107Legal Relations

107.01LEGAL JURISDICTION

.01 Applicable Law

This Contract shall be construed and governed by the Constitution and laws of the State. It is the Contractor’s responsibility to be aware of and comply with Federal, State, and local laws, ordinances, rules, and regulations, and orders and decrees of bodies or tribunals having jurisdiction or authority that affect those engaged or employed on the Work, or that affect the conduct of the Work. The Contractor shall observe and comply with, and ensure the Contractor’s agents and employees observe and comply with, laws, ordinances, rules, regulations, orders, and decrees. Defend and indemnify the Sta te and its representatives against any claim or liability arising from or based on the violation of any such law, ordinance, regulation, order, or decree, whether by the Contractor or the Contractor’s agents or employees, subcontractors of any tier, or sup pliers. If discrepancies or inconsistencies are discovered between any document of the Contract and any law, ordinance, regulation, order, or decree, immediately notify the RE in writing.

.02 Permits, Licenses, and Approvals

Procure permits, grants, licenses, authorizations, certifications, and other approvals for the prosecution of the Work, except where the Department has procured such permits, grants, licenses, authorizations, certifications, and other approvals. For existing permits previously obtained by the Department, submit proposed modifications to the permits to the Department for approval before submitting them to the regulatory agencies having jurisdiction and interest. After receiving the Department’s approval, obtain the necessary approvals from the appropriate regulatory agencies. Do not begin work covered by the proposed permit modification until the necessary approvals are obt ained from the designated regulatory agencies. Before beginning the work affected by the modification, provide a copy of the approval, authorization, or modification to the RE. Keep copies of current permits, grants, licenses, authorizations, certificatio ns, other approvals, and modifications within the Project Limits. Clearly post a copy of each so that it is publicly available for inspection. Before beginning work that 52 requires Contractor-procured permits, grants, licenses, authorizations, certifications, or other approvals, provide a copy to the RE. If the Contractor is not in compliance with required permits, grants, licenses, authorizations, certifications, or other approvals, the Contractor shall take corrective actions immediately. The RE has the right to suspend the Work as specified in 108.13, until the Contractor is in full compliance. Provide to the RE, whenever requested, documentation pertaining to the noncompliance and related corrective actions taken. The Department will not make payment for or modify Contract Time for performing corrective and remedial work required to bring the Contractor into compliance. The Contractor is responsible to pay fines levied against the Contractor, i ts agents, employees, and subcontractors that arise out of or are alleged to arise out of noncompliance with permits, grants, licenses, authorizations, certifications, or other approvals. The Department will recover from the Contractor costs due to fines levied against the Department that arise out of, or are alleged to arise out of, noncompliance by the Contractor, its agents, employees, and subcontractors with permits, grants, licenses, authorizations, certifications, or other approvals. The Department may hold the Contractor responsible for all engineering, inspection, and administration costs (including overhead) incurred as a result of the Contractor’s noncompliance.

.03 Sovereign Immunity

The Depar tment, by entering into this Contract, does not waive its Sovereign Immunity, except as provided under N.J.S.A. 59:13-1, et seq. The rights or benefits provided the Contractor in this Contract that exceed those provided under N.J.S.A. 59:13-1, et seq., are contractual in nature, and do not expand the waiver of Sovereign Immunity provided under N.J.S.A. 59:13-1, et seq.

107.02NONDISCRIMINATION

It is the policy of the Department that anyone performing work under any program, activity, or Contract with the Department, shall not discriminate on the basis of race, creed, color, national origin, age, ancestry, nationality, marital or domestic partnership status, gender, disability, affectional or sexual orientation, gender identity or expression, religion, liability for military service, veteran’s status, income level or ability to read, write or speak English. Pursuant to N.J.S.A. 10:2 -1, the Contractor agrees that in the hiring of persons for the performance of work under this Contract or any subcontract hereunder, or for the procurement, manufacture, assembling, or furnishing of any such materials, equipment, supplies, or services to be acquired under this Contract, no contractor, nor any person acting on their behalf of such contractor or subcontractor, shall by reason of race, creed, color, national origin, ancestry, marital status, gender identity or expression, affectional or sexual orientation or sex, discriminate against any person who is qualified and available to perform the work to which the employment relates; No Contractor, subcontractor, nor any person on his behalf shall, in any manner, discriminate against or intimidate any employee engaged in the performance of work under th is contract or any subcontra ct hereunder, or engaged in the procurement, manufacture, assembling, or furnishing of any such materials, equipment, supplies, or services to be acquired under such contract, on account of race, creed, color, national origin, ancestry, marital status, gender identity or expression, affectional or sexual orientation or sex. There may be deducted from the amount payable to the contractor by the contracting public agency, under this contract, a penalty of $50.00 for each person for each day during which such person is discriminated against or intimidated in violation of the provisions of the contract; and this contract may be terminated by the Department, and all money due or to become due hereunder may be forfeited, for any violation of this section of the c ontract occurring after notice to the Contractor from the Department of any prior violation of this section of the contract. Standard Title VI Assurance. During the performance of this Contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”), in accordance with Title VI/Nondiscrimination Assurance – Appendix A, USDOT Order 1050.2A agrees as follows:

