tractor requests and claims for additional money and time. Related documents typically include: (a) change order and claim notice requirements; (b) required documentation and time periods for submitting that documentation; (c) claim certification requirements; and (d) the DOT’s evaluation process for the claim. They also often address when the DOT’s decision is considered administratively final (e.g., a final decision by the procurement officer, chief engineer, or transportation commissioner) and what happens if the contractor disagrees with that final decision.

There is no question that each DOT’s specific change order and claims processes are critical to addressing a contractor’s rights to pursue its remedies. However, it is beyond the scope of this digest to review all of the details of these processes for each DOT. Similarly, almost every DOT uses some form of partnering, and it is beyond the scope of this digest to address the specific partnering processes for each DOT—unless that partnering process plays a dominant role in the DOT’s dispute resolution process (e.g., Minnesota DOT and Nevada DOT).

Given this, this section will focus on: (a) whether the DOT institutionally uses some form of nonbinding dispute resolution processes, such as mediation and DRBs; and (b) what happens after the DOT has reached its final internal administrative decision and the contractor remains dissatisfied with that decision. In addition, it will briefly discuss a recent research report conducted on behalf of the Colorado DOT that evaluated CDOT’s dispute resolution process and compared it to those used by several other DOTs.

A. Summary of Processes

As is evident by the preceding sections, a wide variety of dispute resolution approaches are taken by the country’s DOTs. For example, some DOTs make available nonbinding processes like DRBs and mediation if the DOT and contractor agree to use those processes. Other DOTs require the use of certain nonbinding processes (particularly DRBs) and that the nonbinding process be exhausted before the dispute moves to binding dispute resolution—i.e., access to arbitration, courts, or administrative boards. Interestingly, some DOTs do not even allow a third party to bind them to a determination, typically based on sovereign immunity principles.

For those DOTs that use binding third-party dispute resolution processes, there is little doubt that the most common process is litigation in a state court of general jurisdiction. As discussed in the preceding section, a few DOTs use special courts (e.g., the Ohio Court of Claims) to reach binding determinations. A few others use administrative boards (e.g., Nebraska State Claims Board) that issue decisions that are only reviewable by the state’s legislature. Some use administrative boards (e.g., MassDOT’s Office of the Administrative Law Judge) that will hear the dispute and write recommendations to the DOT’s decision-maker, who will consider that recommendation in making their final decision.

Binding arbitration is far less common. As discussed in the following, it is expressly allowed as a dispute resolution option in approximately 25% of the DOTs. However, the availability of arbitration is typically limited, particularly in terms of the dollar value of a claim that can be brought. Specifically, only three DOTs are required to use arbitration on any construction dispute, regardless of the size of the claim.

Table 1 (“Dispute Resolution Processes Identified in DOT’s Published Literature”) offers a very high-level summary of the dispute resolution options available to a DOT for the use of nonbinding (i.e., DRBs and mediation) and binding (i.e., arbitration and litigation) mechanisms. This summary is based upon what is set forth in the published literature relevant to the DOT—such as its standard specifications, manuals, and applicable statutes. It does not use either feedback from surveys or interviews or information that is generally known about the DOT’s use of an alternative delivery process.

For example, the survey data shows that Caltrans has used mediation and finds it effective, but there is no “check mark” in Table 1 for mediation because mediation is not specifically listed in the Caltrans published literature. Likewise, some DOTs appear to have no prohibitions against using arbitration (e.g., Kentucky and Minnesota), but do not have express statutory authority to use it and, in any event, do not use it. Table 1 does not identify those DOTs as using arbitration. On the other hand, the survey results and telephone interviews explained that the Louisiana Department of Transportation and Development has the ability to use arbitration under the broad reach of its general arbitration statute and actually has used it. The state-by-state review provides a much more complete picture of the DOT’s processes, as well as limitations on the processes.

Consistent with the preceding explanation, the research for this digest resulted in the following information being derived from the published literature:

• DRBs. 15 DOTs use some form of Dispute Resolution/Review Boards as part of their dispute resolution processes.
• Mediation. 18 DOTs are expressly authorized to use mediation. For most (13), mediation is only available if both the DOT and contractor agree to it. Three DOTs are required to mediate if the contractor requests it and two DOTs (New Mexico and Oklahoma) have a mandatory mediation clause as a predicate to the contractor initiating binding dispute resolution. These five DOTs are included under the “Mandatory Mediation” column in Table 1.
• Arbitration. 16 DOTs either have an express ability to arbitrate construction disputes based on their written processes, are required to arbitrate by statute, or, in the case of the Louisiana Department of Transportation and Development, use arbitration under Louisiana’s general arbitration statute. For 12 of these DOTs, there are some limits as to when arbitration can be used. The column for “Unlimited Arbitration” includes DOTs where the contractor has the choice of deciding between arbitration and some other binding dispute mechanism.
• Litigation in Courts of General Jurisdiction. 33 DOTs and their applicable state laws provide that contractors can sue in the state’s general jurisdiction courts (e.g., district and circuit courts) to obtain a binding decision on their claims or to appeal the DOT’s final decision. Litigation in the state courts is an exclusive remedy for virtually all of these DOTs, while a few DOTs (based on applicable law) give the contractor the choice of going to state court or pursuing other options (e.g., administrative boards or arbitration).
• Litigation in Special Courts. Seven states have created special bodies (e.g., courts and commissions) that hear contract disputes with state agencies like the DOT. Proceedings in these courts are similar to those used in a court of general jurisdiction.
• Administrative Boards. 13 DOTs use administrative boards as a means of resolving contractor claims. These boards have a variety of rules associated with them, particularly relative to appeals from negative decisions.

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⁶² U.S.C. §§ 551–559.

⁶³ ALABAMA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION SECTION 110 - CLAIMS (2022) (“ALDOT STANDARD SPECIFICATIONS”).

what unique compared to other DOTs, as it establishes several layers of internal review of a dispute before reaching a third-party board. However, that board only provides a recommendation to the ALDOT transportation director; the director’s ultimate decision is final and binding. Because of the uniqueness of this approach, it is appropriate to review the internal review processes to better understand ALDOT’s philosophy on dispute resolution.

Claims by the contractor that are not resolved at the project level are sent to ALDOT’s Construction Bureau for evaluation. Among other things, the Construction Bureau furnishes technical advice to ALDOT’s regions on matters related to administration of construction contracts and also approves or authorizes approval authority to the regions for the processing of supplemental agreements, force accounts, and time extensions.⁶⁴ If the contractor disagrees with the Construction Bureau’s claim review, it may seek to make a presentation to the Claims Committee within a specified period of time.

The Claims Committee is to be composed of five ALDOT employees whose position is that of an assistant bureau chief or higher and who were not involved in the design or construction of the project. For federal aid projects, ALDOT will invite the FHWA to send an observer. If the claim was submitted on behalf of a subcontractor, both the contractor and subcontractor must have a representative in attendance at the presentation. The only issues to be considered are those that were specifically presented in the claim package acted upon by the Construction Bureau. Following the presentation, the Claims Committee is to provide a written recommendation to ALDOT’s director, who can accept, reject, or modify the recommendation. If the contractor does not accept the decision of the director, it may then send a written request to make a presentation to the Claims Appeal Board.⁶⁵

The Claims Appeal Board is a standing committee created to receive a presentation regarding a claim for additional monetary compensation, which may also include a request for a time extension. Neither stand-alone time extension requests nor issues over disputes quantities will be considered by the board.⁶⁶ The board consists of three primary members who are normally appointed for two-year terms, with a pool of alternates. ALDOT’s transportation director and the Alabama Road Builders’ Association each appoint a primary and alternate member and jointly appoint the third primary and alternate member. If the contractor disputes the board composition, the ALDOT director has final authority in determining it.

The process before the board appears virtually identical to the Claims Committee process, including the board only being able to consider issues specifically presented in the original claims package. After receiving the board’s recommendation, the transportation director will make a decision that is final, non-appealable, and not subject to judicial or other review. A review of Alabama case law supports that ALDOT is immune from suit based on sovereign immunity principles, and that while attempts have been made to sue the transportation director based on various theories, those have been unsuccessful.

There is no indication in the published literature that ALDOT uses DRBs or mediation. In this regard, the Section 110 Claims process is specifically identified in the term sheet of the March 2023 Draft RFQ/RFP for the I-10 Bayway design-build project, which will be administered by ALDOT on behalf of the Alabama Toll Road, Bridge and Tunnel Authority.⁶⁷

2. Alaska

As noted in Chapter II, the Alaska DOT&PF disputes process makes the contracting officer’s final decision on a claim final and conclusive unless the contractor delivers a notice of appeal to the DOT&PF commissioner.⁶⁸ Appeals of the contracting officer’s final decision are handled through Alaska’s procurement code. Among other things, the code states that the contractor may not raise any new factual issues or theories of recovery that were not presented to and decided by the contracting officer’s final decision, except that the contractor may increase its calculation of damages if the increase arises out of the same operative facts on which the original claim was based. The contractor’s appeal must identify the factual or legal errors in the decision that form the basis for the appeal.⁶⁹

The Alaska procurement code permits the contractor to use arbitration for resolving appeals on claims that are under $250,000 and permits arbitration on claims above $250,000 if both the contractor and DOT&PF agree.⁷⁰ Otherwise, the appeals process involves obtaining the Commissioner’s determination on the claim. The appeals process will entail a hearing unless the Commissioner, within 15 days after receipt of an appeal, adopts the contracting officer’s decision as the final decision without a hearing.⁷¹

Hearings are held before an administrative law judge, who will act as the hearing officer. The hearings are informal, and the hearing officer has wide discretion in terms of how to run the hearing.⁷² The hearing officer will recommend a decision to the commissioner, with that recommendation including findings of fact and conclusions of law. The commissioner may accept, reject, or modify that recommendation or send it back to the hearing officer with instructions, or take other appropriate action.⁷³ The commissioner’s decision after the hearing is final

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⁶⁴ https://www.dot.state.al.us/about/offices.html (last visited October 13, 2023).

⁶⁵ ALDOT STANDARD SPECIFICATIONS, SECTION 110.03 - CLAIMS COMMITTEE.

⁶⁶ ALDOT STANDARD SPECIFICATIONS, SECTION 109.12 - FINAL PAYMENT AND SECTION 110.04(c) - CLAIMS APPEAL BOARD.

⁶⁷ https://www.dot.state.al.us/business/pdf/BaywayTermSheet.pdf (last visited October 13, 2023).

⁶⁸ ALASKA DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION SECTION 105-1.17 – CLAIMS (2020). See also AS 36.30.625.

⁶⁹ AS 36.30.625.

⁷⁰ AS 36.30.627.

⁷¹ AS 36.30.630.

⁷² AS 36.30.670.

⁷³ AS 36.30.675.

and subject to appeal. If there was a hearing, the appeal is to an Alaska superior court in accordance with the Alaska Rules of Appellate Procedure. If there was no hearing, the appeal is to the superior court for a trial de novo.⁷⁴

It should be noted that Alaska DOT&PF’s Guidebook for Design-Build Project Development has special provisions that, among other things, create a traditional standing DRB and require submission of disputes to that DRB as a condition precedent to filing litigation.⁷⁵ This guidebook is dated 2005 and its process appears inconsistent with the earlier-referenced statutory requirements. Consequently, it is unclear what, if any, relevance it has to Alaska DOT&PF’s current design-build program.⁷⁶

3. Arizona

The Arizona Department of Transportation (ADOT) administrative process for the resolution of disputes is set forth in its standard specifications.⁷⁷ The claims review process is sequential, escalating from a decision by the resident engineer, to a decision by the district engineer, and finally to a decision by the state engineer. The decision of the state engineer in relation to the contractor’s claim is final unless the contractor commences arbitration or litigation. Arbitration is the contractor’s sole legal remedy when the claim is $200,000 or less. Litigation is the sole legal remedy for amounts greater than $200,000. The arbitration process is set forth in the ADOT Standard Specifications and will be discussed in Chapter V.⁷⁸ Litigation is to be conducted in Maricopa County, Arizona.⁷⁹

Prior to filing for arbitration or litigation, the contractor may request a nonbinding mediation. It does so by filing a written request for mediation with ADOT. If this happens, ADOT will then arrange for a mutually agreeable mediator, with costs of the mediator to be shared equally between the parties. A telephone interview with ADOT noted that ADOT has had approximately five mediations over the past five years, with only one being unsuccessful and resulting in litigation. Based on the interview, it was confirmed that ADOT has not yet used a DRB on a project.

4. Arkansas

The Arkansas Department of Transportation (ArDOT) standard specifications state that when disputes are not resolved at the resident engineer level, the contractor has the right to appeal to ArDOT’s chief engineer.⁸⁰ The chief engineer’s decision is final and conclusive unless the contractor files a claim with the Arkansas State Claims Commission appealing that decision. The specification states that the contractor is to be afforded an opportunity to be heard and offer evidence in support of its appeal, subject to the commission’s rules and regulations. An Arkansas statute requires pursuit and exhaustion of all remedies against responsible third parties and insurance coverages.⁸¹

The commission’s primary function is to hear and adjudicate claims against Arkansas’s agencies and institutions, and to serve as a fact-finding body for the state’s General Assembly.⁸² The statutes by which it is governed have a number of procedural requirements for those appealing final decisions of state agencies.⁸³ The Commission’s General Rules of Practice and Procedure cover the appeals process.⁸⁴ The enabling statute states that the commission is “not bound by the formal rules of evidence and shall conduct all hearings publicly and in a fair and impartial manner, giving the parties full opportunity for presentation of evidence, cross-examination of witnesses, and argument … [and to] the extent practicable, … shall adopt the procedure used by the circuit courts, and a hearing before the commission shall be conducted in a judicial manner.”⁸⁵ The commission’s final order is statutorily required to provide specific findings of fact and conclusions of law to support its decision.⁸⁶ If an award is greater than $15,000, the commission is to refer the claim to the General Assembly for approval and, if approved, an appropriation.⁸⁷ A party that disagrees with the commission’s order has the right to appeal the order to the General Assembly, which has exclusive jurisdiction to hear appeals.⁸⁸

Nothing in the published literature indicates whether ArDOT uses any alternative dispute methods. However, based on the agency’s response to the survey, it has not ever used arbitration or other alternative dispute methods.

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⁷⁴ AS 36.30.685.

⁷⁵ ALASKA DOT&PF GUIDEBOOK FOR DESIGN-BUILD PROJECT DEVELOPMENT APPENDIX H - SPECIAL PROVISIONS, (2005), https://dot.alaska.gov/comm/assets/DB/AppH_SpecialProvisions_rev1.pdf (last visited October 17, 2023).

⁷⁶ It is noteworthy that the special provision creating the DRB does not correlate to the section references in the current Alaska DOT&PF Standard Specifications, which may be explained by the fact that the current Standard Specifications are dated in 2020 and the Guidebook (and special provision) is dated in 2005.

⁷⁷ ARIZONA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATION FOR ROAD AND BRIDGE CONSTRUCTION SECTION 105.21 - ADMINISTRATIVE PROCESS FOR THE RESOLUTION OF CONTRACT DISPUTES, (2021) (“ADOT STANDARD SPECIFICATIONS”).

⁷⁸ ADOT STANDARD SPECIFICATIONS. SECTION 105.22 ARBITRATION OF CLAIMS AND DISPUTES.

⁷⁹ ARIZ. REV. STAT. § 12-822 (2022).

⁸⁰ ARKANSAS STATE HIGHWAY AND TRANSPORTATION DEPARTMENT STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION SECTION 105.01 - AUTHORITY OF THE ENGINEER, (2014).

⁸¹ ARK. CODE ANN. § 19-10-302.

⁸² https://arclaimscommission.arkansas.gov/ (last visited October 14, 2023).

⁸³ ARK. CODE ANN. §§ 19-10-201–223; 21-5-701–708; and 6-82-501–507.

⁸⁴ https://arclaimscommission.arkansas.gov/wp-content/uploads/2019/11/ASCC-Rules_20191114.pdf (last visited October 14, 2023).

⁸⁵ ARK. CODE ANN. § 19-10-210(b).

⁸⁶ ARK. CODE ANN. § 19-10-216.

⁸⁷ ARK. CODE ANN. § 19-10-215(b).

⁸⁸ ARK. CODE ANN. § 19-10-211.

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⁸⁹ CALIFORNIA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS (2023) (“CALTRANS STANDARD SPECIFICATIONS”). CALIFORNIA DEPARTMENT OF TRANSPORTATION CONSTRUCTION MANUAL, SECTION 3-522 - ALTERNATIVE DISPUTE RESOLUTION PROCESSES, (2022) (“CALTRANS CONSTRUCTION MANUAL”).

