00199.00 146 Section 00199 - Disagreements, Protests, and Claims
Description
00199.00General - This Section detai ls the process through which the parties agree to resolve any
disagreement concerning additional compensation or concerning a combination of additional compensation and Contract Time. (See 00180.80 for disagreements and claims concerning additional Contract Time only, and 00195.95 for disagreements and claims concerning correction of final compensation.) The Agency will not consider direct disagreements, protests, or claims from Subcontractors, Suppliers, or any other Entity not a party to the Contract.
Provisions and Requirements
00199.10Procedure for Resolving Disagreements - When disagreements occur concerning
additional compensation or a combination of additional compensation and Contract Time, the Contractor shall first pursue resolution through the Engineer of all issues in the dispute, including , without limitation, the items to be included in the written notice in 00199.20. If the discussion fails to provide satisfactory resolution of the disagreement, the Contractor shall f ollow the protest procedures outlined in 00199.20. If the Engineer denies all or part of the Contractor's protest, and the Contractor desires to further pursue the issues, the Contractor shall submit a claim for processing according to 00199.30.
00199.20Protest Procedure - If the Contractor disagrees with anything required in a Change Order
or other written or oral order from the Engineer, including any direction, instruction, interpretation, or determination, or if the Contractor asserts a disagreement or dispute on any other basis, except 0195.95, that, in the Contractor's opinion, entitles or would entitle the Contractor to additional compensation or a combination of compensation and Contract Time, the Contractor shall do all of the following in order to pursue a protest and preserve its claim:
before starting or continuing the protested Work.
within 7 Calendar Days after receiving the protested order. In the notice the Contractor shall:
• Describe the acts or omissions of the Agency or its agents that allegedly caused or may cause damage to the Contractor, citing specific facts, persons, dates and Work involved; • Describe the nature of the damages; • Cite the specific Contract provision(s) that support the protest; • Include the estimated dollar cost, if any, of the protested Work, and furnish a list of estimated Materials, Equipment and labor for which the Contractor might request additional compensation; and • If additional compensation is estimated to be due, include the estimated amount of additional time required, if any.
Failure to comply with these notice requirements renders the notice improper.
and allow the Engineer access to those and other supporting records. Provide daily records of protested Work, on a weekly basis, on a schedule to be set by agreement with the Engineer.
records of the protested Work. The Contractor and the Engineer will compare records and either bring them into agreement at the end of each D ay, or record and attempt to explain any differences. 00199.30 147
Engineer.
has fully complied with the requirements described in 00199.20(b). If the protest is denied, the Engineer will notify the Contractor in writing of the reasons for full or partial denial. If a protest is found to be valid, the Engineer will, within a reasonable time, make an equitable adjustment of the Contract. Adjustment of time will be evaluated according to 00180.80. The Engineer has no responsibility for evaluating and may reject a protest that does not comply with 00199.20(b). If the protest is rejected, the Engineer will notify the Contractor in writing of the reasons for rejection.
fully complied with the requirements described in 00199.20(b), and if the Engineer fully or partially denies, in writing, the Contractor's protest according to 00199.20(f), the Contractor may request that a mutually selected Third Party Neutral review the protest. Procedures for selecting, using, and paying for the cost of the Third Party Neutral will be specified by Change Order.
If the Contractor does not accept the Engineer's evaluation of the protest, or either the Contractor or Engineer disagrees with the resolution recommended by the Third Party Neutral, the Contractor may pursue a claim as described in 00199.30.
00199.30Claims Procedure:
additional compensation and Contract Time, and has pursued and exh austed all the procedures provided in 00199.10 and 00199.20 to resolve a disagreement and protest, the Contractor may file a claim.
The Agency's Contract is with the Contractor. There is no contractual relationship between the Agency and any Subcontractors, Suppliers or any Entity other than the Contractor. It is the Contractor's responsibility to fully evaluate any claim before presenting it to the Agency. In addition, when a claim includes Work done or costs incurred by any Subcontractors, Suppliers, or any Entity other than the Contractor, the Contractor remains solely responsible for presenting the claim to the Agency.
