1. (a) Purpose. Government Code, Chapter 2260, provides a resolution process for certain contract claims against the state. Chapter 2260 applies to contracts of the department entered into under the State Purchasing and General Services Act. This section governs the filing, negotiation, and mediation of a claim. When used in this section, the terms "contract" and "contractor" are defined in Government Code, §2260.001.

2. (b) Filing of claim. A contractor may file a notice of claim with the executive director within 180 days after the date of the event giving rise to the claim. The claim must contain:

   1. (1) the nature of the alleged breach;
   2. (2) any amount the contractor seeks as damages; and
   3. (3) the legal theory supporting recovery.

3. (c) Negotiation.

   1. (1) The executive director shall negotiate with the contractor to resolve the claim;
   2. (2) Negotiations will begin no later than the 120th day after the date the claim is received by the department;
   3. (3) Negotiations may be written or oral; and
   4. (4) The executive director may afford the contractor an opportunity for a meeting to informally discuss the claim and provide the contractor with an opportunity to present relevant information.

4. (d) Mediation. The parties may agree to mediate a claim through an impartial third party. For the purposes of this section, "mediation" is assigned the meaning set forth in Civil Practice and Remedies Code, §154.023. The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Government Code, Chapter 2009. The parties may be assisted in the mediation by legal counsel or other individual.

   1. (1) The department and the contractor may agree to nonbinding mediation;
   2. (2) The department will agree to mediation if the executive director determines that mediation may speed resolution of the claim or otherwise benefit the department;
   3. (3) The mediator shall possess the qualifications required under Civil Practice and Remedies Code, §154.052;
   4. (4) Unless otherwise agreed in writing, each party shall be responsible for its own costs incurred in connection with a mediation, including without limitation, costs of document reproduction, attorney's fees, consultant fees and expert fees, and the cost of the mediator shall be divided equally between the parties.

5. (e) Final offer.

   1. (1) The executive director will make a final offer to the contractor within 90 days of beginning negotiations; and
   2. (2) If the final offer is acceptable to the contractor, the contractor must advise the executive director in writing within 20 days of the date of the final offer. The department will forward a settlement agreement to the contractor for signature to resolve the claim.
6. (f) Contested case hearing. If the contractor is dissatisfied with the final offer, or if the claim is not resolved before the 270th day after the claim is filed with the department, then, unless the parties agree in writing to an extension of time, the contractor may file a request with the executive director for an administrative hearing before the State Office of Administrative Hearings to resolve the unresolved issues of the claim under the provisions of Government Code, Chapter 2260, Subchapter C.

Source Note:The provisions of this §210.41 adopted to be effective March 6, 2025, 50 TexReg 1696.