Work Hours and Liquidated Damages
Work Hours
Advisory Circular 150/5370-13 recommends work periods be at least 8.5 continuous hours and that the contractor be given as much time as possible. Work periods can be during any time of day but are generally specified during night hours. However, daylight work should not be excluded outright.
The longer the work period is the better productivity per hour of work. This is because it generally takes the contractor a fixed amount of time to set-up at the beginning of work and break-down/clean up at the end of work. All other time can be dedicated to paving work. For instance, if a 7-hour closure is granted and it takes the contractor ½-hour for mobilization and ½-hour for demobilization, 6 hours can be dedicated to work (about 86% of the closure is used for paving). Conversely, if a 10-hour closure is granted for the same work with the same ½-hour mobilization and demobilization, 9 hours can be dedicated to work (90% of the closure used for paving).
The amount of time expected for daily mobilization/demobilization will vary from job-to-job. For simple taxiway or runway overlays and mill-and-fills, it can be less than ½-hour between authorization to close the runway/taxiway from the ATCT to beginning of paving/milling operations.
Expect contractors to pay their personnel for more hours than the allotted closure because they must show up early for project meetings, safety briefings and equipment start-up and stay late for equipment shut-down and maintenance.
Liquidated Damages
Offpeak construction is done because airports need to keep certain facilities open during peak use hours. Therefore, if a contractor is not ready to open the facility at the agreed-upon time the airport will incur more user costs. In these situations, the airport operator often includes a “liquidated damages” clause in the contract. Legally, liquidated damages are a charge to the contractor because the contractor did not complete a part of the contract and that non-completion injures the owner (costs the owner money). Liquidated damages are different than a penalty because the amount of liquidated damages should be reasonable and related to the actual loss suffered by the owner. A penalty is a forfeiture from which the defaulting party can be relieved (charged). Therefore, for a liquidated damages clause to be upheld, the amounts must be arrived at using reasonable calculations and the owner should keep documentation as to how those amounts were calculated.
An example of a liquidated damages clause is:
For each hour or day after the time fixed for substantial completion of the Contract, the Contractor shall pay the County the following in Liquidated Damages for failure to accomplish the required Phase as specified in 1.03 of this Section. A Job Clock will be supplied and maintained by the Airport and will be located at the Airport Maintenance Shop. This clock will be used for the purposes of determining compliance with the time requirements contained within this section. Liquidated Damages will be assessed immediately for failure to achieve the milestones specified in this Section.
1. Liquidated Damages of $3,000 per day will be assessed for failure to achieve Substantial Completion for Phase 1.
2. Liquidated Damages of $15,000 per hour will be assessed for failure to achieve Substantial Completion for Phase 2.
3. Liquidated Damages of $2,000 per hour will be assessed for failure to achieve Substantial Completion for Phase 3.
Note that liquidated damages can be relatively low (#1 is $3,000/day) or quite high (#2 is $15,000/hour). Bonuses can be awarded for finishing ahead of schedule although they are often not included.
