it is procedurally important to note that it is not possible to mix the methods of signature (pen/ink on paper or digital electronic) on documents that require multiple signatures.  Any document that requires multiple signatures (i.e. contract modifications) must be either signed entirely in pen/ink on paper or signed entirely with all parties using electronic signatures.


To ensure the expeditious processing of any MDOT document that requires your signature (in particular, contract modifications) click here to view BOHIM 2012-02 and learn more about MDOT’s new electronic signature requirements.


If you have any questions specifically about setting up your digitally encrypted electronic signature contact Anita Lindsay at the MITA office at 517-347-8336.


If you have any questions or comments about the new procedures for processing contract modifications contact Glenn Bukoski at or Doug Needham at or call them at the MITA office at 517-347-8336.

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