Claims that include Work done or costs incurred by any S ubcontractors, Suppliers, or any Entity other than the Contractor will not be considered by the Agency unless the Contractor has:
• Completed and provided its own written evaluation of the claim; • Verified by its own independent review and evaluation of the amount of compensation sought; and • Certified the claim according to 00199.30(b) (Part 10).
45 Calendar Days following the date of the Second Notification, the Contractor shall submit to the Engineer in writing, claims for additional compensation or a combination of additional compensation and Contract Time additional to that specified in the Contract. For a claim not submitted within the 45-D ay limit, that has not met the requirements of 00199.20, or i s not filed as provided in 00199.30, the Contractor waives any claim for additional compensation or for additional compensation and Contract Time, and the Agency may reject the claim.
00199.30 148 Written claims to the Engineer or the Agency by the Contractor shall be delivered to the Agency address shown in the Special Provisions, unless a different address is agreed to by the Engineer, and shall be delivered:
• By U.S. Postal Service first class mail or priority mail (which at the sender's option may include certified or registered mail return receipt requested); or • By overnight delivery service of a private industry courier.
Claims will be considered as having been received by the Agency:
• At the time of actual receipt or 7 Calendar Days after the postmarked date whe n deposited for delivery by first class or priority mail, whichever is earlier; or • At the time of actual receipt or 3 Calendar Days after deposit with a private industry courier for overnight delivery service, whichever is earlier. The Agency reserves the right at any time and at any step in the claim decision or review process to request additional information, records or documentation related to the claim or the Contract either directly or through agents working toward resolution of the disputed or claimed events and issues.
Claims shall be made in writing, and shall include all information, records and documentation necessary for the Agency to properly and completely evaluate the claim.
To be considered, claims for additional compensation, or for additional compensation and Contract Time, shall be completed according to 00199.30 and shall be submitted with the required information and in the format below and labeled as required below for each claimed issue:
(Part 1) Summary (label page 1.1 through page 1.X) - In the summary, include a detailed, factual statement of the claim for additional compensation and Contract Time, if any, with necessary dates and locations of Work involved in the claim and the dates of when the event arose. Also inc lude detailed facts supporting the Contractor's position relative to the Engineer's decision (see 00199.20(f));
(Part 2) Proof of notice (label page 2.1 through page 2.X) - Submit a copy of form 734-2887, with all attachments, that was given to the Agenc y. Include the date when that written notice and the date when oral notice was given: (Part 3) Copies of the Contract Specifications that support the Contractor's claim (label page 3.1 through page 3.X);
(Part 4) Theory of entitlement supporting the c laim (label page 4.1 through page 4.X) - Include a narrative of how or why the specific Contract Specifications support the claim and a statement of the reasons why such Specifications support the claim;
(Part 5) Itemized list of claimed amounts (label p age 5.1 through page 5.X) - Claimed damages that resulted from the event with a narrative of the theories and records and documents used to arrive at the value of the damages;
(Part 6) Additional Contract Time requests (label page 6.1 through page 6.X) - If the claim is for a combination of additional compensation and Contract Time, submit a copy of the schedule that was in effect when the event occurred and a detailed narrative which explains how the event impacted Contract Time. In addition, if an Agency -caused delay is claimed:
• Include the specific days and dates under claim; 00199.30 149 • Provide detailed facts about the specific acts or omissions of the Agency that allegedly caused the delay, and the specific reasons why the resulting delay was unreasonable; and • Provide a schedule evaluation that accurately describes the impacts of the claimed delay.
