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TITLE 37PUBLIC SAFETY AND CORRECTIONS
PART 6TEXAS DEPARTMENT OF CRIMINAL JUSTICE
CHAPTER 155REPORTS AND INFORMATION GATHERING
SUBCHAPTER CPROCEDURES FOR RESOLVING CONTRACT CLAIMS AND DISPUTES
RULE §155.31Establishing Procedures for Resolving Contract Claims and Disputes

(j) Appeal to the TBCJ with Respect to Certain Contracts. A contractor who operates or manages a secure correctional facility of the TDCJ may appeal to the TBCJ for final determination, within 20 days of the executive director's decision, any imposed sanction under the contract. The appeal shall be submitted in writing and signed by the contractor or the contractor's authorized representative and delivered by hand, certified mail return receipt requested, or other verifiable delivery service to the TBCJ, P.O. Box 13084, Austin, Texas 78711.

(k) Request for Voluntary Disclosure of Additional Information.

  (1) Upon the filing of a claim or counterclaim, each party may request to review and copy information in the possession, custody, or control of the other party that pertains to the contract claimed to have been breached, including, without limitation:

    (A) accounting records;

    (B) correspondence between the TDCJ and outside consultants it used when preparing its bid solicitation or any part thereof or in administering the contract, and correspondence between the contractor and its subcontractors, material men, and vendors;

    (C) schedules;

    (D) the parties' internal memoranda; and

    (E) documents created by the contractor in preparing its offer to the TDCJ and documents created by the TDCJ in analyzing the offers it received in response to a solicitation.

  (2) This subsection applies to all information in the parties' possession regardless of the manner in which it is recorded, including, without limitation, paper and electronic media.

  (3) The contractor and the TDCJ may seek additional information directly from third-parties, including, without limitation, the TDCJ's third-party consultants and the contractor's subcontractors.

  (4) Nothing in this subsection requires any party to disclose any information or any matter that is privileged under Texas law.

  (5) Requests submitted pursuant to this subsection for material claimed to be confidential by the contractor shall be handled pursuant to the requirements of the Public Information Act.

(l) Duty to Negotiate. The parties shall negotiate in accordance with the timetable set forth in subsection (m) of this section to resolve all claims and counterclaims. No party is obligated to settle with the other party as a result of the negotiation.

(m) Negotiation Timetable.

  (1) Following receipt of a contractor's notice of claim, the committee shall review the contractor's claim(s) and the TDCJ's counterclaim(s), if any, and shall initiate negotiations with the contractor to resolve the claim(s) and counterclaim(s).

  (2) The parties shall begin negotiations within a reasonable period of time, not to exceed 120 days following the date the TDCJ receives the contractor's notice of claim.

  (3) The parties may conduct negotiations according to an agreed schedule provided negotiations begin no later than the deadline set forth in paragraph (2) of this subsection.

  (4) Subject to paragraph (5) of this subsection, the parties shall complete the negotiations required by this subsection as a prerequisite to a contractor's request for contested case hearing no later than 270 days after the TDCJ receives the contractor's notice of claim.

  (5) The parties may agree in writing to extend the time for negotiations on or before the 270th day after the TDCJ receives the contractor's notice of claim. The agreement shall be signed by representatives of the parties with authority to bind each respective party and shall provide for the extension of the statutory negotiation period until a certain date. The parties may enter into a series of written extension agreements that comply with the requirements of this section.

  (6) The contractor may request, in writing, a contested case hearing before the State Office of Administrative Hearings (SOAH) pursuant to subsection (q) of this section after the 270th day after the TDCJ receives the contractor's notice of claim or the expiration of any extension agreed to under paragraph (5) of this subsection.

  (7) The parties may agree to mediate the dispute at any time before the 120th day after the TDCJ receives the contractor's notice of claim or before the expiration of any extension agreed to by the parties pursuant to paragraph (5) of this subsection. The mediation shall be governed by subsections (r), (s), (t), (u), (v), and (w) of this section.

  (8) Nothing in this subsection is intended to prevent the parties from agreeing to commence negotiations earlier than the deadlines established in paragraph (2) of this subsection, or from continuing or resuming negotiations after the contractor requests a contested case hearing before the SOAH.

(n) Conduct of Negotiation.

  (1) A negotiation under this subchapter may be conducted by any method, technique, or procedure authorized under the contract or agreed upon by the parties, including, without limitation, negotiation in person, by telephone, by correspondence, by video conference, or by any other method which permits the parties to identify respective positions, discuss respective differences, confer with respective advisers, exchange offers of settlement, and settle.

  (2) The parties may conduct negotiations with the assistance of one or more neutral third-parties. If the parties choose to mediate the dispute, the mediation shall be conducted in accordance with subsections (r), (s), (t), (u), (v), and (w) of this section. Parties may choose an assisted negotiation process other than mediation, including, without limitation, processes such as those described in subsections (x), (y), and (z) of this section.

  (3) To facilitate the meaningful evaluation and negotiation of the claim(s) and any counterclaim(s), the parties may exchange relevant documents that support the respective claims, defenses, counterclaims, or positions.

  (4) Material submitted pursuant to this subsection and claimed to be confidential by the contractor shall be handled pursuant to the requirements of the Public Information Act.

