Bill Text: CA AB216 | 2009-2010 | Regular Session | Amended
Bill Title: Public contracts: claims.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-02 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB216 Detail]
Download: California-2009-AB216-Amended.html
BILL NUMBER: AB 216 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 6, 2009
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 amended, 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,
including a charter city, except as specified, 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 $50,000 between a contractor and a
local agency, including a charter city, except as
specified, 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) This article applies to all public works claims that
arise between a contractor and a local agency, including a
charter city, except as specified in Section 1100.7, or
charter county.
(b) This article shall not apply to any claims resulting from a
contract between a contractor and a public agency if the public
agency has elected to resolve any dispute pursuant to Article 7.1
(commencing with Section 10240) of Chapter 1 of Part 2.
(b)
(c) (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 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)
(d) The provisions of this article or a summary thereof
shall be set forth in the plans or specifications for any work that
may give rise to a claim under this article.
(d)
(e) This article applies only to contracts entered into
on or after January 1, 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 one hundred
fifty thousand dollars ($100,000)
($50,000) , 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, additional documentation 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) This subdivision shall apply to all claims over
one hundred thousand dollars ($100,000) with fifty
thousand dollars ($50,000) involving any local agency, charter
city, or charter county , or contractor
that does not have an alternative dispute process provided for by
contract , ordinance, or policy .
(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 scheduled within
20 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. Mediation pursuant to this section
shall be for no less than four hours, the cost of which shall be
shared equally between the parties. By mutual agreement, the parties
may extend the length of the mediation beyond the minimum time set
forth in this paragraph.
(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)
(5) 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.
(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 also result in a penalty, payable to the
contractor, of 2 percent of the amount due per month for every month
that payment is not made. In any action for the collection of funds
wrongfully withheld, the prevailing party shall be entitled to
reasonable attorney's fees and costs. The sanctions authorized
pursuant to this section shall be separate from, and in addition to,
all other remedies, either civil or administrative.
(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.
(f) For purposes of this section, "local agency" includes a
charter city, except as specified in Section 1100.7, or a charter
county.
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.