Also see 00180.80 for additional requirements regarding claims for Contract Time and causes that are eligible and ineligible for consideration;
(Part 7) Copies of actual expense records (label page 7.1 through page 7.X) - Include documents that contain the detailed records and which support and total to the exact amount of additional compensation sought. Include the information and calculations necessary to support that amount. That amount may be calculated on the basis of Section 00197, if applicable, or may be calculated using direct and indirect costs presented in the following categories:
• Direct Materials; • Direct Equipment. The rate claimed for each piece of Equipment shall not exceed the actual cost. In the absence of actual Equipment costs, the Equipment rates shall not exceed 75 percent of those calculated under the provisions of 00197.20. For each piece of Equipment, the Contractor shall include a detailed description of the Equipment and attachments, specific days and dates of use or standby, and specific hours of use or standby; • Direct labor; • Job overhead; • General and administrative overhead; and • Other categories as specified by the Contractor or the Agency; (Part 8) Supporting records and documents (label page 8.1 through page 8.X) - Include copies of, or excerpts from the following:
• Any documents that support the claim, such as manuals standard to the industry and used by the Contractor; and • Any daily reports or diaries related to the event, photographs or media that help explain the issue or event (optional), or all other information the Contractor chooses to provide (optional);
(Part 9) Certification (label page 9.1 through 9.X) - A cert ified statement, signed by a person authorized to execute Change Orders, by the Contractor, Subcontractor, Supplier, or Entity, originating the claim, as to the validity of facts and costs with the following certification:
Under penalty of law for perjury or falsification, the undersigned, (Name), (Title), (Company) certifies that this claim for additional compensation for Work on the Contract is a true statement of the actual costs incurred (in the amount of $________, exclusive of interest) and is full y documented and supported under the Contract between the parties.
Signature: Date: ___________________, 20___
Subscribed and sworn before me this ____ day of ________________, 20___
Notary Public My commission expires .
00199.40 150 (Part 10) Contractor evaluation of a lower -tier claim (label page 10.1 through 10.X) - If the claim includes Work done or costs incurred by any Subcontractors, Suppliers, or any Entity other than the Contractor, the following are required:
• Data required by the ot her Subsections of 00199.30(b); • Copies of the Contractor's, S ubcontractor's, Supplier's and Entity's, at all tiers above the level of which the claim originates, separate evaluation of entitlement; • Copies of the Contractor's, S ubcontractor's, Supplier's an d Entity's, at all tiers above the level of which the claim originates, independent verification and evaluation of the amount of damages sought; and • A person authorized to execute Change Orders on behalf of the Contractor, Subcontractor, Supplier and Entit y, at all tiers above the level of which the claim originates, must sign a statement with the following certification:
Under penalty of law for perjury or falsification, the undersigned,
Subcontractor, Supplier or Entity (Company) for additional compensation for Work on the Contract is a reasonable statement, independently verified, of the costs incurred (in the amount of $________, exclusive of interest) and is fully documented and supported under the Contract between the parties.
Signature: Date: ___________________, 20___
Subscribed and sworn before me this ____ day of ________________, 20__
Notary Public My commission expires . If the Engineer determines that additional information, records or documentation is needed to allow proper evaluation of the claim submittal, the Engineer will request the information, records or documentation. The Contractor shall submit to the Engineer within 14 Calendar Days, or as otherwise agreed by the parties, the required additional information, records and documentation.
If the Engineer determines that the claim submittal with the additional information, records and documentation submitted is incomplete and not accepted as a cl aim, the Engineer will notify the Contractor in writing and the submittal will be rejected and will not be considered under 00199.40.
is a condition precedent to the commencement of any lawsuit by the Contractor to enforce any claim.
00199.40Claim Decision; Review; Exhaustion of Administrative Remedies - The Agency
intends to resolveal l claims at the lowest possible administrative level. The Engineer will also determine whether multiple claims should be advanced separately or together. If the Engineer denies the claim for additional compensation or a combination of additional compensation and Contract Time, in full or in part, according to 00199.40(a), the Contractor may request review of the denial. The disputed claim for additional compensation or a combination of 00199.40 151 additional compensation and Contract Time may then be resolved, in ful l or in part, at any of the four progressive steps of claim review procedure as specified in (b) through (e) of this Subsection.
If the Engineer has denied a claim, in full or in part, for Contract Time only according to 00180.80, or has denied a claim, i n full or in part, for correction of final compensation according to 00195.95, those disputed claims may then be resolved, in full or in part, at any of the four progressive steps of claim review procedure as specified in (b) through (e) of this Subsection. A person authorized by the Contractor to execute Change Orders on behalf of the Contractor must be present and attend all claim hearings. For all claims, all of the actions and review under each step of the review process shall occur before the review can be advanced to the next higher step.