⁹⁰ CALTRANS CONSTRUCTION MANUAL, SECTION 3-522B - DISPUTE RESOLUTION LADDER (2022).

⁹¹ CALTRANS CONSTRUCTION MANUAL, SECTION 3-522C - DISPUTE RESOLUTION ADVISOR AND DISPUTE RESOLUTION BOARD (2022).

⁹² CALTRANS STANDARD SPECIFICATIONS, SECTION 5-1.09B(3) - FACILITATED DISPUTE RESOLUTION.

⁹³ CALTRANS CONSTRUCTION MANUAL, SECTION 522C(3b) - TRADITIONAL DISPUTE MEETINGS; CALTRANS STANDARD SPECIFICATIONS, SECTION 5-1.43E(1)(h) - COMPLETION OF ALTERNATIVE DISPUTE RESOLUTION.

⁹⁴ CALTRANS STANDARD SPECIFICATIONS, SECTION 9-1.17D(3) - FINAL DETERMINATION OF CLAIMS.

⁹⁵ CALTRANS CONSTRUCTION MANUAL, SECTION 5-415 - DISTRICT DIRECTOR DETERMINATION OF CLAIMS PREPARATION AND GUIDELINES.

⁹⁶ CALTRANS STANDARD SPECIFICATIONS, SECTION 9-1.22 - ARBITRATION.

⁹⁷ CALTRANS STANDARD SPECIFICATIONS SECTION 9-1.22 - ARBITRATION; CALTRANS CONSTRUCTION MANUAL, SECTION 5-412 - ARBITRATION.

⁹⁸ CALTRANS STANDARD SPECIFICATIONS, SECTION 9-1.22 - ARBITRATION.

⁹⁹ CAL. PUB. CONT. CODE § 10240.2.

¹⁰⁰ COLORADO DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION SECTION 105.22 - DISPUTE RESOLUTION, SECTION 105.23 - DISPUTE REVIEW BOARD, AND SECTION 105.24 - CLAIMS FOR UNRESOLVED DISPUTES, (2023) (“CDOT STANDARD SPECIFICATIONS”).

¹⁰¹ https://www.codot.gov/business/designsupport/dispute_review_board (last visited October 24, 2023).

¹⁰² Figure 105-1 (Disputes and Claims Flow Chart), contained in CDOT STANDARD SPECIFICATIONS, SECTION 105.24 - CLAIMS FOR UNRESOLVED DISPUTES.

Standing DRBs will always have three members, whereas On Demand DRBs will consist of three members only for disputes greater than $250,000—otherwise, they will be a single member DRB. The DRB specification contains time periods for hearing, written recommendations, and acceptance/rejection by the parties of the recommendations. If the DRB recommendation is rejected by either party, the other party may either abandon the dispute or pursue a formal claim per Section 105.24 (Claims for Unresolved Disputes).¹⁰³ Contractors are only allowed to file a claim if they have exhausted the earlier discussed processes, including the DRB process.

The claims process under Section 105.24 requires submission of certified claims to CDOT’s regional transportation director, who will make a decision on that claim. If the contractor disagrees with that decision, it can appeal to the chief engineer. If the contractor disagrees with the chief engineer’s decision, it may initiate de novo litigation to finally resolve the claim, with the requirement that only those claims previously submitted and decided in the contractual dispute and claims processes are to be litigated. The venue for litigation is identified as the Colorado State District Court in and for the City and County of Denver.

Finally, Section 105.24 states that nonbinding forms of ADR, such as mediation, are available upon mutual agreement of the parties for all claims submitted through the earlier discussed process. It also states that the parties may agree, in writing, at any time, to pursue some other form of ADR, although it is not specific as to what that might be. The survey results provide additional context to this and indicate that CDOT has had experience in resolving construction disputes through facilitated partnering, independent experts, and mediation.

CDOT’s current approach to dispute resolution is based upon a policy change by CDOT published on April 3, 2023.¹⁰⁴ The policy change resulted in the removal of merit binding arbitration as an option for contractors, which had been a choice that contractors had for claims in excess of $15,000. The 2022 standard specifications, as well as earlier editions, had detailed arbitration requirements quite similar to those from the AAA that described the arbitration process and the process was in fact being used by contractors.

During interviews for this digest, CDOT explained that the change was needed to enable CDOT to conform to a 2017 Colorado statute that made unenforceable any contract provision where: “the state agrees to binding arbitration or any other binding extra-judicial dispute resolution process in which the final resolution is not determined by the state.”¹⁰⁵ CDOT stated that, aside from the statutory change, it had observed from prior arbitrations that: (a) arbitration did not lead to materially faster resolutions than litigation; and (b) costs associated with the arbitration process are high for both CDOT and the contractors.

It is additionally noteworthy that prior to making the specification change, CDOT retained California State Polytechnic University, Pomona (CalPoly Pomona) in 2022 to provide a comprehensive review of CDOT’s dispute resolution process. The results of this review are set forth in CDOT Dispute Resolution Process Review Project (Final Report) dated July 7, 2023 (CalPoly Report).¹⁰⁶ The CalPoly Report provides, among other things: (a) substantial information about the CDOT process; (b) suggestions for improvements; and (c) some of the dispute resolution practices being used by other DOTs. The CalPoly Report is discussed in more detail later in this section.

7. Connecticut

The Connecticut Department of Transportation (CTDOT) claims and disputes process is set forth in CTDOT’s standard specifications and construction manual, as well as by statute. The process of submitting a formal claim is set forth by statute, which enables the contractor to choose between: (a) filing an action against CTDOT in the Hartford, Connecticut superior court; or (b) initiating arbitration.¹⁰⁷ The statute requires, as precondition to the contractor’s exercising the right to submit a formal claim, that written notice of each claim and the factual bases for each claim shall have been given to Transportation Commissioner. Section 1.11.05 (Required Claim Documentation) of the CTDOT standard specifications defines the detailed information to be provided to the Commissioner.¹⁰⁸ Once formal notice of a claim has been given, the contractor cannot change the claim in any way, in either concept or monetary amount without filing a new notice of claim, except for damages that continue to accrue after submission of the notice, in ways described and anticipated in the notice.¹⁰⁹

Claims brought under the statute can be submitted for mediation under the mediation rules of such dispute resolution en-

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¹⁰³ Section 105.24 only applies to claims in excess of $15,000.

¹⁰⁴ https://www.codot.gov/business/designsupport/cdot-construction-specifications/2017-construction-standard-specs/revssp/rev-sec100-ssp/105dcca.docx/view (last visited October 16, 2023).

¹⁰⁵ COLO. CODE § 24-106-109 (2022), which states: Any term or condition in any contract entered into by the state that requires the state to indemnify or hold harmless another person, except as otherwise authorized by law, or by which the state agrees to binding arbitration or any other binding extra-judicial dispute resolution process in which the final resolution is not determined by the state, or by which the state agrees to limit liability of another person for bodily injury, death, or damage to tangible property of the state caused by the negligence or willful misconduct of such person or such person’s employees or agents shall be void ab initio; except that the contract containing that term or condition shall otherwise be enforceable as if it did not contain such term or condition. All contracts entered into by the state, except for contracts with another government, shall be governed by Colorado law notwithstanding any term or condition to the contrary.

¹⁰⁶ https://www.codot.gov/business/designsupport/dispute_review_board/drp-final-report/drp-final-report.pdf (last visited October 29, 2023).

¹⁰⁷ CONN. GEN. STAT. § 4-61 (2022), entitled “Actions against the state on highway and public works contracts. Arbitration.”

¹⁰⁸ CONNECTICUT DEPARTMENT OF TRANSPORTATION CONSTRUCTION MANUAL CHAPTER 15 - COMPENSABLE TIME, DISPUTES, CLAIMS, AND OTHER PRECEDENT SETTING SETTING (Version 3.3, January 2022).

¹⁰⁹ CONNECTICUT DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROADS, BRIDGES, FACILITIES AND INCIDENTAL CONSTRUCTION SECTION 1.11.02 - NOTICE OF CLAIM (2016).

tities that the parties may agree upon.¹¹⁰ While not specifically stated in the published literature, the survey results indicated that CTDOT did not have the authority to use DRBs and has not used them on its projects. However, the survey indicated that it has used and had positive experiences with both mediation and independent experts in resolving construction disputes.

8. Delaware

The Delaware Department of Transportation (DelDOT) standard specifications state that when disputes are not resolved at the project level, the contractor has the right to appeal to the DelDOT district engineer. If mutually agreed, including agreement to the extension of applicable time limits, the parties may “engage in nonbinding alternate dispute resolution such as mediation to facilitate resolution of the appeal.”¹¹¹ This nonbinding dispute resolution is in addition to, or instead of, the district engineer meeting with the contractor. If the matter remains unresolved at the district engineer level, the contractor has further rights of appeal. For amounts in dispute greater than $100,000, the contractor may appeal the district’s decision to the department’s Claims Committee. For amounts in dispute less than or equal to $100,000, the contractor may appeal the district’s decision to the Secretary.¹¹²

DelDOT’s chief engineer establishes the rules and procedures for the Claims Committee. These rules and procedures are posted on DelDOT’s website and provided to the contractor after a notice of intent to file a claim is provided. Based on an Attorney General’s opinion on a matter, it appears that the committee is comprised of five voting members and a non-voting chair, each of which are employed by DelDOT.¹¹³ Once the Claims Committee issues its preliminary written decision, the contractor and the district have a period of 15 days to attempt a negotiated resolution of the claim. If that does not resolve the matter, the Claims Committee will issue its final written decision.

The contractor can appeal the Claims Committee decision to the DelDOT Secretary, who will review the record and may schedule a meeting or hearing with the parties to discuss the claim. The secretary will ultimately meet with the contractor to present the results of the secretary’s claim evaluation and attempt to reach agreement during the meeting on the claim. If the parties are unable to resolve the matter, the secretary will issue a written decision. The specification does state that if the contractor and the secretary agree, the parties will engage in a facilitated, nonbinding mediation at an agreed-upon time and place. This mediation is in addition to the nonbinding dispute resolution conducted at the district engineer level.¹¹⁴

The specifications do not specifically state that the secretary’s decision is final and binding. Nor do they say whether and how the contractor can appeal that decision. There also was not anything readily ascertainable that could be determined from a review of Delaware statutes, regulations, and law. The previous DelDOT Standard Specifications (2016) provided that the contractor could initiate an arbitration with the AAA under the Construction Industry Arbitration Rules if it wanted to dispute the secretary’s decision.¹¹⁵ While this 2016 arbitration provision had some limitations on the specific process of the arbitration and what was subject to review, it provided the specific path on how to appeal the secretary’s decision. This arbitration provision was removed in the DelDOT’s 2020 Standard Specifications and, as noted, there is nothing that explains in the specifications what is to be done. Based on feedback from those familiar with the DelDOT processes and Delaware law, it appears that this is currently an unsettled matter under Delaware law.

9. District of Columbia

The District Department of Transportation (DDOT) standard specifications identify the contractual process for resolving disputes between DDOT and a construction contractor in Article 7 (Disputes).¹¹⁶ Claims are first to be submitted to the contracting officer. The contracting officer’s decision is final unless the contractor files an administrative appeal to the Contract Appeals Board.¹¹⁷

The board is an executive branch of the D.C. government composed of a chairperson and two other members, all of whom are considered full-time administrative judges appointed by the mayor. The board creates its own rules and is charged with providing “to the fullest extent practicable, informal, expeditious, and inexpensive resolution of disputes.”¹¹⁸ Its decisions are in writing, with final adjudications published in the District of Columbia Register. Contractors have a right to appeal the board’s decision to the District of Columbia Court of Appeals. However, the standard for appeal is limited, as the board’s decisions on questions of fact are considered final and conclusive, and cannot be set aside unless the decision is fraudulent, arbitrary, capricious, or so grossly erroneous as to necessarily imply bad faith, or if the decision is not supported by substantial evidence.¹¹⁹

The survey results indicate that DDOT has used facilitated partnering and DRBs, even though its standard specifications do not reference these processes. DDOT’s first (and to date only) use of a DRB process is on the South Capitol Street

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¹¹⁰ C.G.S. § 4-61(f) (2022).

¹¹¹ DELAWARE DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION, SECTION 105.15.E - DISTRICT REVIEW, (Revisions #2 – June 2022) (“DELDOT STANDARD SPECIFICATIONS”).

¹¹² DELDOT STANDARD SPECIFICATIONS SECTION 105.15.F CONTRACTOR’S APPEAL TO THE CLAIMS COMMITTEE.

¹¹³ Delaware Attorney General Opinion No. 22-IB24 (July 11, 2022), https://attorneygeneral.delaware.gov/wp-content/uploads/sites/50/2022/07/Attorney-General-Opinion-No.-22-IB24.pdf (last visited October 16, 2023).

¹¹⁴ DELDOT STANDARD SPECIFICATIONS, SECTION 105.15.G - SECRETARY’S DECISION.

¹¹⁵ DELDOT STANDARD SPECIFICATIONS, SECTION 105.15.G -ARBITRATION (2016).

¹¹⁶ DISTRICT OF COLUMBIA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR HIGHWAYS AND STRUCTURES, SECTION 103.01 - GENERAL PROVISIONS (CONSTRUCTION CONTRACTS) (2013).

¹¹⁷ D.C. CODE § 2-360.01.

¹¹⁸ D.C. CODE § 2-360.04.

¹¹⁹ D.C. CODE § 2-360.05 and D.C. CODE § 2-360.06.

Frederick Douglass Memorial Bridge Project.¹²⁰ This project is being delivered through a design-build process and the bridge opened for traffic in September 2022, with the balance of the project scheduled for final completion in late 2023. The DRB is a traditional, standing three-member DRB that is in place through final completion.

10. Florida

The Florida Department of Transportation (FDOT) has a robust ADR program, particularly in terms of the use of DRBs. Guidance and requirements for DRBs are set forth in several locations, including FDOT’s Construction Project Administration Manual¹²¹ and the Special Conditions to FDOT’s standard specifications.¹²²

While it is beyond the scope of this digest to provide a comprehensive review of any DOT’s DRB process, some elements of the FDOT DRB program are noteworthy. FDOT requires all contracts to use a DRB and offers two different types:

• Contract-specific DRBs. These are, in effect, traditional standing DRBs with three members appointed early in the project who meet at agreed-upon intervals throughout the project. FDOT and the contractor each select a member that is approved by the other. Those two members mutually select and agree on the third member, who will ordinarily act as Board Chair.¹²³ Among other things, this DRB can provide informal advisory opinions on a dispute.
• Regional DRBs. These are, in effect, ad hoc DRBs with three members that do not ordinarily have periodic meetings; they convene only when normal dispute or claim resolution is not succeeding. Their members consist of individuals preselected by FDOT and the President of the Florida Transportation Builders’ Association and are posted on FDOT’s website.¹²⁴ Unlike the contract-specific DRB, the Regional DRB is only able to provide a written recommendation for disputes that are referred to it; it cannot provide advisory opinions.

FDOT’s website contains guidelines for operating agreements for both DRBs and Regional DRBs, including a listing of individuals who comprise the Regional DRBs and individuals who have been vetted for service on contract-specific DRBs.¹²⁵

FDOT’s Construction Project Administration Manual explains when to use which DRB.¹²⁶ Conventional contracts over $20 million should contain the special provision for a contract-specific DRB, although the resident engineer has the option to use a contract-specific DRB for any complex projects or for projects with a higher than normal probability of issues.¹²⁷ Complex design-build contracts over $50 million should contain a contract-specific DRB, while smaller and/or less complex design-build contracts can use a Regional DRB. If there is no special provision for a contract-specific DRB, then FDOT will have a special provision for a Regional DRB.¹²⁸

FDOT requires contractors to refer all claims to the DRB within a specific time period, as it is a condition of the contract that DRBs be used for all disputes. The failure to do so will constitute a waiver of such claims. Under both DRBs, the parties must accept or reject the board’s recommendation within 15 calendar days of receipt. Failure to reject will be deemed an acceptance of that recommendation.

