information and compensation requests and dispute ...

INFORMATION AND COMPENSATION REQUESTS AND

DISPUTE RESOLUTION

MANUAL

Contract Claims Office Ministry of Transportation

March 2020

All enquiries regarding suggestions for, comments on or the distribution of this manual are to be directed to: Ministry of Transportation Ontario Contract Claims Office 2nd Floor North Garden City Tower 301 St. Paul Street St. Catharines, Ontario L2R 7R4 Attention: Manager, Contract Claims Office

Information and Compensation Requests & Dispute Resolution Manual – March 2020

TABLE OF CONTENTS

1.0 PURPOSE ................................................................................................................ 1 2.0 PROCEDURES FOR ASSESSING AND RESPONDING TO A CONTRACTOR

INFORMATION REQUEST ...................................................................................... 2 2.1 INFORMATION REQUEST OVERVIEW ............................................................... 2 2.2 RECEIPT OF REQUEST ....................................................................................... 3 2.3 REVIEW ................................................................................................................ 3 2.4 RESPONSE ........................................................................................................... 3

3.0 PROCEDURES FOR ANALYSING AND ISSUING A DECISION TO A CONTRACTOR COMPENSATION REQUEST ........................................................ 4

3.1 COMPENSATION REQUEST OVERVIEW ........................................................... 4 3.2 RECEIPT OF REQUEST ....................................................................................... 5 3.3 DAILY WORK RECORDS ..................................................................................... 5 3.4 ANALYSIS ............................................................................................................. 6 3.5 DECISION ............................................................................................................. 8

4.0 PROCEDURES FOR RESPONDING TO A CONTRACTOR NOTICE OF ADJUDICATION ....................................................................................................... 9

4.1 ADJUDICATION PROCESS OVERVIEW ............................................................. 9 4.2 ROLE OF THE CA DURING THE ADJUDICATION PROCESS .......................... 10 4.3 ROLE OF MTO STAFF DURING THE ADJUDICATION PROCESS................... 11

5.0 PROCEDURES FOR RESPONDING TO A CONTRACTOR NOTICE OF CLAIM . 13 5.1 CLAIM REVIEW PROCESS OVERVIEW ............................................................ 13 5.2 ROLE OF THE CA DURING THE CLAIM REVIEW PROCESS .......................... 14 5.3 ROLE OF MTO REGIONAL STAFF DURING THE CLAIM REVIEW PROCESS 14

6.0 ROLE OF MTO REGIONAL CONSTRUCTION OVERSIGHT STAFF .................... 14 APPENDIX A- INFORMATION REQUEST – PH-CC-755 ................................................ 15 APPENDIX B - COMPENSATION REQUEST – PH-CC-756 ........................................... 16 APPENDIX C - COMPENSATION REQUEST REVIEW REPORT – PH-CC-758 ............ 18


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1.0 PURPOSE The General Conditions of Contract (all contracts advertised on or after October 1, 2019) outline the Contractor’s responsibilities related to Information Requests, GC 7.01.08.02, Compensation Requests, GC 3.14, and Dispute Resolution (Claim Review Process, Adjudication and Further Avenues of Dispute Resolution), GC 3.15. The purpose of this Manual is to provide direction to Contract Administrators (CAs) and Ministry of Transportation (MTO) staff for responding to Contractor Information and Compensation Requests and Contractor notices (Dispute Resolution). This Manual defines the roles of the CA and MTO. The intent is that these requests and notices are administered in accordance with the contractual requirements and within the timeframes while respecting the rights and obligations of all parties. All Capitalized terms referenced herein are defined within the General Conditions of Contract (OPSS.PROV 100). The Information Request (IR) process is a streamlined application for the Contractor to ask questions or receive clarification regarding the Contract Documents. The Compensation Request (CR) process is for modifications in payment and/or Contract Time from the original tender. Following the receipt of a CR Decision the Contractor can then elect to proceed to dispute resolution which includes Claim Review Process, Adjudication, or other forms of dispute resolution. These new processes provide a standardized approach to answering routine questions and responding to issues that arise during the administration of a Contract. The goals are to provide timely responses, an opportunity to cooperatively resolve issues and, thoughtful well-reasoned Decisions.