Nondiscrimination in Federally-assisted programs of the U.S. Department of Transportation, Federal Highway Administration (FHWA), as they may be amended from time to time, which herein incorporated by reference and made a part of this Contract.

discriminate on the grounds race, creed, color, national origin, age, ancestry, nationality, marital or domestic 53 partnership status, gender, disability, affectional or sexual orientation, gender identity or expression, religion, liability for military service, veteran’s status, income level or ability to read, write or speak English in the selection and retention of subcontractors, i ncluding procurement of materials and leases of equipment. The Contractor will not participate directly or indirectly in the discrimination prohibited by the Acts and Regulations, including employment practices when the Contract covers any activity, proje ct, or program set forth in Appendix B of 49 CFR Part 21.

either by competitive bidding, negotiation made by the Contractor for Work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the Contractor of the Contractor’s obligations under this Contract and the Acts and Regulations relative to nond iscrimination on the grounds of race, creed, color, national origin, age, ancestry, nationality, marital or domestic partnership status, gender, disability, affectional or sexual orientation, gender identity or expression, religion, liability for military service, veteran’s status, income level or ability to read, write or speak English.

Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by the Recipient or the FHWA, to be pertinent to ascertain compliance with such Acts, Regulations, and instructions. Where any information required of a Contractor is in the exclusive possession of another who fails or refuses to furnish the information, the Contractor will so certify to the Recipient or the FHWA, as appropriate, and will set forth what efforts it has made to obtain the information.

provisions of this Contract, the Recipient will impose such Contract sanctions as it or the FHWA may determine to be appropriate, including, but not limited to the following:

every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations and directives issued pursuant thereto. The Contractor will take action with r espect to any subcontract or procurement as the Recipient or the FHWA may direct as a means of enforcing such provisions including sanctions for non-compliance. Provided, that if the Contractor becomes involved in, or is threatened with litigation by a su bcontractor, or supplier because of such direction, the Contractor may request the Recipient to enter into any litigation to protect the interests of the Recipient. In addition, the Contractor may request the United States to enter into the litigation to protect the interest of the United States. During the performance of this Contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”) in accordance with the Title VI /Nondiscrimination Assurance – Appendix E, USDOT Order 1050.2A, agrees to comply with the following nondiscrimination statutes and authorities; including but not limited to:

Department of Transportation regulations at 49 C.F.R. parts 37 and 38.

Income Populations.

(70 Fed. Reg. at 74087 to 74100). 54

107.03AFFIRMATIVE ACTION, DISADVANTAGED BUSINESS ENTERPRISES OR EMERGING SMALL

BUSINESS ENTERPRISES, AND SMALL BUSINESS ENTERPISES It is the public policy of the State and of the United States that no individual, group, firm, corporation or joint venture working on or seeking to work on a Public Works Project should be discriminated against on the basis of race, creed, color, national origin, age, ancestry, nationality, marital or domestic partnership status, gender, disability, liability for milita ry service, affectional or sexual orientation, atypical cellular or blood trait, or genetic information (including the refusal to submit to genetic testing). The Department has developed Affirmative Action, Disadvantaged Business Enterprise, or Emerging Small Business Enterprise Programs to implement this policy, and the regulations and requirements applicable to the Contract are contained in the Special Provisions. The Department will resolve conflicts between these regulations and requirements and the other provisions of the Contract to further the above stated public policy. Contract Assurance. The Contractor, sub-recipient or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this Contract. The Contractor shall carry ou t applicable requirements of 49 CFR Part 26 in the award and administration of DOT -assisted contracts. Failure by the Contractor to carry out these requirements is a material breach of this Contract, which may result in the termination of this contract or such other remedy as the Department deems appropriate, which may include, but is not limited to one or more of the following:

