Disputes/Claims 2009 Overview Division of Construction Management.

Disputes/Claims 2009 Overview

Division of Construction Management

2

2009 Claims Summary

• Approximately 50 disputes were reported to Central Office in 2009• 25 escalated to Step 3• Remainder resolved at District Level (Step 2)

• Additionally, an unknown number were resolved at Project Level or prior to a formal Step 2 Hearing

2010 Conaway Conference

2009 Claims Summary

•25 Step 3 Claims (PN109)– 17 decided by the Director’s Claims Board– 1 was arbitrated– 2 were mediated– 5 were dropped or settled prior to hearing

8 DCB Hearings conducted (Some hearings considered multiple claims)

2010 Conaway Conference 3

2009 Claims Summary•Of the 17 claims decided by the

DCB–4 awarded 100% of claimed amount–7 awarded 0% of claimed amount–6 awarded from 1% to 97% of claimed amount


2009 Claims Summary

• Of the 17 claims decided by the DCBTotal Demanded: $

12,580,738.49Total Awarded: $

1,996,864.25

Average: 16% of demand was awarded


2009 Claims Summary

1 claim was arbitratedDemand: $68,778.36Award: $0


2009 Claims Summary2 claims were Mediated• 1 was settled • 1 did not settle

– ODOT executed change order for amount it believed it owed

– Case filed in Court of Claims

Total demanded: $ 1,689,367.54Total paid: $ 497,388.49

Average 29 % of Demand was Paid


2009 Claims Summary

Currently 8 active Dispute Review Boards(PN108)

• 4 Claims were heard by Dispute Review Boards

• DRBs rarely decide on damages but rather provide guidance to the parties for resolution and cost negotiation


2009 Claims Summary

• Of the 4 claims considered by DRBs– 2 with recommendations to deny the

claim– 2 with recommendations of sufficient

entitlement to resolve and negotiate


2009 Claims Summary

• Decisions will be within the “four corners of the contract”

• Decisions will be based on “what does the contract say?” (plain reading)

• Decisions will be based on the reading of the Contract as a whole


2009 Claims SummaryLessons Learned:• ODOT is responsible for interest on tardy

payments • ODOT personnel must proactively pursue final

quantity agreement with Contractor • Change orders must be processed timely for

what is known to be owed (even if quantities are not completely agreed upon)

• DOCUMENT DOCUMENT DOCUMENT!


2009 Claims SummaryLessons Learned:• Contractor is responsible for Borrow material.

– If sampling and testing is required, contractor is responsible for requesting samples as material changes

– Material must be able to serve the purpose intended and must be acceptable when incorporated into the work

– Contractor is responsible for material failure even if reason for failure is not identified


2009 Claims SummaryLessons Learned:• DCB will not find entitlement when

notice of dispute has not been given• ODOT personnel – BEWARE of

“constructive notice” – even if nothing in writing in 2 days – “knew or should have known” is a consideration– be PROACTIVE -ASK-DOCUMENT-MITIGATE COSTS!!


2009 Claims SummaryLessons Learned:• ODOT has discretion (“may”) accept

defective Work based on engineering judgment BUT if the DCE “determines the Work is not in reasonably close conformity with Contract Documents” the Contractor must “remove, replace or otherwise correct the Work at no expense to the Department.” (C&MS 105.03)


2009 Claims Summary

Lessons Learned:• Contractor must continue with all

Work including disputed work. ODOT must continue to pay for Work.


2008 and 2009 Claim Comparison

2008• 23 Claims to Step

3• 7 dropped or

settled• 14 DCB

Decisions• 2 Arbitrations

2009• 25 Claims to Step

3• 5 dropped or

settled• 17 DCB Decisions• 1 Arbitration• 2 Mediations



200814 DCB Decisions:1 paid 100%

demand7 paid 0 %

demand6 paid range from

6% to 44%

200917 DCB Decisions:

4 paid 100% demand

7 paid 0% demand6 paid range from

1% to 97%



2008• Total

Demanded:$ 8,430,308.73

• Total Awarded:$ 2,228,903.21

26%

2009• Total

Demanded:$14,663,041.87

• Total Awarded:$ 2,628,127.10

18%2010 Conaway Conference 18

Claim Processing Time

2008• Ave. # Days Between

NOI and Decision Issued

314 days• Ave. # Days Between

Hearing and Decision Issued

107 days

2009• Ave. # Days Between

NOI and Decision Issued

198 days• Ave. # Days Between

Hearing and Decision Issued

49 days


Questions?


Disputes/Claims 2009 Overview Division of Construction Management.

Documents

Transcript of Disputes/Claims 2009 Overview Division of Construction Management.