Construction Claims at Experts in

Special Offers

Experts in - Construction

Construction Claims Article

Program IntroductionThe California State University Risk Management Authority’s (CSURMA) ConstructionClaims Program (CCP) commenced July 1, 1999. The program was formed to provide afunding source to cover constructions claims for all State funded streamlined projects,commencing with the State of California’s approved list of specific projects in the1997/98 Governor’s Budget. In May 2000, the CCP was transferred from CSURMA toCapital Planning, Design and Construction, Office of the Chancellor.A Construction Claims Program Committee administers the program. This committee isthe successor to the former California State University ConstructionClaims/Augmentation Reserve Board. The committee consists of five standing members, two Executive Deans, two Vice Presidents and the Assistant Vice Chancellor of CapitalPlanning, Design and Construction. There are also four alternates, which consists of twoExecutive Deans and two Vice Presidents. The chair of the committee is the AssistantVice Chancellor of Capital Planning, Design and Construction. Appointments to thecommittee are for an open term. Members may terminate appointment upon notice to the committee chair, or upon separation from the CSU.This manual has been designed to provide complete information on how the CCPoperates. It includes a sample Participation Agreement that is required from each campus that has delegated authority to manage capital outlay projects. Also included in themanual is a sample Memorandum of Coverage that is required for each State fundedstreamlined project. Terms and conditions for construction claims liability coverage, and policies and procedures for submitting a claim to the CCP Committee are also included in the manual. Any questions about how the program operates should be directed to theCCP administrator in Capital Planning, Design, and Construction at the Chancellor’sOffice. -------------------------------------------------------------------------------- Page 4 Construction Claims Program ManualPage 3 of 12California State University State Funded Streamlined ProjectsConstruction Claims ProgramParticipation AgreementWe, campus, are participants in the Construction Claims Program for State fundedstreamlined projects, hereinafter referred to as “CCP,” as evidenced by the authorizedsignature on this document.We understand that provided the following requirements are met, coverage through the CCP shall begin for covered projects with construction commencing on or after July 1, 1998.1.We will pay any applicable participation fees, deposits and co-payments; and2.We have executed this CCP Participation Agreement.RESPONSIBILITIES OF PROGRAM PARTICIPANTS:It is understood that as a Program Participant we are obliged to do the following:1.Take action, e.g. provide statistical and claims experience data and other information, as is necessary, to carry out the CCP as required by the policiesand procedures established by the CCP Committee;2.Fully cooperate with the CCP Committee by providing information regarding construction claims, participate in the claims review process and settlement of claims; and3.Actively pursue construction claims control.RESPONSIBILITY FOR PROGRAM COSTS:It is understood that CCP Participants are responsible for their share of all CCP costs. A Program Participant’s share of the program costs shall be 1% of the construction contract(s) award amount for state capital outlay projects and, the co-payment percentage as determined by the CCP Committee.We acknowledge and agree that this Participation Agreement shall automatically conform to any amendments made to the CCP, which affect the conditions of participation in the CCP.PARTICIPANT: President or designee: name and title________Signature: ____________________________________________ -------------------------------------------------------------------------------- Page 5 Construction Claims Program ManualPage 4 of 12California State University State Funded Streamlined ProjectsConstruction Claims ProgramMemorandum of CoverageThis endorsement executes coverage of the State funded streamlined project listed below. Please read it carefully. Once completed, submit it to the Office of the Chancellor,Capital Planning, Design and Construction, Attn: Construction Claims Administrator.Campus: name and addressLimit of Liability:$2,000,000 per projectCo-Payment Percentage:5% to 25% maximum per project as determined under the adopted policies and procedures.Project No.:Project Name ___________________________Contract Value:_________________________________________Premium Due:(Contract Value @ 1% rate per CCPC Policy & Procedure)It is agreed that this Memorandum of Coverage, together with the terms of any endorsements that may be added hereto, constitutes the entire coverage agreement.Signature:Date:(Campus Vice President)Name and Title: _________________________________________________________________Do not complete information below; for CPDC use only:I acknowledge receipt of this Memorandum of Coverage on , and that distribution of copies was made as indicated below.Signature:Date:(Construction Claims Administrator, CPDC)Distribution: Vice President for Business & Administration, Executive Dean, CPDC Facility Planner -------------------------------------------------------------------------------- Page 6 Construction Claims Program ManualPage 5 of 12California State UniversityConstruction Claims Liability CoverageTerms and ConditionsThroughout this document, words and phrases that appear in boldface type have specialmeanings. They are defined in Section I – Definitions.SECTION I – DefinitionsContractor means all contractors and subcontractors performing work on a CoveredProject.Construction Claims Program Committee means the five standing members of thecommittee made up of two Executive Deans, two Vice Presidents and chaired by theAssistant Vice Chancellor of Capital Planning, Design and Construction. The committeealso has four alternate members made up of two Executive Deans and two VicePresidents.Construction Claims Program Fee means the 1% of construction contract award thatcampus is required to pay in