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2.0 PROCEDURES FOR ASSESSING AND RESPONDING TO A CONTRACTOR INFORMATION REQUEST

2.1 INFORMATION REQUEST OVERVIEW

LEGEND

CONTRACTOR SUBMITS INFORMATION REQUEST

RESPONSE ISSUED WITHIN 20 DAYS

RESPONSE COMPLETE

CA REVIEW

CA CONFIRMS SUBMISSION IN CONFORMANCE

WITH CDs

CA NOTIFIES CONTRACTOR IF INCOMPLETE OR NOT IN CONFORMANCE IDEALLY

WITHIN 3 DAYS*

INTERNAL CONSULTATION

REVIEW RESPONSE WITH CSA IF REQUIRED

MAY OCCUR

SHALL OCCUR

* ALL REFERENCES TO DAYS ARE

CALENDAR


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2.2 RECEIPT OF REQUEST

.01 Upon receipt of an IR submission the CA shall immediately review the request and confirm that it conforms with the Contract Documents.

a) The IR must include a clear description of the matter to be clarified or the question asked with specific references to the Contract Documents. If it does not, the CA shall return the submission to the Contractor indicating, in writing, why the submission is not in conformance with the Contract Documents. This shall be done in a timely manner, ideally within 3 days of receipt of the IR.

b) If the IR contains a request for time and/or money, the CA shall return the submission to the Contractor, in writing, that the IR is not in conformance with the Contract Documents. This shall be done in a timely manner, ideally within 3 days of receipt of the IR.

c) If it is unclear whether the IR contains a request for time and/or money, the CA may seek clarification from the Contractor and/or the CSA.

2.3 REVIEW

.01 To prevent possible delays or situations that could result in a CR, the CA shall commence their review immediately upon receipt of the IR.

a) Each review shall be based on the Contract Documents.

b) During the review, the CA may also consult with MTO Construction Oversight representative(s) (CSA and/or Area Manager, Construction).

c) The MTO Construction Oversight representative(s) will support the CA by liaising with any other stakeholders (designer, MTO functional offices etc.).

2.4 RESPONSE

.01 Prior to the expiry of 20 Days from the date of receipt of the IR, the CA shall provide a written response to the Contractor. For more complex IRs the CA may request more time to respond however, the Contractor has to agree to the extension.

.02 When issuing a written response to an IR, the CA shall reference the Contract Documents whenever possible. Conjecture, opinion or “slang” are NOT to be included in any written response to an IR. Any supporting information for the IR shall be attached to the response. This can include drawings, details, etc.

.03 For more complex IR’s (example; precedent setting, have potential impacts to quality, cost, or schedule), the CA should review the written response with the CSA prior to issuing to the Contractor.

.04 The CA shall not deny an IR when responding. The CA response to an IR shall reference the Contract Documents.


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3.0 PROCEDURES FOR ANALYSING AND ISSUING A DECISION TO A CONTRACTOR COMPENSATION REQUEST

3.1 COMPENSATION REQUEST OVERVIEW

60 DAYS REVIEW PERIOD

CONTRACTOR BEGINS

TAKING DWRs

CONTRACTOR SUBMITS COMPENSATION REQUEST

CA COMPLETES DRAFT REPORT

WITHIN 50 DAYS

DECISION ISSUED

CA CONFIRMS SUBMISSION IN CONFORMANCE

WITH CDs

DRAFT REPORT & DECISION

CIRCULATED FOR APPROVAL 10 DAYS

EXPERT OPINION

INTERNAL CONSULTATION

CHANGE ORDER

LEGEND

MAY OCCUR

SHALL OCCUR

* ALL REFERENCES TO DAYS ARE

CALENDAR

CA NOTIFIES CONTRACTOR & CSA IF INCOMPLETE OR NOT IN CONFORMANCE

IDEALLY WITHIN 3 DAYS*


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3.2 RECEIPT OF REQUEST

.01 Upon receipt of a CR submission and prior to conducting an analysis the CA shall immediately review the request and confirm that it is complete and that it is in conformance with the Contract Documents.

.02 Each CR shall include:

a) description of the issue;

b) specific references to the Contract Documents;

c) impacts; financial costs and a detailed summary of critical path schedule impacts shall be included along with supporting critical path schedule updates that have been previously submitted;

d) if the CR relates to a submitted IR, the original IR shall be included with the submission, and

e) if the CR relates to an unresolved Change Order price agreement negotiation, the original Change Order shall be provided with the submission.

.03 If the CR is incomplete, the CA shall inform the Contractor, in writing, of the outstanding concerns and that the submission is not considered a CR until a complete submission is received. This shall be done in a timely manner, ideally within 3 days of receipt of the CR.

.04 If the CR does not conform to the Contract Documents, the CA shall inform the Contractor, in writing, and indicate why the CR does not conform to the Contract Documents. This shall be done in a timely manner, ideally within 3 days of receipt of the CR.

.05 If the CA considers there is a need for a subject matter expert to assess and review the circumstances of the CR, they will discuss with the CSA.