If a dispute is unresolved at the DRB level, the contractor has the right to seek recourse to file a demand for arbitration for claims of a certain monetary value with the Florida State Arbitration Board. As discussed in more detail in Chapter V, the processes associated with arbitration before the board were substantially revamped in 2021, largely to make this a more viable option for contractors seeking to use arbitration.¹²⁹ For claims that are not arbitrated, and provided that the suit is commenced within 820 days of the final acceptance of the work, the contractor has the right to sue FDOT in the county or counties where the cause of action accrued, or in the county of FDOT’s district headquarters responsible for the work, or in Leon County.¹³⁰

11. Georgia

The claims and disputes process for the Georgia Department of Transportation (GDOT) is set forth in Section 105.13 (Claims for Adjustments and Disputes) of GDOT’s standard

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¹²⁰ Progress, THE FREDERICK DOUGLASS MEMORIAL BRIDGE NEWSLETTER (Spring 2022), https://www.newfrederickdouglassbridge.com/_files/ugd/d5aa8e_405d726343554cf38ac86d502900e522.pdf (last visited October 17, 2023).

¹²¹ FDOT CONSTRUCTION PROJECT ADMINISTRATION MANUAL SECTION 3.4 - DISPUTE REVIEW BOARDS (Revised May 25, 2023) (“FDOT PROJECT ADMINISTRATION MANUAL”).

¹²² FDOT SPECIAL PROVISIONS TO FDOT’s STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (FY 2023-24) SECTION 8-3.7 - DISPUTES REVIEW BOARD (“FDOT SPECIAL PROVISIONS”). See also FDOT’s GUIDELINES FOR OPERATION OF A REGIONAL DRB (https://www.fdot.gov/construction/constadm/drb/guideline.shtm (last visited October 17, 2023) and DISPUTE REVIEW BOARD OPERATING PROCEDURE https://www.fdot.gov/construction/constadm/drb/operatingprocedure.shtm (last visited October 17, 2023).

¹²³ FDOT SPECIAL PROVISIONS, SECTION 8-3.7.5 - DISPUTE REVIEW BOARD, MEMBERSHIP.

¹²⁴ FDOT SPECIAL PROVISIONS SECTION 8-3.7.6 - MEMBERSHIP. Three regular members and two alternates are designated for each Regional DRB for a period of one calendar year. FDOT PROJECT ADMINISTRATION MANUAL, SECTION 3.4.4.1, MEMBER SELECTION.

¹²⁵ https://www.fdot.gov/construction/CONSTADM/DRB/DRBMain.shtm (last visited October 17, 2023).

¹²⁶ FDOT PROJECT ADMINISTRATION MANUAL SECTION 3.4.2(a) - INITIATING SPECIFICATIONS, RESIDENT LEVEL RESPONSIBILITIES.

¹²⁷ FDOT SPECIAL PROVISION, SECTION 8.3.7 - DISPUTES REVIEW BOARD available at https://fdotwww.blob.core.windows.net/sitefinity/docs/default-source/programmanagement/implemented/workbooks/fy-2023-24-workbook/sp0080307drb-i18458.pdf?sfvrsn=55135032_2 (last visited October 17, 2023).

¹²⁸ FDOT SPECIAL PROVISION SECTION 8.3.7 - REGIONAL DISPUTES REVIEW BOARD available at https://www.fdot.gov/docs/defaultsource/programmanagement/Implemented/Workbooks/JanWorkbook2011/Files/SP0080307RDRB.pdf (last visited October 17, 2023).

¹²⁹ FLA. STAT. § 337.185(3) (2022).

¹³⁰ FLA. STAT. § 337.19 (2022).

specifications,¹³¹ and supplemented by Chapter 22 (Claims for Adjustments and Disputes) of GDOT’s Construction Manual.¹³² Chapter 22 states that if a contractor’s claim is not resolved at the project level by GDOT’s Area Manager and District Construction Manager, the contractor can submit a Certificate of Claim Form and certified claim to the District Administrator. Section 105.13 states that if the contractor’s claim has been disallowed, the contractor may request mediation and that GDOT shall grant that mediation request. In such case, the parties will meet to select a mediator and then schedule the mediation at a place, time, and earliest date agreeable to the parties. If this occurs, mediation is a condition precedent to the filing of any lawsuit concerning the claims. The GDOT Standard Specifications do not define the venue for court. However, it appears that the venue for litigation is the Superior Court of Fulton County, Georgia.¹³³

While the literature on GDOT’s website did not indicate its position on DRBs, the survey results state that GDOT is authorized to use DRBs. This is consistent with some of the contracts that GDOT has recently entered into under its design-build and P3 programs. The dispute resolution processes in at least some of these contracts require (among other things): (a) mediation for disputes that have not been resolved despite good-faith negotiations, with completion of the mediation as a condition precedent to litigation; and (b) all litigation to be filed, heard, and decided in the Superior Court of Fulton County, Georgia, which has exclusive jurisdiction and venue pursuant to O.C.G.A. § 50-21-1.¹³⁴ Additionally, GDOT is using a traditional, standing DRB for the first time on its I-285/I-20 West Interchange project, which is being delivered through a Design-Build-Finance P3 process. That contract, which also uses facilitated partnering, makes obtaining a DRB recommendation as well as completing mediation conditions precedent to filing litigation in the Superior Court of Fulton County.

12. Hawaii

The claims and disputes process for Hawaii Department of Transportation (HDOT) is set forth in Section 107.13 (Disputes and Claims) of Hawaii’s standard specifications.¹³⁵ It enables a contractor that disagrees with a project engineer’s decision on a claim to appeal that decision to the HDOT director within 30 days after the delivery of the engineer’s decision.¹³⁶ The director’s written decision is deemed final and conclusive, unless fraudulent, or unless the contractor brings an action seeking judicial review of the decision in a Hawaii circuit court within the six months from the date of receipt of the decision.

This provision conforms with Hawaii Revised Statutes §3-126-31, which requires that all state contracts have a disputes clause that requires the procurement officer (i.e., for HDOT the director) to render a final decision on a claim and gives the contractor the right to pursue judicial review of that decision in circuit court. While there are no specific references in the statutes or HDOT specifications about other ADR processes, Hawaii’s introductory section to its statute addressing the “Authority to Resolve Contract and Breach of Contract Controversies” appears to give HDOT the authority to use unlimited nonbinding ADR options, including facilitated partnering, mediation, and DRBs:

In this regard, the survey feedback from HDOT confirmed HDOT has experience in using mediation and independent advisors on some of their construction disputes but is not authorized to use DRBs.

13. Idaho

The administrative process for claims within the Idaho Transportation Department (ITD) is clearly specified in the ITD standard specifications.¹³⁸ The specifications contemplate that the contractor can appeal a decision at the project level (i.e., the district engineer’s decision) to ITD’s chief engineer.¹³⁹ The chief engineer will have a claims review meeting to consider that appeal. The specifications provide flexibility over how that meeting will take place and the information that can be provided by the contractor. Ultimately, the chief engineer will keep an administrative record of the claim review and make a written final decision on the claim. If the contractor disagrees with the chief engineer’s final decision, it may bring a lawsuit in Idaho state court, where the court will review the administrative record compiled by the chief engineer.¹⁴⁰ Unless ITD and the

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¹³¹ GEORGIA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS: CONSTRUCTION OF TRANSPORTATION SYSTEMS SECTION 105.13 - CLAIMS FOR ADJUSTMENTS AND DISPUTES (2021) (“GDOT STANDARD SPECIFICATIONS”).

¹³² GEORGIA DEPARTMENT OF TRANSPORTATION CONSTRUCTION MANUAL (Version 1.02, July 2023).

¹³³ O.C.G.A. § 50-21-1 (Waiver of sovereign immunity).

¹³⁴ See, for example, GDOT’S DESIGN-BUILD CONTRACT FOR THE I-16 FRONTAGE ROAD PROJECT, SECTION 17.8 – DISPUTE RESOLUTION PROCEDURES (June 16, 2023) https://myfiles.dot.ga.gov/DesignBuild/Executedcontract/0019452_I-16%20Frontage%20Road_Executed%20Contract_2023.07.10.pdf (last visited October 17, 2023).

¹³⁵ HAWAII DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS, SECTION 7.13 - DISPUTES AND CLAIMS, (2005) (“HDOT STANDARD SPECIFICATIONS”).

¹³⁶ HDOT STANDARD SPECIFICATIONS, SECTION 7.13(G) - APPEAL OF THE ENGINEER’S DECISION.

¹³⁷ HAW. REV. STAT. § 3-126-25.

¹³⁸ IDAHO TRANSPORTATION DEPARTMENT 2018 STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION, SECTIONS 10516 THROUGH 105-19 (“ITD STANDARD SPECIFICATIONS”).

¹³⁹ ITD STANDARD SPECIFICATIONS, SECTION 105.16 - ADMINISTRATIVE RESOLUTION PROCESS FOR CLAIMS.

¹⁴⁰ ITD STANDARD SPECIFICATIONS, SECTION 105.16(B) - CHIEF ENGINEER LEVEL OF REVIEW.

contractor agree otherwise, the jurisdiction and exclusive venue will be in Idaho’s Fourth Judicial District (Ada County).¹⁴¹

Importantly, ITD’s specifications have multiple levels of nonbinding disputes processes that can be used by the parties, including:

• Technical Experts.¹⁴² The parties can agree to use technical experts to help in the resolution of claims, with the expert being neutral and representing the interests of the contract. The findings and recommendations are nonbinding and presented to the parties jointly for consideration. The findings and recommendations are also admissible in a later dispute proceeding, including litigation.
• Mediation.¹⁴³ The parties are allowed to enter into mediation by mutual agreement at any time, with the timing, rules, and location of the mediation to be developed by mutual agreement.
• DRBs.¹⁴⁴ ITD has an ability to include the use of a traditional, standing DRB in a contract. Recommendations from the DRB are nonbinding and, unlike the technical expert process, non-admissible in any later proceeding.

Based on the statutes, it appears that any or all of these processes can be used for a particular project or dispute, and that they can take place at the administrative level (i.e., district engineer and chief engineer reviews) or thereafter.

14. Illinois

The claims and disputes process used by Illinois Department of Transportation (IDOT) is set forth in Section 109.09 (Contract Claims) of the IDOT standard specifications.¹⁴⁵ There are two levels of administrative review: Level I (Engineer of Construction) and Level II (Chief Engineer/Director of Highways or Designee.) If the contractor disputes the decision of the engineer of construction, it must appeal that decision within 45 days after such decision. The chief engineer/director of highways can either hold a claim presentation meeting or decide based upon the claim documentation submitted. The Level II decision is the final administrative action of IDOT. If the contractor disagrees, it has the right to file a claim for adjudication with the Illinois Court of Claims.

The Illinois Court of Claims hears claims of money damages or personal injury by any citizen against a state agency or state employee.¹⁴⁶ Approximately 8,500 cases are filed annually, with only a small handful of them being contractor claims against IDOT. All decisions of the court are published in an annual digest, and for the 10 years prior to this digest, the court issued only three decisions involving suits against IDOT by construction contractors. The court consists of seven judges that meet monthly, with trials being conducted by 16 commissioners. The commissioners are lawyers who serve on a part-time basis and make confidential recommendations to the court about how to resolve the cases. While there is no Illinois statutory authority to review or appeal decisions of the Court of Claims, parties can appeal to Illinois circuit courts on the limited grounds that they were denied due process.¹⁴⁷

The published literature does not describe IDOT’s use of ADR processes. The survey results indicate that the agency does not have the authority to use DRBs or other forms of ADR, including either mediation or independent experts.

15. Indiana

The Indiana Department of Transportation (INDOT) has a three-level administrative process for reviewing and deciding contractor claims.¹⁴⁸ Like many other DOTs, the second level is initiated when the contractor requests that the District Office review the project level decision. However, unlike other DOTs, if the contractor disagrees with the District Office’s ruling, there are two avenues for a contractor to pursue:

• District Claims Review Board. The contractor may submit a request for a final hearing before a District Claims Review Board for claims less than: (a) $150,000; (b) 20% of the original contract amount; or (c) 100 days of contract time extension. This board consists of three INDOT personnel selected by INDOT’s chief engineer. It includes one member from the District Construction office in the district involved in the claim and two members from the Division of Construction Management. The board will have a hearing, consider the contractor’s arguments and evidence, and issue a deci-

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¹⁴¹ ITD STANDARD SPECIFICATIONS, SECTION 105.18.B - CLAIMS RESOLUTION – DISTRICT COURT.

¹⁴² ITD STANDARD SPECIFICATIONS, SECTION 105.17 - TECHNICAL ANALYSIS SUPPORT (TAS).

¹⁴³ ITD STANDARD SPECIFICATIONS, SECTION 105.18(B) - MEDIATION.

¹⁴⁴ ITD STANDARD SPECIFICATIONS, SECTION 105.19 - CONTRACT SPECIFIC ALTERNATE CLAIM RESOLUTION PROCESS – DISPUTE REVIEW BOARD.

¹⁴⁵ ILLINOIS DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (January 1, 2022).

¹⁴⁶ The information in this paragraph is taken from the Court of Claims website, https://www.ilsos.gov/departments/court_of_claims/home.html (last visited October 18, 2023).

¹⁴⁷ Several Illinois cases address this issue. One of the leading cases is Reichert v. Court of Claims of State of Illinois, 203 Ill.2d 257 (2003), where the Illinois Supreme Court explained that the basis for raising the due process argument was through use of the common law writ of certiorari, which enabled the circuit court to review the record before the Court of Claims and determine, from the record alone, whether the Court of Claims proceeded according to applicable law and deprived the party of due process. The decision reinforced that certiorari cannot be used to review the correctness of a decision by the Court of Claims based upon the merits of the case before it: “Requirements of due process are met by conducting an orderly proceeding in which a party receives adequate notice and an opportunity to be heard.… Due process is not abridged where a tribunal misconstrues the law or otherwise commits an error for which its judgment should be reversed.” Reichert, 203 Ill.2d at 261.

¹⁴⁸ INDIANA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS SECTION 105.16 - NOTICE OF CHANGED CONDITIONS AND CLAIMS (2022) (“INDOT STANDARD SPECIFICATIONS”).

sion. The decision is deemed the final decision by INDOT on the claim. No other appeals will be considered.

• Central Office Review. For claims that do not meet the requirements for board review, or if the contractor elects not to pursue the board review, the District Office’s decision will be reviewed by the INDOT Central Office. Meetings may be requested by either party in regard to the claim.

If the contractor rejects the ruling by the Central Office, its recourse is to submit a request that the matter be discussed before a civil mediator. Once it makes that request, the parties will agree upon a certified mediator from the list of mediators eligible to perform civil mediations in Indiana and who is familiar with the highway and bridge construction industry. The mediation is to be conducted in Indianapolis pursuant to the applicable rules of the Indiana Supreme Court governing civil mediations in the State of Indiana. If mediation is unsuccessful, the contractor’s recourse is to sue INDOT, although a specific court is not mentioned in the specifications. If the contractor fails to request mediation, it will be deemed to have accepted the Central Office’s ruling and it will have no further recourse on the claim.

As with other DOTs, even though its standard specifications do not address ADR mechanisms other than mediation, the survey results indicate that INDOT has used both facilitated partnering and, occasionally, ad hoc DRBs. It is also noteworthy to consider the mechanisms used on projects delivered through P3 (which includes design-build).¹⁴⁹ For example, the disputes clause in the I-65/I-70 North Split Project, delivered through design-build, includes: (a) a robust partnering clause; (b) an informal dispute resolution process; and (c) mandatory mediation if the informal processes are unsuccessful. Only after all of these processes have concluded can a lawsuit be initiated, which the contract specifies as being in the Indiana Commercial Court in Marion County, Indiana.¹⁵⁰

16. Iowa

The Iowa Department of Transportation (IDOT) specifications contain little information about the process for treating and resolving claims. The section that addresses the subject contains a typical provision requiring the contractor to make a notification of claim, but contains little detail about what supporting information is required to be provided, other than “such documentary evidence as the claimant has available,” as well as a supporting affidavit of claimant.¹⁵¹ The contractor can ask for a meeting, and after that meeting IDOT is to rule upon the validity of the claim and notify the contractor in writing of its reasons. The contractor is not to institute court action against IDOT until the claim has been presented to IDOT. The venue for trials is to be in the county or in the federal court district where all or part of the construction work was performed.¹⁵²

17. Kansas

Section 105.13 (Claims Procedure) of the Kansas Department of Transportation (KDOT) standard specifications establishes four levels of internal administrative review to reach an agency final decision: (a) Field Engineer; (b) District Engineer; (c) Bureau Chief of Construction and Materials; and (d) State Transportation Engineer.¹⁵³ The specifications permit the reviews at the district engineer and bureau chief level to hold informal hearings, which are considered settlement negotiations. As a result, while documents submitted at these meetings are part of the agency record, the discussions at these meetings are confidential.

