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I. INTRODUCTION

In order to foster a "partnering approach" to large construction projects, the Ohio Department of Transportation (ODOT) often uses Dispute Review Boards (DRB) in place of the standard dispute resolution process. Since 2004, roughly 21 percent of claims resolved through the ODOT dispute resolution process have ended with recommendations issued by DRBs. The DRB process is designed to "provide special expertise to assist in and facilitate the timely and equitable resolution of disputes and claims."¹ Since ODOT uses the DRB process in an attempt to avoid project delays and minimize the expense of settlement or litigation, it is essential for contractors to understand how the DRB process works in order to increase the chances of succeeding in the event that a dispute with ODOT arises.

II. OVERVIEW OF THE DRB

Once a contract with ODOT is established, the DRB is formed. The DRB consists of three members: one member selected by ODOT; one member selected by the contractor; and a third member selected by the existing two members, who serves as the DRB chair. All three members are required to have at least 10 years of experience with the type of construction involved in the project, and must be impartial and without any conflicts of interest with respect to both ODOT and the contractor. DRB membership often consists of attorneys, engineers and construction professionals. After the contractor and ODOT agree on the DRB members, the DRB will establish its "Operating Procedures for Dispute Resolution" based entirely or in part on a template of procedures provided by ODOT.

During the project, the DRB plays an active role in monitoring construction progress in order to anticipate and resolve disputes. The DRB members are obligated to make quarterly visits to the project site, keep current files on the project, meet with the other members of the DRB, and meet with both the contractor and ODOT. The DRB remains active throughout the life of the project, up until all unresolved claims are closed.

III. DISPUTE RESOLUTION PROCESS

The prima1y function of the DRB is to facilitate the dispute resolution process so that the project is allowed to continue. During the dispute resolution process, the contractor is obligated to continue work, while ODOT is obligated to continue to pay for the work. The process consists of three steps, each of which must be completed before the other. The first two steps involve direct negotiations between the contractor and ODOT, but the DRB must monitor both steps to ensure compliance with the procedure.

In Step 1, the contractor must meet with the engineer and area engineer at the project site. The contractor and engineers will review the contract and attempt to negotiate a resolution. The engineers will then make an "onsite determination" of the dispute and issue a written decision to the contractor.

If the contractor is unsatisfied with the onsite determination, then it must submit a written request for a "Step 2 meeting" to the district construction engineer (DCE), along with documents outlining and relating to the dispute. The contractor must then meet with the District Dispute Resolution Committee (DDRC), which will issue a written decision of the dispute within 14 calendar days of the meeting.

If the contractor is unsatisfied with the decision of the DDRC, it must then submit an appeal to the DRB to obtain a Step 3 hearing. The contractor must submit all claim documentation to the DRB, including a narrative of the dispute in question. During the hearing, the DRB will hear oral presentations from both the contractor and ODOT. After considering the arguments and all relevant documentation, the DRB makes a decision through majority vote and issues a written opinion, providing detailed directions to both parties. The recommendation is non-binding; however, the contractor must indicate to ODOT what its intentions are with regard to the DRB's recommendation.

If the contractor disagrees with the DRB recommendation, two primary courses of action remain. First, if new evidence emerges, the contractor or ODOT may appeal the recommendation for reconsideration by the DRB. However if there is no new evidence to submit, the DRB recommendation is considered the final step in the dispute resolution process and it may not be appealed at any other level within ODOT. At that point the contractor's only recourse is to file a lawsuit against the State of Ohio in the Court of Claims.

IV. ADVISORY RECOMMENDATION PROCESS

Another critical function of the DRB is to act in an advisory capacity during the course of the project. Anytime after completion of Step 1 of the dispute resolution process, the DRB may be contacted by either the contractor or ODOT in order to hold an advisory meeting. After considering the positions of both parties, the DRB will make a preliminary recommendation. The recommendation is not binding, does not have to be accepted or rejected by either side, and does not preclude a Step 3 appeal to the DRB in the dispute resolution process.

V. WINNING A DRB CLAIM

Since 2004, DRBs have issued 11 recommendations with respect to contractor/ODOT disputes that have reached the Step 3 level of the dispute resolution process. Of these 11 recommendations, seven found that the contractor was entitled to at least some degree of compensation. However; the DRB often reduces the amount of compensation to reflect what it feels is the appropriate proportion of blame on the part of both the contractor and ODOT. For example, in a dispute between Mahan/National A Joint Venture and ODOT in 2006, the DRB found the contractor to be 75 percent at fault for the dispute, and therefore recommended that it receive 25 percent of its claim.²

The deciding issue in many DRB recommendations is the interpretation of the contract itself, along with the Construction and Materials Specifications (CMS). The DRB will often look to the provisions of the CMS to determine if they address and control the outcome of the particular issue in dispute. For example, in a dispute between Kokosing Construction Inc. and ODOT in 2009, the DRB determined that because of change of conditions requiring extra work, CMS 104.020 mandated that the contractor be awarded a change order, and given compensation.³

DRB recommendations often emphasize continued negotiations between the contractor and ODOT in order to resolve the dispute with minimal disruption of work. In a 2005 dispute between National Engineering & Construction Co. and ODOT, the DRB recommended that the contractor and ODOT resolve issues regarding material testing through continued negotiations.⁴ Likewise, in another dispute between National Engineering and ODOT in 2005, the DRB suggested that the parties reconsider the proposals put forth in past failed negotiations.⁵

Based on the DRB dispute resolution process and past DRB recommendations, general trends emerge that may help a contractor increase its odds for successfully resolving a dispute with ODOT. First, a good-faith effort to comply with the dispute resolution process, especially with respect to providing adequate and timely documentation of its claim, will increase the odds of a favorable resolution. Failure by a contractor to observe the time limitations associated with the process may foreclose the opportunity to proceed to a Step 3 hearing, or even file a complaint with the Court of Claims. In addition, submitting thorough claim documentation during the process will increase the chances that the DRB will award entitlement close to the amount claimed by the contractor. If the DRB is not presented with enough evidence to make the determination it may recommend that the parties return to negotiations.

Second, since the DRBs rely heavily on the provisions of the CMS, a contractor can increase its chances of successful dispute resolution significantly by understanding and complying with those provisions from the outset of the project. Utilizing experienced counsel to come to a better understanding of both the contractor's and ODOT's obligations under the specifications will help the contractor anticipate and avoid unnecessary conflicts, and better state its entitlement if such conflicts do arise. Finally, willingness toward a "partnering approach" in the DRB process may also increase a contractor's chances of obtaining a favorable outcome in ODOT disputes. Since much of the DRB process is centered on keeping an open dialogue between the parties, and since many DRB recommendations encourage continued negotiations, demonstrating a commitment to meaningful and principled negotiation may help a contractor ultimately receive a favorable DRB outcome.

VI. CONCLUSION

As ODOT continues to use the DRB process to handle conflicts on large construction projects, it is imperative for contractors to know and understand the steps they must take to pursue a claim against ODOT. By following the required steps, adhering to the CMS guidelines, timely submitting the proper documentation, and demonstrating a commitment to open negotiation, a contractor can help ensure it will obtain a successful outcome on a DRB claim.

Endnotes

1. ODOT Proposal Note 108.
2. ODOT ClaimNo. 10-020510-02. ODOT's DRB decisions can be found on the ODOT website whose address is http://www.dot.stale.oh.us/Divisions/Contrac/Admin/Claims/Claims-HTMs/YearList.html).
3. ODOT Claim No. 07-070387-01
4. ODOT Claim No. 06-0163(04)-01.
5. ODOT Claim No. 06-0163(04)-02.