11.2 Contract Administration

G.  Completion of Work. The completion of a construction contract requires some formal procedures, including the following:

1.   Notification. The contractor should provide prompt written notification to the PHA when all work is completed.  A final inspection of completed work shall then be conducted. Until the final inspection has been carried out and corrections made, the PHA should not advance any of the retainage or make the final payment to the contractor.

2.   Final Inspection. Upon receipt of the contractor’s notification of the date when the work has been completed, the PHA should conduct a final inspection within 10 calendar days.

3.   Post-Inspection Meeting. The inspection team should meet after completing the final inspection to determine whether the work has been completed in accordance with the construction documents and to identify any minor items of incomplete or unsatisfactory work (or seasonal work such as planting of shrubs and lawns). The team should also reach agreement on the items to be included on the PHA’s or its architect’s final punch list and on any major deficiencies that must be corrected by the contractor.

4.   Documentation. Following final inspection, the PHA should notify the contractor to submit the following documentation to the PHA:

a.   A certificate of occupancy issued by the responsible local agency for each building (where appropriate);

b.   One notarized original and two copies of the contractor’s release, including certification that indicates:

i.    The work was completed in accordance with the construction documents, including contract modifications, except any minor items identified on the PHA’s or its architect’s proposed certificate of completion;

ii.    The total amount due the contractor and a separately stated amount for each unsettled claim against the PHA;

iii.   Documentation noting that the PHA is released of all claims, other than those stated in the contractor’s release; and

iv.   Wages paid to laborers or mechanics were consistent with the wage rate requirements of the contract and there are no outstanding claims for unpaid wages.

c.   Assignment of all guarantees and warranties to the PHA; and

d.   “Final” partial payment. The PHA may accept part of a project for occupancy before contract settlement if the following conditions are met:

i.    The dwelling units to be accepted (except items approved for delayed completion) have been completed and are ready for occupancy;

ii.    The general contractor agrees to early occupancy and completion of items approved for delayed completion;

iii.   Early occupancy will not unduly inconvenience or represent a safety risk to tenants while the unfinished work is being completed;

iv.   The PHA has obtained occupancy permits from the responsible local agency for each unit to be accepted; and

v.   The PHA has executed an occupancy agreement with the general contractor indicating that the PHA partially accepts specified work, provided that the contractor accepts the responsibility to complete the project by the established completion date.

H.  Final Payment. The PHA should ensure that an adequate and notarized certificate and release are received from each construction contractor to assure that the work was in full compliance with the construction contract documentation and that all materials, supplies, equipment, and labor-related expenses have been paid in full by the contractor. Prior to making final payment, the PHA should ensure that all required certified payroll reports have been received and that any discrepancies and/or wage underpayments have been corrected. Upon receipt of the approved certificate of completion, the PHA is authorized to make payment to the contractor.  The PHA payment to the contractor should be the amount specified in the certificate of completion, but it should not include any amount to be retained for disputed items and incomplete work, such as the punch list or seasonal items.