The specifications make it clear that the administrative hearing before the state transportation engineer is a formal process, requiring, among other things, court reporting of the hearing and witnesses being required to testify under oath. The State Transportation Engineer has sole discretion to hold the hearing or to appoint another hearing officer or panel to hold the hearing. The officer or panel members can be KDOT or non-KDOT employees. If a hearing officer or a panel conducts the hearing, the State Transportation Engineer is to issue his/her decision after reviewing and concurring/modifying the hearing officer’s or panel’s decision. The State Transportation Engineer’s final decision represents the final agency action.¹⁵⁴

The contractor’s right to appeal the State Transportation Engineer’s decision is governed by the Kansas Judicial Review Act (KJRA).¹⁵⁵ The KJRA establishes the exclusive means of judicial review of an agency action, including the State Transportation Engineer’s final decision.¹⁵⁶ The district court hearing the appeal cannot conduct a trial de novo or reweigh the evidence before the State Transportation Engineer. Consistent with the administrative procedures acts in other states, the scope of the district court’s review is extremely limited.¹⁵⁷

Finally, we note that the state of Kansas requires all contracts with its agencies to incorporate the terms of the “Contractual Provisions Attachment,” which contains mandatory contract provisions.¹⁵⁸ Among those provisions is one that states that,

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¹⁴⁹ INDOT’S website contains a listing of its projects and contract documents under Major Projects in Development or Under Construction, and is available at https://www.in.gov/indot/about-indot/central-office/major-projects-delivery-division/major-projects-in-development-or-under-construction/ (last visited October 18, 2023).

¹⁵⁰ INDIANA DEPARTMENT OF TRANSPORTATION, CONTRACT SECTION 19.2 - DISPUTE RESOLUTION PROCEDURES, available at https://www.in.gov/dot/div/contracts/NorthSplit/documents_a/INDOT_North%20Split_Public%20Private%20Agreement.pdf (last visited October 18, 2023).

¹⁵¹ IOWA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR HIGHWAY AND BRIDGE CONSTRUCTION, SECTION 1109.10 - DISPUTED CLAIMS FOR EXTRA COMPENSATION (2023).

¹⁵² IOWA CODE § 613.12.

¹⁵³ KANSAS DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR STATE ROAD AND BRIDGE CONSTRUCTION (2015).

¹⁵⁴ Note that Section 105.13 also addresses projects funded with Local Public Authorities and Federal-aid monies. On these projects, the Local Public Authority has discretion as to the claim resolution process.

¹⁵⁵ K.S.A. 77-601 et seq.

¹⁵⁶ K.S.A. 77-606.

¹⁵⁷ K.S.A. 77-621.

¹⁵⁸ STATE OF KANSAS, DEPARTMENT OF ADMINISTRATION, Form DA-146a, Rev. 06-12, available at https://www.da.ks.gov/purch/DA-146a.pdf (last visited October 18, 2023).

“Notwithstanding any language to the contrary, no interpretation of this contract shall find that the State or its agencies have agreed to binding arbitration.…” Consequently, it appears that binding arbitration is not an available option for KDOT disputes, even if both KDOT and the contractor want to use it.

18. Kentucky

The Kentucky Transportation Cabinet (KYTC) standard specifications and the KYTC Construction Guidance Manual explain the process of submitting and resolving contractor claims. All of these documents are based on Kentucky statutory requirements.¹⁵⁹ These documents provide that if the claim review and decision by KYTC’s Section Engineer and District Project Delivery and Preservation Manager is unsuccessful, the district will submit the claim to the Director of the Division of Construction.¹⁶⁰

The director may hold an informal conference with the contractor for the purpose of reaching a resolution to the claim or identifying issues needing resolution. The director will notify the contractor of KYTC’s final determination and advise the contractor that it has the right to the administrative hearing under Kentucky Revised Statute Chapter 13B or to file a lawsuit with the Franklin County Circuit Court in Frankfort, Kentucky.¹⁶¹ In addition, the KYTC Standard Specifications state if both parties agree, they may engage in formal nonbinding mediation of the dispute with a mediator agreeable to both parties.¹⁶² The survey results indicate that KYTC has actually used mediations to resolve construction disputes over the past 10 years. While the KYTC Standard Specifications do not explicitly discuss DRBs or the use of independent experts, the survey results indicate that KYTC has used ad hoc DRBs and independent experts within the past 10 years.

While it is beyond the scope of this digest to discuss the details of any DOT’s administrative hearing process, it is relevant to note that Kentucky’s Chapter 13B administrative hearing process: (a) provides statutory guidance on the qualifications of a hearing officer; (b) describes in detail the hearing process, including witness testimony; and (c) requires the hearing officer to provide a recommended order that has findings of fact, conclusions of law, and recommended disposition of the hearing.¹⁶³ It also encourages the use of mediation to resolve some or all of the dispute.¹⁶⁴ The Secretary of KYTC may accept the recommended order of the hearing officer and adopt it as KYTC’s final order, or may reject or modify it and issue a final written order.¹⁶⁵ If the final order differs from the recommended order, it shall include separate statements of findings of fact and conclusions of law.¹⁶⁶ The contractor has the right to appeal the final order to the Franklin Circuit Court.¹⁶⁷ Consistent with the discussion on Kansas, the grounds for appeal are quite narrow—such as the final decision: (a) being without support of substantial evidence on the whole record; or (b) arbitrary, capricious, or characterized by abuse of discretion.¹⁶⁸

19. Louisiana

The Louisiana Department of Transportation and Development (LaDOTD) provides its dispute resolution process in its standard specifications, construction administration manual, and Engineering Directives and Standards Manual (EDSM).¹⁶⁹ Unlike those for most DOTs, the LaDOTD dispute resolution process in the documents contains little detail. What is set forth is largely derived from the applicable EDSM. We note that while the written literature did not indicate whether LaDOTD has the ability to use DRBs, the survey results state that LaDOTD is authorized to use them but has not done so.

Based on the EDSM, if a contractor’s claim is not resolved at the district level with the LaDOTD Project Engineer and District Area Engineer, the Project Engineer is to submit the claim to LaDOTD headquarters. The LaDOTD Chief, Construction Division will: (a) assign a Claims Manager for a detailed analysis, (b) make findings and recommendations, (c) review those findings and recommendations with LaDOTD’s chief engineer, and (d) issue a decision. This decision may be appealed by the contractor directly to LaDOTD’s chief engineer, who can initiate any additional review or investigation he deems necessary to amicably resolve the disputed issue. When the chief engineer concludes that LaDOTD has exhausted all efforts to amicably resolve the dispute, he/she is to prepare a written transfer of the disputed issue to the LaDOTD Legal Section for judicial resolution.

The earlier-referenced LaDOTD documents do not indicate where suit is to be filed. However, it appears that Louisiana law establishes the proper venue as the district court of the judicial district in which the state capitol is located or in the district court having jurisdiction in the parish in which the cause of action arises.¹⁷⁰ As for arbitration, the survey indicated that

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¹⁵⁹ KENTUCKY TRANSPORTATION CABINET STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION SECTION 105.13.05- CLAIM REVIEW (2019 Edition) (“KYTC STANDARD SPECIFICATIONS”); KENTUCKY TRANSPORTATION CABINET CONSTRUCTION GUIDANCE MANUAL CST 311 - Claims (May 2009) (“KYTC CONSTRUCTION MANUAL”); 603 KAR 2:015, Section 8 (Administrative Claims Process).

¹⁶⁰ KYTC CONSTRUCTION MANUAL CST 311-8 - CLAIMS: REVIEW BY CENTRAL OFFICE.

¹⁶¹ KYTC STANDARD SPECIFICATIONS SECTION 105.13.05 - CLAIM REVIEW.

¹⁶² Id.

¹⁶³ KRS 13B.110.

¹⁶⁴ KRS 13B.070.

¹⁶⁵ 603 KAR 2:015, Section 9 (Hearing Procedure).

¹⁶⁶ KRS 13B.120.

¹⁶⁷ KRS 13B.140.

¹⁶⁸ KRS 13B.150

¹⁶⁹ LOUISIANA DOTD STANDARD SPECIFICATIONS FOR ROADS AND BRIDGES, SECTION 105.18 - CLAIMS FOR ADDITIONAL COMPENSATION (2016); CONSTRUCTION CONTRACT ADMINISTRATION MANUAL, SECTION 6.9 – CLAIMS (July 2017); LOUISIANA DOTD ENGINEERING DIRECTIVES AND STANDARDS MANUAL, SECTION III.1.1.28 - ADDITIONAL COMPENSATION (Revision Date 12/13/2006), available at http://wwwsp.dotd.la.gov/Inside_LaDOTD/Divisions/Engineering/EDSM/EDSM/EDSM_III_1_1_28.pdf (last visited October 19, 2023).

¹⁷⁰ LA. REV. STAT. § 13:5104.

LaDOTD has used arbitration, and it appears this is based upon the general arbitration statute in Louisiana. This will be discussed more in Chapter V.

20. Maine

As noted in Chapter II, the standard specifications of the Maine Department of Transportation (MaineDOT) contemplate that the parties may mutually agree in writing to any form of dispute resolution, “including mediation, facilitated negotiation, neutral case evaluation, arbitration, or litigation.”¹⁷¹ Based on the survey information, MaineDOT has experience in using several nonbinding dispute resolution processes over the past 10 years, including mediation, nonbinding arbitration, and facilitated partnering. The survey also indicated that while MaineDOT has used DRBs, it does so rarely. MaineDOT did incorporate a traditional, standing DRB, on one of its recent design-build projects (Hampden Bridge Bundling).¹⁷² The survey also indicates that MaineDOT has used binding arbitration to resolve certain disputes.

Aside from what the parties might agree upon, MaineDOT’s standard disputes process contemplates that if a contractor’s claim is not resolved at the project level or by the Bureau Director, the contractor can file an appeal of the Bureau Director’s decision to the Commissioner, who will issue a final agency decision.¹⁷³ The appeals process is limited to documentation submitted to the Commissioner unless the Commissioner directs otherwise. The sole and exclusive means of judicial review of the Commissioner’s final decision is through litigation filed in Maine Superior Court, Kennebec County, Maine.¹⁷⁴ Consistent with some other DOTs, such as those for Kentucky and Kansas, the judicial action is an administrative review of the Commissioner’s decision under Maine’s administrative procedures act.¹⁷⁵

21. Maryland

Disputes with the Maryland SHA are addressed through SHA’s standard specifications and the Code of Maryland Regulations.¹⁷⁶ Claims are to be filed with the procurement officer, whose decision is the final action of the agency. As discussed in Chapter III, contractors who want to appeal this final decision are required to use the MSBCA, with appeals from MSBCA decisions being subject to the Maryland Administrative Procedure Act.

SHA’s standard specifications enable the parties to elect to use nonbinding mediation administered by a mutually agreed upon qualified mediator before proceeding with other dispute resolution procedures, including litigation.¹⁷⁷ While SHA’s standard specifications do not discuss the use of DRBs, the Maryland Department of Transportation, through the Maryland Transit Agency, is using a DRB on its Purple Line rail project.

22. Massachusetts

The Massachusetts Department of Transportation Highway Division (MassDOT Highway) process for handing contractor claims is currently set forth in Section 7.16 (Claims of Contractor for Compensation) of the MassDOT Highway Supplemental Specifications.¹⁷⁸ The Supplemental Specifications modify MassDOT Highway 2023 Standard Specifications for Highways and Bridges, which had little information about the claims and disputes process.¹⁷⁹

As modified, Section 7.16 identifies a three-step process that starts with the district overseeing the contract providing a determination on a claim. If the claim is denied, the contractor may file a request with the chief engineer for a hearing before the Claims Committee, where the parties will present their respective positions and the committee will make a determination. If the contractor disputes the Claims Committee’s determination, it has the option of appealing the determination to either: (a) MassDOT’s Office of the Administrative Law Judge (ALJ); or (b) the Superior Court Department of the Commonwealth of Massachusetts in the County of Suffolk. If the contractor chooses to appeal to the ALJ, the ALJ will hold a hearing and ultimately write a report and recommendation to the secretary of transportation.¹⁸⁰ Hearing procedures and rights of appeal from the ALJ are established by the Code of Massachusetts Regulations.¹⁸¹

While MassDOT Highway’s documents do not discuss the use of mediation, the hearing procedures associated with the ALJ specifically allow mediation to take place by agreement of the parties. Likewise, while MassDOT Highway’s documents do not mention DRBs, it is widely known that the “Big Dig” project

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¹⁷¹ MAINE DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS SECTION 111.1.2 - ESCALATION PROCESS (March 2020) (“MAINEDOT STANDARD SPECIFICATIONS”).

¹⁷² CONTRACT SECTION 111.4 - DISPUTE REVIEW BOARD available at https://www.maine.gov/mdot/design-build/docs/hampden/draft/Book-1--Design-Build-General-Conditions.pdf (last visited October 19, 2023).

¹⁷³ MAINEDOT STANDARD SPECIFICATIONS, SECTION 111.5 - APPEAL TO COMMISSIONER.

¹⁷⁴ MAINEDOT STANDARD SPECIFICATIONS SECTION 111.6 - JUDICIAL REVIEW.

¹⁷⁵ Maine Rule of Civil Procedure 80C; 5 M.R.S.A. § 11001, et. seq., of the Maine Administrative Procedures Act.

¹⁷⁶ MARYLAND DEPARTMENT OF TRANSPORTATION, STATE HIGHWAY ADMINISTRATION, STANDARD SPECIFICATIONS FOR CONSTRUCTION AND MATERIALS SECTION GP-5.15 - DISPUTES (July 2023) (“SHA STANDARD SPECIFICATIONS”); COMAR 21.10.

¹⁷⁷ SHA STANDARD SPECIFICATIONS TC-4.05 - DISPUTE MEDIATION.

¹⁷⁸ The Supplemental Specifications are dated July 30, 2023 (Document 00715) and available at https://www.mass.gov/doc/2023-supplemental-specifications-to-the-standard-specifications-for-highways-and-bridges-june-30-2023/download (last visited October 20, 2023).

¹⁷⁹ MASSACHUSETTS DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR HIGHWAYS AND BRIDGES, SECTION 7.16 - CLAIMS OF CONTRACTOR FOR COMPENSATION (2023 edition).

¹⁸⁰ Recommendations of the Office of the Administrative Law Judge are available online at https://www.mass.gov/lists/transportation-dispute-resolution-reports (last visited October 19, 2023).

¹⁸¹ 801 CMR 1.00 (Standard Adjudicatory Rules of Practice and Procedure), available at https://www.mass.gov/doc/801-cmr-1-standard-adjudicatory-rules/download (last visited October 20, 2023).

extensively used DRBs. In addition, MassDOT’s transit component (MBTA) uses DRBs on some of its projects.

23. Michigan

The claims and disputes process for Michigan Department of Transportation (MDOT) is set forth in the MDOT standard specifications and MDOT contractor claims procedure, with the latter document providing substantial detail about the process.¹⁸² The final administrative process involves the contractor appealing MDOT’s Region Office Review decision to MDOT’s Central Office. The Central Office Review will be based on a panel consisting of three MDOT engineers that had no prior project involvement and are not from the same region as the claim. It is contemplated that there will be an oral hearing and the submission of documents, after which the panel will provide a written decision. MDOT’s Bureau Director of Field Services will write a decision letter that will, among other things, concisely explain the panel’s decision. The contractor must exhaust each of the administrative processes before proceeding in any other administrative hearing or the Michigan Court of Claims. The specifications also state that the contractor cannot seek relief greater than the amount sought at a prior level or present the claim based on facts or issues that differ from those presented at a prior level.¹⁸³

The MDOT specifications do not specifically state what happens if a contractor wants to appeal MDOT’s final action, although they do mention the Michigan Court of Claims. This is a court of statewide, limited jurisdiction formed to hear all civil actions filed against the State of Michigan and its agencies, including breach of contract and claims for money damages. The Court of Claims operates like other Michigan circuit (trial) courts, including the use of Michigan’s civil procedure rules, but there is no right to a jury trial.¹⁸⁴ This means that the contractor would have a trial de novo in that court on its claims. However, unlike claims courts in other states, the Michigan Court of Claims does not have exclusive jurisdiction over administrative appeals. Therefore, it appears the contractor could also choose to seek a judicial review of MDOT’s final action under Michigan’s Administrative Procedures Act or pursue its appeal by filing an action in a Michigan circuit court seeking a non-jury trial.¹⁸⁵

Finally, MDOT has developed DRB Procedures that are to be used on projects that have incorporated the Special Provision for Dispute Review Board.¹⁸⁶ The procedures contemplate a traditional, standing DRB that has the ability to provide both advisory opinions and formal recommendations. While MDOT did not respond to the survey, it was interviewed as part of the CalPoly Report. The report states that MDOT has used DRBs on 80 projects since the implementation of the DRB program in 2013.¹⁸⁷ The report also stated that over the past five years, 5% of MDOT’s claims were resolved through arbitration, although there is no explanation of where MDOT’s authority to use arbitration is derived.