The Engineer may determine to skip the Step 1: Region Level Review, in which case the claim or claims will advance to Step 2: Agency Level Review.
and evaluate a Contractor's claim for additional compensation, or for a combination of additional compensation and Contract Time, if submitted as required by 00199.30.
Once the Engineer determines the Agency is in receipt of a properly submitted claim, the Engineer will arrange a meeting, within 21 Calendar Days or as otherwise agreed by the parties, with the Contractor in order to present the claim for formal review and discussion.
If the Engineer determines that the Contractor must furnish additional information, records or documentation to allow proper evaluation of the claim, the Engineer will schedule a second meeting, to be held within 14 Calendar Days or as otherwise agreed by the parties, at which the Contractor shall present the requested information, records and documentation.
The Engineer will provide a written decision to the Contractor within 30 Calendar Days of the last Engineer -level meeting.
If the Contractor does not accept the Engineer's decision, the Contractor may, within 10 Calendar Days of receipt of the written decision, request in writing that the Engineer arrange a review at Step 1 (see (b) below).
meeting with the Region- level reviewer in order to present the denied or partially denied claim for formal review and discussion. The meeting will take place within 21 Calendar Days of the Agency's receipt of the request, or as otherwise agreed by the par ties.
If the Region-level reviewer determines that the Contractor must furnish additional information, records or documentation to allow proper evaluation of the claim, the reviewer will schedule a second meeting, to be held within 14 Calendar Days, or as otherwise agreed by the parties, at which the Contractor shall present the requested information, records and documentation. The Region-level reviewer will provide a written decision to the Contractor within 30 Calendar Days of the last Region- level meeting.
If the Contractor does not accept the Step 1 decision, the Contractor may, within 10 Calendar Days of receipt of the written decision, request in writing that the Engineer arrange a review at Step 2 (see (c) below).
Administration Engineer (CAE) to present the claim for final Agency review. The presentation will 00199.40 152 take place within 21 Calendar Days of the Agency's receipt of the Contractor's written request, or as otherwise agreed by the parties.
If the CAE determines that the Contractor must furnish additional information, records or documentation to allow proper evaluation of the claim, the CAE will schedule a second meeting to be held within 14 Calendar Days or as otherwise agreed by the parties, at which the Contractor shall present the requested information, records and documentation.
The claim is subject to 00199.60, if not all of the records requested by the CAE were furnished.
The CAE will provide a w ritten decision to the Contractor, subject to 00199.60, if applicable, regarding the claim within 30 Calendar Days of the final Step 2 meeting.
If the Contractor does not accept the Step 2 decision, the Contractor may, within 10 Calendar Days of receipt of the written decision, request in writing through the Engineer that the claim be advanced to Step 3 or 4 (see (d) and (e) below), as applicable. For purposes of determining which process to use for claims under Step 3 or 4 concerning a combination of additional compensation and Contract Time or for Contract Time only, the value of the claim or portion of the claim for Contract Time will be assumed to be the appropriate Liquidated Damages as provided in 00180. 85 multiplied by the number of Calendar Days in question. If applicable, advancement of the claim is subject to the provisions of 00199.60 regarding waiver and dismissal of the claim or portions of the claim.
before a single arbitrator according to the Construction Industry Arbitration Rules of the American Arbitration Association or such other arbitration service and rules as agreed by t he parties.
Arbitration filing costs and any arbitrator's fees will be divided equally between the Agency and the Contractor.
Claims Review Board (referred to as "Board") for consideration, review and recommended resolution. The Board will be comprised of three persons. ODOT will establish and maintain, in consultation with representatives of the construction industry, a panel of more than 12 qualified individ uals available to serve on Boards. If a claim within the scope of this step is properly referred for Board consideration and review, copies of biographies of all persons on the panel will be sent to the Contractor. Within 20 Calendar Days after the biogr aphies are mailed, the Contractor and the Engineer shall each nominate, in writing, three individuals from the panel available to serve on the Board.
Within 10 Calendar Days after receipt of the nominations, the Contractor and the Engineer shall
of the appointment. The two appointees, now Board Members, shall select an individual from the panel to serve as the third Board Member.
