It is critical to resolve all disputes for cost and time during construction as contemporary as possible to the event(s). Timely resolution simplifies negotiations, is more likely to include individuals involved in the events when memories are fresh, facilitates better understanding with fewer people involved at a lower level, and creates a track record of solutions making future negotiations more successful. Claims for disputed work, contract time delay, and assessment of liquidated damages are common at the completion of a construction project. The Construction Administrator should conduct a final review for Contractor's claim(s) at the completion of the project and attempt to resolve any disputed cost and time impacts and to equitably address the merits of a contractor's claim(s). The closeout claims negotiation process is as follows:
Claims Review Board: If a contractor’s claim was not resolved through negotiations, then an official hearing may be scheduled following the completion of all work and acceptance of the project. CPDC shall be contacted, who will then organize and chair the hearing. The hearing is scheduled after completion so that only one such hearing will be held for a given project. The hearing shall be relatively formal and structured but without legal counsel. The results will be in writing and transmitted formally to all involved parties.
CPDC has two written procedures for administering a Contractor’s Claims Review Board hearing. Part I describes the process for filing a claim and describes the Claims Review Board process and may be shared with the contractor. Part II is an internal document that describes the duties of the Board participants, and should not be shared with the contractor. It is important to have three members on the Board who have a good working knowledge of construction and the CSU contract general conditions. It is also important to have a neutral board who has not been involved with the project or decisions leading to the claim(s). Written claims review board procedures have been prepared for CPDC application. They propose composing a board with CPDC professional staff and campus staff, as necessary, to result in an appropriately composed, neutral board.
Guarantee: Each public works contract awarded by the Trustees has a guarantee period of one year, during which time the performance bond is in force. Certain individual items of work or equipment have longer guarantee periods. During the guarantee period, the campus is responsible to police the facility for malfunctions, and notify contractor of all items judged to be contractor's responsibility, and is issued in writing a "Notice to Perform". Refer to SUAM 9840-9842 for more information.
Warranty Item: Though the letter of the contract requires notification of warranty items to come from the Trustees to the Contractor, the Construction Administrator is usually the most knowledgeable to communicate warranty items to the Contractor. The letter can come from the Director/AVP or Vice President if emphasis is needed, and should quote the relevant section of Contract General Conditions (Article 8) and be copied to the bonding company, when deemed necessary and approved by General Counsel. The Contractor has ten days to perform, otherwise the Trustees may call in the bonding company, or have the campus perform the work and back-charge the Contractor.
Latent Defect: The Construction Administrator shall contact the contractor in the event of discovery of a latent defect on a project, and make arrangements for the contractor to repair the problem, pursuant to Article 8.06 of the Contract General Conditions. The Latent Defect period runs 10 years from the Notice of completion.