107.04NEW JERSEY CONTRACTUAL LIABILITY ACT

The Contractor agrees to be responsible for compliance with N.J.S.A. 59:13-1, et seq. The Contract does not in any way waive or amend the Contractor’s duties under N.J.S.A. 59:13-1, et seq. The various notice provisions specified in the Contract are contractual obligations that are in addition to the Contractor’s notice obligations under N.J.S.A. 59:13-1, et seq. The Contractor acknowledges that it will be forever barred from recovering against the State if it fails to give timely notice in accordance with N.J.S.A. 59:13-1, et seq., of any happening of an event, thing, or occurrence or of an act or failure to act, by the Department, and that the Contractor is solely responsible for complying with the various notice requirements and the timeliness of a claim as set forth under N.J.S.A. 59:13-1, et seq. For purposes of determining the date of “completion of the con tract” pursuant to N.J.S.A. 59:13 -5, “completion of the contract” occurs on the date that the Contractor provides written notice to the Department of acceptance of the Proposed Final Certificate or conditional acceptance of the Proposed Final Certificate o r the 30th day after the Department issues the Proposed Final Certificate, whichever event occurs first. Subcontractors, suppliers, manufacturers, and fabricators are barred from making claims against the Department as a matter of law by N.J.S.A. 59:13-1, et seq.

107.05LIMITATIONS OF LIABILITY

Regarding any claim arising from a breach of Contract, tort (including negligence), or otherwise, the State will not be liable to the Contractor for any special, consequential, incidental, or penal damages, including, but not limited to, loss of profit or revenues, loss of rental value for contractor-owned equipment, damages to associated equipment, cost of capital, or interest, except as permitted by N.J.S.A. 59:13-8. 55

107.06PERSONAL LIABILITY OF PUBLIC OFFICIALS

There shall be no liability upon the Department or authorized representatives of the Department, either personally or as officials of the State, in carrying out any of the provisions of the Contract or in exercising any power or authority granted to them by or within the scope of the Contract, it being understood that in all such matters they act solely as agents and representatives of the State. Similarly, for projects on county or local roads, there shall be no liability, either personally or in an official capacity, upon the Board of Chosen Freeholders of the county or counties, or upon the governing body of the municipality or municipalities within the Project Limits.

107.07ASSIGNMENT

Do not assign the performance of the Contract. Do not transfer or assign to any party any Contract funds, due or to become due, or claims of any nature the Contracto r has against the Department, without obtaining the written approval of the Department. The Department, by sole discretion, may grant or deny such approval.

107.08NON WAIVER

Provisions of the Contract do not waive other provisions of the Contract unless specifically stated. If the Department waives a provision of the Contract for a particular occurrence, this waiver does not constitute a continued waiver by the Department of that provision or any other provision of the Contract.

107.09INDEPENDENT CONTRACTOR

The relationship of the Contractor to the State is that of an independent contractor. Conduct business consistent with such status. Do not hold out or claim to be an officer or employee of the Department by reason hereof. Do not make a claim, demand, or application to or for the rights or privileges applicable to an officer or employee of the Department, including, but not limited to, Workers Compensation Insurance, unemployment insurance benefits, social security coverage, or retirement membership or credit.

107.10NON-THIRD PARTY BENEFICIARY CLAUSE

No provision of the Contract is intended to make the public or any member thereof a third party beneficiary, or to authorize anyone not a party to the Contract to maintain a suit for personal injuries or property damage pursuant to the terms or provisions of the Contract. It is the further intent of the Department and the Contractor in executing the Contract that no individual, firm, corporation, or any combination thereof, that supplies materials, labor, services, or equipment to the Contractor for the performance of the Work becomes thereby a third party beneficiary of the Contract. The Department and the Contractor understand that such individual, firm, corporation, or combination thereof, has no right to bring an action in the courts of this State against the Department, by virtue of this lack of standing, and also by virtue of the provisions of N.J.S.A. 59:13-1, et seq., which allows suit against the State in Contract only on the basis of express contracts or contracts implied in fact.

