37 Tex. Admin. Code § 385.1111 - Negotiation and Mediation of Contract Disputes
(a) Purpose. In accordance with Texas
Government Code Chapter 2260, the purpose of this rule is to establish
procedures for the Texas Juvenile Justice Department (TJJD) and its contractors
to engage in negotiation and/or mediation procedures to resolve certain
disputes involving claims of breach of a written contract. These procedures are
not intended to replace the process to resolve any disagreement concerning the
contract in the ordinary course of contract administration under less formal
procedures specified in the parties' contract.
(b) Applicability.
(1) This rule applies to TJJD and its
contractors, as defined in Texas Government Code §
2260.001.
(2) This rule does not apply to:
(A) a claim for personal injury or wrongful
death arising from a breach of contract;
(B) an action of TJJD for which a contractor
is entitled to a specific remedy pursuant to state or federal constitution or
statute;
(C) a contract action
proposed or taken by TJJD for which a contractor receiving Medicaid funds under
that contract is entitled by state statute or rule to a hearing conducted in
accordance with Texas Government Code Chapter 2001;
(D) a contract that is solely and entirely
funded by federal grant monies other than for a project defined in Texas
Government Code §
2166.001;
(E) a contract between TJJD and the federal
government or its agencies, another state, or another nation;
(F) a contract between TJJD and another unit
of state government;
(G) a contract
between TJJD and a local governmental body or a political subdivision of
another state;
(H) a claim from a
contractor's subcontractor, officer, employee, agent, or other persons
furnishing goods or services to a contractor;
(I) a contract within the exclusive
jurisdiction of state or local regulatory bodies; or
(J) a contract within the exclusive
jurisdiction of federal courts or regulatory bodies.
(c) Sovereign Immunity.
(1) To the extent allowed by law, this rule
does not waive TJJD's sovereign immunity to suit or liability.
(2) The procedures contained in this rule are
exclusive and required prerequisites to suit under Texas Civil Practice and
Remedies Code Chapter 107, and Texas Government Code Chapter 2260.
(d) Contract Claims.
(1) Notice of Claim of Breach of Contract.
(A) A contractor asserting a claim for breach
of contract under Texas Government Code Chapter 2260 must file notice of the
claim as provided by this subsection.
(B) The notice of claim must:
(i) be submitted no later than 180 days after
the date of the event that the contractor asserts as the basis of the
claim;
(ii) be delivered by hand,
certified mail return receipt requested, or other verifiable delivery service
to the individual stated in the contract or to the executive director if no
individual is identified;
(iii)
state in detail:
(I) the nature of the
alleged breach of contract, including the date of the event that the contractor
asserts as the basis of the claim and each contractual provision allegedly
breached;
(II) a description of
damages that resulted from the alleged breach, including the amount and method
used to calculate those damages; and
(III) the legal theory of recovery, i.e.,
breach of contract, including the causal relationship between the alleged
breach and the damages claimed;
(iv) provide supporting documentation or
other tangible evidence to facilitate TJJD's evaluation of the claim;
and
(v) be signed by the contractor
or the contractor's authorized representative.
(2) Counterclaim by TJJD.
(A) In order to assert a counterclaim, TJJD
must file notice of the counterclaim not later than 60 days after the date of
the contractor's notice of claim.
(B) The notice of counterclaim must:
(i) be submitted in writing;
(ii) be delivered by hand, certified mail
return receipt requested, or other verifiable delivery service to the
contractor or representative of the contractor;
(iii) state in detail:
(I) the nature of the counterclaim;
(II) a description of damages or offsets
sought, including the amount and method used to calculate those damages or
offsets; and
(III) the legal theory
supporting the counterclaim recovery, i.e., breach of contract, including the
causal relationship between the alleged breach and the damages
claimed;
(iv) provide
supporting documentation or other tangible evidence to facilitate the
contractor's evaluation of TJJD's counterclaim; and
(v) be signed by the executive director or
his/her designee.
(C)
Nothing in this rule precludes TJJD from initiating a lawsuit for damages
against the contractor in a court of competent jurisdiction.
(e) Negotiation.
(1) The parties may conduct negotiations of
claims and counterclaims within a reasonable period of time as long as the
negotiations start prior to the 120th day following the date TJJD receives the
contractor's notice of claim.
(2)
The parties must complete the negotiations as provided by this rule as a
prerequisite to a contractor's request for contested case hearing no later than
270 days after TJJD receives the contractor's notice of claim unless the
parties agree in writing to extend the time for negotiations.