order to participate in the Construction Claims Program.This fee is separate from the Co-Payment required if a claim must be ultimately paid.Co-Payment means the amount to be paid by the program participant; it is equal to theCo-payment Percentage multiplied by the Ultimate Net Loss. For example, if the Co-Payment Percentage is 5% and the ultimate net loss is $200,000, then the programparticipant is responsible for paying a $10,000 Co-payment.Co-payment Percentage means the percentage of Ultimate Net Loss, which theProgram Participant has to pay. The Co-Payment Percentage per project will be aminimum of 5% to a maximum of 25% in accordance with the established policies andprocedures of the CCP.Covered Claims means any and all claims, suits or demands filed by all contractors upon completion of a project, which are not otherwise excluded from coverage and for whichno other Project Funds are available.Covered Individuals means persons who are past or presently appointed officials oremployees of the Program Participant, whether or not compensated while acting for, or on behalf of the Program Participant, including service on outside boards at thedirection of the Program Participant. Covered Individuals do not include employeesof non-program participant organizations, including, but not limited to: auxiliaryorganizations, alumni associations and volunteer university support groups unless suchnon-program participant organizations are specifically covered by endorsement to thisdocument. Covered Individuals do not include design professional who are notemployees of the Program Participant. Covered Individuals do not include owneragents. -------------------------------------------------------------------------------- Page 7 Construction Claims Program ManualPage 6 of 12Covered Party is defined in Section IV of this document.Covered Project means those State funded streamlined major capital outlay construction projects which are initiated during the coverage period and which are specifically listedby endorsement to this document.Date of Acceptance means the date the Program Participant assumes the responsibility for the Covered Project as the term “acceptance” is defined in written agreements withthe contractor.Program Participant means the campus that has signed the Memorandum of Coverage.Occurrence means any and all covered claims by all contractors working on a Covered Project. All covered claims arising from a covered project shall be treated as a singleoccurrence.Project Funds means all monies appropriated for the construction of a Covered Project.Property Damages means:1.Physical injury to or destruction of tangible property which occurs during thecoverage period, including the loss of use thereof at any time resulting therefrom; and2.Loss of use of tangible property, which has not been physically injured ordestroyed, provided such loss of use is caused by an Occurrence during thecoverage period.Ultimate Net Loss means the amount of paid claims and liability for damages for which the Program Participant is responsible on a per Occurrence basis, and which theProgram Participant actually pays in cash, after making proper deduction for allrecoveries and salvages collectible, except that payments shall not constitute Ultimate Net Loss to the extent other funds are available from Project Funds for the CoveredProject. The Ultimate Net Loss includes defense attorney fees and costs of theProgram Participant in defense of the Covered Claim expenses, but does not includeany salaries of the Program Participant’s regular employees. Ultimate Net Loss shallnot include any of the above-described expenses incurred for damages against a Program Participant or defense expense for damages or expenses incurred because of liabilityexcluded by this document.Value Added Claim means claims arising from unfunded owner requested electiveextras not part of the base bid (4.4). A 4.4 change proposal is a proposal originated by the university. -------------------------------------------------------------------------------- Page 8 Construction Claims Program ManualPage 7 of 12SECTION II – CoveragesSubject to the Co-payment percentage, CCP agrees:To pay on behalf of the Program Participant those sums for Ultimate Net Loss whichthe Program Participant shall become obligated to pay as damages, by reason ofliability imposed by law, or liability for Covered Claims of Contractors assumed bycontract, because of Covered Claims, arising from a Covered Project of the Program Participant to which this document applies, caused by an Occurrence.SECTION III – Limitations Upon CCP’s LiabilityRegardless of the number of (1) persons or entities covered under this document, or (2)persons or organizations who sustain injury or damage, or (3) claims made or suitsbrought because of injury or damage, the CCP’s liability is limited as follows:The CCP’s liability for damages shall be only for the Ultimate Net Loss less the amount of the Program Participant’s Co-Payment not to exceed the limit of coverage shown in the document, as the result of any one Occurrence.The Program Participant’s Co-Payment Percentage applies to each Occurrence without regard to exclusions, limitations or exhaustion of aggregate limits in underlyingor contributing coverage, insolvency of any insurance carrier or insurance pool, or anycircumstances wherein underlying or contributing coverage is uncollectible.The CCP shall not be liable for claims filed after the expiration of any such timelimitation that is identified in the project’s general conditions.For the purpose of determining the CCP limit of liability and the Co-Payment Percentage of the Program Participant, all damages arising out of the continuous repeated exposure to substantially the same general conditions shall be considered asarising out of one Occurrence.SECTION IV – Covered PartiesThe parties covered by the CCP:A. The Program Participant named.B. The following individually and collectively, when acting solely within the scope oftheir duties, office or employment for the named Program Participant: Members of the Board of Trustees, Officers and Employees of the CSU.C. Covered Individuals is defined in Section I of this document. SECTION V – ExclusionsCCP