3.3 DAILY WORK RECORDS

.01 Confirm that the Contractor has begun taking Daily Work Records (DWRs). DWRs shall be limited to the Work directly impacted by the CR, and separate DWRs shall be taken for each individual CR.

.02 If DWR’s are not submitted within the first two Days, the CA shall send an Instruction Notice to Contractors (INC) indicating this is a contractual requirement (GC 8.02.03.04) and failure to do so may limit the Contractor’s ability to recover costs.

.03 Reconcile DWRs and note disagreements prior to returning DWRs to the Contractor.


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.04 Monitor and record Contractor work activities (labour, materials and equipment) for work affected by (or likely to be affected by) the CR.

3.4 ANALYSIS

.01 Within 50 Days of receipt of the CR submission, the CA shall complete the standard “Compensation Request Review Report” (PH-CC-758) and assemble all relevant documents as attachments. This report shall contain at a minimum the following:

a) principle (Reasons why the Contractor believes they are entitled to compensation);

b) summary of facts;

c) detailed analysis and review of the CR based on the Contract Documents. The CA shall also consider the Contractor’s position, including:

i. analysis of the Contractor’s requested compensation and if applicable include a breakdown of any substantiated compensation (time and/or money). This breakdown will later serve as the estimate to support the Change Order Approval Cost Estimate (COACE) if there is an approved Change in the Work.

d) recommendation including the Rationale that will be included in the written Decision.

.02 During the review, the CA may also consult with the MTO Construction Oversight representative(s) (CSA and/or Area Manager, Construction).

.03 The MTO Construction Oversight representative(s) will support the CA by liaising with any other stakeholders (MTO functional offices, design team, regional staff, and subject matter experts).

.04 In order to avoid unnecessary revisions or amendments, the CA shall incorporate any comments, expert opinions, or interpretations received during the consultation process into the report such that the approvals process can be completed within the 60 Day review period.

.05 If during the review period, the CA requires additional information from the Contractor in order to justify the CR, this request shall immediately be made in writing. To avoid unnecessary delays this request shall be specific and detailed.

.06 If both parties are cooperatively working towards a resolution of the issue or the CR review requires significant internal input and/or additional time to obtain approvals, the CA may make a request to the Contractor to extend the time to issue a Decision. This extension shall be for a finite duration and agreed to in writing by both parties prior to the expiry of the 60 Day review period.


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.07 Once the Compensation Request Review Report is completed it shall be circulated for approvals as follows (see Table 1 for further details): a) If the request is for monetary compensation only, and the CA’s

recommendation is a denial of the CR in its entirety, at a minimum the CSA and/or Area Manager, Construction shall review and approve prior to issuing the Decision. Depending on the complexity of the issue other MTO representatives may be consulted.

b) If the request does not include an extension of Contract Time and the recommended monetary compensation is within the CA’s Delegation of Authority (DOA) the CSA shall review and approve prior to issuing the Decision.

c) If the request includes an extension of Contract Time and the recommendation is a denial of the CR in its entirety, approval from the Regional Head, Construction is required prior to issuing the Decision.

d) If the request includes an extension of Contract Time component and the recommendation is for an extension of Contract Time at a minimum (up to the limit of DOA), approval from the Regional Head, Construction is required prior to issuing the Decision.

e) If the recommended monetary compensation portion of the request exceeds the Regional Head, Construction’s DOA then the appropriate level of DOA approval for the monetary compensation portion of the request is required.

Table 1: CR Approvals

Compensation Request

Recommend Deny Approvals

Money

X Minimum the CSA and/or Area Manager, Construction

X As per the approved MTO DOA Level chart; CSA review at a minimum

Time X Regional Head, Construction

X Regional Head, Construction

Time & Money

X Regional Head, Construction

X

Regional Head, Construction approves time. DOA for money exceeding Regional Head, Construction is as per approved MTO DOA chart.


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.08 Time is of the essence; therefore, care must be taken to ensure enough time is allotted for the internal review and approval process. In most cases the time required for these approvals should not exceed 10 Days.

.09 If the CA’s recommendation is to deny the CR in its entirety or the request is in relation to an unresolved Change Order price negotiation in contemplation of the matter being escalated as a dispute, the Compensation Request Review Report shall also be circulated to the Regional, Head, Area Claims for review and comment prior to issuing the Decision.

.10 During the review period, care shall be taken to ensure all internal correspondence such as emails and memos be fact based and not include personal opinion or conjecture.

.11 It is recommended the CA arrange a teleconference with the applicable stakeholders (MTO Construction Oversight representative and others as approved by the MTO Construction Oversight representative) to discuss additional details, various options, and opportunities that may be considered to resolve issues related to CR’s.

