MITA Takes Action to End Use of Utility Risk Shifting Contract Provisions
Wednesday, September 28, 2016
Recently, MITA became increasingly aware of a growing trend of public owners incorporating exculpatory contract provisions that shift the risk of utility locating and relocation to the contractor on their public works projects.
In response to this growing trend, MITA has conducted exhaustive research on the issue of whether the owner of a public works project may contractually obligate its contractor to locate and to be responsible for moving underground facilities that conflict with the new public works.
Based on that research, and as summarized in the attached White Paper, it is MITA’s position that, apart from limited exceptions, the responsibility for underground facility locating and relocation is with the owner of the facility and at its expense. Any such specification or contractual provision that seeks to shift that responsibility to a contractor is legally invalid, impractical and inequitable.
We have distributed our White Paper to the County Road Association (CRA), which represents the county road commissions, and the Michigan Municipal League (MML), which represents the cities, villages, and urban townships, for further distribution to their memberships. We also forwarded our White Paper to the American Council of Engineering Companies (ACEC of Michigan) for distribution to their membership. ACEC member companies often serve as consultants to local agency owners performing contract document and design development.
In our communication to CRA, MML and ACEC we strongly suggested that they cease and desist from including these risk and responsibility shifting types of provisions in any future contract specifications. We also requested that they immediately issue an addendum that deletes these types of provisions from the contract specifications for projects they currently have under contract for construction.
To print a copy of the “packet” (cover letter and White Paper) MITA distributed, please click here.
Although MITA has already received indications that our White Paper may produce the desired outcome, it is MITA’s intention to use any and all means necessary, legal or legislative, to end the use of these inappropriate and invalid contract provisions.
We encourage all MITA members to be attentive in your review of contract documents for projects you are considering bidding on, specifically watching for contract provisions or specifications that shift the responsibility for utility locating and relocation to the contractor. Should you find any of these types of contract provisions, feel free to provide the public owner of the project a copy of MIITA’s “packet” and/or give the MITA office a call for further assistance in the matter.
If you have any questions, please contact Glenn Bukoski, VP of Engineering Services, at email@example.com, or Rachelle VanDeventer, VP of Industry Relations, at firstname.lastname@example.org. They can both be reached at the MITA office by calling 517-347-8336.