107.11RISKS ASSUMED BY THE CONTRACTOR

.01 Risks

Take every precaution, as allowed by the Contract, against injury or damage to any part of the Project by the action of the elements, the traveling public, vandalism, or from any other cause, whether arising from the execution or the non-execution of the work. The Contractor cannot impute the negligence of consultants, other contractors, Utilities (other than the Department), other public entities, persons or entities to the Department. The Contractor assumes the following distinct and several risks, whether they arise from acts or omissions, whether negligent or not, and whether such risks are within or beyond the control of the Contractor, as specified in 107.11.01.1 to

.01.4. Excepted from this assumption of risks are only those risks that arise from solely affirmative acts by the State

subsequent to the execution of the Contract with actual and willful intent to cause loss, damage, or injury. The risks are assumed by the Contractor as follows: 56

Contractor, the Contractor’s agents or employees, subcontractors of any tier, suppliers, or agents making deliveries. Protect and preserve public and private property from damage or loss in the prosecution of the Work. Promptly repair or replace such damage or loss as directed by the RE. The Department will not make payment or modify Contract Time for such repair or replacement. If the Contractor damages the Department’s fiber optic network, the Contractor shall immediately notify the RE and the Traffic Operations Center. The Contractor shall include in the notification if the Contractor shall perform the repairs or if it is necessary for the Department to perform the repairs. If the Contractor cannot complete the repairs in the time specified by the RE, the Department has the right to repair the damage and recover the cost for the repair from the Contractor. The Department will assess li quidated damages for lost services at the rate of $1,000 per hour.

damage to materials and to construction performed under the Contract. Promptly repair or replace such damage or loss. The Department will not make payment or modify Contract Time for repairing or replacing loss or damage. The Contractor shall not bear such risk of loss or damage for the repair or replacement of any permanent element of work if the element of the work damaged is completed and is serving its intended function, is subsequently damaged by a public traffic accident, and the Contractor provides the RE satisfactory evidence that such damage was caused by a public traffic accident. Satisfactory evidence is limited to:

The Contractor shall not bear the risk of loss or damage that arises from acts of war, floods, tidal waves, earthquakes, cyclones, tornadoes, hurr icanes, or other cataclysmic natural phenomenon, unless such loss or damage is covered by the Contractor’s insurance.

unjust, by third persons made against the Contractor or the State, on account of injuries (including wrongful death), loss, or damage of any kind whatsoever arising or alleged to arise out of or in connection with the performance of the Work. The risk of claims, whether or not actually caused by or resulting from the performance of the Work, or out of or in connection with the Contractor’s operations or presence at or within the Project Limits, whether such claims are made and whether such injuries, loss, and damages are sustained, applies at any time both before and after Acceptance.

to any property of the Contractor, and of claims made against the Contractor or the State for loss or damage to any property of subcontractors, workers, and others performing the Work, and to lessors. Said risk occurs at any time before removal of such property from the Project Limits, the State’s ROW, or any other property procured by the Contractor for the Project. Defend and indemnify the State from any and all claims or alleged claims described in 107.11.01.3 and 107.11.01.4, and for all expense incurred by the State in the defense, including legal and related costs, settlement, or satisfaction thereof. If so directed by the State, the C ontractor shall at its own expense defend against such claims, in which event it shall not, without obtaining express advance permission from the State, raise any defense involving in any way jurisdiction of the tribunal, immunity of the State, governmental nature of the State, or the provisions of any statutes respecting suits against the State. The provisions of this Subsection are also for the benefit of the State, its agents, officers, and employees so that they have all the rights that they would have under this Subsection if they were named at each place above at which the State is named, including a direct right of action against the Contractor to enforce the foregoing indemnity except, however, that the State may at any time in its sole discretion and without liability on its part cancel the benefit conferred on any of them by this Subsection, whether or not the occasion for invoking such benefit has already arisen at the time of such cancellation. Except as specified in 107.11.01.2, Acceptance, the Final Certificate, or Termination does not release the Contractor from its obligations under this Subsection. 57 The enumeration in this Subsection or elsewhere in this Contract of particular risks assumed by the Contractor or of particular claims for which it is responsible shall not be deemed:

risks or claims; or

Subsection; or

in the absence of such enumerations. The Contractor expressly understands and agrees that any insurance protection required by the Contract, or otherwise provided by the Contractor, in no way limits the Contractor’s responsibility to defend and indemnify the State. Such insurance requirements are designed to provide greater assurance to the State that the Contractor is financiallyable to discharge its obligations under this Subsection and as to the risks assumed elsewhere in the Contract, and are not in any way construed as a limitation on the nature and extent of such obligations.