3.5 DECISION

.01 Prior to the expiry of 60 Days or the agreed upon extension from the date of receipt of the CR, the CA shall provide a written Decision to the Contractor including the following:

a) rationale including sufficient level of detail to support the Decision;

b) quantum including a breakdown of any compensation (time and/or money); and

c) if the Decision results in a Change in the Work, the CA will prepare and issue the corresponding Change Order at the same time.

.02 If the recommendation is to deny the CR in its entirety, the written Decision shall be reviewed by the MTO Construction Oversight representative who will determine if It needs to be reviewed by the Regional Head, Construction and Regional Manager, Construction Oversight.


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4.0 PROCEDURES FOR RESPONDING TO A CONTRACTOR NOTICE OF ADJUDICATION

4.1 ADJUDICATION PROCESS OVERVIEW

NOTICE OF ADJUDICATION

ARBITRATION, LITIGATION, or AGREEMENT

ADJUDICATOR REVIEWS

ISSUES DETERMINATION

WITHIN 50 DAYS OF APPOINTMENT

DETERMINATION ACCEPTED

NOEND YESNO

YES

APPOINTMENT OF ADJUDICATOR 4-11

DAYS

CONTRACTOR SUBMITS PKG

WITHIN 5 DAYS OF APPOINTMENT

MTO SUBMITS RESPONSE

ADJUDICATOR INITIATES KICKOFF

MEETING WITH BOTH PARTIES

ADJUDICATOR MAY MEET WITH BOTH PARTIES AND/OR ATTEND THE SITE

BOTH PARTIES MAY AGREE TO EXTEND

FOR UP TO 14 DAYS

WITHIN 30 DAYS MAY FILE FOR

JUDICIAL REVIEW


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4.2 ROLE OF THE CA DURING THE ADJUDICATION PROCESS

.01 Notice of Adjudication following a CR Decision

a) Immediately upon receipt of a Notice of Adjudication the CA shall notify the CSA; Area Manager, Construction, Regional Head, Construction, Regional Manager, Construction Oversight, Head, Regional Area Claims; and Manager, Contract Claims Office by email.

i. The Contractor's Notice of Adjudication, CR, Compensation Request Review Report, and Decision shall be attached to the email

b) Review and provide comments on the Contractor’s submission package (identify if there are changes/modifications to the Contractor’s principle).

c) When requested by the MTO Construction Oversight representative, participate in Adjudicator’s commencement teleconference (Region to determine who attends meeting).

d) Assist Regional Area Claims staff with preparing MTO response to the Contractor’s Adjudication submission.

e) When requested by MTO, attend meeting with Adjudicator (Region to determine who attends meeting).

f) When the Adjudicator awards compensation, create an Other Payment Adjustment (OPA) to pay the Contractor.

.02 Notice of Adjudication following a Claim Decision

a) Review and provide comments on the Contractor’s claim submission package.

b) When requested by the MTO Construction Oversight representative, participate in Adjudicator’s commencement teleconference (Contract Claims Office to determine who attends meeting).

c) When requested by MTO, review and provide comments on the MTO adjudication submission package.

d) When requested by MTO, attend meeting with Adjudicator (Contract Claims Office to determine who attends meeting).

e) When the Adjudicator awards compensation, create an OPA to pay the Contractor.


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4.3 ROLE OF MTO STAFF DURING THE ADJUDICATION PROCESS

.01 Notice of Adjudication following a CR Decision.

a) The Manager, Regional Construction Oversight Office or their designated representative is responsible to accept or reject the Contractor’s Adjudicator nomination.

b) Regional Area Claims staff are responsible to lead the preparation of the submission to the Adjudicator. (Note: As per Construction Act, the Adjudicator determines the timing of the response).

i. The Compensation Request Review Report and Decision will form the foundation of this submission.

ii. Other MTO staff and stakeholders, as required, will provide input and comments for final submission.

iii. Contract Claims Office staff will support regions by reviewing submissions and providing feedback when requested.

c) The Manager, Regional Construction Oversight Office or their designated representative is responsible to submit the response and respond to additional Adjudicator inquiries.

d) Staff who are familiar with the dispute (CSA; Area Manager, Construction; Head, Area Claims; etc.) will attend the Adjudicator’s commencement teleconference and attend additional meeting(s) and/or site visit(s) with Adjudicator as required.

e) The Manager, Regional Construction Oversight Office or their designated representative is responsible to notify Regional Contract Services when the Adjudicator’s determination includes monetary compensation. The Regional Head, Contract Services is responsible to make payment within 10 Days of the date MTO received the determination.

f) Within 10 Days of the Adjudicator’s determination, the Manager, Regional Construction Oversight Office will determine if an application to set aside for judicial review will be made. It must be filed within 30 Days.

g) Within two years of the determination or the dismissal of the motion for leave, the Manager, Regional Construction Oversight Office will determine whether or not to seek enforcement by the court.


