Part I.
Texas Department of Transportation
Chapter 9.
Contract Management
Subchapter A. General
43 TAC §9.2
The Texas Department of Transportation adopts amendments
to §9.2, concerning Contract Claim Procedure. Section 9.2 is adopted
with changes to the proposed text as published in the October 9, 1998, issue
of the
Texas Register
(23 TexReg 10360).
EXPLANATION OF ADOPTED AMENDMENTS
Senate Bill 370, 75th Legislature, 1997, codified Transportation Code,
§201.112, which authorizes the commission, by rule, to establish procedures
for the informal resolution of a claim arising out of a contract described
by §22.018, Chapter 223, or Chapter 2254, Government Code. Section 201.112
provides for a right to an administrative hearing if a contractor is dissatisfied
with the department's proposed resolution of a claim, and authorizes the executive
director to change a finding of fact or conclusion of law made by the administrative
law judge, or to vacate or modify an order issued by the administrative law
judge, provided the executive director has a legal basis for doing so. The
executive director's final order is subject to judicial review under the substantial
evidence rule.
Section 9.2 is amended to comply with the requirements of Transportation
Code, §201.112. Section 9.2 is also amended to prescribe requirements
relating to the composition of the committee established by the department
to hear contract claims. The executive director is authorized to name the
members and chairman of the committee. In order to ensure that the committee
includes members that are objective and experienced in the type of project
or claim involved, the chairman of the committee may add members to the committee,
including one or more district engineers chosen on a rotating basis, with
a preference, if possible, for selecting district engineers of districts that
do not have a current contractual relationship with the contractor. Section
9.2 is also amended to allow a contractor to file a contract claim at a location
other than the district in which the contractor has a dispute.
Section 9.2 is also amended to clarify that the commission must issue any
final and binding orders concerning agreed dispositions of contract claims.
In order to clarify that all proceedings before the department, including
all oral communications of, and written documentation prepared by, department
staff in connection with the analysis of a contract claim are part of an attempt
to mutually resolve a contract claim without litigation, §9.2 is finally
amended to specify that such communications and documentation are also not
admissible for any purpose in a formal administrative hearing provided for
in paragraph (5) of that subsection.
RESPONSE TO COMMENTS
Written comments were received and are responded to as follows. Comments
were received from the Associated General Contractors of Texas (AGC). The
AGC did not indicate whether it was in favor of or against the proposed amendments.
Comment: The AGC commented that its review of the proposed amendments raised
some concern about item (7) that states that all oral communications, reports,
or other written documentation prepared by department staff during a claim
are not admissible in a formal administrative hearing.
Response: Paragraph (7) of subsection (b) is amended to clarify that all
proceedings before the department, including all oral communications of, and
written documentation prepared by, department staff in connection with the
analysis of a contract claim are also part of an attempt to mutually resolve
a contract claim without litigation. Analyses of a claim are prepared by department
staff for the use of the contract claims committee in its review of a claim,
and its attempt to resolve a claim without litigation. Attempts to settle
a case have generally been considered privileged. Pursuant to paragraph (3)
of subsection (b), the committee will secure detailed reports and recommendations
from the responsible department office, and may confer with any other department
office deemed appropriate by the committee. The amendments to this rule clarify
that the analyses upon which the committee relies to reach its opinion concerning
any offers to settle a claim are also part of the settlement attempt. The
existing privilege would be meaningless without this clarification.
Comment: The AGC finally commented that the organization of the proposed
amendments is somewhat confusing. AGC stated that it would appear that item
(7) dealing with evidence in an administrative hearing should precede item
(6) dealing with the decision made in an administrative hearing.
Response: The department agrees that paragraphs (6) and (7) of subsection
(b) appear out of order in relation to the sequence of events in a contract
claim. The order of those two paragraphs has been switched.
STATUTORY AUTHORITY
The amendments are adopted under Transportation Code, §201.101, which
provides the Texas Transportation Commission with the authority to establish
rules for the conduct of the work of the Texas Department of Transportation,
and, more specifically, Transportation Code, §201.112, which authorizes
the commission by rule to establish procedures for the informal resolution
of a claim arising out of a contract described by §22.018, Chapter 223,
or Chapter 2254, Government Code.
§9.2.Contract Claim Procedure.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Commission--The three member body appointed by the governor
to compose the Texas Transportation Commission.
