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Disputes Review Board Task Team

FTBA Construction Conference 2011. Disputes Review Board Task Team. DRB Task team. Team members Purpose Role of DRB on FDOT projects Background of DRB use by FDOT Issues tackled Changes forthcoming. DRB Task Team – Members. Steering Committee – Ralph Ellis, Bob Burleson, David Sadler

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Disputes Review Board Task Team

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  1. FTBA Construction Conference 2011 Disputes Review Board Task Team

  2. DRB Task team • Team members • Purpose • Role of DRB on FDOT projects • Background of DRB use by FDOT • Issues tackled • Changes forthcoming

  3. DRB Task Team – Members • Steering Committee – Ralph Ellis, Bob Burleson, David Sadler • Task Team – Rammy Cone, Bill Deyo, Bobby Buser, Keith Waugh, Bob Schafer, Nathanial Winthrop, Carrie Stanbridge, Pete Nissen, Frank O’Dea

  4. DRB Task Team – Purpose • This team was formed to address concerns expressed by industry, DRB membership, and FDOT regarding relationship between DRB, contractor, and FDOT and various issues in the DRB administration process.

  5. Role of DRBs on FDOT projects The role of the Dispute Review Board is to provide specialized expertise in technical areas and in administration of construction contracts to assist the Department of Transportation (Department) and the Contractor in resolving disputes in a timely and equitable manner.

  6. Background of DRB use by FDOT • FDOT began use of DRBs in 1994 • Expanded to use of Regional Boards 2002 • FDOT added use of Statewide BOARD in 2004 • FDOT uses DRBs on, or makes available to, EVERY CONSTRUCTION PROJECT

  7. Background of DRB use by FDOT • Project Specific DRB is used on all contracts over $15 Million dollars • The District Construction Offices have authority to add Project Specific DRB if a project is complex or if it considers the project to have a higher than normal probability of issues

  8. Background of DRB use by FDOT By the numbers (681 construction jobs let):

  9. Background of DRB use by FDOT • Regional DRBs are available for use on projects without project specific DRB • Statewide DRB used to hear issues related to warranties or materials performance after Final Acceptance of the construction project – used on nearly all projects

  10. Background of DRB use by FDOT • Historically: • DRB on more than 600 projects • BOARDs have used close to 150 different members • BOARDs have served on projects totally more than $10 Billion • Cost of DRB service approximately $15M (0.2%) • FDOT has a slight favorable edge in recommendations with 54% for FDOT and 46% for contractors

  11. Background of DRB use by FDOT • Historically: • Most issues resolved before become a dispute • Most disputes are resolved before they go to a DRB • For those disputes that do go to DRB, most are accepted with BOARD recommendation

  12. Background of DRB use by FDOT

  13. DRB Task Team – Issues • DRB member selection – eligibility • DRB Meeting frequency • Rejection of recommendations • Utilization of DRB to resolve Prime/Sub disputes • Compensation rate • Issue preservation • Template for DRB Recommendations

  14. Issue – DRB Member Selection • Discussed the membership selection process and eligibility guidelines currently in place. • Agreed as team that selection process would remain in place as is but that eligibility guidelines would be revised to prohibit active full-time employees of prequalified contractors or consultants from serving on BOARDs.

  15. Issue – DRB Member Selection • FDOT has, or will, be contacting all members listed on its website to determine the member’s continued interest and eligibility to serving on BOARDs. • FDOT will revise the Operating Guidelines and Procedures • List on SCO website will be revised

  16. Issue – DRB Meeting frequency • Task team had much debate about the frequency of meetings on project specific DRBs and with whom the decision for this frequency should rest. • Team decided that the frequency of meetings would be determined jointly by the contractor and FDOT personnel with no input from the BOARD.

  17. Issue – DRB Meeting frequency • Meeting frequency will not be less often than quarterly. • The Three Party Agreement and Operating Guidelines will be revised to reflect these changes

  18. Issue – Rejection of Recommendations • Team discussed that is seemed that there was an increase in the number of rejections of DRB recommendations • Discussed that the process of FDOT rejection of a recommendation is that the District must present its reasoning to the State Construction Office for consideration if it is considering rejecting a recommendation.