.02 General Insurance

Work or any portion as put to its intended use until Acceptance. The Contractor may only obtain insurance from companies that are licensed to provide insurance in the State. Ensure that policies are underwritten by companies with a current A.M. Best rating of A- with a Financial Size Category of VII or better. Before performing construction operations, provide the RE with certificates of insurance and policy declaration pages. The Department’s Insurance Certificate (Form DC-175) is the only acceptable form as evidence of insurance. Ensure that insurance policies are endorsed to provide written notice by certified mail to the Department 30 days before changes to and cancellation of the policy. Upon request, provide the RE with a certified copy of each policy. Submit documentation to identify all exclusions and deductible clauses. The limits of liability set forth below do not relieve the Contractor from liability in excess of such coverage. Deductibles for each policy are limited to $250,000 per occurrence. The Contractor is responsible for the deductible limit of the policy and all exclusions consistent with the risks it assumes under this Contract and as imposed by law.

minimum limit of liability in the amount of $1,000,000 per occurrence as a c ombined single limit for bodily injury and property damage. Ensure the coverage for the policy is at least as broad as that provided by the standard basic, unamended, and unendorsed comprehensive general liability coverage forms currently in use in the State. Ensure the policy is endorsed to include:

Ensure the policy is endorsed to delete any exclusions applying to property damage liability arising from:

Ensure the policy names the State, its officers, employees, and agents as additional insured. On the Insurance Certificate, indicate the cost for providing the policy.

cover owned, non-owned, and hired vehicles with a minimum limit of liability in the amount of $1,000,000 per 58 occurrence as a combined single limit for bodily injury and property damage. Ensure the policy is endorsed to include a Waiver of Subrogation for all claims and suits, including recovery of any applicable deductibles. Ensure the policy is endorsed to include Severability of Interest/Separation of Insureds clause.

Protective Lia bility Insurance Policy with a minimum limit of liability in the amount of $4,000,000 per occurrence as a combined single limit for bodily injury and property damage. Ensure the policy is endorsed to include Severability of Interest/Separation of Insureds clause. Ensure the policy names the State, its officers, employees, and agents as additional insured. Provide documentation from the insurance company that indicates the cost of the Owner’s and Contractor’s Protective Liability Insurance Policy. Ensure the policy is endorsed to include per project aggregate. Procure a separate Owner’s and Contractor’s Protective Liability Insurance Policy with a minimum limit of liability in the amount of $4,000,000 per occurrence as a combined single limit for bodily injury and property damage. Ensure the policy is endorsed to include a Waiver of Subrogation for all claims and suits, including recovery of any applicable deductibles. Ensure the policy is endorsed to include Severability of Interest/Separation of Insureds clause. Ensure the policy names the State, its officers, employees, and agents as additional insured. Provide documentation from the insurance company that indicates the cost of the Owner’s and Contractor’s Protective Liability Insurance Policy.

according to the requirements of the laws of this State and include an all-states endorsement to extend coverage to any state that may be interpreted to have legal jurisdiction. Provide Employer’s Liability Insurance with the following minimum limits of liability:

If construction operations requires marine operations, including working from a barge or ship, or unloading material from a barge or ship on a navi gable waterway in the United States, ensure the policy is endorsed to include US Longshore and Harbor Workers coverage and Jones Act coverage.

the underlying policies for Comprehensive General Liability and Comprehensive Automobile Liability with minimum limits of liability of $10,000,000. Ensure the Excess Liability Insuranc e policy takes effect (drops down) if the primary coverage is impaired or exhausted. Ensure the excess or umbrella policy has the same terms and conditions as the primary underlying coverage.

