BILL NUMBER: AB 216 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Beall
FEBRUARY 3, 2009
An act to amend Sections 20104 and 20104.2 of the Public Contract
Code, relating to public contracts.
LEGISLATIVE COUNSEL'S DIGEST
AB 216, as introduced, Beall. Public contracts: claims.
Existing law authorizes a public entity to compromise or otherwise
settle any 3rd-party claim relating to a public works contract.
This bill would define "claim" for those purposes to mean a
written demand or assertion by a contractor, a local agency, charter
city, or charter county or other relief with respect to the contract
documents, as specified.
This bill would, for contracts entered into on or after January 1,
2010, provide for a mediation process and binding arbitration
process for claim disputes over $100,000 between a contractor and a
local agency, charter city, or charter county that does not have an
alternative dispute process, if those claims remain unresolved after
a specified time period.
By requiring local agencies, charter cities, and charter counties
to incorporate this mediation and binding arbitration process in
specified claim disputes, this bill would impose a state-mandated
local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20104 of the Public Contract Code is amended to
read:
20104. (a) (1) This article
applies to all public works claims of three hundred
seventy-five thousand dollars ($375,000) or less which
that arise between a contractor and a local agency ,
charter city, or charter county .
(2) This article shall not apply to any claims resulting from a
contract between a contractor and a public agency when the public
agency has elected to resolve any disputes pursuant to Article 7.1
(commencing with Section 10240) of Chapter 1 of Part 2.
(b) (1) "Public work" has the same meaning as in Sections 3100 and
3106 of the Civil Code, except that "public work" does not include
any work or improvement contracted for by the state or the Regents of
the University of California.
(2) "Claim" means a separate demand by the contractor for
(A) a time extension, (B) payment of money or damages arising from
work done by, or on behalf of, the contractor pursuant to the
contract for a public work and payment of which is not otherwise
expressly provided for or the claimant is not otherwise entitled to,
or (C) an amount the payment of which is disputed by the local agency
written demand or assertion by a contractor, local
agency, charter city, or charter county, including change
orders seeking an adjustment or interpretation of the terms of the
contract documents, payment of money, extension of time, or other
relief with respect to the contract documents, including a
determination of disputes or matters in question between the local
agency, charter city, or charter county and contractor arising out of
or related to the contract documents of the performance of the work
.
(c) The provisions of this article or a summary thereof shall be
set forth in the plans or specifications for any work which
that may give rise to a claim under this
article.
(d) This article applies only to contracts entered into on or
after January 1, 1991 2010 .
SEC. 2. Section 20104.2 of the Public Contract Code is amended to
read:
20104.2. For any claim subject to this article, the following
requirements apply:
(a) The claim shall be in writing and include the documents
necessary to substantiate the claim. Claims must be filed on or
before the date of final payment. Nothing in this subdivision is
intended to extend the time limit or supersede notice requirements
otherwise provided by contract for the filing of claims.
(b) (1) For claims of less than fifty one
hundred thousand dollars ($50,000)
($100,000) , the local agency , charter city, charter
county, or contractor shall respond in writing to any written
claim within 45 days of receipt of the claim, or may request, in
writing, within 30 days of receipt of the claim, any
additional documentation supporting the claim or
relating to defenses to the claim the local agency may have against
the claimant that the responding party reasonably and
in good faith believes supports the claim or relates to defenses to
the claim the local agency, charter city, charter county, or
contractor may have against the claimant .
(2) If additional information is thereafter required, it shall be
requested and provided pursuant to this subdivision, upon mutual
agreement of the local agency , charter city, charter county, or
contractor and the claimant.
(3) The local agency's , charter city's, charter county's, or
contractor's written response to the claim, as further
documented, shall be submitted to the claimant within 15 days after
receipt of the further documentation or within a period of time no
greater than that taken by the claimant in producing the additional
information, whichever is greater.
(c) (1) For claims of over fifty thousand dollars ($50,000) and
less than or equal to three hundred seventy-five thousand dollars
($375,000), the local agency shall respond in writing to all written
claims within 60 days of receipt of the claim, or may request, in
writing, within 30 days of receipt of the claim, any additional
documentation supporting the claim or relating to defenses to the
claim the local agency may have against the claimant.
