Chapter 27.28

DISPUTE RESOLUTION*

Parts:

• 1 Application 2 Definitions

• 3 Partnering

• 4 Notice of Potential Claim 5 Statement of Claims

• 6 Settlement Conference

• 7 Facilitated Dispute Resolution

• 8 Dispute Review Board

Part 1

APPLICATION

Sections:

This Chapter sets forth the dispute avoidance and resolution requirements for Public Works Contracts.

(Ord. 30540.)

*Editor’s note— Ord. 30540, § 7, adopted April 5, 2021, amended Ch. 27.28 in its entirety to read as set out herein. Formerly, Ch. 27.28 pertained to similar subject matter and derived from Ord. 30308.

T27:30

PROCUREMENT OF PUBLIC WORKS

§ 27.28.080

The provisions of this Chapter are intended to conflict with Section 9204 and Article 1.5 of Chapter 1 of Part 3 of the California Public Contract Code (starting with Section 20104), as those Sections may be amended, and with any other Section(s) of the Public Contract Code that address Claims and the resolution of Claims. (Ord. 30540.)

• A. In accordance Section 27.04.020, entitled "Administrative Implementation," the Director of Public Works will establish standard provisions for Public Works Contracts relating to dispute resolution, including provisions relating to the process for a Contractor to submit Claims and a Statement of Claims (as those terms are defined in this Chapter).

• B. The standard provisions for dispute resolution established by the Director of Public Works must be consistent with the requirements this Chapter.

• (Ord. 30540.)

Public Works Contracts will allow the City and Contractor to mutually agree in writing to forego the dispute resolution procedures in this Chapter and to seek resolution of a dispute through other methods, including litigation. (Ord. 30540.)

Part 2

DEFINITIONS

The definitions in this Part 2 govern the application and interpretation of this Chapter. (Ord. 30540.)

"Claim" means a dispute between the City and a Contractor over any of the following:

• A. The time for completing the Public Works Project;

• B. The payment of money or damages arising from work performed by a Contractor or a subcontractor; or

• C. The performance of work shown or contemplated in the Public Works Contract.

• (Ord. 30540.)

"Dispute Review Board" means a panel of three (3) independent individuals established to provide non-binding recommendations regarding the resolution of a Claim.

(Ord. 30540.)

"Facilitated Dispute Resolution" means an informal, non-binding dispute resolution process in which the City and a Contractor meet with a trained, neutral facilitator in an effort to reach a mutually agreeable resolution to a Claim. (Ord. 30540.)

Sections:

• 27.28.070 Facilitated dispute resolution.

27.28.080 Notice of potential claim.

27.28.090 Partnering.

"Notice of Potential Claim" means a written notice provided by a Contractor to the City identifying one or more potential Claims and otherwise meeting the requirements of Part 4 of this Chapter 27.28.

(Ord. 30540.)

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SAN JOSÉ CODE

§ 27.28.090

• A. "Partnering" is the development of teambased relationships between a Contractor and the City in which:

  1. Trust and open communications are encouraged and expected from participants;

  2. Parties address and resolve issues and problems promptly and at the lowest possible level;

  3. Parties seek to develop solutions that are agreeable and meet the needs of everyone involved;

  4. All parties have identified common goals for the partnerships and at the same time are aware of and respect each other's goals and values; and

  5. Parties seek input from each other in an effort to find better solutions for the problems and issues at hand, thus creating synergy in the relationship that fosters cooperation and improves the productivity of the partnership.

• B. "Partnering" does not denote a legal relationship of agency, partnership, or joint venture between the City and a Contractor.

• (Ord. 30540.)

"Statement of Claims" means a written statement provided by a Contractor to the City asserting one or more Claims and otherwise meeting the requirements of Part 5 of this Chapter 27.28. (Ord. 30540.)

Part 3

PARTNERING

Sections:

The City will incorporate Partnering into the administration of its Public Works Contracts. (Ord. 30540.)