(o) Settlement Agreement.

  (1) A settlement agreement may resolve an entire claim or any designated and severable portion of a claim.

  (2) To be enforceable, a settlement agreement shall be in writing and signed by representatives of the contractor and the TDCJ who have authority to bind each respective party.

  (3) A partial settlement does not waive a party's rights under Texas Government Code Chapter 2260 as to the parts of the claims or counterclaims that are not resolved.

(p) Costs of Negotiation. Unless the parties agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with a negotiation, including, without limitation, attorney fees, consultant fees, and expert fees.

(q) Request for Contested Case Hearing.

  (1) If a breach of contract claim is not resolved in its entirety through negotiation, mediation, or other assisted negotiation process in accordance with this section on or before the 270th day after the TDCJ receives the notice of claim, or after the expiration of any extension agreed to by the parties pursuant to subsection (m)(5) of this section, the contractor may file a request with the TDCJ for a contested case hearing before the SOAH.

  (2) A request for a contested case hearing shall state the legal and factual basis for the claim and shall be delivered to the executive director 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 pursuant to subsection (m)(5) of this section.

  (3) The TDCJ shall forward the contractor's request for contested case hearing to the SOAH within a reasonable period of time, not to exceed 30 days, after receipt of the request.

  (4) The parties may agree to submit the case to the SOAH before the 270th day after the notice of claim is received by the TDCJ 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.

(r) Mediation Timetable.

  (1) The contractor and the TDCJ may agree to mediate the dispute at any time before the 120th day after the TDCJ receives a notice of a breach of contract claim, or before the expiration of any extension agreed to by the parties in writing.

  (2) A contractor and the TDCJ may mediate the dispute even after the case has been referred to the SOAH for a contested case. The 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.

(s) Conduct of Mediation.

  (1) The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Texas Government Code Chapter 2009. For purposes of this subchapter, "mediation" is assigned the meaning set forth in Texas Civil Practice and Remedies Code §154.023.

  (2) Parties may agree to use mediation as an option to resolve a breach of contract claim at the time the parties enter into the contract and include a contractual provision to do so. The parties may mediate a breach of contract claim even absent a contractual provision to do so if both parties agree.

  (3) In selecting a mediator, the parties should use the qualifications set forth in subsection (t) of this section. The mediator shall be acceptable to both parties.

(t) Qualification and Immunity of the Mediator.

  (1) The mediator shall possess the qualifications required under Texas Civil Practice and Remedies Code §154.052, be subject to the standards and duties prescribed by Texas Civil Practice and Remedies Code §154.053 and have the qualified immunity prescribed by Texas Civil Practice and Remedies Code §154.055, if applicable.

  (2) The parties should decide whether, and to what extent, knowledge of the subject matter and experience in mediation would be advisable for the mediator.

  (3) The parties should obtain from the prospective mediator the ethical standards that shall govern the mediation.

(u) Confidentiality of Mediation and Final Mediated Settlement Agreement.

  (1) A mediation conducted under this section is confidential in accordance with Texas Government Code §2009.054.

  (2) The confidentiality of a final settlement agreement to which the TDCJ is a signatory that is reached as a result of the mediation is governed by Texas Government Code Chapter 552.

(v) Costs of Mediation. Unless the contractor and the TDCJ agree otherwise in writing, each party shall be responsible for its own costs incurred in connection with the mediation, including costs of document reproduction for documents requested by such party, attorney fees, consultant fees or expert fees. The costs of the mediation process itself shall be divided equally between the parties.

(w) Mediated Settlement Agreement. Any settlement agreement reached during the mediation shall be signed by the representatives of the contractor and the TDCJ and describe any procedures required to be followed by the parties in connection with final approval of the agreement.

(x) Final Settlement Agreement.

  (1) A final settlement agreement reached through mediation that resolves an entire claim or any designated and severable portion of a claim, shall be in writing and signed by representatives of the contractor and the TDCJ 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 shall identify the issues that are not resolved.

  (3) A partial settlement does not waive a party's rights under Texas Government Code Chapter 2260 as to the parts of the claim that are not resolved.

(y) Assisted Negotiation Processes. Parties to a contract dispute under Texas Government Code Chapter 2260 may agree, either contractually or when a dispute arises, to use assisted negotiation processes (alternative dispute resolution) in addition to negotiation and mediation to resolve the dispute.

(z) Factors Supporting the Use of Assisted Negotiation Processes. The following factors may help the parties decide whether one or more assisted negotiation processes could help resolve the dispute:

  (1) the parties recognize the benefits of an agreed resolution of the dispute;

  (2) the expense of proceeding to contested case hearing at the SOAH is substantial and might outweigh any potential recovery;

  (3) the parties want an expedited resolution;

  (4) the ultimate outcome is uncertain;

  (5) there exists factual or technical complexity or uncertainty that would benefit from the expertise of a third-party expert for technical assistance or fact-finding;

  (6) the parties are having substantial difficulty communicating effectively;

  (7) a mediator third-party could facilitate the parties' realistic evaluation of the respective cases;

  (8) there is an on-going relationship that exists between the parties;

  (9) the parties want to retain control over the outcome;

Cont'd...

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