1. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Commission--The Texas Transportation Commission.
   2. (2) Committee--The Contract Claim Committee.

   3. (3) Contract claim--A claim for additional compensation, time extension, or any other reason, arising out of a contract between the State of Texas, acting in its own capacity or as an agent of a local government, and a prime contractor, which is entered into and administered by the Texas Department of Transportation pursuant to Transportation Code, Section 22.018 (concerning the designation of the department as agent in contracting and supervising for aviation projects), Section 391.091 (concerning erection and maintenance of specific information logo, major area shopping guide, and major agricultural interest signs), Chapter 223 (concerning bids and contracts for highway improvement projects, Chapter 361 (concerning state highway turnpike projects, or Government Code, Chapter 2254, Subchapters A and B (concerning professional or consulting services). The claim may be brought by the department or a prime contractor:

      1. (A) based on privity of contract; or
      2. (B) on a prime contractor's continuing liability to a subcontractor for alleged damages sustained by the subcontractor arising from the contract, but not if the subcontractor releases the prime contractor from liability for damages caused by the prime contractor.
   4. (4) Department--The Texas Department of Transportation.
   5. (5) Department office--The department district, division, or office responsible for the administration of the contract.
   6. (6) Department office director--The chief administrative officer of the responsible department office, such officer to be a district engineer, division director, or office director.
   7. (7) District--One of the 25 districts of the department.
   8. (8) Executive director--The executive director of the Texas Department of Transportation.
   9. (9) Prime contractor--An individual, partnership, corporation, or other business entity that is a party to a written contract with the State of Texas which is entered into and administered by the Texas Department of Transportation pursuant to Transportation Code, Section 22.018, Section 391.091, Chapter 223, Chapter 361, or Government Code, Chapter 2254, Subchapters A and B.
   10. (10) Project--The portion of a contract that can be separated into a distinct facility or work unit from the other work in the contract.

2. (b) Contract claim committee.

   1. (1) The executive director will name the members and chairman of a contract claim committee or committees to serve at the executive director's pleasure. The chairman may add members to the committee, including one or more district engineers who will be assigned to the committee on a rotating basis, with a preference, if possible, for district engineers of districts that do not have a current contractual relationship with the prime contractor involved in the contract claim. It will be the responsibility of a committee to gather information, study, and meet informally with prime contractors, if requested, to resolve any disputes relating to the department's project engineer's final decision and the prime contractor, and which result in one or more contract claims.
   2. (2) The commission stresses that, to every extent possible, disputes between a prime contractor and the department's project engineer should be resolved during the course of the contract. If, however, after completion of a contract, or when required for orderly performance prior to completion, resolution of a contract claim is not reached by the parties, either party may file a detailed report and contract claim request with the department office director under whose administration the contract was or is being performed, the department's Construction Division, or the committee. The claim must be filed within one year after the date of the acceptance of the project. Documents filed with the office director or the Construction Division will be transmitted to the committee.
   3. (3) A contract claim, even when related to a direct appeal to the State Office of Administrative Hearings (SOAH) of a contract sanction, cannot be appealed to SOAH before the Contract Claim Committee procedure is completed.
   4. (4) The committee will secure detailed reports and recommendations from the responsible department office, and may confer with any other department office deemed appropriate by the committee.
   5. (5) The committee will then afford the prime contractor an opportunity for a meeting to informally discuss the disputed matters and to provide the prime contractor an opportunity to present relevant information and respond to information the committee has received from the department office.
   6. (6) The committee chairman will give written notice of the committee's proposed disposition of the claim to the parties. If that disposition is acceptable, the claimant shall advise the committee chairman in writing within 20 days of the date such notice is received, and the chairman will forward to the commission an agreed order involving, when required, payment either to the department or the prime contractor on the claim. If the claimant is dissatisfied with the proposal of the committee, the claimant may petition the executive director for a formal administrative hearing to litigate the claim pursuant to the provisions of §§1.21 et seq. of this title (relating to Contested Case Procedure).
   7. (7) If the claimant fails to petition the executive director within 20 days after notice of the committee's recommendation is received, that recommendation will be forwarded to the executive director for adoption as a final order, and all further litigation of claims on the project or contract by the claimant shall be barred by the doctrines of issue and claim preclusion.
   8. (8) Proceedings before the department office director or the committee are in the nature of an attempt to mutually resolve a contract claim without litigation and are not admissible for any purpose in a formal administrative hearing provided in paragraph (6) of this subsection. All oral communications, reports, or other written documentation prepared by department staff in connection with the analysis of a contract claim are part of the attempt to mutually resolve a contract claim without litigation, and are also not admissible for any purpose in a formal administrative hearing provided in paragraph (6) of this subsection.
   9. (9) The administrative law judge's proposal for decision in a formal administrative hearing provided in paragraph (6) of this subsection shall be submitted to the executive director for adoption. The executive director may change a finding of fact or conclusion of law made by the administrative law judge or may vacate or modify an order issued by the administrative law judge. The executive director shall provide a written statement containing the reason and legal basis for any change.

Source Note:The provisions of this §9.2 adopted to be effective July 9, 1996, 21 TexReg 5979; amended to be effective January 10, 1999, 24 TexReg 167; amended to be effective October 16, 2003, 28 TexReg 8957; amended to be effective February 17, 2005, 30 TexReg 724.