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.02 Notice of Adjudication following a Claim Decision.

a) The Manager, Contract Claims Office, upon receipt of a Notice of Adjudication, will notify: CSA; Area Manager, Construction; RCE; Manager, Operations; and Head, Regional Area Claims by email.

b) Contract Claims Office staff are responsible to coordinate the preparation of the submission to the Adjudicator.

i. The Compensation Request Review Report, Contract Claims Office Report and Decisions will form the foundation of this submission.

ii. Other MTO staff and stakeholders will provide input and comments for final submission as required.

c) The Manager, Contract Claims Office or their designated representative is responsible to submit the response to the Adjudicator.

d) Staff who are familiar with the dispute (CSA; Area Manager, Construction; Head, Area Claims; etc.) will attend Adjudicator’s commencement teleconference and attend additional meeting(s) and/or site visit(s) with Adjudicator as required.

e) If the Adjudicator’s determination includes monetary compensation, the Manager, Contract Claims Office or their designated representative is responsible to inform the CA (if applicable), CSA, and Regional Contract Services.

f) The Regional Contract Services is responsible to make payment within 10 Days of the date MTO received the Determination.

g) Within 10 Days of the Adjudicator’s determination the Manager, Contract Claims Office will determine if an application to set aside for judicial review will be made. It must be filed within 30 Days.

h) Within two years of the determination or the dismissal of the motion for leave the Manager, Contract Claims Office will determine whether or not to seek enforcement by the court.


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5.0 PROCEDURES FOR RESPONDING TO A CONTRACTOR NOTICE OF CLAIM

5.1 CLAIM REVIEW PROCESS OVERVIEW

INTENT TO CLAIM SUBMITTED TO CONTRACT

CLAIMS OFFICE

REVIEWCOMPLETED

ISSUES DECISION

CONTRACTOR ACCEPTS DECISION

YES

END

ADJUDICATION OR OTHER FORMS DISPUTE

RESOLUTIONNO

CONTRACT CLAIMS OFFICE TO CONDUCT REVIEW

NOTICE OF CLAIM SUBMITTED

Claim Review Process


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5.2 ROLE OF THE CA DURING THE CLAIM REVIEW PROCESS

.01 Upon request, the CA shall provide the Contractor's CR, Compensation Request Review Report, and Decision.

.02 The CA shall also provide any requested additional documentation or support to MTO.

.03 If the Contract Claims Office Decision includes compensation and the Contract is ongoing, the CA will process the payment as an OPA, in order that it can be added to the next invoice for payment.

5.3 ROLE OF MTO REGIONAL STAFF DURING THE CLAIM REVIEW PROCESS

.01 Upon request the Head, Area Claims will review the Contractor’s notice of Claim submission to verify that it is consistent with the associated CR.

.02 Regional staff will provide any requested additional documentation or support to the Contract Claims Office.

.03 If the Decision includes compensation and the Contract is finalized, the Head, Contract Services will process the payment within 28 Days.

6.0 ROLE OF MTO REGIONAL CONSTRUCTION OVERSIGHT STAFF

.01 MTO is committed to resolving issues at the earliest opportunity while providing thoughtful, well reasoned Decisions whenever possible. The CR and Adjudication processes are dynamic, with strict timelines that MTO must adhere to. In order to achieve the desired outcomes, the Regional Manager, Construction Oversight Office will, at their discretion, allocate staff as necessary to support these objectives. Below are some considerations to help manage these risks: a) CR’s that include a quantum greater than $100,000.00 and/or 20 Working

Days or the equivalent contract completion date, shall have the Regional Area Claims Section provide input during the CR review period. This includes commenting on the Compensation Request Review Report and Decision.

b) CR’s that have the potential to become disputes should be reviewed by the Regional Area Claims Section prior to issuing a Decision.

c) CR’s that may be precedent setting or are complex in nature should be reviewed by the Regional Area Claims Section prior to issuing a Decision.

d) When a Contract has a disproportionate number of CR’s, additional support for the CA team should be considered.

e) For high complexity projects with a value of greater than $20 million the inclusion of dispute resolution expert in the CA agreement should be considered.


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APPENDIX A- INFORMATION REQUEST – PH-CC-755


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APPENDIX B - COMPENSATION REQUEST – PH-CC-756


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APPENDIX C - COMPENSATION REQUEST REVIEW REPORT – PH-CC-758


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