Agenda - Council - 10/14/2008 - Laserfiche WebLink

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CASE # REPORT ON EXTENDED WARRANTEES ON NEW PAVEMENTS AND OVERLAYS By Stevext Jankowski, City Engineer Background; Staff was asked to research and consider requiring contractors to provide.an extended warrantee on praying work such as new bituminous pavements and bituminous overlays, item 24 of the General Specification Included in the contract documents used by the City is an industry standard prepared by the American Society of Architect and Engineers and reads as follows; 24,3 If, after the approval of Anal payment and prior to the expiration of one (1) year after the date of Substantial Completion or such longer period of time as may be prescribed by law or by theterams of any applicable Special guarantee required by the Contract Docunments, any. Work is found to be defective, tate Contractor will, promptly, without cost to the Owner and In accordance with the- Owner's writtin instructions, either correct such defective Warp, or, if it has been rejected by.the Owner, remove It frons. tate Work site and replace it with non -defective Work. It the Contractor does not promptly comply with the terms of such instructions, the Owner may have the defective Work corrected or the rejected Works removed .and replaced, wind all direct and indirect costs of such removal and replacement, including compensation for additional professional services, will be paid'by the Contractor. The Minnesota Department of Transportation, conducted a pilot program. with an extended warrantee period beginning in 2000 which was discontinued after two to three years. The extended warrantees were designed to protect against catastrophic .failures for a period of three years. The primary cost impact was that of extended bonding which was passed onto the owner. The main reason for the program being terminated was. the conclusion that the extended bond costs were being paid ,for an occurrence which very rarly occurred. It was also notable in talking to the MnDQT ot'ficial associated with this program that. the Highway 212 project in the southwest metro was consideringa five year warrantee, MnDot decided against including, this as a requirement of the project after surety companies advised that the risk associated with such a large project over that period of time would cause the premium's to be vary expensive, There was also discussion of 2 -twenty year warrantee period, but MnDOT concluded that the cost of applying are overlay after that period would be less expensive than the extended surety expense. The other issue associated with the extended warrantees was the -need for periodic —227—