Overview of Housing Program Procedures and Guidelines for Housing Rehabilitation Contractors

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1 Office of Community Development Overview of Housing Program Procedures and Guidelines for Housing Rehabilitation Contractors The Community Development Department has updated the procedures and guidelines for contractors participating in the Housing Rehabilitation Program. The attached sheets describe each aspect of the program as it applies to the contractors and descriptions of requirements and processes. They include: Contractor Pre-approval Work Order Specifications Lead-Based Paint Requirements Bidding, Contractor Selection General Conditions Determination of Contract Amount Notice of Right to Cancel Contract Documents Purchase Orders Pre-construction meeting Permits and Construction Documents Construction Workmanship and Disputes Time of Completion Payments Final Walk-through Inspection I acknowledge receipt of the City of Ann Arbor Housing Program Procedures and Guidelines for Contractors, upon meeting the approval of the Community Development Department and reviewing the information contained within, the undersigned agrees to abide by all Housing Program Procedures and Guidelines. Company Name Contractor signature Date

2 Office of Community Development Housing Program Procedures and Guidelines for Contractors 1. Contractor Pre-Approval. All Contractors performing work for the Housing Rehabilitation Program must receive pre-approval from the Office of Community Development and The City of Ann Arbor s Human Rights Department. Qualified contractors are required to complete a program application, have a current builder s license, carry or obtain liability and workers compensation insurance, and provide references. Newly approved contractors may be placed on probationary status and limited to projects totaling $15, or less, until the Office of Community Development s rehabilitation specialists are assured of the contractor s workmanship, timeliness and professionalism. 2. Work Order Specifications. The City will prepare work order specifications using the Housing Developer Pro software. The contractor or homeowner must not in any way or form deviate from the Work Order Specifications without written approval from a housing rehabilitation specialist. Provisions for change will be handled through a change work order issued by the Office of Community Development and approved by signatures from all parties. 3. Lead-Based Paint Requirements. Funding for the housing rehabilitation program comes from the federal Community Development Block Grant Program. Regulations effective September 2000 regarding Lead-Based Paint now require additional program components. All renovation and remodeling contractors performing work on projects where Lead Based Paint may be disturbed must have all workers and supervisors properly trained in Lead Safe Work Practices or certified by the State of Michigan as an abatement professional. Proof of training and or certifications must be provided to the Office of Community Development. Without the required certifications, a contractor may be excluded from bidding on projects containing Lead-Based Paint. Lead-Based Paint training/certification for all contractors is encouraged and OCD may provide low cost training in Safe Work Practices Only. Information and scheduling may be obtained from a Rehabilitation Specialist. 4. Bidding Process, Contractor Selection. Housing rehabilitation contractors are permitted no more than (2) two-awarded rehabilitation projects at one time or a maximum of $70, in rehab. projects total. Sealed bids must be submitted to the Office of Community Development on or before the pre-designated time and date specified on the work order s cover sheet, usually two weeks after the work order specifications are made available. Contractors are responsible for pre-arranging a time mutually convenient with the homeowner to conduct a mandatory walk-thru of the structure and property. A signature from the homeowner is mandatory for acceptance of bid. Individual costs must be written on the rehabilitation specification work order document provided by the OCD with all figures shown. The Contractor or a designated representative must fully complete and sign the bid proposal sheet, incomplete and or unsigned bid proposals may be excluded. A tabulation of all bids will be prepared after bids are received by the predesignated time and compared to other qualifying bid proposals as well as the Office of

3 Community Development s cost estimates. Bid openings are generally held on a Thursday at 11:00 a.m. on the pre-designated date. Bids submitted to the Community Development office after 10:59 a.m. on that date will not be accepted. Bids submitted by contractors with more than (2) two awarded projects or more than $70, in projects at the time of bid opening will also be excluded from the bid opening process. a. The lowest responsible bidder will generally be recommended to the homeowner for acceptance. However, the final choice of the contractor remains with the homeowner. b. Any bidder may withdraw his/her bid at any time. 5. General Conditions The current all Trades Master Specification of the City, including General Conditions, Special Conditions, Work Orders and technical specifications are included as part of the Contract. Copies of the Master Specifications are available to all bidders from the Office of Community Development. 6. Determination of Contract Amount. A 10% contingency amount will usually be added to the contractors base bid amount to allow for unforeseen costs. This amount however does not become part of the total contract amount unless authorized by a rehabilitation specialist. The amount specified in the contract is a loan and must be repaid by the homeowner according to the terms of a note and or mortgage agreement. 7. Notice of Right to Cancel. After the signing of all contracts, documents, and agreements the homeowner has the right to cancel the project within three (3) business days. The Contractor can and shall not begin work until this 3-day rescission period has expired. 8. Contract Documents. The Office of Community Development staff will prepare the owner/contractor agreement for signatures. The Rehabilitation Specialist will notify the Contractor when the owner/contractor agreement is ready for his or her signatures. At the time the Contractor signs the owner/contractor agreement, a commencement and completion date must be determined. The Contractor generally has 90 days from commencement to completion for the project. 9. Purchase Order. A purchase order to authorize payment to the Contractor must be set up with the City s Finance Department in order to process and remit payments. All owner/city contracts must be signed before the purchase order can be set-up. Contractors will receive a copy of the purchase order by mail after this process is complete. This process generally takes approximately 2 weeks from the time the Contractor signs the owner/contractor document. The purchase order copy sent to the Contractor is a confirmation that the account has been set up and future payment requests may be processed. 10. Pre-construction Meeting. The rehabilitation specialist may arrange a pre-construction meeting between the homeowner, contractor, and themselves to discuss and explain any issues relating to the project. Project start dates and work schedules may also be