24. Minnesota

The Minnesota Department of Transportation (MnDOT) standard specifications have provisions for contractors to request compensation for extra work and, if the compensation request is denied, to submit a certified claim.¹⁸⁸ However, neither the specifications nor other materials on the MnDOT website explain the internal review process of MnDOT or what happens if a claim is ultimately denied by MnDOT.

MnDOT’s approach to construction disputes was explained by interviews with MnDOT associated with the survey. MnDOT’s practice for dispute resolution is based upon partnering and use of DRLs. For example, the disputes clause in MnDOT’s standard form design-build contract requires the development of the ladder and the escalation process.¹⁸⁹ As explained during the interview, even if there is nothing formally in the contract documents, MnDOT’s issue escalation process is based on custom and practice, with the MnDOT Commissioner being the highest rung on the ladder. Consistent with this approach, MnDOT takes a flexible view on the process that occurs at each level of the resolution chain, with meetings being held as needed to resolve the dispute. If a claim is not resolved, Minnesota law gives the contractor the choice of suing MnDOT in either: (a) Ramsey County district court; (b) the district court of the county where a major portion of the contract was performed; or (c) the district court of the county in which the contractor resides.

It should also be noted that the General Rules of Practice of the Minnesota Court Rules have a robust alternative disputes process

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¹⁸² MICHIGAN DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR CONSTRUCTION, SECTION 104.10 - CLAIM FOR EXTRA COMPENSATION OR TIME EXTENSION (2020) (“MDOT STANDARD SPECIFICATIONS”); MDOT CONSTRUCTION CONTRACTOR CLAIMS PROCEDURE (Revised February 2021).

¹⁸³ MDOT STANDARD SPECIFICATIONS, SECTION 104.10.F - CONSISTENCY OF CLAIM AND EXHAUSTION OF ADMINISTRATIVE REMEDIES.

¹⁸⁴ https://www.courts.michigan.gov/faq/?category=Court%20of%20Claims (last visited October 19, 2023).

¹⁸⁵ Teddy 23, LLC v. Michigan Film Office, 313 Mich. App. 557 (Ct. of Appeals 2015); M.C.L.A. 600.631 (Appeals from state agency decisions).

¹⁸⁶ MDOT DISPUTE REVIEW BOARD (DRB) PROCEDURES (Revised 2020), available at https://www.michigan.gov/mdot/business/construction/dispute-review-board (last visited October 19, 2023).

¹⁸⁷ CALPOLY REPORT, pp. 30-31.

¹⁸⁸ MINNESOTA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR CONSTRUCTION SECTION 1402.5 - EXTRA WORK, SECTION 1403.6 - CONTRACTOR’S RECOURSE, AND SECTION 1517 -CLAIMS FOR COMPENSATION ADJUSTMENT (2020).

¹⁸⁹ MNDOT DESIGN-BUILD PROGRAM, BOOK 1 TEMPLATE, SECTION 19 - PARTNERING, CLAIMS FOR ADJUSTMENT AND DISPUTES, available at https://view.officeapps.live.com/op/view.aspx?src=http%3A%2F%2Fwww.dot.state.mn.us%2Fdesignbuild%2Fdocuments%2Fonline%2FProcurementTemplates%2FBook1%2FBook1TemplateMay2011.doc&wdOrigin=BROWSELINK (last visited October 24, 2023).

that governs all civil cases.¹⁹⁰ These rules specifically address typical nonbinding processes like mediation and also allow parties to agree upon both binding and nonbinding arbitration once a lawsuit is filed.¹⁹¹ Nothing in the Minnesota statutes appears to exempt MnDOT disputes from being subject to these rules.

25. Mississippi

The Mississippi Department of Transportation (MDOT) claims process is described in both MDOT’s standard specifications and its construction manual.¹⁹² If the contractor disagrees with the disposition of its request for adjustment at the project level, it may submit a claim to MDOT. The MDOT documents do not indicate the individual within MDOT who will review and act upon the claim. However, the State Transportation Arbitration Board Rules of Procedure require that the claim be submitted to MDOT’s chief engineer and denied in whole or in part, or that 60 days have passed from the date the claim was submitted to the chief engineer without a written decision.¹⁹³

If the chief engineer denies the claim or fails to act as described and the contractor wants to appeal, the contractor is either to file for arbitration or initiate litigation, depending on the value of the claim.¹⁹⁴ The board’s jurisdictional limit is for claims $750,000 or less, unless the parties agree otherwise.¹⁹⁵ The board’s order is final and binding, subject to the appeals process discussed in Chapter V.

26. Missouri

The Missouri Department of Transportation (MoDOT) claims and disputes process is set forth in both MoDOT’s Standard Specifications and Engineering Policy Guide (EPG), with the EPG providing the most detailed guidance and requirements.¹⁹⁶ If a claim is unresolved at the district level, the contractor can file the claim with the Secretary of the Commission. The procedures are detailed and include having MoDOT’s Claims Committee meet with the contractor, who will have the opportunity to present its case and present additional information. The Claims Committee’s decision on the claim is final, whereupon the contractor may file a demand for arbitration or litigation. Completion of the administrative process and obtaining a final decision from the Claims Committee is a condition precedent to arbitration or litigation.

The arbitration process is defined in both the standard specifications and Missouri statute.¹⁹⁷ The statute creates a limitation on the monetary value for claims that are eligible for arbitration, indexed annually to a deflator. The current maximum amount for arbitrable claims is approximately $400,000.¹⁹⁸ The prescribed venue for litigation is the Circuit Court of Cole County, Missouri.¹⁹⁹ Additionally, under Missouri law, any claim, whether or not it is arbitrable, may be mediated by any method agreed to by the parties.²⁰⁰

Based on the survey feedback, MoDOT has generally not used formal nonbinding dispute resolution processes, such as mediation or independent experts. Likewise, while MoDOT is authorized to use DRBs, the surveys and interviews indicate that the agency has not done so. The MoDOT representative stated that MoDOT places great emphasis on preserving its relationship with contractors and typically resolves issues through partnering/negotiation before any formal dispute processes are initiated.

27. Montana

The process for reaching a final decision on a contractor’s claim to the Montana Department of Transportation (MDT) is set forth in MDT’s standard specifications.²⁰¹ If the contractor has not been able to resolve at the project or district level, the contractor can appeal the District Construction Engineer’s decision to MDT’s Claims Review Board.²⁰² The board consists of the Chief Engineer, the Preconstruction Engineer, and the Chief Counsel, with the Construction Engineering Services (CES) Engineer as Secretary to the Board. The FHWA Field Operations Engineer and Construction Engineer are non-voting members of the board. The board will only review those documents and evidence submitted in the original claim, its supporting documents, and the district’s evaluation, but may request further information.

The decision of the board is the department’s final decision. If the contractor decides to appeal this decision, it appears to be able to do so under Montana’s Administrative Procedures

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¹⁹⁰ MINNESOTA COURT RULES, GENERAL RULES OF PRACTICE, RULE 114 - ALTERNATIVE DISPUTE RESOLUTION, available at https://www.revisor.mn.gov/court_rules/gp/id/114/ (last visited October 29, 2023).

¹⁹¹ The nuances of how Rule 114 actually works is beyond the scope of this digest.

¹⁹² MISSISSIPPI DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION, SECTION 105.17 - CLAIMS FOR ADJUSTMENTS AND DISPUTES, PARAGRAPH C - DEPARTMENT DECISION, (2017) (“MDOT STANDARD SPECIFICATIONS”); MISSISSIPPI DEPARTMENT OF TRANSPORTATION CONSTRUCTION MANUAL, SECTION 1.3.7 - CLAIMS (2017).

¹⁹³ 37 MISS. CODE R. § 401-5.1.

¹⁹⁴ MDOT STANDARD SPECIFICATIONS, SECTION 105.17.C - DEPARTMENT DECISION.

¹⁹⁵ MISS. CODE § 65-2-5 (2020).

¹⁹⁶ MISSOURI DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION, SECTION 105.16 - CONTROVERSIES AND CLAIMS FOR ADJUSTMENT (2023) (“MODOT STANDARD SPECIFICATIONS”); MISSOURI DEPARTMENT OF TRANSPORTATION, ENGINEERING POLICY GUIDE, SECTION 105.16 - CONTROVERSIES AND CLAIMS FOR ADJUSTMENT, available at https://epg.modot.org/index.php/Category:105_Control_of_Work (last visited October 19, 2023).

¹⁹⁷ MO. REV. STAT. § 226.096 (2021); MODOT STANDARD SPECIFICATIONS, SECTION 105.18 – ARBITRATION.

¹⁹⁸ MODOT STANDARD SPECIFICATIONS, SECTION 105.18.3.7 – CONSOLIDATION.

¹⁹⁹ MODOT STANDARD SPECIFICATIONS, SECTION 105.17 – VENUE.

²⁰⁰ MO. CODE REGS. ANN. 7 CSR 10-26-020.

²⁰¹ MONTANA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION, SECTION 105.16 - CLAIMS FOR ADJUSTMENT AND DISPUTES (2020 Edition, V4.0, Effective June 29, 2023) (“MDT STANDARD SPECIFICATIONS”).

²⁰² MDT STANDARD SPECIFICATIONS, SECTION 105.16.3 - DECISION ON CLAIMS.

Act, which contemplates litigation in state district court.²⁰³ The specifications also permit nonbinding, independent third-party mediation if the parties agree, which will include an agreement on the mediator and mediation date.

The survey results indicate that MDT has used mediation and DRBs over the past 10 years, although its use of DRBs has been rare. MDT has also used nonbinding arbitration to establish entitlement to a construction dispute.

28. Nebraska

The Nebraska Department of Transportation (NDOT) standard specifications do not have the same level of detail as most other DOTs regarding the process for addressing the submission and administration of changes, claims, and disputes.²⁰⁴ For example, they do not establish time periods or required contents for contractor submissions, or explain the hierarchy within NDOT that will act upon those submissions. Rather, they simply state the contractor is to give notice of its intention to make a claim if it believes it is due compensation for extra work and that the validity of the claim will be determined by the engineer.²⁰⁵ The specifications also have a partnering provision stating that, among other things, the partnering facilitator will help guide the parties “to establish a hierarchical protocol which attempts to resolve disputes through discussion rather than litigation.”²⁰⁶

NDOT’s Construction Manual discusses the normal “chain of command,” some of which explains what is to happen for claims.²⁰⁷ The manual states the State Construction Division is “the eventual authority for all … unresolved contract and construction related questions” and has “final decision capability for all disputes or questions regarding contract administration.” The State Construction Engineer has responsibility for handing appeals from District Engineer decisions.²⁰⁸

The manual does not explain what happens if the contractor’s claim is denied by the State Construction Engineer. However, based on a review of Nebraska statutes, it appears that Nebraska’s State Contract Claims Act provides the exclusive remedy for resolving its claim.²⁰⁹

This act appears to give the contractor the option of seeking recourse either in the State Claims Board or in litigation in the District Court of Lancaster County, Nebraska.²¹⁰ The State Claims Board is comprised of Nebraska’s Director of Insurance, Commissioner of Labor, and Director of Administrative Services, with the Attorney General acting as its legal advisor.²¹¹ Both the contractor and NDOT must agree to have the dispute heard by the State Claims Board—otherwise the contractor must initiate an action in the above-referenced court if it wants to pursue its claim.²¹² If the claim is heard in the State Claims Board, it is administered under Nebraska’s State Miscellaneous Claims Act.²¹³ Based upon that act, it appears that: (a) any decision over $50,000 is to be brought to the Legislature for approval and appropriations; and (b) any appeal of that decision is to be heard by the Legislature.²¹⁴

The survey results indicate that NDOT has used mediation and facilitated partnering as a means of resolving its disputes. Based on the survey, NDOT does not have the authority to use DRBs.

29. Nevada

Similar to Nebraska DOT, the Nevada Department of Transportation (NDOT) standard specifications have limited details for: (a) addressing the submission and administration of changes, claims, and disputes; (b) identifying time periods or required contents for contractor submissions; or (c) explaining the NDOT hierarchy that will act upon those submissions.²¹⁵ NDOT also makes the Chief Construction Engineer responsible for resolving claims and disputes.²¹⁶

Unlike Nebraska DOT, the Nevada DOT specifications specifically address claims and disputes via its partnering program’s project Issue Resolution Ladder.²¹⁷ NDOT also uses a three-member Dispute Review Team (DRT) depending on the project’s scope, cost, duration, and complexity.²¹⁸

The DRT is established under Section 105.18 (Dispute Review Team) of the standard specifications, as well as through a Special Provision that replaces Section 105.18 with a more detailed DRT process.²¹⁹ The Special Provision and the Sample DRT Operat-

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²⁰³ MCA 2-4-702 (Initiating judicial review of contested cases).

²⁰⁴ NEBRASKA DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION (2017 edition) (“NDOT STANDARD SPECIFICATIONS”).

²⁰⁵ NDOT STANDARD SPECIFICATIONS, SECTION 109.05 - PAYMENT FOR EXTRA WORK (2017 edition).

²⁰⁶ NDOT STANDARD SPECIFICATIONS, SECTION 113 - PARTNERING (2017 edition).

²⁰⁷ NDOT CONSTRUCTION MANUAL, SECTION 101.04 - CHAIN OF COMMAND (2023 edition).

²⁰⁸ NDOT CONSTRUCTION MANUAL, SECTION 101.05 – STATE CONSTRUCTION ENGINEER (2023 edition).

²⁰⁹ NEB. REV. STAT. § 81-8,306.

²¹⁰ NEBRASKA DEPARTMENT OF ADMINISTRATIVE SERVICES, RISK MANAGEMENT, STANDARD OPERATING PROCEDURES: HOW TO FILE A CONTRACT CLAIM AGAINST THE STATE OF NEBRASKA (May 17, 2021).

²¹¹ NEB. REV. STAT. § 81-8,220.

²¹² NEB. REV. STAT. §§ 81-8,302 to 81-8,306.

²¹³ NEB. REV. STAT. § 81-8,305. The State Miscellaneous Claims Act is in NEB. REV. STAT. §§ 81-8,294 to 81-8,301.

²¹⁴ NEB. REV. STAT. § 81-8,300.

²¹⁵ NEVADA DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (2014) (“NDOT STANDARD SPECIFICATIONS”). NDOT Construction Division’s AWP Documentation Manual does contain more detail about some contract administration and payment.

²¹⁶ NEVADA DEPARTMENT OF TRANSPORTATION, CONSTRUCTION MANUAL (February 2021) (“NDOT CONSTRUCTION MANUAL”), pp. 1-10 to 11.

²¹⁷ NDOT STANDARD SPECIFICATIONS, SECTION 105.05 – PARTNERING.

²¹⁸ NDOT CONSTRUCTION MANUAL, p. 2-35; See also DISPUTE RESOLUTION PROGRAM, available at https://www.dot.nv.gov/doingbusiness/about-ndot/ndot-divisions/operations/construction/dispute-resolution-program (last visited October 21, 2023).

²¹⁹ NEWLY ADOPTED ALTERNATIVE DISPUTE RESOLUTION SPECIFICATIONS, SECTION 105.18 - ALTERNATIVE DISPUTE RESOLUTION (March 2016), available at https://www.dot.nv.gov/home/showpublisheddocument/2067/636183800505570000 (last visited October 21, 2023).

ing Procedures and Guidelines make it clear that the DRT is to function similarly to a traditional, standing DRB, with recommendations being admissible in subsequent proceedings.²²⁰ It also confirms that the contractor must comply with Section 105.18 to pursue a claim, filing for arbitration or litigation, although there is no further explanation in the NDOT documents about what happens if the contractor decides to pursue a claim.

