134.6 Dispute Resolution

Once a consultant is selected to work for MoDOT, circumstances may arise that lead to a dispute between MoDOT’s PM/CA and the consultant. In most cases, a complete understanding and recognition of each party’s concerns will result in successful resolution of the disagreement. However, when that is not the case, this dispute resolution procedure is used.

The relationship between the consultant and MoDOT is a professional contractual relationship. All parties to the contract should understand the dispute resolution process. The PM/CA and the consultant should make every attempt to fully understand the dispute and express honest statements of fact prior to initiating formal dispute resolution. In this context, the PM/CA is defined as the person who authorizes MoDOT’s payment of the consultant invoices.

Before initiating formal dispute resolution, the following activities should occur:

1. The district engineer, or division engineer (hereinafter indicated by “DE”) prepares a letter to the consultant outlining the contested issues.
2. The disputing parties (project manager level for both MoDOT and consultant) participate in a face-to-face meeting.
3. The consulting firm conveys the firm’s recommendations for resolving the dispute.
4. MoDOT’s representative discusses the consultant’s proposed resolution and responds in a letter, either accepting the proposal or offering a rebuttal.
5. MoDOT and the consultant attempt to negotiate a settlement.

If the PM/CA and the consultant reach an agreement that provides the consultant with payment greater, or less than the contract maximum, the PM/CA needs to initiate a supplemental agreement and follow normal procedures to get the supplemental agreement executed, including approval by the PSC. If no settlement is forthcoming, formal dispute resolution is initiated.

134.6.1 Initiating Formal Dispute Resolution

When attempts between the PM/CA and the consultant have failed to resolve the disagreement, the consultant should enumerate the firm’s concerns in a letter to the DE, thereby initiating formal dispute resolution. A Dispute Resolution File should be started by the PM/CA.

Disagreements may arise over the scope of services, fees, hours, the consultant evaluation, errors and omissions, or other issues. Initiation of the resolution process will in no way be reflected on negatively in the consultant’s performance evaluation. The consultant’s letter to the DE should specifically outline the disagreement and the consultant’s view of the issues. This detailed letter must include:

1. A clear description of the items that are being disputed
2. What the consultant desires to resolve the dispute
3. Background—the sequence of events that led to the dispute
4. Documentation to support the request
5. All correspondence between the parties relating to the items in dispute (including e-mail)
6. A listing of previous attempts to resolve the issue (including e-mail)
7. A copy of the contract and any supplemental agreements

Upon receiving the consultant’s letter and documentation, the DE will have the PM/CA prepare a similar letter, also addressed to the DE, outlining the administrator’s view of the disagreement with particular attention to the information in the consultant’s letter. MoDOT may also initiate formal dispute resolution by the PM/CA sending a letter, under the DE’s signature, to the consultant contact listed in the contract. The consultant should be directed to respond to the department’s letter. As a courtesy, the PM/CA should notify the consultant project manager before writing this letter.

134.6.2 Dispute Review by District or Division Engineer

The PM/CA transmits the letter documenting the issues of the dispute, with the consultant’s letter attached, to MoDOT’s DE for review. In addition, the DE also notifies the Assistant Chief Engineer and the State Design Engineer that formal dispute resolution has been initiated. With this notice, the State Design Engineer begins tracking the dispute resolution process. Whenever the two parties in the dispute reach a resolution, the State Design Engineer should be notified of the following:

1. Where in the process resolution was reached
2. The date resolution was reached
3. What resolution was reached

The DE evaluates the information in the letters, discussing it with the PM/CA and the consultant project manager as necessary.

134.6.3 Meeting of the Two Parties

The DE arranges a meeting with the consultant principal. If an agreement is reached after discussion between the DE and the consultant principal, the DE provides a letter to the firm indicating the terms of the agreement. However if agreement is still not reached, the dispute may be taken to the Dispute Resolution Committee.

134.6.4 Dispute Resolution Committee

The Dispute Resolution Committee (DRC) is comprised of the Assistant Chief Engineer (acting as chair), Director of Business Development and Compliance, and Chief Financial Officer. In preparation for the DRC’s meeting, the DE will share written details of the formal dispute resolution’s outcome to this point with the State Design Engineer who then facilitates the DRC procedures. The committee will review this information together with other background information, including the original letters from the PM/CA and the consultant project manager outlining the dispute. When the committee meets, all representatives of the disputing parties are given the opportunity to attend. The DRC discusses the issues with the disputing parties and tries to reach a resolution satisfactory to both parties. If a resolution cannot be reached, an offer of mediation is made to the two parties. Should both parties agree to use mediation to settle the claim, they will share the cost of mediation equally.

If an agreement is reached, the DRC sends the consultant a letter outlining the resolution of the dispute.

134.6.5 Mediation

A mediator is an outside party who facilitates a discussion between the disputing parties and enables them to explore options to reach agreement. Responsibility for dispute resolution is solely that of MoDOT and the consultant. The mediator has knowledge of the process and the general terms of the dispute but is not intimately knowledgeable of all project details.

After the consultant has accepted MoDOT’s offer for mediation, the State Design Engineer is responsible for making arrangements for a mediator. This includes selecting an approved mediator from a list (developed jointly by ACEC and MoDOT) and arranging the time and place of the meeting. Participants at the meeting are limited to the DE, the DRC’s chair, the consultant principal, and the mediator. Others, including the PM/CA and the consultant project manager, are not active participants in this meeting but may provide information if the mediator so requests. Legal representation is optional. The disputing parties are responsible for their own costs associated with the mediation but will share all expenses associated with the mediator equally.

Should the mediation result in the dispute’s resolution, the DRC sends the consultant a letter explaining the resolution of the dispute. However, should the mediation not result in resolution of the dispute, the issue is forwarded to MoDOT's Chief Engineer for final action.

134.6.6 Final Decision by the DRC

When mediation fails, the State Design Engineer will notify the DRC and MoDOT’s Chief Engineer and provide any additional information gathered during the mediation process. The Chief Engineer will review the information provided and if desired, meet with the members of the DRC to discuss the results of the dispute resolution process up to that point. Upon decision by the Chief Engineer, the State Design Engineer provides a letter to the DE and the consultant principal informing them of the decision. When the consultant receives the letter from the State Design Engineer outlining the decision of the Chief Engineer, the firm may respond; however, formal dispute resolution will have been completed and MoDOT will not entertain further appeals from the consultant.

Dispute Resolution Process (DRP)