ODOT Errors & Omissions Policy

1. ODOTErrors & OmissionsPolicy ODOT/ACEC Conference PresentationApril 17, 2007 Cathy Nelson, ODOT

2. AGENDA • Recap - Professional Engineering Accountability • E&O Policy • Purpose • Key Elements • Next Steps • Policy Review • Implementation

3. What is Professional Engineering Accountability? • Being accountable to the engineering profession’s laws and standards • Adhering to OSBEELS • Being technically competent • Adhering to the “Standard of Care” • Applies to ODOT and Consultants to the same degree, but different consequences

4. Professional Engineering Accountability -- ODOT’s Programmatic Approach • Engineering Policies & Procedures • Training • Deviation Policy • Design Quality Program • Consequences for failure to comply

5. Performance Accountability Consequences…

6. Draft E&O Policy Applies To: • ODOT A&E contracts • ODOTConstruction Contracts • Using Consultant prepared construction plans and specifications • Consultant Construction Engineering and Inspection • Consultant Contract Administration

7. Policy Purpose • Contract Procedures to identify, evaluate and resolve E&O issues • Create shared understandingbetween ODOT & Consultants regarding Standard of Care • Focus on resolving issues collaboratively/quickly -- 1stidentifying cost responsibility -- 2nd

8. Key Policy Elements Contract Language Requirements • Indemnity • Insurance • Standard of Care • E&O Claims Process

9. Standard of Care Definition “The Consultant shall perform all Services in accordance with the degree of skill and care ordinarily used by competent practioners of the same professional discipline under similar circumstances, taking into consideration the contemporary state of the practice and the project conditions”

10. Shared Understanding and Delivery of Appropriate Standard of Care • Technical Competency • Appropriate care and professional judgement • Industry Standard of Practice • Site conditions Negligent Perfect

11. E&O Claims Process -- Goals • Identify E&O issues early • Timely Consultant notification of issues • Work together to correct, mitigate or minimize effects • Identify costs incurred when Standard of Care not met and provide resolution of cost responsibility

12. Claims Process -- Key Elements • Work issues at project level • raise issues early • work collaboratively • track costs • Escalate when necessary

13. Escalation Process • ODOT CA requests Standard of Care Determination from Chief Engineer • Option 1 -- CE decides • Option 2 -- CE appoints TI • Option 3 -- CE appoints TI to chair TRC • 3 Technical Experts

14. Escalation Process • If Standard of Care met -- • All work together to resolve issues and ODOT covers cost • If Standard of Care not met -- • ODOT pursues Cost Evaluation and Recovery

15. Premium Costs Additional costs incurred by ODOT and/or Construction project due to not meeting Standard of Care • Cost of non-value added workDelays, inefficiencies, rework, extra work • Not reimbursed by FHWA on federal-aid projects

16. Cost Evaluation Potential Mitigating Factors • Limitations on scope of services • Time constraints for service performance • Unforeseen or changed conditions • Third party requirements • Responsibility & comparative fault of other parties • Other constraints….

17. Cost Recovery Negotiations 1) Negotiate at project level 2) Chief Engineer • negotiates resolution with Consultant • agrees with Consultant to share equally the cost to present to a 3rd party neutral (non-binding) • pursue other Alternate Dispute Resolution • Escalate issue to litigation

18. Next Steps • Policy Review • Internal and External review • Comments due June 1st • Implementation • Inclusion in future A&E Contracts • Discussion and training on policy purpose and usage • Monitoring