Liability Insurance with a minimum limit of liability in the amount of $2,000,000 per occurrence. Ensure the policy is endorsed to include:

Ensure the policy names the State, its officers, employees, and agents as additional insured.

any period when the required insurance is not in effect, the RE may suspend the Work. The Department may refuse to make payments due under this Contract or any other contracts with the Department until the required insurance coverage is in effect. The Department may use monies withheld to renew the insurance for the periods and amounts referred to above. Alternatively, the Department may default the Contractor and direct the Surety to complete the Project. 59

107.12THE CONTRACTUAL CLAIM RESOLUTION PROCESS

.01 Satisfying the Notice Requirements

If the Contractor has provided the RE notice of change as specified in 104.03.04, the RE and the Contractor may negotiate a resolution, even if the full impact has not been determined. If a notice of change has not been resolved, the Contractor may initiate the contractual claims resolution process. To initiate the contractual claims resolution process, submit to the RE a Contractual Notice Form for the claim. Upon request, provide the RE with 5 copies of all documentation submitted in support of the claim. At a minimum, include the following information with the Contractual Notice Form:

claim.

matter giving rise to the claim.

support the claim.

to which the Contract provides that the Department’s decision is final, the Contractor shall set out in detail the facts supporting its contention that the decision of the Department was fraudulent, arbitrary, or capricious.

the Contractor’s approved baseline progress schedule and updates, as well as relevant fragnets. Include a time impact evaluation of the delay as specified in 108.11.01.C.

or other calculations and basis of the amount sought.

custody agent, as specified in 103.05.

Department and that the Contractor has requested that the review process begin. If the RE determines that the submitted Contractual Notice Form does not provide sufficient information, the RE will consider the Contractual Notice Form incomplete for the purpose of processing the claim under the Contractual Claim Resolution Process, and the RE will notify the Contractor of the missing components required to start the process. The Department will not initiate formal discussions or meetings concerning a claim submitted on an incomplete Contractual Notice Form. The Department will review alleged liability and damages at the same time.

.02 Steps

The Department will not process or review claims submitted by a subcontractor or supplier at any tier. Claims submitted by the Contractor are eligible only for payment when there is an obligation or liabi lity on the part of the Contractor and shall not be a pass through of a claim by a subcontractor or by a supplier. The Contractor can submit a claim, based on a subcontractor’s dispute only if under the terms of the subcontract agreement, the Contractor has an underlying obligation to the subcontractor. If the Contractor has no liability to the subcontractor under the subcontract agreement, the Contractor cannot pursue the claim with the Department. A Contractor may initiate the Contractual Claims Resolution Process up to 30 days after the issuance of the proposed Final Certificate. The Contractual Claims Resolution Process may continue beyond the “completion of the contract” as defined in 107.04; however, the Contractual Claims Resolution Process will not extend any statute of limitation that may apply to a claim. The Contractual Claims Resolution Process is sequential in nature and is composed of the following steps:

60

The Department will not allow a claim to proceed to the next level of review unless and until the claim has been reviewed at the preceding step. Additionally, the Department will not allow the claim to proceed to the next level until the Contractor indicates in writing that the decision of the previous step is unacceptable and requests that the claim be forwarded to th e next step within the specified timeframe. If during any step in the process, a claim is resolved, the Contractor must sign an unconditional release, provided by the Department, as to all matters arising from the claim. The Contractor is limited to the documentation provided to the Department at the beginning of Step I throughout all steps of the Contractual Claims Resolution Process. Submission of additional information by the Contractor at any subsequent step is cause for the claim to be returned by the Department to Step I for review. The Department will inform the Contractor in writing if the claim is returned to Step I. If a claim is returned, it must proceed through all completed steps in the process again. The Department will not pay interest on the amount of any payment made in resolution or settlement of a claim resolved through the Contractual Claims Resolution Process. When the value of the claim submitted by the Contractor is $20,000 or less, the Step II review will be the final step in the Contractual Claims Resolution Process. For such claims, the decision of the Regional Claims Review Board is final and terminates the Contractual Claims Resolution Process. Where there has been a determination at Step I or Step II that the Contract does not provide a basis for the claim or that the Contractor has failed to timely submit a notice of claim pursuant to N.J.S.A. 59:13-1, et seq., the Department reserves the right to terminate the Contractual Claims Resolution Process at the end of Step II. For such claims, the Secretary of the Department Claims Committee will provide the Contractor with the reasons for the termination of the Contractual Claims Resolution Process and the rejection of the claim. The review of a claim at any step does not constitute a waiver by the Department of its defenses that the Contract does not provide a basis for the claim or that the Contractor failed to timely submit a notice of claim pursuant to N.J.S.A. 59:13-1, et seq. When the Contractual Claims Resolution Process is terminated for a claim as a result of the Contractor’s act or failure to act, the Contractor waives its rights to further participation in the Contractual Claims Resolution Process for that claim. The Contractual Claims Resolution Process is as follows:

20 days after the RE has determined that sufficient information was provided by the Contr actor on the Contractual Notice Form as specified in 107.12.01. This time limit may be extended by mutual agreement of the parties. Within 10 days of the receipt of the decision by the RE, the Contractor shall either accept or reject the decision in writing; or upon failure to acce pt or reject the decision in writing, the Department will terminate the Contractual Claims Resolution Process. If the Contractor rejects the decision and intends to proceed to a Step II review, the Contractor must request a Step II review within 10 days of receipt of the RE’s decision.