30. New Hampshire

New Hampshire Department of Transportation (NHDOT) provides that if the contractor does not agree with a decision at the project level, it may appeal the matter to the commissioner in accordance with the department’s statutory appeals procedures.²²¹ It also appears that contractors can bring an action directly in superior court for its claims, which is tried without a jury.²²²

The commissioner’s appeal procedures contemplate a hearing with, among other things, exhibits and witnesses and a decision that includes findings of fact and conclusions of law.²²³ It appears that the contractor’s appeal rights from the commissioner’s decision is to the New Hampshire Transportation Appeals Board. The three-person board consists of a registered professional engineer, a licensed New Hampshire lawyer, and a person skilled in the field of public works and construction who is to represent the general public.²²⁴

31. New Jersey

The New Jersey Department of Transportation (NJDOT) standard specifications have a detailed, robust process for resolving claims and contractual disputes, called the “Contractual Claims Resolution Process.”²²⁵ The process consists of four sequential steps:

• Step I: Review and decision by the Resident Engineer;
• Step II: Review and decision by the Regional Claims Review Board;
• Step III: Review and decision by the Claims Committee; and
• Step IV: Nonbinding mediation.²²⁶

Mediation is only used if the contractor requests it and NJDOT agrees, with the mediation process being governed by, among other things, NJDOT’s standard Nonbinding Mediation Agreement.

To proceed to the next step of review under the Claims Resolution Process, the contractor must indicate in writing that the decision of the previous step was unacceptable and request that the claim be forwarded to the next step. The contractor is also limited to the documentation provided to NJDOT at the beginning of Step I throughout all other steps, and if it did not do so, NJDOT could require that the process start again for such claim at Step I. Importantly, the exhaustion of the process is not a prerequisite to the contractor filing a legal action against NJDOT in any court of competent jurisdiction. However, if the contractor does bring an action related to a pending claim, the Contractual Claims Resolution Process ends as to that claim, regardless of the level of review of the claim.²²⁷

While NJDOT’s Claims Resolution Process does not mention the use of DRBs, it appears that NJDOT is open to using them. NJDOT recently issued a request for qualifications for DRB applicants, stating that a three-member DRB may optionally be used to replace Steps II and III for certain projects.²²⁸ Additionally, while there is no indication that NJDOT has used, or that it is interested in using, binding arbitration, New Jersey statutes expressly state that there is nothing that prohibits parties on public projects from agreeing to settle contract disputes by arbitration.²²⁹

32. New Mexico

The New Mexico Department of Transportation (NMDOT) has a robust section in its standard specifications that addresses the claims resolution process.²³⁰ The review process starts with the district engineer’s review and decision on the claim. If the contractor wants to appeal that decision, it is to request a reconsideration of the claim by the cabinet secretary. The cabinet secretary can make a decision on its own or refer the claim to the Claims Board.

The Claims Board is an informal dispute resolution board comprised of up to three panelists appointed by the cabinet secretary. They are to have relevant experience in highway and transportation design, construction management, engineering, surveying, construction contract administration, construction oversight work, or law, and cannot include any current employees of either NMDOT or the contractor. Similar to many traditional DRBs, attorneys are permitted to attend the informal hearing but not participate unless the Claims Board specifically

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²²⁰ SAMPLE DRT PROCEDURES AND GUIDELINES, available at https://www.dot.nv.gov/home/showpublisheddocument/2065/636183800501500000 (last visited October 21, 2023).

²²¹ NEW HAMPSHIRE DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION, SECTION 105.19 - RESOLUTION OF CLAIMS AND DISPUTES (2016).

²²² RSA 491:8.

²²³ NHDOT RULES, CHAPTER TRA 200 - RULES OF PRACTICE AND PROCEDURE, available at https://www.gencourt.state.nh.us/rules/state_agencies/tra200.html (last visited October 21, 2023).

²²⁴ RSA 21-L:14.

²²⁵ NEW JERSEY DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION SECTION 107.12 - THE CONTRACTUAL CLAIM RESOLUTION PROCESS, (2019) (“NJDOT STANDARD SPECIFICATIONS”).

²²⁶ For claims under $20,000, the final agency action is at the Regional Claims Review Board level.

²²⁷ NJDOT STANDARD SPECIFICATIONS SECTION 107.13 - LITIGATION OF CLAIMS BY THE CONTRACTOR. N.J.S.A. 59:13-1, et seq.

²²⁸ https://www.nj.gov/transportation/contribute/business/procurement/documents/DisputeResolutionBoardRFQ5-4-22.pdf (last visited October 21, 2023).

²²⁹ N.J. REV STAT. § 59:13-7 (2022).

²³⁰ NEW MEXICO DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR HIGHWAY AND BRIDGE CONSTRUCTION SECTION 105.20 - ADMINISTRATIVE REMEDY (2019) (“NMDOT STANDARD SPECIFICATIONS”).

addresses an issue to them or unless agreed to by both parties. The Claims Board is to provide a final, written recommendation to the cabinet secretary to resolve the claim, whereupon the cabinet secretary will issue its decision.²³¹

If the contractor does not accept the cabinet secretary’s decision, it is required to mediate under the New Mexico Public Works Mediation Act.²³² The contractor is required to exhaust the mandatory mediation procedures of that act before seeking judicial relief in state district court. However, the standard specifications also allow the parties, by mutual agreement, to arbitrate the claim instead of proceeding to litigation in state district court.²³³ This process will be discussed further in Chapter V. Based upon the survey results, NMDOT rarely uses DRBs, but when it does, they are standing DRBs.

33. New York

The New York State Department of Transportation (NYSDOT) sets forth its claims and disputes process in its standard specifications.²³⁴ Disputes not resolved at the project level or with the Regional Director are to be brought to the NYSDOT Commissioner, who will have different time periods for reviewing and acting based upon the magnitude of the claim. If claims are still unresolved at project closeout, there are several options for how they will be addressed.

One option is during contract closeout, which contemplates meetings in the Office of Construction with appropriate representatives of the parties to amicably resolve the disputes. In lieu of that process, the contractor may elect to use what NYSDOT characterizes as the “Gatekeeper” process, with the NYSDOT chief engineer being the Gatekeeper. The Gatekeeper can identify an ADR process to help resolve disputes over $50,000 during the closeout process. The contractor is to provide the Gatekeeper with a brief description of the contract work, identify the contractor’s preferred method of dispute resolution, and explain why the circumstances justify the use of that resolution method. Based on the Gatekeeper’s assessment, it will advise the contractor how to proceed with processing the dispute, limited to: (a) participating in the closeout meeting with the Office of Construction; (b) having a facilitated contract closeout meeting with the Office of Construction; or (c) using a DRB.

The facilitated closeout meeting will consist of a one-person facilitator agreed upon by NYSDOT and the contractor who is knowledgeable in public works construction matters and who shall try to bring the parties to a mutually agreeable resolution of the disputes. The DRB option will consist of one person agreed to by both parties, or three persons (one selected by NYSDOT, one selected by the contractor, and one mutually selected by NYSDOT and the contractor). The DRB will make a recommendation as to the resolution of the disputes. The specification states that the records made and recommendations or actions of the facilitator or DRB are considered “off the record, nonbinding, confidential, and may not be used in any future litigation.”

If disputes remain unresolved after the above processes, the specifications state that the contractor may file a claim in the New York State Court of Claims. The Court of Claims is the exclusive forum for civil litigation seeking damages against State of New York agencies. Appeals from the court’s orders can be heard in the state’s appellate division of an applicable supreme court, with the act stating that: “The appeal from a judgment may be taken upon questions of law or of fact, or both, or for an alleged excess or insufficiency of the judgment.”²³⁵

34. North Carolina

The North Carolina Department of Transportation (NCDOT) process for claims review is set forth in Section 104-8 (Compensation and Record Keeping) of both the standard specifications and construction manual.²³⁶ While the standard specifications do not provide substantial guidance on the authority of individuals within NCDOT to make decisions, the construction manual explains that claims during the project are reviewed by the resident engineer, division construction engineers, and area construction engineers, with the “Records and Reports” section of the manual establishing the actual claim processing procedures.²³⁷

For claims before project closeout, the district engineer is delegated responsibility to make a decision. If the contractor fails to receive the compensation adjustment to which it believes it is entitled, the claim is to be resubmitted as a final claim upon completion of the project. These final claims are reviewed and responded to by the state construction engineer as part of the final estimate process.

While the NCDOT documents do not state what happens if the contractor wants to appeal the state construction engineer’s decision, this appears to be handled by statute.²³⁸ The statute says that a contractor who has completed an NCDOT contract

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²³¹ NMDOT STANDARD SPECIFICATIONS, SECTION 105.20.3 - SECRETARY LEVEL.

²³² NMDOT STANDARD SPECIFICATIONS, SECTION 105.20.4 - LITIGATION. The New Mexico Public Works Mediation Act is specified in NMSA § 13-4c-1, et seq. (1978).

²³³ NMDOT STANDARD SPECIFICATIONS SECTION 105.20.3.1 - ARBITRATION.

²³⁴ NEW YORK STATE DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS SECTION 105-14 - DISPUTED WORK AND DISPUTE RESOLUTION (January 1, 2024).

²³⁵ NEW YORK STATE CONSOLIDATED LAWS: COURT OF CLAIMS ACT, SECTION 24 -APPEALS available at https://ww2.nycourts.gov/COURTS/nyscourtofclaims/claimsact.shtml#Section24 (last visited October 21, 2023).

²³⁶ NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROADS AND STRUCTURES NORTH CAROLINA DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROADS AND STRUCTURES SECTION 104.8 - COMPENSATION AND RECORD KEEPING (January 2024); NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, CONSTRUCTION MANUAL SECTION 104.8 - COMPENSATION AND RECORD KEEPING, available at https://connect.ncdot.gov/projects/construction/Pages/ConstMan.aspx?Method=CM-01-104#104-7%20EXTRA%20WORK (last visited October 21, 2023).

²³⁷ https://connect.ncdot.gov/projects/construction/Pages/RRMan.aspx?Method=RR-21#ACTIVE%20CLAIMS (last visited October 21, 2023).

²³⁸ N.C. GEN. STAT. § 136-29 (2022), Adjustment and resolution of DEPARTMENT OF Transportation contract claim.

may a verified written claim to the Secretary of Transportation for the amount the contractor claims is due, stating the factual basis for the claim. The secretary will investigate the claim and the contractor may appear before the secretary, either in person or through counsel, to present facts and arguments in support of the claim. The secretary is to give a written decision acting on the claim.

If the contractor is dissatisfied with the secretary’s decision, the contractor can file a lawsuit under North Carolina’s administrative procedures act challenging the decision or file a civil action in the Superior Court of Wake County or in the superior court of any county where the work under the contract was performed. The civil action is to follow the same procedure (i.e., a trial de novo) as in all civil actions except that all issues shall be tried by the judge, without a jury.

The published literature did not indicate whether NCDOT uses any nonbinding ADR processes. However, NCDOT’s survey response stated that the agency has used facilitated partnering, independent experts, mediation and standing DRBs, although DRBs have been rarely used.

35. North Dakota

The North Dakota Department of Transportation (NDDOT) claims process is set forth in its standard specifications, along with guidance in its construction manual.²³⁹ The process is also prescribed by the North Dakota statute that addresses the resolution of claims before NDDOT.²⁴⁰ Both the statute and standard specifications discuss the notice requirements at the project level and the obligation that the contractor give notice in accordance with the statute. The manual elaborates on this, stating that claims that cannot be resolved at the project level or by the director of operations may be forwarded to the deputy director for engineering or to the NDDOT director for a final attempt at resolution. Ultimately, NDDOT’s director is to act upon the claim within the times required by the statute.²⁴¹ If the claim is not resolved, the contractor’s next step is to file for arbitration in accordance with the North Dakota statute.²⁴² The North Dakota statute contains a specific condition precedent to arbitration that ties into giving the Director notice of the contract’s completion.²⁴³ The arbitration process will be discussed more fully in Chapter V.

While the NDDOT literature does not address other forms of ADR, telephone interviews explained that NDDOT has used both DRBs and mediation. It has used standing DRBs on some of its large, complex bridge projects, of which there were approximately five to six over the past 20 years. Thess are implemented through a special provision in the procurement documents.

36. Ohio

The Ohio Department of Transportation (ODOT) published literature identifies ODOT as having a robust ADR process, particularly in terms of the use of partnering and DRBs. The survey results confirm that ODOT has experience in using ADR processes other than those specifically addressed in its published literature, including mediation and nonbinding arbitration. ODOT’s disputes process is set forth in Section 108.02 (Partnering), with the most detailed process being set forth in Paragraph G (Dispute Resolution and Administrative Claims).²⁴⁴

The precise process is dependent upon whether ODOT will use a DRB or a DRA on the project.²⁴⁵ ODOT typically uses a traditional, standing three-person DRB for projects that are in excess of $20 million and/or of a highly technical nature. It uses a single-person DRA for projects with contract values between $5 million and $20 million, with the DRA also acting in a traditional DRB capacity (e.g., attending quarterly meetings and being involved in more than the resolution of a dispute).

The first several steps of ODOT’s Dispute Resolution and Administrative Claims Process are the same regardless of whether a DRB or DRA is involved. When a dispute is not resolved on-site, it is referred to the District Dispute Resolution Committee (DDRC).²⁴⁶ The DDRC will review specific information, meet with the contractor, and issue a decision. If the contractor is dissatisfied, it must either abandon the claim or take an affirmative step to go to the next stage of the process.

For projects without a DRB or DRA, the next stage is for the contractor to file a notice of intent to file a claim with the Dispute Resolution Coordinator in the Division of Construction Management and request either: (a) a Director’s Claim Board hearing on the claim; or (b) Alternative Dispute Resolution (ADR). These processes contemplate:

• Director’s Claim Board. This process involves the Board having a hearing on the claim and submitting a written recommendation on the disposition of the claim to the Director.²⁴⁷ The Director will consider the Board’s recommendation and make a final decision, which is the last step

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²³⁹ NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION SECTION 104.05 - CLAIMS FOR ADJUSTMENT (January 1, 2023); NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, CONSTRUCTION RECORDS MANUAL SECTION 8 - NOTICE OF INTENT TO FILE A CLAIM/CONTRACTOR CLAIMS (June 2023) (“NDDOT CONSTRUCTION MANUAL”).

²⁴⁰ N.D. CENT. CODE § 24-02-26.1 (Condition precedent to contractor demand for highway construction arbitration – Claims for extra compensation).

²⁴¹ N.D. CENT. CODE § 24-02-26.1.

²⁴² NDDOT CONSTRUCTION MANUAL, Chapter 8, p. 32.

²⁴³ N.D. CENT. CODE § 24-02-30.

²⁴⁴ OHIO DEPARTMENT OF TRANSPORTATION CONSTRUCTION AND MATERIALS SPECIFICATIONS (Online Version 10/20/2023).

²⁴⁵ ODOT CONSTRUCTION ADMINISTRATION MANUAL OF PROCEDURES SECTION 108.02.G - DISPUTE RESOLUTION AND ADMINISTRATIVE CLAIMS PROCESS (2017).

²⁴⁶ Each District is to establish a DDRC consisting of the District Deputy Director, District Construction Engineer and the Capital Program Administrator (other than the project personnel involved in the dispute).

²⁴⁷ The Board consists of the Deputy Director of the Division of Construction Management, Deputy Director of Engineering, and a District Capital Program Administrator from a district not involved in the claim.

of ODOT’s Dispute Resolution Process and may not be appealed within ODOT.

• ADR. The ADR process entails the parties either choosing arbitration or mediation in the manner in which those methods are practiced by ODOT and allowed by law. The Dispute Resolution Coordinator will obtain a written agreement from the parties as to the ADR method and selection of the neutral third-party or technical expert.

These specifications further state that ODOT’s Dispute Resolution and Administrative Claim process is a condition precedent to filing an action in the Ohio Court of Claims, but that the procedures “do not otherwise compromise the Contractor’s right to seek relief in any Ohio Court with legal jurisdiction.”

Projects using either a DRB or DRA operate under Practice Notes 108 and 109, which respectively define the DRB and DRA process.²⁴⁸ Under the Practice Notes, the contractor is to first file with the DRB/DRA a notice of intent to appeal the DDRC decision to the DRB/DRA and request a hearing. The hearing will take place in accordance with the DRB/DRA Operating Procedure and result in a nonbinding recommendation on the dispute for the parties to consider and act upon. The Practice Notes also state that the contractor has the option to opt out of the DRB/DRA process and request that ODOT have the claim proceed through binding arbitration, although ODOT has the discretion to decline the Contractor’s request. The binding arbitration process will be discussed in Chapter V.

37. Oklahoma

The Oklahoma Department of Transportation (ODOT) standard specifications provide that if a contractor’s claim is formally denied, or not timely responded to, the contractor is to proceed “in accordance with the currently adopted dispute resolution procedure included in the Contract.”²⁴⁹ The dispute procedure that is referred to is called Form 2300, “Contract Dispute Resolution Procedures,” and contains a comprehensive process for addressing and resolving contractor claims.²⁵⁰

Claims that are not resolved at the resident engineer level can be appealed by the contractor to ODOT’s director of operations for a final decision. If the contractor is dissatisfied with that decision, the contractor is required to request mediation in accordance with the AAA’s mediation rules. Termination of the mediation is a requirement to the initiation of binding dispute resolution. If mediation is unsuccessful, the contractor is to file suit in the district court in Oklahoma City. However, if the parties agree, they may petition the district court to refer the matter to binding arbitration. This will be discussed in more detail in Chapter V.