shall not be obligated to make any payment or defend any lawsuit in connectionwith any claim made against the Program Participant as follows: -------------------------------------------------------------------------------- Page 9 Construction Claims Program ManualPage 8 of 12A. For injuries or damages, which do not arise out of an Occurrence as defined in thisdocument;B. For any liability for damages for either the actual or alleged use, misuse,mismanagement or loss of funds, grants, or appropriations nor for the return of suchfunds, grants, or appropriations where such liability arises due to fraudulent or criminalact or acts of a Covered Individual. The CCP shall defend a Covered Individual unless their alleged conduct was outside the scope of employment.C. For any liability arising from a Value Added Claim.SECTION VI – ConditionsA. Covered Party shall comply with adopted Policies and Procedures of the CCP. SuchPolicies and Procedures may impose various duties and obligations as a condition ofcoverage including, but not limited to, claims handling and coverage determination.B. Notice of an Occurrence, Claim or Suit:1. In the event of an Occurrence, written notice containing particulars sufficient toidentify the Covered Party and also reasonable obtainable information withrespect to the time, place and circumstances thereof, including the names andaddresses of the Covered Party and of available witnesses, shall be given by orfor the Covered Party to the Construction Claims Program Committee chair. .2. If claim is made or suit is brought against the Covered Party, the Covered Partyshall be obligated to forward to the CCP or its designated representative everydemand, notice summons or other process received by it or its representatives.3. The Covered Party in cooperation with the Office of General Counsel shallcooperate with the CCP and upon its request, assist in making settlements in theconduct of suits and in enforcing any right of contribution or indemnity againstany person or organization which may be liable to the Covered Party because of all damages with respect to which coverage is afforded under this document; andthe Covered Party shall attend hearings and trials and assist in securing andgiving evidence and obtaining the attendance of witnesses. The Covered Partyshall not, except at its own risk, voluntarily make any payment, assume anyobligation or incur any expenses. In the event that the amount of Ultimate NetLoss becomes certain either through trial court judgment or through agreementamong the Covered Party, the claimant and the CCP, then the Covered Partymay pay the amount of judgment or amount agreed upon to the claimant or effect the settlement and, upon such submission of due proof thereof, the CCP shallreimburse the Covered Party for that part of such payment which is in excess of the dollar value of the co-payment percentage, or will, upon request of theCovered Party, make such payment to the claimant on behalf of the Covered Party. -------------------------------------------------------------------------------- Page 10 Construction Claims Program ManualPage 9 of 12Policies & ProceduresSECTION I - Procedures for Processing the 1% Construction Claims Program FeeOnce a State funded streamlined capital outlay project has been successfully bid, campus will be charged for project coverage within thirty (30) days of issuance of the Notice toProceed, and the fee will be based on the awarded contract value stated therein. This isintended to insure that all projects are appropriately covered and that payment iscompleted efficiently and timely.CPDC, Facilities Planning, shall maintain information for all pending capital outlayprojects eligible for coverage through the program. Once a project has been successfully bid, the following actions shall occur:A. The campus will submit to the facility planner in CPDC a copy of the Notice toProceed, CPDC 2-7 form at award, and the abstract of bids. B. The construction claims administrator shall issue the Memorandum of Coverage tothe Vice President for Business and Administration for execution. A copy of theexecuted document shall be sent to the campus Vice President for Business andAdministration, the campus Executive Dean, and the facility planner in CPDC.C. The construction claims administrator shall submit a request for a Plan of FinancialAdjustment (PFA), using the Memorandum of Coverage for support documentation,to the accountant for the CPDC Construction Claims Program trust account.The construction claims administrator shall maintain official records for all documentsprepared under this policy and procedure.Procedures for Submitting a Claim to the CCP CommitteeIt is the policy of the Construction Claims Program Committee (CCPC) that allsubmitted claims will be subject to a standardized process. Therefore, it is mandatory that campuses follow the specific plan that is clearly stated herein. This policy isintended to ensure that all campus claims are resolved in a fair, efficient and timelymanner. When a campus becomes aware that it is likely to receive a covered claimthat exceeds project funds, it shall notify the CCPC Chair so that mitigation effortsmay be coordinated.SECTION II - Conditions for Submission of a RequestCampuses may submit a request to the Construction Claims Program Chair for funding of a contractor claim under the following conditions:A. The project management team was successful in negotiation of the claim, at its ownrisk but the claim exceeds the available project funds. -------------------------------------------------------------------------------- Page 11 Construction Claims Program ManualPage 10 of 12B. The pre-claim negotiations result in a preliminary resolution that requiredfunding beyond the available project funds.C. The campus’s construction claims review process results in a successful preliminaryresolution that requires funding beyond available project funds.D. The recommendations of the Contractor’s Claim Review Board hearing favor thecontractor’s claim, and the awarded amount requires funding beyond the availableproject funds.E. The contractor rejects the recommendations of the Contractor’s Claim Review Board, and threatens or files an action, which