LEGISLATIVE ANALYST MEMORANDUM

To: Members of the Board of Supervisors

From: Shauna Johnson, Office of the Legislative Analyst

Date: June 13, 2005

Re: Requiring Private Companies to Replace Signs - (OLA No. 038-05G)

Employee Suggestion

An employee suggested that private construction companies conducting work on behalf of the City should be held accountable for replacing signs that they remove.

Executive Summary

When the City enters into a contract with a construction company for an infrastructure project, the contract normally stipulates that the contractor is responsible for restoring all pavement markings and traffic controls damaged or removed during construction.¹ However, there are instances in which a contractor fails to replace a sign. The Department of Parking and Traffic (DPT) is responsible for replacing such signs. According to DPT, roughly 100 signs are involved annually, costing the City $10,000 per year.

The OLA recommends that the City:

• Require, if appropriate, all contracts to specify that contractors be responsible for replacing signs.
• Withhold payment to contractors when signs are not replaced.

• Keep a central record of contractors that have not replaced signs.

Analysis

Contracts for infrastructure projects are issued by a variety of departments including DPT, the Department of Public Works (DPW), Muni, and the Public Utilities Commission (PUC). The contracts vary, and (depending on the staff or department issuing the contract) may or may not include a stipulation requiring a contractor to replace any sign it has removed. If a contract issued by the City does not specifically require contractors to replace signs removed during construction, the City must cover the costs of replacement.

Contract Oversight

For City projects with construction contractors, City agencies assign a resident engineer to oversee the project. In addition, DPT assigns an engineer to coordinate traffic routing and other traffic related issues. The resident engineer works with the contractor and with DPT to ensure that signs are returned or properly replaced if it is a condition of the contract. The contractor is normally paid in installments as the project progresses, with a single final payment after all work is completed and signed off by the resident engineer. If signs are not replaced properly, it is the resident engineer’s responsibility to withhold payment to the contractor until the contract obligations are fulfilled or DPT is reimbursed for replacing the signs.

While the exact number of occurrences is unknown, DPT staff estimates that contractors doing work for the City fail to repair or replace roughly 100 signs per year. The average cost of a sign is $100 (including installation).

Recommendations

The failure of private contractors to return or reinstall removed signs after construction has been an ongoing concern for DPT. Therefore, the OLA recommends that the City consider the following:

• Require, if appropriate, all contracts to specify that contractors be responsible for replacing signs.
• Withhold payment to contractors when signs are not replaced.

• Keep a central record of contractors that have not replaced signs.

¹ This is part of the excavation permit issued by the City department that initiates a contract.