Based on interviews with Oklahoma’s attorney general’s office, ODOT has not had litigation proceedings for the past 15 years. Claims that have been brought were typically resolved by discussions and negotiations directly between the parties, and at times in mediation.

38. Oregon

The Oregon Department of Transportation (ODOT) standard specifications contain a comprehensive procedure for resolving disagreements over additional compensation or time that involves a number of ADR processes.²⁵¹ The ODOT Construction Manual also offers more detailed guidance on the claims process and who is involved.²⁵²

The first process occurs after the initial evaluation of the dispute by the project engineer, where the contractor may request the use of a Third Party Neutral to review the protest.²⁵³ If ODOT agrees, then the procedures for selecting and using the neutral would be specified by change order. It appears that the term “Third Party Neutral” is not defined but seems to trigger the use of a variety of options, including a partnering facilitator, technical expert, DRB, or even mediator. If the parties are unable to reach agreement on the use of such a neutral, the contractor has the right to file a formal claim in compliance with the details identified in the specification.²⁵⁴

Once the claim is submitted, the decision on it elevates from the project engineer to a Region-Level Review, and ultimately to the contract administration engineer for an Agency-Level Review. The Agency-Level Review is the final administrative process and is expected to take place with meetings by the parties. If the contractor does not accept the contract administration engineer’s decision, it has multiple options, depending upon the values of money and time that are at issue.²⁵⁵ These options are:

• Claims Less than $50,000. Binding arbitration before a single arbitrator.
• Claims of $50,000 to $500,000. Claims Review Board, with the contractor to select a member, ODOT to select a member, and the two appointees to select the final member. The process described in the specification appears comparable to a typical ad hoc DRB, and the recommendation

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²⁴⁸ PN 108, DISPUTE RESOLUTION BOARD PROCESS (10/21/2022), available at https://www.dot.state.oh.us/Divisions/ConstructionMgt/Specification%20Files/PN108_10212022_for_2023.pdf (last visited October 21, 2023). PN 109, DISPUTE RESOLUTION ADVISOR PROCESS, available at https://www.dot.state.oh.us/Divisions/ConstructionMgt/Specification%20Files/PN109_10212022_for_2023.pdf (last visited October 21, 2023).

²⁴⁹ OKLAHOMA DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION SECTION 105.18 - CLAIMS FOR ADJUSTMENT (2019).

²⁵⁰ SPECIAL PROVISIONS, CONTRACT DISPUTE RESOLUTION PROCEDURES, Form CZ002300 (January 2, 2013).

²⁵¹ OREGON DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR CONSTRUCTION SECTION 00199 - DISAGREEMENTS, PROTESTS, AND CLAIMS (20 24) (“ODOT STANDARD SPECIFICATIONS”).

²⁵² ODOT CONSTRUCTION MANUAL CHAPTER 27 - DISAGREEMENTS, DISPUTES AND CLAIMS available at https://www.oregon.gov/odot/Construction/Doc_ConstructionManual/cm27.pdf (last visited October 21, 2023).

²⁵³ ODOT STANDARD SPECIFICATIONS SECTION 00199.20(g) - PROTEST EVALUATION BY THIRD PARTY NEUTRAL.

²⁵⁴ ODOT STANDARD SPECIFICATIONS SECTION 00199.30 - CLAIMS PROCEDURE.

²⁵⁵ ODOT STANDARD SPECIFICATIONS SECTION 00199.40 - CLAIM DECISION; REVIEW; EXHAUSTION OF ADMINISTRATIVE REMEDIES.

is neither binding nor admissible in subsequent legal proceedings. ODOT will provide a decision on the claim after the recommendation.

• Claims over $500,000. The parties may agree to use the Claims Review Board or proceed to litigation.

The specifications state that disputes are to be brought exclusively within the Circuit Court for the State of Oregon in the county where ODOT’s main office is located. If a dispute must be brought in a federal forum, then it shall be brought in the United States District Court for the District of Oregon.²⁵⁶ Litigation is contemplated to be filed only after all of the available administrative remedies have been exhausted. The specifications also allow the parties to agree to use nonbinding mediation at any time, with the rules, time, place, and mediator being established by mutual agreement.²⁵⁷

39. Pennsylvania

The Pennsylvania Department of Transportation (PennDOT) standard specifications primarily address the resolution of claims in Section 105.01 (Authority of the Representative).²⁵⁸ When a contractor has a claim, it is to submit a notice of intent to claim to the PennDOT contracting officer. The contracting officer will attempt to settle and resolve the claim with the contractor and has the discretion to conduct a claim review meeting with the contractor. If the claim is unresolved, the contracting officer will issue a final determination of the claim, which will serve as PennDOT’s final order regarding the claim. The contractor has the right to appeal the contracting officer’s decision with the Board of Claims. The above-referenced process is derived from the Pennsylvania Procurement Code, which not only explains how to address pre-litigation disputes, but also establishes the Board of Claims.²⁵⁹

The Board of Claims is both a judicial and an independent administrative agency that has jurisdiction to hear and determine contract claims against the Commonwealth of Pennsylvania.²⁶⁰ Its rules are comprehensive and contemplate typical discovery and hearing processes. The board publishes its decisions (similar to Ohio DOT) on its website.²⁶¹ Appeals from board decisions are filed with the Commonwealth Court in accordance with 42 Pa.C.S.A. § 763.²⁶²

While there is nothing in the PennDOT specifications or website about the use of ADR processes, PennDOT used a DRB for the first time on its Rapid Bridge Replacement project, delivered through a P3 approach.²⁶³ The DRB functioned as a traditional, three-member standing DRB through the life of the project’s construction. The DRB was to be used for disputes at the project level and before they reached the Contracting Officer for a final decision.

40. Rhode Island

The Rhode Island Department of Transportation (RIDOT) standard specifications provide little guidance on the internal process for handling claims.²⁶⁴ The claims provision identifies what the contractor is to submit but does not explain the hierarchy within RIDOT if disputes are not resolved at the project level.²⁶⁵ The procedure for claims and disputes addresses using RIDOT’s internal processes, but those processes are not in the specifications. Unresolved disputes are to be submitted either to binding arbitration or litigation for resolution in accordance with Rhode Island law.²⁶⁶ Under Rhode Island law, RIDOT is required to arbitrate any disputes less than $100,000. If both RIDOT and the contractor agree, the parties can arbitrate any amount over $100,000.²⁶⁷ If the parties do not consent to arbitration for amounts over $100,000, then the claim is to be brought in the superior court for Providence County, Rhode Island.²⁶⁸

41. South Carolina

The South Carolina Department of Transportation (SCDOT) standard specifications and construction manual do not address the resolution of claims above the project level in any meaningful detail.²⁶⁹ Rather, the claims procedure is set forth in a Supplementary Specification, which has a comprehensive explanation

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²⁵⁶ ODOT STANDARD SPECIFICATIONS SECTION 00170.00 - LEGAL RELATIONS AND RESPONSIBILITIES, GENERAL.

²⁵⁷ ODOT STANDARD SPECIFICATIONS SECTION 00199.50 - MEDIATION.

²⁵⁸ PENNSYLVANIA SPECIFICATIONS, PUB 408/2020 (Change 7, effective October 6, 2023) (“PENNDOT SPECIFICATIONS”). There are references to “dispute resolution” in several other areas of the specifications, including: (a) Section 108.06 - Time Extensions and Reductions; (b) Section 110.03 - Additional Work, Extra Work, and Extra Work on a Force Account Basis; and (c) Section 110.08 - Final Inspection, Acceptance, and Final Payment. These involve disputes over the district Engineer’s decisions, and because they do not always refer back to the Section 105.01 process, there may be some confusion on the dispute resolution ladder within PennDOT.

²⁵⁹ 62 Pa.C.S.A. § 1712.1 (Contract Controversies).

²⁶⁰ http://www.boc.state.pa.us/descript.htm (last visited October 22, 2023). The Board’s website notes that it is the successor to the “Board of Arbitration of Claims.”

²⁶¹ http://www.boc.state.pa.us/other.htm (last visited October 22, 2023).

²⁶² 62 Pa.C.S.A. § 1725(f) (Appeals).

²⁶³ The P3 contract is available at the following website, and Section 30 defines the Dispute Resolution Process: https://www.penndot.pa.gov/ProjectAndPrograms/p3forpa/Documents/Rapid%20Bridge%20Replace%20Project/PPA_-_EXECUTED%20Jan%208%202014.pdf (last visited October 22, 2023).

²⁶⁴ RHODE ISLAND DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (2004 edition, amended March 2018) (“RIDOT SPECIFICATIONS”).

²⁶⁵ RIDOT SPECIFICATIONS SECTION 105.18 - CLAIMS FOR ADJUSTMENTS AND DISPUTES.

²⁶⁶ RIDOT SPECIFICATIONS SECTION 105.19 - PROCEDURE FOR CLAIMS AND DISPUTES.

²⁶⁷ R.I. GEN. LAWS § 37-16-2(c) (2022).

²⁶⁸ R.I. GEN. LAWS § 37-13.1-1 (2022).

²⁶⁹ SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, 2007 STANDARD SPECIFICATIONS FOR HIGHWAY CONSTRUCTION SECTION 105.16 - CLAIMS FOR ADJUSTMENTS AND DISPUTES; SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, CONSTRUCTION MANUAL SECTION 105.16.2 - CONTRACTOR CLAIMS POLICY AND PROCEDURE (2004).

of the process.²⁷⁰ This procedure is identified as a “nonbinding” condition precedent to litigation or any other form of dispute resolution, and is intended to cover the disputes process from the time a Certificate of Claim is submitted under the SCDOT standard specifications through litigation. These procedures are deemed to be settlement discussions and non-admissible in litigation.

Once the Certificate of Claim is submitted, it is to be reviewed and acted upon by SCDOT’s director of construction. Decisions for claims under $50,0000 are final and not subject to further administrative action, with the contractor’s recourse being litigation in the South Carolina Circuit Court for Richland County. If the contractor disputes the director’s decision on a claim in excess of $50,000, the matter will be referred to a standing DRB for review and nonbinding recommendation. If the claim is still unresolved after the DRB process, the contractor has the right to pursue litigation in the above-referenced court. These procedures presume that the project is using a standing, traditional three-member DRB. Based on the survey results, SCDOT virtually always uses a DRB process on its projects, although the published literature did not provide any explanation as to when the agency would or would not use the process.

42. South Dakota

The South Dakota Department of Transportation (SDDOT) standard specifications address the claims process through Section 5.17 (Claims for Adjustment and Disputes).²⁷¹ While the details in Section 5.17 are clear, SDDOT’s Construction Manual provides much more granularity into the mechanisms and timing of the process and should be reviewed in conjunction with Section 5.17.²⁷²

If the dispute is not resolved at the project level (i.e., with the area engineer), it is submitted to the region engineer. If the contractor is dissatisfied with that result, it can elect to have the claim reviewed by SDDOT’s Claim Review Panel, which consists of the secretary of transportation, SDDOT’s director of planning and engineering, the state construction & maintenance engineer, and the remaining SDDOT region engineers who are not responsible for the project for which the claim was submitted. After the panel conducts a claims review meeting, the secretary of transportation issues the final SDDOT determination on the claim.

If the contractor disagrees with that final determination, it may pursue other remedies available by South Dakota law. The specifications specifically mention that one option is to request nonbinding mediation, which will be used if the secretary agrees. Under South Dakota law, contractors can sue SDDOT in the county where all or part of the construction work was performed.²⁷³

43. Tennessee

The claims process for the Tennessee Department of Transportation (TDOT) is set forth in Section 105.16 (Claims for Adjustment and Disputes) of its standard specifications.²⁷⁴ Claims that are unresolved after the contractor has filed a certified claim are subject to internal appeal, although the specification does not clearly explain who at TDOT is the final authority for determining that appeal.²⁷⁵ The specifications state that appeals from that decision may be brought by the contractor with the Tennessee Claims Commission. The Claims Commission functions as a court and follows the Tennessee Rules of Civil Procedures and the Tennessee Rules of Evidence.²⁷⁶

While the commission’s decisions are appealable, there are limitations. The commission’s factual findings are presumed to be correct, and appellate courts will not overturn those findings unless the evidence preponderates against them. Tennessee courts accord great deference to the commission’s determinations on matters of witness credibility and do not re-evaluate that assessment in the absence of clear and convincing evidence to the contrary. On the other hand, the commission’s conclusions of law are subject to de novo with no presumption of correctness.²⁷⁷

Nothing in the published literature discusses TDOT’s ability to use nonbinding dispute processes. Based upon the surveys, TDOT has used nonbinding mediation procured through the State Attorney General Office, and it found that process to be very effective in resolving construction disputes. The survey indicated that TDOT does not have the authority to use DRBs.

44. Texas

The Texas Department of Transportation (TxDOT) has a well-defined and comprehensive process for resolving claims and disputes. TxDOT’s standard specifications have some basic

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²⁷⁰ CLAIMS PROCEDURE, SUPPLEMENTAL SPECIFICATION (January 1, 2021), available at https://www.scdot.org/business/technicalPDFs/supSpecs/Claims_Procedure_010121_Approved.pdf (last visited October 22, 2023).

²⁷¹ SOUTH DAKOTA STANDARD SPECIFICATIONS FOR ROADS AND BRIDGES (2015), as modified by the SDDOT’s Supplemental Specifications (September 7, 2022).

²⁷² SDDOT CONSTRUCTION MANUAL, PROJECT MANAGEMENT SECTION CHAPTER 11 - CCO’S, PRICE NEGOTIATIONS, AND CLAIMS (Revised July 2021).

²⁷³ SDCL § 31-2-34. Note that there appear to be no restrictions on having a jury trial, based on the absence of such language in the statute and several cases that involve appeals of jury trial verdicts involving SDDOT (see, e.g., Fisher Sand & Gravel Co. v. State, 558 N.W.2d 864 (S.D. 1997).

²⁷⁴ TENNESSEE DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (January 1, 2021) (“TDOT STANDARD SPECIFICATIONS”).

²⁷⁵ TDOT STANDARD SPECIFICATIONS SECTION 105.16.E - APPEALS PROCESS.

²⁷⁶ https://treasury.tn.gov/Explore-Your-TN-Treasury/About-the-Treasury/Claims-Commission (last visited October 22, 2023).

²⁷⁷ There are several reported cases explaining appeals from Commission decisions and these principles, including several appeals from cases where TDOT was a party. See, e.g., Ray Bell Constr. Co., Inc. v. State, Tenn. Dep’t of Transp., 356 S.W.3d 384, 386 (Tenn. 2011) and APAC-Atlantic, Inc., Harrison Construction Division v. State, 013 WL 5883697 (Court of Appeals of Tennessee 2013).

discussion of the topic.²⁷⁸ However, the details to the process are set forth in Chapter 8 (Disputes and Claims) of the TxDOT Construction Contract Administration Manual.²⁷⁹ The manual is based upon the Texas statute that addresses contract claims procedures²⁸⁰ and describes how the hierarchy within TxDOT will consider decisions made at lower levels of the agency.

Decisions at the district engineer level are appealed to a Contract Claims Committee for an informal meeting. The committee is composed of division directors and one or more district engineers.²⁸¹ If the contractor is dissatisfied with the proposed disposition of the claim, the contractor may petition for a contested hearing before the State Office of Administrative Hearings. These hearings are presided over by an administrative law judge, who will render a final decision regarding the claim that will be submitted to TxDOT’s executive director for adoption. However, the executive director has the ability to modify the order, providing a written statement for the reason he/she did so.²⁸² The director’s final order is subject to judicial review under Chapter 2001 (Administrative Procedure), Government Code, under the substantial evidence rule.

The applicable Texas statute on claims does address both P3 (i.e., comprehensive development agreements) and design-build contracts, specifying that the disputes procedures may be different in those contracts.²⁸³ The use of binding DRBs was addressed in Chapter III. TxDOT has also routinely used nonbinding mediation and traditional, standing three-member DRBs (called “Dispute Review Panels”) as part of its dispute resolution process on some of its P3 and design-build projects.²⁸⁴

45. Utah

The Utah Department of Transportation (UDOT) predominately addresses claims in Sections 1.20 (Claims Higher Level Review) and 1.21 (Claims Review Board) of its standard specifications.²⁸⁵ Section 1.20 requires the parties to make a good-faith effort to settle the claim by using the Partnering Escalation Ladder in UDOT’s Partnering Field Guide before a claim is submitted or a meeting requested with the Claims Review Board. UDOT has the option of using DRBs on its projects, with the DRB being considered part of the partnering process.²⁸⁶ UDOT’s DRB specification indicates that it is a standing, three-member DRB that has regular meetings and will provide a nonbinding recommendation based upon disputes presented to it.