• A. For Major Public Works Contracts exceeding one million dollars ($1,000,000), the City and Contractor will engage in at least one (1) preconstruction workshop to mutually develop a Partnering strategy.

• B. The City and Contractor will engage in the Partnering workshop at a mutually agreed upon time promptly following contract award.

• (Ord. 30540.)

• A. For Major Public Works Contracts in the amount of ten million dollars ($10,000,000) or more, an independent facilitator must conduct the pre-construction Partnering workshop required by Section 27.28.120.

• B. For Major Public Works Contracts in the amount of one million dollars ($1,000,000) or more but less than ten million dollars ($10,000,000), the Contractor has the option, upon reasonable notice to the City, of having an independent facilitator conduct the preconstruction Partnering workshop required by Section 27.28.120.

• (Ord. 30540.)

The City and Contractor may agree to engage in additional Partnering workshops beyond the one required by Section 27.28.120 and may agree to have an independent facilitator conduct any additional Partnering workshops. (Ord. 30540.)

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PROCUREMENT OF PUBLIC WORKS

§ 27.28.230

The City and Contractor will mutually agree on a facilitator for any Partnering workshop that will have an independent facilitator. (Ord. 30540.)

Major Public Works Contracts will include appropriate provisions providing for the City and Contractor to share equally the costs of Partnering workshops.

(Ord. 30540.)

Part 4

NOTICE OF POTENTIAL CLAIM

Sections:

27.28.190 Content.

27.28.200 Pass-through claims.

27.28.210 Failure to submit.

• 27.28.220 Pursuing a claim.

27.28.230 Additional dispute resolution.

The Claims process in Public Works Contracts will focus on identifying and resolving disputes as early as possible. (Ord. 30540.)

The Contractor must submit to the City a Notice of Potential Claim no later than fifteen (15) Working Days after the event, occurrence or other cause giving rise to a potential Claim. (Ord. 30540.)

• B. A good faith estimate of the cost and/or time impact to which Contractor believes it may be entitled based on reasonably available information.

• (Ord. 30540.)

• A. Public Works Contracts will prohibit a Person furnishing labor, materials and/or equipment under contract to the Contractor from submitting a Claim directly to the City.

• B. The Public Works Contract will allow the Contractor to pass through a Claim from a Person furnishing labor, materials and/or equipment under contract to the Contractor only if the Contractor certifies in the Notice of Potential Claim that the Contractor reviewed the Claim and reasonably concluded the Claim has merit.

• (Ord. 30540.)

A Contractor is not entitled to additional compensation or an extension of time based on any Claim for which the Contractor does not submit a Notice of Potential Claim in accordance with the requirements in the Public Works Contract. (Ord. 30540.)

Public Works Contracts will set forth requirements for a Contractor that has properly submitted a Notice of Claim to pursue that Claim. (Ord. 30540.)

Public Works Contracts may include provisions for dispute resolution during the progress of the construction in addition to those contained in this Chapter 27.28.

(Ord. 30540.)

Part 5

A Notice of Potential Claim must include at least the following information:

• A. The contractual and factual basis of the potential Claim; and

STATEMENT OF CLAIM

Sections:

T27:33

SAN JOSÉ CODE

§ 27.28.240

Public Works Contracts will include procedures for the Contractor to submit to the City a Statement of Claims. (Ord. 30540.)

A Statement of Claims must include at least the following information:

• A. Each Claim, separately stated and identified, that the Contractor is asserting against the City, along with the contractual and factual basis and amount of the Claim;

• B. For each Claim, all documentation reasonably needed for the City to evaluate and determine the merits of the Claim; and

• C. A Contractor certification that the Claims and all information provided in the Statement of Claims are accurate and true to the best of Contractor's knowledge.

• (Ord. 30540.)

• A. The Contractor is precluded from including any of the following in a Statement of Claims:

  1. A dispute for which the Contractor failed to comply with any requirements in the Public Works Contract for pursuing the Claim, including the submission of a Notice of Potential Claim as required by Part 4 of this Chapter 27.28; and

  2. Any pass-through Claim arising from a Person or entity that furnished labor, materials and/or equipment under contract to the Contractor unless the Contractor complies with the certification requirement in Section 27.28.200.