(3) The parties may conduct negotiations with
the assistance of one or more neutral third parties.
(4) To facilitate the meaningful evaluation
and negotiation of the claim(s) and any counterclaim(s), the parties may
exchange relevant documents that support their respective claims, defenses,
counterclaims, or positions.
(5)
Material submitted pursuant to this subsection and claimed to be confidential
by the contractor are handled pursuant to the requirements of the Public
Information Act.
(6) The agreement
may resolve an entire claim or counterclaim or any designated and severable
portion of a claim.
(7) The
agreement must be in writing and signed by representatives of the contractor
and TJJD who have authority to bind each respective party.
(8) A partial settlement does not waive a
party's rights under Texas Government Code Chapter 2260 to proceed on the parts
of the claims or counterclaims that are not resolved.
(9) Unless the parties agree otherwise, each
party is responsible for its own costs incurred in connection with a
negotiation, including, without limitation, the costs of attorney's fees,
consultant's fees, and expert's fees.
(f) Mediation.
(1) The parties may agree to mediate the
dispute at any time before the 120th day after TJJD receives the contractor's
notice of claim or before the expiration of any written extension agreed to by
the parties.
(2) The parties may
mediate the dispute even after the case has been referred to the State Office
of Administrative Hearings (SOAH) for a contested case. SOAH may also refer a
contested case for mediation pursuant to its own rules and guidelines, whether
or not the parties have previously attempted mediation.
(3) The mediation is subject to the
provisions of the Governmental Dispute Resolution Act, Texas Government Code
Chapter 2009. For purposes of this rule, mediation is assigned the meaning set
forth in the Texas Civil Practice and Remedies Code §
154.023.
(4) To facilitate a meaningful opportunity
for settlement, the parties must, to the extent possible, select
representatives who are knowledgeable about the dispute and:
(A) who are in a position to reach agreement;
or
(B) who can credibly recommend
approval of an agreement.
(5) Sources of mediators include governmental
officers or employees who are qualified as mediators under Texas Civil Practice
and Remedies Code §
154.052,
private mediators, SOAH, the Center for Public Policy Dispute Resolution at the
University of Texas School of Law, an alternative dispute resolution system
created under Texas Civil Practice and Remedies Code Chapter 152, or another
state or federal agency or through a pooling agreement with several state
agencies.
(6) The confidentiality
of a final settlement agreement to which TJJD is a signatory that is reached as
a result of the mediation is governed by Texas Government Code Chapter
552.
(7) Each party is responsible
for its own costs incurred in connection with the mediation, including costs of
document reproduction for documents requested by such party, attorney's fees,
and consultant or expert fees. The costs of the mediation process itself are
divided equally between the parties.
(g) Settlement Agreement.
(1) A settlement agreement reached as a
result of negotiation or mediation that resolves an entire claim or
counterclaim or any designated and severable portion of a claim or counterclaim
must be in writing and signed by the representatives of the contractor and TJJD
who have authority to bind each respective party.
(2) If the settlement agreement does not
resolve all issues raised by the claim and counterclaim, the agreement must
identify the issues that are not resolved.
(3) A partial settlement does not waive a
contractor's rights under Texas Government Code Chapter 2260, as to the parts
of the claim that are not resolved.
(h) Referral to the State Office of
Administrative Hearings.
(1) The contractor
may request a contested case hearing before SOAH after the 270th day after TJJD
receives the contractor's notice of claim or the expiration of any written
extension.
(2) If a claim for
breach of contract is not resolved in its entirety through negotiation or
mediation in accordance with this rule on or before the 270th day after TJJD
receives notice of claim, or after the expiration of any written extension
agreed to by the parties, the contractor may file a request with TJJD for a
contested case hearing before SOAH.
(3) A request for a contested case hearing
must state the legal and factual basis for the claim, and must be delivered to
the executive director of TJJD or other officer designated in the contract to
receive notice within a reasonable time after the 270th day or the expiration
of any written extension agreed to by the parties.
(4) TJJD forwards the contractor's request
for a contested case hearing to SOAH within a reasonable period of time, not to
exceed 30 days after receipt of the request.
(5) The parties may agree to submit the case
to SOAH before the 270th day after the notice of claim is received by TJJD if
they have achieved a partial resolution of the claim or if an impasse has been
reached in the negotiations and proceeding to a contested case hearing would
serve the interests of justice.
Notes
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