  19. Issue – Rejection of Recommendations By the numbers:

  20. Issue – Rejection of Recommendations • Discussed the concept of an oversight board to review recommendations that were being considered for reject but team decided that this additional tier of review was not necessary. • Final outcome was that process was working as is.

  21. Issue – Utilization of DRB • Team discussed the use of DRBs to resolve disputes between the Prime Contractor and its subcontractors. • The consensus of the team was that DRBs were not the forum for hearing disputes between Prime Contractor and its subcontractors.

  22. Issue – Compensation rate • Much of the focus of the team was on compensation rates for BOARD members for hearings and meetings • Presently, BOARD members are compensated for meetings and hearings at a rate of $1100/day/member for total of $3300/day for meetings or hearings.

  23. Issue – Compensation rate • Team decided to leave meeting rate of $3300/day as is and to increase the hearing rate to $8000/hearing. • The specifications, Operating Guidelines, and Procedures are being revised to reflect these changes.

  24. Issue – Compensation rate • From the July 2011 Specification: A per hearing cost of $8,000 has been established by the Department for providing compensation for all members of the Dispute Review Board for participation in an actual hearing. The Board chairman will receive $3,000 for participation in the hearing while the remaining two members will receive $2,500 each.

  25. Issue – Compensation rate • Continued: The Department and the Contractor will equally provide compensation to the Board for participation in an actual hearing. The Department will compensate the Contractor $4,000 as its contribution to the hearing cost.

  26. Issue – Compensation rate • Continued: Such payment will be full and complete compensation to the Board members for all expenses related to the hearing. This includes travel, accommodations, meals, pre- and post- hearing work, review of position papers and any rebuttals, conducting the hearing, drafting and issuance of recommendations, readdressing any requests for clarification.

  27. Issue – Compensation rate • Continued: It is not intended for hearings to last longer than a single day, however, in some cases they may. Any additional time and/or compensation for a hearing would only be allowed upon prior written approval of the Department and the Contractor. If an additional day(s) is granted for the hearing, it will be at $3,300 per day, regular meeting rate, payment of which is equally split between the Department and the Contractor.

  28. Issue - Issue preservation • Team discussed what issues should be allowed to be heard by a DRB. • While the types of issues are broad, a common issue was preservation of the dispute or claim issue.

  29. Issue - Issue preservation • From the July 2011 Specification: Only disputes or claims that have been duly preserved under the terms of the Contract as determined by the Board will be eligible to be heard by the Board. Requests for equitable adjustment must be certified as required by 4-3.2. Claims that are referred to the Board must be in compliance with 5-12.

  30. Issue - Issue preservation • What is duly preserved? FDOT considers the issue to be duly preserved if it is a request for equitable adjustment that it be certified (a contract requirement); if the issue is a claim, that it has been timely noticed, properly documented and certified (a contract requirement).

  31. Issue - Issue preservation • The Specification change addressing the duly preserved language requires the BOARD to make a determination as to whether or not the contractor has duly preserved its issue. If it has, then it can be heard. If it has not, then it is considered waived per the contract.

  32. Issue – Template • The task team discussed the standardization of recommendation format • Idea was that the template format would provide all DRB members an outline of what is expected to be provided in its recommendation • DRB members are preparing a template for distribution and review by the task team

  33. Changes Forthcoming • Specifications changes will start with July 2011 contract lettings • Operating Guidelines are revised and will be posted prior to July 2011 implementation • Three Party Agreement has been revised for July 2011 implementation • Procedures have also been revised for July 2011 roll out.

  34. Questions??

  35. Contact Information David A. Sadler, P.E. Director, Office of Construction 605 Suwannee Street, MS 31 Tallahassee, Florida 32399 Tele: 850-414-5203 david.sadler@dot.state.fl.us

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