Department. If the Contractor provides a timely written rejection of the RE’s decision and a timely request to forward th e claim to Step II, the RE will forward the claim and supporting information previously submitted by the Contractor to the RCRB within 7 days of receipt of the Contractor’s request to forward the claim to the next step. The RCRB will schedule and hold a meeting to review the claim with the Contractor within 30 days of receipt of the claim information from the RE. This time limit may be extended by mutual agreement of the parties. The RCRB will issue a written decision regarding the claim within 20 days of the meeting. Within 15 days of the receipt of the decision by the RCRB, the Contractor shall either accept or reject the decision in writing to the RCRB Chair; or upon failure to accept or reject the decision in writing, the Department will terminate the Contractual Claims Resolution Process. If the Contractor rejects the decision and intends to proceed to a Step III review, the Contractor must then request a Step III review within 15 days of the Contractor’s rejection. Submit the Step III request to the Secretary of the Department Claims Committee, P.O. Box 600, Trenton, New Jersey 08625-0600 or email to DOT-Secretary.ClaimsCommittee@DOT.NJ.GOV. 61

Department’s management. Additional non -voting members may include a Deputy Attorney General, the Secretary of the Claims Committee, and a member of the FHWA. For issues involving the Claims Committee or Mediation, contact the Secretary of the Claims Committee. The Claims Committee will not review a claim or combination of claims valued less than $250,000 or 1 percent of the current adjusted Contract Price, whichever is greater, until after the receipt of conditional release as specified in 109.11. If the Contract is 75 percent complete or greater as measured by Contract Time or Total Adjusted Contract Price, the Claims Committee will not review a claim or combination of claims until after receipt of conditional release as specified in 109.11. If the Claims Committee does not review a claim or combination of claims before Completion, the Claims Committee will review the claim or combination of claims at a single session of the Claims Committee after the receipt of the conditional release as specified in 109.11 and all claims have been reviewed at Steps I and II of the Claims Reso lution Process. When reviewing a combination of claims, the Claims Committee will not review any individual claim valued less than $20,000. Regarding a request for a Step III review that meets the applicable requirements, the Secretary of the Claims Committee will schedule a Claims Committee review to be held within 60 days of the receipt of the request from the Contractor. This time limit may be extended by mutual agreement of the parties. The Claims Committee will notify the Contractor in writing of its decision on the claim within 60 days of the review. Within 20 days of the receipt of the decision by the Claims Committee, the Contractor shall either accept or reject the decision in writing, or upon failure to accept or reject the decision in writing, the Department will terminate the Contractual Claims Resolution Process. If the Contractor rejects the decision and intends to proceed to a Step IV Non-Binding Mediation, the Contractor must request a Step IV Non-Binding Mediation within 60 days of receipt of the Claims Committee’s decision. Submit the request to the Secretary of the Claims Committee.

Department tentatively agrees to participate in non -binding mediation, the Contractor must satisfy the following conditions to proceed:

Agreement (Step IV Agreement), a copy of which is available on the Department’s website.

biographical background listing the experience and qualifications of each candidate. If a candidate was previously engaged by the Department or Contractor, identify the project and when the candidate served. If a candidate was employed by the Department or Contractor, identify when the candidate was employed and the candidate’s job duties. The Contractor may propose candidates that have been used for mediation purposes for this Project or another project.

candidates submitted by the Contractor. If the Department rejects the proposed candidates, the Department will request the Contractor to submit 4 additional candidates that meet the original criteria. Submit this additional list within 15 days of the receipt of a written request from the Department. The mediator must be acceptable to both the Contractor and to the Departme nt for the Non -Binding Mediation to proceed. Upon mutual agreement, the mediator can be an individual proposed by the Department.

of the Claims Committee will schedule a meeting for the Non-Binding Mediation.

approval.

