UDOT pleased with work on highway projectThe Utah Department of Transportation couldn't be more pleased with how the I-15 reconstruction project is coming along.
UDOT announced Friday that Wasatch Constructors, the I-15 contractor, will get every last penny of the $5 million bonus it is eligible to receive for work performed during a six-month period that ended April 30.The extra money, which UDOT refers to as an "award fee," is given to the construction consortium based on the department's evaluation of its performance.
Wasatch received a 95.24 score, on a grading scale of 70 to 100, for its ability to stick to the schedule it outlined in its $1.325 billion contract with UDOT. A score of 95 or higher means Wasatch gets all of the monetary prize - in this case, $1.75 million.
The remaining $3.25 million was awarded based on management, quality, public information and maintenance of traffic. Wasatch received a composite score of 96.74 in those categories.
UDOT officials say the award fee is a portion of the contractor's profit, placed at risk as a condition of receiving the contract. The award-fee process gives the department financial leverage to ensure the project is done properly, and finished on time and within budget.
UDOT Executive Director Tom Warne had nothing but praise for the contractor.
"The full award fee for Wasatch during this period is a reflection of what we've been saying all along - that they are ahead of schedule, they are on budget, the quality is good and they have the management system in place to deliver the project," Warne said. "That's what this is a reflection of."
Wasatch received $2,490,133 out of a possible $2.5 million during the first award-fee period, which began with the start of the project on April 15 of last year. It has now earned $7,490,133 out of a possible $7.5 million.
"Wasatch Constructors is glad UDOT recognizes the quality of the product we're delivering," Bill Murphy, Wasatch's reconstruction project manager, said in a statement delivered to the media by Wasatch spokesman Brian Mauldwin.
"We're committed to building a quality freeway with the least amount of inconvenience within our contractual time limits."
UDOT will continue to evaluate Wasatch every six months. The companies can earn up to $50 million in award fees through the life of the project - $5 million each during the next six periods and $7.5 million for the final period. The remaining $5 million will be awarded if Wasatch meets its early completion deadline of July 15, 2001.
"I certainly think that the first couple of periods are the most challenging, while they're getting up and running and putting their organization together," Warne said. "I think this is a good indication they might just win, or earn, all or most of the award fee."
Warne, however, pointed out Wasatch has room for improvement.
Wasatch officials will not say how much of the consortium's total, potential profit is represented by the $50 million award fee. Warne said he doesn't know, that UDOT did not require the contractor to disclose that information. The $50 million, however, is about 3.8 percent of the contract.
"A margin (of profit) for a contractor is generally in the 3 to 7 (percent) range, so this would be a big part of their profit, no question about it," Warne said.
A task force of lawmakers, legislative staff and members of Gov. Mike Leavitt's policy and budget staffs reviewed and approved the award-fee process last year.
Wasatch is rebuilding and widening 17 miles of the interstate through Salt Lake County using the accelerated, design-build construction method. The total cost of the project is $1.59 billion.