is resolved in a subsequent negotiatedstatement.The Contractor’s Claims Review Board hearing contractually exhausts thecontractor’s appeal process. However, if the claim is pursued by the contractor, ameeting shall be held to review options and the strength of the CSU position. Themeeting should include the Vice President for Administration, the Executive Dean,the Assistant Vice Chancellor of CPDC chair of CCPC, the chair of the CSUContractor’s Claims Review Board, campus counsel, and others as required. If therecommended outcome is to negotiate a settlement, then the appropriate Universityofficial or counsel shall pursue it with the contractor or the contractor’s counsel.F. The contractor files a court action and the court determines that campus has to pay the contractor’s claim or the contractor and the campus agree on a settlement amount. SECTION III - Requirements for Submitting a RequestIf any of the previous conditions exist, a campus must submit a request to the Chair of the CCPC. The campus will be required to demonstrate to the CCPC that the project fundsand contingency were used for the base project scope and that the claim(s) are not a result of poor judgment of the project management team in directing the contractor to performprotested work. The campus request shall include the following:A. Brief description of the claim including the contractor’s position, the projectmanagement team’s position, the amount of the claim, and the requested claimpayment value.B. Indicate process and rationale for direction given to the contractor to performprotested work; include a copy of field instructions as appropriate when directionshave been used per Contract General Conditions, Article 5.02.C. Identify efforts utilized to mitigate the claim.D. Provide a brief overview of the campus’s management of the project to explainwhether most disputes were successfully resolved or mitigated.E. Provide a copy of the project’s change order log that includes the reason for eachchange according to approved categoriesSECTION IV - Process for Determining Campus Co-paymentA. The CCPC will convene a committee meeting as soon as possible after receipt of acampus request. The CCPC will review all required information submitted by thecampus, and will then evaluate and assign costs, if any, to the following factors in -------------------------------------------------------------------------------- Page 12 Construction Claims Program ManualPage 11 of 12order to determine the campus’s co-payment percentage. The method for determining this percentage will have a direct correlation to the percentage value of the claimcompared to total construction cost with a minimum of 5% and a maximum of 25%.1. Cost of delay claims caused by the campus, either directly by specific direction to stop work, or indirectly by not acting timely when delay was otherwisepreventable.2. Cost of elective change orders (owner requested) which have no directrelationship to base (original) project scope.3. Cost of known claim that was not timely mitigated to lessen or avoid the costimpact due to specific direction given by the campus (use of Contract GeneralConditions, Article 5.02).4. Overall evaluation of how the project was managed.5. Financial reporting oversight.6. How the contingency was spent.7. Timely mitigation/resolution of contractor-related issues.8. Negligence in project management.B. CCPC recommendations that exceed a five percent (5%) co-payment will include awritten objective and subjective assessment of campus management of the project.The CCPC may request additional information from the campus, the contractor andothers as deemed appropriate.C. If a campus disagrees with the recommended percentage established by thecommittee, the campus has seven (7) days following receipt of written notification tosubmit a written appeal to the chair of the CCPC.D. The campus may request a meeting with the CCPC to personally present an appealwithin two (2) weeks after submitting the written appeal.E. The CCPC will issue a final recommended co-payment percentage, with theconcurrence of the Executive Vice Chancellor/Chief Financial Officer of theChancellor’s Office and forward it to the appropriate individuals in the Chancellor’sOffice and the campus.F. The CCPC will endeavor to provide its final recommendation within thirty (30) daysof receipt of request.SECTION V - Recommended Payment by CCPCA. Upon review of all information submitted, the CCPC will submit arecommendation(s) to the Executive Vice Chancellor/Chief Financial Officer at theChancellor’s Office to provide a funding allocation from the CCP account for acovered claim(s) to the campus so that the contractor may be paid as timely aspossible. This will avoid late payment penalties during the co-payment analysis anddetermination phase.B. The campus will then be responsible to reimburse the Chancellor’s Office CCPaccount for the co-payment amount, once it is determined.C. The CCPC will prepare an annual report on all decisions and fund balance, andpresent it to the Executive Vice Chancellor/Chief Financial Officer of theChancellor’s Office. -------------------------------------------------------------------------------- Page 13 Construction Claims Program ManualPage 12 of 12SECTION VI – Court Awards to CSUShould the court action determine that the contractor is to pay the CSU, then the awardshall be used in the following priority:A. Direct costs paid by the CCP.B. Balance to be returned to campus for expenditure for capital outlay use only.SECTION VII – Construction Claims Program Trust Fund BalanceOnce the Construction Claims Program Trust Fund balance reaches $10 million,campuses will continue to pay the 1% program fee for each Covered Project. However,if there are no Covered Claims against the project within 30 days after the CountyRecorder’s recordation date of the Trustee’s notice of completion, the campus shallsubmit, to the Chair of the Construction Claims Program, a certification that no Covered Claims related to the project have been filed. After receipt of such certification, the 1%program fee for that project shall be returned to the campus. Such returned program fees shall be used for capital outlay purposes only.