(2) If additional information is thereafter required, it shall be
requested and provided pursuant to this subdivision, upon mutual
agreement of the local agency and the claimant.
(3) The local agency's written response to the claim, as further
documented, shall be submitted to the claimant within 30 days after
receipt of the further documentation, or within a period of time no
greater than that taken by the claimant in producing the additional
information or requested documentation, whichever is greater.
(d) If the claimant disputes the local agency's written response,
or the local agency fails to respond within the time prescribed, the
claimant may so notify the local agency, in writing, either within 15
days of receipt of the local agency's response or within 15 days of
the local agency's failure to respond within the time prescribed,
respectively, and demand an informal conference to meet and confer
for settlement of the issues in dispute. Upon a demand, the local
agency shall schedule a meet and confer conference within 30 days for
settlement of the dispute.
(e) Following the meet and confer conference, if the claim or any
portion remains in dispute, the claimant may file a claim as provided
in Chapter 1 (commencing with Section 900) and Chapter 2 (commencing
with Section 910) of Part 3 of Division 3.6 of Title 1 of the
Government Code. For purposes of those provisions, the running of the
period of time within which a claim must be filed shall be tolled
from the time the claimant submits his or her written claim pursuant
to subdivision (a) until the time that claim is denied as a result of
the meet and confer process, including any period of time utilized
by the meet and confer process.
(c) (1) This subdivision shall apply to all claims over one
hundred thousand dollars ($100,000) with any local agency, charter
city, charter county, or contractor that does not have an alternative
dispute process provided for by contract.
(2) Upon submission of the claim, the applicable local agency,
charter city, charter county, or contractor shall review the claim
and make a determination within a 45-day period as to what portion of
the claim, if any, is undisputed and shall satisfy that portion of
the claim. If the local agency, charter city, or charter county
requests additional information that it reasonably and in good faith
believes is necessary to analyze the claim or any portion of the
claim, it shall submit a request for information within 30 days of
the date on which it first receives the claim. Once a local agency,
charter city, charter county, or contractor has received additional
information, it shall have an additional 30-day period in which to
satisfy any undisputed portion of the claim, and to identify those
portions of the claim that it disputes. The maximum amount of time
the local agency, charter city, charter county, or contractor may
request additional information to extend the requirement that it
provide a final written determination is 105 days from the date of
the first submission of the claim, unless the parties mutually agree
to extend the time limits set forth in this section.
(3) In the event that there is any portion of a claim that remains
unresolved, either party may request a meet and confer conference
within five days of exhausting the maximum allowable time, or the
time mutually agreed upon pursuant to paragraph (2). Once a meet and
confer conference has been requested, the conference shall be
completed within 10 days of the request, unless both parties agree to
an extension of time.
(4) In the event there is any portion of a claim that remains
unresolved and the meet and confer conference period has been
exhausted, the party who submitted the claim, at its discretion, may
demand mediation with the parties mutually agreeing to a mediator
within 30 days from the date of the demand for mediation. If the
parties are unable to mutually agree on a mediator, the parties shall
utilize an alternative dispute resolution process to assist in the
selection of a mediator.
(5) If any portion of the claim remains unsettled after mediation,
the contractor and the local agency, charter city, or charter county
shall submit the dispute to binding arbitration, and shall follow
the same procedure for selecting an arbitrator as set forth in
paragraph (4) for the selection of a mediator.
(6) Failure by the local agency, charter city, or charter county
to respond to a claim within the time periods set forth in this
subdivision shall result in the claim being deemed approved in its
entirety, and shall be processed for payment within five days from
the expiration of the time period in which the local agency, charter
city, or charter county is required to act. Failure by the contractor
to respond to a claim from the local agency, charter city, or
charter county within the time periods prescribed in this subdivision
shall result in the claim being approved. The parties may extend the
time period for response by mutual agreement.
(f)
(d) This article does not apply to tort claims and
nothing in this article is intended nor shall be construed to change
the time periods for filing tort claims or actions specified by
Chapter 1 (commencing with Section 900) and Chapter 2 (commencing
with Section 910) of Part 3 of Division 3.6 of Title 1 of the
Government Code.
(e) Exercising rights established under this section supersedes
any and all notice requirements under Part 3 (commencing with Section
900) of Division 3.6 of Title 1 of the Government Code.
SEC. 3. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.