(2)
Committee--The Contract Claim Committee.
(3)
Contract claim--A claim for additional compensation,
time extension, or any other reason, arising out of a contract between the
State of Texas, acting in its own capacity or as an agent of a local government,
and a contractor, which is entered into and administered by the Texas Department
of Transportation pursuant to Transportation Code, Section 22.018, Chapter
223, or Government Code, Chapter 2254, Subchapters A and B.
(4)
Contractor--An individual, partnership, corporation,
or other business entity that is a party to a written contract with the State
of Texas which is entered into and administered by the Texas Department of
Transportation pursuant to Transportation Code, Section 22.018, Chapter 223,
or Government Code, Chapter 2254, Subchapters A and B.
(5)
Department--The Texas Department of Transportation.
(6)
Department office--The department district, division,
or office responsible for the administration of the contract.
(7)
Department office director--The chief administrative
officer of the responsible department office, such officer to be a district
engineer, division director, or office director.
(8)
District--One of the 25 districts of the department.
(9)
Executive director--The executive director of the
Texas Department of Transportation.
(b)
Contract claim committee.
(1)
The executive director will name the members and chairman
of a contract claim committee or committees to serve at his or her pleasure.
The chairman may add members to the committee, including one or more district
engineers who will be assigned to the committee on a rotating basis, with
a preference, if possible, for district engineers of districts that do not
have a current contractual relationship with the contractor involved in the
contract claim. It will be the responsibility of a committee to gather information,
study, and meet informally with contractors, if requested, to resolve any
disputes that may exist between the department office and the contractor,
and which result in one or more contract claims.
(2)
The commission stresses that, to every extent possible,
disputes between a contractor and the engineer or other department employee
in charge of a project should be resolved during the course of the contract.
If, however, after completion of a contract, or when required for orderly
performance prior to completion, resolution of a contract claim is not reached
with the department office, the contractor may file a detailed report and
contract claim request with the department office director under whose administration
the contract was or is being performed, the department's Construction Division,
or the committee. Documents filed with the office director or the Construction
Division will be transmitted to the committee.
(3)
The committee will secure detailed reports and recommendations
from the responsible department office, and may confer with any other department
office deemed appropriate by the committee.
(4)
The committee will then afford the contractor an opportunity
for a meeting to informally discuss the disputed matters and to provide the
contractor an opportunity to present relevant information and respond to information
the committee has received from the department office.
(5)
The committee chairman will give written notice of
the committee's proposed disposition of the claim to the contractor. If that
disposition is acceptable, the contractor shall advise the committee chairman
in writing within 20 days of the date such notice is received, and the chairman
will forward to the commission an agreed disposition involving payment to
the contractor, for a final and binding order on the claim. If the contractor
is dissatisfied with the proposal of the committee, the contractor may petition
the executive director for a formal administrative hearing to litigate the
claim pursuant to the provisions of §1.21 et seq. of this title (relating
to Contested Case Procedure).
(6)
Proceedings before the department office director
or the committee are in the nature of an attempt to mutually resolve a contract
claim without litigation and are not admissible for any purpose in a formal
administrative hearing provided in paragraph (5) of this subsection. All oral
communications, reports, or other written documentation prepared by department
staff in connection with the analysis of a contract claim are part of the
attempt to mutually resolve a contract claim without litigation, and are also
not admissible for any purpose in a formal administrative hearing provided
in paragraph (5) of this subsection.
(7)
The administrative law judge's proposal for decision
in a formal administrative hearing provided in paragraph (5) of this subsection
shall be submitted to the executive director for adoption. The executive director
may change a finding of fact or conclusion of law made by the administrative
law judge or may vacate or modify an order issued by the administrative law
judge. The executive director shall provide a written statement containing
the reason and legal basis for any change.
(8)
If the contractor fails to submit the petition within
20 days after notice of the committee's recommendation is received, that recommendation
will be final, and all further appeal by the contractor shall be barred.
This agency hereby certifies that the adoption has been
reviewed by legal counsel and found to be a valid exercise of the agency's
legal authority.
Filed with the Office of the Secretary of State on December
21, 1998.
TRD-9818485
Richard Monroe
General Counsel
Texas Department of Transportation
Effective date: January 10, 1999
Proposal publication date: October 9, 1998
For further information, please call: (512) 463-8630
Subchapter A. General
Chapter 25.
Traffic Operations