Construction Claims News

construction claims

So many Kentuckians tried to file claims for unemployment insurance Sunday and Monday that state phone lines and a jobless-claim Web site were overwhelmed, leaving many people frustrated. The Office of Employment and Training installed two new ...

Jobless overwhelm Kentucky unemployment lines - Louisville Courier-Journal

NEW YORK (AP) - Stock prices have been higher today, led by strength in tech stocks. The move comes despite some fresh readings indicating weakness in the economy. WASHINGTON (AP) - President-elect Barack Obama says he will bar pork-barrel projects ...

Business Minute: Stocks firm...Crashing unemployment lines...Gasoline ... - Idaho8.com

Weather-related construction delays and other problems have added nearly $500 million to the cost of building two new coal-fired power plants in Oak Creek, the project's builder, Bechtel Corp., said in claims it has submitted to Wisconsin Energy Corp ...

Contractor claims delays add $500 million to cost of power plant - Milwaukee Journal Sentinel

PETER Garrett is refusing to overturn the Howard government's approval of the multibillion-dollar Tasmanian pulp mill because of legal advice suggesting Gunns could legally seek compensation. Speaking on radio yesterday the federal Environment ...

Garrett fears compo claim if he blocks Gunns mill - Age

Maine approached the end of 2008 with a week in which initial jobless claims dropped. The state was one of eight states reporting the greatest reductions in unadjusted initial claims for unemployment insurance in the week ending December 20 ...

Maine's weekly unemployment claims drop - Portland Press Herald

The company building the University Estates housing development near Ohio Rt. 682 and Armitage Road has been sued by a Circleville, Ohio firm, which is trying to collect on two mechanicâ€™s liens totaling $48,298. Schumacher Homes of Circleville, Inc ...

Contractor claims UE owes it over $48,000 - Athens News

ATLANTA - (Business Wire) Beazer Homes USA, Inc. (NYSE: BZH) ( www.beazer.com ) today announced the appointment of Kenneth F. Khoury as Executive Vice President and General Counsel. Most recently, Mr. Khoury was Executive Vice President and General ...

Beazer Homes Names Kenneth F. Khoury Executive Vice President and ... - Earthtimes

However swift denials were issued, with claims construction plans had benefited from the current financial crisis. Initially George Sorial, Trump's lawyer and managing director of international development for the Trump Organization, was reported in ...

Trump denies golf course hit by the crunch - CNN

Apple at Macworld introduced a new version of the 17-inch MacBook Pro . The new model uses the same unibody aluminum construction of the 15-inch version and is just 0.98 inches thick -- enough to make it the thinnest 17-inch notebook ever, the ...

Apple launches unibody 17-inch MacBook Pro - MacNN

NEW YORK (AP) - Wall Street has dismissed more bad economic news and is finishing with a moderate advance that leaves stocks at their highest levels in two months. Fresh details from the Federal Reserve on its efforts to combat the recession have ...

Construction Claims Links

No news is good news. IP problem.