If the two Board Members ca nnot agree on the selection of the third Board Member, the Circuit Court in the county in which the Agency's main office is located will resolve the dispute. In this event, the Engineer will act through the Agency's legal counsel to request the Circuit Court to select an individual from the panel to serve as the third Board Member. Once the three Board Members have been selected, the three Board Members will decide which of the three will be the Board Chair.
00199.40 153 The Board may request the Engineer to designat e a person not associated with the Contract to act as the recording secretary for the Board. The recording secretary is not a Board member, and will only assist the Board with administrative tasks related to its consideration and review of the referred cl aim.
The Agency and the Contractor will equally share the costs of the Board members. The Agency will pay the costs of the Board's recording secretary. Members of the Board are to act impartially and independently in the consideration of facts and conditions surrounding the dispute. Board recommendations concerning the dispute are considered advisory only, shall not be binding on either party, and shall not constitute evidence in any legal proceeding for any reason.
The Board will schedule and conduct an informal hearing at which the Contractor and the Agency will each have an opportunity to present evidence and argument. The Contractor and the Agency shall each submit a brief written summary of the claim to each Board member and the other party at leas t 10 Calendar Days before the hearing. Unless directed otherwise by the Board Chair, the summary shall include, for each issue under dispute:
• A short statement describing the disputed issue; • A short position statement by the party on the issue; • A clear a nd concise explanation of the contractual basis for that position, including specific reference to Contract Documents; • A clear and concise description of the costs claimed for each issue, including, without limitation , specific documents demonstrating productivity, time and costs; and • Exhibits, including , without limitation , copies of plan sheets, extracts from the Standard Specifications and Special Provisions, correspondence, photographs, or other evidence to support the position.
The proceedings will be conducted in a manner determined by the Chair, in consultation with the other Board members. Unless directed otherwise by the Chair, the hearing will be conducted according to the following guidelines:
• The hearing will be informal; • The witnesses will not be sworn; • The Contractor will present its case first; • The Agency will then present its case; • Both parties will then have opportunity to present rebuttal; • The Board may ask questions and, to promote open discussion of the issues, both par ties may respond or emphasize issues; • The parties' attorneys may observe the hearing and may respond to direct questions from the Board, but may not make factual presentations or legal arguments; and • The Board will conclude the hearing when it appears to t he Board Chair that each party has had sufficient opportunity to support its case and the Board has no further questions.
Within 10 Calendar Days after conclusion of the hearing, the Board will forward to the Agency's designated representative and the Contractor the Board's written recommendation for resolution of the claim. Within 10 Calendar Days of its receipt of the Board's recommendation, the Agency will provide to the Contractor the Agency's written decision regarding the claim.
00199.50 154 If the Contractor d oes not accept the Agency's decision regarding the claim, the Contractor may proceed to litigation as described in Step 4 (see (e) below).
the Step 3 Board review process according to 00199.40 (d)(2). If not, the Contractor may proceed to Step 4 (see (e) below).
• Claims over $500,000; • Appeals of arbitration awards issued in Step 3 at 00199.40(d)(1) above, according to ORS 36.600 through ORS 36.740; and • Agency decisions issued under Step 3 at 00199.40(d)( 2) above.
The Contractor must follow each step in order, and exhaust all available administrative remedies before resorting to litigation. Lawsuits must be properly filed in a court of competent jurisdiction within 6 months from the date of the final decision that exhausted the Contractor's available administrative remedies under this Section 00199.
The Contractor shall comply with 00170.00.
00199.50Mediation - Notwithstanding the formal claims procedure specified above, the parties may
enter into nonbinding mediation by mutual agreement at any time, in which case the parties may also agree to suspend the time requirements in Section 00199 pending the outcome of the mediation process. The rules, time and place for mediation, as well as selection of the mediator, shall be established by mutual agreement. Costs shall be divided equally between the Contractor and the Agency. Either party may terminate mediation at any time upon 5 Calendar Days ' notice to the other, after which the time requirements of Section 00199 shall be automatically reinstated and shall resume from the point at which the time requirements were suspended.
