This article was featured in the June 2024 edition of the Utility Contractors Association of New England, Inc.’s Construction Outlook.
Starting several years ago, Massachusetts Department of Transportation (“MassDOT”) began publishing annual updated versions of its Standard Specifications for Highways and Bridges (“Standard Specs”) on its website. See https://www.mass.gov/lists/construction-specifications. Not only are current versions available on the website (including an updated set of 2024 documents), historical/superseded versions also remain available. A summary of all the various changes in its most recent version is beyond the scope of this article, but MassDOT has provided a helpful Appendix identifying the 2024 amendments to the prior, 2023 version of the Standard Specs. The Appendix is accessible here. Contractors are urged to familiarize themselves with the version of Standard Specs applicable to their projects (together with any applicable supplementary and special conditions; note also that some non-MassDOT contracts nevertheless incorporate MassDOT’s standard specifications). For projects governed by the most recent 2024 version, contractors should be sure to take note of the various changes.
This article focuses on one change in particular: MassDOT’s adoption of an entirely new Division I, Section 7.16, applicable to contractor claims. For many years, Section 7.16 had remained largely unchanged; the 2023 version of Section 7.16 is remarkably similar to the 1988 version of Section 7.16 (except that the 2023 version includes an additional paragraph addressing interest on judgments that MassDOT had added in 2020). With respect to appeal rights, the 2023 version even included a reference to a statute that was referenced in the 1988 version (even though that statute had been subsequently repealed in 2004 as part of the “Act Modernizing the Transportation System of the Commonwealth”). The 2024 version no longer references the repealed statute.
Contractors are urged to review and understand the new Section 7.16, which states – among other things – that “[a]ll disputes between the Contractor and the Department shall be resolved as provided by this subsection.” Section 7.16 establishes a 3-step notice and claims submission and review process, summarized generally as follows. This summary does not replace a careful review of Section 7.16, particularly as it may relate to the facts of a given situation.
Step 1: Contractor Claim Submission to MassDOT
This step is comprised of two subparts: (A) submission of a notice of claim; and (B) submission of an itemized statement(s) of claim.
Notice of claims subject to Section 7.16 “must be made in writing to the Engineer within 7 days after the beginning of any work or the sustaining of any damage on account” of the act or omission of MassDOT giving rise to the claim. The written notice must contain a description of the nature of the work performed or damage sustained; the time and date the event was first identified; the location of the impacted work; and the contractual basis for the contractor’s claim.
Within 30 days of beginning any work or sustaining any damage on account of the act/omission, the contractor shall also submit to the Engineer an itemized statement containing: a detailed description of the work claimed and sequence of events and location; a breakdown of actual costs and damages sustained including all supporting documentation; and a Time Entitlement Analysis, if the contractor is seeking a time extension.
As part of this “Step 1” process, if the work that is subject to the claim is not completed within the initial 30 days, the contractor has an ongoing obligation to submit – “on a monthly basis” – the “actual costs to-date and an estimated cost to complete.” Then, upon completion of the work, “a final actual cost shall be submitted in 30 days.”
Section 7.16 maintains language to the effect that failure to comply with the applicable notice and claim submission requirements shall render the claim “forfeited and invalidated.” As part of the information to be submitted, the contractor “will be required to certify, in writing, that the work for which the Contractor is claiming payment, other than as provided for in the Contract, is work actually performed, and the costs as shown are the amounts legally due for performing such work for which payment is claimed.”
Section 7.16 contemplates that the parties will attempt to resolve the issues presented based on a review of the materials submitted and the contract documents. “After a complete review, the Department will issue a written decision on the Contractor’s claim.”
Step 2: Construction Claims Committee Determination
If the contractor is not satisfied with MassDOT’s written decision, the contractor may appeal to MassDOT’s Claims Committee: “[w]ithin 14 Days after the receipt date of the Department’s written decision denying a claim, the Contractor may file a request with the Chief Engineer for a hearing before the Department’s Claims Committee.” The contractor should be prepared to file additional information with respect to the claim, including as the Claims Committee may request. “The Contractor’s claim information must be enhanced to include sufficient description and information to enable understanding by a third party who has no knowledge of the dispute or familiarity with the Project and this documentation must also include a description of the efforts undertaken to resolve the dispute.” After a meeting with the Claims Committee, “the Chief Engineer will provide to the Contractor a written determination on each claim.”
Step 3: Appeal to Administrative Law Judge or Suffolk Superior Court
A contractor “may” appeal the Chief Engineer’s decision to MassDOT’s Administrative Law Judge and Section 7.16 details the information to be provided to the Administrative Law Judge. However, Step 3 also states that “[a]t any time after the determination by the Claims Committee [but within applicable statute of limitations/repose periods], the Contractor at its sole discretion may appeal the Claims Committee’s determination to the Superior Court Department of the Commonwealth of Massachusetts in the County of Suffolk for further consideration.” In light of this language, contractors will need to assess the pros of cons of proceeding with a further appeal before the Administrative Law Judge or in Suffolk County Superior Court. Contractors must continue to keep detailed records, including “complete records of the extra costs and time incurred related to the claim.” Records must be retained for at least 7 years from the date of resolution of the claim.
For many years, the standard specifications set forth in the “Blue Book” had not undergone regular changes. However, MassDOT has been regularly updating its Standard Specs. These updates are not always clerical; as illustrated by Section 7.16, MassDOT has made substantive changes to its Standard Specs. As always, contractors are advised to familiarize themselves with the requirements of their contracts with MassDOT. Preparation of a contract matrix is often a useful tool to promote compliance with applicable contract requirements.