Section 1.21 of the standard specifications addresses the constitution of and process used by the board. It states that the board’s purpose is to provide an “independent and impartial review of submitted claims, written findings, and recommendations to the department’s deputy director.” Presentations will be circulated in advance of the informal meeting, and lawyers are only allowed to make brief opening and closing remarks and advise their clients. While not specifically stated in the specifications, the board will make its findings for consideration by the parties. Ultimately, the department deputy director will make a decision, which is considered UDOT’s final administrative decision. If the contractor is dissatisfied, its rights are to file a complaint in state court.

46. Vermont

The Vermont Agency of Transportation (VTrans) defines its claim and disputes process in its standard specifications.²⁸⁷ Claims not resolved by the VTrans region director can be appealed to the chief engineer, who is to “act as referee in all questions of dispute arising under the terms of the Contract.”²⁸⁸

The chief engineer has discretion to determine what information is needed to render a decision, including obtaining documents, conducting interviews, and/or having an informal meeting with the contractor. The chief engineer’s final written determination (called the “Final Claim Judgment”) is VTrans’ final determination on the claim and is to include findings of fact and conclusions of law. If the contractor wants to appeal this determination, it is to seek appellate review at the Transportation Board.

The Transportation Board consists of seven members and can use a hearing officer to consider appeals from the chief engineer.²⁸⁹ The specifications state that the Transportation Board is to defer to the factual findings contained in the Final Claim Judgment and review the legal conclusions de novo. Either party can appeal final orders of the board to the Vermont Supreme Court, which appeal is to be “reviewed on the record.”

47. Virginia

The VDOT defines its claims process in Section 105.19 (Submission and Disposition of Claim) of its standard specifications, with that process being dictated by what is specified by statute.²⁹⁰ The specifications state that if the contractor is dissatisfied with

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²⁷⁸ TEXAS DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR CONSTRUCTION AND MAINTENANCE OF HIGHWAYS, STREETS AND BRIDGES ITEM 4 - SCOPE OF THE WORK, SECTION 7 - DISPUTE OR CLAIMS PROCEDURE (November 1, 2014).

²⁷⁹ TEXAS DEPARTMENT OF TRANSPORTATION, CONSTRUCTION CONTRACT ADMINISTRATION MANUAL (November 2022).

²⁸⁰ 43 TEX. ADMIN. CODE § 9.2 (Contract Claims Procedure).

²⁸¹ 6 TEX. TRANSP. CODE § 201.112(d).

²⁸² 43 TEX. ADMIN. CODE § 9.2(g)(4).

²⁸³ 43 TEX. ADMIN. CODE § 9.2(c).

²⁸⁴ See, for example, the I-35 Phase 2 design-build contract, dated September 17, 2021. The applicable dispute provisions are set forth in Section 11.1 (Dispute Resolution Procedures), Exhibit 20 (Dispute Resolution Requirements) and Exhibit 21 (Operating Procedures). These are available at https://ftp.txdot.gov/pub/txdot/pfd/strategic-contracts/alt-delivery/i35ephase2/abvd/execdba.pdf (last visited October 22, 2023).

²⁸⁵ UTAH DEPARTMENT OF TRANSPORTATION, 2017 STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (“UDOT STANDARD SPECIFICATIONS”).

²⁸⁶ UDOT STANDARD SPECIFICATIONS SECTION 00747 - DISPUTE REVIEW BOARD.

²⁸⁷ VERMONT AGENCY OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR CONSTRUCTION SECTION 105.20 - CLAIMS FOR ADJUSTMENT (2024) (“VTRANS STANDARD SPECIFICATIONS”).

²⁸⁸ VTRANS STANDARD SPECIFICATIONS SECTION 105.04 - CHIEF ENGINEER TO BE REFEREE.

²⁸⁹ 19 V.S.A. § 5(c).

²⁹⁰ VIRGINIA DEPARTMENT OF TRANSPORTATION ROAD AND BRIDGE SPECIFICATIONS (2020); VA. CODE § 33.2-1101, et seq.

a decision at the project level, it shall notify the VDOT commissioner that it desires to appear before the commissioner, whether in person or through counsel, and present additional facts and arguments in support of its claim. The commissioner will issue a decision after the meeting and provide a written decision on the claim.²⁹¹ If a contractor wants to pursue the claim after the commissioner’s decision, it must file suit in the Circuit Court of the City of Richmond or where the highway project that is the subject of the contract is located. Trials are by the court and without a jury.²⁹²

While the VDOT specifications do not directly address the use of DRBs or other forms of ADR, VDOT (and other state and local agencies) is allowed by statute to use nonbinding processes, including both nonbinding arbitration and mediation.²⁹³ Based on survey results, VDOT has used mediation, independent experts, facilitated partnering, and (on rare occasions) standing DRBs. For example, and as noted in Chapter II, VDOT is currently using a traditional, standing DRB on its Hampton Roads Bridge Project, which is the largest project in VDOT’s history. Because of the statute referenced above, which requires that the alternative dispute process be nonbinding, VDOT does not view itself as being authorized to use binding arbitration.

48. Washington

The WSDOT comprehensively addresses its disputes process in WSDOT’s standard specifications.²⁹⁴ Before reviewing this, it is important to recognize that WSDOT has long used DRBs on its projects, and the treatment of unresolved claims is dependent upon whether a DRB has been empaneled or will be empaneled on the project.

The specifications state that if negotiations fail to resolve a dispute, the contractor is to provide written notification of its intent to pursue the dispute further.²⁹⁵ When the proposal form includes the bid item “Disputes Review Board,” unresolved disputes are to be presented to the DRB, which is a condition precedent to any further right of the contractor to pursue the dispute either by certified claim or litigation/arbitration. If the bid item does not include the reference to “Disputes Review Board,” the contractor’s written notice is to whether the contractor is requesting to resolve the dispute using a Disputes Review Board or whether it will submit a formal certified claim to WSDOT. If the contractor requests a DRB and WSDOT agrees, the parties will move forward to put a DRB in place. If WSDOT disagrees, then the contractor will be obligated to submit a certified claim. The specifications set forth a detailed DRB process and, consistent with the traditional use of that process, the DRB is to provide the parties with a nonbinding recommendation on the dispute.²⁹⁶ If the dispute is not resolved, the contractor is to submit a certified claim, a process that is typical of that used by most DOTs and set forth in detail in the specifications.²⁹⁷

Certified claims that have not been resolved are subject to either arbitration or litigation, depending on the monetary value.²⁹⁸ Arbitration is mandatory for claims which total $1,000,000 or less, although the parties can mutually agree to arbitration for claims in excess of that amount. Claims that exceed the arbitration threshold are to be litigated in Thurston County Superior Court, or such other superior court upon which the parties may agree. The WSDOT specifications also permit mediation to be used after WSDOT has been given an opportunity to respond to the contractor’s certified claim. Mediation and its processes are subject to mutual agreement by the parties.²⁹⁹

49. West Virginia

While the West Virginia Department of Transportation Division of Highways (WVDOH) standard specifications provide little guidance on how to address unresolved claims, the WVDOH Construction Manual does.³⁰⁰ The manual provides a workflow that explains what happens when a claim is submitted and who is charged with taking what action.³⁰¹ Disputes that are not resolved at the project level are brought to the regional construction engineer for decision. If the dispute is unresolved at that point and a DRB is in place, the DRB is to provide a nonbinding recommendation. If a DRB is not in place, or if the DRB’s recommendation does not result in a resolution, the contractor is to submit a “Notice of Potential Claim” form. This triggers involvement by both the WVDOH Contract Administration Division and the Legal Division. If the claim is not resolved and the contractor files a formal complaint before the West Virginia Legislative Claims Commission or any court of law, the Legal Division takes the lead in dealing with the matter.³⁰²

The commission has exclusive jurisdiction over all construction contract claims against the state, as well as a variety of other

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²⁹¹ VA. CODE § 33.2-1101.

²⁹² VA. CODE § 33.2-1103.

²⁹³ VA. CODE § 2.2-4366 (Alternative dispute resolution).

²⁹⁴ WASHINGTON DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR ROAD, BRIDGE, AND MUNICIPAL CONSTRUCTION SECTION 1-04.5 - PROCEDURE, PROTEST, AND DISPUTE BY CONTRACTOR; SECTION 1-09.11 - DISPUTES AND CLAIMS; AND SECTION 1.09-13 - CLAIMS RESOLUTION, (2024) (“WSDOT STANDARD SPECIFICATIONS”).

²⁹⁵ WSDOT STANDARD SPECIFICATIONS SECTION 1-04.5(1) – DISPUTES.

²⁹⁶ WSDOT STANDARD SPECIFICATIONS SECTION 1-04.5(1)A – DISPUTES REVIEW BOARD.

²⁹⁷ WSDOT STANDARD SPECIFICATIONS SECTION 1-09.11(2) – CLAIMS.

²⁹⁸ WSDOT STANDARD SPECIFICATIONS SECTION 1-09.13(1) – CLAIMS RESOLUTION – GENERAL.

²⁹⁹ WSDOT STANDARD SPECIFICATIONS SECTION 1-09.13(2) – MEDIATION.

³⁰⁰ WEST VIRGINIA DEPARTMENT OF TRANSPORTATION DIVISION OF HIGHWAYS STANDARD SPECIFICATION FOR ROADS AND BRIDGES SECTION 105.17 - CLAIMS FOR ADJUSTMENT AND DISPUTES (2017); WEST VIRGINIA DEPARTMENT OF TRANSPORTATION DIVISION OF HIGHWAYS CONSTRUCTION MANUAL (2022) (“WVDOH CONSTRUCTION MANUAL”).

³⁰¹ WVDOH CONSTRUCTION MANUAL SECTION 105.4.2.5 - GENERAL WORKFLOW FOR PROJECT DISPUTE AND CLAIMS.

³⁰² WVDOH CONSTRUCTION MANUAL SECTION 105.4.2.6 - LEGAL DIVISION INVOLVEMENT.

matters.³⁰³ While the commission applies the West Virginia Rules of Civil Procedure, it is not bound by the usual common law or statutory rules of evidence, and may accept and weigh, in accordance with its evidential value, any information that will assist the commission in determining the factual basis of a claim.³⁰⁴ Awards are made subject to final approval by the Legislature.³⁰⁵ It appears that there is no ability to appeal a decision by the commission, based on a recent case reviewing the legislation establishing the commission and assessing West Virginia law on sovereign immunity.³⁰⁶

50. Wisconsin

The Wisconsin Department of Transportation (WisDOT) standard specifications and construction manual provide for well-defined dispute resolution procedures.³⁰⁷ They specify a step-by-step notification process the contractor is to follow when requesting additional compensation, which is ultimately followed by the Region’s final decision. If the contractor does not agree with the decision, it can either file a formal, certified claim or, if WisDOT agrees, go through a third-party advisory opinion process.³⁰⁸ WisDOT’s third-party advisory opinion process contemplates the use of a single member DRB selected from a member of the statewide DRB roster. The process is similar to the advisory opinion process included as an option in many traditional, standing three-member DRBs, and is intended to be flexible to accomplish the goal of helping the parties negotiate a resolution to the dispute.³⁰⁹

If the third-party advisory opinion process was not used, or if it was used and did not result in a resolution, the contractor is to file a formal claim under Section 105.13 (Claims Process for Unresolved Claims) of the WisDOT Standard Specifications. This section states that the parties can use “an alternative dispute resolution method” at any point before WisDOT provides a final decision. In this regard, the Dispute Resolution Procedures of the WisDOT Construction Manual provide for the parties to create a three-member DRB that can be used to provide a formal, nonbinding recommendation on the dispute. The recommendation is admissible in subsequent litigation.³¹⁰

If the parties are unable to resolve their differences and WisDOT issues a final decision, the contractor may appeal the decision to WisDOT’s secretary or to the State of Wisconsin Claims Board. If it appeals to the secretary and obtains a negative decision, the contractor can also appeal that decision to the Claims Board.³¹¹ The board is not bound by common law or the rules of evidence and may hear testimony having reasonable value of evidence, excluding that which is immaterial, irrelevant, or unduly repetitious. It presents its findings and recommendations to the legislature for action. If the legislature refuses the claim, the contractor can file suit against the state.³¹²

51. Wyoming

The Wyoming Department of Transportation (WYDOT) dispute resolution procedures are set forth in Section 105.15 (Contract Amendment and Dispute Resolution) of WYDOT’s standard specifications.³¹³ Disputes that are not resolved at the resident engineer or district engineer level can be referred to the chief engineer, who will convene a meeting to resolve the dispute.³¹⁴ The chief engineer’s decision is the final action of WYDOT in relation to the claim. If the contractor is dissatisfied, it may sue the Wyoming Transportation Commission in state district court.³¹⁵

C. The CalPoly Report

Colorado DOT commissioned CalPoly Pomona to evaluate its dispute resolution program. It appears that this endeavor was prompted by a Colorado state senator, who presented a bill in early 2022 that expressed dissatisfaction with the CDOT construction disputes process, and particularly the allegations raised in a 2021 lawsuit filed by a Colorado contractor that alleged improprieties by CDOT in dealing with a DRB member.³¹⁶ While

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³⁰³ https://claims.wvlegislature.gov/summary-of-jurisdiction/ (last visited October 22, 2023).

³⁰⁴ W. VA. CODE, § 14-2-15 (Rules of practice and procedure).

³⁰⁵ https://claims.wvlegislature.gov/faqs/ (last visited October 22, 2023).

³⁰⁶ State of West Virginia ex rel. Ladanye v. West Virginia Legislative Claims Commission, 242 W.Va. 420 (Supreme Court of Appeals of West Virginia 2019).

³⁰⁷ WISCONSIN DEPARTMENT OF TRANSPORTATION, STANDARD SPECIFICATIONS FOR HIGHWAY AND STRUCTURE CONSTRUCTION SECTION 104.3 - CONTRACTOR NOTIFICATION AND SECTION 105.13 - CLAIMS PROCESS FOR UNRESOLVED CHANGES (2023) (“WISDOT STANDARD SPECIFICATIONS”). WISCONSIN DEPARTMENT OF TRANSPORTATION CONSTRUCTION AND MATERIALS MANUAL SECTION 253 - DISPUTE RESOLUTION AND SECTION 254 - CONTRACT CLAIMS (December 2022) (“WISDOT CONSTRUCTION MANUAL”).

³⁰⁸ WISDOT STANDARD SPECIFICATIONS SECTION 104.6 - REGION FINAL DECISION.

³⁰⁹ WISDOT CONSTRUCTION MANUAL SECTION 253.2 - THIRD-PARTY ADVISORY OPINION.

³¹⁰ WISDOT STANDARD SPECIFICATIONS SECTION 105.13.1 - GENERAL; WISDOT CONSTRUCTION MANUAL SECTION 253.3 - FORMAL DISPUTE REVIEW BOARD.

³¹¹ WISDOT CONSTRUCTION MANUAL SECTION 254.1 - BACKGROUND. The Claims Board is composed of a representative of the governor, a representative of the Department of Administration, a representative of the Department of Justice, and the chairpersons of the senate and assembly committees on finance.

³¹² WIS. STAT. § 775.01.

³¹³ WYOMING DEPARTMENT OF TRANSPORTATION STANDARD SPECIFICATIONS FOR ROAD AND BRIDGE CONSTRUCTION (2021) (“WYDOT STANDARD SPECIFICATIONS”).

³¹⁴ WYDOT STANDARD SPECIFICATIONS SECTION 105.15.8 - REFERRAL TO CHIEF ENGINEER.

³¹⁵ WYDOT STANDARD SPECIFICATIONS SECTION 105.15.9 - ADJUDICATION.

³¹⁶ SB 22-048, CONCERNING THE IMPROVEMENT OF THE DISPUTE REVIEW BOARD STAGE OF THE PROCESS USED TO RESOLVE CONTRACTUAL DISPUTES BETWEEN CONTRACTORS AND THE DEPARTMENT OF TRANSPORTATION (introduced January 18, 2022), available at https://leg.colorado.gov/sites/default/files/documents/2022A/bills/2022a_048_01.pdf (last visited October 29, 2023).