00199.60Revie w of Determination Regarding Records - If not all of the records requested by the
CAE under 00199.40(c) Step 2 were provided, then the CAE will determine:
• If the records are of the type described in 00170.07; and • If the records have not been maintained or the records, or access to the records, has not been provided to the Agency as required by 00170.07 and this Section; and • If the records are material and necessary for proper evaluation of part or all of the claim; and • The portions of the claim for which the records are material and necessary for proper evaluation.
If the CAE makes the foregoing determinations, then subject to the review process described below, all portions of the claim for which the CAE determined the records are material and necessary for proper evaluation are immediately waived and irrevocably dismissed.
Even if the records have not been maintained or the records, or access to the records, have not been provided to the Agency in a given instance, the CAE may determine that sufficient records have been provided for the Agency to properly evaluate the claim in that instance. If the CAE makes this determination, the claim or portions of the claim will not be waived or dismissed under this provision.
If the Contractor does not accept the CAE's written determination that the records are material and necessary for proper evaluation of part or all of the claim, and the portions of the claim for which the records are material and necessary, the Contractor may, within 14 Calendar Days of recei pt of the CAE's determination, request, in writing, a review of such determination by the Construction Engineer (CE). If the Contractor does not request a review of the CAE's determination, the CAE's determination shall then become the Agency's final determination as of the expiration of the time limit to request review. 00199.60 155 If the Contractor requests the review, the CE will schedule a review meeting within 14 Calendar Days, or as otherwise agreed by the parties, of when the CE receives the written review request. The Agency and the Contractor will each have an opportunity to explain their respective positions at the review meeting in a manner determined by the CE.
Within 10 Calendar Days of the review meeting, the CE will issue a written proposed f inding of whether the records not maintained or not provided to the Agency, or for which access was not provided to the Agency, are material and necessary for proper evaluation of part or all of the claim. If the CE makes that finding, then the CE willal so make a proposed written finding as to what portions of the claim the records are material and necessary and, therefore, waived and irrevocably dismissed.
Even if the records have not been maintained or the records, or access to the records, have not been provided to the Agency in a given instance, the CE may determine that sufficient records have been provided for the Agency to properly evaluate the claim in that instance. If the CE makes this determination, then the claim or portions of the claim will not be waived or dismissed under this provision.
The CE's proposed findings will be submitted to the Contractor and the Agency's Director. The Contractor may submit written objections concerning the proposed findings to the Director within 5 Calendar Days of receipt of such findings. If written objections are submitted, the Director may adopt or modify the proposed findings, and the Director's findings shall be the Agency's final determination. If no written objections are submitted within the 5 Calendar Day time limit, the CE's proposed findings shall then become the Agency's final determination as of the expiration of the time limit to submit written objections.
If the Agency's final determination is that the records are material and nec essary for proper evaluation of part or all of the claim, then the claim or that portion of the claim for which the records are material and necessary is waived and irrevocably dismissed, unless the Contractor provides the records, or access to the records , to the CAE within 5 Calendar Days of the Agency's final determination. If the Contractor provides the records, or access to the records, within this time limit, the CAE will schedule a meeting with the Contractor within 14 Calendar Days or as otherwise agreed by the parties, to discuss the records.
The Agency's final determination that records are material and necessary for proper evaluation of part or all of the claim, and the Agency's final determination of the portions of the claim for which the records are material and necessary, shall be final and binding.
If the entire claim is waived and irrevocably dismissed pursuant to the Agency's final determination there will be no further decision by the Agency on the claim or further review of the claim under 00199.40 and the claim will not be eligible for mediation under 00199.50. If only portions of the claim are waived and irrevocably dismissed pursuant to the Agency's final determination, the CAE will provide a written decision to the Contractor regarding the remaining portions of the claim within 30 Calendar Days of the final Step 2 meeting, or the Agency's final determination regarding the records, whichever is later. There will be no further decision by the Agency on or further review under 00199.40 of the portions of the claim waived and irrevocably dismissed pursuant to Agency's final determination and those portions will not be eligible for mediation under 00199.50.
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