4 discussed at this time. The contractor may be required to provide written notification of work times and schedules. 11. Permits and Construction Documents. All required permits must be obtained prior to start of construction. Permits and a blank copy of the Construction Work Order (obtained from Rehab. Specialist) must be posted on site and accessible to rehab specialists and/or building inspectors at all times. 12. Construction. The contractor is responsible for the completion of all items identified in the work order as bid in a professional and workmanlike manner, in accordance with governing codes and safety regulations. Any changes to the bid proposal and or work order, including additions, deletions, changes in costs, or extensions of the contract period shall be noted on a Change Work Order form prepared by the rehabilitation specialist and approved by signature from the homeowner, contractor, rehabilitation specialist and department administrator. 13. Workmanship and Disputes All work performed must be of the highest quality possible and conform to all applicable codes and regulations. The contractor is responsible for the action(s) of all workers and subcontractors in relation to quality of workmanship and professionalism while on the job site as well as throughout the duration of the project. If a disagreement and or dispute should occur or if the homeowner has questions/ concerns/suggestions in relation to the construction work order or project, the Contractor shall inform the owner to contact the rehabilitation specialist or do so themselves immediately. 14. Time of Completion. The Contractor generally has 90 days from the submitted commencement date to completion of all the work contained in the work order specifications. The contractor shall be expected to staff the project every working day of the week when possible. Weather conditions or the lack of available materials may be cause for exceptions. Extensions of time to the contract agreement must be of a creditable nature and approved by the Office of Community Development. All extensions shall be noted in a change work order signed by the homeowner, contractor and rehabilitation specialist acknowledging such change. With prior written notice, another Contractor may be selected by the City to complete any work not completed by the original Contractor by the end of the contractor/homeowner contract agreement period. In the event the new Contractor exceeds the original base bid amount for the designated work item(s), the original Contractor may be required to compensate the difference. 15. Payments. Payments are issued in two increment ranges of 40%, (up to 80% of total project) and a final payment of 20%. Contractors may submit an application for payment to the Rehabilitation Specialist with fully completed work items and costs listed. The total of the request must meet or exceed the above listed percentage ranges. A rehabilitation specialist will inspect all work items for completeness before a payment can be processed. All final permits, inspections and project related paper work (waivers of lien, homeowner release of funds, sworn statements etc.) must be submitted before the final application for payment is accepted for processing. All payments are mailed to the

5 Contractor directly from the City s Finance Dept. with the exception of the final payment, which can be picked up in the Office of Community Development (providing all necessary paper work has been submitted, signed, and approved) after 3:00 p.m. on the specified date. Payment requests must be submitted by 5:00 p.m. on Tuesdays in order for checks to be processed and issued on or before the City of Ann Arbor s established, (21) twenty-one day payment period. Our goal in the Office of Community Development is to process and remit payment to all of our contractors within (10) ten to (14) fourteen days. However departmental approvals, holidays, and other financial processing regulations may extend these payment(s) to the City s established (21) twenty-one-day payment period. 16. Final Walk-through Inspection A final walk-though and inspection of the project shall be made by the Rehabilitation Specialist, the Contractor, and the Homeowner to insure all work contained in the work order specifications and or change order(s) has been completed as specified and meets the approval of all parties. 17. Warranty Period Contractors shall remedy any defect due to faulty material or workmanship and pay for all damage to other work resulting there from, which appear within one year from the final payment. Furthermore the Contractor shall furnish the homeowner with all manufacturer and supplier written warranties. M:\Housing Rehabilitation Program\CONTRACTOR GUIDELINES05.doc Revised: April 2005

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