• B. The Contractor is precluded from pursuing any of the following:

  1. Any dispute not included in the Contractor's Statement of Claims; and

2. Any dispute included in the Statement of Claims for which the Contractor fails to provide sufficient documentation for the City to evaluate and determine its merits.

(Ord. 30540.)

• A. Public Works Contracts will require the City to respond, in writing, to a Statement of Claims by indicating whether:

  1. A Claim, in whole or in part, is disputed and the basis of any such dispute; or

  2. The Contractor provided insufficient information to determine the validity of the Claims.

• B. The Public Works Contract will require the City to pay the Contractor the amount of any Claims, or portions of Claims, not in dispute.

• (Ord. 30540.)

• A. Within fifteen (15) Calendar Days of the City's response to a Statement of Claims, the Contractor may, in the Contractor's discretion, request a settlement conference in accordance with Part 6 of this Chapter 27.28.

• B. If the Contractor requests a settlement conference and the settlement conference does not result in the resolution of the disputed Claims, the Contractor may, in the Contractor's discretion, request facilitated dispute resolution in accordance with Parts 7 and 8 of this Chapter 27.28.

• (Ord. 30540.)

Part 6

SETTLEMENT CONFERENCE

Sections:

T27:34

PROCUREMENT OF PUBLIC WORKS

§ 27.28.370

The purpose of a settlement conference is to try informally to resolve disputed Claim(s) in a manner acceptable to both parties. (Ord. 30540.)

The City will conduct a settlement conference promptly following a Contractor's request for the conference.

(Ord. 30540.)

27.28 and the settlement conference does not resolve all the Claims, the Contractor may request the parties meet with a trained, neutral facilitator in an effort to reach a mutually agreeable resolution of the disputed Claim(s).

(Ord. 30540.)

• A. Facilitated dispute resolution will be informal and non-binding, with each party having an opportunity to present its position and supporting information.

• B. Recommendations resulting from facilitated dispute resolution are not admissible in court in any subsequent litigation.

• (Ord. 30540.)

• A. The Contractor and City may mutually agree to exchange documents setting forth their respective positions on the disputed Claim(s).

• B. If the Contractor and City agree to exchange documents, they will mutually agree on a time for the exchange that is sufficiently before the settlement conference to allow all parties to adequately consider the documents.

• (Ord. 30540.)

The City will conduct the settlement conference informally, with both sides being able to present their respective issues. (Ord. 30540.)

The City and Contractor will mutually agree on the scheduling of facilitated dispute resolution and the selection of a person to act as the facilitator. (Ord. 30540.)

The Public Works Contract will include appropriate provisions providing for the City and Contractor to share equally the costs of facilitated dispute resolution.

(Ord. 30540.)

Part 8

DISPUTE REVIEW BOARD

Part 7

Sections:

FACILITATED DISPUTE RESOLUTION

If the Contractor requests a settlement conference in accordance with Part 6 of this Chapter

The purpose of a dispute review board is to provide a non-binding recommendation as to the

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SAN JOSÉ CODE

§ 27.28.370

resolution of a disputed Claim that could not be resolved by means of the settlement conference conducted in accordance with Part 6 of this Chapter 27.28. (Ord. 30540.)

The Major Public Works Contract will include appropriate provisions providing for the City and Contractor to share equally all costs associated with a dispute review board. (Ord. 30540.)

• A. The City and Contractor will establish a dispute review board before construction starts and have the board available through construction if the Major Public Works Contract is in the amount of ten million dollars ($10,000,000) or more, and the Director determines the work is sufficiently complex to warrant the cost of such a board.

• B. If the Major Public Works Contract is in the amount of one million dollars ($1,000,000) or more but less than ten million dollars ($10,000,000), the City or Contractor may request, at any time before project completion, the establishment of a dispute review board.

• (Ord. 30540.)