107.13LITIGATION OF CLAIMS BY THE CONTRACTOR

The Contractual Claims Resolution Process is not an administrative procedure but is contractual in nature, intended to review properly filed and documented claims. The exhaustion of the Claims Resolution Process is not a prerequisite to the filing of a legal action against the Department. The Contractor, however, must fully comply with all of the terms and conditions of N.J.S.A. 59:13-1, et seq. before commencing a legal action. Therefore, where a Contractor brings a legal action, arising out of a Contract, against the Department, its agents, officers, or employees, arising out of or related, directly 62 or indirectly, to a claim pending against the Department, the Contractual Claims Resolution Process, at any step, shall terminate as to that claim(s) or related claims being litigated, no matter which level of review the claim may be at when the legal action is filed. The Department will, thereafter, resolve such claim(s) under the legal action, subject to the provisions of N.J.S.A. 59:13-1, et seq. The Contractor may submit claims to the Department for processing through the Contractual Claims Resolution Process that are unrelated to pending litigation, subject to the terms of the Contract and N.J.S.A. 59:13-1, et seq. In a legal action, the Contractor’s re medy for additional payment or an extension of Contract Time shall not exceed the actual additional costs incurred by the Contractor resulting directly from the change. In addition, the damages sought by the Contractor shall not exceed the amount allowed by force account as specified in 104.03.08. The Contractor bears the burden of proving compliance with the requirements of the Contract, and must maintain all records required under the Contract.

107.14PATENTED DEVICES, MATERIALS, AND PROCESSES

Observe patent and copyright laws. If a design, device, material, or process covered by letters of patent or copyright is used in the Work, obtain permission for such use by suitable legal agreement with the patent ee or owner. Pay the costs for the use of patented materials, equipment, devices, or processes used on or incorporated in the Work. Defend and indemnify the State and the Department, affected third parties, or political subdivision from any and all claims filed against the State or Department for infringement of patented designs, devices, materials, or processes, or any trademark or copyright. The Contractor is responsible for all costs, expenses, and damages that the Contractor may be obliged to pay by reason of an infringement during the performance of the Work or after Acceptance. Observe 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements” and any implementing regulations set forth by the USDOT, FHWA or FAA if State contract is for the performance of experimental, developmental, or research work funded under a Federal Aid Project.

107.15TAXES

N.J.S.A. 54:32B-9 provides that any sale or service to the State, or any of its agencies, instrumentalities, public authorities, public corporations (including a public corporation created pursuant to ag reement or compact with another state), or political subdivisions where the State is the purchaser, user, or consumer, is not subject to the sales and use taxes imposed under the Sales and Use Tax Act. N.J.S.A. 54:32B -8 provides that sales of materials, s upplies, or services made to contractors, subcontractors, or repairmen for exclusive use in erecting structures, or building on, or otherwise improving, altering, or repairing real property of the above listed bodies are exempt from the tax on retail sales imposed by the Sales and Use Tax Act. The sales tax exemption does not apply to equipment used for Contract work or for force account work whether the equipment is to be purchased or rented. The Con tractor may obtain the required Contractor’s Exemption Purchase Certificate (Form No. ST -13) to apply for the exemption, by writing or calling the New Jersey Division of Taxation, Tax Information Services, P.O. Box 269, Trenton, New Jersey 08625, or any New Jersey Division of Taxation Regional Office. Pursuant to N.J.S.A. 54:49-19, et seq., and notwithstanding any provisions of the law to the contrary, whenever a taxpayer, partnership, or S-corporation under contract to provide goods, services, or construction projects to the State or its agencies or instrumentalities, including the legislative and judicial branches of the State government, is entitled to payment for those goods or services at the same time a taxpayer, partner, or shareholder of that entity is indebted for any State tax, the Director of the Division of Taxation will seek to set off the necessary payment to satisfy the indebtedness. The amount set off shall not allow for the deduction of any expense or other deductions that might be attributable to the taxpayer, partner, or shareholder subject to set-off under this act. The Director of the Division of Taxation will give notice of the set -off to the taxpayer, partner, or shareholder and will provide an opportunity for a hearing within 90 days of the notice under the procedures for protests established under N.J.S.A. 54:49-18. No request for conference, protest, or subsequent appeal to the tax court from any protest, shall stay the collection of the indebtedness. The Department will stay interest that may be payable by the State to the taxpayer, pursuant to N.J.S.A. 52:32-32, et seq.

107.16RECOVERY OF MONIES BY THE STATE

Whenever the Contract provides all of the following: